The standards you maintain in your organization’s warehouse can determine its productivity levels and the overall costs of operation. A streamlined, efficient, and productive warehouse can result in savings on a cost-per-unit basis. More warehouse efficiency = faster production = more production = more money out the door. Your approach to warehouse management can make all the difference in productivity. Use this article to revolutionize systems at your business, improve warehouse efficiency, and achieve long-term warehouse optimization.
Discover Where You’re Losing Time
The first step toward a well-oiled warehouse is identifying where your current practices are falling flat. Reevaluate your warehouse often, and check for potential improvement to drive increased engineering standards. An evaluation could uncover inefficiencies you can correct to increase production rates and profitability immediately. Evaluate your warehouse regularly to find and fix issues as soon as possible, before they can cause trouble.
nGROUP utilizes video diagnostic tools to analyze each task in a warehouse individually. Our special nVISION software uses photographs and practical instructions to explain where warehouse managers can reduce time. Using video allows you to see where you’re losing productivity, as well as opportunities you may have to improve operations. Video diagnostics can also uncover whether things such as body movement, risk factors, and potential errors are slowing your warehouse down.
The nVISION software can use side-by-side screenshots to show you which method saves the most time. Improving the efficiency of one task by even a few seconds could amount to hours of saved time per week and month, and better productivity in the long run. Using nGROUP’s video software to analyze your warehouse can quickly pinpoint where you may be losing time, providing the first step toward achieving a more productive warehouse.
Use the Acronym: PUMP
When assessing your warehouse’s current productivity levels, try the simple acronym PUMP. Go through your warehouse’s systems with the four parts of PUMP in mind:
- Pace. Rate how fast your warehouse team works.
- Utilization. Look at the percent of the time a worker is on task. In an eight-hour day filled with distractions (lunch, fatigue, breaks, bathroom), 60-70% is world class.
- Method. Examine how workers go about processes. (nGROUP implements nVISION here to see how you can change the process.)
- Performance. Measure the overall performance of your warehouse. Small changes in pace, utilization, and method result in a significant difference here.
PUMP is an acronym we use at nGROUP to analyze how efficiently warehouses are operating. It makes it easy to remember what to look for when determining the performance of your warehouse, as well as deciding how you can improve operations.
Cross-training, or training a team of workers to perform different tasks, can be instrumental in boosting productivity in a warehouse. Having highly-specialized warehouse workers can lead to inefficiencies. If a worker needs time off, for example, you might not have any other employees capable of taking over. The current competitive warehouse market and warehouse labor shortage both lead to high turnover rates – exposing your warehouse to efficiency problems if you lose an essential specialized worker. Cross-training your workforce eliminates these issues.
Cross-training has many benefits, such as improving your warehouse’s overall performance. It can improve employee engagement with the company as well, helping your warehouse workers feel more connected to operations and increase trust at your establishment. Employees can learn new skills and diversify their resumes, increasing how valuable they are to your firm. Cross-training can also keep a warehouse job more exciting, helping prevent position fatigue and employee turnover. A skill flex matrix is an excellent tool that can be used to monitor and measure the level of cross-training effectiveness. These tools allow the management team to analyze program success and find areas of improvement.
Streamline Your Warehouse with Lean Six Sigma
Three methodologies are essential in maximizing warehouse efficiency: Lean, Six Sigma, and Lean Six Sigma. Lean reduces activities that don’t add value to your warehouse processes. It is a systemic methodology. Six Sigma focuses on process variations and process improvements, emphasizing customer satisfaction. It is a problem-solving methodology. Lean Six Sigma focuses on preventing defects by promoting work standardization. It is a data-driven methodology that combines Lean and Six Sigma.
Implementing one of these methodologies in your warehouse can help you eliminate waste and variations in the system, which boosts efficiency. Improve process performance while reducing waste and decreasing cycle time. Lean Six Sigma integration can result in exceptional improvements.
Consider an Incentive Pay Program
Incentive pay might not be the right strategy for jobs involving creativity, such as your marketing department. However, it can have a high impact on labor forces that rely on necessary mechanical skills, such as in your shipping and receiving warehouse. When it comes to motivating warehouse workers, incentive pay can be the right answer for boosting productivity.
You will need to measure the performance of your warehouse staff as well as analyze its pace, searching for sources of waste time or excessive downtime. Then, you’ll need to establish new standards in your warehouse to address these issues. Incentive pay could be one such solution. When implemented correctly, incentive pay (in conjunction with other tools) can increase productivity 20-30%.
To make an incentive pay program work for your warehouse, only implement it if the workers control productivity. If productivity depends on machines or automated processes, inventive pay might not be the right option, since workers don’t have control over how quickly the machines produce items. Determine if your program is effective by asking if it will increase measurable productivity, if it involves metrics such as attitude and attendance, if the labor standards are attainable, and if you can continue to monitor the program and offer feedback.
Incorporate a Labor Management System
Finally, consider incorporating a labor management system to improve warehouse efficiency. Specialized software can help you closely monitor staff hours and production levels, giving you a comprehensive overview of the details of your establishment. You can see where you're losing productivity and take steps to resolve the issue adequately.
Find out how nGROUP uses labor management strategies, video diagnostics, custom solutions, and ways to maximize the efficiency of distribution centers and warehouses across the country.