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Your business is growing, and you are challenged to find a 15% increase in units per person-hour in your distribution center to meet the demand. After reviewing your KPI reports, you notice that year-over-year results display consistency in units per person-hour and throughput run rates. This has you conclude you are operating at capacity.
As you ponder your options, you determine that automation is how you can meet the challenge. Fortunately, you will be attending the upcoming trade show and will get a look at solutions that may fit your needs. As you walk down the aisles, you see an abundance of options. The AMR’s wiz-by, sortation units above, robotic pick and place arms, ASRS, the options are endless.
You return home to an inbox full of e-mails from vendors ready to help. After you return the data requests and have the NDAs signed, solutions with estimates start to arrive. You are encouraged when you recognize the solutions provided can achieve the productivity increases you need.
Unfortunately, the price tags and lead times do not line up with your timeline or budget. Therefore, it may be necessary to consider alternative solutions.
What Connors Group suggests is an often-overlooked option because organizations believe they have maxed their current state capacity. However, business requirements can change over time. The expansion of E-commerce, changing order profiles, SKU proliferation, and omnichannel require us to reevaluate our current distribution workflows. What worked under previous conditions may be less effective under present conditions. A proper distribution center assessment will help uncover these hidden opportunities. Reviewing physical and systemic processes and analyzing historical data can reveal substantial opportunities for improving productivity and throughput to achieve your goal.
A key consideration should be how we determine productivity expectations for our Team Members. A well-engineered distribution center will evaluate the best method to achieve each task by reducing touches, changing sequences, eliminating nonvalue-added work, and will employ engineered labor standards. Under qualified supervision, properly developed engineered labor standards can improve productivity by 10-20%. In addition, attaching incentive pay to associate performance can yield an additional 10-15% productivity gain.
As impressive as that sounds, achieving those results will require change management to ensure success and sustainability. The impact of sound-engineered labor standards goes beyond understanding how your associates perform and labor staffing models. Initially, it determines your baseline and quantifies your performance gap. From there, you develop your roadmap to close the gap. Then, as you experience positive results from your efforts, you fuel the continuous improvement cycle crucial to sustained success.
A byproduct of effectively managing in an engineered labor standard environment is gaining the skill set and process knowledge required to navigate automation solutions successfully. The crawl, walk, run implementation approach can deliver positive, sustainable results. Automation that does not meet expectations often occurs due to running before we know how to walk. Employing engineered labor standards in a distribution environment can take you through each phase of crawl, walk, run and lay the foundation for a successful automation implementation when you are ready to fly.
To discuss your current state or schedule a distribution center assessment, visit connorsllc.com or call Connors Group at (800) 813 – 7028.
