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Labor Productivity Can be 50% of Warehouse Operating Cost

As it announced its SCM Labor Management solution, Infor pointed out that labor and warehouse productivity can account for up to 50% of the total operating costs of a warehouse.

Labor costs are typically the largest expense in the warehouse,said Infor, and in many operations, such as third party logistics providers (3PLs), it can account for up to 50% of a warehouse's total operating costs.

Many companies plan for and track workforce schedules and actuals through spreadsheets, a manual process prone to errors. This process does not generate an accurate, real-time view of tasks in the warehouse or allow management to identify inefficiencies.

Integrating labor management with a company's warehouse management system, can reduce these costs up to 30% by identifying areas of high performance as well as the comparable inefficiencies. With the fully integrated labor management, operations can pinpoint unproductive time, such as idle time between tasks, meetings, repair work, etc. Direct activities can also be tracked, in which all users can be measured against expected standards, and each other, to prove and showcase good performance, while also identifying areas for improvement and corrective action.

"You cannot improve what you cannot measure," said Mark Humphlett, director supply chain, global solutions marketing, Infor. "The warehouse has traditionally been an area of high costs and companies have not had visibility into the labor productivity that drives warehouse operations. Infor SCM Labor Management provides a simple, graphical way to direct, track, measure, and report employee productivity. This provides a better understanding where labor time is being used, where productivity could be improved, and places control of warehouse labor in the hands of the company."

Humphlett added, "Businesses are looking for ways to maintain a competitive advantage, maintain profit margins, and specifically better utilize labor resources.”

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