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May 5 , 2010 -


Logistics News: DSC Logistics gets End-to-End Workforce Management Right

20% Labor Gain is Part of the Results, but not All; Building a “Culture of Accountability”


Cliff Holste, Materials Handling Editor

SCDigest Says:

“What we really wanted to develop out of this was a culture of accountability,” Chamberlain says.

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While Labor Management thinking and technology have become very popular in distribution center environments over the past five years, the approach and ultimate success taken can often vary dramatically from company to company and DC to DC.


The evidence seems clear that companies which take a more comprehensive or holistic view of the program, sometimes captured under the newer term “Workforce Management,” in general achieve better results for both their firms and their DC associates.


One proof point of that claim is the success enjoyed from such an approach by DSC Logistics, a logistics service provider headquartered in the Chicago area with some two dozen distribution centers around the country.


DSC has used Workforce Management technology and thinking to not only achieve a 20% reduction in variable labor costs, but also to really transform the way it manages it operations, interacts with clients, and builds strength within its labor force.


With experience in Labor Management during a prior position at Kraft Foods, Jim Chamberlain, Director of Engineering for DSC, said on a recent Supply Chain Videocast on The Supply Chain Television Channel that “When I moved on to DSC Logistics, it was something I started selling internally, telling management this is something that can really set us apart and give us competitive advantage.” (To see the full broadcast, go to An Enterprise View of Workforce Management. This Videocast also includes Ed Gill of Accenture and John Ogg of Gaylord Entertainment.)


The initial Workforce Management pilot started at one DC in 2005, using software from RedPrairie. Chamberlain says they had to go slow at first, as some in management were skeptical of the program and many did not fully understand the full potential of a Workforce Management system.


Interestingly, DSC actually chose it most well run facility for that first pilot program.


“We knew if we could show strong results there, we could achieve even more at some of our other sites,” Chamberlain said.


Ultimately, the program and supporting LMS software have been rolled out to 20 sites – and Chamberlain says really owning that rollout and program internally have been essential to the significant success DSC has achieved.


“We did a “train the trainer” approach, where at the pilot site, RedPrairie managed the rollout 100% and we were their shadows,” Chamberlain said. “By the third site, we had learned it all, and for the next 17 sites it was a complete DSC run program.”


“Someday the consultants are going to go away, and you really have to own the program for it to ultimately be a success,” Chamberlain added.


DSC had four high level goals for the program: 

  • Improve safety
  • Improve quality
  • Achieve operational consistency across the DSC network
  • Improve performance and productivity

He said the safety and quality goals were very important to articulate, because in some cases productivity improvement programs in a DC “can work at cross purposes” with those performance measures.


“Best methods,” or the right way to do each DC task, are a critical foundation for achieving all four of these goals.


“We are very process-centered,” Chamberlain said. “But with this program, we took it down a level, where the step in the process might be “case picking,” we define how to case pick using methods at a micro-level to make sure you are maintaining the quality, you are being safe, you are being consistent, and you are being productive.”


But tools like methods and engineered standards are just part of the program at DSC.


“The standards and the methods that go along with Workforce Management, those are just the enablers,” Chamberlain says. “These are people projects, the people on the floor. You have to make sure they understand what the definition of success really is when you roll these programs out.”


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Defining a Roadmap


One of the real keys to DSC’s Workforce Management success was developing a clear road map that defined where the company was, what it wanted to become, and the transformative steps needed to get there. (See graphic below.)



Fairly common in other supply chain improvement projects, such formal planning and documentation are not as commonly found in Labor Management projects.


“What we really wanted to develop out of this was a culture of accountability,” Chamberlain says. “Now, if we have a site that is struggling, we go in and help them with these basics so that they can be successful. It’s really provided us with a blueprint that shows how every site in our network can be successful if they follow these steps.”


The program was also rolled out with extensive and continuing training from DSC for all levels of the organization – a critical step too many companies tend to skimp on.


Chamberlain says the program and tools have also made a big difference in their discussions with clients.


“Our clients want to hear more about the program,” Chamberlain said. “It has also moved us away from subjective conversations to very objective ones, where we use the numbers to support all the initiatives we are trying to roll out” with customers, he added.


The program overall has exceeded its goals and led to many quantitative and qualitative benefits at DSC, says Chamberlain, including an incentive pay program that has been well received by associates. The system has also enabled DSC to be much more confident and aggressive in its business proposals, “because we know anything we put in there we are going to be able to achieve,” Chamberlain says.


But in the end, most executives want to understand the impact on the “bottom line,” and the results have been very strong there as well.

“Bottom line, across our network we are looking at about a 20% reduction in our variable labor costs,” Chamberlain says.


“We didn’t really expect that kind of return, but I think it came from the work we put into it,” Chamberlain says.


What’s your reaction to the DSC Workforce Management success? Do you think it is common for common, or the exception in terms of the depth of approach? What else would you add as key to LMS success? Let us know your thoughts at the Feedback button below.


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