Gilmore
Says: |
Consider conducting an
internal Labor Management
System to get a large
number of team players
up to speed quickly, and
get questions and concerns
on the table.
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do you say? Send
us your comments here
|
There
are a number of keys to having
a quality Labor Management
System implementation. As
with most supply chain initiatives,
“Change Management”
is critical for success, and
it seems to be especially true
for LMS implementations.
Below,
we take you through some keys
through the lifecycle of a Labor
Management project.
Initial
Education: Consider an Internal
Workshop First
While
there is growing understanding
about Labor Management in Logistics
generally, it is still a new
concept to many companies. Often,
the trigger for accompany to
begin looking at LMS is someone
coming into the company from
outside the organization who
had successful experience with
LMS previously, and makes a
strong case for adoption.
Supply
Chain Digest recommends that
to kick off a project, companies
consider holding a half day
work shop on LMS that includes
logistics executives down to
floor level supervisors. The
purpose is to educate as many
as possible in the organization
about what LMS is and isn’t,
its benefits, and other foundational
information, and to dispel myths
or other misconceptions that
members of the team may hold.
These
workshops could be led by a
knowledgeable internal employee,
especially one that has managed
an LMS project elsewhere. It
would also be relatively easy
to find a consultant or LMS
vendor to participate in the
effort.
The
benefits: you’ll save
months of time educating team
members in the traditional way,
get buy-in much faster, and
get issues on the table that
might be barriers to support.
Get
a Detailed Assessment of Expected
Savings
Receiving
a detailed savings estimate
on the potential for labor management
early on from either a consultant
or Labor Management System solution
provider can be an important
step to galvanize the process
internally.
Company
management will often be surprised
at the magnitude of the potential
productivity gains and labor
savings, and the resulting insight
can drive a much higher level
of executive support and prioritization
of an LMS effort.
In
some cases, the resulting productivity
gains can also help companies
avoid or delay expected capital
projects to add a facility or
expand current ones –
news that will always be well
received by company management
and generate considerable support.
Clearly
Articulate Goals Internally
It
is important to determine what
you really trying to achieve
as a result of the LMS implementation.
Is it a specific amount of hard
labor cost savings? Over what
period of time? Or is the focus
more on improving throughput
within existing cost structures?
Avoid capital expenditures?
It’s
important to be very clear on
these goals at all levels, especially
since in some scenarios reduction
in head count may be involved
(though with the level of labor
turnover in most DCs that shouldn’t
be an issue).
Still,
one 3PL that has implemented
LMS made it very clear to its
DC managers that if the LMS
showed overstaffing in a facility
or area, that headcount would
need to be reduced, or the project
couldn’t be cost justified.
Fuzziness
about goals and expectations
will lead to problems down the
road.
Involve
Floor Level Associates and Supervisors
Early On
As
the LMS project begins, it is
absolutely critical to get the
involvement of both operators
and supervisors very early on
in the project, not just managers
and IEs.
Companies
should clearly want to avoid
the impression that the LMS
is being dictated down from
on high. As with any program,
if those affected most feel
that have been participants
in the process from the start,
their support down the road
is much more likely. Finally,
supervisors and operators almost
invariably have excellent ideas
about how productivity can be
increased, such as by improving
the methods used.
Focus
on the Role and Training of
Supervisors
With
the implementation of LMS, no
job changes more dramatically
than that of front line supervisor.
Most
have to learn a whole new way
of managing. First, they need
to learn to use the information
and reporting from LMS software
rather than subjective observation
as the primary mean to assess
employee performance.
Second,
supervisors need to understand
in detail the best methods for
each process, and to learn how
to effectively “coach”
employees that are not meeting
standards appropriately.
The
reality is that in almost all
cases there are some supervisors
who cannot make the transition.
But the success of the overall
project will be enormously enhanced
by focusing intently on the
role of supervisor and providing
the right level of training
and support to them.
Determine
How You Want to Roll Out LMS
by Function and Facility
If
you have a multi-DC logistics
network, you will have to make
some decisions about how you
want to roll out LMS capabilities.
For example, should you pick
as the pilot DC to be the one
you think will be the easiest,
or the one with the largest
savings potential? Should you
roll out one function, such
as order picking, to all DCs,
then repeat that approach for
other processes? Or should you
do every process in the first
DC before moving on to the next?
There
are no right answers to these
questions, but it is important
to think them through in detail.
SCDigest believes overall themajority
of companies select for the
first install a DC where they
believe the DC Manager is fully
behind the initiative and is
one of the best facility managers.
The majority also tends to do
most functions in a given DC
first before moving to a second,
but we’ve seen companies
with enormous opportunities
in picking and replenishment
apply LMS to that process in
sequential DCs first to capture
the most savings early on, then
go back to other functions.
Bake
Supervisor Duties into Their
Performance Expectations
Following
from the previous tip, the most
companies most successful with
LMS are those that set clear
new expectation for supervisors,
and use that as a basis for
their own evaluations.
For
example, you might require supervisors
to conduct a set number of employee
observations per week/month
to evaluate whether operators
are following the defined best
methods. You might also require
supervisors to conduct and document
their coaching activities either
overall, or for employees falling
below some specific amount of
standard over a period of time.
Work
Hard to Install Confidence that
the Data is Right
Nothing
will harm the success of the
new system than if operators
(and supervisors) don’t
have confidence that the data
is accurate and performance
is not being measured effectively.
This means companies should
put a lot of effort into explaining
how the “black box”
of the standards calculator
works, well prepare supervisors
to answer operator questions,
and look hard on go live to
ensure themeasures are in fact
accurate.
Watch
Closely for Performance Outliers
Upon
go live and on an on-going basis
thereafter, it is important
to review data relative to performance
against standard to look for
outliers on both the plus and
minus side that may signal the
goal time calculations need
to be reworked.
Despite
the best engineering effort,
it is quite common for calculations
or algorithms to be off in the
first few weeks of go-live for
a process or area. In some cases,
this may be obvious early on,
but in other cases it may take
10-12 weeks to determine there
is an issue. If in that time
employees seem to be achieving
more than plus or minus 5% of
standard on a consistent basis,
it may signal the need for review.
In some cases, the actual performance
may be even more off expectations.
LMS
users need to monitor this even
after the initial deployment
is fine tuned. Especially in
large DC networks, many things
can change at an individual
facility, from storage mode
changes to adding new material
handling vehicles to software/process
changes, etc.Any of these can
have an impact on the standard,
but often companies don’t
immediately make the change,
or don’t do so optimally.
Pay attention to the data to
see when achievement starts
to drift one way or the other.
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