Many logistics managers share a common goal: reduce idle time. In logistics, idle time can be defined as a time within operational hours in which people and equipment are not moving goods. The ultimate goal in logistics is to move goods — and the faster you move goods, the less costs you incur. Thus, idle time can hurt profitability.
Idle time can be classified into two categories: necessary and unnecessary. Necessary idle time is caused by reasons beyond our control and is usually mandated by government, the nature of your logistical operations, or the equipment you are using. Such idle time can be anything from employees breaks to equipment maintenance downtime. Necessary idle time is unavoidable and usually encouraged to ensure sustained long-term logistical performance.
In contrast, unnecessary idle time is being unproductive because of reasons that are within our control and can be cause by anything from employees slacking or waiting for a slow printer to untimely equipment failures. In most cases, we tend to think of unnecessary idle time as just the way things are because we don’t realize its impact.
Beyond idle time, an operation can be moving slower than expected because of technological challenges. Moving slowly has the same impact as idle time: lost productivity. Think of high productivity with regular interruptions like you would think of people traveling. You can drive fast toward a destination and make a long stop, or drive more slowly without stopping. Either way, you reach your destination at the same time.
For example, tedious, repetitive clerical work is one technology-based cause of warehouse slow-downs. If there is tedious repetitive clerical work in your warehouse, you’re likely not making the most out of automation technologies. Automating repetitive clerical tasks speeds up the respective activity and frees people to do other, more productive duties.
Unnecessary idle time is a profitability enemy because you end up paying for more costs than you should. Every warehousing facility should have systems in place to reduce the likelihood of unnecessary idle time.
Why does idle time happen?
1) Difficult to notice
In operations, idle time can be subtle, but that’s not to say it isn’t costly. Small windows of idle time in an operation can translate into significant costs over the long term. For example, 5 minutes of unnecessary idle time for every hour of work for a workforce of 100 people can add up to $273K of lost time in a year. However, those 5 mins of inefficiencies per hour can be incredibly hard to detect or can be taken for granted without realizing the long-term impact — unless you put effort into identifying and eliminating it.
2) Absent or lenient operational goals
If you run an operation without setting a clear productivity target, people tend to slack — it’s human nature to relax a bit if there are no clear performance expectations. Setting a lenient goal or no goal at all allows for idle time to thrive. Logistics operations should always set performance goals and enforce them.
3) Poor equipment/ technology
In some cases, idle time is due to technological shortcomings. Doing clerical paperwork instead of moving goods is just a single example of how technology — or lack thereof — can slow down operations. In the worst of cases, I have seen operators printing data from one data management software, and soon after manually entering the data into a different software. Technology could have eliminated the data entry process and allowed the operators to spend more time on productive functions.
How do you avoid idle time?
1) Track and measure everything
Track, measure, and analyze all activities in your logistical processes, including clerical work. Most logistical operations are tracked, but companies fall short in analyzing that data and generating ideas that can improve processes. To ensure your business is not susceptible to idle time, implement a formal structure to analyze and improve processes. Sophisticated logistics service providers use productivity tracking software to reduce the likelihood of unnecessary idle time. Such software can be too expensive for small operations, but small companies can use simple analytical tools made on MS Excel to mimic productivity tracking software.
2) Set operational goals and enforce accountability
Without clear operational goals that are understood by all team members, human faults kick in and people start to slack. However, setting targets is not enough; you need a good enough target. If goal setting is not something your business has a habit of doing, it might take time for you to set an adequate operational target. Goal setting takes many iterations before you master it. However, setting good operational goals is not enough. You also need to implement an accountability structure to enforce and follow up on targets. Without an accountability structure, targets can easily be disregarded.
As we’ve seen, idle time can be subtle, insidious, and costly. The unfortunate thing is that you don't know how much idle time is costing you until you solve for it. Having a comprehensive data-driven operations management system accompanied by an accountability framework can help alleviate this type of operations inefficiency. Another thing to remember is that idle time will sneak into your operations the moment you stop paying attention. It is important to make idle time reduction part of your organizational culture and not a one-time fix.