Non-Productive Time (NPT) Management in Distribution Centers: Measurement and Control

In a warehouse or distribution center, operational efficiency is key to ensuring productivity, meeting customer deliveries, and reducing costs. One of the key factors to monitor and manage is Non-Productive Time (NPT), which represents periods in which resources (human, equipment, or systems) do not generate value and ensure operational continuity.

In production lines, NPT may be more tangible to measure, simply because the process is stopped for some reason: lack of materials, maintenance, or some quality event that merits correction during operation, but in a storage, crossdocking or order preparation operation environment, the perception, identification and recording of this unproductive time is more complicated to measure.

But it is necessary to conceptualize what is Productive and Unproductive Time, since the measurement focuses on the operation.

Productive – non-productive time

Productive time is generally calculated by comparison and is the net period of time during which the operation will be carried out. For example, an 8-hour work shift is the time a resource (personnel, equipment) will be assigned to carry out the operation, minus unproductive time. Meeting the needs of a picking operation, order preparation, storage, etc., are part of a warehouse's activity, and tasks are scheduled each day and progress is monitored.

A significant gap between the hours required by the shift and the actual hours, or the measurement of "non-productive" hours due to identified causes, represents a deviation that is objectively quantified.

"Non-productive time" includes all hours during which an operation is downtime or slows down for any reason, excluding scheduled causes such as lunches, breaks, and team training from the analysis. These reasons must be identified, measurable, and substantiated, in order to then prepare operations control reports that monitor progress on schedule.

To measure Non-Productive Time (NPT), the following formula can be applied:

NPT= (Total Downtime/Total Available Time) x 100

How are the causes of a NPT identified?

The most common NPTs that can be identified in a warehouse are:

• Wait for supplies or instructions.

• Equipment or system failures.

• Process inefficiencies.

• Dead times between tasks.

• Union disputes

• Absenteeism

• Work accidents

• Maintenance

• Power Outages

• Climate

• External to the company

What tools do we use to analyze NPTs?

Various measurement methods can be applied to NPT:

Time and Motion Study

This technique, developed by Frederick Taylor and the Gilbreths, consists of:

• Time activities to identify unproductive times.

• Classify tasks into value-added vs. non-value-added.

Taylorism is a concept that plays an important role in business management research. It introduces the concept of standardizing work processes to industry. Taylorism allows companies to optimize the efficiency and quality of their products or services. The goal is to increase productivity and reduce costs. To achieve this, the work steps of a process are analyzed, optimized, and standardized before carrying them out in a predefined sequence. Adherence to this sequence ensures that all work steps are carried out according to the standard and allows deviations to be detected and corrected.

Real-Time Location Systems (RTLS)

Inventory tracking is a fundamental part of any business, especially those involved in logistics and product warehousing. Having a real-time inventory tracking system, also known as a Warehouse Management System (WMS), can help optimize operations and improve supply chain efficiency. In this article, we'll show you how to implement a real-time inventory tracking system and how it can benefit your company.

A real-time inventory tracking system allows businesses to have complete control over their inventory at all times. This means you'll be able to know the exact quantity of products you have in stock, their exact location within the warehouse, and their condition. Additionally, you'll be able to track product inflows and outflows, allowing you to keep a detailed record of every transaction.

These solutions include technologies such as RFID, IoT, and handheld devices that allow monitoring of personnel and equipment movements and downtime in picking, preparation, dispatch, and storage areas.

What Strategies can be implemented to Reduce NPT?

Each company, depending on its organizational culture, will implement different methodologies for problem-solving or seeking to increase productivity. We name the most recognized ones.

• Continuous Improvement Circles (Kaizen)

• Root Cause Analysis (RCA)

• Paretto Analysis of Weight of Causes of NPT

• 5 Whys Method (Toyota Production System)

• Ishikawa Diagram (Fishbone)

• Report of Findings

Bibliographic references

- McKinsey & Company. (2018). "Operational Excellence in Warehousing."

- Nakajima, S. (1988). Introduction to TPM: Total Productive Maintenance.

- Womack, JP, & Jones, DT (1996). Lean Thinking: Banish Waste and Create Wealth.

- https://fulfillmenthubusa.com/how-to-implement-a-real-time-inventory-tracking-system/