Cadre Whitepapers

UNLEASHING WAREHOUSE PRODUCTIVITY, The Case for Simplifed Gainsharing

Introduction
The cost of labor constitutes about 65% of the operating budget for most warehouse facilities.  Everyone agrees that labor is a very important resource.  Yet, as a recent Gallup poll indicated, almost 20% of warehouse workers described themselves as “actively disengaged” from their work.  As many as half of those surveyed were doing just enough work to get by.  Market or customer demand notwithstanding, quality and efficiency cannot be at their peak when so valuable a resource is so poorly applied to the task at hand.  Industry pundits peg the cost of this disengagement at $300 billion annually.

So what’s the problem?   Central to solving this dilemma is the realization that when managers and workers look at it, they see two very different problems.  On the one hand, warehouse operations are much more variable than manufacturing and even the most tightly structured processes rely to some extent on worker choices as to how to do something or what to do next.  Managers want workers to make good decisions, those that are in the best interest of the client or the company.

What workers see is altogether different.  Their work is repetitive and boring.  It will be about the same tomorrow as it is today and as it was yesterday.  Customer A looks just like customers B and C, as do their products.  Passing the time is their most important goal.  Being more efficient has no direct benefit for many of them.  They have little or no control over the work schedule, the work load, or the sequence of tasks. 

How can these perspectives be reconciled?  The key is to align worker motivation with management objectives – to make it worthwhile for hourly employees to want to make the same decision as the manager.  In short, to find a way to engage the individual worker in the process in such a way that everyone benefits.

The answer is Simplified GainSharing.