The warehouse industry is constantly evolving, with new technologies and techniques emerging all the time. One of the most promising developments recently has been monitoring labor to improve warehouse performance. What we refer to as “Labor Analytics” involves the collection and analysis of data on labor-related activities in a warehouse based on scanning barcodes. By using this data, warehouse operations leaders can gain a better understanding of how their team and business is performing.
Follow along as I dive into the basics of labor analytics, the benefits of tracking this data in the warehouse, and how to leverage data to maximize success.
Basics of Tracking Labor
As mentioned above, labor analytics is the process of collecting and analyzing data on labor-related activities. This data is captured every time your team scans barcodes on products and bins throughout the warehouse. The right technology analyzes these events and surfaces metrics based on who is scanning, what products are moving, and the time to complete the tasks performed. This data provides warehouse operations leaders with the ability to measure productivity, establish standard operating procedures (SOP), and identify opportunities to improve with training.
There are many tools and technologies commonly used in warehouses, but two are required to capture and analyze data: a warehouse management system (WMS) and mobile scanning devices. A WMS is the backbone of any warehouse and where data is stored as orders are placed and fulfilled. If you’re using Excel or an outdated legacy system, it may be time to switch to take your operation to the next level. On the other hand, mobile scanning devices drive inventory and order fulfillment accuracies by validating the movement of products from the time they enter the warehouse until they are on the way to customers. Combining these two technologies will result in incredible efficiency gains and lay the foundation to get the most out of your team.
It’s also important to note that labor analytics is not a substitute for a labor management system (LMS) or software to track time and attendance. Managing those functions are vital to successfully running a 3PL, but this analysis is focused on measuring productivity and providing actionable insights.
Peeling Back the Layers of Benefits
As each team member scans products and bins, data is stored and processed to provide powerful insights. Measuring workforce performance is just the beginning as performance can be analyzed individually for each of your customers as well. Some of the key benefits include:
Increase Employee Performance
You can’t improve what you don’t measure, and labor analytics is a perfect example with picking and packing activities in the warehouse. Track the time it takes to pick and pack each item in your warehouse as well as the time to cycle through jobs for a complete breakdown of your fulfillment operation. Establish benchmarks and SOPs for your team which make it easy to identify bottlenecks or other challenges holding your team back. You’ll quickly know who your top performers are and use them as mentors for newly onboarding employees or individuals falling behind.
Expert tip: Build a culture founded on success. Displaying the data publicly in the warehouse can increase competition among peers and pairing it with an incentive program for your top performers is a fun way to enhance company culture.
Improve Labor Planning
Establishing benchmarks and SOPs is another key tactic to improve how you plan and allocate resources each day. Based on order volumes and historical trends you can accurately assign your team to areas of the warehouse where they are needed most. You’ll experience fewer obstacles and missed service level agreements (SLAs). Optimizing the resources you have is crucial to customer satisfaction and efficient growth.
Expert tip: Hungry for more? You may realize additional capacity to onboard new customers and instantly propel your bottom line.
Measuring productivity levels does more than provide insights to maximize output, it defines the time required to accomplish tasks. Time is money. Calculate labor costs based on individual performance and assess the cost to serve each customer and their orders. While additional information is needed to fully comprehend the profitability of your partnership with each customer, labor costs have largely been a mystery or guesstimate to warehouses until now. Stepping back and assessing labor costs for your entire operation is essential to growing profitably in a time where every dollar counts.
Expert tip: Are you the best around? Bet on yourself. Add accelerators into SLAs when you exceed expectations to generate incremental revenue.
Increase Customer Acquisition
Measuring productivity and calculating labor costs continue to stack benefits as you’ve advanced productivity and amplified profitability. It’s time to look to the future and growing your business. Leverage high-quality performance metrics to enhance your sales pitch. Put your best foot forward when promoting your business to give customers confidence in your ability to serve them and their customers.
Expert Tip: Create a competitive advantage. Utilize productivity metrics and labor costs for similar customers when quoting new business to ensure you are competitive and profitable.
Drive Growth Through Data with Extensiv
Extensiv serves thousands of 3PLs and brands through a variety of solutions and we’re committed to creating more flexible and reliable fulfillment networks that exceed today’s sky-high consumer expectations. Labor analytics is just one element of our offering to successfully serve your customers and your customers’ customers.
Learn more about how Extensiv 3PL Warehouse Manager and labor analytics can elevate your productivity and profitability, request a demo.