Logistics businesses operate on fairly thin profit margins most of the time. Other major contributing factors such as payroll, subcontracting, and other labor-related costs further impact the profitability of warehouse operations.
Many businesses find it to be a bit challenging to find ways of reducing these overhead expenses.
More recently, supply chain businesses have been making better use of labor management software. This type of software is generally very easy to install, maintain and deploy.
Well-built LMS platforms help companies control their overhead costs, increase profit margins, and make informed staffing decisions based on raw metrics.
Labor management software has been around for quite some time. However, in recent years, solutions built specifically to help warehouse operations that deal with inventory control, shipping, and order fulfillment have been developed.
In this blog post, we’ll outline the most important facts about LMS systems. We'll explore some of the reasons why warehouse operations are implementing these systems and the benefits they offer.
What is Labor Management Software?
Labor management software solutions help distribution centers, fulfillment or warehouse operations streamline human resources and employee management.
There are two general types of LMS solutions.
The most common is the reactive LMS. This type of LMS platform is a reporting system that provides warehouse management via reporting tools to help them monitor employee operations.
For example, this type of platform can provide daily, weekly, or monthly reports about individual employees or overall department productivity.
The other solution is a predictive LMS. This solution helps warehouses plan for daily employee activity. It’s a rather robust application that is typically customized and built with optimized tools, apps, and functions. For example, fulfillment center managers can configure their LMS to meet their business needs. Meanwhile, a storage depot can set it up with many different labor management tools.
What are the Benefits of Using an LMS?
Labor management software offers managers an additional tool with which to optimize their labor force. All without compromising service, safety, or the ability to expand as business picks up. There are a few important attributes that LMS solutions offer any type of warehouse operation including the following...
Improved Visibility of Workforce Performance
A customized LMS solution helps relay real-time data to managers, HR professionals, and others in leadership roles. This information can be collected and organized in reports that help them better monitor and manage the performance of their warehouse labor. It can be configured to review individual employees, departments or vendors – adding to the flexibility of labor management software.
Save Time and Labor Costs
When management uses the LMS to its full potential, it can help them reduce the number of hours and amount of money spent on labor by optimizing the performance of each department and employees.
Additionally, it helps to reduce wasted time by providing detailed reporting of inefficient operations.
At the heart of most technological solutions in logistics is the concept of improving overall productivity.
Labor management solutions are designed specifically to maximize the productivity of each employee, by identifying areas of waste and closing productivity gaps. It can also notify management when productivity for positions like order picking, scanning, and others start going into decline.
Better Labor-Based Decisions
Managers depend on accurate information and data to make decisions on hiring, firing, laying off or allocating resources to other areas. With a custom-configured LMS, a warehouse manager or HR professional can set up reporting tools that provide them with the data they need to make smarter payroll or labor-based decisions. This is especially helpful in businesses that have peak seasons.
A Labor management system is an exceptional tool that helps managers and human resource professionals collect the data they need to make informed decisions, reduce payroll, and optimize the performance of their employees.
Working with a professional 3PL like Redwood Logistics can help warehouse operators pick the right LMS solution for their needs. Additionally, any decent 3PL can help you create a plan for implementation and set up of metrics or KPI’s that make sense.
If you’d like to learn more about labor management software, and how it can help grow your warehouse labor force, contact Redwood Logistics today.