Take a step back to December 2013. During the last shopping weekend before Christmas, <a href="https://www.wsj.com/articles/online-retailers-stole-christmas-many-shoppers-say-1387988761?tesla=y" target="_blank">e-commerce sales jumped 37 percent from the year before</a>, challenging retailers and carriers to meet delivery expectations. Fifteen percent of online shoppers who ordered items by retailers’ specified cutoff dates did not receive their packages by Christmas Eve.
To increase capacity during peaks, fulfillment operations commonly employ seasonal labor to cope with increased order volumes. However, determining the right amount of additional labor and getting the most out of staff is challenging. Labor management software (LMS) can forecast workforce requirements, track performance and control labor costs while fostering a culture that incentivizes productivity, self-management and continuous improvement.
See below for five ways LMS benefits operations during peak season:
1. Increase overall productivity and performance
Automated labor tracking frees supervisors to invest time in the workforce and manage for a higher level of productivity. LMS tracking enables operations to evaluate employees and temps in relation to their peers, experience in their current position and other performance benchmarks. Furthermore, labor management systems integrate with mobile devices such as tablets and smart phones to provide actionable tracking information on the floor. This enables supervisors to reconcile on-floor observations with current and historical performance data to address issues in real time.
2. Bolster retention
Driven by LMS, a robust performance management program increases employee retention and job satisfaction. By implementing a structure of accountability that rewards high-performing employees through financial and non-monetary incentives, operations can get more out of their existing skilled workforce and reduce the need for temporary labor.
3. Identify low performing employees earlier
Operations can put new employees on a training curve within the LMS that provides a better understanding of work content and establishes appropriate performance expectations based on time in the facility and projected improvement. Rather than waiting months to determine an employee’s strengths and weaknesses, operations can gauge employee progress and provide coaching, or reassign personnel to alternative functions.
4. Identify training needs
Extensive performance data enables operations to identify high-performing employees and those who require extra attention, leading to process improvements and increased productivity. Supervisors can observe outstanding associates and glean key tactics to implement with the rest of the workforce.
5. Understand staff activity through accurate performance and on-standard percentage data
With fulfillment operations under intense pressure to meet shipping deadlines and satisfy customer expectations, having too little labor is far worse than overstaffing. However, the costs of overstaffing add up over time and discourage maximum productivity from each employee. LMS provides accurate performance and on-standard percentage information that illuminates how staff uses their time. This enables operations to avoid wasted staff with better labor forecasting at a more granular level.
In practice, a fulfillment operation may operate with a permanent staff of 10 employees supplemented by a contract with a temp agency for up to 25 temporary staff members. Using point of sale data, management knows it must complete 15,000 picks the following day. Given the quantity and product mix, LMS forecasting dictates the operation requires 12 pickers and one support employee. The historical tracking and forecasting functionality allows operations to flex workforce based on incoming work, ensuring sufficient staff to meet productivity goals while reducing wasted labor.
Rapid ROI: An LMS pays off
The productivity and efficiency gains from investment in Intelligrated’s GoalPost® LMS can yield positive ROI in the first year of ownership. Factoring in an achievable productivity improvement of six percent for an operation filling an average of 5 million orders per year, GoalPost can save more than 32,600 hours of labor each year. This translates into positive ROI of more than $358,000 in the first year and a cumulative impact of more than $1.2 million over three years.