Productivity, Are We Giving Ourselves the Complete Picture?

Productivity has always been important but it is becoming increasingly so.

Achieving and setting productivity standards underpins cost budgets, whilst also informing the resource levels needed to reach service levels.

A miscalculation will nearly always have a consequence, in this scenario operations either overspend or under deliver and neither are palatable. Get it right consistently and it becomes a competitive advantage.

Productivity in warehouses is essentially all about people. Attracting and retaining staff is becoming a real challenge for operators and singularly relying on short term resource to deliver peak is now unsafe. Many businesses are increasing their core headcount to address this challenge, absorbing the additional cost, and indeed many are already planning for the Christmas peak ahead.

It is easy to see the attraction of investing in automation when faced with these realities. Automation will reduce the people requirement however, it will bring with it a number of its own challenges, not forgetting the distraction it creates to implement, the cost of acquiring, and the need to be confident you are investing in a future-proofed solution.

So, how is productivity best measured?

How to measure productivity

In warehouse operations, UPH (units per hour) has been a long standing industry indicator. UPH is a rudimentary measure of performance; it provides a guide to how an operation is tracking.

The vagaries of UPH can be illustrated to readers who have witnessed ‘pick and stick’ operations where the picking team might be tempted to select picks out of sequence (doing untold damage to replenishment..!) due to a recognition that a ‘good pick’ holds plenty of units, thus the pick is more ‘economical’ and likely to return a decent UPH for the picker.

Measuring efficiency is a much fairer way of measuring people and far more precise when it comes to understanding the cost to serve.

Efficiency as a means of measuring operations

To measure efficiency one needs to know the parameters relating to each task, for example in a pick operation; the locations being visited, metres being walked and the number of units picked among other things. Each task then has a unique amount of time allocated for its completion.

Measuring operations in this way makes for fair comparison, regardless of whether the operations are next door to each other or in different countries.

For a more holistic picture, capturing the utilisation of people is important: knowing how efficient people are when they are working, knowing how often they are working is illuminating.

Few operations capture/report on the time they have lost at the beginning or end of a shift, and/or between tasks. This can be quite revealing and is within the remit of the management team to ensure a smooth flow of work. Immediate improvements to productivity can be achieved by paying attention to lost time.

Bonus schemes are becoming more popular as a tool to help retain staff and reward over achievement. In order for a bonus scheme to drive the right behaviour efficiency ought to be calibrated with utilisation.

Addressing the productivity challenge

Unipart Logistics understand productivity is a never-ending challenge requiring disciplines in both control and visibility. As customer requirements continue to change, businesses that can accurately measure the efficiency and utilisation of their operations will be best placed to drive productivity and race ahead of those competitors still limited by less accurate measures.