Why Labor Management?

Q. We are currently using a WMS that has LMS capabilities, why do I need Easy Metrics?

All Warehouse Management Systems (WMS) contain very basic labor tracking functions that allow users to track single variable performance. This is useful for general trend analysis over time for an employee or operation, but it does not give you the granular detail needed to evaluate employee performance on a day to day basis or establish fair labor standards to hold them accountable to. As well, Easy Metrics provides detailed cost to serve visibility and activity based budgeting which is not available in other LMS solutions.

Q. We are happy with out spreadsheets, how will Easy Metrics help us?

Spreadsheets are great tools and it seems like half of corporate America still runs crucial business operations on them. However, if you need to look at performance over time, or do extensive data analysis, spreadsheets become too cumbersome. Databases offer real time analysis and reporting, and Easy Metrics, since it is a cloud based service, gives anyone in your organization web access to vital reports.

Q. How does an LMS measure employee performance and productivity levels?

First, an acceptable performance level is defined for each process, or type of work that is being done. A performance standard for this process is found in one of two ways:
1. The classic way involves industrial engineers conducting time and motion studies. Engineers will spend about 10 hours measuring every process. Enterprise LMS’s are typically set up this way.

2. Another way involves having the data correlation define the performance standard by identifying the current level of productivity for all processes and then setting standards based on a stretch goal above the current level. It takes about 5-30 minutes for big data to define a performance standard depending on how many variables are included in the standards. This approach is cheaper, faster and incorporates hundreds of times more data than an engineer can capture through observation. Most Easy Metrics customers either use this approach to develop the standards or they use these tools to refine and update the standards developed by engineers.

Q. What kind of activities does an LMS collect and track?

Production activities from the WMS such as picking, putaway, receiving, shipping, etc. As well as indirect/non standard labor like maintenance, cleanup, and meetings.

Q. How does an LMS know more than a really good supervisor?

An LMS provides clear and objective data. Supervisors are frequently surprised to discover who are the really great performers when LMS is first rolled out. For example, extroverts often look like they are the busiest and most productive, but in reality it’s the steady eddie’s that are frequently the most productive . Data reveals what is difficult to measure by observation.
A supervisor can only be in one place at a time. Employees may work very hard when the supervisor is near them, but not so much when he or she is not around. An LMS captures all the work the employee does for every minute they are paid each day.

Q. Do all LMS’ require Engineers or Engineered Labor Standards?

An LMS requires that labor standards be assigned to each process. Easy Metrics is the only system that uses data analysis to recommend those labor standards. Other system require the company to either do their own data analysis or hire engineers to develop the standards.

Q. What companies make labor management systems?

Easy Metrics, Oracle, Red Prairie, High Jump, Manhattan Associates, NextView, TZA-Pro-track, SAP, ProRep

Q. Why do facilities use an LMS?

To increase productivity by gaining visibility into the productivity of individual employees, and to make sure that disciplinary steps are based on objective performance information.

Q. How does an LMS help with Labor Forecasting?

LMS know what the labor standards are for each process and how the facility is performing against those standards. Therefore if a site can project their upcoming volume the LMS can tell them how many labor hours will be needed based on standard and recent productivity. This can help right-size the workforce which is important, because if you have too many employees for the volume of work they will tend to slow down to the level needed to process that work in a full work day.

Q. How does an LMS affect quality, attendance, and safety?

It is important to incorporate quality and safety tracking along with productivity tracking. If the focus is solely on productivity, you may just get that but at the expense of quality or safety. Most LMS do track these variables, and both quality and productivity can improve. Quality can vastly improve if it is measured by the LMS and tied to Pay for Performance.

Employees who are earning a bonus on a PFP system will be less likely to have attendance issues. Some sites also tie attendance as a factor in their PFP bonuses.

Employees that operate under an LMS are, in general, happier employees. They get feedback on how they are doing and it gives them goals to work towards versus just clocking hours. More engaged employees improves attendance, quality, and safety.

Q. For whom is an LMS most valuable?

Companies where labor is the largest single variable cost, for companies where labor has a direct impact on productivity and costs, and for companies where there is a lot of variability on individual productivity.

If the productivity is driven by equipment, like a printing press, then the employee cannot improve productivity. But in operations like that, equipment is the largest cost and not employees.

Q. Is the value of an LMS just a rumor? There are a lot of horror stories of companies spending millions and getting marginal or no value.

An LMS is a tool. If used correctly it can transform the profitability and productivity of a company. Most failures are from long and costly implementations, and labor standards becoming out-of-date, rendering the LMS obsolete over time. Easy Metrics makes this much easier in that we help the customer maintain their standards easily and continually with data, and coach them on areas of improvement that we identify within the information.


Q. How much work is it and how long does it take to implement Easy Metrics?

3 and 4 months depending upon the resources allocated. The implementation process requires about 1-2 hours per week of phone meetings to communicate with the key management team on the incentive program setup and data collection. We recommend scheduling dedicated meetings twice per week with your assigned POC(s) in order to optimize the implementation process.

Q. How much work will this take? We are short on staff.

To implement the full Easy Metrics model, it takes about 2 hours a week working with key management team members and the overall implementation takes 90-120 days. Once implemented, we recommend daily reviews of the performance results by your team. The goal with Easy Metrics is to use it as a tool to create a culture of productivity in your company.

Q. How will an LMS help if you already are doing well on non-productive time?

LMS’s address productivity on on-standard processes and % of hours spent on off-standard processes. If a site is managing their off-standard processes well, then the LMS will still be able to help them manage the productivity level for their on-standard processes.

Data, Technical and IT

Q. What are the technical requirements?

Easy Metrics is a web based application and only requires an internet browser to operate. All reports are created in Adobe PDF format or .csv if you want to import them. If you currently scan some or all of your processes this data can be automatically uploaded into Easy Metrics using a simple csv download from your tracking system. For companies that would like to run the application internally, API’s can be created to interface with most enterprise systems.

Q. We don't have a computerized tracking system and track everything manually.

Easy Metrics is the only labor management system that supports manually tracked processes. As well, if your company is short on staff, you can fax or email us your daily production sheets and our efficient administrative staff will handle the data entry for you then run and review the reports and email them to you.

Q. How does an LMS get data?

Enterprise LMSs pull their data from an integrated Warehouse Management System (a WMS.) Easy Metrics, however, compiles the data in the cloud from multiple sources: WMS, Raymond’s iWarehouse system, Time clocks, packaging software, and more. The algorithm makes sense of all the separate data sources, and feeds it back to the LMS for easy-to-use formatting, reporting, and visualization.

Q. Does having an LMS require your IT guy to create scripts to integrate the LMS and WMS?

With enterprise yes, with Easy Metrics no. A traditional LMS will generally require that the WMS data feed be configured in a specific format. If the LMS and WMS are the same company then they should link together easier. Easy Metrics takes a different approach and pulls the WMS data as-is and then compiles that data to import into the system. This approach requires significantly less customer IT involvement and enables the system to be more flexible and adaptive going forward.

Q. Can an LMS tie into multiple Warehouse Management Systems (WMS's)?

Enterprise systems rigidly couple each transaction in a WMS to the LMS. Easy Metrics uses a loosely coupled architecture. The later enables the ability to work with multiple data systems to include multiple WMS’ simultaneously. In fact, this type of architecture can not only receive multiple WMS’s, but multiple data sources (labeling software, time clocks – even spreadsheets).

Q. How does an LMS help with budgeting?

Traditional LMS has no effect on budgeting. Easy Metrics enables activity-based budgeting models that track your volume adjusted against forecast.

Q. What kind of data does an LMS collect and track?

An LMS tracks production metrics for each task such as picking, putaway, receiving, shipping, etc. and the time spent to do that task. It will also capture time and cost spent on off-standard/indirect processes like housekeeping or meetings. Quality scores can be pulled into an LMS and incorporated into the employee performance reports.

Q. Do most facilities already have enough data to put into an LMS, or is it a pain to get the data in there?

Yes, if they are already have a WMS with RF or voice pick scanning then they have the data that is needed.
Most companies have the data. The problem is traditional LMS providers require the customer to create the export data file to match the input format of the LMS. With Easy Metrics, we only require a raw data export from the customers systems then using EM’s integration tools, transform and map the data to Easy Metrics.

Q. If you don't have the data already in your WMS what happens?

You never have all the data in your WMS since the WMS focuses on tracking inventory and not work. However, Easy Metrics has developed several different methods that enable companies to track and allocate 100% of an employees labor.
If the production data is not tracked electronically then a traditional LMS is probably not a viable option. Easy Metrics has customers that do not have any electronic data capture. We use spreadsheet-like templates that are automatically uploaded into EM each day to track the production metrics and time on task for each employee.

Q. Does having an LMS require workers to input data, and how do they do it?

Yes and no. For on-standard work in the WMS, 50-65% of work, it is automatically tracked via the WMS and scan guns. For off-standard work, employees may have to fill out a work form or log their time into a timeclock system via job codes.


Q. How soon will productivity increase?

It depends on how well the program is communicated to your employees and the training of supervisors on the program. If everything is communicated clearly before going live and the program embraced by upper management, you will see results very quickly. Most companies will see a complete ROI on the system within 6 months of going live and are able to achieve productivity gains of over 30% in about a year.

Q. What is the difference between classic LMS and cloud LMS?

Traditional enterprise LMSs cost between $500K – $2Million for one facility, between software licensing, industrial engineering, implementations, and ongoing licensing and support fees. Cloud based LMSs, like Easy Metrics, require no hardware, greatly simplified software implementation, lower up front costs and lower support costs.

Traditional Enterprise is going to charge a large upfront cost for the software and hardware implementation, and then yearly maintenance fees of 15%. That might last 5 years but then you need to buy and implement the upgraded system. That starts the billing over again. Rigidly coupled enterprise systems require ongoing support of industrial engineers to maintain and keep current the labor standards, which naturally change when new customers are added or processes change.

Cloud-based LMSs don’t charge a lot up front, but have a monthly subscription (Saas). This makes it much easier to achieve a positive ROI because you don’t have a huge investment to overcome. With a cloud system, you also get all the upgrades as they are rolled out instead of needing to wait for periodic updates or an upgrade to the new version. With a cloud you don’t have to purchase, install and maintain servers onsite. This reduces the IT involvement significantly.

Q. How does NOT having an LMS increase costs?

Lack of an LMS limits the ability of management to run an operation profitably. For most operations, labor is the highest controllable cost center. Without an LMS or comparable employee metrics system (spreadsheets), management is more subjectively deciding who is a good performer and who is not. Good performers make the company money, poor performers cost the company.

In other cases, there are customers that are costing the company money in outrageous labor costs. Servicing customers into unprofitability is dangerous – because adding volume makes the financial losses even more devastating. A powerful LMS will tell you which customers, employees, processes are making you and losing you money.

Q. Should an LMS show immediate results? How long should it take?

During the implementation phase a site might see a small gain in productivity due to the fact that employees know they are being tracked. The first big jump in productivity comes when the Supervisors are able to start holding employees accountable. This includes recognizing top performers and taking fair and objective action with underperformers on a daily basis. The final big jump in productivity comes when the site roles out a PFP program and the employees have the opportunity to share in the savings if they achieve their individual stretch goals.

Productivity and Labor Costs

Q. How does Easy Metrics actually increase productivity?

There are three key reasons why the Easy Metrics system drives productivity higher:
1. Employees now have visibility and daily accountability on their performance and how they compare to everyone else. When employees know they are being measured and the results acted upon, human nature naturally drives up their production level.
2. The system empowers management with granular visibility on who is performing and who is not performing and gives them the information to make the right decisions.
3. Employees are directly compensated for the value they are able to create through their increased effort. Often marginal performers can become your top performers with a simple financial incentive.

Q. How does an LMS measure employee performance and productivity levels?

First, an acceptable performance level is defined for each process, or type of work that is being done. A performance standard for this process is found in one of two ways:
1. The classic way involves industrial engineers conducting time and motion studies. Engineers will spend about 10 hours measuring every process. Enterprise LMS’s are typically set up this way.

2. Another way involves having the data correlation define the performance standard by identifying the current level of productivity for all processes and then setting standards based on a stretch goal above the current level. It takes about 5-30 minutes for big data to define a performance standard depending on how many variables are included in the standards. This approach is cheaper, faster and incorporates hundreds of times more data than an engineer can capture through observation. Most Easy Metrics customers either use this approach to develop the standards or they use these tools to refine and update the standards developed by engineers.

Q. What one thing, when measured and revealed by an LMS, contributes to productivity gains?

The biggest issue is the eliminate of “yeah buts”. It is very difficult to hold employees accountable on a daily basis if they have a legitimate reason why their units-per-hour score might be lower than normal. If an employee has a low units-per-hour score for the previous day and when the supervisor addresses this issue the employee is able to say “yeah, but it is because I had all those small orders to do, I can’t make the standard processing small orders.” Then the supervisor is unable to hold the employee accountable. An LMS using multiple metrics would provide a fair standard for the work regardless of the product mix, and this will eliminate any plausible excuses for low productivity.


Q. What are the risks of implementing Easy Metrics?

Adjustments to employee compensation have to be handled correctly. When a pay-for-performance system is setup, it needs to incorporate employees and all key personnel in its development to ensure proper buy in. Additionally, once implemented, future adjustments to bonuses have to be handled delicately. There are many published case studies where the performance gains were so great, upper management decided to cut bonuses which resulted in the program collapsing. It is easy to give more, but very difficult to take away.

Q. How does an LMS influence employee engagement?

Consistently recognizing good performers based on objective criteria improves employee engagement because they feel appreciated. A PFP program that is structured properly will help bring about a significant improvement in engagement because they are being rewarded for achieving stretch goals. One of our customers used a good analogy when describing their PFP program: “If you were bowling, and there was a sheet in front of the pins and couldn’t see how many you knocked down each time, how long would you continue playing the game?” Goals, feedback and rewards help give the employees something to focus on and helps them engage in their work and their team.

Q. How does an LMS identify employees that need coaching or additional training?

An LMS simply shows you who is a poor performer, by process, relative to everyone else. An employee may be very good at once type of task but poor at another. An LMS identifies this for you. Then, the employee can either be trained, or assigned work that they have the highest performance on.

Q. How do you reward & recognize employees who are performing particularly well?

There are several ways. Pay for Performance is gaining tremendous traction in today’s competitive labor market. A Pay for Performance system that is based on individual productivity will also reward those employees who are performing well and saving money. A PFP program that is properly designed will not only be self-funding, it will drive down the unit cost of labor. Recognition often means more than monetary rewards. Sometimes being publicly acknowledged and being shown appreciation for outstanding work is what engages employees.

Q. What methods do companies use on employees who are not performing well?

Escalating disciplinary process based on fair, objective and consistent criteria is key. This eliminates subjective decisions made by Supervisors that are based on limited information. Getting the most out of an LMS includes revealing this objective, fair data so supervisors can do: counseling, training, pairing with good performers, or termination.

Q. How does an LMS - indirectly or directly - motivate employees?

It will increase the morale of top performers because they are being recognized and rewarded for their contributions. It will motivate mid-level performers because it will give them goals to shoot for and feedback on how they are performing. Most people want feedback on their performance and an LMS makes it very easy to provide consistent and accurate feedback. Underperforming employees may not be as motivated by an LMS because it will shed a light on how their performance compares to the the rest of the workforce.

Q. What happens when an employee sees another employee doing really well and getting acknowledged for it?

The biggest morale destroyer in an operation is when a top performer works hard but is not recognized, and an underperformer is just going through the motions and is never held accountable. When employees see top performers recognized or underperformers held accountable in a fair manner it helps increase the engagement and morale of the rest of the workforce.

Q. What if your workforce won’t like having an LMS? How do you educate them?

Sometimes there is resistance in the beginning, but during the implementation process, it is important to communicate to the employees the value of the system and what it means for the company. LMS is just another form of transparency in the business.

A Pay For Performance program is very helpful in getting employee support towards an LMS because they have something to gain from it. If a PFP program will not be implemented then the supervisors will need to make sure that they are using the LMS information to recognize and acknowledge good performance, so that it isn’t just seen as a disciplinary tool.

Q. Why are employees afraid of their performance being monitored?

Most aren’t. Top performers, the ones you want to attract and keep, embrace it. But those who know that they are underperforming may be a little concerned about their managers gaining visibility into everyone’s performance. Employees may also be concerned that the labor standards won’t be fair and won’t address their unique situation. For this reason it is important to share with employees how the standards were developed and how they are taking into consideration factors that can make a job harder than normal to perform.

Q. Who should deliver the message than an LMS is going to be implemented? HR or Operations?

Operations. The initiative must have full support from the top down. An LMS helps change the culture of the company toward one that embraces productivity. It may be helpful to have HR involvement so that employees know that it will be rolled out in a fair and objective manner.

Q. How does an LMS help with temporary employees?

Day laborer hours should still be tracked so that you are accounting for their time and costs, but we don’t recommend tracking them as individual employees in the system. Longer term temporary employees should be tracked because it will give you performance information that can be used to end an assignment quickly if someone is consistently underperforming, or to bring a temporary employee on directly if he or she is a top performer. Many of our customers also include their temporary employees in the PFP program because it helps drive productivity higher and unit labor costs lower.

Most jobs have a learning curve so an LMS will track the temp worker to the learning curve and identify workers that are not tracking to the curve. As well, if your the temps participate in pay for performance, this will usually motivate them to learn quickly the job.

Q. What about long-term employees that are resistant to change, does an LMS help them too?

It depends on whether or not they are good performers. There are always a small percentage of people who resist the LMS and do not improve their productivity. Management needs to counsel them.

Easy Metrics has been implemented in facilities with multiple 20-30 year veteran employees. In most cases, the veterans are responsibly performing and appreciate being acknowledged. The LMS confirms their performance and value.

Business type and size

Q. Isn't our business too complex for a performance management system?

Can your employees’ activity be measured? If it can, then it can be tracked, databased, standardized and reported on. With our proprietary performance benchmarking methodology, we can track and model the performance of most any production environment.

Q. We have only 50 employees with one facility, aren't we too small for Easy Metrics?

Easy Metrics is a cloud based pay-as-you-go model with no upfront software costs. Customers with as few as 20 employees have achieved substantial ROI’s with Easy Metrics. For operations with consistent demand we recommend about 20 employees as the minimum and for operations with high growth a minimum of 12-15 is recommended.

Q. Are LMSs only for large companies? How big does an operation need to be to gain value from an LMS?

For enterprise type LMSs, ROI occurs at around 80 employees. Easy Metrics, because it is cloud based and its approach eliminates the need for engineered labor standards, a strong ROI can be achieved with as few as 20-40 employees.

Q. Are LMSs only for warehouses?

With the advancements in big data and correlation modeling, LMSs are not only available, but affordable to all kinds of labor-intensive work environments. Some of these include: Retail, Agriculture, Food Processing, Manufacturing, Call Centers, Hospitality, Airports, Government, and more.

Any operation where labor is a significant cost would benefit from an LMS. LMSs are no longer strictly the domain of warehouses. In fact, an LMS can have the highest P&L impact of any software system in any labor intensive environment

Pay for performance

Q. How does gainsharing, or pay for performance, work with LMS data?

Gainsharing is a bonus program that rewards employees if their facility achieves certain goals. Individual employees have limited impact on the facility’s overall performance, and therefor a gainsharing program will generally not increase productivity as much as a Pay for Performance program that is based on an individual’s productivity.

Q. Why are employees motivated by Pay for Performance?

It’s simple human nature. You get what you incentivize. More productivity means more money for the employee. PFP sets stretch goals for the employees and then shares a portion of the savings with them when those goals are achieved. It does not require employees to work at an unsustainable pace, but it does require them to be very focused and intentional in what they do. A PFP bonus of 20% can have a major impact on their discretionary income. It also gives them goals to shoot for and a sense of accomplishment when they are reached.

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