Labor Management System Practice

Productivity Improvement -- Too Good To Be True?

Labor is the largest controllable expense in a distribution operation often representing over half of the operational cost and other than electricity the only truly variable expenditure.  Common knowledge amongst experienced engineers is the fact that people only yield 65% productivity when working outside the visibility of a labor management system and when not being held to an individual engineered labor standard.  Furthermore, experienced engineers also know that given an effective pay-for-performance incentive system built on engineered labor standards and governed within a labor management system, people will produce 15% to 25% more work than those not on an incentive.  Implementing a pay-for-performance system based on engineered labor standards within a labor management system will very often allow a business to reduce its workforce by 50% – “too good to be true?”  Given this scenario, labor management systems with engineered labor standards often pay for themselves within the initial year of implementation.

• Does the system calculate discrete engineered labor standards (+/- 5% confidence of normal with 95% accuracy)?
• For what distribution processes does the labor management system generated engineered labor standards and at what confidence level?

• Will the labor management system monitor all employee tasks from payroll clock “on” to payroll clock “off.”
• Has the software vendor integrated their system with my warehouse management system before and where?

HOW CAN 4SIGHT HELP? 4SIGHToffers the following services:

• Operations assessment -- what opportunity is there for your operation to improve productivity after installing a labor management system and employing a pay-for-performance incentive system based on engineered labor standards?

• Return on Investment/Capital Justification -- 4SIGHTwill determine the ROI of the project and assist your company in developing the capital justification including all estimates of one time and on-going expenses and benefits.

• Labor Management System Selection -- 4SIGHTwill utilize its 9 Step process to assist your company in selecting the software that best fits your company’s needs. 4SIGHT will collaborate with your company to develop the following from 4SIGHT’s LMS toolkit : functional/technical requirements document, Request for Proposal (RFP), Vendor Scoreboard, Demo Scripts, and more.

• Engineered Labor Standards Development -- 4SIGHT will develop fair and accurate (usually +/- 5% confidence of normal with 95% accuracy) engineered labor standards.

• Training -- 4SIGHT can train management, employees, and an engineering staff to perform process improvement, develop preferred methods, and audit engineered labor standards.

• Change Management -- 4SIGHT‘s strength is change management.  A project is only as successful when the targets of the change accept the change.   4SIGHT has successfully implemented these projects hundreds of times and will lead your company to the easiest path to success.

• Engineered Labor Standards Audits -- 4SIGHTcan review your company’s engineered labor standards and determine its level of accuracy.

4SIGHT Labor Standards Engineers are certified to perform time studies and employ MTM.

Nearly 95% of 4SIGHTLabor Standards implementations have been in union environments where 4SIGHTengineers have developed a reputation with the unions for particularly thorough and fair Labor Standards implementations.