Businesses are looking to automation to counter the effects of labor shortages and high wages. Yet many are either hesitant or unable to make the large upfront investment required of automation and robotics projects.

Given the high price of automation, smaller organizations are often stuck looking for other ways to increase efficiency, profitability and employee satisfaction in their distribution facilities. For such companies, an effective but lower-cost alternative is a labor management program.

Since the economy began to rebound from the COVID-19 slowdown, warehouses have experienced a tight labor market. Unemployment levels have been at record lows, making qualified workers harder to find. In the face of that challenge, a labor management program can offer multiple advantages, including:

• Enhanced job satisfaction, by optimizing workflows and fostering a sense of accomplishment that’s crucial to retaining talented associates. 
• Clear career development paths, incorporating skill development and performance evaluations, preventing workers from stagnation in their roles, and promoting long-term commitment. 
• Flexible scheduling arrangements.
• Greater employee empowerment, providing control over schedules and tasks, and contributing to autonomy and heightened job satisfaction. 
• Transparent communication, enhancing trust and keeping employees informed about company objectives.

As the labor market has become more and more competitive, the price of labor has increased. A labor management system (LMS) can help in the following ways: 

• It increases associate productivity by up to 15%, with incentive-based pay programs potentially pushing levels to 20% or more. 
• Optimized workforce scheduling, informed by historical data and demand forecasts, minimizes overtime costs and avoids overstaffing during periods of low demand. 
• Task automation features streamline routine activities, without the need for costly robotics projects. 
• Resource allocation and cross-training enhance workforce flexibility, reducing reliance on specialized personnel and curbing overtime expenses.
• Performance-monitoring tools identify inefficiencies and further enhance productivity.

Warehouses and distribution centers often have such high throughput requirements that they feel that they either need to hire more associates or invest in costly automation systems. But those aren’t the only options. 

An LMS can significantly boost throughput levels by optimizing workforce efficiency and resource utilization. In addition, by automating routine tasks, it minimizes facility downtime.

Integrating quality-control measures into the process reduces the likelihood of rework and delays. And by facilitating cross-functional collaboration and communication, an LMS ensures that different departments work cohesively and avoid organizational silos.

Because LMSs have been around for much longer than a lot of the newer automation, they don’t require as high an equipment cost. Typically delivered via a software-as-a-service model, they eliminate the need to maintain on-premises servers and third-party software.

A typical labor management program has a quicker return on investment than automation projects — between two and six months to implement, depending on various factors. There’s no lead time for getting equipment; you can start a project as soon as you have staffing available. Secondly, the projects are less work overall, bypassing the construction phase that accompanies most automation efforts. ROI is typically realized within 12 to 24 months.

By increasing labor reporting visibility, providing timely feedback on performance and coaching employees, a labor management program can prove to be a major asset for any organization. Moreover, the cost savings can be put toward future investments in automation. Because automation doesn’t eliminate all human labor, the two technologies can work together to create maximum optimization.

Tom Stretar is vice president of technology, and Brandon Vallonio is manager of technology, with enVista.