Conscientiously or not, labor is often used to compensate for inefficient business processes. Organizations and personnel are challenged to overcome poor processes with brute force and hard work, often resulting in process or system workarounds, duplication of efforts, off-system spreadsheets and redundant checks. This is why it is so important to measure and improve employee productivity, worker productivity and labor efficiency. Labor is a controllable and improvable expense for service companies, distributors and manufacturers.
Labor is a controllable and improvable expense
There are numerous ways to attack labor productivity and optimize your use of human resources. At Supply Velocity our methods are rooted in Business Intelligence, Lean Six Sigma and Supply Chain Management. We therefore use the approach of:
- Understanding the current state
- Identifying and eliminating non-value-added work
- Designing the future state
- Measuring performance of the work area.
Examples of ways to improve labor productivity include:
- Workplace layout (office, warehouse, factory)
- Business process improvement
- Examples include:
- Back-office processes
- Supply Chain processes
- New product development
- Allocate resources to your most important customers
- Reduce rework and ongoing sources of variation
- Examples include:
Workplace Layout – Labor Productivity Improvement
The general principles of workplace layout require you to understand the 80/20 of your workplace. For most business processes, 80% of the work is related to 20% of the tasks / customers / inventory. By mapping workplace flows and analyzing the volume of work, your facility layout can match volume, minimizing how much time your human resources walk around to do their job.
See our Facility Layout Service Summary for additional details on this methodology.
Business Process Improvement
Business process improvement uses process flow mapping to streamline information flow within your company, eliminating unnecessary work.
See our Business Process Improvement Service Summary for additional details on this methodology.
Customer Optimization – Differentiate Service to High Performing Customers
Sometimes the best way of improving labor productivity is to focus your labor on the area that can drive sales growth… doing more with the same number of people, versus reducing your labor. Customer optimization helps you measure who your best customers are and provides a framework for allocating customer service resources to your best customers. This can drive profitable sales growth by serving your best customers deeper.
See our Business Intelligence – Customer Optimization Service Summary for additional details on this methodology.
Reduce Rework and Variation
Eliminating rework is the best way to improve labor productivity. There is no activity that is a larger waste than reworking something that was done incorrectly the first time. This is the heart of the quality revolution that hit American Industry in the 1980’s and 1990’s. However, while quality improvement was introduced 30+ years ago, there is still more work to be done. Quality problems often start with variation. Supply Velocity’s Six Sigma tools help companies identify and reduce variation in business processes.