Current Trends and Business Challenges in Supply Chain Labor – Part 2: Optimizing the Workforce

Last week, we explored the business challenges and trends in supply chain labor. In part 2, let’s take a deeper look at how companies are addressing those challenges.
Best-In-class supply chains are addressing workforce challenges by taking a comprehensive approach to their labor strategy…

When observing workforce optimization in warehouse and distribution centers, we can typically refer to three areas that comprise the building blocks of effective Employee Engagement.

Experience shows that best-in-class companies take a Crawl – Walk – Run approach to the implementation of workforce optimization strategies. The overall journey typically requires a cultural transformation within an organization, but the benefits outweigh the efforts with improvements in employee engagement, retention and bottom-line results
If we take a closer look at the three areas, here is what’s working:

Lean Warehousing:

  • Process Standardization works because it produces documentation for processes across all shifts, reduces variability, makes training of new employees more effective, increases safety and provides a baseline for continuous improvement.
  • Establishing a Baseline for Measurement is important, because it can reveal how much improvement has occurred through incremental changes.
  • “Walking the Floor” is an ideal way to engage employees in real-time and provide opportunities for coaching and learning.
  • Process Improvement is continuous, effective, necessary and is at the core of Kaizen
  • Recruiting and Hiring Best-Practices are the hallmarks of any successful business with a people-first culture.
  • Eliminating Waste across all aspects of the business enables investment in additional resources.

Workforce Performance:

  • Establishing productivity, quality and safety targets is an effective way to set a reference point for expectations.
  • Engagement and Education is a favorable way to encourage positive behavioral change in employees.
  • Reinforcing desired work habits is a positive way to reiterate the goal of continuous improvement.

Workforce Staffing and Planning:

  • Utilizing Technology to establish Engineered Labor Standards with software products like LaborPro™ is an effective way to better manage ever-changing labor models.
  • Performance Reporting is imperative to highlight the effectiveness or shortcomings of established and agreed upon goals and targets.
  • ROI Analysis confirms that all efforts point to improvement to the bottom-line.

Final take…

The challenges in supply chain labor will continue to evolve, just as trends will continue to change. By Staying nimble and relying on tried and true Lean Principles and Performance Goals, best-in-class companies will not only endure but will also thrive in today’s challenging environment.

Connors Group Introduces Partnership Aimed At Manufacturing Business Improvement

FOR IMMEDIATE RELEASE

Pittsburgh, PA – CONNORS GROUP, a market leader in productivity improvements through labor and process optimization, is pleased to announce a partnership with PRIMA BUSINESS SPECIALISTS of State College and Pittsburgh, PA. This partnership will create a comprehensive offering aimed at identifying and solving manufacturing business problems.

“Our labor and process optimization efforts and results are the best available” stated John Connors, Chairman of Connors Group. “The addition of PRIMA and their WISDOM ™ components to our lean and productivity improvement capabilities will allow us to offer our manufacturing clients a complete portfolio of services resulting in faster bottom-line results.”

PRIMA recently rolled out WISDOM™ which combines knowledge and experience in: interim executive placement, strategy, its execution, growth, talent acquisition and retention, and new product launches as applied to process dependent businesses.

“The Connors/PRIMA relationship combines extremely capable and proven front and back-end business practices and experiences while delivering this complete solution to the market,” Said Rocco Petrilli, Founder and Managing Partner of PRIMA Business Specialists. “The exit of the Baby Boomers and GenXers from the manufacturing base, combined with the dwindling numbers of the entering generation, creates a void in the necessary knowledge and experience that is vital to business control and success. The Connors/PRIMA partnership provides a ready, effective and affordable solution to this critical issue.”

“The continued resurgence of US based manufacturing is threatened by limits in talent” added Jeff Peretin, President of Connors Group. “The enhanced proficiency of the Connors/PRIMA team provides manufacturing companies with both short and long-term sources for this talent.”

About Connors Group

Connors Group was formed in 2008 with the mission of helping our clients achieve real, measured and sustainable operational improvement.
As a proven management consultancy specializing in workforce performance and productivity improvement, we help our clients achieve long-term operational success through proven methodologies and extensive field experience.
Our qualifications are established both by our satisfied clients and by the personal experience of our consultants. Our founder and executive team were formerly part of HB Maynard, where we developed and delivered a high-value workforce performance model and approach based on a seventy-five-year legacy of productivity management expertise. Connors Group continues that legacy in our work today.

About PRIMA Business Specialists

Founded in 2007, PRIMA Business Specialists LLC is an execution-based business whose sustainable competitive advantage is the rapid delivery of resolutions to its client companies’ problems.
PRIMA has served numerous clients in various industries and markets with services ranging from interim executives to talent acquisition and retention; all whose foundations are based on execution achieved through clarity, KPI measurement and single point accountability.

The New Reality: Part 3 – Resistance Is Futile

The New Reality of retail has dramatic implications on the operating model for brick-and-mortar locations. As industry differentiators of convenience and selection become irrelevant, stores must be repurposed to support the omnichannel experience. This means that the role of the store and the associates must change, and the management techniques, including metrics and incentives, must be similarly adapted.

Product is King

In the New Reality created by the emergence of omnichannel shopping, product is king for retailers. Specifically, the physical shopping experience needs to be about showcasing product in a way that illustrates the integration of that product into the life of the consumer. It is no longer sufficient to show product features and benefits. It must be assumed that the hyper-educated shopper already knows the specifications of the product, or has them at their fingertips with a click of their smartphone. Differentiation must occur by illustrating how a product enhances the life of the end-user.

The product must be at the heart of the experience in stores…

This grants physical retailers the opportunity to showcase a suite of products that integrate, in a way that may be more difficult online. Successful retailers will not only allow these ancillary products to be purchased online while in the store but will also facilitate it. The role of the front of the store as a showcase is inevitable. However, it must be in done a manner to delight and entice customers through creating a memorable experience.
Another role for physical stores is as a fulfillment center for local deliveries or as a pick-up point for online orders. This means that inventory must be integrated across the network rather than ending at receipt in the stores. Associates must be able to find, pick and ship/pack the product efficiently to facilitate the customer experience. Companies like Manhattan Associates and JDA are integrating their warehouse systems to manage inventories across the entire network, allowing optimal customer fulfillment experience and visibility to product no matter where it sits.. As pure online competitors find more and more ways to offer same-day delivery, retailers with a physical presence must leverage their assets to get there first.

New Metrics and Expectations

As the new reality takes hold, and the role of physical stores and online fronts redefine themselves; it is crucial that retailers adapt their metrics. It is no longer desirable to segregate online and physical data. Retailers must integrate this data into one set that understands the relationship between online and in-store behaviors. This involves numerous changes in how we study traffic.

Nature of Traffic

In the past, traffic was defined as a person passing through the doors of a store or as a click on a website. They were generally tracked separately and treated as mutually exclusive. In the New Reality, companies will need to bridge this gap to understand and optimize the buying cycle. Meaningful loyalty programs help to track behavior between channels because they provide a marker that can be used to track a single customer, but very few companies are effectively using this to measure the customer lifecycle.
Furthermore, traffic was used as the basis for conversion calculation; in most cases all traffic in one of the channels was equally considered. As noted before, one of the biggest challenges for brick-and-mortar retailers is the decline in “browsing” and “pre-purchase” traffic. Even though the Conversion and Average Transaction metrics were lower for these customers, they were still incremental to the core “destination” traffic. We will cover this more in the Conversion chapter of this blog.

Interior Analytics

Traffic in brick-and-mortar has traditionally started and stopped at the entrance. While valuable, there is a treasure trove of insight available inside the store. Understanding how customers behave inside stores can inform on associate locations, plan-o-gram effectiveness, display interaction, store layout, fitting room configuration and many other factors.
This is an emerging space in terms of measurement technology, with companies like Retail Next and Shoppertrak pioneering new technologies. The IoT (Internet of Things) enables much of this. WIFI tracking, Bluetooth tracking, pressure sensitive floor mats, cameras with facial recognition and infrared readers are all available for companies to gather interior data. Companies who master not only the collection of this data, but the analysis required to develop insights from it will have a competitive advantage in integrating the omnichannel experience.

Integration with CRM

Integrating omnichannel traffic (both web and physical) for a single customer over the lifecycle of that customer will be necessary to truly understand the effectiveness of marketing efforts in the New Reality. Without looking at the entire ecosystem it is easy to sub optimize one channel at the expense of the other. Being able to translate (and predict) the click on a homepage to the anticipated purchase behavior in-store will yield significant advantages to the company who masters the traffic data of the New Reality.

Customer Service in the “New Reality”

Customer Service has traditionally been measured in terms of Customer Satisfaction. Companies have assumed that a “satisfied” customer will be more likely to re-purchase or recommend the store. This is expressed in the pre-eminence of the “Net Promoter Score” as the premier customer satisfaction gauge. The limitation with this is that it measures satisfaction with the current environment, and is thus limited to asking a customer about what they’ve seen and is focused on the absence of inhibitors rather than the presence of “delighters”. It also focuses on customers who made a purchase, and ignores the non-converted shopper.

Delight vs Satisfy

In the New Reality, satisfaction will not be enough to attract traffic to stores..
Customers will always have a need to experience the tactile, and thus brick-and-mortar will always have a (limited) role in the retail experience. This will not, however, make up for the decline in physical traffic caused by the loss of “pre-purchase” and “browsing” traffic. To attract “non-destination” traffic, stores must focus on providing a reason for shoppers to come to the store beyond making a purchase. There are three broad categories that stores can leverage to make this happen:

Social

This was historically one of the big attractions for malls. The food court was the place where people could congregate, mingle and interact. The millennial generation is comfortable doing this virtually, and that is one of the reasons that malls have suffered from traffic decline; especially in terms of “browsers.” Retailers who understand how to leverage virtual platforms to attract people to physical locations will have a large advantage. This goes beyond “checking in” when you enter the store.

Entertainment

The gamification of retail is one of the largest emerging trends in the industry. Kate Prohorchik writes about this brilliantly in her blog at Iflexion. This is one way of attracting non-destination shoppers to your company. Another means that has been mastered over time by Disney is the element of integrating entertainment into the shopping experience. Any Disney outlet at their parks has a theme and something to discover for the shopper. Shoppers often enter their outlets for no other reason than to see what they are all about. The concept of “merchantainment” is another example of delighting versus satisfying customers.

Discovery/ Proprietary Product

One of the most enduring realities of retail is the concept of the “treasure hunt.” Shoppers love to find a bargain, an unexpected product, or something new. Hence the “off price” retail industry has been less impacted by the emergence of Amazon. TJX, Gabriel Brothers, Burlington, Ross and their ilk offer something that has yet to be replicated online; the ability to find an unadvertised discovery amidst piles of other product that have little interest to the shopper. This is also true at warehouse outlets like Costco and BJ’s. They rotate product frequently so that there is always a fresh value to be found that would not have been a normal component of the shopping basket. Finally, companies can delight shoppers when they have a strong private label that is known for delighting customers. Fashion retailers have traditionally led in this space, and in recent years this has been dominated by companies like Zara who can turn their private label fashions most quickly. A cautionary note is that a strong portfolio of private labels is preferential, but not sufficient. No company has had a stronger portfolio of brands than Sears, but taking your eye off staying relevant to the shopper will still kill a store faster than loyalty to private brands.

Beyond the Associate

One of the largest components in measuring customer satisfaction has always been the interaction with associates in the store…
While it is true that relationships matter, this is predominantly focused on destination shoppers who make repeat visits. Maintaining strong relationships is helpful, but not enough to offset the loss of non-destination shoppers. People will come back for a delightful associate, but they will not come to the store for a non-purchase interaction with one.
Retailers must find a way to entertain customers in a way that is about the experience…
Associates are a necessary, but not crucial component of the experience A great example is the Burberry flagship store in London. Angela Ahrendts, Burberry’s CEO, says “Walking through the doors is just like walking into our website. It is Burberry World Live.” Christopher Parr writes an excellent description of the flagship experience in his article at Pursuitist.

Measuring Customer Delight

The measurement of customer delight versus customer satisfaction is still in its infancy. It can be cumbersome and expensive to measure non-purchase behavior. It requires retailers to understand not just what happens, but why.

Dynamic measures focus on technology to gather data, and this is good to monitor trends…but to truly understand the customer journey, retailers should consider regular supplemental studies to validate and discover the reasons behind quantitative outputs. This should include a calibration of quantitative measures, such as customer journey mapping, with qualitative data gathered from customer intercept interviews and exit interviews that include both purchasing and non-purchasing customers. A duplicate survey of random shoppers through the website can help to cross-reference data.

Resistance is Futile!

These changes can be overwhelming to retailers who have focused on traditional measures throughout their existence. Unfortunately, the choice is to embrace the New Reality and adapt retail operations to match it, or go the way of Toys R Us, Radio Shack, Circuit City and so many others who did not recognize the need for fundamental change until it was too late.
Like Alan Deutschman writes in Change or Die, 90% of people who have coronary-artery bypass grafting fail to change the lifestyle that brought on the need for the procedure within two years. Companies are no different. Clinging to past behaviors and measures is the retail equivalent of fast food and no exercise. The question is, are you able to make the change that will ensure your future health?

The New Retail Reality: Part 2 – Disruption

Over the past several years, the Retail industry has undergone significant disruption.

The retail industry cannot continue to operate as if it has separate channels. Customers no longer find value in shopping that way and will avoid retailers who persist in forcing them to shop “the way it’s always been done.”

The integration of online shopping into the buying cycle has introduced numerous factors that must be reconsidered for retailers to prosper. Four of the most significant are:

• The hyper-educated consumer
• The death of “browsing”
• The inability to differentiate on convenience
• The dominance of showrooming in physical retail

The Hyper-Educated Consumer

In the traditional retail model, shoppers came to specialty stores for advice from knowledgeable associates and to have a broader and deeper merchandise set to consider. For larger purchases this might have involved numerous visits to multiple physical locations to develop the consideration set, to cross-reference the knowledge imparted by sales people, and to allow for time to discuss with friends and family. These factors would contribute to a rise in traffic numbers…
As retailers became aware of the nature of the buying cycle, shelves and queue lines began to feature smaller, inexpensive “impulse” items that might capture dollars during a “non-purchase” visit. As online retail evolves, it offers a wider and deeper set for consideration, with instant price comparisons, deep product knowledge and reviews from other shoppers that cannot be matched by the physical store alone. By the time a shopper enters a store for any destination purchase, they are either at the “Purchase” point and are ready to satisfy their need, or they need to experience the tangible element of the “Research” step and are in the store for a very specific reason. Often, by the time the consumer arrives at the store they are far more knowledgeable about the product than the associates in the store and know the lowest price for which the product can be bought. This makes it very difficult for physical retailers to differentiate based on expertise or offering.

The Death of “Browsing”

A secondary impact of the ability for consumers to complete nearly all the first three stages of the buying cycle without leaving their homes is the death of “browsing”.
As the need for multiple visits to develop a consideration set and research alternatives evaporates, the number of physical visits required to make a purchase shrink. This means that the ancillary smaller purchases that might have occurred on these “pre-purchase” visits also diminish. There are fewer shoppers that are just “browsing”. This erosion of smaller purchases might show a false positive in the retail equation. Conversion and Average Transaction might increase with the decline in traffic, but the health of the physical location erodes as traffic declines. It is important for retailers to understand the lower-level dynamics as they evaluate the business. Not just how many are shopping, but WHO the shoppers are.

Convenience Is No Longer a Differentiator

As mentioned before, the traditional retail model relied on convenience to attract shoppers to physical locations. Department stores collected a wide breadth of product into a single location. Specialty stores added depth of assortment and expert knowledge previously unavailable. Malls added to the availability and convenience of the shopping experience by congregating multiple retailers under one roof, eventually adding a social aspect. Lifestyle centers further expanded on the social aspect, making an experience that moved shopping to a secondary position, but still included shopping in the mix. The introduction of online shopping has diminished all these factors for retailers. As Chris Anderson writes in his book, The Long Tail: Why the Future of Business is Selling Less of More (2006), online offers infinitely more depth and breadth of product than any single physical location could ever offer. The role of the store in terms of the traditional offering is obsolete. Retailers must redefine the role of the physical outlet to survive.

Showrooming is King

The role of the store must consider that it is not a part of the “Consideration” or, to a large part, the “Research” cycles. Again, Best Buy is a great example of a company who recognized the permanent shift in buying dynamics and adapted its stores accordingly. Consumers will continue to have a tangible need to touch, feel and see product, especially product that is new or cutting edge. While fulfilling this need physical retailers also have an opportunity to showcase product in an environment where the integration or supplementation of other product may enhance the customer experience in ways that were not considered during the online shopping “Research” phase. This is the new reality of selling. It is no longer about product features and benefits, but rather about lifestyle integration. To that end, associates have a new role in the selling cycle. Their knowledge can no longer be about individual products, but rather must be about the broader integration of that product into the life of the consumer.
The new reality may seem daunting, and the challenge is very real. Transitioning is difficult for large, public companies, but transition is required for survival. In the omnichannel world stores have a primary function to support the online purchase, not the other way around. While subtle, the difference is a significant departure from the traditional mindset for most retailers. This has direct implications to the operating model of physical retailers, but resistance is futile. Change is necessary for survival in the new reality.

Connors Group Launches LaborPro™ SOFTWARE – Engineered Labor Standards System

Connors Group Announces the Release of LaborPro™ Software Platform

FOR IMMEDIATE RELEASE

Pittsburgh, PA – Connors Group is pleased to announce the release of LaborPro™, a powerful, feature rich, Engineered Labor Standards software system built for Retail, Grocery, Distribution, Manufacturing and Service Industries.

Connors Group designed and developed LaborPro™ by drawing upon years of industry work across multiple systems and input from an advisory board of clients and industry practitioners.
LaborPro™ is an easy-to-use, fast and reliable cloud-based system, that gives users the ability to manage large, dynamic, and complex labor models.

Features and benefits:

• The platform is preconfigured with master standards for Retail, Grocery, Distribution, Manufacturing and Service Industries
• It’s powerful, easy to use and flexible location profiling simplifies location-specific standards
• Users can quickly apply labor standards to an entire organization or network
• A statistical approach ensures an accurate labor model by focusing on the work content that truly matters
• The software is highly scalable and deployable with minimal IT support required
• Offers the ability to manage large, dynamic, and complex labor models or simpler but ever-changing models

“The reception to LaborPro™ has been tremendous,” stated Jeff Peretin, President of Connors Group. “Many of our clients, including Lululemon™ and Buffalo Wild Wings™ are seeing a fast return on their investment. The ease-of-use, and out-of-the-box features has resulted in immediate bottom-line results.”

About Connors Group

Connors Group was formed in 2008 with the mission of helping companies achieve real, measurable, and sustainable operational improvement through Industrial Engineering and Lean business practices.

Traffic – The Ultimate Measure: A Free Whitepaper

Traffic is the ultimate measure of long-term success for any retailer. It's simple, are people coming to the store or not?  No amount of cost-cutting, productivity increases, or margin plays can compensate for a long-term decline in traffic to the store.

The Retail Equation: A Free Whitepaper

Retail is one of the most volatile econospheres in the world right now. Over the course of the next several weeks, we will be publishing a series of Whitepapers that explores this and other aspects of the retail environment.

 

 

Achieving Effectiveness Through Efficiency: A Case for Workforce Optimization

Retail is one of the most highly-competitive industries. Retail consumption is estimated to contribute to approximately 2/3 of the GDP for the United States. What does this mean? Potential for great profits.

To keep a foot in the ever-changing retail landscape, all internal systems of your business must be running at peak performance to outdo the external opposition. The best way to do this is with workforce optimization. Workforce optimization hones in on the individual practices that occur on a day-by-day basis to better understand what can be improved upon to maximize efficiency, productivity and, ultimately, profitability. By utilizing workforce optimization and well-structure Engineered Labor Standards (ELS), you can set you retail business to reign supreme.

 Eyes on the prize!

The Components of Effectiveness: Efficiency versus Productivity

When thinking of effective business practices, both efficiency and productivity immediately jump to mind. The combination of the two is the recipe for profitable success. Understanding what each of the ingredients to this winning recipe are is important for creating proper ELS to support workforce optimization. With a vetted ELS in place, workforce optimization can function at its highest level.

It is generally accepted in business that efficiency versus productivity is equivalent to saying quality versus quantity. Although both necessary distinctives individually, the profitable power comes from the combination of both. Having a productive employee who is not efficient means a lot of work output at low quality, leading to a loss of profit. Efficiency without enough productivity cannot meet supply and demand, and also affects profitability. There needs to be a well-balanced combination. Workforce optimization is the solution.

Power of the People

The core of workforce optimization is the workforce itself: your employees. Your employees are your directors of first impressions, your product experts, your money managers and your advertising aficionados. By examining the individual practices that contribute to both the efficiency and the productivity of your employees, workforce optimization will bring the best out of your business.

Employee Efficiency

Efficiency in regards to employees in retail is mainly comprised of excellent customer service. You want your employees to always be able to provide the utmost level of customer service to return to your business the highest rates of customer retention.

 The best type of retail business is repeat business, making

workforce optimization for efficient employees extremely important to long-term success.

For example, let’s examine the importance of manager/employee relationship communication and how effective ELS and workforce optimization can achieve this goal. Once your business has implemented a well-tested ELS, the systems in place for day-to-day processes should be optimized. One way this is accomplished is through automation of menial tasks, like time card management. With these processes in place, your management has more time to be in constant and consistent communication with employees, allowing performance monitoring to promote improvement and reinforcement.

 Having regular communication between employees and management is

essential for a successful retail business. Workforce optimization helps create this time.

Employee Proficiency

Proficient retail employees are employees who maximize what is accomplished in the amount of time worked in a shift. Overall employee proficiency for your business comes from getting the maximum amount of work without having too many employees scheduled at one time.

Workforce optimization will allow for creating specific tactics to ensure that the highest level of proficiency is being received and maintained by all employees. Utilizing methods such as automated attendance tracking and schedule analysis allows for improvement upon ELS. A quick and easy clock-in method leaves more time for work and less room for human error. Analyzing scheduling trends that provide the most profitability at peak hours will allow for the application resources efficiently for maximum productivity.

There are so many more ways that workforce optimization can be incorporated into your retail business. Request a free consultation today and learn how we can assist you in workforce optimization!

Standard Time Is Not the Opposite of Daylight Savings Time

If you are a Retailer, Standard Time is about more than just geographical time zones – it is also a key factor in Labor Management. The livelihood of a Retailer depends is its ability to be very cost-efficient on task work in both Stores and Distribution Centers, in order to focus efforts on customer service and selling. Standard time represents the ‘should take’ time for these tasks. Engineered Labor Standards (ELS) are the key to understanding standard time, and to documenting and implementing best methods and processes. Becoming informed about standard time with ELS will allow for improved workforce planning, workforce management, customer service, and ultimately profitable sales for your company.

A Bit of the Basics

Engineered Labor Standards are time values established from analysis of the elements that are part of your company’s process, from start to finish. These standards are used to monitor and improve productivity, identify areas for improvement, provide reliable time frames, reduce cost and maximize labor (just to name a few). It’s been said that about half of cost accrued from distribution is due to labor. Probably more importantly, having the proper allocation of labor by store and by hour for tasks and customer service is critical to Retail success. Understanding and mastery of ELS is a vital tool in workforce management.

ELS can take into account critical time and workload details.

Engineered labor standards are one of three basic types of labor metrics. The others are estimates and historical actuals. One reason engineered standards are the most important and profitable to a company is the ability to analyze current procedures to find key areas for improvement

Regarding Retail

The days of ELS as a tool for manufacturing are in the past. Standard time within the retail and distribution environment is paramount for workforce planning and productivity.

Standard Time considerations might include the time that it

takes to complete a customer checkout transaction.

ELS is different for each company, but the core approach remains the same. Below are some of the main steps to constructing ELS, along with some important considerations:

  • Improve Your Foundation
    Developing effective ELS for your company results from clearly identifying the current process, along with specific areas for improvement. This provides the ability to set clear task improvement goals.
  • Develop the Necessary Elements
    Developing elements, or “work-steps”, provides the level of detail required to accurately drive labor based on key volume drivers. This provides the resolution needed by site and by hour. Each element has its own respective unit to be able to track efficiency.
  • Roll Up the Details
    While having the details measured is important the labor management equation, most organizations do not have the time and resources to manage these details on a day-to-day basis. It is critical to roll up to a few key drivers that are manageable. This is a critical miss in many ELS efforts.

The key to success with ELS is to have the details to allow for

data analysis, but to roll these details up to a manageable level.

  • Implement
    Once ELS has been developed and validated, your standards can be implemented. Standards can be built into labor management and scheduling systems. Employees can be trained on the best practices to optimize efficiency.
  • Maintain Awareness
    Standards must be maintained and updated as necessary. Changes in business practice or operations could impact elements of your ELS, so it is important to stay involved and aware of changes. If ELS are well-structured, this process is much easier.

These items are just some of the several keys to success for workforce planning. Contact us today to learn even more about Engineered Labor Standards and other helpful tools for optimizing workforce management.

Crawl-Walk-Run to Distribution Labor Management Success

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.

Crawl

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.

Walk

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.

Run

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.