Red Prairie's engineers looked at the situation and told the food company that, since it had more processing going on on the other side of wall, the best way to proceed was to knock holes in the walls so that they no longer had dead end aisles. This would let work flow through from one end to the other and develop a more efficient traffic pattern within the warehouse. "It significantly increased their productivity," says Le Tart. "They were up over 50 percent because a simple thing like a traffic pattern was allowing them to be more consistent in how they did things."
Another metric that many companies should be concerned with modeling into their handling standards is food safety. "This is a hot topic right now, with all the recalls for the industry," notes Le Tart.
He says companies can improve the safety level of food by building the proper procedures for handling it into their LMS standards. "If you're handling meat for example, how long can it be in a part of the warehouse that isn't refrigerated? Don't leave it sitting on the docks. All the issues around food safety really can be part of the process of the best practices that are implemented, so you're really combining two separate areas into one correct process."
Many warehouses use incentive programs to raise worker productivity levels. However, they may be implementing them wrong, or in such a fashion as to actually lower worker productivity and raise the level of resentment. During the engineering process that is required to properly implement an LMS, such pitfalls can be identified and corrected.
Retalix's Morgenroth sites a recent LMS installation that Retalix performed at Southern Foods, a Bowling Green, KY-based foodservice distributor. "They had an incentive program and it was based on the CPH (cases per hour) number, based on the square footage and the aisle travel within the primary zones of picking-which would be the cooler and the freezer and the grocery-the first thing we identified, once we put in engineered standards, was that a cases per hour rate incentive should not be used."
According to Morgenroth, picking 88 cases in a cooler requires less travel than picking 88 cases in the grocery area, which makes picking in the cooler easier. This leads to the unfair rewarding of selectors who work in the cooler, over those working in dry, who are actually doing much more work. Engineered standards, which take into account the different travel rates in both environments, put them on a level playing field.
"Your grocery guys are going to pick more cases per hour than what your cooler guys are because it's all based on travel," says Morgenroth. "Your incentive plan is going to be fair and equitable now. If you didn't have this tool to measure utilization, you'd be giving money away that you shouldn't be."
"The new standard involves giving you time to pick based on the layout of the warehouse" explains Kim Capps, vice president of special projects for Southern Foods.
"And you're not getting penalized because you're going to the freezer or you're going to the dry area."
In addition, according to Morgenroth, new metrics for Southern's picking teams will eventually include "a productivity piece, a production piece and a service level piece that they will have to meet. Those are the measurements that will eventually drive the incentive plan."
"The incentive will be for staying on production and having fewer service failures" Capps adds.
Experts like Tompkins' Brockmann believe the best incentive program should contain a mix of metrics. "What I like to see included is a set of qualifiers, let's say you have a facility-wide safety goal, a facility wide inventory accuracy goal, a facility-wide order fill rate, or customer service metric-so you have four or five metrics out there and your incentive is based on an individual performance, but if the facility doesn't meet the safety and customer service goals for the month then your incentive is reduced by a certain percentage."
A mix like this keeps workers' attention on the fact that, yes there is a time component to getting the job done, but you have to keep providing quality customer service, as well as maintain a safe workplace.