Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
Faced with swiftly changing business conditions, logistics professionals are finding creative new uses for their labor management systems (LMS), in addition to their core application of tracking labor performance in order to identify workers in need of remedial training and offer bonus incentives to high-performers.
Under pressure from economic trends such as omnichannel fulfillment, demand for next-day shipping, and warehouse labor shortages, companies are using data generated by their LMS to help solve a wide array of logistics challenges. Today's LMS platforms allow DC supervisors to quickly adjust to changing market conditions, provide real-time feedback and coaching to employees, and boost efficiency in smaller facilities and retail stores.
Although the specifics will vary from one operation to the next, all of these applications can save users time and money. What follows are five ways companies are wringing extra value from their labor management systems:
1. To provide mobility for managers. "LMS platforms have come a long way in the last five to 10 years," says Bradley Gillette, director of supply chain excellence at Ryder System Inc., the Miami-based third-party logistics service provider. Ryder works with a variety of LMS systems in its operations, including commercial and in-house platforms on both its own and its clients' networks.
One of the most visible of those changes is mobility, Gillette says. Software developers now offer labor management systems that can run on mobile computing platforms, such as tablets and smartphones. This allows warehouse supervisors to walk the floors of their facilities and provide on-the-spot coaching to their workers, instead of sitting alone at their desks pulling clerical reports, he says.
Coaching workers based on real-time feedback can help boost efficiency and safety, improve teamwork, and enhance training efforts. Access to LMS data also allows warehouse managers to adapt to new work flows, such as the addition of tasks like each-picking, light assembly, returns, or kitting.
2. To provide real-time performance feedback. Operating under the assumption that an informed worker is a productive worker, some DCs have set up their operations so that LMS-generated performance data can be seen in every corner of the warehouse. Using large dashboard displays, many warehouse managers post real-time performance updates so workers can measure their progress against pre-set goals.
"An LMS can be used to track, reward, benefit, and incent," says Jason Franklin, product manager for labor and business intelligence at Intelligrated Software. "Workers like friendly competition—to be judged and to see who won."
In addition to motivating workers to work more efficiently, sharing performance data in a public space can build employees' trust in the overall incentive system, Franklin says. By offering a transparent picture of performance, managers encourage workers to compare themselves with their peers as they all work toward long-term goals.
Despite these benefits, some experts warn that displaying LMS data on public dashboards can distract some warehouse workers from their primary jobs—particularly if they're constantly checking the scoreboard. There's also the risk that they'll cut corners on safety if they're running behind, or slack off after a busy morning when they see they'll easily make their daily quota.
"We have found that when we put that information on display, people who were performing well above average ended up going slower, just to fill up the allotted time," reports Jon Kuerschner, vice president for supply chain solutions at HighJump Software Inc. "They were normalizing their behavior to meet the expectation."
Managers don't have to turn off dashboards entirely to avoid these outcomes, Kuerschner says. They can provide LMS data only for certain workers, aggregate the data for a team of employees, or provide incentive-based pay that's based on a combination of individual and team performance.
3. To boost worker retention. In addition to helping boost worker efficiency on the warehouse floor, LMS platforms can be effective tools for retaining current employees and even recruiting new workers, says Gary Allen, Ryder's vice president for supply chain excellence.
By linking LMS metrics to employees' paychecks, a company can reward its best workers with higher compensation. And the rewards don't have to be monetary. Some operations link workers' performance to nonfinancial incentives. For instance, in some DCs, workers who hit their targets can earn extra vacation hours, prizes, or a chance to attend a weekly pizza party.
While linking performance to rewards can be a strong incentive, some managers warn that it can be a tough sell initially. That's because employees often need time to adjust to the idea that their daily performance is an open book. Their reluctance tends to diminish as workers see the benefits of greater transparency in their compensation structure.
Not all employees are averse to the idea, however. Workers from the millennial generation, who are accustomed to living in a digital world, tend to embrace the concept, experts say.
"As opposed to saying 'The LMS can track everything; Big Brother's watching,' the new workers we're hiring are used to new technologies," Allen says. "It encourages their competitive nature. People like to hear feedback—both qualitative and quantitative. It helps them understand how they're contributing to the whole organization."
That transparency has been helpful both in recruiting new warehouse employees and in retaining existing workers, experts say. That is especially important in an increasingly tight labor market, where warehouses must compete with industries like construction and plumbing for help.
"One of the shifts we're seeing in the work force is that millennials want to know they're in an organization they have a future with," Allen says. Not only are they eager for tips and advice, he says, but they also want a career path set out for them that they can expect to follow if they continue to perform well.
4. To rev up fulfillment operations in small DCs and retail stores. Many LMS providers promise that the software can deliver a 10- to 30-percent improvement in worker efficiency. A boost of that magnitude makes it easy to justify the software's cost, since those efficiencies add up fast in a warehouse with several hundred workers.
Calculating the return on investment (ROI) gets much harder for smaller facilities with just a few dozen workers, however. So in recent years, some users have begun using a simplified version, sometimes called "LMS light," in small fulfillment centers and even retail stores.
With a smaller price tag, these versions usually forgo certain features of a full-blown LMS, such as employee coaching, customized goals, and interoperability with the warehouse management system (WMS). But a scaled-back version of an LMS with a simple dashboard can still deliver performance gains of nearly 10 percent, proponents say.
"If you look at a large home improvement store or sporting goods retailer, the store is basically a warehouse with customers in it some of the time," says Intelligrated's Franklin. "But in the store environment, we have no idea how long it should take to receive and scan items, or do break-out and put-away by aisle," he says. "So how can we hold individuals accountable?"
One answer is to use a stripped-down LMS system to develop a baseline for time needed to perform various tasks.
This approach can be especially valuable in the age of omnichannel fulfillment, as stores struggle to master new tasks like filling e-commerce orders from retail shelves or meeting deadlines for buy-online-pick-up-in-store orders, Franklin says. Using an LMS to, say, batch orders so that an employee can retrieve three items at once instead of making three trips can help stores run more efficiently.
5. To generate data for high-level decision-making. Another way companies are wringing extra value from an LMS is to leverage the data it generates for corporate-level scenario modeling and strategic decision-making.
By applying business analytics tools to LMS-generated data on receiving, put-away, picking, value-added services, and shipping, users can calculate the best way to respond to market shifts like variations in seasonal demand, the introduction of new product lines, or a changeover from pallet picking to piece picking.
Managers can also use LMS-generated data in activity-based costing, a method of estimating the cost of completing a job by adding up the costs of all of its constituent activities, says HighJump's Kuerschner. That can be crucial when a DC is trying to decide whether it would be profitable to bring on a new customer who demands complex kitting or assembly tasks, instead of just basic loading and shipping.
Taken together, these five creative applications of a standard labor management platform are helping DC managers find solutions to 21st century logistics challenges. Whether an operation is looking to adapt its operations to meet the demands of omnichannel order fulfillment or the changing demographics of the next-generation labor force, the humble LMS may hold the answer.
More than half of home deliveries to U.S. online shoppers arrive either late, damaged, or at the wrong address, totaling 53% of orders with one of those issues, according to a study from e-commerce software vendor HubBox.
Specifically, almost one in three (27%) home delivery packages are currently delivered late, while almost one in six (15%) online orders are delivered to the wrong address. The results come from Atlanta-based HubBox, which works with networks and carriers to provide retailers with pickup access to over 400,000 locations worldwide.
Furthermore, the survey of more than 1,000 U.S. shoppers revealed consumers’ top five home delivery pain-points: 1. Orders delivered to the wrong house or block (37%), 2. Packages left with neighbors they don’t like or don’t speak to (30%), 3. Item arriving damaged (28%), 4. Delivery is late (27%), and 5. Having to wait at home for deliveries (25%).
According to HubBox, those frustrations have pushed nearly half (49%) of shoppers to consider out-of-home delivery collection points to overcome poor delivery service.
“Shoppers expect seamless experiences throughout their buying journey – and nowhere more so than in delivery and the last mile where shoppers’ anticipation of receiving their order is highest,” HubBox CEO Sam Jarvis said in a release. “Retailers that offer flexible and convenient delivery experiences, such as pickup points or BOPIS, (Buy Online Pick Up in Store) stand a better chance, and, if they can’t meet these expectations, they risk significant lost sales and future loyalty.”
In addition, more shoppers now expect compensation for late deliveries; over half (53%) expect money off their next order if a delivery is delayed, while 63% expect delivery charges to be waived and another 54% expect a free delivery code for their next order.
“Late deliveries don’t just erode hard-won customer loyalty. Increasingly, as retailers are having to compensate customers for delayed orders, they eat away at already slim margins – and this at a time when the cost of fulfilment is rising and some carriers are charging additional fees for home deliveries,” Jarvis said. “By diversifying fulfilment options, such as adding local pickup, retailers can ensure demand can be met across their network even during peak trading periods such as Black Friday and the Christmas holidays while ensuring consumer experience is maintained.”
Regular online readers of DC Velocity and Supply Chain Xchange have probably noticed something new during the past few weeks. Our team has been working for months to produce shiny new websites that allow you to find the supply chain news and stories you need more easily.
It is always good for a media brand to undergo a refresh every once in a while. We certainly are not alone in retooling our websites; most of you likely go through that rather complex process every few years. But this was more than just your average refresh. We did it to take advantage of the most recent developments in artificial intelligence (AI).
Most of the AI work will take place behind the scenes. We will not, for instance, use AI to generate our stories. Those will still be written by our award-winning editorial team (I realize I’m biased, but I believe them to be the best in the business). Instead, we will be applying AI to things like graphics, search functions, and prioritizing relevant stories to make it easier for you to find the information you need along with related content.
We have also redesigned the websites’ layouts to make it quick and easy to find articles on specific topics. For example, content on DC Velocity’s new site is divided into five categories: material handling, robotics, transportation, technology, and supply chain services. We also offer a robust video section, including case histories, webcasts, and executive interviews, plus our weekly podcasts.
Over on the Supply Chain Xchange site, we have organized articles into categories that align with the traditional five phases of supply chain management: plan, procure, produce, move, and store. Plus, we added a “tech” category just to round it off. You can also find links to our videos, newsletters, podcasts, webcasts, blogs, and much more on the site.
Our mobile-app users will also notice some enhancements. An increasing number of you are receiving your daily supply chain news on your phones and tablets, so we have revamped our sites for optimal performance on those devices. For instance, you’ll find that related stories will appear right after the article you’re reading in case you want to delve further into the topic.
However you view us, you will find snappier headlines, more graphics and illustrations, and sites that are easier to navigate.
I would personally like to thank our management, IT department, and editors for their work in making this transition a reality. In our more than 20 years as a media company, this is our largest expansion into digital yet.
We hope you enjoy the experience.
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In this chart, the red and green bars represent Trucking Conditions Index for 2024. The blue line represents the Trucking Conditions Index for 2023. The index shows that while business conditions for trucking companies improved in August of 2024 versus July of 2024, they are still overall negative.
FTR’s Trucking Conditions Index improved in August to -1.39 from the reading of -5.59 in July. The Bloomington, Indiana-based firm forecasts that its TCI readings will remain mostly negative-to-neutral through the beginning of 2025.
“Trucking is en route to more favorable conditions next year, but the road remains bumpy as both freight volume and capacity utilization are still soft, keeping rates weak. Our forecasts continue to show the truck freight market starting to favor carriers modestly before the second quarter of next year,” Avery Vise, FTR’s vice president of trucking, said in a release.
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single index, a positive score represents good, optimistic conditions, and a negative score shows the opposite.
A coalition of truckers is applauding the latest round of $30 million in federal funding to address what they call a “national truck parking crisis,” created when drivers face an imperative to pull over and stop when they cap out their hours of service, yet can seldom find a safe spot for their vehicle.
According to the White House, a total of 44 projects were selected in this round of funding, including projects that improve safety, mobility, and economic competitiveness, constructing major bridges, expanding port capacity, and redesigning interchanges. The money is the latest in a series of large infrastructure investments that have included nearly $12.8 billion in funding through the INFRA and Mega programs for 140 projects across 42 states, Washington D.C., and Puerto Rico. The money funds: 35 bridge projects, 18 port projects, 20 rail projects, and 85 highway improvement projects.
In a statement, the Owner-Operator Independent Drivers Association (OOIDA) said the federal funds would make a big difference in driver safety and transportation networks.
"Lack of safe truck parking has been a top concern of truckers for decades and as a truck driver, I can tell you firsthand that when truckers don’t have a safe place to park, we are put in a no-win situation. We must either continue to drive while fatigued or out of legal driving time, or park in an undesignated and unsafe location like the side of the road or abandoned lot,” OOIDA President Todd Spencer said in a release. “It forces truck drivers to make a choice between safety and following federal Hours-of-Service rules. OOIDA and the 150,000 small business truckers we represent thank Secretary Buttigieg and the Department for their increased focus on resolving an issue that has plagued our industry for decades.”
A real-time business is one that uses trusted, real-time data to enable people and systems to make real-time decisions, Peter Weill, the chairman of MIT’s Center for Information Systems Research (CISR), said at the “IFS Unleashed” show in Orlando.
By adopting that strategy, they gain three major capabilities, he said in a session titled “Becoming a Real-Time Business: Unlocking the Transformative Power of Digital, Data, and AI.” They are:
business model agility without needing a change management program to implement it
seamless digital customer journeys via self-service, automated, or assisted multi-product, multichannel experiences
thoughtful employee experiences enabled by technology empowered teams
And according to Weill, MIT’s studies show that adopting that real-time data stance is not restricted just to digital or tech-native businesses. Rather, it can produce successful results for companies in any sector that are able to apply the approach better than their immediate competitors.