The latest generation of Labour Management Systems may finally be showing cost effective results

Labour management systems in logistics

Many of us in the logistics management field hesitated to adopt LMSs (labour management systems) until they had third party logisticsbuilt up some kind of a track record. Well, the results are beginning to come in, and it seems like some users are reporting substantial gains in productivity after implementing the systems. Better still, there are several low cost, small scale systems available which have been giving good results, which should result in more systems entering service around the UK.

Labour management is a major expense, in terms of money, time and talent. Labour is frequently a company’s biggest cost even when things go right. Once you factor in the occasional compliance problem, payroll error or other accident, it can easily be the determining factor in your bottom line.

How can Labour Management Systems help your 3PL?

Broadly, a LMS is a system that aids in reporting and planning labour productivity and costs. It should be able to analyse the labour requirements for any particular unit of work to be done, and provide a standard duration for each element of the work. This lets you report on the actual performance of whole facilities, groups, and even individual workers, and compare them against each other or an established standard. It can use your historical performance data to estimate warehouse throughput, and then schedule labour in the most flexible and cost efficient manner.

It isn’t hard to see how a software package that can take some of the guesswork out of labour management would increase efficiency. It can also be used to analyse your company’s actual processes and compare them to proposed changes with the same labour force. Perhaps more importantly for some, it can take a lot of the subjectivity out of performance reviews as well.

Because logistics managers have historically been slow to adopt LMSs, their development has been somewhat slowed. Now that they are being implemented, especially on the smaller scale that most UK or European logistics companies operate on, we can expect to see a lot more systems being marketed at this level, many of which will offer features that specialise more narrowly, and suit our individual operations better.

So, the ‘wait and see’ policy seems to have paid off. The only question now is whether it is more efficient to wait a little longer for the perfect fit, or to gain more limited benefits early. But hey, that’s the kind of call we’re paid to make.


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