Labor Standards in the Warehouse (Part 6): Are Time Studies or Predetermined Time Systems Better?

(Editor’s Note: This is the final part of a series on warehouse labor standards. Click here to read Parts 1-5).

The most granular labor standards are based on time studies or predetermined time systems (PTS). MSD and MOST, in turn, are the two most prevalent methodologies used to develop PTS time standards for the warehouse. 

I talked to subject matter experts at several consulting and software organizations active in this area (enVista, Kurt Salmon Associates, Manhattan Associates, RedPrairie, TranSystems, TZA, and West Monroe Partners) to get their views on the pros and cons of PTS versus time and motion studies. They all had differing opinions on the topic, but there was a high degree of consensus on the following points:

• Both PTS and time studies can result in very accurate standards. The religious wars surrounding this topic, which were common five years ago, have largely died out.  If a client has a preference, most of the consulting organizations will use the methodology the client prefers. However, like a carpenter who has a favorite hammer, consulting organizations tend to have a methodology they are most comfortable with:
  • enVista: MSD by preference, time studies are done about half the time in practice
  • KSA: time study
  • Manhattan Associates: time study
  • RedPrairie: MSD
  • TranSystems: time study
  • TZA: MSD by preference, time study in practice
  • West Monroe Partners: MOST
• Many clients do not have a strong preference, so the consulting organization can often use its favored methodology. However, if a client has industrial engineers (IEs) on staff, those IEs may have a preference. You don’t just put standards in and walk away; they must be updated from time to time. Most companies either have, or will hire, IEs to keep the standards up to date. If a company already has IEs experienced with a particular methodology, then that could be a good reason to select that method.
• PTS studies will almost certainly have time study components. PTS is focused on the time associated with elemental human movements.  But warehouses also use machines that must be timed and this is typically done using time studies.
• There are elements of subjectivity associated with both time studies and PTS. More seasoned IEs will create better standards. There are also methods consultants can use to minimize subjectivity. 
• Over time, MSD consultants have developed elemental motions into patterns that are consistent for almost all warehouses. For example, a typical pattern might be “obtain a large dense case from the middle tier of a three tier pallet rack.” This is 60 TMUs. MOST is inherently more “pattern like” in the standards it develops. This means that PSD implementations are usually quicker and less expensive than time studies; they are also easier to keep up to date. However, consultants who favor time studies would argue that the fact time studies takes longer is actually a benefit; associates need to see consultants working hard to develop accurate standards.
• Whichever method is used, cultural issues cannot be ignored. Consultants must communicate with associates about what they are doing, how they are developing the standards, and spend enough time on the floor so that the associates will view the standards as being objective. The education process is easier with time study projects because they are inherently easier to understand.
• Whatever methodology you use, the standards should be kept in a labor management system (LMS) for several reasons. An LMS can provide real time feedback to associates on where they stand during the course of the day; they make it much less burdensome to calculate how associates are doing on an ongoing basis; they provide better support for companies that want to use incentive plans in conjunction with their labor program; and they offer other benefits as well. Buying a LMS from your current warehouse management system (WMS) software vendor is a growing trend. Advanced labor management systems can accept PTS or time study based standards.

Based on this research, you might wonder which methodology I would favor. Before I had these conversations, I was a predetermined time systems proponent. I still lean to MSD, but my views have softened considerably. Labor study methodology is only one of several decision criteria I would use in selecting a consultant. And I would no longer score methodology as strongly as before. I would now focus more on a consultant’s ability to identify and document best practices and standard operating procedures, support change management, and their ability to leave behind detailed operational plans to make sure the desired results are achieved.

(Note: Manhattan Associates and RedPrairie are ARC clients).