Distribution and Materials Handling Focus: Our Weekly Feature Article on Topics Related to Distribution Management and Material Handling Strategies and Technologies  
  - February 12, 2008 -  

Logistics News: Seven Myths of Labor Management Systems


As LMS Gains in Popularity, It’s Time to Dispel Misconceptions that Sometimes are a Barrier to Adoption


SCDigest Editorial Staff

What are some of the key myths and misconceptions around Labor Management Systems?

SCDigest Says:
Employee morale and retention goes up after LMS implementation, especially if incentive pay programs are used.

What do you say? Send us your comments here

The article below first appeared last year in the issue of The Supply Chain Digest Letter that focused on Labor Management. (See our Labor Management System resource page).

1. LMS is not an Executive Level Issue: Some logistics executives have viewed Labor Management as just a lower level warehouse issue. Wrong. The cost savings alone make it worth executive attention, and the ability for better budgeting, resource planning, and execution consistency should also serve to make LMS a key tool for executives to look for supply chain improvements.

2. If I have a WMS, I am getting Labor Management:  While a growing number of Warehouse Management System providers now also offer LMS, the traditional productivity tracking capabilities of a WMS do not provide the benefits of a true LMS.

3. Employee Morale Will Go Down: Many companies mistakenly believe that while Labor Management may be good for the company, it will be poorly accepted by employees. The results, however, consistently demonstrate the opposite. Employee morale and retention goes up after LMS implementation, especially if incentive pay programs are used.

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4. It Won’t Work Well in a Union Environment: Some companies worry that labor won’t be accepted by a union, or it will cause problems. Again, the evidence is the opposite. Many of the first LMS implementations were in union shops, and there are dozens of examples of successful implementations. Getting union operator involvement early is key though.

5. LMS will Require a lot of IT Resources: While implementation of LMS software and integration with existing systems will take some IT resources, the need and intensity of IT effort is simply minimal compared with most supply chain software projects, and is rarely a significant barrier to adoption.

6. “Labor Management” is an Unenlightened Approach to Managing Associates: Done well, with employee involvement upfront, a strong emphasis on supervisors playing a “coaching” role, incentive pay programs and other elements, LMS can be seen as a very progressive approach to workforce management.

7. Labor Management Results are Over Rated: Companies often think that stories of productivity gains in areas like case or piece picking of 30-40% just aren’t possible. We won’t go as far as to say they are common, but there are lots of validated stories where we’ve seen those levels. 20% or greater gains in labor intensive areas are the norm.

Do you agree with our seven LMS myths? Why or why not? Let us know your thoughts at the Feedback button below.

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