Maximizing Your Workforce's Potential

You can't plan for everything, but your operations plans should include enough flexible tools to allow you to adapt to changing conditions.

At a time when many material handling and logistics operations normally would be ramping up for the seasonal consumer buying peak, most supply chains aren't experiencing the historical surge in volumes. In fact, that surge may be largely relegated to history as the retail sector points to lower-than-traditional peak seasons for the last few years.

Good practice for seasonality is just good practice for the business, says Art Smuck, vice president and general manager of operations for ATC Logistics and Electronics (ATCLE). For a good logistics person, practices don't change much between down periods and upswings, he continues. You have to understand the flows. “The elements don't change; what you do with them does.”

A prime area where Smuck focuses attention is labor. He is a strong proponent of cross training and supplementing a full-time workforce with temporary workers. But, even temporary workers require training, he says, and that becomes a trigger point in planning.

It can take 48 to 96 hours to train temporary workers in his operation, Smuck notes. That doesn't include any sourcing time with the agency providing the workers, pre-employment screening, drug testing or any other elements of the process of acquiring workers. That has to be part of the planning horizon and sets the trigger point in Smuck's planning. He needs to know what the forecast looks like in a sufficient window of time to allow for all of the steps to acquire the necessary temporary workforce. Come up short, and you can't get the work done as promised. Over-estimate, and you are paying for resources you aren't using.

With more logistics operations downsizing and relying on temporary workers to scale to demand, this peak-season strategy has become a daily tactic.

Labor Scheduling Strategies

Chris Carey, president of consulting firm Chris Carey Advisors LLC, also places a strong emphasis on labor as one of the strategies he used to help a third-party logistics (3PL) provider improve productivity, efficiency and profitability. Labor is the single largest expense you can manage in a distribution operation, he points out. You certainly want to work to use fixed assets more fully, he says, but you can't do much with rents and utilities.

Carey offers a before-and-after view of labor scheduling for his 3PL client. Labor scheduling and allocation were left to the general manager in each of the three facilities the company operates. There were no systems to manage daily labor levels, just the gut feel of the managers based on their experience. The managers called their regular agency with temporary labor requirements for the next day.

One of the first steps Carey took with the operation was to identify the least number of tasks to be measured. The biggest failure people make, he says, is they get too granular. They try to measure too many tasks, and as a result goal-setting becomes nearly impossible. Carey measured tasks like receiving, put-away, pick/pack and other operations over a four- to eight-week period to establish productivity standards by task. That told him how many units per hour each operation could process.