The client is a leading retailer in Canada.
West Monroe Partners implemented an engineered labor standard program at the client a number of years ago when they transitioned to a new warehouse management system (WMS) after an acquisition. West Monroe, with more than 500 successful labor standards implementations, was chosen for our engineering expertise and detailed knowledge of the labor management capabilities of the new WMS.
Over the years, many changes impacted the accuracy of the standard, including:
- Added new warehouse locations and some existing racking was removed
- Replaced older material handling equipment with new machines
- New product mix and packaging
- Added or modified warehouse shifts
The client wanted to review the current standards to ensure continued accuracy and reliability. With labor costs representing a large portion of their operating budget, maintaining an up-to-date labor standard was part of the client’s strategy to remain competitive.
With our help, the client hoped to:
- Establish a labor standard that sets accurate performance targets for employees
- Increase overall productivity for case picking and forklift activities
- Set a transparent standard implementation process to ensure labor union’s buy-in
- Remain cost-competitive in a low-margin retail industry
- Continue using a work measurement program backed by a proven engineering methodology
To ensure all operational requirements were reflected in the standard, we reviewed process documentation, examined the accuracy of warehouse travel coordinates, and conducted extensive data collection at each distribution facility, including:
- Material handling equipment travel speed in various load conditions
- Warehouse congestion for different types of activities
- Process times for material handling equipment
- Motion times for manual activities performed by warehouse staff
- Case handling requirements for different types of product packaging
- Work conditions that effect rest and personal needs allowances
Upon completion of data collection, the WMS was updated with the new labor standard parameters. We conducted extensive audits to ensure the accuracy of the standard’s calculations, working alongside union representatives to perform additional audits on the warehouse floor. Through open dialogue, we were able to get union approval of the labor standard changes.
As a result, the client is able to maintain the high level of productivity at its distribution centers, gain greater union confidence in the fairness of the standard, better manage its labor costs and continue to provide timely service to its expanding network of stores.