Is It Time for a Labor Management System? 3 Cornerstones for Getting Ahead

Few would argue the fact that labor costs eat up a good portion of any company's annual budget. Knowing this, monitoring and tracking workforce efficiency would logically be a top concern for companies looking to operate smarter, better, and faster - but that's not the case. In fact, labor management often falls by the wayside - and then stays there - during enterprise implementations.

In his recent blog, Plan, Monitor and Measure - The Cornerstones of Supply Chain Labor Management, strategic supply chain consultant Brian Lindenmeyer said, "It's surprising how many companies have not yet considered labor management as their next initiative. Especially since most companies would agree that you first need to measure what the current state is to understand if the future state is an improvement, right?"

Companies are bridging that gap with solutions known as Labor Management Systems (LMS), many of which integrate directly with Microsoft Dynamics and enable the management and tracking of labor activities for distribution-based operations. They typically incorporate real-time interaction with warehouse systems and are generally deployed within the four walls of the warehouse. Once the data is collected, the LMS reports on labor activity and then benchmarks that information against the firm's internal, historical data and established labor standards.

Some companies are catching on to the value of automated labor management. A mature market by supply chain software standards, the LMS sector's market penetration currently stands at around 45 percent (compared to 80 percent for Warehouse Management Systems, for example), according to Gartner, Inc.'s research vice president Dwight Klappich. He says 23 percent of companies currently have a "fully deployed" LMS while 22 percent have "partially deployed" systems. Another 10 percent of ...