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Despite the recession, companies are spending money on warehouse systems, with a focus on process improvement, cost savings and labor management, says Simmerman. The key is to have a clear notion of the return on investment. The area of labor productivity alone promises "savings that customers enjoy for years to come."
Engineered labor standards, as an add-on to traditional warehouse management system software, are gaining in popularity. Companies are working with consultants and industrial engineers to define warehouse processes and what it takes to execute them properly. A workable system will integrate standards with performance data in order to measure the workforce.
The result is a "complete diary of [a] person's workday." Managers can easily track indirect and non-value-added time, as they strive to maximize worker productivity. The exercise can even lead to a redesign of the warehouse, so as to shorten the travel time of forklifts and optimize inventory slotting.
"Outside of transportation," Simmerman says, "labor costs are probably the highest cost element in a distribution process. For years it's just been ignored."
As with so many aspects of the supply chain, real success in process improvement rests on collaboration, both internal and external. As supply chains grow more complex, companies find it tough to achieve a "global, unified view" of their inventories and supporting processes. Often the effort involves multiple information systems that might or might not communicate easily with one another.
With proper management, he says, companies can achieve that single view of inventory with a variety of sub-systems. They can draw on existing data and systems the user has already invested.
A recent enabler is the emergence of software applications "in the cloud," hosted outside the user's premises. Labor management is an especially suitable process for that approach, Simmerman says. Applications that drive material handling systems, on the other hand, are probably best managed internally, within a company's firewall.
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