Logistics and Supply Chain World | September 2012

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September 2012 | R100/-
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Logistics and Supply Chain World | September 2012
Industry Insights
Help employees meet great
expectations
Warehouse workers dont do the same task the same way each and every
time. Observing what really happens on the floor is key to developing good
performance standards.
E
very warehouse manager has likely heard What
gets measured gets done. Measuring and
monitoring operations are key to managing an
efficient, productive facility. Therefore, developing and
implementing an employee performance expectations
program shouldnt be taken lightly.
Many warehouse managers approach labor standards
development with an assembly line mentality. They
often expect every task or warehouse function to be
repeated the same way, each and every time. Basically
Paretos Law, the 20/80 rule, does not fit into such a
simple formula. While a labor management system
(LMS) is an important component in developing
good performance standards, you must first measure
employee performance.
Three Approaches
Create a macro standard using historical records. Those
might include the number of locations visited, the
number of cartons created, and the number of units
picked to fill the average order. With that information,
the system determines the average number of picks per
hour or shift per employee. The LMS then determines
how many operators will be needed to pick orders on
the next shift.
Create master standards data using published standards.
In this approach, every task is comprised of discrete
movements, such as picking up a product and putting
it on a pallet. Over the years, industry has compiled
accepted standards for how long all of those should
take. The sum of those movements makes up the basis
by Tom Tanel
for master standards data.
Create discrete or engineered labor standards. An
engineered labor standard breaks down each process
into its component parts. Through time/motion studies
and work sampling, an industrial engineer determines
how long on average it takes workers to complete each
component of the task safely with a built-in personnel
fatigue and delay factor (PF&D).
Common Mistakes
It is impossible to create accurate expectations by making
performance fit predetermined standards without
considering the variables and their combinations. For
example, in a grocery warehouse 125 cases per hour
as a picking standard does not take into consideration
whether it is in the dry, refrigerated or frozen storage
areas. Or for that matter whether its a full pallet pick
or a mixed rainbow pallet pick. Expectations must
be based on an apples-to-apples comparison in the
warehouse.
Another mistake many managers make is using averages
to create expectations. An average is merely a statistical
aberration that does not occur in the real world.
Using averages often means
lowering standards, because just
a few poor or high performers
can skew the results

Some managers mistakenly believe that if every
employee is surpassing the standards, it is a sign that
the facility is operating at high productivity. Its actually
an indication that they need to re-evaluate their
expectations and the standard.
Finally, remember that productivity comprises two
areas: efficiency and effectiveness. Efficiency is doing
things with the least wasted effort, while effectiveness
is doing the right things or doing the things that yield
results. You cant measure productivity without looking
at both.
The Right Expectations
Which should I work on first: efficiency or effectiveness ?
In theory and practice, the best answer is to improve
your effectiveness first. Its much better to aim at the
result than to worry about the process. Too often we get
bogged down in the means and lose sight of the end.
Take these steps to develop performance standards and
expectations :
Determine if you can measure the task throughout
the facility. If you cant, you should not be using it as
a performance standard. Unit load degradation is a
good indicator that you cannot measure a specific task
throughout the warehouse. For example, if you receive
inventory by pallet, store it by case, but ship it by piece,
the product has to be handled in three different ways in
the facility.
Beware of technical or confusing expressions. Rather
than terms like cost ratios, use more common physical
terms such as lines, orders, SKUs, unit loads, etc. Also,
avoid mixing different businesses, such as cases and
broken case picks or LTL and FTL receipts. Once you
measure actual performance against a standard, put it
in a meaningful way.
Perform a standards study. You should clearly
communicate the purpose and methods of the study
to all employees. Implementing performance standards
and expectations without explaining the reasons for
the change can create unnecessary tension and anxiety
among those who are going to be affected. If possible,
allow employees to be involved in the process, including
work sampling and measuring.
If your workforce is unionized, you should also explain
your plans to the union. To be successful, you need the
support of everyone involved.
Seek employee involvement and gain their support.
Whether union or non-union, advise employees of the
reasons for the program, and describe what, when,
and how this will be accomplished. Ask for their
input. Discuss the results with employees, as well as
first line supervisors and verify the findings. Did your
measurements represent normal and typical activities?
A performance measurement program depends on
accurate expectations. Using abnormal conditions to
create a baseline for expectations will undermine the
entire effort.
Create a range of performance expectations, not a single
threshold. Every employee is different, and expecting
identical performance from each is unreasonable. This
only discourages those employees who cant reach
the standards, while encouraging the best performers
to underachieve. Also, employees are more likely to
support and buy into the performance expectations
if they understand that there is a range of acceptable
performance.
44
Logistics and Supply Chain World | September 2012
Set up and monitor a pilot program. Are your
expectations reasonable? If not, a pilot program should
quickly identify any errors in your original conclusions.
It is much better to discover the problem on a small
scale before you implement the expectations across the
entire warehouse.
Provide constant, positive feedback. Most employees
will not meet the new performance expectations
overnight. Look for incremental improvements, and
reward good performance. Remember, people soon
forget about monetary rewards do not undervalue
praise and recognition. It costs little, but has a much
more lasting effect.
Develop a method to monitor employee performance
graphically, instead of in spreadsheet tables. This way,
you can actually see trends and resolve issues before
they become real problems.
Communicate results of the team, not the individual.
Posting individual results can have a negative impact.
The workers on the floor can tell you who the most
productive employees are and who the least productive
are without looking at posted results. It only causes
dissension and resentment among co-workers. A
small group, through productivity gain sharing has a
better chance of achieving success as a whole than an
individual does. Only communicate individual results in
private meetings or communications.
Deal with employees who fail to meet expectations.
These employees come in two types: those who cant
and those who wont. In either case, you must identify
which type an employee is and find a way to help
him or her reach the expected level. Employees who
cant meet expectations can usually be coached. Try to
achieve improvements incrementally. People who wont
meet the expectations need to be counseled. Dont ask
what they dislike; ask them why they dislike it. This will
eliminate their opportunity to merely gripe and force
them to discuss exactly what it is about the standards
that they find unreasonable. Listen to their arguments
they may have valid points.
Use performance management appraisal and
development. Performance reviews help supervisors
feel more honest in their relationships with their
subordinates and feel better about themselves in
their supervisory roles. Subordinates are assured clear
understanding of whats expected from them, their own
personal strengths and areas for development, and a
solid sense of their relationship with their supervisor.
Avoiding performance issues ultimately decreases
morale, decreases management credibility, decreases
the organizations overall effectiveness and wastes more
of managements time to do what isnt being done
properly.
To measure your people effectively, identify metrics
that are appropriate for your organization and that will
improve the warehouses performance.
About the Author :
Tom Tanel is president and CEO of
CATTAN Services Group Inc. (www.
cattan.com), a logistics advisory,
counseling, and training firm in
College Station, Texas.
New World, New Rules, New Ideas
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