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Posted on December 16th, 2007 by pat
Filed under: Simplified GainSharing
Pat,
What is the most effective way to administer Simiplified GainSharing to the associate level in an automated Pick-and-Pass operation with no engineered labor standards? The product and work mix is not consistent from zone to zone.
Tony
Hi Tony,
Pick & Pass generally is difficult to establish as individual standards, but readily lends itself to a small team environment. We posted a paper on Small Teams which can be found in the topic bar to the right of this reply.
Where it’s hard to analyze your specific requirements from a blog, I do believe the elements to guide your incentive planning are embedded in the Small Teams paper. To enumerate them:
1) Select the three or four best workers currently working in your Pick & Pass operation.
2) Bring them into a brainstorming meeting, and tell them you’re considering a Simplified GainSharing model for your DC, but you’re stumped on how to structure it for a Pick & Pass operation. Caution them that there are no guarantees the Company will implement these incentives, but right now you’re in the exploration stage.
3) Show the brainstorming group the Associate Presentation for Simplified GainSharing that walks through for a workforce group how Simplified GainSharing works (if you need an Associate Presentation, I’ll be happy to email you one). Once they see the sliding scales, no caps, and associate/company splits for sharing gains, the creative forces take over and you’ll find yourself in a brisk discussion on how these concepts can be applied to your Pick & Pass operation. Top associates are always captivated by the dynamics of the program; indeed we’ve never failed to come away from such a brainstorming session without a viable solution.
4) Include in your brainstorming session a supervisor or manager who understands the overall thruput or departmental production rates of the Pick & Pass operation. Once the top workers flesh out how to apply incentives to small teams, the salaried personnel must do a reality check to assure that the production rates of the small teams will all add up to the overall departmental rate. If they do, you can be asured that the sliding scales will be fair to both the company and the associates.
5) After a metric is created, a Plan Document can begin to be worked out by the management team. A sample Plan Document can be downloaded from this blog.
6) There’s a post by Susan White Livermore where she successfully used this methodology in a manufacturing facility. Also Ron & I will post a paper on this blog concerning Pick & Pass incentive tracking.
Feel free to blog back with any questions that arise from this process.
A few final comments on engineered standards — where it’s always ideal to find engineered standards in use prior to starting an incentive plan, the absence of engineered standards should not deter a DC from beginning a powerful plan like Simplified GainSharing. Remember the Company captures two-thirds of all gains, which is actually found money, since you do not presently have this enhanced productivity.
Some companies opt for establishing engineered standards first, telling themselves they’ll layer in an incentive plan later. Besides being a lengthy process, it’s also several times more expensive then raising productivity levels with incentives. I know of one DC which seven years ago spent $200,000 in ELS consulting fees for a 15% raise of the standards levels — and this was only for order selection!
Simplified GainSharing has doubled standards in our best performing DCs over the years; so to my mind it’s better to capture the big gains in a quicker and less expensive manner, then afterwards use industrial engineers as Buyout Specialists who can show workers how to earn even more gainshares. In this way, the workers see the engineers as helping them earn more money and become considerably more cooperative in the ELS efforts. It’s the proverbial win-win situation.
Pat