Guest Commentary: Use Lean Labor Management to Reduce Costs and Boost Performance

While the concept of Lean originates in the manufacturing space, it applies across an array of industries. One example is the Retail Industry, which uses Lean concepts to reduce waste and increase quality in the supply chain. Companies are also increasingly using Lean concepts as a foundation for labor management to increase productivity and reduce costs in a warehouse.

Most recently, we’ve been applying five guiding principles to create a lean warehouse (which we describe in more detail in a series of whitepapers):

1. People Involvement: Engaging every employee to root out waste, eliminate problems and make improvements.
2. Built-in Quality: Striving to prevent mistakes before they happen, and engineering processes to make them “mistake proof.”
3. Standardization: Documenting best practices and making sure that they are followed.
4. Short Lead Time: Filling customer orders as promptly as possible.
5. Continuous Improvement: Understanding that no matter how well a process works today, there is room to make it even better.

These same lean principles, when applied to labor management, can have a dramatic impact on employee performance. Labor management tools measure and feedback performance to the employee, while Lean provides methods and processes to improve their performance. The combination of the two encourages identification of best practices and adaptation through positive feedback. Employees make the best use of the equipment and the warehouse is used to its full potential.

Here are some other ways a warehouse operation can benefit from implementing a lean approach:

• Reduces inactivity
• Increases safety
• Increases the work pace
• Boosts employee morale

All of this drives up performance with minimal investment, if any at all.

Implementing Lean Labor Management
The key to a successful lean labor approach is people involvement. This consists of:

• Educating employees about the importance of ensuring quality in every process
• Recognizing employees as the experts in the processes done on a day-to-day basis
• Empowering employees to make recommendations for improvement
• Providing employees with the tools they need to make changes

Small incremental changes in the way employees think about their jobs and the value they bring to an organization can have tremendous impact on the performance across an entire organization.

Once the foundation for lean thinking is in place, management needs to work with employees to create standard processes and set performance goals. Management needs to make the commitment to coach and train employees to cultivate a continuous improvement culture. Management should then create an employee recognition program that will reward employees for meeting their goals. This will motivate employees to work more efficiently and continue to find improvements in their day-to-day processes.

Chris Merritt currently serves as the Vice President and General Manager of Ryder’s Supply Chain Solutions Global Retail vertical. In this role, he is responsible for building and strengthening Ryder’s capabilities and presence in this industry vertical through better operational execution and innovative solutions. Mr. Merritt brings more than 20 years experience in the retail, healthcare, and logistics industries.