Executive Briefings

Labor-Management Systems: State of the Art

Companies are finally beginning to take advantage of labor-management systems in their distribution centers. Lou Cerny, vice president of Sedlak Consultants, describes the rate of adoption, and advises on why, when and how to implement LMS in your own operation.

Labor-Management Systems: State of the Art

Between 30 and 35 percent of companies have true labor-management software (LMS) systems in place in their distribution centers, according to Cerny. He says an increasing number of his clients are realizing the benefits of that application, however.

LMS systems are becoming more attractive as companies seek to obtain the maximum return on investment from their distribution operations. “There’s an opportunity for associates to increase their income and provide the best customer service,” he says. “LMS allows the stars to be rewarded.”

LMS applications direct the labor function in warehouses, guiding facilities as to where their people should be, and which items they should be touching. At the same time, they allow for detailed measurements of individual productivity.

In the process, companies can set benchmarks for performance, tied to their standard operating procedures, while taking into account safety and ergonomic considerations. Measurements can drill down to the length of movement between picks, often down to the minute, and are individualized for each worker. But the software alone won’t ensure maximum efficiency. “The organization has to be responsible for proper training and setting incentives for performance,” says Cerny.

Potential employee resistance to the technology needs to be overcome. Companies must avoid the “Big Brother” mentality, Cerny says. LMS systems “are really intended to make sure that people have the tools in place to properly perform their jobs, and are rewarded accordingly.” Associates should be informed about the system in advance, and management needs to share its expectations “and make sure they’re fully engaged in the process.”

Implementation can take roughly two weeks per labor standard. The average distribution center has between 12 and 20 unique functions that need to be measured. It can take anywhere from 12 to 18 weeks to monitor key measurements and procedures, with a return on investment in six to 18 months, Cerny says.

To view the video in its entirety, click here

Between 30 and 35 percent of companies have true labor-management software (LMS) systems in place in their distribution centers, according to Cerny. He says an increasing number of his clients are realizing the benefits of that application, however.

LMS systems are becoming more attractive as companies seek to obtain the maximum return on investment from their distribution operations. “There’s an opportunity for associates to increase their income and provide the best customer service,” he says. “LMS allows the stars to be rewarded.”

LMS applications direct the labor function in warehouses, guiding facilities as to where their people should be, and which items they should be touching. At the same time, they allow for detailed measurements of individual productivity.

In the process, companies can set benchmarks for performance, tied to their standard operating procedures, while taking into account safety and ergonomic considerations. Measurements can drill down to the length of movement between picks, often down to the minute, and are individualized for each worker. But the software alone won’t ensure maximum efficiency. “The organization has to be responsible for proper training and setting incentives for performance,” says Cerny.

Potential employee resistance to the technology needs to be overcome. Companies must avoid the “Big Brother” mentality, Cerny says. LMS systems “are really intended to make sure that people have the tools in place to properly perform their jobs, and are rewarded accordingly.” Associates should be informed about the system in advance, and management needs to share its expectations “and make sure they’re fully engaged in the process.”

Implementation can take roughly two weeks per labor standard. The average distribution center has between 12 and 20 unique functions that need to be measured. It can take anywhere from 12 to 18 weeks to monitor key measurements and procedures, with a return on investment in six to 18 months, Cerny says.

To view the video in its entirety, click here

Labor-Management Systems: State of the Art