Golden Pallet Award: The Biggest is the Best

Safeway's NorCal distribution center—the size of 33 football fields—boasts a 99.9 percent accuracy rate. Here’s how they do it.


Sort: Distinguish between what is need and not needed;
Set in Order: Have a place for everything and everything in its place;
Shine: Clean and look for ways to keep things clean and organized;
Standardize: Maintain and monitor the first three categories;
Sustain: Stick to the 5S rules and audit your results.

In the daily work of a company, routines that maintain organization and orderliness are essential to a smooth and efficient flow of activities. This lean method encourages employees to improve their working conditions and helps them to reduce waste and unplanned down time.

Having a well-maintained facility can also prevent accidents and NorCal has greatly reduced its injury frequency rate (IFR) in recent years. “We measure our IFR by how many injuries per 200,000 hours,” says Mixey. “In 2003, our IFR was at a 13.0 IFR and in 2008 we finished at 7.4 IFR, and our goal for this year is 6.0. So it’s consistently improved—and improved dramatically.”

Mixey attributes this success to continually raising the level of safety awareness among employees. “We believe in recognizing safety and each facility has a separate safety program. The programs are essentially all the same, but they’re tailored to each specific warehouse. Our employees earn points for not getting injured and when they earn enough points they get a Safeway gift card. We also have a barbecue for any department that goes injury free for 30 days. We’ve had departments that have gone more than 200 days without any accidents,” he says.

Recognizing employees for their safety records improves morale, as does giving them a chance to shine. NorCal has developed a task force comprised of high potential supervisors to identify areas of opportunity to improve operations and reduce costs. Not only do the employees help solve real problems, but they get to hone their management skills.

“We’re building our bench strength here,” says Mixey. “One area that the task force worked on was product damage at the store. It was delaying the drivers. The task force went through the process and identified certain issues, such as poor shrink wrapping and pallets that were not properly loaded, and fixed those problems over the course of a year. There’s been an almost 20 percent reduction in driver delays.”

NorCal continually seeks operational improvement. For example, the distribution center recently incorporated a flow aisle in its grocery warehouse which took almost 1,000 slow-moving items out of various selection paths and located them down one aisle. “By doing this, we removed about three quarters of a mile of travel in the warehouse,” says Mixey. “Considering we’ve got anywhere from 80 to 100 selectors working each day, you can imagine the amount of time we’re saving.”

KEEPING IT GREEN

Sustainability is very important to Safeway. The company is one of the largest retail purchasers of wind energy, using 57 million kilowatt hours of wind energy, enough to power all 303 Safeway retail fuel stations, all stores in San Francisco, California and Boulder, CO, as well as all of the company headquarters and all corporate offices in Northern California.

That commitment to the environment extends into its distribution and manufacturing operations as well. For example, at its distribution centers, Safeway uses ammonia as a refrigerant, which does not contribute to ozone depletion or global warming.

NorCal has its own recycling center right on its premises. “When our trailers come back with store returns, they go to the recycling center first and from that point we off-load and recycle cardboard bails and plastic bags,” says Mixey. “Everything goes through our recycle center and in doing so, we’ve been able to eliminate tons of waste. We even separate our bread products from our bakery shrink and sell that to local farmers to feed their hogs.”

The company has been a member of the EPA’s Transport Partnership since 2006. The alliance is committed to adopting fuel-saving and air-pollution strategies which reduce fuel costs and decrease greenhouse gas emissions—which is extremely important to NorCal considering its fleet runs about 25 million miles per year.

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