FoodLogistics.com |

FAIR AND BALANCED: To create standards that promote and reward productivity, warehouse managers need to make sure the metrics they use to formulate standards are accurate.

Labor costs are the bane of the distribution center.

Or they were.

In decades past, uncontrolled labor costs would eat into the already slim margins that were–and continue to be-a grim reality for those in the food and beverage industry. The failure to track workers who loafed, or to make an accurate calculation of the time required for tasks such as picking, palletizing, loading and unloading, resulted in overtime costs that all-too often spiraled out of control.

"We're in a country that demands productivity increases in the distribution world," says Bob Morgenroth, the director of supply chain management for Retalix Inc., Dallas.

The demand for productivity increases and the concern for the already slim profit margins in the industry were the driving forces in the development of software that was designed to help warehouse and distribution center managers control total labors costs. Labor management software (LMS) gained a foothold in many of the larger companies initially because they operate in union environments.

Due to their size and the vast amounts of monies that could be saved, these companies went the extra route of having precisely engineered labor standards built into their systems with the help of labor engineering consultants.

According to Morgenroth, the smaller warehouse operations have shied away from using labor management software until recently, when they began to realize that measuring time, movement and tasks reduced their overall labor costs.