For the past few years, more and more distribution centers have opted for the software route when it comes to managing their workforce. In a bid to boost productivity, they're implementing labor management systems (LMS), software that allows companies to monitor individual workers' activity—say, picking or putaway—and benchmark their performance against preset standards. In fact, a recent DC Velocity survey found that 14 percent of respondents planned to buy an LMS solution this year.
As for where they can obtain this software, DCs today have a number of choices. To begin with, most of the large warehouse management software (WMS) vendors offer LMS packages or modules. But that's just part of the picture. In recent years, a number of smaller, less-well-known vendors have entered the market. They tend to specialize in more affordable packages aimed at small and medium-sized warehouses and distribution centers, according to Steve A. Mulaik, a partner with The Progress Group, an Atlanta-based logistics consulting firm.
These smaller LMS vendors offer both traditional licensed software, which companies install on their own servers, and hosted versions that can be accessed via the Internet on a subscription basis. Some of the vendors in this space include Enteq Systems, Spalding Software, Next View Software, and Inception Technologies.
One of the biggest differences between the labor management systems offered by the smaller players and those available from their larger counterparts is functionality. For the most part, the programs marketed by the little guys are stripped down packages that handle basic functions like monitoring and measuring worker activity.
By contrast, the programs marketed by the big WMS vendors typically offer a vast array of capabilities. For example, they often include real time labor standards—a feature that allows managers to measure a worker's performance in real time against a pre-established standard for a particular task. "As a guy completes his work, you get feedback right away," says Mulaik. In addition, they typically offer labor planning tools, which managers can use to determine how many people they need, where they should be deployed, and when they should be moved from one area to another.
While this added functionality can be quite valuable to larger operations, activating all those features can take a fair amount of time, Mulaik says. In fact, implementing the programs offered by big WMS vendors tends to be a complex undertaking, often requiring assistance from the vendor as well as from computer programmers and systems integrators.
And that's what makes the offerings from the smaller players so appealing—their simplicity and ease of installation. "They are relatively simple to set up and maintain," says Mulaik. "You can learn these packages quickly and thus, the amount of outside help you need to configure and use them is much smaller. Some of the bigger, mid-sized users can even do it themselves."
The consensus in the field is that for small and medium-sized DCs, the packages marketed by the new kids on the LMS block offer an easy way to get started with labor management. "My opinion is that it is certainly a very viable option and with a service subscription payment plan, can provide a more pay-as-you-save approach to LMS," says Larry Parker, director of the labor standards practice at systems integrator 4Sight Supply Chain Group. "For the risk averse, it provides the option to dip your toes in the water as opposed to plunging into a large upfront expense."