Crawl-Walk-Run to Labor Management
Labor Management System (LMS) implementations are often considered a technical challenge. Often overlooked, however, is the cultural change component that requires a patient, phased implementation approach. LMS implementations require IT integration and engineering effort to ‘go-live’, but what sets them apart from other technology enablers is that they are truly a people-centric program focused on your most important asset – your workforce. To achieve long-term, sustained success we typically advise companies follow a crawl – walk – run strategy for their labor management journey.
The crawl phase is all about the basics. Many core operational practices can be developed or updated well in advance of going “live” with an LMS. One such example that many companies miss, is to prepare the workplace and standardize work methods. This is where time tested Lean approaches such as workplace organization (5-S) and standardized work methods can yield significant improvements; often in the range of 5-15% improvement. The largest intangible benefit is that by engaging the workforce and physically improving the workplace and work methods, the culture begins to change. This paves the way for positive change and develops momentum for a successful labor management adoption.
Once the foundation is in place, goals and expectations need to be established to track progress. A simple way to start this process is to develop “Reasonable Expectations” (RE). An RE is an expression of work output in units of measure per hour (e.g. cases per hour, units per hour, or pallets per hour). The major benefit of REs is that they are easy for managers, supervisors and associates to understand.
Once Reasonable Expectations are determined and understood by supervision, employees can begin to be held accountable. Implementing initial REs allows supervisors to build proficiency in holding employees accountable to more specific output expectations. Supervision should start by focusing on observing compliance to standard work methods, as opposed to immediately focusing on a number. This coaching shows employees that supervision is committed to their success and builds a deeper level of trust and engagement.
After employees are making improvements through adherence to standard work methods and performance feedback, the REs can be used to build simple staffing models to better predict the requirements of the business. Many times, this is as far as many organizations need to go.
Companies that have properly prepared themselves through the crawl – walk phase are positioned to take the next step in the journey by utilizing an LMS technology solution for improved planning and reporting. Though, it should not be taken lightly as many companies struggle, and even stop mid-implementation due to underestimating the technical and cultural challenges. Careful planning, cross-functional involvement and project management are essential to ensure a successful implementation.
In this phase where technology is introduced, transparent communication is critical for complete buy in. Everyone impacted should have regular touch points and be brought along through the project for a smooth implementation. To achieve fair and accurate individual performance expectations, Engineered Labor Standards (ELS) are typically developed and travel is configured in the LMS. This allows the LMS to dynamically track the accurately credit an individual associate for the work that they complete. Associates should be actively engaged in this development process so they understand what is included in their performance expectation.
A key component of the implementation is to thoroughly test and validate the system results prior to going live. The validation process should include the operations team to transfer knowledge of how the system is structured. This ensures they understand how the system generates performance and the accuracy of the results. A rushed implementation that does not thoroughly test the LMS and include the operations team in the process risks losing complete confidence of the standards and reports.
Lastly, Supervision must be trained on providing effective performance coaching conversations. Rather than simply letting someone know they are not meeting the expectation, individual performance management coaching helps associates understand the specific reasons for not meeting performance expectations and, more importantly, how to improve. When performed correctly, coaching is the key to improving overall performance.
Labor Management System implementations can result in an improved, fair and equitable work environment, lower turnover, and productivity increases of 15-30%. These results are not automatic and require investments of time and money to achieve savings. Think of a LMS like a gym membership – you only get out of it what you put into it. If you want to positively change the culture and achieve long term success, you need to develop a roadmap to reach your goals – a roadmap that goes from crawl to walk to run.