If you’ve ever taken a road trip with kids, you’ve heard the questions “Are we there yet?” and “How much longer?” Smart fulfillment warehouse operators can definitely relate. But the questions we’re continuously asking are more along the lines of “How long should this task really take?” and “What’s the most efficient process for this project?”
These questions relate to fulfillment warehouse productivity standards, which are critical to keeping your warehouse labor costs in check. Not all fulfillment center operators invest the time to establish these standards, and that’s a mistake. We asked Amware CEO, Harry Drajpuch, to share his thoughts and experience on the subject.
What is a productivity standard?
It’s a reasonable expectation of the time it will take the average worker to perform a particular task correctly and efficiently. It’s usually created by carefully studying all of the steps required to execute that task over a long period of time and assigning a definitive time value to each one. You can set productivity standards for almost any activity. But some of the most common ones in a fulfillment warehouse include:
- # of pallets that can be put away per hour
- # of lines that can be picked per hour
- # of lines that can be packed per hour
- Time required to build a specific kit
Are fulfillment warehouse productivity standards like KPIs?
They’re similar. But a productivity standard is more objective and operational – and more geared to individual performance. It’s a no-nonsense way of saying, “Under ordinary circumstances, this is what every person working in our fulfillment center should be able to achieve when he or she performs this particular task for a particular period of time.”
And that’s helpful why?
Once you establish a productivity standard, you’ll have an accurate baseline that can be used to determine everything from your facility’s optimal warehouse staffing to a task’s actual cost. Just as important, you’ll have the reality check you need to expect and get the optimal performance out of each person who works there and reduce eCommerce fulfillment center costs.
How do companies go about setting productivity standards for their fulfillment centers?
A lot of professional organizations and consultants have already created engineered productivity standards that are readily available. Companies can also conduct their own time studies. Or they can run some calculations based on their own performance history, if there’s enough data available.
They can also use a combination of these methods, as we do at Amware. While we definitely use engineered standards from different sources to determine what’s possible, we’re also careful to compare those standards against the data we’ve gleaned from serving more than 200 clients – and handling millions of orders.
So once you’ve established a productivity standard, what do you do with it?
Well, the first thing you want to do is share it with key stakeholders, including your fulfillment center’s manager and shift supervisors – and, of course, the associates doing the work. Then it’s time to start monitoring that standard and applying it across your operation.
How can facilities compare their associates’ true performance against the established productivity standards?
If your facility is using RF devices, you can compare and contrast associate performance easily because you can pull productivity data right out of the warehouse management system.
That information is still collectible, even with paper-based processes. Just designate a person at each facility who’s responsible for tallying each individual associate’s daily deliverables (based on the paperwork those individuals turn in) and dividing those deliverables by the number of hours worked. If you don’t have such a person available, consider hiring a temp; that person will more than pay for him or herself in terms of the increased productivity he or she will enable.
How do warehouse associates usually respond to the introduction of a productivity standard?
Remarkably well. Studies have shown that associates, once informed of a target, usually want to meet or beat it. That probably explains why facilities that establish and monitor fulfillment warehouse productivity standards can usually increase productivity by 10–15%, depending on order volumes, and even more if they’ve previously been performing poorly.
Speaking of poor performers, what happens when results show that certain associates are falling short?
First of all, you need to give it time. Sometimes all it takes for associates to step up their game is to realize that their output doesn’t measure up to the productivity standard. So if you’ve done your hiring correctly and hired for a good attitude as well as proficiency, many of those who aren’t up to snuff will probably approach their better-performing co-workers or supervisors for advice about how to improve their performance without you having to intervene.
It’s wise to think of a productivity standard as a carrot rather than a stick, especially in this day and age, when warehouse workers are so difficult to find and keep. If your company only uses what you learn to identify and lower the boom on lackluster performers, you may be missing out on some of a productivity standard’s biggest educational and motivational benefits. These include:
- Providing associates who need it with additional coaching, mentoring or training
- Creating a friendly rivalry between different teams or shifts by offering rewards or bragging rights for the best performances or highest levels of improvement
- Honoring high-performers with recognition that inspires other associates to want to achieve similar successes
- Having an open-door policy that encourages all of your associates to come and discuss their performance results and how those results stack up
Ultimately, these positive practices will go a long way toward ensuring a more productive, high-quality workforce.
Thanks for a “productive” discussion. Any additional thoughts you’d like to share?
Fulfillment warehouse performance standards underscore an important truth: eTailers don’t always need to make costly, bold moves to achieve meaningful savings. When you combine smart engineering practices, proven processes and low-cost technology, there are many ways you can improve performance and cut fulfillment center costs substantially – without having to invest millions on major warehouse automation projects.