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Trends in Labor Management

A man holding a box in a warehouse

Labor management systems (LMS) are a viable solution to efficiency problems; without a LMS, a facility operates at 60 to 70 percent of total potential. They are used to calculate task statistics, report feedback and measure effectiveness of each task.

How has LMS evolved over time?

Early adopters of labor management systems were grocery and food service companies. Outside of those two industries, there was a perception that LMS was a negative – that they were used like a hammer to knock the workforce down and get more productivity out of each individual.

Other companies now understand the positives of LMS and are increasingly implementing labor management programs. Recently, there has been a huge migration to the cloud, giving companies a faster time-to-value by more rapidly implementing the program.

Economic trends impacting evolution

Low unemployment rates – As the unemployment rate approaches historic lows, it becomes increasingly difficult for companies to attract and retain talented employees. Incentive programs can be implemented with LMS to share some of the savings from the productivity program back to the workforce.

Tax reform – The recent tax reform will free up company capital, and they will be looking for ways to invest those extra dollars. A great way to do that is to invest in the workforce and put tools in place to make them more productive and share some of the gains through incentive programs.

Benefits of LMS

LMS systems have several benefits that companies used to be unaware of.

Labor Management System benefits include:

  • Increasing your predictability in the warehouse
  • Improving customer service by making sure orders get out on time
  • Increasing morale by giving the workforce certainty of when their day will finish
  • Training and coaching to improve the workforce rather than giving a quota for productivity.

What are the benefits of the cloud compared to on-premise LMS?

As more companies migrate to the cloud, personnel consider the benefits of using the cloud compared to an on-premise labor management system.

  • Faster time-to-value – Savings are achieved quicker than with on-premise solutions.
  • Scalability – Cloud solutions enable cost reductions based on the number of users currently operating in the warehouse. This is especially important for retailers whose workforce can double during holidays, so they don’t pay a large upfront license fee based on peak warehouse operators for on-premise LMS.
  • Reduced IT wait time – Operations coordinators with on-premise solutions must wait for IT resources to be available. The cloud reduces the amount of resources necessary for program implementation, so the LMS can be implemented more quickly.

Concerns about LMS in the cloud

The primary concern is security. Since there are many reports in the news of data breaches, companies are obviously concerned about protecting their intellectual property. That issue has decreased over the years as infrastructures like Amazon Web Services and Microsoft Azur have proven to be secure, so we use those tools to deploy the labor solution. More and more applications are moving to the cloud, and IT organizations really see that benefits far outweigh the risks.

Key considerations

LMS is more than a software implementation; it’s really a people, process and technology implementation. Technology is just the enabler to make sure the savings are achievable and sustainable with each program, and the real crux is the people and the process. The processes put in place should be efficient, and once that’s established, a measure is put on that process. Change management is the most important aspect because it’s what sets the stage for a successful program by ensuring everyone is engaged from top to bottom and understands his role. Ultimately, companies want to find a tool that meets their business objectives, and usually a key objective is to get a fast time-to value. The best way to do that is to look at a cloud solution that’s less complex, going to be implemented quickly and drive a quick return on investment.

Learn more about how workforce management can make a positive impact on your business.

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