Tech-driven revolution in the works for labor management

The market for labor management system (LMS) software could be in for a boost from consumer-driven technologies such as mobile devices and cloud computing. While many larger warehouses use LMS to track, manage and optimize labor, the software is sometimes perceived as too costly to deploy for smaller operations or as more of a niche solution for larger operations willing to expend the effort necessary to analyze labor trends against engineered standards.

But thanks to technologies such as mobile devices and cloud computing, LMS solutions are shaping up as solutions that are easier to deploy and ones that deliver more tactical-level punch to warehouse supervisors and associates.

LMS solutions are used to track and manage workforce productivity and utilization in a warehouse. For example, they look at how long it takes to build a kit or how many picks per hour are typical for a given zone or product type. Some LMS solutions incorporate engineered standards studies, but LMS may also draw labor-related data from a warehouse management system (WMS).

LMS has been adopted by far fewer organizations than WMS. According to Modern Materials Handling’s 2013 Software Survey, WMS adoption stood at 57% among respondents, while LMS was at 24%. Of course, WMS is seen as vital to executing activities in a warehouse, whereas in the past, LMS had a reputation of being more a backward-looking system used to fine-tune labor performance.

Some observers in the supply chain execution (SCE) software community say that technologies such as smart phone and tablets, as well as cloud delivery, could be just what LMS needs to make further inroads by making it more impactful and easy to deploy. “I think labor management, like a lot of other supply chain management applications, is tracking toward cloud-based solutions,” says Steve Simmerman, senior vice president with TZA. “The cloud allows us to scale our solution from traditional upper-tier customers down to the small- to medium-sized businesses.”

Easier entry point
Cloud solutions deliver software functionality as a service over the Internet so that the user company doesn’t have to install servers. This lowers the bar for entry, which can be important for smaller companies or for multi-site rollouts, says Simmerman—though to some extent, it comes down to a company’s approach to information technology (IT). “Some companies are aggressive at adopting cloud-based solutions,” Simmerman says. “But we still see other companies struggling with it—they are still dipping their toes in the water. So it really comes down to a customer preference for how they want to manage their IT.”

Currently, says Simmerman, roughly 25% of TZA’s LMS deals are going cloud-based, but in nearly every customer engagement, the cloud is being seriously assessed as an option.

Other suppliers also report interest in cloud-based LMS. Chuck Fuerst, director of product strategy for HighJump Software, says he sees cloud-based LMS increasing in popularity.

For one thing, says Fuerst, cloud-based solutions are now widely adopted and proven for other software systems such as customer relationship management. Another important factor is that cloud solutions are well suited to subscription pricing, which makes it easier for companies to get into a solution. “For smaller businesses, it removes some of those upfront costs, and can mean more predictability in terms of their expenses, while still giving access to the same technology that previously tended to be preserved only for larger companies,” he says.

Some vendors, however, aren’t so sure that cloud LMS will become predominant. Peter Schnorbach, senior director for product management with Manhattan Associates, says that for its many Tier 1 customers, deploying LMS on premise isn’t a major challenge because they typically have the IT staff and data center capacity to do so, especially for a relatively smaller solution type such as LMS. “Most of our customers who are looking at cloud deployments would target the bigger applications that would allow them to scale back in a major way in their data centers,” says Schnorbach.

Mobility meets LMS
There is seemingly universal agreement among LMS suppliers, however, that the market is ready for mobile-enabled LMS. This differs from simply putting a few LMS metrics on a radio-frequency (RF) terminal, which has been done for many years, to coming up with apps or dashboards geared for users of smart phones and tablets.

According to Schnorbach, mobile LMS functionality will be “transformative” for LMS users because it will enable better real-time access to information. Mobile LMS would allow a supervisor to do things like clock in a worker who forgot to clock in, answer a question from an employee who needs data from the LMS, make an entry into the system, or view metrics and perhaps congratulate someone who has just exceeded a performance goal—all without leaving the warehouse floor.

“With mobile devices like tablets, supervisors can interface with employees and answer their questions in real time, which maximizes the time they can spend on the warehouse floor,” says Schnorbach. “And that’s what you want. You want your managers out on the floor, not glued to PCs in their offices.”

For managers, smart phones and especially tablets are an ideal way to access metrics and dashboards from a LMS solution, says Fuerst. Meanwhile, he adds, the devices used by frontline workers are evolving, in some cases, to be hybrid devices that combine a smart phone with traditional scanning and data collection capability.

“We are seeing this whole shift in the hardware platform that people are using to access information from,” says Fuerst. “That’s pushing the software vendors to offer a solution that works well for iPads and smart phones.”

LMS vendors are having to deal with the user interface challenges of developing for many device form factors, as well as mobile navigation paradigms such as touchscreen and swipe inputs. In some cases, LMS vendors are using HTML5, a next generation of hypertext markup language that support mobile Web browsers, so that mobile apps can be more easily developed that can work across multiple device platforms.

Schnorbach believes vendors will have to rethink their approach to the “user experience” people get from a SCE solution now that mobile devices have become pervasive. “We have to start rethinking how we release the product in terms of the user experience and how that will translate to a mobile device,” he says.

HighJump’s Fuerst says it’s possible that, in the future, smaller pieces of mobile-enabled LMS will be delivered much like consumer-focused mobile apps—on an app store. While HighJump hasn’t pieced out LMS functionality on an app store yet, it’s an approach that might work given broad acceptance of the model, says Fuerst. For sure, he adds, there is interest at HighJump in breaking LMS into smaller chunks of functionality or measurements to “allow you to get access to the benefits sooner—to sort of stair step into it.”

Tactical-level punch
Another LMS trend is the use of workflow and alerting to make solutions more proactive. These technologies make LMS a more effective operational app, rather than as solution for assessing labor performance against standards, according to Ross Elliott, executive vice president and chief technology officer with Accellos.

For Accellos’ mid-market focus, says Elliott, labor management must deliver operational benefits. While a handful of its customers have opted for a full-blown LMS with an alliance, the more common way its customers get LMS functionality is through features built into the WMS, such as a “Pivot Grid” tool that can look at orders across multiple dimensions and compares that with labor needs and capacity.

“We view [labor management] as another piece of information that warehouse managers have at their disposal to help them run a warehouse more effectively,” says Elliott.

Alerting and workflow make labor data more proactive, adds Elliott, by automatically notifying users of thresholds that have been exceeded, such as a kit that should take one hour to build, suddenly starting to take two hours to build.

Some users also display labor metrics onto monitors so that everyone can see the trends, says Elliott. The whole idea with alerting, workflow, as well as key performance indicators and mobile functions, is to turn labor data into actionable insights, he says. “We want to build a foundation so that our customers can really drive their business,” he says.

Ashley Furniture, a home furniture manufacturer and retailer, has worked toward giving LMS more tactical impact, according to Jon Kuerschner, vice president of supply chain systems for the Arcadia, Wisc.-based company. It has deployed a LMS from HighJump at five distribution centers, making role-based metrics available to everyone on the floor.

At first, the company used large video monitors located near shipping lanes to display LMS metrics. The trouble with that, says Kuerschner, is that it created a “gawker effect” with associates traveling to the boards to view details. The deployment was subsequently tweaked so that the monitors display only high-level trends, while more role-specific trends are available to associates on their RF-terminals.

While Kuerschner says the LMS also is used in the back office to assess performance, there is definitely a benefit to letting associates see how their performance is stacking up against goals by role, area and task.

“What we find is that by putting that real-time information out there on a tactical basis, on the end users screens, it’s the peer pressure that really drives the productivity we are looking to gain,” he says. “Ultimately, it’s all about reducing your operating expenses.”

Companies mentioned in this article
Accellos: accellos.com
Highjump: highjump.com
Manhattan Associates: manh.com
TZA: tza.com