Separate but Equal: Warehouse and Labor Management Systems

Sep 13, 2006 7:18 PM  By

This is the first in a two part series on warehouse and labor management. Next week, we’ll discuss performance appraisal and which information you need to measure it.

Recent advances in warehouse management systems (WMS) and time and attendance (T&A) systems provide many benefits in inventory control, distribution operations, and personnel administration. They also provide an opportunity to obtain files that you can use to comply with certain labor management requirements. But though labor management is a key means of cutting costs and improving service, it is usually given a low priority during implementation of WMS and T&A systems.

It is also unfortunate that some WMS and T&A providers have been trying to market modules of their programs as a plug-in solution for total labor management. Experience shows that significant additional implementation costs and customized programming, not included in the quoted price, are required.

In any case, the data in these systems are not adequate to achieve accurate work measurement, cannot be used for all the necessary labor management features, and usually do not cover all employees. What’s more, these providers do not specialize in labor management and cannot offer the expertise required to implement, train, and achieve the desired benefits.

Warehouse and labor management systems should have equal implementation priority and should share data, but they should be separate systems.

Employee work measurement
WMS and T&A data are most useful when it comes to employee work measurement. The WMS information provides completed production units, while the T&A information provides payroll and departmental transfer hours. Ideally the WMS data should be broken out by individual employee, unless an operation is structured as a team or group function

You can obtain employee transfer information from the WMS; it is preferable, however, to obtain it from the T&A system to guarantee that the hours employees spend in various departments equals the total payroll hours in the T&A system. This integration of completed production and payroll hours is critical if the data in the labor management program are to have credibility for incentives, operational statistical analyses, and future automated budgeting.

In work measurement, there is a clear distinction between the types of system that should be used for in-process information and for historical analyses. In-process information—which includes the estimated time for employees to complete batches of work and a “real-time” check of each employee’s progress–should be included in the WMS program, since the information is readily available as part of the WMS software functionality. It can provide information such as the following:

Historical analyses, on the other hand, should be part of a total labor management program. Once the daily work is completed, data from various sources, including the WMS and the T&A system, should be combined to provide accurate employee work measurement history as well as summarized management data such as:

  • daily and weekly employee productivity details in various departments and for different types of employees, such as core staff, new hires, and temps.
  • employee history reports showing employee performance for the entire year.
  • department, building, and corporate summary productivity statistics for daily, weekly, and yearly periods.

Quality control
In the context of labor management, quality control monitors the quality of the work performed by employees, not the quality of merchandise received from vendors. The WMS program is best used for collecting the quality sampling data, while the labor management program is used for analyses of the information.

The greatest benefits are achieved when the quality data can be associated with the employee who performed the work. Where this is not possible, the data can be defined by function or by work center and should include total samples taken from an employee, a function, or a work center; total defective samples; and the type of errors that caused the defects.

A total labor management program should import the sampling data and use it to create:

  • employee quality indexes, or if not available, functional and work center quality indexes.
  • quality sampling details including an analysis of the errors causing the defective work.
  • acceptability of sample sizes and guidelines for future sampling needs.

PART 2

Don Cook is president of New Brunswick, NJ-based Cook & Associates, a labor management consulting firm.