Today’s savvy consumers are becoming hugely demanding. The growth of the internet, technology and the ability to order anything, any time, any place is having a huge impact across the retail sector. As a consequence, the warehouse is taking centre stage in an increasingly dynamic supply chain. Those who work within the logistics and warehouse environment are finding themselves under pressure as they continue to struggle to meet the ever-changing demands of their customers in a physically demanding environment.
Consequently, warehouse staff can find themselves in roles that can be hugely rewarding but also highly pressured when using outdated systems that fall short for today’s retailers.
Historically, labour management systems have offered a very basic approach to managing the performance of the warehouse to ensure it met its goals, whilst incentivising staff to achieve goals that mirrored these performance levels. This meant that businesses have often implemented performance standards such as straight cases or pallets moved per hour. These generic rates can give a standard time for a specific task, but importantly do not take travelling time, case weights, or other factors into account.
As an example: Operative A picks 200 cases and Operative B picks 50 cases. Who is more productive? The initial answer would be Operative A, however this level of information makes it impossible to say… Operative A was picking packs of yoghurts and Operative B was picking sacks of potatoes. Now we start to consider the make-up of the work task and understand that each work assignment should be measured individually to give a true performance measurement.
This unfairness using generic performance rates not only undervalues the performance of individual operators who could be deemed ‘slower’ but the management of productivity is difficult as leaders have to account for these nuances by averaging measurement over a period of time, which means any issues cannot be flagged until some months into the future. Furthermore, any analysis takes some time to reset any parameters and tweak the generic rate whilst the employees would be continuing to be measured against pick rates that weren’t relevant to their tasks. The consequence from a morale and business perspective is dire.
In my experience, labour systems are generally accepted by the workforce, especially if adopted as part of individual incentive schemes. They tend to be more accurate than traditional forms of measurement. Our own system allows pickers to measure their own performance against their set targets at the end of each assignment or shift period. This makes it very easy for individual workers to gain maximum benefit from incentive and bonus schemes.
Regaining control with current technology Today, the increase in the adoption of warehouse management technology is allowing warehouses to regain more automated control of their logistics operation. As the trend for more frequent, faster deliveries gathers pace organisations are relying on technology to not only manage the flow of goods through their warehouses, but incentivise and manage their labour operation to achieve peak performance. Operators in the warehouse and logistic environments are now reaping the rewards of technology that offers a fair approach to achieving goals. They are no longer victim to generic work rates, but can have performance goals set against realistic performance values for specific tasks, achieve bonuses based on outcomes and feel they offer a valuable contribution to the running of the operation.
Retailers now expect core WMS functionality to include a suite of integrated applications including labour management, all running off a single database. The beauty of an integrated labour management system is that it produces all the statistics and reporting requirements needed to optimise scheduling, set performance expectations and manage the work load more efficiently across the workforce. An integrated system is dynamic, so that when an order is released within the system all labour requirements are measured and calculated automatically. This allows warehouse managers to download live reports whilst monitoring activity and making appropriate adaptions to workforce allocation throughout the day.
Musgrave Retail Partners integrates latest labour management technology Ireland based retailer Musgrave Retail Partners Limited is seeing the value of an integrated labour management functionality after implementing the WCS Labour Management module as part of its WMS system supplied by WCS. Brendan Fitzgerald from Musgrave Retail Partners commented: “The labour management module within our WMS has delivered significant benefits for us and allowed us to analyse productivity in a different way. Before our use of the labour management functionality, measurement of productivity was based on metrics such as cases per hour assembly and tasks per hour for fork activity.
These metrics gave us some basic performance indicators but failed to account for factors such as hit rate, volume and required work effort. Workers could earn additional bonus payments when picking large orders or during periods of increased volume, without any increase in work effort.”
He continued, “Any good productivity bonus scheme should be able to reward extra effort and the Labour Management module we integrated into our WMS system helps us achieve this.”
The company no longer has to wait for remeasured standards to realise benefits from warehouse layout changes for example.
Previous standards had been based on averages and standards only changed when a remeasure occurred. Using the Labour Management functionality each assignment is now based on actual parameters such as distance travelled and where travel is decreased through better layout, the benefit is immediately realised through decreased standard times.
Fitzgerald concluded: “Labour management has assisted in delivering significant productivity improvements and provided us with more productivity data than was available previously. This means we have meaningful discussions with under performers as well as recognise and reward individuals who have demonstrated additional work effort and achieve high performance.”
Ultimately, the pace of change is creating innovation in technology that offers businesses across the industry an opportunity to manage performance, offer incentives to employees to motivate and critically improve productivity. As competition in the industry heats up, retailers need to utilise technology available to them to continue to succeed and meet the increasing demands of the consumer.
By Ian Maughan, Supply Chain Specialist, Worldwide Chain Stores (WCS).