Labour Standards
Many companies around the world now use standards to measure and improve the performance of their workforce. In S&V´s experience, a typical warehouse with proactive managers will attain productivity improvements of 15-20% if they install standards after having already used a basic performance measurement system such as counting cases/pallets or reasonable expectancies. Alternatively, a DC which has had no productivity measurement system beforehand will typically gain a 25-35% improvement in performance after installing standards if it is proactively managed.
For more information please read our case study on the benefits an existing S&V customer has realised through the implementation of labour standards.
Computer technology has made the use of engineered standards much easier, including the use of software to collect and analyse time data. Visit our C-Time page for further details.
What Are Engineered Labour Standards?
Engineered Labour Standards have been in use since the 1930´s. Essentially, standards are a system companies use to measure the productivity of individuals, teams and processes.
Standards were originally developed to be used in manufacturing environments where workers were paid "piece rates" or based on the number of pieces or components of equipment they assembled per hour. A standard was developed to determine how many pieces a person could be expected to make per minute/hour, based on all of the different factors that affected them such as assembly line delay, fatigue, how far they had to reach to grasp components, supervisors stopping them to talk to them etc.
With the advent of computers and electronic Warehouse Management systems in DCs, discrete engineered labour standards have been in use in the retail industry since the mid to late 1980´s. Like earlier predecessors, an engineered standards system will calculate a time for a specific piece of work to be completed whilst taking into account a very wide range of factors. For example in an assignment to select an order for a store the time calculation will take into account the order start point, actual travel distances to and from locations, the weight and cube of each product picked, the opening height and height above the ground of each location that each product is picked from, different traffic delays by hour of the day and worker fatigue by hours worked just to name a few! Hence, across a working day, a person on standards will accumulate an amount of standard time for each task they perform and in turn will use up actual time to complete each task. The difference between the two times is used to calculate the person´s performance, I.e. if a person has been allocated 100 minutes standard time to pick an order and they complete the order in 90 minutes, their performance would be 110% of standard. Likewise, if on the same order they took 110 minutes, their performance would be 90%.
Process Design
You do not always need a labour standards system to gain productivity benefits in a DC. Sometimes, merely having a 3rd party review your processes will pay dividends. Ask yourself, how long has it been since anyone in your organisation have a really good look at the way things are done and you may be surprised at the answer.
S&V always performs a very detailed analysis of methods and procedures as part of a labour install and on many occasions, this review has in its own way made just as much a contribution to the productivity improvements that have resulted from the project as have installing standards. At one customer site, S&V was able to produce a 15% improvement in pick rates just by taking a close look at procedures in their textiles area and making suggestions on improvements.
Typically, process design and review is something every company should be doing on an ongoing basis. Unfortunately, very few seem to have the time or the resources to commit to this essential aspect of running a productive business.
A fresh set of eyes and experience may be just what your business needs to kick start improvements.
Further Information
If you would like to learn more about engineered labour standards please refer to our Links page.
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