Let’s start with what we think a Labor Management System is. Human Resources is necessary in every industry, and with that, we all manage labor. If we are lucky, we are using a system. So, it’s an easy jump to say, “I know Labor Management Systems”, but it may come as a surprise to know that many of us don’t.
One thing that sets Labor Management Systems apart are their niche market of distribution center operations. These are typically specialized buildings, often with refrigeration or air conditioning, which is stocked with products. These product are then redistributed to consumers, retailers or wholesalers. Distribution centers are frequently referred to as warehouses. Here lies the keystone of Labor Management Systems, as they often integrate with a Warehouse Management System.
Truckloads of goods arrive where they are processed and stored until purchased. Reducing processing times reduces the amount of inventory needed to be stocked, which reduces the bottom line. Having a large impact on the bottom line is where each HR shows that they are a strategic operations ally. This is right where you want to be. How do we impact the bottom line and get buy in? DATA. There is a direct correlation to the efficiency of processing goods and the cost associated in the warehouse. Labor frequently makes up more than 20% of the expenses of an organization. It becomes imperative that warehouses have the highest level of productivity with the lowest headcount possible. Labor Management Systems are powerful tools that can help identify the time wasted on non-essential tasks. With an automated system you are now able to compare activity against your current labor standards both internally and with industry wide benchmarking.
Reporting on previous work done is a great way to get organized, but the real value of these systems is the ability to look ahead. What was previously used to reward top performers or shine a light on the worst performers can now be used to ensure the right staff are in place for optimum efficiency. Think of all the groups of employees that can now be evaluated and forecasted. Receivers, Haulers, Unloaders, Order Fillers, Supervisors, etc. These systems can even take it a step farther for geo tracking your equipment and assets. This is invaluable when you start thinking about the location of where the goods are in the warehouse and the time it takes if your assets and labor aren’t already in the right place. If our fastest moving items are in the back of the warehouse you need the essential reporting in the LMS to recognize it instantly. Even if your facility needs a reslot to increase efficiency, are you picking the best time of year based on your labor force to conduct one? Having previous data for a busy Christmas season allows management the ability to plan accordingly.
An important note is that while Labor Management Systems integrate well with other systems there are entire Supply Chain Suites that make their money selling you systems and modules that you may not need. Once they sell you, here comes the engineering, customization, implementations and your money is rolling out the door. There is also SaaS- which is a software as a service. This is the monthly fee that some providers charge to maintain your software. Just like a LMS allows managers to capture exactly the labor they need without going over by one hour or person, it’s the Human Resources job to ensure that your software selection is in alignment. Just enough to make you better, faster and cheaper. It’s a slippery slope of a WMS, LMS, ERP, CRM, Time Keeping, etc.
A typical suite of supply chain services includes Asset Tracking, Route Planning, Shipping and Receiving, Warehouse Management, Inventory Management, Invoicing, Forecasting, Supplier Management. SAP, Oracle, and JDA are known Supply Chain Management software powerhouses that pack a financial punch.
There are businesses that mimic the warehouse concept that are seeing a great deal of positive impact from theses types of systems. Think hotels, resorts and manufacturing. They have the need to maximize productivity while tracking a multitude of other aspects of their business. This is when HR is able to really shine. With the pleathora of systems to choose from and a wide open world of integration you no longer need to go with a one million dollar supply chain suite. You can piece and build exactly what you need. The suggestion is to start with timekeeping. Knowing that we can not have the businesses or facilities without a staff and payroll make starting with timekeeping logical. Pick one that integrates well with LMS or WMS, or both. Timetac, Mitrefinch and RedPoint are a good start.
From the HR standpoint it’s very important for you to jump in and do research and evaluations. Many managers can see the need for a system but are unable to see the global picture on how that specific system could affect so many other things both positively and negatively. Assuming that you have evaluated your organization and know that an LMS will increase your efficiency then what? Now that we know what a LMS does, which one do you need? DM Mobile, Easy Metrics, TZA, GoalPost. There are also a la cart modules from JDA and other large providers. Thank goodness you started with a timekeeping system that integrates with any LMS or WMS!
We all know that technology makes us better, but there are a lot of growing pains and change initiative management factors that our Humans Resources need to plan for and get ahead of. Implementations are frequently heavy workloads and a large push but worth it when your due diligence is done in the selection phase. While it sounds mindless, work with companies that make it easy to work with them. Start now with your managers that are the most change adverse with one on one coaching so that when the time comes you have all the buy in necessary.