The Challenge
How do you manage rapid growth with a warehouse at full capacity?
LogisVest SRL (a fictional name) is a distribution company that faced an enviable challenge: accelerated growth.
LogisVest’s sales surged by 25%, but their warehouse was already operating at maximum capacity. Space for additional staff was limited, and building a new warehouse wasn’t a viable short-term option. Meanwhile, the shipping process began to lag behind.
Pinpointing the Problem
Our analysis revealed an issue rooted in organizational culture rather than technology or processes. While a warehouse’s theoretical capacity is typically 80%, LogisVest was operating at just 65% due to low employee productivity.
A shift in organizational culture, with a sharper focus on productivity, was essential.
The Solution
Empowerment and Transparency
To address the organizational culture issue, we proposed a merit-based recognition system to foster healthy competition and reward performance.
To fairly measure warehouse operations, we established four key metrics:
- Number of lines prepared for delivery
- Number of orders processed
- Total volume processed
- Total weight processed
The winner in each category (with employees able to win multiple) received a 25% bonus. A second team bonus was awarded to every member if monthly team targets were met, playing a key role in building teamwork beyond just individual motivation.
Data was calculated in real time and made accessible to all employees, ensuring transparency.
Implementation
From Concept to Results
We deployed a BI solution that pulled data from SAP and calculated the performance metrics (KPIs) needed for the incentive program.
Note: Extracting accurate, near-real-time data from SAP was a unique challenge, worthy of its own detailed case study.
The dashboard was organized into four tables—one for each metric—and made available to everyone involved, from management and team leads to warehouse staff. A screen was even installed in the break room.
Results
No One Wants to Finish Last
Incentive Impact The bonus system worked, though not as expected. Top performers stayed motivated, but the biggest gains came from consistent underperformers who stepped up to avoid the bottom ranks, driving an overall productivity increase of 27%.
This boost allowed LogisVest to handle their sudden growth and buy time to plan a new warehouse. The software investment paid off in under five months.
Culture Shift Providing officially recognized performance metrics and tangible rewards for top performers sparked a significant change in company culture.
Positive Side Effects Low performance couldn’t hide anymore—data laid it bare. Some employees uncovered unexpected potential to improve, while others opted to leave, helping the company shed inefficiencies and lift team morale.
Team Bonus Effect The team bonus added peer pressure on underperformers, pushing them to quickly improve their results.
Conclusion
A Simple Dashboard Transformed Organizational Culture
In this case, we tackled organizational culture challenges with a digital solution. The real hurdle was accurately identifying the issue and crafting the right fix—implementing the technology was the easy part.