The scene: a big box store early on Black Friday. A large crowd gathers outside the store waiting for the doors to open. Among them, Shopper A and Shopper B. Both are eager to go inside the store to make their purchases. Shopper A has a game plan. She has the store's circular from the paper, a list of items, and most importantly, she has familiarized herself with the store's layout. She also knows that the items she's looking for will be strategically placed within the store. Shopper B, however, has no plan for finding her purchases. While she walks from one end of the store to the other, Shopper A already has her items and is headed for checkout.
Retailers have already learned the strategic placement of merchandise within their stores can help drive sales while improving efficiencies for both their workforce and their customers. These lessons learned can be used by warehouse managers to improve their efficiencies as well. While many warehouses utilize engineered labor standards, or task interleaving or slotting practices, those that implement all three achieve the "productivity trifecta" of warehouse optimization. If you are not doing all three of these, you're leaving money on the table.
ONE SYSTEM CAN LEAD TO BETTER EFFICIENCIES
Research shows that the average warehouse or DC operating without a formal labor management program operates at about 65-70% of its potential efficiency — what industrial engineers describe as a fair day's work for a fair day's pay. This means that by adopting labor standards, you can improve your labor productivity by 30-35%, without rushing workers or using special incentives.
Engineered labor standards are not widely used in warehouses or distribution centers, even though they can significantly impact the performance of employees. Unlike most automated systems in the warehouse, workforce management (or labor management) systems do not increase productivity themselves. They are tools to help you create a more productive environment. While the mere act of measuring workers has proven to increase performance, the real productivity gains come from getting everyone doing the right tasks the right way. For example, if you have 100 workers in your DC, you have 100 different ways in which the workers are doing their jobs. What are the chances that every one of them is the most efficient? The answer is ZERO.
Job design and the development of methods and standards is not necessarily something a warehouse management system will do for you. System-directed work from the system can accomplish the "right tasks" part, but getting everyone to do their tasks the "right way" is more complicated. It requires good job design, development of efficient methods, and creating fair and accurate labor standards to measure the workers against these methods.
By using experienced industrial engineers to study your jobs, equipment, and environment, the single most efficient method for completing each job and task can be determined. This critical step of developing preferred methods and engineered standards, along with proper training and change management, has enabled customers to improve labor productivity and consistently attain 100 percent of the labor standards.
TWO SYSTEMS ARE BETTER THAN ONE
Companies that implement engineered labor standards have made great strides in improving productivity. Adding a second productivity practice, such as task interleaving, can further enhance your warehouse efficiencies. Once you know how long it should take to complete each task based on preferred methods and engineered standards, you can leverage this information in a number of ways to improve labor productivity and utilization.
System-directed task interleaving, also known as dynamic task management, is an automated function that takes system-directed work to the next level. A company using a paper-based approach to assign work is losing both efficiency and accuracy. Workers waste time travelling back and forth from a central location to pick up their next assignment. By utilizing task interleaving, workers are directed to their next task based on priorities, proximity and their qualifications. With system-directed work, workers receive their next assignment on their mobile devices as soon as the previous task is completed, eliminating wasted travel. For example, a forklift driver replenishing a forward pick area from bulk storage might be directed to pick a nearby pallet and take it to a loading dock or return a stack of empty pallets to a palletizer before returning to bulk storage.
Also, by intelligently grouping picks into "waves," modern warehouse management solutions can significantly increase picking efficiency by enabling workers to pick multiple orders at the same time. This reduces travel and order cycle times.
THREE PROCESSES EQUALS THE OPTIMIZATION TRIFECTA
If implementing one productivity solution is good for improving efficiency in your warehouse, then certainly using two processes is even better. Add a third to the mix, such as pickface slotting, and you've achieved the ultimate trifecta in warehouse optimization.
Think of how you organize things in your home. You probably keep coffee in a cabinet near the coffee maker. Your refrigerator might have shelves within the door to make frequently-used items easily accessible. Even on your computer, you probably keep files you access often in a folder on your desktop. In our everyday lives we arrange, or slot, our belongings to help us complete our tasks with minimal effort.
In warehousing, slotting is the intelligent positioning of merchandise for the purpose of optimizing order fulfillment efficacy. Slotting your inventory helps you identify the most efficient placement for each item in a distribution center or warehouse.
If the inventory in your DC has any degree of seasonality, if you support weekly/monthly campaigns for promotional item fulfillment, or if you have a fair amount of new SKU introductions into your facility, you could benefit substantially from proper slotting of your forward pick areas. Proper slotting of high velocity SKUs can significantly reduce pick travel time as well as minimize pick-line congestion, thus making pickers much more productive.
Slotting tasks can be integrated with other DC tasks by your warehouse management solution, so re-slotting does not require you to stop the other tasks and disrupt operations. When integrated with workforce management systems, the expected savings and ROI can be computed prior to accepting the slotting plan. This will allow you to determine if the slotting plan will be effective and provide operational benefits.
MAKING THE SYSTEMS WORK FOR YOU
No one process or system will single-handedly maximize your productivity. A coordinated plan to implement two or more of the above processes will provide the greatest benefit to your warehouse operations. A good place to start is to examine your current operations in light of the three optimization processes mentioned above to create a baseline and get a feel for your current productivity levels. It is important to have an ongoing process improvement program where you continue to "peel the onion" to look for other areas in which you can increase your worker productivity and facility throughput.
To the point, you may also want to look at other related factors. Are your overall operations as efficient as they could be? Could your DC layout better facilitate your current and future operations? Do you have industrial engineers trained in developing preferred methods and engineered standards? Who will handle the critical change management process? The answers to these questions will help you determine how to best implement improved labor standards, task interleaving and slotting practices to achieve the warehouse optimization trifecta.
Tom Kozenski is Vice President, Solution Strategy, RedPrairie.
Retailers have already learned the strategic placement of merchandise within their stores can help drive sales while improving efficiencies for both their workforce and their customers. These lessons learned can be used by warehouse managers to improve their efficiencies as well. While many warehouses utilize engineered labor standards, or task interleaving or slotting practices, those that implement all three achieve the "productivity trifecta" of warehouse optimization. If you are not doing all three of these, you're leaving money on the table.
ONE SYSTEM CAN LEAD TO BETTER EFFICIENCIES
Research shows that the average warehouse or DC operating without a formal labor management program operates at about 65-70% of its potential efficiency — what industrial engineers describe as a fair day's work for a fair day's pay. This means that by adopting labor standards, you can improve your labor productivity by 30-35%, without rushing workers or using special incentives.
Engineered labor standards are not widely used in warehouses or distribution centers, even though they can significantly impact the performance of employees. Unlike most automated systems in the warehouse, workforce management (or labor management) systems do not increase productivity themselves. They are tools to help you create a more productive environment. While the mere act of measuring workers has proven to increase performance, the real productivity gains come from getting everyone doing the right tasks the right way. For example, if you have 100 workers in your DC, you have 100 different ways in which the workers are doing their jobs. What are the chances that every one of them is the most efficient? The answer is ZERO.
Job design and the development of methods and standards is not necessarily something a warehouse management system will do for you. System-directed work from the system can accomplish the "right tasks" part, but getting everyone to do their tasks the "right way" is more complicated. It requires good job design, development of efficient methods, and creating fair and accurate labor standards to measure the workers against these methods.
By using experienced industrial engineers to study your jobs, equipment, and environment, the single most efficient method for completing each job and task can be determined. This critical step of developing preferred methods and engineered standards, along with proper training and change management, has enabled customers to improve labor productivity and consistently attain 100 percent of the labor standards.
TWO SYSTEMS ARE BETTER THAN ONE
Companies that implement engineered labor standards have made great strides in improving productivity. Adding a second productivity practice, such as task interleaving, can further enhance your warehouse efficiencies. Once you know how long it should take to complete each task based on preferred methods and engineered standards, you can leverage this information in a number of ways to improve labor productivity and utilization.
System-directed task interleaving, also known as dynamic task management, is an automated function that takes system-directed work to the next level. A company using a paper-based approach to assign work is losing both efficiency and accuracy. Workers waste time travelling back and forth from a central location to pick up their next assignment. By utilizing task interleaving, workers are directed to their next task based on priorities, proximity and their qualifications. With system-directed work, workers receive their next assignment on their mobile devices as soon as the previous task is completed, eliminating wasted travel. For example, a forklift driver replenishing a forward pick area from bulk storage might be directed to pick a nearby pallet and take it to a loading dock or return a stack of empty pallets to a palletizer before returning to bulk storage.
Also, by intelligently grouping picks into "waves," modern warehouse management solutions can significantly increase picking efficiency by enabling workers to pick multiple orders at the same time. This reduces travel and order cycle times.
THREE PROCESSES EQUALS THE OPTIMIZATION TRIFECTA
If implementing one productivity solution is good for improving efficiency in your warehouse, then certainly using two processes is even better. Add a third to the mix, such as pickface slotting, and you've achieved the ultimate trifecta in warehouse optimization.
Think of how you organize things in your home. You probably keep coffee in a cabinet near the coffee maker. Your refrigerator might have shelves within the door to make frequently-used items easily accessible. Even on your computer, you probably keep files you access often in a folder on your desktop. In our everyday lives we arrange, or slot, our belongings to help us complete our tasks with minimal effort.
In warehousing, slotting is the intelligent positioning of merchandise for the purpose of optimizing order fulfillment efficacy. Slotting your inventory helps you identify the most efficient placement for each item in a distribution center or warehouse.
If the inventory in your DC has any degree of seasonality, if you support weekly/monthly campaigns for promotional item fulfillment, or if you have a fair amount of new SKU introductions into your facility, you could benefit substantially from proper slotting of your forward pick areas. Proper slotting of high velocity SKUs can significantly reduce pick travel time as well as minimize pick-line congestion, thus making pickers much more productive.
Slotting tasks can be integrated with other DC tasks by your warehouse management solution, so re-slotting does not require you to stop the other tasks and disrupt operations. When integrated with workforce management systems, the expected savings and ROI can be computed prior to accepting the slotting plan. This will allow you to determine if the slotting plan will be effective and provide operational benefits.
MAKING THE SYSTEMS WORK FOR YOU
No one process or system will single-handedly maximize your productivity. A coordinated plan to implement two or more of the above processes will provide the greatest benefit to your warehouse operations. A good place to start is to examine your current operations in light of the three optimization processes mentioned above to create a baseline and get a feel for your current productivity levels. It is important to have an ongoing process improvement program where you continue to "peel the onion" to look for other areas in which you can increase your worker productivity and facility throughput.
To the point, you may also want to look at other related factors. Are your overall operations as efficient as they could be? Could your DC layout better facilitate your current and future operations? Do you have industrial engineers trained in developing preferred methods and engineered standards? Who will handle the critical change management process? The answers to these questions will help you determine how to best implement improved labor standards, task interleaving and slotting practices to achieve the warehouse optimization trifecta.
Tom Kozenski is Vice President, Solution Strategy, RedPrairie.
