Integrate your existing system to further cut costs and improve efficiency
Labor Management Systems promise to deliver productivity and efficiency, but they can be so much more—it just takes a change in perspective. By treating your existing LMS not as an end solution, but as another data source for a larger business intelligence solution, you’ll be able to maximize your savings and productivity gains across your entire operation.
The ultimate goal of an LMS should be to reduce and optimize the overall cost of labor as a result of managing the productivity of your workforce. However, increasing the productivity of a workforce does not necessarily translate to a significant reduction in cost for that workforce.
When the evolving demands of the marketplace are taken into account, an LMS alone isn’t enough to keep up. But the data from your LMS can be used to unlock cost and performance visibility across your entire operations network.
What Influences Labor Costs?
Your labor costs are influenced by a number of factors including, but not limited to, your timeclock hours, missing time, gap time, product volume, and more. Your LMS does not track and manage all (or even most) of these factors; that’s not what it’s designed to do.
For example, your LMS might not track missing and gap time, which are the two most important metrics for tracking team utilization and process management. If you don’t know how much of your employees’ recorded timeclock hours are wasted on non-essential or non-profit generating tasks, you’re not going to be able to drive efficiency.
This is why Easy Metrics recommends integrating your LMS into an OpsFM (Operations Financial Management) solution.
What Are The Benefits of OpsFM?
OpsFM opens the door to a variety of powerful and effective tools to cut down your labor costs and further optimize your operation. The three most notable are cost to serve reporting, pay for performance (PFP) programs, and labor forecasting.
Because Easy Metrics OpsFM solution integrates with and merges many different data sets within an operation’s distribution network, it makes detailed activity-based costing possible. Revealing labor costs by product type, customer, employee, shift, facility, and department is only possible with combined data sets.
This allows operations and business teams to evaluate their relationships with vendors and clients in terms of cost, and even allows them to re-price their product lines so that they receive the optimal gross margin off of every sale. The true Cost to Serve by customer or product type is a critical financial metric, previously invisible to operations.
Pay for Performance programs are our self-funding, proven strategy for improving performance, retention, and hiring. From structure, to maintenance, to adoption, Easy Metrics has instituted dozens of successful PFP programs in many different industries for the world’s leading companies and brands. Worker incentive programs are a great way to foster a productivity-focused workplace culture and build a reliable long-term team.
Easy Metrics has also been able to provide our clients with simple-to-use labor forecasting. Using historical information, Easy Metrics can accurately predict how many FTE’s your operations will need in order to process incoming volume, adjusting for current changes in productivity. Such forecasting allows you to plan your budgeting with regards to all the data available to you.
The value of your LMS does not stop at the borders of its functionality. Leveraging it as a data source allows you to build up a bird’s-eye view of your operations and fully dig down into your labor costs, opening the door to programs that can improve operational efficiency, worker retention, budgeting, and more.