December 27, 2022

“Time keeps on slippin, slippin, slippin…”

This article first appeared in MHI on August, 29th 2022. Author: Dave Haley

That’s an opening line from a Steve Miller song, Fly Like an Eagle.

In the song, Miller sings about his lofty hopes for the future; all very noble and hard to feel otherwise as you’re listening. Less aspirational can be reducing the time that keeps on slipping away in your warehouse operations. In the current labor market, time slippage means lost dollars, missed service, and the inability to grow your business.

As of the July 2022 BLS statistics, non-farm payroll employment returned to pandemic levels. The unemployment rate was 3.5%. Traditionally, 4% to 5% is considered “full employment.” We have 5.7 million unemployed people and there are 10.7 million jobs open in the US per the Aug 2022 BLS statistics.

What? We have 10.7 million jobs that need to be filled AND we have only 5.7 million people to fill them. Yikes!

Is automation the answer? Well, it is certainly a consideration. Automation can lessen the effort it takes to complete a task. Think of it like a lever. If you can only move so much weight as a human, you can lift way more with a lever. How you design the lever dictates how much you can decrease the effort needed to complete the same task. Similarly, automation designed around an ineffective process can have a minimal and, at times, negative impact on the process that you are intending to improve.

Automation is best applied after you have done the basics.

The first step? Removing warehouse wasted time.

The key is to look at time, not headcount.  Sure, there may be some reductions in staff but more likely in this market you’ll see improvements in open roles, overtime, and timed burned in constant training due to turnover.

Why turnover?

Fatigue is a top reason given by warehouse workers for leaving their jobs. Travel is the biggest source of wasted time in a warehouse. That wasted time and effort fuels fatigue. We are talking about the distance a picker in a warehouse can travel, sometimes as much as 12 miles in a shift. That is exhausting and a source of job dissatisfaction. If you can reduce the travel time to complete productive tasks, you improve throughput and put less stress on your team.

Where to start?

Launch a waste walk.

It’s not as glamorous as it sounds. Done correctly, it’s highly effective for opening the team’s eyes to waste in a process. It’s not complicated, but the walk needs to be disciplined. Look for anything in the process that does not add value, then try to eliminate it. For example, value-add activities alter a product to meet customer expectations, and this is paid for by the customer. Therefore, a kitting or value-add process that the customer pays for to ease receipt of goods to their customer adds value. Fixing the kitted product to correct errors is not adding value.

What do you focus on during this walk? There are eight elements of warehouse waste:

• Transportation: Unnecessary movement of the work product
• Inventory: Excess work product that is not active in a value-added process
• Motion: Movement that is unnecessary or that does not add value, including movement that is too quick or too slow
• Waiting: Any extra time when people, processes, or equipment is idle waiting for resources
• Overproduction: Producing more than is necessary
• Overprocessing: Continuing to process beyond the requirements and to levels not valued by the customer
• Defects: Waste from inspection costs, repairs, and customer complaints or returns
• Underutilization of Talent: Not fully utilizing the talents and skills of staff members

Pause for a second. Think about the impact of reducing or eliminating these sources of wasted time from your process. What could that do for your operations?  Is there wasted time in your warehouse?

If this type of process review is not part of your culture, make sure the communication with the team provides them with the comfort that this is not a blame game. Acknowledge that the process likely can be improved and for this to be successful, the feedback of the team that does the work is very much needed. You need their ideas, and they need to feel comfortable that they can share their challenges with the leadership team. They need to know that feedback will be appreciated – and rewarded.

If you have a Value Stream Map, that is a great start. If you have a process map, that is good as well. Without documentation, it is a little more challenging but that should not stop you. You can create process documentation as you go.

Try this too; walk the process in reverse. Looking at the flow from the end to the start takes you out of your comfort zone and you may find some big wins.

Look at the shipping department as an example. What is the last step in that process? Is it loading a truck? What delays the forklift operator from executing? Is the equipment they need available and in good working order? Does the operator need to retrieve paperwork? Do they need to search for the load? Is there a need to correct errors from the previous step? What about a QA check in this process? That is time slipping away.

Notice that the focus is not on making the operator move faster. The focus is on how we can make their time more effective. How do we make their effort drive toward customer value?

As you move through this journey, you’ll find you create a pull environment. As loading gets more effective, the prior step (staging, documentation) will need to move toward optimization, or it becomes a bottleneck. Then the process repeats, all the way to the start of the material flow.

The data shows that the labor crunch is not a temporary event. So now what? Before you unleash the robots to deal with your open roles that just cannot get filled, drill down your processes. Make your team’s efforts effective in meeting customer requirements and eliminate actions that limit your effectiveness.

It is an accumulation of precious minutes, or as Mark Levy said, “If you want to know the value of one minute, ask the person that just missed the bus.”

Read Open Sky Group expert Dave Haley’s complete insight via MHI.