Distribution and Materials Handling Focus: Our Weekly Feature Article on Topics Related to Distribution Management and Material Handling Strategies and Technologies  
  - October 2, 2007 -  

Logistics News: Should Labor Management always come after WMS?


That’s the Prevailing Wisdom, but Some Disagree



SCDigest Editorial Staff

SCDigest Says:
Often, it is better to sequence the savings by first doing WMS and then later driving another level of costs out through Labor Management.

What do you say? Send us your comments here

As Labor Management Systems continue to gain in popularity, a frequent question we receive at Supply Chain Digest is: can you or should you put in Labor at the same time as a new WMS?

This question was in fact one of the first ones we received for our New Answers@scdigest feature, and a number of our experts offered their opinions (See Can You Implement WMS and LMS Together? for full question and expert responses).

The conventional wisdom has generally been that you do Labor after WMS, for a variety of reasons. Those include:

  • The need to get new process down pat first
  • Too much complexity going on with just WMS implementation to add on more work
  • Similarly, with people consumed with the WMS project, not enough available resource to also tack on LMS

Another factor is that companies often don’t want to generate all the potential savings from WMS and LMS in one big bang. Often, it is better to sequence the savings by first doing WMS and then later driving another level of costs out through Labor Management. This approach can drive a “continuous improvement” model in distribution for a number of years through the WMS and then LMS implementations and resulting operational improvements.

That was certainly the case for two of the case studies we have done on LMS, as both Sara Lee Foods and Sports Chalet looked to labor to deliver a new round of savings after WMS. (See Sports Chalet Makes Labor Management Work Through Technology and Performanced-Driven Culture and Sara Lee Foods Finds LMS Value.)


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Place for LMS First?

There are some, however, who question that conventional wisdom.

“I would be quick to point out that with today's LMS solutions you can and should consider implementing the LMS first,” says John Seidl, a Principal at Kurt Salmon Associates and its new GoalPost Labor Management group. “The LMS can function well in a legacy or manual environment and will generate the hard savings needed to further justify the WMS. This approach has only become possible in the last 3 or 4 years but in one that every company should consider - a self-funding approach with direct benefits right up front. I would also suggest you consider implementing slotting, supply chain event management and TMS before the WMS as well.”

Those sentiments were supported by Jeffrey Boudreau, a partner at XCD Performance Consulting, who told SCDigest that the conventional approach often misses opportunity.

There seems to be pervasive assumptions labor management should be considered only after every possible supply chain improvement has been pursued. It is the “icing on the cake” after network design, automation, and WMS benefits run their course, Boudreau wrote.

“Quite the contrary, I find leading companies use labor management in strategic ways at every possible opportunity: Such as to extend facility output before new capacity comes on line; or as part of a broad distribution network strategy to reduce the number of facilities in a network, their size and capital requirements,” he added.

The common theme among both sides of the coin is that LMS can deliver a lot of value to distribution operations. Either approach can and has delivered strong results. We’d suggest distribution managers keep their options open.

Do you agree or disagree? Share your perspective by emailing us at feedback@scdigest.com

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