Enhancing Labor Management

Labor management is a comprehensive approach that blends software, industrial engineering and change management to enhance logistics productivity. Key components of a successful labor management program include labor standards and expectations, production reporting, manpower planning, associate engagement and incentive-based pay. The secret to labor management success lies in adopting a continuous process improvement mindset tailored to your organizational culture. This involves defining the current state, visualizing the future state, building the solution, executing the plan, providing go-live support and redefining the new “current state” with the new baseline.

Defining the Current State

To define the current state, start with an assessment phase, which should take about 5 to 10% of the project duration. Understand the “why” behind implementing a labor management program by conducting interviews with key personnel, benchmarking against industry peers using historical data and best-in-class standards and identifying opportunities for improvement, categorizing them as short-term (tactical) and long-term (strategic).

Visualizing the Future State

Visualizing the future state also falls within the assessment phase and should take about 5 to 10% of the project duration. Review interview responses to identify common themes and opportunities and develop a risk model for business case development. When developing the risk model for business case development, it’s crucial to consider various factors. These include site selection criteria, current facility performance, openness to change, workforce tenure and previous labor management experience.

Additionally, the model should address required resources such as operations, IT and testing and training. Training and ramp-up considerations, including the time of year, IT blackout periods, peak seasons and concurrent projects are also essential. Financial aspects, such as finance, costs for software and services, funding approval and ROI/IRR requirements, should also be incorporated into the risk model to ensure a comprehensive assessment.

The Build Phase

The build phase is the longest cycle of the project, encompassing about 40 to 50% of the duration. Success in this phase rests on three pillars: integration design, process optimization and industrial engineering.

• Integration Design: Involves data mapping for visibility, ERP/WMS integration, transaction history, time and attendance and automation with RF/Voice.
• Process Optimization: Utilizes lean tools like value stream mapping, spaghetti diagrams and cause and effect diagrams.
• Industrial Engineering: Focuses on developing SOPs for preferred work methods, establishing goals and engineered standards, configuring labor management system (LMS) applications, optimizing travel paths and job codes, generating reports and ramping up associates.

The Execute Phase

The execute phase is critical, taking about 20 to 30% of the project duration. It also relies on three pillars: integration testing, end-user training and go-live preparation.

• Integration Testing: Ensures accurate file transmission, data processing and error logging. Matches physical observations with data, maintains an IT issues log and understands SLA terms.
• End User Training: Covers PWM training for associates and supervisors, associate coaching, LMS application usage, report generation, indirect time entry and labor planning.
• Go-live Preparation: Involves readiness checklists covering operations, training, software, IT, resource needs and issues logs, as well as documenting lessons learned.

The Go-Live Phase

The go-live phase, which marks the commencement of the initial journey, should take about 10-20% of the project duration. If the previous phases were executed well, go-live should be smooth. Staff all shifts with subject matter experts, document lessons learned for future reference and celebrate the achievement.

Redefine: Post Go-Live

Post go-live, the focus shifts to sustaining momentum through continuous associate and supervisor engagement. Implement a formal observation program that evaluates performance levels and new hires. Utilize appreciative inquiry to identify future opportunities and revisit incentive-based pay and previously tabled items for ongoing improvement.

Conclusion: Driving Efficiency in Logistics Operations

By following these steps, you can create a closed-loop process in your labor management program that continuously improves and adapts to your organizational needs, driving productivity and efficiency in logistics operations.

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