Labor is a huge expense for 3PL operators, accounting for as much as 70 percent of overall costs. Yet controlling costs is easier said than done. It requires a variety of skills, including accurate forecasting and precise scheduling. It also requires well-defined processes and well-trained employees. For decades, 3PLs have relied on cross-training, ongoing monitoring, pay per piece and other labor management practices to reduce labor costs and optimize productivity.

Many leading 3PLs have also implemented Warehouse Management Systems. When the right system is deployed properly, 3PLs are able to meet their most important key performance indicators (KPIs) and achieve best-in-class performance. According to Aberdeen Group, that means:

  • Order accuracy rates of at least 99.7 percent
  • First-time order-completion rates of at least 98 percent
  • On-time delivery rates of at least 98 percent

Best-in-class performance also means managing labor effectively: the most successful warehouses keep labor cost increases to less than 0.25 percent year over year. They also boost impressive employee productivity. And now, thanks to new class of labor management software that uses engineered labor standards, what was once only a dream—a workforce that is 100 percent productive 100 percent of the time—is becoming reality.

Supply-chain managers forced to operate without any kind of warehouse or labor management solutions typically share several common challenges:

  • How do we track and make meaningful improvement toward our KPIs?
  • How do we set and enforce attainable, yet ambitious, productivity goals?
  • How can we eliminate idle time that’s eating away at our bottom line?
  • How do we get ahead of day-to-day issues so we’re not always in a reactive mode?
  • How can we standardize our processes and create a culture of continuous improvement?Warehouse Man with Scanner

While these challenges are a fact of life for many 3PLs, they don’t have to be. Thanks to integrated warehouse and labor management solutions, once-common complexities such as maintaining accuracy, scheduling employees, timing breaks, expediting orders, invoicing, and forecasting are becoming much simpler.

“What should my employees be doing now?”, while labor management helps them answer the question, “How long should it take my employees to perform each task?”

Unfortunately, many warehouse managers are unable to answer either question; no wonder 60 percent of those responding to an Aberdeen Group survey report placing greater importance on labor management systems that can help them manage and measure employee productivity. With almost 20 percent of employees describing themselves as “actively disengaged” from their work and approximately half admitting that they do just enough to get by, the savviest warehouse managers realize that defining standards, tracking against those standards, and paying employees based on those standards is a way to increase both employee productivity and bottom-line results.

AccellosOne Enterprise 3PL: An Integrated Solution for Both Warehouse and Labor Management

With a reputation for delivering bottom-line results that lead to rapid return on investment, AccellosOne Enterprise 3PL is an integrated suite of solutions designed specifically by 3PL professionals to meet the complex needs of both multi-client and dedicated 3PL operations. At its core is the Warehouse Management System (WMS). Designed to reduce costs and improve a 3PL’s most important metrics—order accuracy, order completion, and on-time deliveries—this powerful solution sets the stage for labor optimization by automating and standardizing processes, including all inbound and outbound processes.

From receipt to putaway, from picking to kitting, from shipping to reporting, the WMS features out-of-the-box, easy-to-configure workflows for all aspects of inventory management. In addition to providing a 360-degree, real-time view of exactly what’s happening on the warehouse floor at any given point in time, the WMS features enhanced task and labor management capabilities that make it easier to staff employees, manage their tasks, and schedule their breaks.

There’s also an operator assignment function that enables assigning expedited orders to the most experienced staff, even if they don’t start for another 15 minutes, as well an incident-tracking function that enables charging time to specific customers. Some 3PLs looking for more advanced labor management capabilities are turning to labor-specific solutions such as the AccellosOne Labor Management System (LMS).

Fully integrated with the AccellosOne Enterprise 3PL WMS, the AccellosOne LMS enables 3PLs to:

  • Identify most and least productive employees
  • Improve employee productivity
  • Give managers the data they need when they need it
  • Forecast labor needs
  • Track employee and performance against KPIs
  • Simulate alternative scenarios
  • Monitor customer profitability

Let’s take a look at how it works for a specific task, say the moving of 10 pallets from the staging area to other locations. The employee uses his RF gun to scan the first pallet. This scanning action starts the clock and the RF gun accurately and automatically logs the exact time the first pallet is picked up, the amount of time it takes to be transported to its new location, and the exact time it’s dropped off. These activities—all of which are considered direct labor, whether for receiving, putaway, or loading—are all communicated to the LMS.

The same procedure is followed for indirect labor activities, such as time spent returning to the staging area to pick up the next pallet. One of the most significant advantages of the AccellosOne LMS is that its labor standards are “real world”—based not on theoretical projections or academic studies, but on precise empirical data that is captured during the actual execution of real tasks. Easy-to-understand data tables are instantly accessible through the system’s dashboard, making it possible to monitor and improve productivity, address unexpected issues, and develop accurate forecasts.

Learn more about Technology Solutions for better Warehouse and Labor Management: