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Unlocking Warehouse ROI with a Labor Management System (LMS)  Implementation

One of the most valuable investments a warehouse can make is implementing a Warehouse Management System (WMS). A WMS streamlines workflows, provides real-time inventory visibility, and automates processes — all critical components of a well-oiled machine. But it’s also a tool that takes time, resources, and a lot of capital to implement. And while a WMS is an invaluable tool, another crucial cog in the warehouse machinery is your labor force. And of course, the reality is that warehouse ROI is an important consideration in every warehouse setting.

Fact is, the cost of labor can account for up to 65% of total warehouse fulfillment costs — so a well-trained, motivated, and capable workforce is critical with or without a WMS in place. That’s where a Labor Management System (LMS) can help. An LMS is a software solution designed to optimize and manage warehouse labor. It’s a less expensive solution that is easier to implement and can be integrated with a WMS. Implementing an LMS before a WMS can be a good strategy to employ, especially for companies looking to achieve warehouse ROI fast.

LMS before WMS

Oftentimes deploying a WMS happens before an LMS is implemented. This allows supply chain businesses to address the wide range of warehouse needs in one fell swoop, adding an LMS later down the line. However, just because something is done one way traditionally, doesn’t mean something different isn’t the right course of action.

Some operations may find it advantageous to implement an LMS before the WMS. For companies who are looking to realize savings quickly and want to empower their workforce to put their best feet forward, an LMS-first approach may be the best strategy. There are a handful of reasons operations can benefit from starting with an LMS.

  • Smooth transition: The LMS can serve as a training ground for your WMS. By upskilling your team on warehouse best practices, optimizing workflows, and familiarizing them with new processes before the WMS launch, you can minimize confusion and disruptions. It is often assumed that an LMS must only be deployed over ‘old’ processes; however, taking the time to adjust the workflow (either procedurally or with minor changes to existing systems) can dramatically increase the value of an LMS.
  • Boosted productivity: An LMS helps you identify individual strengths and weaknesses, assign tasks accordingly, and implement some initial incentive programs, maximizing the potential of each team member. This leads to faster picks, fewer errors, and a more productive workforce.
  • Data-driven decisions: The LMS gathers valuable data on worker performance. This allows you to identify bottlenecks, optimize tasks, and adjust WMS settings (before implementation) for better overall operational synergy. This is yet another way to achieve warehouse ROI fast.
  • Improved morale: Investing in your people’s development is always a worthwhile investment. This is how you demonstrate they’re valued contributors to the success of the warehouse. This leads to higher morale, reduced turnover, and a team that’s genuinely excited to collaborate with the WMS, instead of feeling replaced by it. This may be the most critical piece of the rollout and requires an effective change management strategy.

Starting with an LMS provides warehouses with measurable speed to value, reducing labor costs without disrupting productivity. Every organization will have a varied set of requirements when it comes to LMS selection and different LMSs offer a variety of tools to improve performance. Some critical features may include:

  • Training and coaching
  • Mobile accessibility
  • Performance tracking
  • Non-standard time capture/tracking
  • Scheduling
  • The ability to provide objective feedback
  • Meaningful employee recognition
  • Individual and team incentives
  • Monetary and non-monetary rewards
  • Labor planning and forecasting

The right LMS can help your organization be better equipped to manage an upcoming WMS implementation. It can offer training programs that cover WMS-related workflows, safety protocols, and performance optimization techniques. 

Future-Proofing Your Workforce

Implementing an LMS before a WMS doesn’t just prepare your workforce for the immediate WMS implementation, but also for future changes in technology and automation. Technology is advancing very quickly (especially with the increased use of Artificial Intelligence), with improvements in robotics, conveyors, and packaging seen every week. Having a workforce that’s adept at keeping up is critical, and it may even help reduce turnover. Employees are inspired to stay with a job when a commitment to their growth and learning is evident, and an LMS does exactly that.

An LMS is designed to foster high levels of engagement by allowing people to learn at their own speed. The advanced features some LMSs provide, like gamification, skill gap analysis, or wearable technology integration offer operations a myriad of ways to motivate and empower employees beyond annual reviews. 

By prioritizing your workforce with an LMS, you’re not just implementing software, you’re fostering a culture of growth, engagement, and shared success. An LMS before a WMS boosts productivity, minimizes disruptions, and achieves faster ROI. No matter where you stand in your LMS or WMS journey, we can help make sure you make the decision that’s right for your operation. No operation is the same, so the solution you choose can’t be cookie-cutter either. Give us a call, and let’s see how we can make your supply chain your differentiator. 


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