Finding Hidden Productivity
By KEOGH Consulting
Productivity enhancements can be achieved in your distribution center without spending a dime. It is easy to fall into the trap of wanting your neighbors’ technology, and to get that apparent quick hit improvement. For example, warehouse management systems (WMS), pick-to-light technology and conveyor systems most often enhance productivity. But, these solutions are easily identified and costly changes to your business. Why not invest in more time to study and identify those harder-to-find opportunities that require little or not investment but also provide productivity gains.
The main areas that can yield productivity increases and resulting labor savings with no investment include improvements in the areas of layout / material flow, procedures, training/exception handling, product slotting, and staff management.
Layout / Material Flow
The material flow and layout of your facility should result in minimal travel time during the day. Using the picking area as an example, the typical walk time is 38% of the pick time during a shift. If you’re experiencing a larger percent of time walking within the picking area, there may be opportunities to modify the layout of storage equipment. In a large storage area, the use of tunnels and cross aisles reduces travel time and minimizes backtracking. Using the layout configuration that best supports your business can enhance the overall material flow. A U-shaped layout flow is the most common, and is used by most retailers. A straight-through layout flow is best for manufacturing or freight forwarding operations. While modifying layouts can occasionally require capital investment, the cost is minimal when compared to new equipment investments.
A review of the day-to-day procedures can uncover many productivity enhancements. The best approach for reviewing procedures is to map the current process using Visio to visually review the material flow. By mapping the process, you can identify inefficient backtracking, delays, and repetitive tasks. Once identified, you can develop new procedures that reduce backtracking and eliminate or reduce delays and repetitive tasks. For example, if you are performing the QA process at packing and delays are extensive correcting picking errors, you might move the QA process into the picking area. Another example, which is related to this process, is packing during picking (pick-n-pack) versus the use of pack stations downstream. While this is a larger change, it might increase order fulfillment if smaller orders use the pick-n-pack process.
Whatever the current or proposed process, the clear understanding of the tasks to perform is critical to higher productivity. Through the process of mapping, you might discover that operators are uncertain about the actual procedures. Much time can be wasted during the day redoing functions, because they weren’t done right the first time. For example, if replenishment is not timely and done correctly, pickers may run out of stock during order fulfillment, causing reduced productivity. If everyday activities are not a problem, then handling exceptions may be causing confusion and reduced productivity. The mapping of exceptions should also be done to ensure there is an effective procedure for handling them efficiently.
Product slotting often presents the biggest opportunity for enhancing labor productivity. The term product slotting refers to the positioning of products into the right equipment type and location to maximize the use of space and labor resources. The issue of slotting impacts the two largest warehouse labor pools: picking and replenishment. While you might associate slotting with the purchase of a WMS or slotting program, the use of general slotting practices can be implemented without an investment. However, it is true that on-going slotting is more efficiently performed with a slotting program. The return on this investment is typically less than one year.
By simply observing the picking process for one shift, you can identify labor congestion and ergonomic issues. Ergonomic issues refer to operators continuously bending and stretching to locations to pick products for orders. Typically 80% of the picking activity is represented by only 20% of the total active products. These top moving products should be located in the most ergonomic locations and right-sized equipment to reduce pick stock-outs and minimize replenishment labor. These products should then be balanced across picking zones to reduce congestion and further increase the productivity of the pickers.
The methods for motivating operators are unique for each individual, but there is a right mix of motivational tactics that can work in your operation. Monetary rewards are one of the biggest methods for motivating people, but in the spirit of no-cost solutions, there are other tactics that can work. Recognizing good performances in team meetings is a great way to motivate that person and others. In addition, establishing an employee of the month parking space near the entrance of the warehouse is a nice perk for exceptional performance. This is not a monetary reward, but one that is sure to please, if the parking situation is poor at your facility.
Placing employees into teams is another method of motivating individuals in a group to perform at higher levels. This staff rearrangement can also backfire, if relationships are not solid within the team. However, identifying and correcting these strained relationships can enhance the productivity of the facility. Back to monetary rewards, productivity incentive plans should be evaluated to see the bottom line impact on costs and savings. The results of such an analysis might be positively surprising.
Some analysis is required to identify if these or other enhancements will improve the productivity in your operation. This analysis involves estimating the labor rates for each solution. Labor rates can be determined by using traditional time studies and/or with the use of pre-determined time standards (such as MOST - Maynards Operating Sequence Technique). In addition, warehouse space planning may be required for simulating various changes to layouts.
If these non-investment improvements in productivity are not enough, then make sure to go through the justification process for investments. The justification should compare the investment, with the incremental labor, inventory and other annual operating savings. A net present value (NPV) analysis should be performed to select the solution that provides the highest positive NPV.