The Blue Horseshoe Blog

Plan, Monitor and Measure – The Cornerstones of Supply Chain Labor Management

Posted by Blue Horseshoe on Oct 18, 2012 5:04:20 PM

It’s surprising how many companies have not yet considered Labor Management as their next initiative. Especially since most companies would agree that you first need to measure what the current state is to understand if the future state is an improvement right? The old phrase of “you cannot manage what you do not measure” was one of the focal points of the prior blog, so let’s pick up where we left off regarding managing your most important (and typically largest variable) supply chain cost – your workforce!

There are three cornerstones to Labor Management – Planning, Monitoring and Measuring. Your Labor Management program should be designed to support all three of those and each of them require one another to be effective. You cannot plan or monitor what you do not measure, just as you should not try and measure what you do not need to plan or monitor. For example, if you have 1 person handling returns out of 100 people, is it necessary to measure that returns process with 5 variables and discrete handling and traveling characteristics?

Planning with Labor Management

An effective Labor Management system should be designed to help you plan labor requirements by area, function, wave, or any other critieria that drives the execution of your distribution center. This plan should be derived from multiple variables supported by standards that are based on what it should take to complete the job.

Monitoring with Labor Management

We all know that the only thing right about a forecast is that it is wrong. So while a labor plan may give you a starting point, it’s important that a Labor Management system give your operational leadership the ability to monitor the workforce productivity in real-time. This real-time access to individual productivity will help managers make the necessary decisions about labor re-balancing requirements as the work plans progress during the day.

Measuring with Labor Management

Industrial Engineers know that seconds are for track meets (not labor standards) just as operation managers should know that UPH (units per hour) is for facility reports. Industrial Engineers who know work methods and measurements know that standards are in decimal minutes; and operation managers should know that labor performance of an individual is driven by work content. Utilizing multi-variant discrete standards provides a great view of labor, and coupling it with the workforce management systems to effectively track labor from clock-in to clock-out will uncover the lost time and productivity that can easily be regained. And by regained I mean get more out of what you already got.

In my next segment, we’ll look at the basics to Labor Management – where to begin and what to look for as you consider this initiative for your supply chain operational excellence.

Read Other Posts from Supply Chain Logistics Series…
Managing the Most Important Part of Your Supply Chain. The People.

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