FEATURE AUTOMATED WAREHOUSING The importance of not being idle
Michael Harris of business and technology consulting firm, West Monroe Partners, explains how to focus on internal processes to reduce idle time to increase efficiency and output
M
anufacturing and distribution is under enormous pressure to do
more with less. In the battle to increase employee efficiency and output, there lies a power struggle between productive and unproductive time. Although tasks that don’t produce tangible results may be necessary to support warehouse or distribution centre operations, organisations are often not acting proactively to identify and mitigate the time spent on idle or indirect time. Idle time can account for up to 40-50% of a firm’s distribution labour costs in extreme cases. A lack of visibility into the idle time issue is not just a matter of extra expense - it’s a roadblock on the path to a more productive floor. There are a number of sophisticated
intelligence tools and wearable devices that have emerged and this has led some to believe that the simplest solution to tackling idle time can be found in these new gadgets. However, this investment in technology is essentially, only a cosmetic fix. What warehouse leaders need to do is to start from the ground up, outlining smarter processes for tracking and assessing all labour hours that lay a foundation for future transformation.
REMOVING WHAT YOU DON’T KNOW Every warehouse operation has tasks which aren’t considered productive. Management teams have historically planned for these indirect hours as a percentage of overall productive time. Many leaders would make the case that there is a specific, set ratio between direct and idle hours, yet few truly grasp the savings involved in removing bottlenecks from their organisations. Deciding to treat idle time reduction as grounds for continuous progress is the first step in optimising workforce productivity. Recognising how time, both productive
and unproductive, is spent is integral to the success of distribution centres and warehouses. Without proper processes in place, employees are often left to discern for themselves how to report idle time. This leads to idle time that’s logged incorrectly or inconsistently - if at all. In most cases, the problem is threefold, created by a lack of detailed tracking, poor internal communication and insufficient employee education around what constitutes indirect time. Each of these areas can be remedied, but a long term solution requires more than a quick fix. Internal time tracking,
Right: higher productivity and lower labour costs will continue to be a priority for
warehouse leaders
communication and education should be constantly evaluated and enforced to ensure that unproductive tasks are both controlled and mitigated.
1. What is idle time? The first step to effectively tracking indirect time is thoroughly fleshing out what constitutes it in your organisation. 2. What works for you? Determine how best to capture, measure and report productive (and unproductive) time, whether that’s through paper logs, RF device time codes or even wearable devices. 3. Who is your point person? Designate a primary contact responsible for processing and analysing employee time logs. Not only will this person be responsible for sifting through the data and identifying trends, but he or she should also be the authority on making sure that indirect time is properly entered into the system. Ultimately this person will be accountable to this process. 4. Where are your lines of communication? Once employee time is defined and a method for collecting and reviewing that time is set, communicate this information to all front line supervisors. 5. Is a training program in place? Floor associates must also receive robust training on the idle time tracking program and expectations. Addressing the ‘what’s in it for me?’ question through something such as an incentive-based pay structure can be instrumental in earning staff buy-in and cooperation.
GETTING STARTED Introducing a program to track and manage idle time can improve employees’ overall efficiency and throughput, regardless of whether an organisation is holding associates accountable to a simple performance expectation or the latest and greatest discrete engineered labour standards. Still - the process demands structure. There are a few key phases involved in getting a successful idle time tracking initiative off the ground. There are a few questions warehouse leadership should be prepared to answer along the way - these can be seen left. Higher productivity and lower labour costs will continue to be a priority for warehouse leaders. With the convergence of technology and manufacturing, many in the industry may look to new, forward thinking gadgets to solve idle time problems. However, before diving into a fully fledged IT roll-out, smart organisations should look deeper into their internal processes to find and eliminate the bottlenecks that are dragging them down. Making this operational introspection an
ongoing process, not just a one-time project, is key to minimising idle time costs and inspiring all employees to embrace the culture of continuous improvement.
West Monroe Partners
www.westmonroepartners.com T: +1 479-845-9900
14 NOVEMBER 2014 | AUTOMATION
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