Over the last few years, I have led teams of West Monroe consultants through Productivity Blueprint Assessments at many different types of clients within the retail, distribution, and LTL trucking industries. The West Monroe Productivity Blueprint is an assessment based on P.U.M.P. methodology (i.e., Productivity = Utilization x Methods x Performance) that is designed to pinpoint areas of opportunity related to workforce productivity, quantify those opportunities, and create a detailed road map on how to achieve those productivity improvement opportunities, from engineering through execution.
Although we have performed these assessments across industries and clients of all sizes, there is one common thread. Prior to the assessment, the client always believes that their biggest opportunity lies in Performance, which is the skill and effort put forth by the employee while completing productive work. The reality is that the biggest opportunity found in these assessments is actually Utilization. Utilization is the percentage of an employee’s paid day spent doing productive work. The higher an operation’s Utilization percentage, the more time employees spend driving productivity. Performance, which is mainly the responsibility of the employee, is typically close to 100%. In other words, when employees are doing productive work, they are performing at a normal skill and effort level. However, there are other issues within the operation that reduce the amount of time an employee spends on productive work. Why? Utilization is a direct reflection of a company’s front-line management team and its effectiveness (or ineffectiveness). It is about having the right people, in the right place, at the right time, doing the right work…and this is the responsibility of the management teams leading the day- to-day efforts of employees across operations.
How to identify utilization issues (and opportunities) within your operations
Here are a few signs you may have utilization issues within your operations:
- Your workforce gathers needed tools and equipment after the shift start up meeting
- Employees engage in non-work talk between or during assignments
- Workers take more than the allotted amount of time for paid and unpaid breaks
- Employees linger on the clock after their last assignment before punching out
- Your associates experience excessive wait times for trailers, equipment, or other bottlenecks
Even if you don’t have “warning signs” like the examples above, most companies are able to achieve a 15-25% improvement in productivity by implementing solutions to opportunities identified in a Productivity Blueprint assessment – even for organizations with labor or workforce standards in place. The key is to identify, quantify and mitigate utilization issues through sustainable programs designed to improve the overall productivity of your workforce.
For more information on how West Monroe’s Productivity Blueprint can help you, please contact Michael Harris.