Lenox DC Start-up: a Survival Story

Greg Petro, the vice president of distribution at Lenox, helped the manufacturer/marketer of tabletop items and collectibles move into its 500,000-sq.-ft. distribution center in January 2004. But although Petro is a veteran operations executive — he’d previously worked at Popular Club Plan and Dr. Leonard’s Healthcare Corp., among other direct marketers — he admits that the process of opening Lenox’s Bristol, PA, facility, training the workers, and implementing the systems and procedures was anything but smooth.

“There were lack-of-training issues, and we did not have the right people involved,” Petro recalls. Among the many internal issues was the discrepancy between sales expectations and operations’ ability to meet those expectations.

“It’s all about having a deep understanding of what you’re doing,” Petro says. “I call it ‘data collection vs. data involvement.’ You really have to understand what the numbers mean. Otherwise you’re just collecting garbage.”

For example, in Lenox’s wholesale business, the reseller designates a window of deliverability when placing an order, specifically a “start ship” date and a “cancel” date. The latter is the last date that the customer will accept as a ship date; if the order hasn’t shipped by then, Lenox is to cancel it unless the client grants an extension. Lenox frequently found itself trying to beat the back end of the deadline (the cancel date) rather than the beginning of the time window (the start ship date). Say a large retailer wanted Lenox to ship 5,000 dinnerware place settings within a two-week window from Sept. 15 to Sept. 30. “We’d be working to not miss the Sept. 30 date, and we were at most times not successful. Anything shipped after the deadline would require an order extension, and the customer wouldn’t always grant us the extension. Instead, the large retailer could buy the dishes from our competition or give our floor selling space to our competitor because of our inability to meet their requirements.”

To resolve such problems, Petro had to obtain the cooperation of all parties involved. “You’ve got to overcommunicate the mission,” he says. “When I got there, people were working up to 80 hours a week, and you could tell they were fried. They were good people, but because of their state they could not see the bigger picture.”

Petro also made people more accountable and disregarded what he considered invalid excuses — say, someone insisting that he couldn’t improve a process until the arrival of a system enhancement, which wouldn’t be implemented for another six months. “We didn’t have six months. So we had to get creative.”

Greg Petro will present “A Post-Mortem Look at a DC Start-up: What Worked, What Didn’t, and Why” on Wednesday, May 2, during the National Conference on Operations & Fulfillment.

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