Meijer Enters the Express Lane

Mitch Boucher explains how a new construction strategy is helping Meijer keep pace and chart new territory as customer behavior evolves

Above Mitch Boucher’s desk, between the building plans, Post-it notes, and family photos, you’ll find a simple quote that serves as an important daily reminder: “The speed of the business requirement is greater than the speed of the organization’s ability to fill it.”

Boucher, director of construction and engineering for Meijer, has been with the major retail chain since 2008. In that time, he’s helped the company expand from 181 to 235 stores. In fact, what started as a hometown family grocer in 1934 has grown into a multi-billion dollar operation with roughly 75,000 employees.

Meijer, which has locations in Michigan, Indiana, Kentucky, Wisconsin, Ohio, and Illinois, opens anywhere from 6 to 10 new stores a year. But Boucher is responsible for much more. In addition to grand openings, his team handles small capital projects, builds distribution and supply-chain facilities, and completes store remodels across the Meijer portfolio. It does so as quickly as possible. Why? Because customer demands are changing. And if Meijer doesn’t keep pace, then customers will take their business elsewhere. That’s why speed is essential.

“Construction and engineering teams in retail must move quickly to allow and enable organizational goals,” Boucher explains. “We have to build whatever it takes to get the latest products into the store, and we have to adapt so that the company can test out the latest ideas before introducing innovations to the market.”

After studying electrical engineering at Michigan State University, Boucher began his career at Herman Miller, where he supported eight facilities and about 3 million square feet of real estate. He helped the global furniture manufacturer build a $14 million facility and several LEED-certified projects that led to more than $1 million in annual cost savings. He then moved to another furniture manufacturer and helped build factories in India and Shanghai, China. These roles taught Boucher the importance of communication, collaboration, speed, and efficiency. In 2008, when he joined Meijer, he helped the organization create its first comprehensive energy management plan.

“Construction is a slow process. The industry is inefficient by nature. But the business wants things fast, and a director’s job is to find new ways to deliver.”

Since then, he has added prototyping and engineering. In 2014, when Meijer’s previous director of construction retired, the team reorganized, and Boucher took on his current role as director of construction and engineering. Now, his six managers and 25 professionals work together on construction projects that total hundreds of millions of dollars each year. Boucher works with his counterparts in the business to prioritize his department’s activities, but the need for speed guides the work.

“Construction is a slow process,” he says. “The industry is inefficient by nature. But the business wants things fast, and a director’s job is to find new ways to deliver. So we are working in one of the slowest industries, namely construction, to provide services to one of the most quickly changing industries—retail.”

Before Boucher accepted his current role, the department was broken into several small, functional units that covered site development, building construction, interiors, and fit outs. Coordinators visited the field to supervise construction. Project managers worked with contractors. Construction managers and design managers created construction drawings and supervised implementation. Retail managers created store layouts. As a result, everything was done in a vacuum, and each project filtered down through every separate function. It was difficult to communicate corporate strategy or track performance goals. This resulted in a slowdown in projects. And, worse yet, it was hard to focus on meeting customer needs.

After noticing the problem, Boucher decided to reorganize his entire department. He created a new-store team, a remodel team, and small projects, fast execution team. “Our new approach removes silos, increases collaboration, and focuses on customer needs,” Boucher says. “A project manager (PM) talks to a store manager to find out exactly what local customers want, and that same PM works with the design team, executes the project, and ultimately inspects the final details.”

The formula has been proven successful for growth and project completion. Recently, Boucher’s remodel team increased from 6 to 32 stores. The fast execution team will work on 46 different initiatives, and some may be as small as $10,000 to install a new case in one store. Some will be larger and faster such as to set up a new sushi case program in 40 stores over the course of just one month. The new store team can now open a new store location just 352 days after breaking ground. In 2015, Meijer’s workers typically finished touch-up painting one week before a grand opening. Now, they do so four weeks in advance. The extra time lets the store team polish up interiors and stock shelves perfectly before the doors open. The new approach is successful because it focuses less on procedure and more on the customer.

“We manage the performance and not the process, and we do that with the marketplace guiding the way,” Boucher explains.

The changes have not only brought benefits to Meijer’s customers, but Boucher says he has also noticed an increase in team morale and improved ability to capitalize on sustainability initiatives, as well. “Our employees in construction and engineering are more fulfilled, and our retention is better because we’ve reorganized to let our teammates use all of their capabilities,” he says.

Most of Meijer’s 25 construction professionals have a degree in construction management. But, as the owner’s agent, they’re doing more than traditional construction duties. They’re validating budgets and scope against company standards. They’re checking the ROI on proposed investments and using soft PM skills and institutional knowledge to ensure responsible spending.

In addition to new business ideas, Meijer has introduced many sustainable construction practices over the last several years. In 2007, Meijer unveiled its first LEED-certified store. Now, the organization builds all stores to LEED standards and certifies one store per year.  “We have always been a responsible part of the business community. We just don’t talk about ourselves as much as we could,” Boucher says. In 2016, Meijer joined the EPA’s GreenChill program to reduce refrigerant emissions. At the time, the company already had a best-in-class leak rate of only 12 percent. Since that time, Meijer has reduced its leak rate to 9.2 percent. Stores that are to be built in 2018 will feature all LED lighting and best in class HVAC systems.

These factors all work together to impact Meijer’s bottom line. Stores are now delivered on time or, in some cases, even early. In 2016, Meijer opened nine new stores. The portfolio of stores was within 1 percent of budgeted costs. The 2017 stores were about 3 percent under budget returning $20 million in savings to the company for additional growth. Boucher says the new model helped create the right atmosphere to drive the results. “Our employees now have the authority to go after these cost savings and implement the solutions that cause good things to happen,” he says.

Now Boucher and Meijer have their sights set on continued growth. “What we’ve done is establish the floor,” Boucher says. “What we’ve been able to achieve so far is now the standard to exceed. It’s the minimum.” Meijer will continue building new locations and renovating existing ones to stay relevant in the ever-changing world of retail.

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