Supply chain: Workforce management systems

With supply chain processes and product flows optimised ‘to the max’ during the recession, an increasing number of organisations are switching on to substantial further productivity improvements which can be achieved through the introduction of supply chain workforce management systems, as Chris Buckley, services director of RedPrairie, explains.


Compared to the US, the discipline of workforce management is relatively immature in the UK and Europe. However, according to productivity solutions provider RedPrairie,few logistics service providers or other major warehouse operators now purchase a warehouse management system without a workforce management system to fully optimise warehousing operations. And with productivity improvements of 10 to 35 per cent in a typical warehousing operation, with the added benefits of improved employee satisfaction and retention and reduced labour costs, it is not difficult to see why. While this may sound too good to be true, the proof can be seen in operation in an increasing number of major UK warehousing and supply chain operations.

The starting point for effective workforce management is detailed modelling. The warehouse or manufacturing operation in question is painstakingly measured and modelled, including its racking, docking operations, shelving and materials handling equipment. Specialised industrial engineers then use the model to calculate standard times for every single operation that employees are called to carry out, incorporating any applicable changes in the preferred method of carrying out those operations. The engineers also measure the distance travelled, and calculate the time taken to travel it—either on foot, or on a forklift truck. They also calculate the time taken to pick an item, or put it away, or climb on and off a forklift truck.

These calculated times for given tasks then comprise the ‘goal times’ that management and operatives should aim for when completing a given task. And, as such, they are then monitored by the workforce management application, through links to systems such as warehouse management, ERP and supply chain execution applications.

The power of the workforce management system lies in the tremendous level of detail in the model and calculated goal times. For example, the goal time for a task involving visiting one hundred locations will be different for a task involving visiting just 10 locations—even if the number of parts or packages to be picked or put away is the same. Every task has its own pre-calculated goal time, which can be printed on a work ticket or displayed on-screen, and then compared to the actual time taken.

It is these comparisons that help to boost productivity. By levelling the playing field, the system provides clear data about which individuals, teams, or shifts are consistently meeting or coming close to the calculated goal times. And equally, which individuals, teams or shifts aren’t.

In terms of productivity measurement, it is a much more precise tool than a rough-cut guide such as cases-per-hour. Employees also prefer the system as it offers a fairer measure of productivity, for example by eliminating ‘cherry picking’, whereby some employees pre-select light or easy work, leaving the heavy lifting or multi-location work to others. In some cases, this has led to reductions in employee turnover of as high as 35 per cent. And, if required, the system can permit management to reward the high-performers through higher pay, as overall labour costs reduce as productivity rises.

Management also appreciates the modelling capability of the system. Alterations to layout or operating procedures can be modelled in the form of ‘what if’ analyses and then de-bugged or optimised to suit. This allows operators to see if what they’re proposing to do will genuinely save time, or add time instead.

Workforce management systems can also save valuable management time through optimising labour schedules. Poor shift scheduling on the shop floor can lead to under or overstaffing, resulting in increased costs or missed targets. To avoid this, warehouse managers often spend countless hours on scheduling, trying to get their shifts just right.

The scheduling of warehouse personnel presents many challenges. Many warehousing facilities operate around the clock, with a wide range of job positions to schedule and multiple shifts to cover. Within each shift, employees must also be assigned to various tasks or work orders. Union and legislative regulations may place restrictions on work hours, overtime compensation and the types of shift rotation that can be implemented. The schedulers must also consider time-off requests, labour rules, skill sets and personnel availability when developing schedules for warehouse workers.

Automated forecasting and scheduling systems allow operators to balance workload in order to match demand while reducing the need for overtime or temporary workers. Optimised scheduling begins with an accurate forecast, ideally based on actual customer demand. Using the engineered labour standards the system then calculates the workforce required by category for a given timeframe, e.g., peak hours, a shift, a day or a week. This allows demand to be accurately evaluated.

In addition to maximising scheduling accuracy, balance and compliance, by automating this process, managers can spend more time on the shop floor. In many cases, labour scheduling systems also have employee self service capabilities, allowing workers to access their schedules, enter preferences and request overtime or time off online.

Compared to warehouse management systems, workforce management systems are also relatively quick and simple to implement, with an average implementation time of four months and a typical payback period of less than 12 months. And the icing on the cake is that there’s no disruption to the operation during the implementation.

Of course, the greatest value of workforce management solutions does not come from installing labour management software. The software only monitors results—good or bad. The real value comes from improving the methods used to complete each task to be as efficient, accurate and safe as possible. In so doing, operators can drive maximum productivity and value from their workforce, and at the same time unlock a major source of additional cost savings.

RedPrairie delivers productivity solutions to help companies around the world in three categories—workforce, inventory and transportation. RedPrairie provides these solutions to manufacturers, distributors and retailers looking to support business strategies that increase revenue, reduce costs and create competitive advantage.