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In the supply chain industry reducing costs while increasing customer satisfaction is an ability that can ultimately determine success. Because labor is 60% - 65% of operating cost, this is typically an area of interest when it comes time to evaluate where costs can be eliminated or reduced. Strictly monitoring and adjusting labor standards ultimately leads to more efficient decision making by the management team. These decisions can relate to anything from warehouse setup to departmental staffing levels. There are six easy steps to follow to develop effective labor standards for your facility. The six steps include: 1. Analyze 2. Accountability 3. Communicate 4. Productivity 5. Support 6. Initiate Step One – initiate - includes observing how processes are currently done and creating a new activity process to eliminate any inefficiencies that may exist. Step Two – accountability – focuses on creating a culture that adapts to change easily and effectively. By making staff aware of their role in the process and explaining your expectations they will more easily understand what level of performance is expected. Step Three – Communicate – is partnered with the previous step. Communicating changes, expectations and even benefits will simplify the process by putting everyone on the same page. Step Four – Productivity – is where labor standards are determined and associated to compensation. Step Five – Support - is where technology plays a major role. The use of a WMS will drive the behavioral changes through custom workflows developed to align with your activity process expectations. Functionality within the WMS that can be customized can include picking, packing, loading, quality control, barcode usage and much more. Labor reporting within the WMS is a useful tool to view activity in real time to see if goals are being met and what changes can be made. Step Six – Initiate – is where executive buy – in must occur. For the improvement process to be successful it is imperative that all members of management are aware of the expectations and are ready to award staff for increases in productivity. To learn more about this topic or WMS please contact me at [email protected] 800-933-2839 ext. 243 or visit the website www.datexcorp.com . Datex provides flexible, reliable supply chain solutions to make companies more profitable. Contact us today.
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How to Improve Labor Productivity in the Warehouse
By Angela Cox
Benefits of Labor Management
Once labor standards have been determined, decisions
regarding change to warehouse, loading dock, shipping dock
or facility staffing can be made more easily.
Labor Measurement x Number of Operations Performed
=
Total Workforce Performance
Develop Effective Labor Standards in Six Steps
1. Analyze
2. Accountability
3. Communicate
4. Productivity
5. Support
6. Initiate
1. Analyze
Observe employee activity on the warehouse floor.
Determine steps for how employee completes an activity –
“Activity Process A”
Determine how you would like employee to complete that same
activity to be most efficient– “Activity Process B”
Develop your labor budget based on Activity Process B for each
function performed – this will determine Total Workforce
Performance
How to Perform an Effective Warehouse Assessment
1. Perform a walkthrough – Observe efficiency of processes and determine how they can be improved
2. Gather performance metrics – combine research analysis,
on-site data and industry reports 3. Speak with your staff – ask for feedback on what they see
as problems or areas of improvement 4. Make use of internal report data – Analyze current reports
generated 5. Benchmark – Compare desired output (goals) with current
output (actual) and with that of other similar companies
Critical Areas to Assess
1. Labor – generally makes up 60% - 65% of cost
2. Facilities
3. Current Procedures
4. Systems - software/ hardware
2. Accountability
After baseline activity processes have been developed – focus
on converting the culture regarding accountability
Staff should be aware of how their contribution affects
the organization as a whole
Set clear standards and expectations for productivity –
increase these over time to see consistent productivity
increases
3. Communicate
Explain to staff how changes will benefit them and that standards are the same for all team members
Communicate Your :
• Expectations • Benefits • Changes • Feedback (do this regularly)
4. Productivity Develop a system to identify key tasks that are
performed on a regular basis – daily, weekly, monthly
or quarterly
Next set time standards for each task
Use these standards to determine employee
compensation and performance evaluation tools (take
into consideration seasonal peaks)
Result : Productivity Index Measurement
5. Support Make your warehouse management system (WMS) work for
you – it is your best support tool
WMS should support and drive the behavioral changes
made to improve productivity
Make any changes to the system necessary to meet
your requirements
WMS tracking labor Labor reporting – use standard or customize reports to
track specified labor KPI’s
• Daily Average Unload by Owner (Pounds) • Daily Average Unload by Owner (Cases) • Daily Unload by Owner (Pounds) • Daily Unload by Owner (Cases) • Completed Tasks Per Resource
Connection between mobile devices in your facility and
WMS can track staff productivity in real time. Reports
can be used to identify problem areas or areas
performing well.
WMS functionality for labor
Workflow – can be used to optimize product handling,
reducing the amount of touches on each piece of inventory
Slotting/ Picking – Generates pick lists to reduce travel
time, makes staff available for additional activity
Packing/ Loading – system ensures items required to pack
or load are available, reducing out of stocks and wasted
productivity
WMS functionality for labor
Quality Control – System tracks products through lifecycle
and allows errors to be caught early reducing activities such
as returns processing
Barcode Traceability – manual data entry reduced and
inventory accuracy increases
And much more…
6. Initiate
Initiate management team buy – in
Management should be supportive of labor
standards and be able to take action on
assessments being created with new standards
Reward employees using feedback and incentives
800.933.2839
Online demonstration
Web chat
@Datexcorp
Datex Corporation
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