We are in times of crisis, where increasing productivity is one of the main challenges in logistics management. Today doing “more” with the same resources and maintaining security protocols is the goal.
Over time, companies have faced different business challenges in logistics management, one of the most significant has been the evaluation of the level of productivity, which impacts the final objective of the supply chain specifically in the speed of response, is say having the “right product, in the right place, at the right time, at the lowest possible cost.” Today after the current crisis, making processes more agile and identifying the cost of an operation, where it is won, where it is lost, becomes vital to keep a company afloat.
Productivity is defined as the result of the implementation of methods that allow a better performance of the available resources. Frederick Taylor was one of the pioneers in the evaluation of productivity, contributing at the end of the 19th century to the development of a “task” -based system, where the standard time it took the best operator had to be measured through a stopwatch qualified to carry out an activity, determining maximum, nominal and proven capacity.
The results of Taylor’s studies brought about the reduction to a third of the personnel and a profitability of almost 50% to the companies that applied it, however Frederick has not been the only one to study labor productivity, the Gilberth husbands, Adamiecki and other European authors have also made their contributions.
Defining the time that should be invested in an activity allows identifying which tasks can negatively influence the productivity of a process and with this, resources can be better controlled. At the logistical level, all the activities carried out in a distribution center can be measurable and quantifiable, however, “What is not defined, cannot be measured. What is not measured can not be improved. What is not improved is always degraded ”(Lord Kevin, S XIX). Therefore, defining measurement indicators will provide a complete overview of the processes, with which commitments with clients and final consumers can be established, which will even result in optimizing the use of resources. All this translates into cost reduction for the company.
There are manual and technological productivity measurement tools, your choice will depend on the size of the equipment you want to measure and the possible integration that can be generated with other systems. Labor Management System (LMS) or Workforce Management for example, is an excellent technological tool that allows you to have real-time information on the performance of your employees through the condensation of productivity assessment methodologies.
To implement such a tool, the following methodological steps must be taken into account:
- Identify the main processes. In a distribution center the main operations are the receipt, storage, preparation and dispatch, however, it must be identified which one or which activities have the greatest impact on your organization. This depends on the logistics model that is implemented, it is not the same, a warehouse that only handles pallets to the office, where possibly the main impact may be the receipt, to a warehouse that is only responsible for dispatching units, where preparation should be considered. of orders. Analyze process diagrams, identify key processes using engineering tools, analyze function manuals and identify operation metrics such as number of items, number of receipts, number of units dispatched, among others.
- Establish the activities of the processes. The direct and indirect activities of the processes must be identified. In a distribution center you have the step by step of each process, for example, a receipt, it can be broken down into various activities, taking items, counting, registering LPN, among others. Likewise, indirect activities such as rest times, change of uniform, industrial safety routine, among others, should be established.
- Define standard process times. Once the activities have been identified, it is important to establish a time standard, for which different techniques can be used such as: decomposing the tasks into different activities, identifying a sample size, taking records through timing; analyze the conditions and environments for carrying out the activities defined in the distribution center, taking into account personal fatigue or delay; perform average calculations, carry out pro rata if necessary, and finally as a result, type-times can be set which will be the point of analysis and evaluation of productivity.
- Establish the plant layout. It involves the identification and, if necessary, the reorganization of the physical distribution of the distribution center where the reception and office doors, hallways, storage areas, order preparation areas, among others, are contemplated. Take into account in the design, the importance, frequency and safety of the areas for the definition of CeDi workflows (routes) and spaces. Now, as mentioned at the beginning of this article, due to the current crisis, the distribution of human resources will be essential, taking into account the distances for the safety of its employees, ensuring that the routes and process times are not affected.
- Identify the equipment. It is important to list the equipment that is available in the CeDi, considering the corridor spaces to define equipment restrictions, resources that said equipment will use, capacities and movement times. Keep in mind that a forklift is not the same as an electric forklift in times and movements. Additionally, it will be important to consider handling equipment that ensures quality in product handling. It may be a good idea to start contemplating new voice-assisted product management technologies.
- Identify the staff plant. It is important to know the number of resources that are available for each process, there are multiple time and movement evaluation tools among them, the basic and normally used, list the activities and sub-activities of each process and take time, taking into account account for the most and least qualified operators, and also identify tolerances.
Now, once the methodology is understood, the key to improving productivity in CeDi will be in the integration of the information previously collected, that is, first when defining the main processes with the plant design, the result will be the process flow, likewise, establishing a new distribution between areas will generate a reduction in the dead times per route and will allow establishing the safety distances currently required to care for human resources during these times.
Subsequently, the equipment (machinery) that will allow the flow of materials, products and operators to be more dynamic must be included, as well as the production capacity being increased, since one of the effects of the current crisis is that contemplating the right inventory it is not safe, on the contrary a large security inventory must be kept. It should be noted that it is essential that the staff identify who or who are the most efficient in the processes, often qualitative evaluations are not the best option.
By now you will have built an operating model and the next step will be to pilot test to ensure that the expected savings and increases in productivity are achieved; it is here where the organization methods acquire all their importance that will allow showing a victorious result in these times of crisis, doing “more” with the same resources, faster and now including one more variable, security.
Once the pilot tests are finished, it can be said that the live start is given way, and it is where you can assess whether implementing a methodology such as Labor Management was a good decision. Thus, through the different reports and management indicators that can be viewed in the required periods, the final result of this implementation can be evaluated, where the main advantage for its use will be the almost immediate increase in CeDi productivity. . Improving the performance of employees and physical resources through control and monitoring.
Labor Management sees not only the evaluation after, but also the before, that is, the planning, where weekly activities can be established and the required resources can be defined according to the activities that must actually be carried out, possibly before This implementation if a number of employees were considered to work a shift, the decisions were made in a qualitative and visual way, now they will be quantitative and real.
Many times, it is thought that the main disadvantage for a company to implement it as a practice is the high investments that the implementation of technology implies, but frequently at the end of a project of this type, management manages to demonstrate and compare the return on investment.
Since the focus of the functionalities of a Labor Management system are planning and reporting of work, including calculation of goals and ability to determine operating costs, even by specific clients, associating them directly with orders, you can even motivate the work team through an incentive payment plan.
Therefore, keep in mind that implementing a system or any methodology to measure productivity will allow you to have cost control, increase or maintain the operating margin even in times of crisis, and finally, demonstrate that the final result will be the definition of fair and measurable standards that will increase job performance by retaining the best employees and developing best practices. Given that this implementation not only generates efficiencies immediately, but long-term visibility will be maintained to continue making adjustments as the needs of the company, the market or the environment change.
By: Ana Katerine Benitez, Solution Consultant at Cerca Technology