Sara Lee Foods, as with a growing number
of companies, labor management was the logical
next step for driving continuous operational
key trend also seems to be that companies
are turning to labor management after
a series of other supply chain improvements
(Warehouse Management, network redesign,
improved warehouse layout, etc.) that
have delivered results but are starting
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asked: ‘What’s the next level
we can take our supply chain to?’”
said Mike McGee, Director of Logistics and
Supply Chain Strategy. “For us, labor
management was part of that answer.”
Lee Foods is a multi-billion manufacturer
and distributor of many well-known household
brands, including Sara Lee, Jimmy Dean,
Ball Park, Hillshire Farms and others.
management has significant value and benefits
on its own. But a key trend also seems to
be that companies are turning to labor management
after a series of other supply chain improvements
(Warehouse Management, network redesign,
improved warehouse layout, etc.) that have
delivered results but are starting to plateau.
With most companies pushing strongly from
the top for continuous improvement, labor
becomes an obvious potential next phase
always ask how we can continue to drive
value into our business and help the customer
drive value into theirs,” McGee added.
Lee recently executed a successful supply
chain network redesign strategy, moving
to a network of “mixing centers”
that could ship a full or near full line
of product across brands to its retail customers.
Part of that effort also involved strong
process standardization across the mixing
center DCs, as well as a new warehouse management
system (Manhattan Associates).
deciding to adopt Labor Management software
(also from Manhattan), Sara Lee took what
it calls an “Integrated Engineering
Approach.” Key elements of this strategy
standards at the individual operator level
across facilities, while accommodating
the nuances of each distribution center
layout and operation.
of “Endorsed Methods” for
tasks to leverage best practice.
of common practices across the network
for the human resources component of labor
management (e.g., coaching, counseling).
management software that provides a platform
for building a common set of fair and
equitable metrics across each DC in the
Sara Lee Foods has now implemented Labor
in two sites, one of which is managed by
a 3PL, with a further roll out across eight
more sites planned. At each site, approximately
10 areas and functions are put on standards.
Consistent with so many other companies
that implement LMS, when Sara Lee “turned
on” a new area, especially those that
are labor intensive such as order picking,
McGee said they would find operators were
working at just about 70% of standard. Within
approximately 10 weeks, most operators would
be working at near 100% - a significant
on, the gain is about 5% per week,”
McGee said. Although he declined to offer
a specific total labor cost savings, McGee
did say Sara Lee was achieving cost reductions
“within the typical estimates of 5-15%.”
One thing that was a bit surprising to Sara
Lee was the ability LMS gave them to better
understand, control, and reduce indirect
time in the DC – time not specifically
associated with defined tasks like putaway
or picking.“We found there is a lot
of opportunity in indirect labor,”
said McGee. McGee also emphasized the importance
of installing operator confidence in the
system, and used the analogy of bar code
scanning. Operators trust that when they
scan a bar code with an RF terminal, that
transaction is being accurately recorded,
he said. It’s just as important to
show operators how the labor data will be
collected, often using these same bar code
scans, and how that data is used to calculate
Additional LMS Benefits
addition to the overall labor cost savings,
Sara Lee has found the following benefits
from Labor Management:
capacity in each facility
in temporary workers and over time hours
ability to understand performance of each
facility in the network, and to do root
cause analysis to drive improvement in
under performing areas.
Management is enabling us to solve problems
and find opportunities,” McGee concluded.
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