01. Labor Management Payback

The eternal debate: What comes first, labor management or methods & systems improvements? Dynamic organizations continually improve methods & systems. Since a Labor Management Program is still the quickest and cheapest way to lower costs and improve service, the trick is to implement a flexible program that easily adjusts to the changes while maintaining labor control. The payback is just too good to postpone. PEP projects normally have a payback of between 10 and 14 months. What are your thoughts?


  1. Ewen - DHL says

    Even though we’re going to replace our Warehouse Management System, because of the length of the implementation period we’d like to get an effective Labor Management program installed and not have to wait several years before the new WMS is fully operational in all facilities. We do however want to be certain that our chosen Labor Management program will accept files from the WMS and can adjust to the changing operating environment. Has anyone else been in a similar situation and what was your decision?

  2. Amado - Nordstrom Direct says

    Ewen: When we started a new fulfillment operation, we decided to have our PEP labor management program in place to see how we progressed. Now 11 years later, after many changes, including several WMS upgrades and significant building expansion, we’re still using the same program. We were able to adjust the program to continuously monitor our operation during these periods of change. I feel the information has helped make us more efficient and has also provided data that has been very useful in identifying and designing improvements.

  3. Tim - Nordstrom Direct says

    At Nordstrom Direct, after completing a facility expansion last month, we couldn’t wait to get PEP turned back on and operational. During expansion it was necessary to suspend PEP for a brief period in order to establish new standards. During this period, management and employees alike were missing the perpetual daily feedback in the form of reporting and productivity tracking that PEP provided. We are now “live” again and seeing productivity pick back up again, helping the employees and business leaders track progress and results.

  4. Barron - SDI says

    Obviously, working with SDI, we firmly believe that an operation must be designed properly with the correct methods, systems, and materials handling equipment. In many of our projects, our clients have also expressed interest in a labor management program. We don’t see any reason why a flexible labor management program cannot be an integral part of the overall improvement project. We’ve had several clients that utilize PEP and have found that it could easily be revised when operational improvements were made and, in fact, the PEP data has been very useful in helping us decide on the optimum design changes.