Performance Management

During the early part of the twentieth century Industrial Engineering was developed as a scientific process for analysing and improving industrial processes with the primary objective of increasing efficiency and reducing costs.  In the latter part of that century the techniques were picked up and used to good effect in distribution operations but more recently they have fallen by the wayside and few organisations now retain the necessary skills in-house.

At THE LOGISTICS BUSINESS, given the economic slowdown, we believe that the time is right to re-introduce these techniques but in the context of a modern more practical approach.  To this end we have developed a structured programme of work designed to re-introduce the Industrial Engineering techniques of observation and measurement and to combine these with strong Operations Management Experience.

The approach is split into four stages:-

1. Scoping - We carry out a simple benchmarking exercise to asses the scope for improvement.  Results are delivered to clients within five days.

2. Warehouse Model - Working with clients and using rated activity sampling techniques, we develop a model to measure performance and more accurately assess potential areas for improvement.  Different options can be tested and client priorities incorporated.  The result is an action plan including a credible calculation of savings and benefits.  Typically, this exercise takes around four weeks.

3. Performance Management Programme - The action plan to deliver improved performance could include:-

• regular reporting to measure individual and overall productivity
• workload planning to assist and support operational decisions
• cost to serve reporting
• process improvement programmes to find the most productive ways of working
• coaching for individuals and teams.

Improvements start almost immediately leading to reduced costs in year one of the new operation.

4. Continuous improvement - Good performance will become a priority and a shared responsibility.  The change in culture means that the performance management programme will continue to deliver benefits year after year.  To ensure its success we offer a performance management service to keep activity times up to date and adapt processes to meet changing company and client needs.

The benefits of this approach are that it:-

• Ensures that challenges and opportunities are managed locally and thoroughly
• Allows you to monitor progress and feel confident that results are being achieved
• Enables your management team to sign off one stage before work starts on the next stage
• Offers you more opportunity to influence the course of the project as it develops
• From our point of view the staged approach allows us to work more closely with you and helps us to provide you, our customer, with the high standards of service, which we always aim to achieve

Outcomes

Our experience is that organisations who follow the four-stage plan can typically expect warehouse performance to improve by between 20 and 30 per cent.  Those improvements will reap rewards well into the future as a result of the new ethos of Performance Management.