iSixSigma

Manpower

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  • #55018

    Steve
    Guest

    Hello everyone. I am trying to determine how many employees we need in our warehouses. The problem I am running into is that each day the demand is different, Cycle Times are difficult to determine because each order is different (an order could have 1 item or 100 items). I have Takt Times for each of our 4 warehouses, but cannot with any confidence advise upper management whether they should hire more people or not fill positions as employees leave or move on to other positions in the company.

    Any thoughts?

    Thanks everyone!

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    #198233

    Amit Kumar Ojha
    Participant

    If the demand is not clear, how did you figure out the Takt Time …
    I suggest you to use some predictive modelling technique such as Regression analysis to predict the demand and based upon that you need to determine the manpower requirement.

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    #198234

    Chris Seider
    Participant

    Solving a problem from afar….? What is the problem?

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    #198235

    Steve
    Participant

    I developed the Takt Times based on the demand each day. I used the NET available work time and divided by the lines picked and received in our warehouse. I know what the demand was for each day by reports I can generate the next morning. What is unclear is the Cycle Time per order because each order can be drastically different. I am trying to figure out how many people should be employed in each one of our warehouses.

    Thank you for the responses Amit and Chris.

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    #198236

    Shelby Jarvis
    Participant

    Steve,

    What is driving the variation in the number of items to be picked on each order? Is it random variation? Is it related to product line? Do families of products exist?

    You will find that breaking the big problem into the components may help you add clarity. Once you segment the problem, you may find that you can solve the smaller problems or at least the ability to expand your question for this forum.

    Great question, don’t give up.

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    #198239

    Steve
    Participant

    Shelby,

    Thanks for your response. I work in an electrical supply distribution company. Variation is driven by, simply put, how busy the electricians are. And as you could imagine, a single job for an electrician could be as small as changing an outlet or as large as outfitting a brand new hospital. We sell all kinds of electrical devices from sensors that make things turn on and off – to solar panels – and all the way down to light switches.

    The variation in items to be picked/received on each order depends entirely on what job is being worked on. Our main warehouse picks between 800 lines on a slow day to 1300 lines on a busy day. Our receivers bring in around 400 lines a day. So I wouldn’t think any of this is driven by product lines or product families. An order could have simple $.50 parts on it as well as parts that cost well over a couple thousand dollars. It really is a wide range of material.

    Thanks again.

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    #198240

    Shelby Jarvis
    Participant

    Steve,

    You have a complex problem which may benefit from a few tools typically used in lean to help you begin to make progress. Prior to establishing the number of (reduced) employees required to support the electricians; work to simplify the process. Along this journey, you will learn more about true capacity and pick cycle times.

    My caveat: I know nothing about your company nor its current condition. You may find that you are very well off in some of these areas but need more.

    * Prior to starting, gather baseline data for typical cycle times to pick. (you may choose to group into categories or possible size of orders)
    * Begin by implementing 5S. This process will enable you to set up a standard condition for which you can base and measure all future improvements. If you are not versed in 5S, many resources are available.
    * Measure complexity of travel: A great fundamental tool for this is a spaghetti diagram. You should track people as well as machinery. Benefits of this include understanding the time wasted in travel but more importantly you may uncover any safety issues like people and machinery frequently intersecting.
    * Evaluate the inventory for patterns. Items rarely pulled can be less convenient to pull where as frequently pulled items should be located for convenience and speed. You may also learn that some items are always pulled together. This allows you to co-locate related items.
    * Establish visual controls to make picking easier to train, learn, and execute.
    * Re-measure your cycle times in the exact manner prior to the project.
    * Have you improved?
    * Have you learned other opportunities? Do not limit yourself to if you know/don’t
    know the answer. Do you have additional opportunities?
    * Make additional improvements.
    * Now you have improved the safety, quality, ad delivery. If you have not already achieved the cost savings, you can more clearly define the opportunity and make a meaningful recommendation.

    Many companies start with cost savings. It makes sense in a meeting, but is fundamentally wrong for the long term health of the business.

    Always follow the pattern of improving Safety, then Quality, then Delivery, then Cost. You will find you gain the cost savings, but in a meaningful way. When you approach cost savings first, you will not have processes in place to support less people, you risk injury or ergonomic issues, you risk quality, and you risk delivery failures.

    I hope this is helpful.

    Shelby

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    #198251

    Steve
    Participant

    That was very helpful. I appreciate it very much.

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    #198265

    Nik
    Guest

    Steve,

    Sounds like there are two opportunities here: deploying Lean to stabilize the impact of demand variation as well as optimizing the processes AND answering a significant question for your management team. I suggest finding a way to do both, effectively.

    Shelby outlines a good approach to being Lean to the process. And it would be disastrous for your program (and your managements’ reputation) to have Lean efforts associated with head reduction. So an additional aspect to consider (from Theory of Constraints): What’s the goal? What is the goal for the warehouse? Where is the opportunity to really make money? Most businesses think profit comes from cost reduction, but profit also comes from market domination and velocity of sales – – these things require more resources not less. We have a Lean exercise we use in our Value Stream Mapping class that has people building Lego ships. The customer orders vary, and orders come in every minute for 15 minutes. In round 1, the customers order 30 submarines, and the teams never succeed at producing that. Plus if you factor in the cost of standing inventory and WIP, they don’t even turn a profit for that period. We then apply Lean principles to the bottleneck areas (with ground rules that you can’t hire anyone, and certainly can’t fire anyone) and run the exercise again. Now the teams produce all 30 submarines in 15 minutes. Everyone agrees that it is a more productive outcome and the work is less frantic. One additional critical take-away (and the reason I mention it here), is that in the first round the workers were 100% busy (and not producing), but in the second round they weren’t 100% busy. Many had some down time, and we discuss manning levels. Classic managers want to apply traditional philosophies to optimizing cost (laying folks off), but others really question if idle resources are really a significant enough of a problem. They provide surge capacity, and they saw that being 100% busy (round 1) contributes to frantic work places and negatively impacts money making production.

    A few years ago I had an assignment to improve a network of tool cribs. One of the tools we used to test various theories was process simulation (we used the software Process Model). I gathered data on arrival patterns and cycle time with each order. You can gather this data by hand, but we had a tool check out logging system and I used that data to calculate how many people showed up each hour at the crib (and I kept the fluctuating demand in the simulation) and the time at the window (by measuring the time between first transactions between individuals during busy periods). We made a simple process and verified our baseline. Then we could experiment. We varied tool crib attendant levels, removing high demand low cost items (by making them freely available so folks didn’t have to wait in line), and even analyzed the impact of combining tool cribs (which I didn’t think would save time, but it actually did by providing more resources and preventing queue build ups). This provided me with some analytical rationale for my recommendations, demonstrated the value of the tools to management, and they eventually authorized a multimillion dollar upgrade because we could demonstrate the ROI based on reducing the time employees were waiting in line for tools.

    So if it were me, I would look for ways to use Lean to meet the company’s real goals, and make sure help them answer the near term questions as well.

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