Much of the recent focus on warehouse efficiency has been targeted at reducing labor costs and increasing productivity.
However, with nearly 300,000 consistently open positions in the U.S. manufacturing sector, warehouses facing a skills gap must make the most of the employees they do have. Idle time, while traditionally viewed as an inherent part of warehouse operation, represents a significant obstacle to improved productivity.
Not all idle time is created equally though. Idle time can be a function of supporting operations or a consequence of internal bottlenecks, process failures and other inefficiencies. While idle time at the most efficiently operated warehouses accounts for only a small fraction of distribution labor costs, in warehouses with poor tracking practices it can reach 40-50%. Warehouses lacking a proper procedure for documenting and addressing idle time are hobbled by a competitive disadvantage in their quest for greater competitiveness and efficiency.
One of the greatest hurdles warehouse leaders face when managing idle time is a lack of information. Some warehouses use outdated labor standards that don’t accurately reflect the production time of a given task. Idle time is not a priority because the labor standard itself is so “generous” that there is no motivation or basis to really understand the impact of the idle time.
On the other hand, warehouse associates are often unsure as to what constitutes productive and indirect time. Ironically, this is often the result of warehouse managers themselves not understanding the time reporting standards. Improper time management puts a larger strain on the operation process, especially when tasks are measured via “buckets” of time. Productive and idle time are indistinguishable, and it is impossible for management teams to determine the root of any given bottleneck without more standardized, informed tracking.
Building A Better Process
Regardless of the variables contributing to a warehouse’s excess idle time, the solution remains largely the same: track and analyze – and do both accurately. Warehouses must clearly define idle time buckets as well as a method for recording the time incurred in each bucket. All tasks need to be recorded in detail to aid in the analysis portion and ultimately find the root cause.
It is also important that all idle tasks, even those necessary to support the operation, are documented and accurately tracked. This way, related tasks can be clustered and assessed in groups, helping to pinpoint alternative processes that may minimize idle time even further.
For example, incidents like equipment failures and spills are particularly important, as they can contribute significantly to idle time, and highlight underlying issues within existing operations. Of course, the process of data collection is highly dependent on associates on the floor both understanding and carrying out the recording process. Management teams should work closely with associates in order to ensure clear lines of communication while removing obstacles to the operation process.
Once data on idle time and other processes has been compiled, firms need to appoint a clear authority to analyze the time logs; this responsibility will, in most cases, be performed by a front line supervisor or office clerk. The extra time spent on analysis will reap returns far in excess of their original investment for warehouse efficiency. The goal of time log analysis should be to locate specific vulnerabilities and carve an idle time avoidance strategy; detailed feedback from associates is particularly helpful in this endeavor. Delays in performing a specific task may simply indicate that a process needs to be revisited and updated, but recurring difficulties may be signs of a larger culprit, such as a faulty piece of machinery. By identifying and removing bottlenecks in the production process, warehouses can expect to increase overall productivity.
After an idle time tracking system has been applied, both managers and associates require training to understand the changes. The end-goal of any training program is comprehension, but it is also important to keep incentives in mind. Associates rewarded based on performance will be particularly motivated to reduce idle time, as decreased indirect time translates into increased productivity. Motivation can also be passed down by example. For instance, well-trained supervisors should spend their time overseeing operations from the floor, rather than simply managing from behind a computer screen. The ability to proactively address issues is a sure sign of improvement and integration in the warehouse environment.
Reaching For More Than “Good Enough”
As demand for increased warehouse productivity and decreased labor costs grows, reducing idle time is a necessary step toward realizing a more agile operation. A truly successful effort to reduce idle time is not something to consider as “one off” project, but rather as a method for ongoing improvement that adapts to the realities on the warehouse floor. But policies or machines alone won’t be enough to drive the best results. In the fight to stamp out idle time and its expense, devoting equal attention to processes and people is the smartest approach.
Michael Harris is a Manager within West Monroe Partners’ Workforce Optimization practice. Michael brings over 19 years’ experience in operations management, process improvement, and labor standard creation in both small and large scale distribution facilities. His understanding of both the operation and engineering sides of distribution make him well suited to identify and implement changes to increase efficiency.