In the supply chain industry reducing costs while increasing customer satisfaction is an ability that can ultimately determine success. Because labor is 60% – 65% of operating cost, this is typically an area of interest when it comes time to evaluate where costs can be eliminated or reduced. Strictly monitoring and adjusting labor standards ultimately leads to more efficient decision making by the management team. These decisions can relate to anything from warehouse setup to departmental staffing levels.
There are six easy steps to follow to develop effective warehouse labor productivity standards for your facility.
The six steps include:
1. Analyze
2. Accountability
3. Communicate
4. Productivity
5. Support
6. Initiate
Step One – initiate – includes observing how processes are currently done and creating a new activity process to eliminate any inefficiencies that may exist.
Step Two – accountability – focuses on creating a culture that adapts to change easily and effectively. By making staff aware of their role in the process and explaining your expectations they will more easily understand what level of performance is expected.
Step Three – Communicate – is partnered with the previous step. Communicating changes, expectations and even benefits will simplify the process by putting everyone on the same page.
Step Four – Productivity – is where labor standards are determined and associated to compensation. Step Five – Support – is where technology plays a major role.
The use of a WMS will drive the behavioral changes through custom workflows developed to align with your activity process expectations. Functionality within the WMS that can be customized can include picking, packing, loading, quality control, barcode usage and much more. Labor reporting within the WMS is a useful tool to view activity in real time to see if goals are being met and what changes can be made. Step Six – Initiate – is where executive buy – in must occur. For the improvement process to be successful it is imperative that all members of management are aware of the expectations and are ready to award staff for increases in productivity.
To learn more about this topic or WMS please contact me at marketing@datexcorp.com 800-933-2839 ext. 243 or visit the website www.datexcorp.com . Datex provides flexible, reliable supply chain solutions to make companies more profitable. Contact us today.
Reduce Warehouse Labor Costs to Increase Profitability
Typically, the largest single cost component of warehouse total operating cost is labor. Although hourly labor rates have increased over the past few years, overall work productivity has tended to remain somewhat stagnant. With the shortage of supply chain workers...