Cut. Cut. Cut. In lean times, most transport companies know how to hunker down to weather the storm. But as cargo volume rebounds, will bad habits return and prevent organizations from having the labor efficiency they need?
Labor costs can get out of control quickly and are the hardest to get back into line. These costs represent the largest single expense for most supply chain enterprises. Consequently, smart management of labor costs is the only way to ensure that added labor costs at least are matched by efficiency increases.
In the terminology of economists, product output increases (throughput, for example) must exceed labor cost increases to achieve efficiency. However, too many companies in the supply chain fail to obtain these efficiencies because they still manage operations on dozens of spreadsheets throughout the organization. This “desktop” approach to planning can lead to inefficient addition of labor costs because access to “actionable” information is denied to the senior management team.
The improvements achieved from automation of manual spreadsheets were realized nearly three decades ago, but many companies keep this data locked up on individual computers throughout the organization, inaccessible to others.
The challenge for global businesses is to ensure labor efficiency as cargo volumes increase in the year ahead. To do so, these enterprises must break out of their spreadsheet mentality to ensure visibility through companywide planning, analysis and management of labor costs.