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34 MARCH 2015 • FOOD LOGISTICS www.foodlogistics.com Although Labor Management Systems (LMSs) have existed and successfully paid their way for years – offering workforce savings of anywhere between 5 and 30 percent, depending upon whom you ask – many companies still haven't made widespread invest- ments in them. In certain cases, a low or non-existent LMS adoption rate is understandable (see sidebar). But in many others, it's subject to debate, because many of the common arguments that companies have for holding off may not be as compelling or accurate as initially advertised. The most common argument: "It's too expensive." Unlike the rumors of Mark Twain's death while he was still very much alive, the ones about the high expense of some LMSs are any- thing but exaggerated. Many Tier One LMS options are indeed pricey, with final tabs totaling more than $1 million once the costs of implementation and support are added in. (And to their credit, they often offer impressive functionality that's well worth it, which is why several of our company's largest and most complex operations currently use them.) However, that doesn't mean there aren't many other well-performing LMSs that may be just as capable of meeting most of your company's initial objectives for considerably less. That's what my company discovered when we decided to deploy LMSs at several of our facilities across the U.S. After carefully weighing our options, we selected a mid-range solution that had many if not all of the capabilities these facilities needed – and a friendlier price tag of less than six figures per facility. Thus far, that solution has proven to be highly effective. With that in mind, don't rule out the possi- bility of getting an LMS just because your com- pany can't or won't bankroll one that's top-tier right out of the gate. You may not need as many bells and whistles as you think, especially during the early years following implementation. Another objection: "Our facility doesn't have time to collect all of the essential information." Although gathering the kind of detailed per- formance data that an LMS requires can be akin to chopping up multiple onions for a barbecue sauce – essential but painful – it's usually not necessary to start this process from scratch. In fact, it's highly likely that your facilities already have most of this information on hand, provided they keep transaction logs, use a WMS or have developed other kinds of line- item detail. Admittedly, the information may not be in an LMS format. However, it can easily be tweaked via scripting that enables integra- tion between your WMS and LMS of choice – or by using an LMS that's part of your existing WMS. Plus, should your operations still have data gaps, it's possible to fill them in via strategically placed data-entry kiosks. The next objection: "Why do we need an LMS? We already have excellent measurement tools." LMSs clearly don't have a monopoly on measuring and monitoring productive time. In fact, many food and grocery DCs clearly do a highly commendable job of this with the help of various reputable systems and process manage- ment techniques. However, unless these systems and techniques are especially advanced, they're probably not capturing it at the granular level that an LMS would, which means your facility managers could be missing out on considerable I t's often been said that if you build a better mouse- trap, the world will beat a path to your doorstep. However, when it comes to giving DC operators the ability to more effectively control one of the most expensive compo- nents of their operating cost, that's clearly not the case. When An LMS Doesn't Make Sense L abor Management Systems are often synonymous with substantial efficiency. Yet that doesn't mean these high-powered tools are the ideal match for every facility. "Some warehouse operations are so small or simple that they wouldn't really derive the huge benefit from an LMS that a larger, more multifaceted operation would," advises logistics engineer Rajiv Saxena, Ph.D. The same holds true with warehouses located in some of the world's lower-cost markets: "If workforce expenses are already extremely low, shaving a percentage off isn't likely to yield significant enough savings to merit the systems investment," Saxena said. Even operations that appear to be prime LMS candidates can occasionally prove to be problematic. "LMS tools won't work as well as they should unless they're plugged into the right kind of people – those who have the willingness to commit to doing everything from inputs to analysis the right way without bend- ing rules or cutting corners," says Saxena. "If the commitment's there, the sky is the limit. If not, don't be surprised if your facility's results are on the bottom end of the savings spectrum." LMS OBJECTIONS Lessons learned from multiple implementations. BY DAVID FRENTZEL The Flip Side Of David Frentzel SECTOR REPORTS W A R E H O U S I N G : L A B O R M A N A G E M E N T S Y S T E M S