From SCDigest's On-Target E-Magazine
- July 14, 2014 -
Logistics News: Somewhat Quietly, Labor Management Systems for Distribution Continue to Drive Big Operational Improvements
Cloud based LMS and Systems that Also Consider Material Handling are Two New Trends
SCDigest Editorial Staff
Labor Management Systems - a combination of engineered standards and software to track an individual's productivity in the DC - have not been much in the news of late, but continue to drive value and cost savings at dozens of new DCs every year.
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| Productivity improvements in areas such as order picking can be as high as 30%, meaning, for example, that at the start of a program workers may be operating at 70% of standard, and rise over coming months to near 100% for a given task type. |
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What Do You Say?
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At times, stories on LMS have been popular in the trade journals, but it seems not so much recently. It also doesn't seem like there have there been that many marketing programs by providers focused just on LMS of late, so its profile in the market seems to have decreased over the past few years.
"I think with the market for WMS still fairly strong and all the focus on omni-channel and eFulfillment, LMS just isn't at the top of the priority for some of the vendors right now," says SCDigest editor Dan Gilmore.
But experts tell SCDigest that doesn't mean labor management isn't still growing strong, and delivering big benefits to companies that adopt LMS.
For example, Tom Stretar, who heads the labor management practice at consulting firm enVista, noted that the unit had record results in Q1 this year, bringing in more than $1.5 million in revenue from services related to LMS - certainly some indication that the LMS market is healthy.
"The labor market is strong right now, especially in retail distribution, e-Commerce fulfillment, and food manufacturing environments investing in large LMS rollouts," Stretar told SCDigest.
Labor management programs in general combine three major elements:
1. Determination of the "best method" to do each task, from order picking to truck loading, in a DC
2. Development of discrete engineered standards for these tasks, taking into account all the physical moves required for each piece of work.
3. Software that can use those standards to develop dynamic goal times for the specific of each piece of work and then report on performance against those standards at an individual level. That means, for example, that the goal time for a pick on the bottom level will be somewhat longer than the standard for a pick at the chest-high golden zone. Workers (and teams) can therefore be evaluated on performance as a "percent of standard."
There are other aspects to LMS as well. Today's better LMS software systems now include powerful labor planning capabilities, support "coaching" and other management practices, enable incentive pay programs and more. And as the consultants will all tell you, the "change management" aspect is critical to having a successful LMS implementation.
(Distribution/Materials Handling Story Continues Below
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