MU College of Engineering and MidwayUSA: Partners in improvement, student learning

The University of Missouri College of Engineering and hunting and outdoor products retailer MidwayUSA are partnering on senior industrial and manufacturing systems engineering students’ capstone projects.

Midway USA 40 yearsThis senior capstone for industrial engineering takes place in the field, providing students the opportunity to work with different companies as engineering consultants and giving the students a look at potential careers early on, putting them ahead in terms of experience.

MidwayUSA, headquartered in Columbia, is an internet retailer specializing in shooting, hunting and outdoor products. Purchasing, warehousing then shipping these products nationwide at the lowest cost and as rapidly as possible represents a golden opportunity for ongoing process improvement.

And MidwayUSA is no stranger to process improvement. The firm was selected as one of just four recipients of the Malcolm Baldrige National Quality Award in 2015. They also won in 2009, making MidwayUSA one of only seven organizations to earn the award twice. The Malcolm Baldrige National Quality Award is presented annually by the president of the United States to manufacturing, service, small business, health care, education and nonprofit organizations judged to be outstanding in seven Baldrige criteria for performance excellence. Companies are only eligible to win the award every sixth year.

Happy Midway staff

Midway staff meeting outside.

So when Dr. Cerry Klein, professor in the Industrial and Manufacturing Systems Engineering Department and planning and operations facilitator for the College of Engineering, and Dr. James Noble, professor in the Industrial and Manufacturing Systems Engineering Department and MU site director for the NSF I/UCRC Center for Excellence in Logistics and Distribution, reached out to Midway in 2014 to place capstone students, Midway was receptive.

More so because MidwayUSA industrial engineer Tim Holtsman, who supervises student capstone projects at Midway, is himself an MU industrial engineering graduate who undertook his capstone project at Washington University.

“They (Klein and Noble) reached out to us personally,” says Holtsman. Holtsman says he and his former manager, also an MU industrial engineering graduate, immediately saw the benefits of employing bright young students to scrutinize micro and macro Midway USA systems. The first group came aboard in 2014.

That first group, Holtsman says, undertook an analysis of package routing to internal MidwayUSA shipping stations. The objective was to improve the process and increase invoices shipped per labor hour. This group performed admirably, he says, resulting in MidwayUSA implementing changes to the process that greatly improved efficiency.

The second group analyzed the firm’s invoice adjustment process in 2015. “That’s how we issue refunds and credits to help resolve customer service issues,” Holtsman says. Holtsman directed the group to review hundreds of customer interactions, focusing on how and why refunds were issued and how to standardize that process. This project was also a success, resulting in a 35 percent reduction in invoice adjustments while improving customer satisfaction.

Midway USA equipment

Part of the sprawling MidwayUSA warehouse system.

The third, in 2016, was also in customer support, a review of the firm’s internal escalation process. Escalation, in retail order terms, is when a customer support agent can’t answer or resolve a customer question, complaint or other issue and must refer that customer to management for resolution. This can occupy an inordinate amount of customer support agent and supervisor time and energy. This group reviewed a thousand or so escalations then cataloged, documented and analyzed issues and how they were resolved. As a result, Holtsman says, MidwayUSA recently decided to add another layer of employees with more product experience and have such questions and issues routed to them. The results of this analysis are now being evaluated, he says, but point to additional payroll being offset in terms of customer support agent and management productivity.

The fourth, in progress, is a review of internal value added processes. MidwayUSA engages in substantial repackaging and repurposing of products. It is extremely important to allocate appropriate labor rates as a component of product cost in order to understand accurate product margins. Blanket increases or decreases are often ineffective, resulting in providing inaccurate margin information for product procurement. Holtsman says the student groups’ initial analysis into more accurate product costing looks quite promising.

“The students have been fantastic to work with!” says Holtsman. “They have added tremendous value to our organization.

“In terms of how we select these projects, we choose things where we know there’s going to be extensive data collection and analysis required. All involve some element of analyzing a process and watching it for an extended period of time. It’s really time-consuming.”

Do these student groups require close supervision?

“No, not really,” Holtsman says. “I provide top level guidance and give them the data they need. They check in, check out as needed. We give them the autonomy to do what they need to do.

“If no one was doing these projects, I would have to be out there doing that work. This way we have an entire team, three or four of them going out and watching.”

Holtsman adds that this feedback loop is so effective that MidwayUSA sometimes implements process reforms before the student groups’ final presentation.

Mike Groene, now a consulting analyst with the Cerner Corporation, was part of the second group in 2015 and recalls it being a rigorous but rewarding process.

“It was definitely eye opening to see how what we learned in the classroom could be applied to problems in the real world,” he writes. “I think the team’s first reaction was this isn’t really an engineering problem and we wouldn’t be able to apply tools from the classroom to this problem. So we got creative. It was much more challenging than the isolated perfect world of textbook problems we spend so much time reviewing in class.”

Does he think the experience was beneficial?

“I definitely have referenced that project in a number of interviews and would like to think it has been instrumental in helping me get jobs/offers/additional interviews,” he says. “When I can use exact numbers such as ‘Reducing a (large) annual expense by 35 percent in the first year’ it definitely catches a potential employers’ attention.”

For more information on how the University of Missouri College of Engineering Industrial and Manufacturing Systems Engineering capstone project can benefit your firm, contact Dr. Noble at NobleJ@missouri.edu; or Dr. Klein at KleinC@missouri.edu or 573-882-4858.

For more information on MidwayUSA, visit their website, find them on Facebook or follow them on Twitter.


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