OPSdesign has created this guide to engineered standards in the warehouse. In today’s highly competitive logistics and supply chain industry, warehouses manage increasing demands for speed, accuracy, and efficiency. One of the most powerful tools to achieve these objectives is the implementation of engineered standards. These standards allow warehouse operations to be optimized systematically and scientifically, driving productivity improvements, reducing costs, and ensuring workers perform at their best.
This article provides a detailed exploration of engineered standards in the warehouse, including a definition and the steps involved in developing them, deploying them effectively, and monitoring their results. By the end of this article, you should have a solid understanding of how engineered standards can transform your warehouse operations.
What Are Engineered Standards?
Engineered standards are scientifically developed benchmarks that define the time required to perform specific tasks in a warehouse. These standards are based on a detailed analysis of tasks, tools, and work methods. They provide a standardized way to measure the efficiency of various warehouse activities, such as picking, packing, receiving, shipping, and inventory management.
Engineered standards differ from arbitrary or historical standards in that they are grounded in scientific principles, such as motion studies, time-and-motion analysis, and ergonomic considerations. They are designed to provide an accurate, objective measure of “normal” performance for a given task rather than relying on subjective opinions or previous experience.
Benefits of Engineered Standards
The adoption of engineered standards in warehouse operations offers several advantages:
Objective Measurement: Engineered standards provide an unbiased, data-driven approach to assessing employee performance, making it easier to identify opportunities for improvement.
Improved Efficiency: Engineered standards help streamline operations by optimizing work methods and eliminating inefficiencies, reducing wasted time and effort.
Cost Reduction: Standardized processes can help warehouses operate more efficiently, leading to cost savings in labor, equipment, and overhead.
Better Resource Allocation: By understanding the time and effort required for each task, warehouse managers can allocate resources more effectively, ensuring that labor and equipment are used optimally.
Consistency and Fairness: Engineered standards help create a level playing field by establishing consistent expectations for all workers, which can improve morale and reduce disputes over performance metrics.
Steps to Develop Engineered Standards
Creating engineered standards requires a systematic approach, combining detailed data collection, analysis, and modeling. Below are the key steps involved in developing engineered standards for warehouse tasks.
1. Task Identification and Breakdown
The first step in developing engineered standards is to identify the specific tasks for which you will establish standards. In a warehouse, this could include picking orders, receiving goods, sorting items, packing, and shipping. It’s crucial to break down each task into smaller, measurable components.
For the task of order picking, the breakdown might include:
- Travel time to pick locations
- Time spent at each pick location to retrieve the item
- Time spent traveling between picks (for multi-item orders)
- Time spent placing the item in the cart or container
- Time for reorganization or adjustments to the picking path
By breaking tasks down into components, you ensure that the standard reflects the full scope of the activity and all associated variables.
2. Data Collection and Time Study
The next step is to gather data on how long each task or component takes in a real-world setting. This is typically done through time studies, where trained observers record the time it takes to complete each task under normal working conditions.
During a time study, the observer will:
- Observe a worker performing the task.
- Record the time taken for each individual element of the task (e.g., travel time, picking time, packing time).
- Take note of factors that might impact performance, such as worker experience, equipment quality, or environmental conditions.
The data collected in this step forms the foundation for the engineered standard.
3. Analyze the Data
Once the time data is collected, it’s time to analyze it. The goal is to identify the “normal” or expected time for each task or sub-task. This involves:
- Calculating the average time: The average time for each task is determined by taking the sum of the observed times and dividing by the number of observations.
- Eliminating outliers: Outliers or extreme data points should be excluded from the analysis, as they could distort the results. For example, if a worker performs an exceptionally fast or slow task due to a rare event, this will not represent a typical performance.
- Accounting for variability: In addition to average times, it is important to assess the variability in task performance. This can be done by calculating the standard deviation of the observed times.
The analysis aims to determine a realistic, achievable standard that reflects normal conditions while accounting for factors such as variability in worker performance and environmental influences.
4. Develop the Standard Time
Once the data is analyzed, the next step is to calculate the standard time. This is typically done using one of two methods:
- Time-based method: In this method, the standard time is simply the average time for completing the task, adjusted for factors such as rest, delays, or allowances for interruptions.
- Predetermined motion time system (PMTS): In more complex or precise systems, the standard time is calculated based on predetermined motion time elements, which are time values associated with specific movements (e.g., lifting, carrying, walking). PMTS systems are often used in more industrialized settings but can be valuable for tasks involving repetitive movements in warehouse environments.
The formula for calculating standard time is usually:
Standard Time = Observed Time + Allowances
Allowances account for factors such as:
- Rest time: Time needed for breaks or to recover from fatigue.
- Delay time: Time lost due to equipment failure, interruptions, or inefficiencies.
- Personal time: Time spent on personal needs, like bathroom breaks or adjustments.
5. Validate the Standard Time
Once the standard time has been developed, it’s important to validate it to ensure it reflects the time required to perform the task. Validation can be done by comparing the standard time with actual observed performance over an extended period. Ideally, the new standard should result in a realistic, achievable target for workers without being overly demanding or too lenient.
This step may involve pilot testing in a small area of the warehouse to see how the new standard works in practice. Adjustments can be made if the standard proves too high or too low.
Deploying Engineered Standards
Once engineered standards are developed and validated, they must be deployed across the warehouse. This involves communicating the standards to all stakeholders, training workers, and ensuring that the standards are implemented consistently throughout the operation.
Communicate the Standard to Employees
Clear communication is key when deploying engineered standards. Warehouse workers must understand the rationale behind the standards and how they were developed. This helps foster buy-in and ensures that employees do not view the standards as arbitrary expectations.
Warehouse managers should:
- Hold training sessions to explain the new standards.
- Provide workers with clear expectations regarding performance metrics.
- Offer opportunities for workers to ask questions and provide feedback on the standards.
Incorporate the Standards into Daily Operations
Once the standards are communicated, the next step is integrating them into the daily workflow. This includes:
- Adjusting workflows: Warehouse processes may need to be adjusted to align with the new standards. For example, changing the picking method or layout may be necessary to reduce travel time or streamline processes.
- Setting targets: Set performance targets based on the engineered standards. These targets should be realistic and aligned with the calculated standard times while providing workers with enough flexibility to manage unexpected events or delays.
Provide Support and Resources
To successfully implement engineered standards, warehouse managers must provide the necessary tools and resources. This includes:
- Training: Ongoing training sessions to help workers adapt to the new standards and refine their skills.
- Tools and equipment: Ensuring workers have access to the tools and equipment needed to perform their tasks efficiently. For example, providing better material handling equipment may reduce travel time for order pickers.
- Incentives: Developing incentive programs to motivate workers to meet or exceed the performance targets established by the engineered standards.
Monitoring and Measuring the Results
Once engineered standards are in place, monitoring and measuring their impact on warehouse operations is crucial. Continuous monitoring ensures that the standards remain relevant and effective while identifying areas for further improvement.
Track Performance Metrics
The most direct way to monitor the results of engineered standards is by tracking key performance indicators (KPIs) that reflect the efficiency and effectiveness of warehouse operations. Common KPIs include:
- Cycle time: The time it takes to complete a specific task or set of tasks (e.g., order picking or packing).
- Labor productivity: The amount of work completed per labor hour, often measured as units picked or shipped per employee per hour.
- Error rates: The frequency of errors in tasks such as picking the wrong items or incorrect shipping.
- Cost per unit: The cost of fulfilling each order, including labor, equipment, and overhead costs.
Analyze Performance Against Standards
To assess how well the warehouse meets the engineered standards, compare actual performance data to the standard times developed during the planning phase. This allows managers to see if tasks are completed within the expected timeframes or if adjustments are needed.
Continuous Improvement of Engineered Standards
As with any operational initiative, maintaining a continuous improvement culture is essential. Over time, changes in warehouse technology, staffing, or processes may make the original engineered standards obsolete. Regularly revisiting and adjusting the standards based on new data is essential for ongoing optimization.
In addition, monitoring employee feedback and performance data can uncover opportunities to refine the standards, improve productivity, and enhance worker satisfaction.
Engineered standards offer a powerful method for optimizing warehouse operations, driving efficiencies, and reducing costs. By systematically developing, deploying, and monitoring these standards, warehouses can establish clear, measurable benchmarks for success. However, warehouse managers must commit to ongoing data collection and refinement to ensure that standards remain relevant and effective in an ever-evolving industry. With the right approach, engineered standards can significantly enhance warehouse productivity, improve worker performance, and contribute to long-term operational success.
