Category Archives: Human Logistics

New Year, New Energy: Positive Change Requires Positive Energy

New Year, New Energy: Positive Change Requires Positive Energy
Are you heading into 2017 with new challenges and aggressive corporate objectives? If so, you have probably completed detailed research, developed strategies, and lead countless meetings in preparation to facilitate change in your labor-intensive operations. But have you given thought to how you are going to create the energy necessary for change to truly take place – not just on paper – but in the minds and habits of your workforce? In other words, positive and lasting change requires positive and lasting energy to be accepted and adopted at an individual level.
In order to gain the best performance possible from your labor force you must align their motivation with your objectives.   This means that workers must be clear about the company’s objective – crystal clear – and that those goals are part of your production benchmarks that are monitored and shared with the workers DAILY!
Whether you share production reports daily in a meeting or create a powerful display on your production floor, the communication and the vibe you put forward must be individualized to the worker – crediting them as individuals or praising the performance of their shift over another. There is one clear way to know if you are motivating your workforce. If you were the proverbial fly on the wall in the break room, would you hear your workers discussing their performance?
When we first partner at a new facility, we often see the remains of production performance charts that are intended to motivate the floor workers. Too often managers capture data sporadically and worse they don’t share the data with the workers on a consistent basis. News flash – only the workers can affect the outcome of your goals. It is the “duty” of the manager or supervisor to create the energy that motivates the worker. This requires constant monitoring of performance, necessary adjustments that are preventing success, and above all – holding the workforce accountable in a positive, productive manner.
The last consideration for creating a high energy workforce that exceeds your expectations, is to reward your workforce with both praise and pay using a cost per unit model.   In facilities where the nGROUP performance system is utilized, ‘Pay for Excellence’ reinforces that each teammate is an essential part of the team, and is rewarded with incentive pay for their excellent performance. Above all our approach is to create positive, encouraging goal-oriented environments and coach teammates how to work smarter to achieve greater success for themselves and your company.
nGROUP Executives will be attending the RILA conference February 12-15. If you would like to schedule an appointment to discuss 2017’s trend setting labor production methods during the conference, please contact Vice President Ryan Cates at rcates@ngroup.biz. Don’t want to wait until February? Give us a call for a brief phone conversation prior to the conference. See you in Orlando.  
About nGROUP
As an on-site insourcing partner,
nGROUP works with companies in a vested partnership relationship. For over 10 years, the nGROUP Performance System has been adopted by executives and managers in labor intensive industries to meet and exceed corporate objectives. NPS consistently outperforms other methods, increasing productivity, quality, and morale, and reducing labor costs by a minimum of 10-25%.

Alternative Solutions to Corporations Seeking Labor Compliance

With the majority of the “Obamacare” Affordable Care Act (ACA), mandates going into effect in 2014, executives and human resource professionals across the country are scratching their heads trying to figure out the best strategy for labor compliance and cost improvements. nGROUP Performance Partners, a national on-site outsourcing provider, is answering their call with a business model that offers solutions in both critical areas.

Our proven business model guarantees cost savings in labor, meets the ACA mandates, and eliminates most compliance and co-employment issues,” says David Hair, President of nGROUP Performance Partners.

nGROUP provides labor and process management services to companies with labor intensive operations. nGROUP oversees entire operations or a singular work cell. For example, a client may outsource an entire manufacturing facility to nGROUP, or nGROUP may only be responsible for one work cell within the facility, such as packaging.

According to Hair, it is the role of assuming responsibility that sets nGROUP apart from other industrial engineering efficiency consultants and other flexible workforce options, such as temporary staffing. “This year our clients are expressing concerns about a number of labor compliance issues, particularly those aimed at temporary employment. At the end of the day our job is to not only produce the results we guarantee but to also deliver a workforce that is motivated, trained, and in compliance.”

When it comes to compliance regulations, the ACA has gained a lot of attention from critics, citing that the law offers little guidance as to how mandates will be regulated. For example, one of the most controversial regulations of the ACA is the mandate that companies with more than 50 full-time employees shall provide “qualified” health coverage for all their full-time employees, or pay an annual penalty of $2,000 per full-time employee. If a company does provide such coverage but it’s not “affordable,” the penalty is $3,000 per employee. (Affordable is defined as less than 9.5% of the employee’s family income.) Many economists have reported that the financial impact of the penalties associated with this mandate will reduce profit margins and drive higher prices.

Regardless of any direct financial impact, the ACA will most certainly increase compliance burdens. As reported on the Committee on Ways and Means website, the ACA will add nearly 80 million man-hours each year to individuals and businesses. Critics point out that the IRS compliance burden is the tip of the iceberg. With agencies such as Health and Human Services and the Department of Labor, the fear is that additional and duplicate oversight and regulations will continue to add unparallel compliance burdens on corporations, small businesses, and individuals.

“Whether or not the ACA is here to stay or is destined for mass revision, one solid truth remains,” Hair says. “Companies throughout the United States need to take measures now to ensure compliance when the majority of its mandates go into effect in 2014.”

In instances involving the need for cost improvements, risk protection and a flexible workforce, companies are looking for new business models that ease compliance burdens. A performance based partnership is an emerging example of how companies are adopting alternative workforce models on U.S. soil.

For more information on nGROUP performance partners visit http://www.nGROUP.biz, view http://www.nGROUP.biz/movie, or contact David Hair, CEO at dhair@nGROUP.biz

Revisiting The Talent Myth

By Ryan Cates,
nGroup VP, National Sales and South East Region

One of my favorite themes in Malcolm Gladwell’s work is his perspective on talent.  Several of his books and essays focus on how we identify talent, how it develops and what it is.  The concepts are worth revisiting as I see a lot of essays, blogs, and articles focused on the theme of how to find and engage the “best talent”.

The first exhibit I submit for consideration is an essay titled “The Talent Myth” written in 2002.   (http://gladwell.com/the-talent-myth/)

For those too busy to read the whole thing, here are some of the highlights…

  • Much of the essay revolves around Enron and their interaction with McKinsey.
  • “The War for Talent”, a term that still gets thrown around today, was coined by McKinsey back in the late 90’s and was based on the idea that the best companies were stuffed with the most talented people.  So, if you wanted to be successful, it was necessary to do whatever it takes to attract the sharpest tacks in the box.
  • The war for talent developed into the “Talent Mindset”, which can be summed up as “I’ve hired the smartest people, I should let them do whatever they want”.  This was a guiding principle at Enron and we all know how that panned out…
  • Studies show that people who believe in malleable intelligence (“I may not be smart but I can become smart”) are more effective than those who believe in fixed intelligence (“I was born smart”).
  • In many cases great systems being run by “average people” will outperform “great talent”.
  • Companies such as Southwest Airlines, Proctor and Gamble, and Wal Mart do quite well without chasing the latest and greatest fresh out of Ivy League MBA programs.
  • They were always around [McKinsey consultants at Enron]. They were there looking for people who had the talent to think outside the box. It never occurred to them that, if everyone had to think outside the box, maybe it was the box that needed fixing.

Just to be clear, I don’t think Malcolm Gladwell would say that talent isn’t valuable. Nor do I.  In certain instances talent can be supremely valuable (i.e. pro sports). However, in most cases, success relies a good and flourishing system and not so much on elusive and expensive genius.

 

What Does Leadership Mean To Me?

By Franklin Solorzano,
nGroup Vice President of Implementation

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picture from http://www.stylegerms.com/

As management teams, we too often confuse the roles of managing and leading.  The reality of our job requirements is that we are to oversee processes and not people. So instead of thinking we manage people,  we need to understand that we are actually leading them.  We need to ask ourselves, “What does leadership mean to me?” To help us arrive at an answer, here are a few of my favorite definitions of leadership:

 “Leadership is the art of influencing and directing people in such a way that will win their obedience, confidence, respect and loyal cooperation in achieving common objectives.” — U. S. Air Force

If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” — John Quincy Adams

Leadership is a privilege, not a right, and we need to treat it as such. Leadership means encouraging people to live up to their fullest potential and find the path they love. That, and only that, will create a strong culture and sustainable levels of innovation”-Forbes

Forbes is telling us that the title we hold in our organization does not guarantee us a leadership position. The ‘Leader” label is an earned from your fellow employees by example you set and the way you treat others.  I suggest everyone in a management position start a never-ending focus on developing leadership skills  because they are they key to unlock an employees  full potential and open the door of success for any organization.

‘Leading by Principles’ is the set of truths that drive an organization to meet client and stake holder expectations. I will give some examples of principles to help us reflect:

In business to business sales, our goal is not to rely on a specific process for success but to find a solution to a problemWe must understand client needs and requirements, identify the appropriate solutions aligned with their goals, develop a value added proposition, and adapt to the changing demand of the costumer.  In other words, there is no business guide book for certain success, we are simply here to create the best solution to a problem within a company.

To offer further insight, let me use what Lou Gerstner defined about human resources in his outstanding turn around of IBM:

Outstanding, dedicated people make it all happen, particularly when they work together as a team.” This is a principle that all companies should embrace. In my career, I have been part of companies with incredibly talented leaders who have driven their performance by their egos instead of company goals.  I have discovered that talent without teamwork does not meet client expectation.  Leaders must make sure that they are working with their unit to accomplish goals as a team every single day.

If we want to be considered a high-performance company, we must be leaders of principles not process.  We need to be encouraging each other to make decisions based on the key drivers of success and be participants in problem-solving.  Let’s go beyond meetings to start actively digging into the details, taking business day by day, setting an example, and keeping it simple.

These are a few of my personal thoughts on leadership. Now answer for yourself, “What does leadership mean to me?”

A Better Culture On The Production Floor

By Ryan Cates,
nGroup VP, National Sales and South East Region

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Years ago I worked with two 3PL’s that had cross-docking operations in the Southeastern US.  On paper, the businesses were strikingly similar.  Both supported big box retailers with highly manual processes.   They had dramatic fluctuations in volume and frequent interruptions to production planning due to upstream supply chain issues.  The companies paid market competitive, but relatively meager wages, and had a workforce primarily made up of minorities.

However, their cultures were as different as night and day.  So, what made these two similar operations so different?

  • Facility condition: Facility A was well kept, brightly lit, a strict 5S policy was in place, and it had a nice break room for the associates with TV’s (typically playing ESPN) and games (foosball, air hockey, etc.).  Facility B was perpetually messy, proper equipment was frequently in short supply, and the break room was way too small with nothing that would make it a desirable place to be.  Care to guess which operation had more turnover?  The work was tough and the pay wasn’t exceptional, but Facility A was a place where employees were  generally happy to be.  The good will shown by the management team at Facility A transferred into a camaraderie amongst the workforce that sustained a productive culture.

For the record, if you’re thinking “That sounds expensive”, we’re not talking about anything opulent here.  Just basic maintenance with a little extra effort and an eye for the people working on the floor.

  • Personal discipline:  The GM at Facility A was a former ship captain and he ran his building like a well-run ship.  Everything went in its place at the end of each shift, daily production meetings were succinct, and people were expected to be prompt.  The expectation was that problems would be handled at the lowest level possible and genuine crisis were few and far between.  He typically walked the floor no more than once per shift with a heads up to management and interacted with the workers and made it a point to know most of their names.

 On the other hand, Facility B didn’t have daily production meetings because the belief was that they were pointless.  We tried to have them a couple of times and sure enough, they were.  Everything was handled as it came up and , unfortunately, not much got handled.

There’s a lot more that goes into creating great company culture but, if you’re looking for improvement, creating a good facility environment and enforcing personal discipline are perfect places to start.

Labor Shortage in the DC Industry: A Look Into An Article from DC Velocity

The holidays are coming up and the warehouse and distribution center industry is facing a historically low labor shortage. Read about the staffing problems surrounding the DC industry from DC Velocity and let us know what you think. What are the solutions? What do you think about Devine’s workforce strategy?

Read the article on their webpage by clicking HERE or from our direct quote below.

**Warehouse, DC labor crunch approaching crisis levels at worst time, survey finds

ProLogistix reports tightest job market since 2007.

By Mark B. Solomon

The warehouse and distribution center (DC) industry is facing its most severe labor shortage since 2007, a potential crisis that could affect peak holiday season fulfillment operations and carry over well into next year and beyond, according to ProLogistix, a firm that provides staffing services for warehouses and DCs.

Brian Devine, president of Atlanta-based ProLogistix, which for 15 years has conducted an annual survey of warehouse and DC labor trends, said his company and rival firms are having trouble finding qualified applicants to staff their clients’ warehouses as they ramp up for the holiday crunch. Three out of every four applicants never make it to interviews due to drug-related offenses or criminal histories, among other problems, Devine said. But even the total pool of warehouse applicants has been diminishing, Devine said.

At the same time, wages in the past three months have increased much faster than Devine said he had anticipated. Initially, Devine thought wages would rise in 25-cent-an-hour increments per quarter, resulting in a $1.00- to $1.25-an-hour increase over the next 12 to 18 months. Instead, wages are rising at levels that will result in pay gains of up to $2.00 an hour over that same period, he said. The sudden changes in wage trends will force many warehouse and DC managers to revise their 2014 and 2015 budgets to account for higher labor costs, Devine said. Most ProLogistix clients are aware of the problem and are taking steps to adjust, albeit reluctantly, he said.

Devine said he expected some level of increase because warehouse wages have been virtually flat for about a decade. For example, a forklift operator, on average, earns about 25 cents an hour more today than in 2004, Devine said. As far as forklift operators are concerned, the greatest demand today is for tech-savvy workers who are comfortable around machines that have become more automated, Devine said.

The shortage of qualified warehouse labor is likely to persist long after the holidays, Devine said. He couldn’t comment on whether this would become a multiyear trend, saying his firm’s forecasting capabilities don’t extend out that far.

The explosive top-line growth of Amazon.com and its voracious appetite for fulfillment labor is a factor leading to tight supply across the system, according to Devine. However, he said the segment would be confronting a labor shortage even if Amazon didn’t exist, adding that firms were scrambling for labor eight to ten years ago when Amazon was not nearly the potent force it is today. Seattle-based Amazon, the world’s largest e-tailer, has not announced its peak fulfillment staffing levels.

ProLogistix, which touts itself as the largest staffing firm dedicated to warehouse and DC labor, employs about 12,000 workers. Many of them start as provisional employees who hope to become permanent once they complete a trial period at a ProLogistix client. The workers remain on ProLogistix’s payroll even if they become permanent workers at a client’s location.

The immediate concern is the pre-holiday shipping season, when retailers, on average, increase warehouse and DC staffing by 43 percent in the three months leading up to Christmas. Devine worries that there aren’t enough workers to meet the burgeoning fulfillment demand. Even collaborative efforts with competitors to meet staffing levels are falling short, he added. “A customer needs 20 workers. We have 12. I contact a competitor to see if it can fill the remaining 8 vacancies, and they only have four candidates,” he said in a phone interview.

WAGE RUN-UP
Due to the tight supply, companies that have yet to bump up workers’ wages, or don’t do it soon, could lose workers as they jump to other jobs paying 50 cents or $1 more an hour for pre-holiday work, Devine said. “There will be a lot of plundering” leading up to the peak of the holiday fulfillment period, he said.

Gilt Groupe, a fast-growing online shopping company headquartered in New York, is experiencing a tight labor market around its main fulfillment facilities in Louisville, Ky. “There is a lot of competition [for workers] in this geography,” said Michelle Ball, Gilt’s senior professional of human resources, in a phone interview from Louisville where she is based. Gilt’s Louisville operation consists of a 302,000-square-foot fulfillment center and a separate 100,000-square-foot location. It also manages facilities in Brooklyn, N.Y., and Las Vegas that are used mostly for cross-docking activities.

In an effort to widen its recruiting channels, Gilt, for the first time in its seven-year history, will perform in-house hiring to augment the work of its outside agencies, Ball said. It has yet to see the need to offer higher wages as a mechanism to attract or retain DC labor, she said.

Gilt employs 400 folks full time in Louisville year-round. During most of the year, the ratio of temporary workers to full-timers is about 35 percent; the ratio will swell to 50 to 60 percent as the company nears the height of the peak season. Last year, Gilt’s peak fell on the day after Thanksgiving, which has become known as “Black Friday” for the shopping frenzy that ensues on that day. Ball estimates that 700 full- and part-time workers will be on the job in Louisville at the peak of its holiday period.

UPS Inc., which plans to hire 95,000 seasonal workers—many at its main global air hub in Louisville known as “Worldport”—is so far having no problems attracting applicants, according to Susan L. Rosenberg, a company spokeswoman. “The application flow has actually been quite good,” she said. UPS has seasonal workers that return year-after-year just for the holiday period, Rosenberg said. The company has been successful in hiring returning veterans for seasonal work, according to Rosenberg. A portion of those workers transition into full-time jobs with the company, she added. UPS has also formalized a long-held practice of reaching out for retirees who might be interested in serving as driver coordinators and trainers during the peak period, she said.

UPS, which suffered a hit to its reputation during last year’s holiday as a last-minute deluge of online shipments clogged its system and led to delivery delays, has taken various steps to avoid a repeat this holiday. One of the most significant is that it will operate its full U.S. air and ground network on the day after Thanksgiving, the first time in its 107-year history it will do that.

A WORKFORCE STRATEGY
Devine advises clients to develop what he calls a peak-season workforce strategy. First, they should determine how many of the warehouse and DC positions are mission-critical and take all steps necessary to keep those workers from leaving. He suggested that companies, whenever practical, split full-time positions into two part-time slots and allow workers to share those slots to give each worker extra hours. Devine also recommended that employers consider incentives such as a “perfect attendance” bonus during the busiest peak period that would pay workers an additional $2 an hour.

Devine characterized his business as the “tip of the spear” of the U.S. economic cycle. Part-time workers are usually the first hired when the economy emerges from recession because businesses need additional labor but are reluctant to commit to full-time help. Part-timers are also the first to be let go at the start of a downturn because it is easier to shed those workers as part of a downsizing move. The labor tightness in Devine’s part of the world indicates that the “economy is stronger than it might otherwise feel,” he said.

Devine added that the higher wage costs could have a silver lining: It could help attract and retain workers that would either not be interested in the industry or might go to another field in search of more money.

**Solomon, M. (2014, October 2). Warehouse, DC labor crunch approaching crisis levels at worst time, survey finds. DC Velocity.

Making Meetings Worth It

By David Cook

Everyone has been to those meetings – there’s no clear cut agenda, no objectives and no leader.  The time ends and everyone walks out asking, “What did we just accomplish?  What are our action items to complete from this meeting?  Was that a waste of my time?  Did we resolve anything or are we going to have to schedule another meeting?”  The result is that people don’t want to attend meetings because they’re not productive.

So what do we do with the fact that communication, focus, creating trust, and a clear vision for company’s future are all necessary for a company to be successful?

We turn bad meetings into good ones.   The book “Traction” by Gino Wickman describes the ideal, a Level 10 Meeting.   Wickman suggests one meeting a week with the executives or leaders in the group for one and half hours (or 4% of your work week) with a clear cut agenda. I know you’re thinking that this is a lot of time, but an affective meeting can make huge strides in productivity.

The Level 10 meeting is set up as follows:

  • Opening -5 mins
  • Scorecard – 5 mins
  • Rocks Review – 5 mins
  • Employee and Customer Headlines 5 mins
  • To Do list 5 mins
  • Issues Discussion 60 mins
  • Conclusion cascading messages.
  • Meeting Rating – 5 mins

(Wickman, Gino. Traction. Dallas: BenBella Books, 2011. Print pages 190-191.)

The scorecard is the main items that are tracked from week to week.  For example, looking at sales for the week, amount of tasks completed since last week, etc.

The Rocks are main goals for the quarter that are being work towards.  This number should not be more than 5 Rocks to make sure that focus is achieved.

The to do list is items that were assigned the previous meeting and need to get an answer of completed, yes or no.  If no, no explanation why, it just gets added to the next weeks to do list.  If to do was important that can be put as an issue to be discussed in the issue section of the meeting.

In the issue discussion, everyone gets a chance to put in their opinion but there is no opportunity to lobby for your view.  The leader of the meeting gives everyone a chance to speak.  At the end of the issue discussion a decision is made as to what to do next.  The leader makes the decision.  There is not a decision by consensus. This is placed on the to do list and the meeting moves to the next issue.

At the end of the meeting you as a team have resolved the issues and have action items to accomplish. Not every issue needs to be discussed in the meeting, only the important ones. Some can be held over until next time.

Level 10 meetings help to facilitate great meetings and help a company or group move forward towards its ultimate goal of success. With this format, everyone knows the expectations, what they agreed they would do, progress is made and time is saved in the end.

Happy meeting everyone!

Should We Train Our Employees?

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Why would a company spend the time, resources and capital to train their employees?  When a company doesn’t invest in employees, it has a difficult time growing it’s business. Since there are skeptics on the subject of employee training and the return of investment to a company, let’s look at the reasons companies don’t have formal training programs for employees:

Cost
Training programs can be expensive to implement and can be difficult to add hard return numbers to the expense.

Time
Companies of all sizes note that it takes too much time to train employees because it removes them from their primary duties for too long. Managers must also step away from their responsibilities to set up for training.

Lack of Trust
Companies fear if they train employees, they will take that knowledge and go work for the competition.
(http://www.bizmove.com/personnel/m4d.htm)

Here are a few advantages of providing training to your employees:

Raises bottom line.
Companies that invest $1,500 per employee in training compared with those that spend $125 experience an average of 24 percent higher gross profit margins and 218 percent higher revenue per employee (source: Laurie J. Bassi et al., “Profiting From Learning: Do Firms’ Investments in Education and Training Pay Off?” American Society for Training and Development, 2000).

Saves a company money.
A trained staff reduces time spent problem solving, time correcting mistakes, fewer accidents, lower maintenance costs, reduced downtime, lower recruitment costs, fewer support calls, and increased staff productivity. It frees up the managers to spend more time on other tasks that can earn the company more profits with a fully trained staff.

Increases worker productivity.
Just a 2-percent increase in productivity has been shown to net a 100 percent return on investment in training (source: “The 2001 Global Training and Certification Study,” CompTIA and Prometric).

Motorola calculated that every dollar spent on training yields an approximate 30 percent gain in productivity within a three-year period. Motorola also used training to reduce costs by over $3 billion and increase profits by 47 percent (source: Tim Lane et al., “Learning to Succeed in Business with Information Technology,” Motorola).

Improves employee satisfaction and retention.
A Louis Harris and Associates poll reports that among employees with poor training opportunities, 41 percent planned to leave within a year, whereas of those who considered their company’s training opportunities to be excellent, only 12 percent planned to leave. A Hackett Benchmarking and Research report shows that companies that spend $218 per employee on training have more than a 16 percent voluntary turnover, while companies that spend over $273 per employee have turnovers of 7 percent.  Career development is the No. 1 factor in employee retention, according to a survey of 6,400 employees conducted by consultants Sharon Jordan-Evans and Beverly Kaye.

As noted by Zig Ziglar “What’s worse than training your workers and losing them? Not training them and keeping them.

Training can dramatically increase the productivity of a company and increase its intellectual capital as well.  A company that invests in its employees will find that they are loyal to that company and work hard to provide results that prove their investment was worth it to the company’s bottom line. In a competitive environment it’s the staff that can really set a company apart from its competitor.  Ultimately a company will do business with another company it is confident can do the job they are hired to do.