Robust Production Management (RPM) Module 10: Small Warehouse Case Study

Copyright © 2005 Metrilogics, LLC. All rights reserved.
Robust Production Management
Metrilogics
Front-line controls for bottom-line savings.
TM
SM
Module 10:
Small Warehouse Case Study
By Lance Latham
Senior Managing Partner

Performance Management Structure and Concepts:
Raw Performance Data by Individual Team Member
v Paid Time Off (Indirect Hrs.): Non-Chargeable Down Time, Vacation, Holiday,
Personal, Funeral/Disability
v Lost Time (Indirect Hrs.): Meetings, Projects, Running Reports, Ticket Closing,
Supervision, Training, Pallet Replenishment, Inventory Management, Inventory Consolidate, Other
Exception Time
v Completed direct task volumes: Receiving Putaways,
Pick/Pack Lines, Logistics Replenishment Cartons, Logistics Cycle
Count Locations, Shipping Cartons Packages
v Establishing hourly capacity task rates
Quality Work
(Earned
Credit Hrs.)
v Quality Data: Tracked thru various methods for Receiving, Pick/Pack and Shipping; not always
tracked to individual team members. Average across all data sources = approx. 99+%
v Work Time (Direct Hrs.):
Time spent completing task work*
v Loaded Hourly Salary: Includes base compensation + benefits + ER taxes
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Establishing Direct Task Capacity Rates (cont.)
In addition to the hands-on processing time incorporated into a given task’s
hourly capacity rate, other business-related time is also included:
v Task Preparation Time: Opening and reviewing relevant emails and reports; creating rows
and fields in tracking databases; printing and retrieving all necessary paperwork; checking out
equipment, retrieving necessary supplies (barcode labels, batteries, pens, skids, rolls of brown packing
paper, etc.); identifying and confirming replenishment needs by customer and warehouse location.
v Unavoidable Business-Related Interruption Time: Equipment glitches; working with
delivery drivers re. receipt of damaged material; asking / answering questions involving Warehouse
team members; supervisors and Client Services (verbally, via email or by phone); problem solving re.
location issues and / or material versions being picked or shipped.
v Work Station Clean-Up, Maintenance and Reporting Time: Disposing of excess
shrink wrap / packaging / erroneous labels; recycling workstation supplies; re-stacking empty skids
away from main floor area; keying data into systems (order info., time tracking, database fields,
confirmation emails to supervisors and Client Services).
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Analysis (cont.): Warehouse Performance* for Base Period
Spare Capacity
= Primary Area
of Opportunity
Secondary Area
of Opportunity
Associated
Opportunity
*Analysis per Metrilogics ‘White Box’ system, based on Warehouse time, task volume and payroll data for the 10/1/09 – 9/30/10 base period.
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Analysis (cont.):
Daily Receiving Putaway Units and Hours During Base Period
U
n
i
t
s
H
o
u
r
s
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Analysis (cont.):
Daily Logistics Cycle Count Locations and Hours During Base Period
U
n
i
t
s
H
o
u
r
s
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2.) Distribute base period work volume across fewer Warehouse team members.
Recommendations:
Increasing Production Agility to Close Costly Performance “Gaps”
3.) Ensure adequate level of skills training across key tasks to maximize flexibility
and responsiveness of Warehouse team.
4.) Increase the level of management planning and coordination day by day and
hour by hour, via focused short interval scheduling techniques.
1.) Communicate hourly capacity rates for the 5 primary Warehouse activities,
and encourage Warehouse team members to achieve them.
5.) Provide weekly performance feedback to each Warehouse team member.
6.) Reward Warehouse team members for performance improvements and goal
achievements by implementing / reinstating a performance-based incentive
program.
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Recommendation #2:
Distribute Work Volume Across Fewer Warehouse Team Members
Before
FTE = 17.41
After
16,579.45 (61.34%)
1,559.59 (5.77%)
764.05 (Fixed)
4,201.04 (Variable)
4,965.09 (18.37%)
3,923.81 (14.52%)
27,027.94
Annual hours
by 10,569.53
(28.11%)
FTE = 12.99
= a need for approx.
13 FTE’s
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Recommendation #5:
Provide Weekly Performance Feedback to Warehouse Team Members
Goal: Reinforce performance focus among Warehouse team members at the individual
level.
v Management to provide one-on-one feedback to individual team members on a weekly basis re.:
o Quality / accuracy % for the week and year-to-date
o Productivity % for the week and year-to-date
o Cross-training skills changes for the week and year-to-date
v Management and team members to discuss performance successes achieved - or issues
encountered - for the most-recently concluded week.
v Management and team members to jointly make action plans for the following week, aimed at
improving quality/accuracy and productivity, as well as taking advantage of any cross-training
opportunities.*
v Implement a performance management system to facilitate ease of performance review and
communication between Warehouse management and team members.
* Subject to availability of anticipated work demand and Warehouse team attendance levels.
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Manager
1st Shift Supv.
2nd Shift
Team Lead
Pick/Pack
Team Lead
Shipping
Team Lead
1
Logistics
1
Shipper
2
Receivers
4
Pickers
Post Project Benefits (cont.): Proposed Warehouse Org. Chart
Total proposed FTE complement = 13
4 from current 17 FTE level
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Robust Production Management (RPM) Module 10: Small Warehouse Case Study