This time of year, distribution center managers often find themselves bringing in temporary workers by the dozen to meet peak season order fulfillment demands. Although that has the potential to be a headache and a half, there's a way to minimize the hassles: by using workforce management software.
Workforce management software automates the task of planning, scheduling, and tracking employees. Although these solutions have been used in the retail, manufacturing, and health-care sectors for a decade, they haven't really caught on in the distribution and logistics space. That's starting to change as more companies discover their potential for helping manage labor. Distribution centers "are turning to workforce management software solutions to help minimize costs associated with non-productive time or unnecessary overtime," says Malysa O'Connor, director of the logistics practice group at Kronos, one maker of this type of software.
In addition to Kronos, a number of other vendors offer workforce management solutions. They include such well-known supply chain software developers as Red Prairie and Infor as well as specialty players like WorkForce and Dayforce. As with most software solutions these days, users have the option of purchasing a software license and installing the program on their corporate servers or accessing it over the Internet on a software-as-a-service basis.
Workforce management solutions do away with the need for spreadsheets to schedule workers. Besides assigning workers to shifts, these applications track time and attendance, overtime payments, and worker absences. They also help companies forecast their labor needs and develop budgets for seasonal hiring. "Implementation of these systems is increasing because more and more organizations are realizing that automating time and attendance tracking, scheduling and planning, and forecasting is critical for efficiently and effectively utilizing their labor," says Amanda Stirling, a research analyst with McLean & Co., a research and advisory firm specializing in human resources.
For warehouse operations, the software has the additional benefit of helping to ensure that appropriate workers are assigned to specific tasks, say forklift drivers to a receiving dock. Not only can workforce management solutions allocate workers to shifts based on start and stop times, they can ensure the assigned workers have the skills required for that shift. "Scheduling is improved because the solutions take into account all employee variables such as availability, vacations, overtime status, skills, and abilities and work volume and demand to ensure that the right people are in the right place at the right time," says Stirling.
Workforce management software can do more than just schedule workers. The more sophisticated solutions have analytics built into the application that allow distribution managers to examine their operations and get a better fix on their overall labor needs and costs. "Many DCs we work with are using analytics to [obtain] real-time visibility into performance and costs," says O'Connor. "For example, analytics tools enable DCs to monitor labor against orders in real time to see which orders are over- or understaffed and reallocate labor on the fly from overstaffed orders."
Because workforce management software helps distribution managers adjust worker schedules to reflect changing needs, it can reduce inefficiencies in labor utilization. The Canadian analyst firm Info-Tech Research Group estimates that these solutions can save companies between 2 and 9 percent of payroll costs by boosting efficiency. "Making the most of labor spend is especially important given the state of the economy," notes Stirling.