Equipment makers eyeing LMS market?

Material handling equipment vendors no longer want to sell just machines. A few want to sell software as well. In particular, labor management systems (LMS) that would be a step up from what exists now.

Systems integration specialist John Sidell says he knows of at least three equipment makers right now that are considering developing their own LMS software. According to Sidell, a principal and co-founder of the firm New Course LLC, these newcomers would use real-time positioning as the basis for their labor software tools.

That would be a different approach from what's being done now.

Labor management software in use today is predicated on companies' using a warehouse management system (WMS) and bar codes. In handling cases or pallets, a warehouse worker scans the bar code on the carton or pallet, creating a time-stamp for that activity.

Labor management systems then use the time-stamp records, which are stored in a database in the WMS, to create an activity benchmark. That benchmark provides the basis for measuring worker performance. In general, a basic LMS would allow a company to determine which of its workers performs an activity like picking most efficiently. The standards set by the top workers could be used as "best in class" benchmarks for assessing the performance of others.

Many experts, however, argue that to develop a bona fide labor standard requires the services of an industrial engineer. Typically, the engineer will use a combination of on-site observations and software calculations to establish the most efficient way to perform individual tasks and determine how long activities like picking or putaway should take.

But even engineered labor standards don't accurately monitor and measure workers' performance. That's because the time stamps don't reflect work activity when workers don't follow established procedures. For example, a worker doesn't take the prescribed path to the storage area to retrieve products, thereby adding time to the process. Or instead of confirming the pick at the time of selection, a worker waits until after he travels to the dock door. For time stamps to be accurate, they have to record work when it's done, and that assumes workers will follow the rules. "There's some fudge because of the time scan," says Sidell. "And if a worker is given a directive on how to travel, the system doesn't know if the worker actually followed the path."

Another way to monitor performance would be to track activity independent of workers' having to scan bar codes. That could be accomplished through telemetry, the automatic wireless transmission of data from a source. A radio-frequency tag could be placed on a forklift, enabling it to send signals on the driver's whereabouts. Those signal locations could be recorded in a database, which would provide the information used to monitor performance.

Software would be required to assign the data to individual workers and then analyze the information, creating the basis for work performance standards. In addition to driving productivity improvements, the software could enhance safety by tracking forklift drivers' activities and ensuring compliance with safety rules. For example, Sidell says, this tool could indicate whether forklift drivers are hopping off their vehicles while they're still rolling.

A new kind of LMS software based on real-time positioning has the potential to shake up the market at a time when WMS software sales are being driven to a great extent by companies upgrading their warehousing software to gain access to a robust LMS solution. Most major WMS vendors offer this type of application in their suites, and a few specialty vendors sell labor management solutions as well. If the material handling equipment vendors do proceed with their plans and enter the LMS market, logistics managers will surely benefit from having more options for tracking warehouse productivity.