The supply chain is becoming an increasingly demanding industry to work in. Whether you’re managing warehouse operations, working on the distribution center (DC) floor or driving a truck, standards for the speed and quality of work are rapidly increasing.
To continue meeting expectations and maintain competitive customer service levels, businesses need rigorous engineered labor standards.
What Are Engineered Labor Standards?
Engineered labor standards (ELS) refer to a method of determining the amount of time required to perform a specific task. ELS should account for all elements involved in the task process, including the physical demands of the job, the equipment and tools used and the necessary skills and training of the worker.
The goal of engineered labor standards is to provide a scientifically based, objective measure of the time required to perform a task to improve productivity and reduce waste.
What Are the Benefits of Engineered Labor Standards?
Engineered labor standards’ use of time and motion studies to establish precise performance benchmarks improves workforce productivity, efficiency and resource allocation, resulting in reduced costs and enhanced workforce management.
Additionally, ELS foster a culture of continuous improvement and accountability, enabling businesses to optimize operations and achieve higher competitiveness in their markets.
How to Create Successful Engineered Labor Standards
By following the steps below, businesses can successfully implement engineered labor standards and create a high-performance workforce that will result in shorter timelines, reduced implementation costs and a foundation for dependable standards.
1. Streamline Existing Processes
The best way to begin an ELS implementation is to review existing processes. This is usually done by formal observation to gain an understanding of the interaction between warehouse systems and processes. During documentation, distinguish between value-added (VA) and non-value-added (NVA) steps in the process.
Eliminate any unnecessary NVA steps in the process and create an actions list for every process. This list consists of any issue that could prevent associates from performing with best practices. After the actions list is complete, send it to the management team in charge of the engineered labor standards implementation.
We always recommend using videos to illustrate key steps in the process, as video is a valuable tool for end user training.
2. Create Elements
After eliminating NVA steps and completing the actions list, the next step is to create elements for the ELS implementation. Elements are small work-steps in every process that can be accurately and consistently calculated by means of unit of measure.
When analyzing elements for a process, keep it as simple as possible. An example of elements necessary for picking full case items include:
- Travel to location
- Scan source location
- Verify SKU/enter F3 on radio frequency (RF) device
- Pick item from location/place item to destination
- Enter quantity in RF device
Once this is complete, you’ll be ready for the next step, which is to collect data.
3. Collect Data/Time Study
Data for a labor standard is collected by conducting a time study, which determines the amount of time it takes to complete each of the elements.
Rather than trying to complete manual time studies, a more efficient and reliable process is to use time study software. The elements for the process are created when the software is downloaded to a computer, and a compatible version is transferred to a PDA – the device used to conduct time studies. Once the time study is complete, the data is transferred back to your PC in the form of an Excel spreadsheet, making it easier to perform data analyses and calculations.
4. Analyze and Validate Data from Time Study
This is the most critical step in creating engineered labor standards. Time study data will show the number of occurrences and the time across each occurrence for each element.
An important step at this stage is grade factoring, which ensures everyone is at a level playing field across all operations. Time study data is then modified to minimize variation across elements. Another method used to validate standards is to create most models on the current process and compare this with the existing standard.
Once the data is validated, we highly recommend conducting associate education meetings to educate them on how the standards were developed and earn their trust, especially if incentive pay is involved.
5. Rollout ELS/Post-Labor Standards Implementation
Once the ELS has been finalized, it’s time to roll it out to the management team and associates. The rollout is a review of all the steps that were involved in creating the standards.
After the rollout is complete, it’s important to get associate compliance for the labor standard. Managers will then run observations to prove that each associate can meet the average performance expectation.
An additional, optional step in the process would be to develop an incentive program for associates who exceed expectations. Incentives have been shown to increase overall productivity.
Conclusion
To create successful engineered labor standards, combine the use of pre-determined time systems, time and motion studies and work sampling to evaluate and measure labor efficiency and activities. This, paired with productivity measurement, results in time and money savings, reduced implementation costs and the development of exceedingly dependable standards.
enVista offers comprehensive workforce management solutions, focusing on associate training, change management, process improvement and technology adoption to streamline operations and reduce costs. With extensive industry experience, enVista delivers tailored labor management programs that lower costs, increase facility capacity, improve customer service and optimize system use. Additionally, enVista provides labor management system selection and implementation services, using industry-leading applications and our proprietary enCompass™ tool for effective performance monitoring and employee engagement. Partnering with enVista ensures successful project implementation and lasting improvements in labor efficiency.
Learn more about ways to maintain and maximize on your labor performance management program.
