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Supply Chain and Logistics Technology: Multi-faceted LMS benefits await

Implementation complexities have stood in the way of LMS adoption rates; however, our analysts say that more logistics operations will focus attention on workforce management to balance efficiencies now that the business climate is on the upswing.
By Bridget McCrea, Contributing Editor
April 01, 2012

Lipari Foods embraces LMS
Figuring out incentive pay levels for employees was a real grind for Lipari Foods’ human resources department. More than half of its 750 workers received some type of incentives and a full one-third of them were paid solely based on performance—from drivers who are paid by the mile to warehouse selectors paid by the number of cases picked.

The human resources (HR) department and warehouse managers spent an inordinate amount of time every week manually gathering, reviewing, and calculating the incentive pay records. Tired of poring over spreadsheets, Brian Zilo, director of HR, and his team set out to find an automated solution. “We needed a system that could handle the calculations automatically, and on a weekly basis, without all of that human intervention,” says Zilo.

Lipari Foods’ labor management woes didn’t end there. Founded from the back of its founder’s Ford station wagon in the 1950s, the food distribution company had expanded significantly over the years. The company currently operates from a 270,000-square-foot DC and distributes seafood, deli and bakery items, packaging, confections, and snacks to grocery stores in Michigan, Ohio, Indiana, Illinois, and parts of surrounding states.

As it grew, Lipari Foods acquired a collection of manual and automated solutions to track time and attendance, process payroll, and administer employee benefits. At the heart of those operations was a payroll system that the firm had purchased for $66 in 1995.

“We had an obsolete payroll system, a time and attendance program that was sorely outdated, and a labor management system based on spreadsheets and a bit of luck,” says Zilo. “It was time to make a move to something better.”

In 2007 Lipari Foods began looking at its LMS options. The solution would have to replace the firm’s manual processes, give it more visibility into labor data (for tax and legislative changes, in particular), and support key company objectives. Zilo says payroll, time, and attendance were its top automation targets.

After looking at several options the company decided to install the Kronos Workforce Central suite, which includes timekeeper, human resources, payroll, and workforce management components.

Zilo says the fact that those modules were available under a single umbrella—and in a web-based format—made Kronos Lipari Foods’ top choice.

Timekeeper, for example, automates the capture and management of employee time and attendance information, while HR handles benefits administration, compensation and performance management, and training tracking.

“We needed an integrated system,” Zilo explains. “We didn’t want independent systems that couldn’t talk to each other or that required complex links to communicate with one another. That was a big factor in our decision.”

Even with those initial “wants” addressed, Lipari Foods’ new LMS took some time and effort to implement. Gleaning data and information from various manual systems, scrubbing it, and then feeding it into the new, automated databases was labor intensive, says Zilo. Even with those hurdles standing in the way, the company’s LMS went live one week early and at a price below original budget expectations.

The system now gives Lipari Foods’ HR department and managers complete visibility into the firm’s labor data and has eliminated the manual-intensive processes associated with its incentive-based pay programs. The LMS has also helped the distributor scale up its operations without having to add HR personnel.

“We saw a 66 percent increase in employment over a three-year period and we didn’t have to increase our department’s three-person staff at all,” says Zilo. “I was pretty proud of that.”
To other logistics operations that might be contemplating an LMS or looking for relief from manual labor processes, Zilo says that any firm with 250 or more workers should definitely consider an automated approach.

“You can do it by the seat of your pants and with a big HR staff,” states Zilo, “or you can let technology do the work for you. It’s your choice.”

About the Author

Bridget McCrea
Contributing Editor

Bridget McCrea is a Contributing Editor for Logistics Management based in Clearwater, Fla. She has covered the transportation and supply chain space since 1996, and has covered all aspects of the industry for Logistics Management and Supply Chain Management Review. She can be reached at .(JavaScript must be enabled to view this email address).

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