Collins Says:

The advent of labor management systems (LMS) has enabled businesses to better use labor resources, maintain profit margin expectations and gain a competitive edge. Labor management has become the next logical step for businesses in search of new efficiencies. What do you say? Send us your comments here

This article was originally publshed in The Supply Chain Digest Letter, our hardcopy newsletter focused on a single topic each month (June, 2007 issue on Labor Management Systems). To subscribe to the SCDigest Letter (free for qualified professionals), click here. To view of Labor Management System Resource page, click here: Labor Management System (LMS) Information and Resources.

As the adage goes, you can’t manage what you can’t measure. Today this is true of many things in warehouse and distribution center management, but perhaps nowhere more so than for monitoring the productivity of your workforce. Payroll is typically the largest single expense in the warehouse. Because of this, many companies have undertaken projects to utilize warehouse management systems (WMS) and other technologies to do more work in less time. But while directed, verified work direction raises efficiency levels, it is not enough to truly streamline work performed and maximize your dollars spent.

The fact is many businesses fail to gain visibility to the work their employees carry out on a daily basis. They balance the need to meet tight customer deadlines with making sure employees are on time for work. This is a difficult challenge. Fortunately, the advent of labor management systems (LMS) has enabled businesses to better use labor resources, maintain profit margin expectations and gain a competitive edge. Many businesses are looking to these systems as a foundation for improved workforce management and cost reduction—whether they already have a WMS or not. Labor management has become the next logical step for businesses in search of new efficiencies.

Here are five reasons we think Labor Management should have some urgency in your distribution strategy:

1. Your workforce is underperforming: Not only is it likely that your employees aren’t reaching their full productivity potential, but you don’t know by how much they’re missing it.

2. Unproductive activity is eating away at your budget: A Labor Management system will help you pinpoint unproductive time in your warehouse and reduce indirect time.

3. You’re spending too much time babysitting your workforce: Labor Management systems foster a self-driven and self-directed workforce by providing an accurate, objective measurement tool.

4. You need to meet corporate objectives for cost reduction: For many companies, planning and measuring the work carried out by their employees is the next logical step for reducing logistic costs.

5. Your competitors are doing it: Labor Management systems not only reduce costs but help you focus your efforts on improving and maintaining quality and service levels.

Agree or disgree with our expert's perspective? What would you add? Let us know your thoughts for publication in the SCDigest newsletter Feedback section, and on the web site. Upon request, comments will be posted with the respondents name or company withheld.