Improving labor management

Bob Trebilcock, Editor-at-Large -- Modern Materials Handling, 7/15/2004

All warehouse management systems (WMS) direct the activities of labor on the warehouse floor during the order fulfillment process. But a WMS doesn't determine the optimal number of order pickers and lift truck drivers it will take to process that wave of orders based on labor standards and work rules. Nor does a WMS provide the tools to track the productivity of individual workers.

That's where a labor management system comes into play.

"There are really two aspects to labor management," says George Bishop, senior vice president for LxLi (416-621-9292, www.lxli.com). "The first is the creation of an engineered labor standard. The second is to use that information to forecast, plan, and manage your work force."

An engineered labor standard breaks down a task, like picking to a pallet or unloading a truck, into component parts. It then determines how long it should take to perform each step of that task to create the standard. Engineered labor standards take into consideration variables such as: the size and weight of a carton; how high an employee has to reach to pick product from a particular shelf; and at what speed a lift truck should travel from the dock to a putaway zone. The system then adds up the component pieces to determine how long it should take to perform a specific task.

Those standards can then be applied to forecast how much temporary labor a facility might need to hire in order to fill orders during the peak holiday season, for instance. Labor management software can also plan the optimal number of employees and resources, like lift trucks, to pick a wave of orders the next day.

Finally, labor management allows a facility manager to dynamically redeploy labor throughout the day if the work is running ahead or behind the plan.

"As orders change, and as conditions change, I can change my planning in real time by bringing in more temporary help or sending some of the workforce home," explains Ronald D. Riggin, chief technology officer for MARC Global (866-703-8279, www.marcglobal.com). "That's becoming more commonplace in the industry."

Riggin says that most facilities can see a 10% or more productivity improvement from a labor management system.

Along with forecasting and planning the labor needed to fill orders, a labor management system also allows managers to track the performance of individual employees. This is especially useful in facilities with performance-based incentive programs. "A WMS can tell you how many cases were shipped and how much labor was used at an aggregate level," Riggin says. "But a labor management system tracks how many cases Joe picked on a transaction by transaction basis, and whether Joe was performing ahead or behind of the standard."