Total Throughput Divided by Total Labor Cost Is Just the Tip of the Iceberg – Know for Sure and Take Control with a Warehouse Labor Management System
Dead reckoning. It’s a navigational term that describes an estimation based on little or no information. Not the best way to sail a ship. Not the best way to manage a warehouse either.
But for so many warehouse operators who have invested in a modern warehouse management system (WMS), tracking labor, time and output is often akin to dead reckoning. You count the total number of boxes that pass through the warehouse in a day and divide it by the total labor cost to arrive at some approximation of productivity for the location. While, between the lines, two hours of an eight-hour day get “wasted” on non-productive tasks. Sitting in meetings, cleaning equipment, changing batteries, traversing the warehouse or taking breaks.
A warehouse labor management (LMS) system can change all that because it feeds off your WMS information – number of picking transactions, UPCs, machine speeds, dimensional inputs, number of items and cases, size and weight of cases, case grab factors, racking heights and configurations, machine speeds and travel paths, etc. – providing keen insights into game-changing efficiencies.
Why not take all the detail you gain from your WMS and overlay that data onto a labor management system to gain a richer perspective on what’s really happening in your warehouse?
What you find could be enough to return 10% to 25% labor savings to your bottom line.
Understanding the True Value of LMS
Over the years, labor management systems have gotten a bad rap. Many perceive them as a stick held over employees’ heads to squeeze more work out of them. But in reality, a modern LMS can be more of a carrot.
Top brass can better align labor goals to corporate strategies, giving the organization a clear sense of purpose and direction. Supervisors can manage to fixed targets, adding measurable value to the business within a meaningful context. Leading employees can be recognized by merit; lagging employees can be identified for further coaching. Everyone benefits by understanding the rally points, and recognition can be based on demonstrable results.
A modern LMS empowers labor to learn faster, innovate and do more, because the game is clear-cut. Assumptions and innuendo are removed from the discussion. Visibility translates into performance, which translates into rewards up and down the organizational chain.
It’s Not Brain Surgery
Adding an LMS to your WMS is a straightforward operation. Modern integration APIs accommodate virtually all combinations of systems, so, even if your WMS is a few years old, it can still play with a state-of-the-art LMS.
The process begins by mapping your warehouse, location by location, horizontally and vertically, so that distances and hot spots can be identified, measured and tracked. Take note of the time it takes to complete a task or travel from one location to the next. Work with your integrator to review and, if necessary, re-engineer various tasks prior to system configuration.
Once the software is configured, test your original inputs and observations, and make any further adjustments. With the audit complete, commence training and transition your LMS provider to support.
Getting the Most Out of the Data
A properly deployed LMS can help supervisors quickly see where inefficiencies occur and make the necessary corrections in real-time based on accurate data.
Employees needn’t change the way they work. There’s no new technology for them to learn, other than to record their various tasks on the same handheld device they’ve been using to inform the WMS. When an employee shifts from picking or loading to taking a break or attending a meeting, a simple tap on the menu transfers the information from the WMS to the LMS and the supervisor is alerted.
As long as everything is conducted according to the labor goals set in the system, everything holds steady. If a task runs off course, corrections can be made immediately. No more waiting until end-of-day or end-of-week to modify a plan. Lines can be balanced on the fly. Bottlenecks can be cleared. And building output can be tweaked, instantly, all on the wings of real-time feedback.
Best yet, accurate progress reports continue to feed your analysis. Over time, this leads to efficient labor scheduling, process innovations and a growing sense of morale, as your people understand their impact on outcomes and strive to drive greater performance.
All in a Day’s Work
Adopting a modern LMS can lead to a number of tangible and intangible benefits for your organization, including:
- 10-25% labor savings.
- Better employee communications, centering expectations and accountability on facts.
- Performance-based incentive programs, protecting your best, most productive workers.
- Visibility into warehouse activities, leading to process improvement.
- More productive coaching and training, based on documented successes.
- Accurate activity-based pricing, contributing to your revenue stream.
- Long-term gains based on accurate historical reporting and analysis.
Jason Milbrandt, Senior Director, Client Services brings over 20 years of engineering and labor management system experience across retail, food and beverage and healthcare industries to Open Sky Group. Jason’s focus is leading the labor management practice, driving teams to deliver exceptional results in productivity and incentive programs for clients. Open Sky Group’s mission is to deliver solutions that allow our customers to achieve more, often with less, while having the flexibility to adapt to change. Jason lives that mission focusing on labor management solutions that improve warehouse performance, providing the best results for our clients.
Open Sky Group, global specialists in the Blue Yonder supply chain solutions (formerly JDA RedPrairie Software), helps companies like yours implement and upgrade warehouse, labor and transportation management systems. To learn more, visit https://www.openskygroup.com today.
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