How to Build a Better Labor Standard

by | May 7, 2018

I’ve said it before: the worst way to build a labor standard is with a stopwatch. It’s time consuming, expensive and difficult to do correctly. Not surprisingly, most companies that use a stopwatch for their time studies don’t do it right. As a result, they end up with an inaccurate labor model. For any organization with a payroll north of $100 million, a one percent difference in labor spend is worth a million dollars or more. In this blog post, I would like to show you two, more effective ways to measure the tasks your employees perform so you can build out the most accurate labor standards.

Way One: Predetermined motion time study
A predetermined motion time study (PMTS) is an ideal way to measure tasks that have well-defined steps. As with most work measurement techniques, it starts by observing a task being performed correctly. The best way to complete these observations is to take a video recording. The video is then analyzed and broken down into human movements like reach, grasp, place, step and so on. The person analyzing the video refers to a database that includes standard time values for each movement. For example, according to the PMTS database in Opus, Axisum’s work measurement platform, one step takes .648 seconds. So, if the worker takes five steps to perform a task, it adds 3.24 seconds to a labor standard.

There are a number of benefits gained from using a PMTS over the old stopwatch time study. First, a PTMS is completed faster and far more accurately. Recording the task, analyzing it and turning it into an accurate labor standard takes a significantly less amount of time compared to the time required to make enough observations with a stopwatch. Second, it easily accounts for variations of the task. Using a stopwatch, you must measure each variation separately. With PMTS, you can rapidly model variations by replacing steps in the process. Similarly, PMTS allows for changes to the task. So, if a process is modified then individual steps can be changed, as opposed to a stopwatch where you need to remeasure the revised task.

Way Two: Work sampling study
While PMTS is the right option for procedural tasks, it doesn’t effectively measure non-procedural tasks – activities that do not have a clear playbook like customer interactions. For these types of tasks, work sampling, which involves walking around a workplace studying what employees are doing, is a better-suited method. Data is usually collected using a tablet or mobile phone equipped with an app like Studia, Axsium’s new mobile data collection work sampling tool. Observations are recorded over a variety of working hours each day of the week. The data collected is combined to create a statistically accurate model that shows how much time employees spend idle, talking about work and non-work matters, traveling between locations, assisting customers and more.

As with PMTS, work sampling is better than a stopwatch because it takes less time to produce an accurate, objective labor standard while at the same time efficiently measuring work that is hard to measure in other ways.

What method should I use?
We know a work measurement study is meant to build out the labor standards that will help improve productivity, so it’s important to use the right work study technique in the scenario for which it’s best suited. Should you use PMTS or work sampling? The short answer is both. When Axsium embarks on a labor study, we make a list of tasks to be observed and determine the best method of measuring each one. A combination of work sampling and PMTS allows you to capture all work more accurately and for less time and cost than the old stopwatch.

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