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Creating Successful Engineered Labor Standards

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How to Create Successful Engineered Labor Standards

With increased competition, it’s more vital than ever for companies to have accurate and timely customer service, and having a high-performance workforce can help. By following the five steps below, businesses can implement engineered labor standards (ELS) successfully 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 engineered labor standard implementation is to review existing processes. This process 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.

It is necessary to eliminate any unnecessary NVA steps in the process and also beneficial to 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, it should be sent to the management team in charge of the ELS implementation.

2. Create Elements

After the NVA steps are eliminated and the actions list is complete, the next step would be 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.

Analyzing a process into elements leads to the next step of collecting data. Keep it as simple as possible. An example of elements necessary for picking full case items include:

  1. Travel to location
  2. Scan source location
  3. Verify SKU/enter F3 on radio frequency (RF) device
  4. Pick item from location/place item to destination
  5. Enter quantity in RF device

3. Collection of Data/Time Study

Data for a labor standard is collected by conducting a time study, which is determining the amount of time it takes each of the elements to be completed.

A more efficient and reliable process is using 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 completed, the data is transferred back to your PC in the form of an Excel spreadsheet, making it easier to perform data analyses or calculations.

4. Data Analysis/Data Validation from Time Study

This step is the most critical step in creating an engineered labor standard. 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 is done to ensure that 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.

5. Rollout ELS / Post-Labor Standards Implementation

The ELS should be rolled out to the management team and associates once it has been created and finalized. The rollout is a review of all the steps that were involved on creating the standard.

After the rollout is complete, it is important to get associate compliance for the labor standard. Managers will then run observations to prove that each associate is able to 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.

To create a successful engineered labor standard, combine the use of pre-determined time systems, time and motion studies, and work sampling to evaluate and measure labor activities. This results in time and money savings, reduced implementation costs and the making of exceedingly dependable standards.

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