Reducing Indirect Time, Gap Time and Unassigned Time in the Warehouse: How Full Time Accounting Drives Productivity

Key Insights

• Unassigned time, indirect time, and gap time are critical labor metrics that directly affect warehouse productivity, labor cost per unit, and throughput efficiency.
• Academic and industry research (KPMG, Prologis, Arrivy) shows that granular time tracking and reduction of unassigned or gap time can improve service delivery and operational resilience.
• Amazon’s warehouse management systems enforce an “assign-all-time” discipline—tracking “Time Off Task” (TOT) to ensure all labor minutes are categorized and analyzed for performance improvement.
• Complete time accounting (assigning all direct, indirect, and unassigned time) transforms dark labor into actionable data, helping Continuous Improvement (CI) and Industrial Engineering (IE) teams pinpoint inefficiencies.
• Indirect time, such as kitting, travel, and training, should be structured—not minimized—to support operational stability and long-term workforce development.
• Balanced labor models target 80–90% direct labor and 10–20% indirect labor, with unassigned time approaching zero through clear coding and process visibility.
• Platforms like Takt enable this discipline operationally: the Virtual Kiosk + Gap Time Report lets associates code every minute of their shift, and TaktAI provides real-time insights into unassigned and gap time at the shift level.

In today’s high-velocity distribution centers, what goes unseen can become the largest drain on productivity: unassigned minutes, gap time between jobs, and indirect tasks that are never coded. These time categories may not appear in standard throughput reports, but they erode efficiency, inflate labor cost per unit, and block continuous improvement efforts. This article explores why accounting for all time (i.e., adopt an “assign-all-time” discipline), how operations like Amazon have institutionalized this mindset, the operational importance of balancing direct and indirect labor, and how you can implement achievable goals and proper allowances.

Why indirect, gap, and unassigned time matter

In warehouse operations, the common labor buckets are: direct time (actual picking/packing/putaway), indirect time (kitting, training, travel, meetings), and unassigned or gap time (minutes not coded to any activity).

• “Gap time” often appears when workers wait for tasks, systems, or materials; this is unproductive time that rarely gets measured.
• “Unassigned time” means minutes paid for but not captured in any category—so they do not show up in performance dashboards.
• Indirect time is necessary, but unless structured, it can seep into what should be direct task capacity.

Research indicates that rigorous labor tracking and analytics are increasingly mandatory in modern warehouses. For example, a KPMG time-and-motion study stressed that supply-chain organizations must reduce variation in service delivery through granular time measurement.  Industry commentary notes that labor planning remains a top concern in warehouses: “effective labor planning ensures the right people are in the right places at the right times” — and by implication, that wasted or unassigned time diminishes that capability.

A recent blog by Arrivy calls out “time leaks” in warehouse management — noting that small, unnoticed inefficiencies in time accounting propagate into considerable declines in throughput and cost performance.

In short: if minutes are not captured, they cannot be managed. What doesn’t get coded doesn’t get improved.

Benchmarking assign-all-time: lessons from Amazon

Amazon’s warehouse operations have long set the bar for precision in labor tracking — though they have also prompted discussion around balance and employee experience. The company’s “Time Off Task” (TOT) system is designed to monitor every minute of an associate’s day, flagging inactivity and driving accountability at scale. While this has delivered world-class operational efficiency, it has also drawn scrutiny from workers, media, and regulators who argue that it can feel punitive or overly mechanized.

The lesson for warehouse leaders isn’t to replicate Amazon’s exact system — but to extract the operational discipline without importing the cultural downsides.

There are clear takeaways every warehouse operation can apply responsibly:

• Real-time visibility: Measure labor utilization continuously, not just in end-of-week reports, so supervisors can act on issues as they happen.
• Coding discipline: Ensure every minute of paid time — direct, indirect, or idle — is assigned to a clear reason code, turning “dark time” into analyzable data.
• Accountability through coaching: Use uncoded or excessive gap time as coaching opportunities, not punishment; focus on root causes like process gaps or system delays.
• Supportive infrastructure: Provide user-friendly tools (kiosks, dashboards, mobile UIs) that make it easy for associates to record and categorize time accurately.

The key insight is that discipline doesn’t have to mean pressure. When “assign-all-time” is implemented with empathy, transparency, and collaboration, it becomes a foundation for continuous improvement rather than control.

When this spirit is embedded into a Labor Management System (LMS) or Warehouse Intelligence platform like Takt, operations leaders gain both precision and trust — allowing Industrial Engineering (IE) and Continuous Improvement (CI) teams to uncover inefficiencies, close performance gaps, and build a culture of shared accountability.

Balancing direct time, indirect time and time assignments

A mature warehouse does not aim to eliminate indirect time; rather it structures it, monitors it, and optimizes it. Here’s a practical framework:

Balancing acts:

• If indirect time is too low (e.g., zero meetings/training), you may risk under-investing in process improvement or capability building.
• If gap/unassigned minutes grow, that usually signals mis-alignment of work, inadequate data capture, or simply lack of accountability.
• Set realistic allowances: for example, allow X minutes per shift for travel or break; beyond that everything must be coded or flagged.
• Use historical data and analytics (predictive tools) to forecast the mix of direct vs indirect, but also track variances and root-cause them. For example, predictive analytics can flag when gap time increases unexpectedly.

To ensure fairness and transparency:

• Explain to operators why time categorization matters (transparency fosters buy-in).
• Build in allowance codes (e.g., standard breaks, system down time) so that coded time is realistic and doesn’t penalize normal activity.
• Review uncoded minutes weekly and create coaching interventions rather than blame cycles.
• IE/CI teams should review time distributions (direct vs indirect vs gap) by shift or zone and investigate patterns — e.g., does one line show 10% gap time compared to 3% elsewhere? Why?

How the new Takt features support this discipline

The latest release of Takt Virtual Kiosk and its Gap Time reporting capability bring the assign-all-time philosophy operationally to your workflows:

• Associates can log indirect tasks (kitting, value-added services), missing time or time-off-task directly at the kiosk. (Via Takt’s built-in Indirect Labor tracking tool.)
• Gap/time-off-task minutes are captured as coded events rather than “unknown”.
• TaktAI, available on the Shift Detail page, flags abnormal patterns (e.g., excessive gap time in Zone B) so supervisors can react in-shift rather than next day.

Implementing these features allows you to turn hidden minutes into actionable events, letting IE/CI teams optimize labor allocations with granularity.

Actionable steps: launch your assign-all-time program

1. Define your time taxonomy – create uniform codes for direct, indirect, gap/unassigned time. Ensure clarity at associate, supervisor, and IE/CI level.
2. Deploy the Virtual Kiosk around the warehouse – set up Takt Virtual Kiosks at logical points (start of shift, break areas, zones) so coding is easy and quick.
3. Set allowances – define standard allowances for break, travel, training, systems down. Everything else must be coded.
4. Monitor gap/unassigned time weekly – track trends by shift, zone, job type. If a shift’s unassigned % > target, trigger investigation.
5. Coach, don’t punish – use alerts (via TaktAI) to engage supervisors in real-time coaching. Use root-cause workshops for recurring events.
6. Balance indirect vs direct – review indirect time categories quarterly. Are they growing slowly? Are they purposeful? Is the indirect:direct ratio within acceptable bounds for your operation?
7. Iterate the standards – engineered standards for indirect tasks and travel should be reviewed every quarter to reflect changes in layout, automation, or process.
8. Communicate the value – share visible dashboards with teams: when gap time drops by 20%, tie it to realized throughput, less overtime or increased productivity.

Unassigned time, gap time, and unmonitored indirect labor are the “hidden waste” of today’s warehousing operations. They rarely show in standard dashboards, but they quietly degrade productivity, inflate labor costs, and degrade morale. By adopting an “assign-all-time” discipline—one that tracks, codes, and acts on every minute—you can move from hidden loss to visible improvement.

Platforms like Takt make this operationally feasible—providing UI, analytics, and automation to turn minutes into data, events and actions. The goal is not simply to reduce indirect time to zero (that would be counterproductive), but to bring it into view, structure it, and manage it with the same discipline you apply to direct tasks.

When every minute is visible and actionable, your labor cost per unit falls, your throughput improves, and your Continuous Improvement engine actually has the raw material it needs to produce results.