7 Myths of Labor Optimization Debunked
With order fulfillment and replenishment activities accounting for up to 65 percent of total warehouse expenses, labor management software (LMS) proves invaluable in offsetting escalating labor costs. From increased efficiencies, accuracy and throughput to reductions in errors, training time and turnover, LMS repeatedly demonstrates its ability to transform omnichannel fulfillment operations. But despite these obvious benefits, many warehouse and operations managers have reservations about utilizing an LMS in their facilities.
Intelligrated has deep experience implementing LMS in a variety of fulfillment operations. During these engagements, we've heard many of the misperceptions that persist about the limitations of implementing an LMS. What follows are the top seven LMS myths we encounter as well as explanations to set the record straight about these incorrect assertions.
1. We don't need labor optimization because we don't have enough direct labor resources to get a reasonable ROI. Even with a smaller number of resources, LMS can often provide sufficient process improvements by getting more out of the current workforce, thus putting off the need for making capital investments or other large cash outlays. Improving a resource from 50 percent to 75 percent performance effectively adds a half-resource to the area with a minimal investment in coaching.
2. My WMS provides me with all the productivity information I need. A WMS reports only on single metrics like cases-per-hour and doesn't account for foot travel and product attributes. Unlike an LMS, a WMS also does not enable a cultural change or ways in which to maintain a continuous increase in performance (via coaching).
3. My processes are well defined, so I don't need an LMS. The old management adage, "you can't manage what you don't measure" applies here, in that there's no way to know if processes are efficient if you are not tracking them. LMS reveals which employees are (and are not) following processes, and can uncover individual organic process changes that should be shared and added as a standard operating procedure.
4. Real-time feedback is needed to make proper staffing decisions. The truth is, there is an opportunity cost for evaluating labor movements in real time. Staffing decisions should be based on longer (15- to 30-minute) time frame "trends" to avoid losing the time it takes to move from one area to the next.
5. LMS provides only metrics around activities that have already happened.By continually gathering key performance data and other metrics, LMS allows warehouse managers to predict with high accuracy how they will process work in the future. This provides benefits to both short term, daily plans as well as longer-term staff planning for seasonal or other high volume events.
6. My wave process drives efficiency through planning and execution. While wave processes can drive process efficiencies, LMS also addresses the peaks and valleys as other priorities make their way into the daily product flow.
7. Optimizing each area separately optimizes the entire facility. Without a complete view of the entire facility, operations managers are unable to see how different areas feed or starve other sections with work. LMS takes a holistic look to tune the entire facility.
In addition to solving all the above challenges, Intelligrated's GoalPost® LMS is designed to address the ever-increasing complexities associated with omnichannel and e-commerce order fulfillment. Consult with one of our labor management experts to learn how you can realize the many benefits of LMS.