Is Labor Management Now the Key Differentiator for Logistics Services Providers?

Guest blog by Jim Chamberlain, senior director, industrial engineering & continual improvement, DSC Logistics & Supply Chain Management

Like most successful third-party logistics (3PLs) providers, DSC Logistics has had a strong commitment to several core values that have helped us grow our business from humble beginnings with one facility on the South Side of Chicago to now managing more than 50 logistics centers and more than 3,000 employees. Those values revolve around providing five things to our customers — accuracy, damage-free delivery, on-time delivery, safety and low costs — and they’re just as important now as they’ve ever been. But, increasingly, we’ve seen labor management emerge as probably the most mission-critical differentiator for us in today’s hyper competitive logistics services market.

Labor productivity is more important than head count

All 3PLs have to focus on reducing labor costs but how you reduce those costs is even more important. It’s overly simplistic to think that you can just reduce head count to drive down costs. Today’s labor markets, with an aging work force, rising millennial job expectations and intense competition for good talent in some areas, demand a greater focus on labor productivity and employee job satisfaction. Not only does management need more visibility into how individuals are performing, so they can be coached to greater productivity, but we also need labor management systems that associates can have trust in so we can retain their talents.

Labor management can deliver quick results

After we implemented the JDA Warehouse Labor Management (WLM) solution, DSC achieved a 20-plus percent reduction in our variable labor spend across our logistics network. This was way above and beyond our initial goal of just reducing waste at the beginning and the end of shifts at our logistics centers.

We believe that our focus on labor management and productivity is mission critical, at the same level of importance as our ability to flawlessly receive and ship cases for our customers. This focus has really been a key foundation for our success. Visibility and systems are important to the way we manage logistics for our customers. Labor management is now a key part of our systems approach and enables our associates in logistics centers and warehouses to make the right decisions throughout the day to become productive, efficient and cost-effective.

A culture of accountability

WLM has had a strong, positive impact on the DSC culture. We wanted a system that was fair for everybody. WLM supports both recognition programs and accountability so we can use it to raise the performance of everyone in the company and also celebrate the successes of the people who help take us where we want to be.

From the forklift operator all the way up through to our CEO Ann Drake, we look at the information every single day. It’s a centralized program where every site communicates out to every other site on a weekly basis to say, ‘Here’s how we did.’ It’s been a game-changer for us.

To learn more about our experience with warehouse labor management, please watch the video, read the case study or visit us at DSC Logistics.

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