Supply Chain: From Plant Floor To PeopleSupply Chain: From Plant Floor To People

The new breed of labor-supply-chain tools and services might want to take some pages from the playbooks of supply-chain-management vendors that are starting to fashion their software to help customers more effectively utilize employees across the entire supply chain, says Forrester Research analyst Noha Tohamy.

Unlike IBM, which has designed its labor supply chain for the services arena, vendors such as RedPrairie Corp. and Manhattan Associates Inc. are focusing on labor management in manufacturing. These two now are developing integrated systems that analyze and optimize each workforce process, enabling companies to reduce costs associated with managing labor, and more important, align their workforce with overall business strategy. Similar to how supply-chain-management software uses complex algorithms and models to determine optimal execution, these companies are implementing planning and analytical tools to monitor and analyze workforce trends and key performance indicators.

RedPrairie, for example, offers labor-management applications that track and evaluate employee performance, which is only one piece of the labor-supply-chain puzzle--the quantitative piece, says Peter Schnorbach, VP of product marketing for RedPrairie's workforce performance-management software. RedPrairie is missing the qualitative piece, which involves the management of employee skills and knowledge. The integration between the two functions is key to building a labor supply chain, and RedPrairie plans to get there in one of two ways: either by building the qualitative capability into its software or by integrating with third-party systems that have the capability, Schnorbach says.

Manhattan Associates tackling the qualitative piece, too. "In the past 18 to 24 months, customers started coming to us and saying that they need to better utilize their employees. They're all looking to do more with less," says Prashant Bhatia, director of product management at Manhattan Associates. Its applications can be configured to track warehouse activities, provide objective performance monitoring, and analyze and report on labor activity. Because customers have been placing more emphasis on labor, the vendor recently added new functionality to its software, including planning and monitoring.

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