The Customer
Headquartered in Huntersville, NC, American Tire Distributors (ATD) is one of the largest independent suppliers of tires to the replacement tire market. ATD operates more than 130 distribution centers, including twenty-four distribution centers in Canada, serving approximately 80,000 customers across the U.S. and Canada. The company offers an unsurpassed breadth and depth of inventory, frequent delivery, and value-added services to tire and automotive service customers. American Tire Distributors employs approximately 5,000 associates across its distribution center network. ATD was recognized as one of Forbes’ 2021 America’s Best Mid-Sized Employers and received a Gold Stevie Award in the Transportation Company of the Year category of the American Business Awards. ATD also received a Bronze Stevie Award for Most Innovative Company of the Year.
The Challenge
In 2020, like many organizations, American Tire Distributors was faced with multiple labor challenges across their supply chain network during the Covid-19 pandemic including rising labor costs, high overtime, and high turnover. To help mitigate this, ATD explored ways to implement a self-funding incentive program. They quickly realized for this to be successful, they needed the following infrastructure:
• Accurate performance standards to ensure the program was self-funding.
• A Tier 1 labor management software to provide the necessary reporting and analytics.
• A formal and consistent performance management program to keep team members engaged and improve culture.
It was critical for ATD to find an experienced vendor specializing in Labor Management Programs that not only had tier one software but had the engineering and execution experience to successfully support their entire network of distribution centers.
The Solution
ATD partnered with TZA to implement a full Labor Management Program including its ProTrack Labor Management System as well as supporting engineering and strategic consulting services. Additionally, ATD leveraged TZA’s 40 years of labor consulting and engineering experience to train their team of Industrial Engineers and create a comprehensive strategy allowing the ATD Engineering team to effectively continue the program’s roll out to the entire network. The program included TZA’s ProTrack Labor Management System providing labor planning, engineered standards calculation, incentive pay, accountability, coaching and business intelligence reporting as well as best practice standard operating procedures, multi-determinant engineered standards, and a defined performance management strategy.
Since the initial rollout, ATD and TZA have partnered to continuously improve the effectiveness of their labor management program with ProTrack being the foundation. Their goal is to get ProTrack into each of their 130 distribution/mixing centers ranging in headcount from as low as five to as high as one hundred, providing 100% visibility to performance and associated labor costs.
The Results
Within 90 days of Go Live, the pilot sites were experiencing an average performance improvement of 11% resulting in the decision to quickly expand into the rest of their network. The highest performing sites have seen UPH improvement of 25 to 30 percent within the first year of implementation.
ATD continues to not only see savings year over year, but improved retention and reduced overtime as well. Also, the analytical reporting allowed the ATD engineering team to enhance and better measure the results of various continuous improvement initiatives.
“Since going live with ATD’s Labor Management Program, we’ve experienced a steady uptick of productivity, and so far, this year, we’re trending an improvement of 105% CPUH and 103% UPH compared to this time last year.”
Courtney Artozqui, Kansas City GM
“I’m a really big believer in the Labor Management program that ATD has rolled out. It has made it much easier to manage and motivate our team by giving us real-time performance information we can use in our conversations. Our team is always interested in their performance and eager for ways to improve their work. I’m excited for what this will continue to bring to ATD, and I look forward to future opportunities to increase our productivity with ProTrack LMS.”
Stephen Sallustro, Long Island GM
The Future
The team at American Tire Distributors is continuing to roll out ProTrack and their labor management program to all their sites and have decided to make ProTrack the cornerstone of their high-performance culture. TZA is their partner of choice for Labor Management needs going forward. ProTrack has become ingrained in the culture of ATD, and we look forward to continuing the partnership well into the future.
