I got a two-hour briefing on Manhattan Associate’s new Active Warehouse Management platform, which includes labor management, prior to the company’s online Momentum Connect 2020 conference. I can’t remember the last time I was so excited following a new product launch briefing. The new cloud architecture, new user interface, and significant advancements in optimization and employee engagement are wonderful. Any one of these improvements would have been impressive. Incorporating all these enhancements in their new release is astonishing.
On Wednesday May 20th, my presentation ran at the Manhattan conference. It was focused on best practices in engaging warehouse workers. On the same day, Peter Schnorbach, Senior Director of Product Management at Manhattan, made public the new features associated with their labor management solution. The two presentations were highly synergistic.
Warehouse Best Practices
My speech focused on survey research I had done around best practices associated with engaging warehouse workers. But I also looked at what practices were strongly associated with achieving gains in productivity, quality (as measured by picking accuracy), customer engagement, and safety simultaneously. A warehouse management system (WMS) can drive gains in productivity and quality, but does not significantly affect the other two dimensions associated with running an excellent warehouse. A labor management system (LMS) can drive very robust gains in productivity but can be negatively associated with retaining workers (particularly right after the system goes live).
I looked at over 40 factors that might be associated with running a balanced scorecard warehouse, a warehouse that excels in all four dimensions. I only found eight factors strongly associated with improving performance across productivity, quality, worker engagement, and safety. Five of those practices were associated with the way managers managed and rewarded workers.
Manhattan Associates’ New Approach Toward Labor Managment
What was interesting to me was the way Manhattan’s Active Labor Management built in new features supporting worker engagement. Historically, an LMS was more like a slap than a hug.
Granular labor standards could be used to define labor productivity goals. These goals were designed to keep workers utilized and productive. Fair productivity targets do not cause workers to feel rushed or overwhelmed if they are performing the tasks correctly. There is something of a science behind building fair standards.
Workers are expected to meet their productivity goals. If they don’t, they are coached, or receive negative reinforcement, or if bad productivity is habitual, they can be fired. And well written labor standards protect the company against lawsuits from employees who have been fired. In some cases, companies would get a significant wave of productivity improvements from implementing an LMS; and then put in place a bonus plan for workers that exceed goal which would drive a second wave of productivity gains.
But what Peter introduced was a kinder and gentler version of LMS focused on driving worker engagement. Here are a few of the balanced scorecard practices I mentioned in my presentation:
- Manager training in providing effective feedback
- Managers frequently monitor individuals as they do their jobs and provide on the spot positive reinforcement
- Workers monitored at least once a month to make sure standard operating procedures and best practices are being used
- Non-financial remuneration (food, time off, etc.) for high performance
Each of those practices is supported in Manhattan’s new LMS. I use to be a speech teacher; In terms of providing effective feedback to novice speakers, I was taught that you tell someone what specifically they have done well, then go into specific areas where they could “improve”, and you end by saying something like “overall, this was really good.” And the feedback is given immediately, right after they have given the speech.
The new LMS’s user interface makes it much easier to drill into an associate’s performance and give more immediate feedback. The LMS allows a manager to send a “toast” message – that can be positive, neutral, or negative – several times a day. If the feedback is negative, the manager assigns a “challenge” to the employee. To “challenge” an employee is a much nicer way of saying to an associate can improve in this area.
And workers may be failing in hitting productivity targets because they are struggling with specific tasks. The new interface allows managers to drill down and figure that out. Then targeted coaching can be given to the associate.
The new solution also has gamification features. Peter described the features as including “performance transparency, challenges, points recognition and rewards. When an associate is presented with their performance, and they have met their goals, confetti rains down. Associates can see how they are performing in comparison to their peers – whether they are beating them at the game of warehousing performance. Associates can earn points for doing their job effectively. They can spend those points on a third-party reward and recognition platform.”
As I found in my research, workers don’t need big rewards to motivate them. Non-financial remuneration – in the form of food, time off, etc. – for high performance was one thing that differentiated high performing warehouses from their peers. These new features may drive productivity similar to an incentive program but it is more fun and costs less!
In conclusion, after viewing the application, I think Peter summed up the new labor management system fairly when he said “Designing applications that appeal to our sense of purpose, as humans, and gamified to take advantage of modern device experiences, offers the chance to deliver true employee engagement across fulfillment operations.” There is the potential this application could improve, perhaps significantly, worker retention, training time, and create a more satisfied and productive workforce.