July 2010 | Commentary | IT Matters

Managing Labor Boosts Warehouse Operations

Tags: Logistics I.T., Warehousing, Warehouse Management Systems (WMS), Supply Chain Management, Labor Management

Joe Caston is chief executive officer and president of Cadre Technologies, 303-217-7048

 

When up against competition, service is the name of the game, and your labor force is the most important tool you have to win business and increase profitability.

Labor management tools help you determine whether your workforce is able to perform at the level necessary to deliver cost-effective service to your customers. With the data and reports such tools calculate and generate, you can approach potential customers with numbers that demonstrate your ability to be a viable long-term partner.

Standardizing Measurements

Companies often leave labor force performance evaluations to the subjective judgment of managers or supervisors. Labor management systems help create performance standards that provide an objective frame of reference. Managers can use this data to offer incentives and training, evaluate performance, and make necessary personnel changes.

Engineered labor standards are a great way to measure performance. A labor management consultant can evaluate how long it should take to perform every task involved with the company’s warehouse operations, such as the length of time to pick a particular product type. Measuring actual operational results against these standards identifies areas for improvement.

Salvaging a Bad Month

Knowing whether your warehouse is meeting your deliverables for the month is critical. Labor management systems can generate information on the fly, providing real-time visibility into warehouse performance.

End-of-month performance measurements don’t allow managers to turn performance around to meet the current month’s goals. Gauging activity mid-month allows time to remedy issues. Having instant access to information is a key factor in the process, and virtually impossible without automation.

An automated system provides a dashboard with key performance indicators designed to alert users when warehouse activity falls below or exceeds thresholds. If productivity dips, the warehouse manager can take immediate action.

Everyone has margin pressure, and providing good customer service at competitive rates is more important than ever. The warehouse has to operate as efficiently as possible. A labor management system will evaluate a time period— whether a day, week, or month— and provide actionable data related to how efficiently work is being performed and whether the business is meeting revenue goals. For companies with multiple facilities, visibility into remote locations can be invaluable.

A Philosophical Shift

These may seem like relatively simple concepts, but they represent a philosophical shift for logistics providers who are used to concentrating on moving product, as opposed to measuring internal performance. Businesses using warehouse managment systems may be able to add a labor management module— or may even have one they are not using. It is often the last piece of the IT equation that businesses implement, but with newer technology and real-time warehouse systems, labor management becomes a seamless interface that is relatively simple to learn.

Labor management may not be your company’s first priority, but don’t let it take a back seat. The sooner you start tracking your labor costs, the sooner you will become more efficient and competitive.