By Senior Consultant, Michael Olenick

The automation and software breakthroughs shaping the next generation of distribution centers enable extraordinary improvements in throughput and efficiency. Executive leadership teams at the helm of these buildings face new and unique management challenges and opportunities:

  1. Can they foster a healthy and productive employee population that interacts heavily with robotics and computers and receives constant performance feedback?
  2. Will their frontline managers and engineers be agile and resilient enough to respond to constant but necessary software enhancements or unexpected outages?
  3. Do they have the appetite and focus to drive success toward their bottom line goals while forging ahead where few have gone before?

Building a Productive Workplace

In our previous post—The Role of Labor in the Future DC—we talked talked about the transformative opportunities of live-performance management through integrated devices associates use to complete their jobs. Thanks to mobile phones, interactions that would have been alienating 15 years ago, now feel normal, even expected. But that doesn’t mean there aren’t risks to attend to. Associates will often approach measurement of their performance with some suspicion, at least initially. The omni-presence of live-performance raises the bar and associates will rightfully expect accurate scores that fairly reflect their level of effort. The onus is on leadership to ensure that associates understand how the scores are built and that they believe they can achieve the expected goal performance level.

It’s also possible that associates might believe that they are being monitored by the computer software which can feel impersonal and potentially demotivating. Teams overcome this risk through thoughtful communication about the scores within positive coaching environments between supervisors and their team members. If the risks are intentionally addressed and mitigated, real-time performance data can dramatically improve supervisor visibility and your associate productivity.

Our team recently partnered with a leading e-commerce retail client to build highly dynamic multi-variable engineered labor standards which consistently provide performance scores with less than 1% weekly variation. Scores with this level of accuracy build critical trust with associates that the scores they are seeing are true.

Associates also need to believe that the goal performance is obtainable. Great engineered labor standards (ELS) allow for quality measurement, but a building director primarily needs good performance. This requires capable and confident leaders to effectively use the ELS in a positive and productive environment. Invest in your front line supervisors by providing training both in the classroom and on the floor as this combination of technical and soft skills training are essential to drive a positive and high performing culture.

An Agile, Intelligent Workplace

Automation and software make new frontiers achievable but to do this they must work well and work consistently. Like anything with a lot of moving parts (such as lines of code) you need to prepare for breakdowns and maintenance work. One recent client staffed their flagship automated distribution center with three full-time on-site industrial engineers and utilized engineers in two other key operational leadership positions. This technical horsepower was critical to ensuring that all the MHE details aligned with the WMS software logic and that the ELS were applicable with both the MHE and the WMS. While that staffing approach might sound excessive, the five engineers and their operational teams partnered with LogistiPoint to transform their operation and drive a 29% year-over-year productivity improvement. When you invest in high quality equipment and software, be sure to also invest in an executive and advisory team that will get you the most out of it.

Experimentation and Failure

Embracing significant and continuous change is not for everyone. Leaders on this new frontier must be comfortable with experimentation and failure; they know that they are the ones writing the rule book and don’t often have templates to follow. For example, our team embraced experimentation by supporting the development of a boundary pushing concept called automated wait-for-work. A key input in labor management programs relies on the quality of data that accounts for an associate’s on-standard time (time spent doing productive work) and indirect time (time spent doing non-value-added work). This distinction typically requires associates to manually track when to switch between these categories. This can be tedious and often creates opportunity for data integrity loss. Being able to automate this improves the quality of the data and saves the associate time. It’s a win-win.

We learned something additionally remarkable when we implemented this concept in one specific activity. Usually if you track indirect time more accurately, you end up lowering your on-standard time. When automatic wait-for-work turned on in the Decant department, the expected improvement in indirect time tracking was observed. However, the department also improved in their on-standard time. How was this possible? Associates learned to expect the system to notify them when there was no work available. Then, they observed that sometimes when they had no work available, the system failed to notify them and they were not placed into indirect time tracking. Associates shared this finding with their leaders who discovered and then resolved a software bug resulting in work returning to that station and in a material improvement in their productivity.

This instance of continuous improvement, coupled with refined data quality and a reduced burden of time tracking, shows the powerful potential of an aligned leadership team listening to and supporting their associates who are engaging with cutting edge automated systems.

In order to stay ahead of the curve and leverage your operations as a competitive advantage, it’s imperative to strategically integrate labor and automation at each level of your organization. While industry leaders aggressively innovate, and labor continues to get more competitive, can you afford not to modernize your operation?

If you are looking for a partner to help you take the next step into automation, or if you have recently invested but are not sure you have optimized your operation, consider reaching out to us. The time and effort you put into getting your automation, labor and leadership working together at their peak will pay you dividends in the coming years.