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TRANSCRIPT
© 2014 MHI®
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sound recordings of seminar sessions. All rights reserved.
Sponsored by:
Presented by:
Peter Schnorbach
Senior Director, Product Management
Manhattan Associates
Labor
Management: There’s More Than
One “Right Approach”
NOTE: The use of
the following opening
title slide is
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Copyright 2013 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Agenda
• The Various Approaches to LMS
• LMS Approaches in Detail
• From Time Tracking to Incentive Pay
• Emerging Trends in LMS
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Copyright 2013 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Pay based on
performance
against engineered
standards, quality,
and safety metrics.
The Various Approaches to LMS
Track discrete
elements against
actual
performance of
each individual
against the
engineered
standard.
… and
compare
against
reasonable
static
standards.
Turn it on and
track what is
going on…
Time Tracking
& Throughput
Reasonable
Expectancies
Engineered Labor
Standards
Incentive Based
Pay and other
Advanced
Functionalities
Effort Benefit
4
Copyright 2013 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Agenda
• The Various Approaches to LMS
• LMS Approaches in Detail
• From Time Tracking to Incentive Pay
• Emerging Trends in LMS
5
Copyright 2013 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Time Tracking and Throughput - Effort
Effort • Least amount of effort required among the 4 different approaches.
• Requires an IT system rollout. Need to consider hardware
procurement , administration staff and the typical IT project phases.
Also need to consider if hosting is an option.
• A change management and training plan needs to be developed.
The amount of effort can vary depending on project goals. Sessions
can include Managing LMS Output/Reports, Coaching Employees and
LMS 101.
• Staffing to rollout and maintain the LMS
• 3 – 5 month is a typical project duration. IT tasks
cover most of the work.
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Time Tracking and Throughput – Benefits
Provide Real Time Measurement and Reporting - Allow for real time visualization of
utilization and throughput metric:
• Review Direct vs. Indirect Labor Thresholds and Establish Benchmarks
• Focus on Time Utilization (reduction of Approved and Unapproved Time)
Labor Productivity Improvements
• 10% Labor Productivity Increase
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Copyright 2013 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Reasonable Expectancies – Effort
Effort • Change Management and Training:
o Identify Job Function Best Practices and document into Standard
Operating Procedures (SOPs) inclusive of system interactions
o Train Supervisors and Associates on the best practices though the use of
video and on-the-floor time
o Conduct on the floor observations to ensure adherence to SOPs and to
provide real-time feedback to Associates
o Moderate amount of effort compared to the 4 different approaches.
• IT System Rollout: Increased design, configuration, testing and go-live
complexities. Higher IT hardware expenses to support.
• Building Reasonable Expectancies: Increased staffing to support
Reasonable Expectancies (RE’s)
• 4 – 6 month project duration. IT, Change
Management and RE’s cover most of the work.
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Copyright 2013 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Reasonable Expectancies – Benefits
Benefits • Developed, Implemented, and Coached Best Practices: Identify,
document, and train supervisors and users on operational best practices with
each job function on the floor.
• Foundation Created for ELS: RE’s can be a stepping stone to Engineered
Labor Standards.
• Increased Utilization of LMS system: More bang for your buck.
• Labor Productivity Improvements: 15% labor productivity increase.
“Make All Associates Better”
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Copyright 2013 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Team Standards
• Account and Measure
Associates on Team
Supported Operations – Incorporate those
Associates into the labor
program who do not
utilize the WMS
Reflective Standards
• Account and Measure
Associates in Support
Roles – Account for the time of all
Associates in the
warehouse
Training Curves
• Account and Measure
Associate Training – Identify an Associate who
requires additional training
and/or is fully trained by job
function.
Reasonable Expectancies – Benefits
Dynamic PF&D
• Adjust PF&D via
Exceeded Threshold: – Accumulated Weight
– Accumulated Work
Hours
– Specific time of day
Quality Measurement
• Integrate accurate
overall measurement of
Associate and team
performance
Safety Measurement
• Integrate safety
measurement of
Associate and team
performance
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Engineered Labor Standards - Effort
Effort • Significantly more effort required than RE’s.
• IT System Rollout: Considerations for High Availability and Disaster Recovery
environments – Higher IT hardware expenses.
• Standards Building and Validations: Industrial Engineering team to build and
maintain standards.
• Change Management, Change Management, Change Management…
• 6 – 10 month project duration. IT, CM, and ELS cover most of the work.
Definition of 100% of Standard:
The level of performance achievable by a trained worker,
working at a reasonable, safe pace following
a standardized set of procedures.
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Copyright 2013 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Standards Maintenance
Engineered Labor Standards
Following the completion of an LM project, the
business will be responsible for maintaining the
integrity of the standard time values.
The standard values calculated should not
warrant any change unless one of the following
occurs:
• SOP change
• Layout change (Although this is usually only an XYZ change)
• Equipment change
• Business change (ex: significant product switch from heavy
product to light product)
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Copyright 2013 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Change Management – Sponsorship
• Demonstrate leadership and set the example
• Every level aligned in purpose and communication:
– VPs → Directors → Managers → Supervisors → Associates
– If sponsorship does not cascade through each level, the change
will not be successful with Associates.
– Avoid “black holes”.
• Supervisor role is the most difficult and important:
– Must lead the change at the Associate level, while absorbing a
significant change in their own job.
“Cascading Sponsorship”
Everyone will have their doubts at some point –
raise them in the appropriate forum so that they
can be addressed.
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Copyright 2013 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Change Management – Training
Day Date Technical Training Soft Skills Training Duration LM
Ch
am
pio
n
Cli
en
t IT
Su
perv
iso
r
En
gin
eer
Lead
Asso
c
Man
hatt
an
HR
Su
perv
iso
rs
Oth
er
Notes
LM Install 60 min X Y
Installation of LM application and review of LM
installation instructions, DB maintenance processes
and application installation procedure.
Configuration Training 3 Days X X Y
Review of all Labor Management and WM
configuration requirements and configuration of LM
test environment.
Location Mapping and Machine
Timings120 min X X Y
UMT Software Setup and
Configuration60 min X X Y
Engineering Standards 101 60 min X X X X Y
60 min X Communication, not Training
Change Management (Your Role in LM) 45 min X X X X YHow the supervisor and lead roles change with DCP
in place
SOP Observation Training How to Teach Associates 90 min X X X X Y YTrain-the-trainer for supervisors and leads (tell,
show, do, review)
Practicing to Teach SOP Training to
Associates60 min X X X X Y Y Practice and applying learning in safe environment
SOP Training 30 min X X X Y By Functional Area
Holding Associates Accountable for
Performance90 min X X X X Y
Basic LM Navigation and
Procedures90 min X X X X Y Y
Engineered Standards Validation 60 Min X
Engineering Standards 201 Standard Validation Training 90 min X X X X Y Y201 Prepares Supervisors for
Go-Live; Run By Dept aligned with Go=Live dates
Engineering Standards 101 30 min X X X Y By Functional Area
Labor Productivity Measurement
and Reports
Preparation for Go-Live:
Communicating With & Observing
Associates
90 min X X X X Y Y
Go-Live 30 min X X X Y By Functional Area
Managing Labor Using LM Output 90 min X X X X Y YEnd of 1st Go-Live week; applies what was learned in
Reporting Review
Handling Conflict 45 min X X Y
* = Timing to be aligned with introduction of new performance discipline process
Leader(s) of Training
Insert Client
Logo Here
Formal Communication Update (Recommended)
LM Implementation Training Plan
Training Topic Audience
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Change Management – Communication
Engineered
Standards General
Information
Engineered
Standards Best
Practices and Tips
for Success
HR Related
Disciplinary
Information and
FAQs
Associate EP%
Reporting Copies of
Each SOP
Sample Communication Board
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Change Management – Branding The Program
F.R.O.G. Fair Reporting Of Goals
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Engineered Labor Standards – Benefits
Units 15 25 10
Locations 5 1 10
Cartons 6 3 5
Replenishment Picking Receiving
Assoc 1 Assoc 2 Assoc 3
Distribution
Standard 85% 70% 110%
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• Tracks Associate time from clock-in to clock-out via integration with T&A system or LM kiosks
• Work Unit information is integrated to LM and/or entered in via kiosks
• Track ANY type of job in the system – On Standard, Off Standard, Cleaning, Maintenance, etc
• Monitors Direct Labor vs. Indirect Labor
• Records Actual vs. Estimated task time
• Reports on Labor Performance, Efficiency, Quality
• 30% Labor Productivity Increase
Maximizes Labor Efficiency Through Performance Monitoring
and Reporting
Engineered Labor Standards – Benefits
18
Copyright 2013 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Incentive Based Pay
Effort
• Significantly more effort required compared to ELS.
• IT System Rollout: Increased hardware sizing and
considerations for High Availability and Disaster Recovery
environments – Higher IT hardware expenses.
• Incentive Pay and Advanced Functionalities: Designed to
meet business requirements and within business policies. HR
and executive management participation.
• 8 month – 1.5 year project duration. IT, ELS and
Change Management cover most of the work.
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Copyright 2013 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Incentive Based Pay
• Incentive Based Pay: paying an employee for his/her performance
• The harder the employee works, the more money they will receive
• The slower the employee works, the less money they will receive
• Up to 45% Labor Productivity Increase
• Functional Depth: Best-in-class LMS systems
should include…
• Employee Performance Percent
• On Standard Percent
• Utilization Percent
• Quality Audits
• Safety Incident Rate
• Overtime Incentive Pay
• Trainer, Trainee, Reflective and Team Pay
Benefits
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Copyright 2013 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Advanced Functionalities
Forecast
Schedule
Monitor
Plan
Historical Data
Production Data (WMS)
• Forecast workload and schedule
resources based on historical
information.
• Reduce Indirect, Temporary and
Overtime costs through enhanced
visibility to labor requirements.
• Reduce labor costs through optimized
allocation of resources to work.
• Validate labor capacity meets projected
throughput requirements.
• Proactively add or eliminate workforce
based on cost, qualifications and
performance.
• Manage actual workload based on real
time production information.
• Monitor progress of work against actual
performance.
• Modify labor allocation in real time
based on actual performance.
• Identify production bottlenecks through
real time visibility to changes in
performance levels, production orders or
labor shortages.
Planning Workflow Best In Class
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Copyright 2013 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Agenda
• The Various Approaches to LMS
• LMS Approaches in Detail
• From Time Tracking to Incentive Pay
• Emerging Trends in LMS
22
Copyright 2013 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
4 Levels of Labor Measurement
• Incentive Pay based on Labor
Standards » Pay them based on performance
against engineered standards, quality,
and safety metrics
• Engineered Labor Standards » Track discrete elements against
actual performance of each individual
against the engineered standard
• Reasonable Expectancies » Turn it on and track what is going on
» And compare against reasonable
static standards
• Historical Averages » Turn it on and track what is going on
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Historical Average
Reasonable
Expectancy
Engineered/ Discrete
Pay Incentive
Productivity Improvement
Time Utilization Process Improvement Activity Pace
Single Element
Standard
Multi Element
Standard
45 %
30 %
15 %
10 %
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The Path to Engineered Standards Can Be Gradual
• “Crawl, Walk, Run” approach = smaller effort, less savings
• Engineered Standards up front = faster speed to benefit
Activity Reporting
(standard wms
function)
Reasonable
Expectancy
Forecasting, Planning
and Monitoring
Engineered
labor Standards
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Copyright 2013 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Agenda
• The Various Approaches to LMS
• LMS Approaches in Detail
• From Time Tracking to Incentive Pay
• Emerging Trends in LMS
25
Copyright 2013 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Engagement Techniques of the 21st Century
Informational flow with minimum
hardware or application restrictions.
Information available anywhere and
anytime.
Integration of Quantitative and
Qualitative information.
Gameification capabilities for engaging
employees.
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Copyright 2013 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
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Copyright 2013 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
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Copyright 2013 Manhattan Associates, Incorporated. Strictly Confidential. Not for Distribution.
Questions?
Visit us at booth 4513
Peter Schnorbach
Senior Director, Product Management
Manhattan Associates