Simple and Effective Productivity Measurement

Many years ago I had an amazing experience that I am still learning from.

I had been asked to help a new warehouse manager to improve the performance of his company’s new facility. This was the first mechanized warehouse, in a new building, for a consumer goods wholesale company. So management was learning how to use a WMS, bar coding, pick modules, a conveyor and sortation system, etc. There was much to learn and do. In our discussion of where to begin, we agreed that improving personnel productivity would be a key element. I then asked how we would quickly know if the changes we select and implement actually contributed to productivity improvement. The company did not have a productivity measurement system in place, and the manager was not particularly interested in all the complex work he believed necessary to create one.

So we began to design a measurement system that would be simple and effective. The requirement of simple suggested that we start with a measurement of the productivity of the facility as a whole. I believe also that by starting at that level, managers have the opportunity to clearly demonstrate their values and intention, because most people have a great deal of insecurity about how managers will handle this new information.

My first lesson was how simple and effective a whole system measurement process could be. We began by deciding that we should measure daily results. Fortunately the time clock the company had installed could report the total hours worked at the end of each day. While there are many hours worked each day performing a wide variety of tasks, to keep it simple and because we could obtain put-away and shipment data from the WMS, we decided to use total cases stocked and shipped each day as our measure of work, and we decided to graph the relationship between hours worked and cases handled. This turned out to be an easy task.

Then is when the learning started. In talking about how to handle the daily results we acknowledged that merely the act of measurement is a change and we wanted to know the result of just that change by itself. So I asked the manager to begin the measurement process and not to talk about the measurement system with any of the staff for at least 30 days. Second, we recognized that because we wanted all the warehouse workers to contribute to the change process, we wanted them to see the same measured results. So we decided that the manager would post the data daily on a graph on the bulletin board.

The results were amazing. In 30 days, without any other conversation or work, measured productivity improved by more than 10 percent and never declined below that point again. For a facility with more than 50 people, that ROI was a hard act to follow.

Don Benson, P.E., has been consulting to retail, wholesale and manufacturing organizations for more than 25 years. His practice focuses on improving the effectiveness of warehouse and distribution operations. His office is in Oakland, California. He can be reached at coach@warehousecoach.com or 510-482-3436.

Other articles in this series:

Improving Distribution Operations

Evaluating Vendor Shipping Performance

Improving Labor Productivity

Picking Document Design

Implement Cycle Counting

Inventory Storage

Planning Daily Operations

Another Way To Think About Change

Space Use in Carton Flow Rack

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