It's widely assumed that a union work force won't accept engineered labor standards. But if you work within the contract and bring the union in from the start, you might be surprised.
Contributing Editor Toby Gooley is a writer and editor specializing in supply chain, logistics, and material handling, and a lecturer at MIT's Center for Transportation & Logistics. She previously was Senior Editor at DC VELOCITY and Editor of DCV's sister publication, CSCMP's Supply Chain Quarterly. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.
Would you like to see a double-digit increase in productivity in your warehouse or distribution center? That's what you can expect if you implement engineered labor standards in those facilities. Engineered standards establish the most efficient way to perform individual tasks, and they provide a basis for measuring productivity and identifying inefficiencies.
Sounds great, you say, but there's just one problem: The employees in your facilities are unionized, and they're not about to let management tell them exactly how to do their jobs or measure their individual performance.
That's the conventional wisdom, but it isn't necessarily true. Engineered labor standards have in fact been successfully implemented in many unionized warehouses and DCs. The key to getting labor on board with engineered standards, experts say, is to be consistent, maintain clear and honest communication, and respect both rules and people.
BYO engineer
Engineered labor standards specify productivity expectations for specific tasks. Typically developed by industrial engineers, they are based on a combination of on-site observations, software calculations, benchmarking, and validations through actual practice. The most common standards are for order picking and selection, followed by fork-truck operations, putaway and replenishment, and receiving and loading, says Charles Zosel, vice president, optimized labor performance for the consulting firm TZA.
The first consideration for anyone who plans to implement engineered standards in a union warehouse is what, if anything, the union contract says on the subject, says Zosel. Some contracts prohibit the use of engineered standards, while others allow them but contain provisions regarding how standards may be implemented and what rights the union has to contest or influence them.
Many times, unions will want to send their own industrial engineers to monitor an implementation. "Typically, union engineers communicate with local union representatives and companies during the development of labor standards," said Denny Toland, lead industrial engineer for the International Brotherhood of Teamsters Warehouse Division, in an e-mail. When requested by a local union representative, union engineers will perform an audit of a labor standard to determine whether the measured requirement is reasonable, he said.
If your business is specialized, you may need to explain what's unique or different about it to union engineers. "It can be difficult if they don't have a good understanding of your particular operation," says Ed Borger, vice president of operations for VWR Scientific Products, a distributor of laboratory chemicals and equipment. In-house industrial engineers developed VWR's labor standards; the company also uses labor management software from Manhattan Associates to measure performance against those standards.
Because some of VWR's products are hazardous, special training is required for warehouse employees, including members of the International Brotherhood of Teamsters who work at three of the company's five distribution centers. An in-house environmental health and safety team trains them and other workers in the proper handling of hazardous materials. Meanwhile, Borger works with the union to be sure the complex program conforms with contracts and agreements.
Play it straight
Unions are not opposed to engineered labor standards in principle. "We understand that management utilizes labor standards as a means to optimize efficiencies and cost control, and will work with the company to ensure that acceptable and reasonable standards are adopted," Toland said, adding that union members take pride in being highly productive.
Nevertheless, standards may initially be met with suspicion. That's entirely understandable, says Borger of VWR. "You have the same people often doing the same thing for years. They are very close to the work, and they think they are doing it the best possible way until you come in with a new process. It's difficult to accept that there's a better way of doing your job."
What can you do, then, to ensure that a union work force will accept and even embrace engineered standards? "Communication between the union and management is key to the successful implementation of labor standards," said Toland. "When all views are considered— from the union members and management representatives—it allows everyone to be part of the process. This typically leads to broader acceptance of the resulting labor standards by both parties." He notes that creating production committees that include representatives of both labor and management can be an effective means of fostering communication.
Zosel sums up the communication mantra this way: Be open, honest, truthful, straightforward, and transparent. Meet early and often, give the union updates on where things stand, and be open about the difficulties you're experiencing."Say exactly what you're going to do, follow through, and be consistent," he adds.
But communication alone doesn't guarantee success. It's equally important to involve employees and their union reps in developing, testing, and validating the standards. That collaborative approach raises the chances that employees or union engineers will find any problems or mistakes so they can be corrected. "The goal is to have a productivity target that's right and fair," Zosel says. "If they find something that's not right, we need to get it fixed. They understand that we want them to find things that are not right."
Even when all parties are working well together, managers may encounter some resistance. Borger has found that the more variable the task, the more difficult it is to gain acceptance for the associated standard. For example, it has not been easy to develop standards for receiving VWR's tens of thousands of items, which arrive in some 90 different units of measure in a wide range of pallet configurations and product mixes.
A common source of tension is applying identical standards and measurements to every site. There are a lot of subtleties when engineered standards are involved, Borger says. "Don't assume that the people will react the same way or the process will be better because it's your second or third [standards implementation]," he warns. "Start new at each location."
Zosel cautions against making assumptions about what will work simply on the basis of whether the work force is unionized or not. He cites the example of posting performance results: Do you do that publicly on a bulletin board, or do you report performance privately to each employee? "Some union and non-union facilities don't post, and some union and non-union sites do. It's more a matter of the company culture or the union culture," he says.
Clarity and consistency
Although engineered labor standards may initially be greeted with skepticism, a well-designed system will produce benefits for both labor and management. "One of the biggest benefits of fair and accurate standards is that they not only define what management can expect of labor, they also define what workers can expect of management," says Zosel.
That approach has paid off for VWR, which reports 25- to 30-percent productivity improvements in the DCs where the company applies engineered labor standards. Borger sees more opportunities for improvement, thanks to the information he now has about the labor costs associated with particular products. He expects the union will continue to work with VWR to find further efficiencies.
"Unions have the same issues as management in terms of performance," he says. "When you agree and align around what's expected, you get clarity and consistency. You get both sides on the same page, and you take a lot of 'noise' out of the system."
States across the Southeast woke up today to find that the immediate weather impacts from Hurricane Helene are done, but the impacts to people, businesses, and the supply chain continue to be a major headache, according to Everstream Analytics.
The primary problem is the collection of massive power outages caused by the storm’s punishing winds and rainfall, now affecting some 2 million customers across the Southeast region of the U.S.
One organization working to rush help to affected regions since the storm hit Florida’s western coast on Thursday night is the American Logistics Aid Network (ALAN). As it does after most serious storms, the group continues to marshal donated resources from supply chain service providers in order to store, stage, and deliver help where it’s needed.
Support for recovery efforts is coming from a massive injection of federal aid, since the White House declared states of emergency last week for Alabama, Florida, Georgia, North Carolina, and South Carolina. Affected states are also supporting the rush of materials to needed zones by suspending transportation requirement such as certain licensing agreements, fuel taxes, weight restrictions, and hours of service caps, ALAN said.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
As the hours tick down toward a “seemingly imminent” strike by East Coast and Gulf Coast dockworkers, experts are warning that the impacts of that move would mushroom well-beyond the actual strike locations, causing prevalent shipping delays, container ship congestion, port congestion on West coast ports, and stranded freight.
However, a strike now seems “nearly unavoidable,” as no bargaining sessions are scheduled prior to the September 30 contract expiration between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) in their negotiations over wages and automation, according to the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary.
The facilities affected would include some 45,000 port workers at 36 locations, including high-volume U.S. ports from Boston, New York / New Jersey, and Norfolk, to Savannah and Charleston, and down to New Orleans and Houston. With such widespread geography, a strike would likely lead to congestion from diverted traffic, as well as knock-on effects include the potential risk of increased freight rates and costly charges such as demurrage, detention, per diem, and dwell time fees on containers that may be slowed due to the congestion, according to an analysis by another transportation and logistics sector law firm, Benesch.
The weight of those combined blows means that many companies are already planning ways to minimize damage and recover quickly from the event. According to Scopelitis’ advice, mitigation measures could include: preparing for congestion on West coast ports, taking advantage of intermodal ground transportation where possible, looking for alternatives including air transport when necessary for urgent delivery, delaying shipping from East and Gulf coast ports until after the strike, and budgeting for increased freight and container fees.
Additional advice on softening the blow of a potential coastwide strike came from John Donigian, senior director of supply chain strategy at Moody’s. In a statement, he named six supply chain strategies for companies to consider: expedite certain shipments, reallocate existing inventory strategically, lock in alternative capacity with trucking and rail providers , communicate transparently with stakeholders to set realistic expectations for delivery timelines, shift sourcing to regional suppliers if possible, and utilize drop shipping to maintain sales.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.
Krish Nathan is the Americas CEO for SDI Element Logic, a provider of turnkey automation solutions and sortation systems. Nathan joined SDI Industries in 2000 and honed his project management and engineering expertise in developing and delivering complex material handling solutions. In 2014, he was appointed CEO, and in 2022, he led the search for a strategic partner that could expand SDI’s capabilities. This culminated in the acquisition of SDI by Element Logic, with SDI becoming the Americas branch of the company.
A native of the U.K., Nathan received his bachelor’s degree in manufacturing engineering from Coventry University and has studied executive leadership at Cranfield University.
Q: How would you describe the current state of the supply chain industry?
A: We see the supply chain industry as very dynamic and exciting, both from a growth perspective and from an innovation perspective. The pandemic hangover is still impacting decisions to nearshore, and that has resulted in a spike in business for us in both the USA and Mexico. Adding new technology to our portfolio has been a significant contributor to our continued expansion.
Q: Distributors were making huge tech investments during the pandemic simply to keep up with soaring consumer demand. How have things changed since then?
A: The consumer demand for e-commerce certainly appears to have cooled since the pandemic high, but our clients continue to see steady growth. Growth, combined with low unemployment and high labor costs, continues to make automation a good investment for many companies.
Q: Robotics are still in high demand for material handling applications. What are some of the benefits of these systems?
A: As an organization, we are investing heavily in software that will allow Element Logic to offer solutions for robotic picking that are hardware-agnostic. We have had success deploying unit picking for order fulfillment solutions and unit placing of items onto tray-based sorters.
From a benefit point of view, we’ve seen the consistency of a given operation improve. For example, the placement accuracy of a product onto a tray is far higher from a robotic arm than from a person. In order fulfillment applications, two of the biggest benefits are reliability and hours of operation. The robots don't call in sick, and they are happy to work 22 hours a day!
Q: SDI Element Logic offers a wide range of automated solutions, including automated storage and sortation equipment. What criteria should distributors use to determine what type of system is right for them?
A: There are a significant number of factors to consider when thinking about automation. In my experience, automation pays for itself in three key ways: It saves space, it increases the efficiency of labor, and it improves accuracy. So evaluating which of these will be [most] beneficial and quantifying the associated savings will lead to a “right sized” investment in technology.
Another important factor to consider is product mix. With a small SKU (stock-keeping unit) base, often automation doesn’t make sense. And with a huge SKU base, there will be products that don’t lend themselves to automation.
With any significant investment, you need to partner with an organization that has deep experience with the technologies that are being considered and … in-depth knowledge of the process that is being automated.
Q: How can a goods-to-person system reduce the amount of labor needed to fill orders?
A: In most order picking operations, there is a considerable amount of walking between pick faces to find the SKUs associated with a given order or set of orders. Goods-to-person eliminates the walking and allows the operator to just pick. I have seen studies that [show] that 75% of the time [required] to assemble an order in a manual picking environment is walking or “non-picking” time. So eliminating walking will reduce the amount of labor needed.
The goods-to-person approach also fits perfectly with robotic picking, so even the actual picking aspect of order assembly can be automated in some instances. For these reasons, [automation offers] a significant opportunity to reduce the labor needed to fulfill a customer order.
Q: If you could pick one thing a company should do to improve its distribution center operations, what would it be?
A: Evaluate. Evaluate the opportunities for improving by considering automation. In my experience, the challenge most companies have is recognizing that automation is an alternative. The barrier to entry is far lower than most people think!