How Labor Management Systems (LMS) Improve Warehouse Productivity

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How Labor Management Systems (LMS) Improve
Warehouse Productivity
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With labor costs allocating between 30-60 of a
distribution facilities budget, its no wonder
businesses look to Labor Management Systems (LMS)
after implementing a Warehouse Manufacturing
System (WMS). Fortunately, LMS and WMS work
together to provide insightful data pertaining to
the labor force. To better manage human
resources within warehouse operations, one can
examine LMS through the lens of the following 6
key areas Labor Standards per Operation
Traditionally, labor standards have been
provided by engineers and time studies which is
often costly and time-consuming. On the other
hand, newer LM solutions calculate these
standards by using historical data, eliminating
the expense, and decreasing installation time.
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Employee Performance Transactional history
helps the LM solution identify top performers and
highlights employees who could benefit from
additional training. From there, management can
reward top employees for their achievements.   Dir
ect Labor Direct labor is the time normally
tracked through transactional data which reveals
data on employee productivity, or the complexity
of a given operation.   Indirect Time Indirect
time is the time employees spend on tasks
unrelated to production. For a warehouse
employee, an example might be the amount of time
spent charging a lift. A well-performing LM
system will offer an alternative method to
capture indirect time. One popular method is
provided in the form of a user start/stop entry
on a tablet or mobile device.   Missing
Time Missing time is the time that the employee
is paid for vs. the time tracked in either direct
or indirect labor (and this can get costly!). In
fact, it is estimated that only 50-80 of an
employees time is direct labor. The remaining
time is either indirect or missing. To ensure ROI
is achieved, LM systems will typically address
the missing time issue first. For companies that
do not track missing time, you will probably see
1 hour per day per employee on average. This
means that on an 8-hour shift, 12.5 of the time
is left unaccounted for. If indirect time is not
logged, you can see how this can quickly grow to
a number like 30-50, making it extremely
difficult to understand true costs.  
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Cost to Serve Engineered Labor Standards focus
on a specific standard for a process, whereas
Cost to Serve takes a holistic approach to
obtain your labor costs for customer, employee,
process, and product. The most common method to
calculate Cost to Serve is as follows Cost
per Standard Process Average Transaction
Volume Cost to Serve This calculation technique
can be useful but is dependent upon the accuracy
of the engineered standard and the ability of the
employee to be consistent with that standard. A
robust LMS can help elaborate on this calculation
with much more precision. By allowing for
multiple sources such as Warehouse Management
System, Transportation Management Systems (TMS),
Customer Relationship Management (CRM), Materials
Resource Planning (MRP), Time Clocks, and
telematics the system can create a cost and
performance model to give you Cost to Serve
results according to customer, employee, process,
and product. Connect with us! Source Link -
https//katalysttech.com/blog/how-labor-management
-systems-lms-improve-warehouse-productivity/
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