AX Using Labor Standards in the new Warehouse Management solution

This post consists of two parts: An introduction to labor standards from a business standpoint, from the Progress group, and then a short example of how all of this looks in AX.

Introduction

One of the less well known but very distinguishing features of the new Warehouse management solution in Dynamics AX 6.3 is its support for multi-variable, engineered labor standards.  Labor standards are very important in warehouses that have lots of people.  A common misconception is that they are used to increase the pace of the workforce.  In reality, pace rarely increases much if at all.  Two other positive effects result from the proper use of labor standards.

First, the utilization of the workforce improves, i.e. the time when workers are working.  With labor standards a warehouse manager can better estimate how many people are really needed to do a job and he can schedule accordingly.  A surprising outcome from standards projects is that they reveal how much supervisors “hedge” labor to cover the unknown.  Supervisors are much more willing to move or trade resources from their area to other areas after labor standards are implemented; they can see how much their department’s performance suffers if they do not.

AX can provide feedback on historical performance for a given warehouse task and that information can be used to develop a good planning number for how much a person can get done in a given area in a given segment of time.  No one can remain busy and perform well in a warehouse or warehouse area that has 30 people that really needs 25.

Second, labor standards can drive improvements in productivity through better methods.  A standard should be set around the best way to do a job.  A lot of companies have no idea what the best way is to do a job until they do a labor standards project.  Once identified, companies teach everyone the best methods and measure each person’s productivity.  Associates that are not meeting performance often times are not following the proper procedure.

What is a labor standard?

At this point, you might be wondering “What exactly is a labor standard?”  A labor standard is a formula used to calculate the estimated time it should take to perform a given class of work.  Labor standards are derived from timestudies of associates actually performing the work.  A timestudy is used to calculate statistically valid estimates for each element of a given class of work.  An “element” is a step a worker performs when doing a job.  For example, in picking there is an element for “Scan location” to confirm that the picker picked from the right location.  

Once the timestudy is complete, as a result, we are getting out estimated times for executing a task, for example, 13.29 seconds for every line the user picks and 3.57 seconds for every unit he picks.

It is worth noting that in many other systems this formula can only have one variable, e.g.

Estimated Picking Time = 18.26 seconds * # of lines picked

but in AX we can support two variables per standard (One for the Pick and one for the Put).  

This means standards implemented in AX in most instances will be more accurate than in these other systems.