What is a labor management system (LMS)?

What is a labor management system?

A labor management system (LMS) is software designed to optimize workforce productivity and efficiency. It helps warehouses manage their labor resources by providing insights into employee performance, task allocation and workflow optimization.

Through an LMS, supply chain businesses can manage their workforce scheduling, time tracking and payroll. They can strategically align labor resources to operational requirements, maximize employee utilization, improve productivity levels and reduce costs.

Warehouse labor management at a glance

• Planning and monitoring resources across functional areas
• Enabling a self-directed workforce
• Calculating and monitoring labor standards
• Capturing all direct, indirect and lost-time labor activities
• Reporting on performance and utilization
• Integrating the time/attendance and payroll system
• Drilling down to department, shift, individual or activity over time to understand trends
• Displaying performance on a mobile device to provide associates with real-time feedback
• Calculating time and resources required within the warehouse management system to manage work demand

Main features and capabilities of a labor management system

Features and capabilities of a labor management system include:

Hiring and training

Warehouse managers can ensure they have the right number of people with the suitable skillsets, without either over- or understaffing their operations. By managing shift patterns, seasonal demand and other labor factors, warehouses and distribution centers can run at peak productivity.

Labor management systems help businesses onboard new team members so they can develop the necessary skills to perform their job tasks. Warehouses can also manage ongoing training for existing staff so they can stay up to date with safety issues and best work practices.

Staff scheduling

With LMS support, warehouses can balance demand with staff availability and skillsets. Crucially, they can help warehouse managers navigate the issues that impact labor demand, such as changing order volumes, types and seasonality peaks.

Businesses can use the LMS to adjust staffing to minimize downtime and avoid overloading team members. They can also distribute workers across various warehouse processes based on needs and existing workflows, factoring in warehousing space and available equipment.

Gamification

Gamification uses game mechanics and rewards/recognition tools to digitally engage employees in achieving their goals and to encourage positive behavior. By incorporating “game” elements such as points, leaderboards, challenges and rewards, building gamification into a labor management system makes daily tasks more interactive and rewarding.

Essentially, gamification makes employee performance more self-determined and motivating. Employees can see the impact of their work and receive instant feedback.

Monitoring, measurement and reporting

By compiling employee data throughout the day, warehouses can monitor and report on whether individuals or teams are meeting their productivity goals. This enables them to identify areas for improvement and implement targeted training programs. Providing labor performance feedback and incentive programs in a timely manner motivates employees to achieve higher levels of productivity and efficiency.

Engagement and rewards

Via an LMS, businesses can:

• Add bonuses: define their own variables to calculate pay packages.
• Pay for performance: conduct quick calculations of additional pay based on team member performance.
• Integrate incentives: calculate incentive payments and integrate them into payroll.
• Reward quality: factor variables into recognition and reward programs – e.g., safety, quality, tardiness or absences.

Benefits of a warehouse labor management system

An labor management system provides labor planning and forecasting tools, real-time performance visibility, analytics and labor standards to enhance management decision making, training and labor productivity – all while keeping costs to a minimum.

Labor is the primary cost in warehouse and distribution operations. At the same time, effectively managing team members and strategically assigning workloads is key to improving employee engagement, morale, retention and productivity. Many supply chain businesses are therefore turning to labor management software to track, measure, report and plan labor activities to increase efficiency and reduce operating costs. Here are some specific benefits:

Monitoring expected versus actual performance

• Via an LMS, team members can monitor their expected versus actual performance on a mobile device throughout the day. Empowered with these performance indicators, they can take greater ownership of their work and benchmark their improvement, resulting in higher morale.
• Fair performance targets, coaching and incentive programs all lead to improved employee satisfaction levels.

Productivity improvements and labor savings

• By identifying and adjusting inefficient work processes, managers can optimize employee performance and productivity, while reducing overall labor costs.
• An LMS also provides real-time insights that enable warehouse managers to reallocate work, transfer resources and manage costs in a timely manner.

Improved customer satisfaction

• By collecting and making sense of data, labor management systems help warehouses to better forecast and predict assignment completion, so that customers receive their orders accurately and on time.

Why is a labor management system important?

At 50–70% of overall operating spend, labor comprises the largest proportion of a warehouse budget. Effective labor management is crucial to maximizing return on investment and minimizing costs.

At the same time, 55% of warehouse managers are concerned about labor scarcity – more so than outdated equipment or insufficient space.

Around 41% of warehouses cannot attract and retain qualified team members. Robust labor management is seen as a way to attract, develop and motivate the right workforce, leading to high business performance.

Source: ShipBob

Infios LMS solution

Infios’s Labor Advantage labor management system enables you to plan, measure and view workforce activities within your organization. It is designed to help you monitor performance and utilization objectively.

Visibility tools provide real-time data on key performance indicators, utilization and actual team member performance versus set expectations. The Infios solution enables you to reduce unproductive activity by identifying consistently high performers, as well as those who need assistance. This includes indirect labor. You can reward high performance, detect inefficiencies and take any needed corrective actions.

Enabling a self-directed workforce

The Infios LMS helps you set clear standards, so each team member can see what is expected of them. This means you can monitor their expected against actual performance through a mobile device and provide direct feedback throughout the day.

Empowered with performance indicators, team members can take greater ownership of their work and benchmark their improvement. The result is higher morale and an independent, self-directed workforce.

Integrating with Infios's Execution Suite

Labor Advantage is available as part of our comprehensive supply chain execution suite. All Infios solutions are highly configurable, so you can change the system to meet your unique needs without costly, time-consuming custom code modifications.

Combined with rapid upgrades that you can perform yourself, our adaptability tools help ensure a strong return on investment and low total cost of ownership.

Features and benefits of Labor Advantage

• Capture of all direct, indirect and lost-time labor activities
• Resource planning and monitoring across functional areas
• Travel path creation and XYZ coordinate mapping
• Personal time, fatigue and delay allowance
• Real-time radio frequency goal assignment and associate performance feedback
• Performance and utilization reporting
• Associate self-service portals
• Time and attendance and payroll system integration

Related Infios technologies

Infios offers several compatible solutions that you can integrate with your labor management system to engage team members. Designed to reduce distractions and harsh repetitive movements, our solutions lower risk and increase employee well-being and satisfaction. In turn, your business is rewarded with greater worker loyalty.

It is important to note that technology is an enhancement to rather than a substitute for well-trained staff or productive warehouse practices. It is a tool to help augment the workforce and support employees to be more efficient at their jobs while keeping them safe.

Infios’s supporting labor well-being solutions are summarized below:

Gamification

Our gamification solution is based on success psychology and reward recognition, comprising game-design elements in the workplace and incorporating such features as rewards, challenges, leaderboards and feedback.

Just like in a video game, team members can climb up the leaderboard if they improve their performance, while teams can work together to build stronger morale. Ultimately, Infios’s gamification solution is able to drive a sense of achievement, boost engagement, foster healthy competition and increase both employee productivity and satisfaction.

Voice, Vision and Mobility (VVM)

Here, staff receive directions through a headset as to the location of an item and the quantity to pick. The picker completes the task and verbally records any necessary information back into the system – for example, if the quantity is short, or if there is any noticeable damage.

The system then directs the picker to the next task. This means they remain eyes free and hands free, with no need for clipboards or hand-held devices, leaving them able to concentrate on the task at hand.

Autonomous Mobile Robots (AMRs)

This technology is one of the most emerging and innovative automation breakthroughs. Unlike guided automation, AMRs can move independently around objects and team members, using sensors, cameras and embedded safety mechanisms.

By reducing the need for static rail systems, warehouse operations can increase their usable floor space. They also take repetitive, time-consuming tasks out of team members’ hands, freeing them up to focus on aspects of the job that require more skill. For example, an AMR can move to a picking location while carrying products, and the nearest team member can perform the manual handling. It can then move to other areas of the warehouse, and the picker can simply move to the next closest AMR.

Warehouse Management System

While Infios’s Warehouse Management System (WMS) focuses primarily on inventory management and order fulfillment, our labor management system complements its capabilities by optimizing workforce performance and efficiency. You can create a comprehensive labor planning and monitoring platform, while managing work demand.

By integrating with the WMS, an LMS provides additional functionality such as real-time labor tracking and task allocation based on employee skills and availability, along with performance analytics. This expanded functionality enables warehouses to better manage labor resources, streamline operations and ultimately improve overall warehouse performance.

Warehouse Control System

Our Warehouse Control System (WCS) provides a central point of management and control for your entire material handling equipment portfolio. It works seamlessly across multiple automation technologies and vendors, enabling you to orchestrate your operations, optimize materials flow throughout the facility and manage your workforce through an LMS.

A WCS creates a single point of communication between the automation equipment and WMS. By optimizing material flow across the warehouse and providing visibility down to individual units, it becomes the engine room for automation in the warehouse.

Labor management system case studies

Efficiency and productivity gains with the same headcount

Ashley Furniture is the world’s largest home furniture manufacturing company and second-largest retailer, employing more than 25,000 people worldwide. The company’s huge growth has brought supply chain challenges to inventory accuracy, workflows and replenishment. It needed a cluster of software solutions that could adapt to its evolving business needs and turned to Infios to implement Warehouse Advantage (WMS), Yard Advantage (YMS) and Labor Advantage (LMS).

The WMS gives Ashley Furniture a foundation of best practices for receiving, put-away/flow-through, inventory management, order processing and replenishment, along with the ability to build their own specific processes. The YMS provides them with clear visibility of the number and location of its trucks and inventory, which may be located off-site or in huge yards. Yard drivers receive prioritized tasks on their mobile devices, which are sequenced based on the urgency of the required task and the driver’s location in the yard.

The LMS provides the ability to measure and track labor activities to further increase efficiencies, as well as objectively measuring employee performance against engineered expectations.

As a result, Ashley Furniture has enjoyed efficiency gains, as well as being more productive without needing to increase headcount. The Infios suite enables the company to implement very specific timing and synchronization among many moving parts.