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A New Look at Warehouse Labor Management

Al Gagnon, senior account executive with enVista, traces the history of labor-management applications in the warehouse, and talks about why and where the technology is catching on with companies today.

The science of warehouse workforce management has its roots in manufacturing. Concepts that were developed for the plant floor started migrating to distribution centers in the late 1970s and early 1980s, says Gagnon. Managers began with the use of traditional time cards; from there, they turned to software vendors and consultants to take advantage of innovations in computer technology. Additional features became available with the maturation of standalone warehouse-management system (WMS) vendors, as well as providers of enterprise resource planning (ERP) systems that included labor-management modules.

Regardless of the system chosen, it's essential that facility managers maintain performance expectations and reporting at some level, Gagnon says. A smaller organization might seek to create basic metrics for picking on the floor. Sophisticated Tier 1 vendors will offer systems with multiple coordinates, showing such details as dock door, pallet and precise location of a putaway, making order selection easier and more efficient.

In tough economic times, labor management takes on a far more vital role in the warehouse. Between 40 and 50 percent of total warehouse costs are tied up in labor, Gagnon says. Implementation of a new system in a large operation can mean a savings of "significant dollars." He describes a maturity matrix which traces the sophistication of internal systems from "crawl" to "walk" and "run." Even in the earliest phase, a 4- to 8-percent return on investment is possible, rising to between 15 and 20 percent with the addition of coaching, counseling and worker incentives.

Companies today are employing all sorts of creative techniques for improving warehouse productivity, including Lean and Six Sigma quality efforts. Workers, too, seem open to improvements that measure their performance and reward them accordingly. "People want to know how they're doing," says Gagnon. "Most want to do a good job. They're very receptive to the program if it's implemented properly, fairly and [with] equitable metrics and measurements."

To view this video interview in its entirety, click here.

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