Managing labour costs is essential for enhancing productivity and efficiency, particularly in picking and slotting tasks. Warehouse and 3PL professionals often struggle with high travel time due to layout, inconsistent training that drives overtime, and limited analytics for forecasting labour, which together reduce ergonomics and hide kaizen opportunities.
Rising wage pressure has made disciplined labour management even more critical. Analysts report warehousing wages increased by more than 30 percent between July 2020 and July 2024, while UK average weekly earnings also continued to trend upward through 2024 and 2025, including in transport and storage. (McKinsey & Company)
At Clarus WMS, the focus is on practical levers like walk sequences, demand pick faces, accurate master data, and clean operational workflows that reduce travel and idle time. As our in?house expert notes, the system treats “a SKU as a SKU”, the physical design, replenishment rules, and pick?face strategy determine the true cost to serve.
The result of traditional methods:
- Delays in fulfilment due to inefficient picking and high travel time
- Inefficiencies in labour utilisation, leading to overtime and poor cross?training
- Lost revenue from non?optimised slotting and lack of analytics for forecasting
This article breaks down the failures of outdated labour management methods and explores how Clarus WMS rethinks the process with modern, cloud?based practices for better visibility and audit trails. We add evidence and clarifications to support decisions in live operations.
What is Labour Cost Management and How Do I Optimise It?
Labour cost management means measuring and improving the time your team spends creating value, then removing or reducing non?value activities like unnecessary walking and rework. Practical steps include analysing travel paths, implementing sensible slotting rules, and forecasting labour for peaks to reduce overtime reliance. The wage environment has been inflationary since 2020, so even modest process gains convert quickly to savings. (McKinsey & Company)
Expert insight: “You must pair system capability with physical reality. If you add SKUs without space, rethink pick faces, replenishment mins and maxes, and whether tote?picking or pallet pick faces suit the demand pattern.”
Where organisations do adopt voice?directed work, industry data indicates meaningful accuracy and productivity gains, but suitability varies by site. Honeywell reports up to 35 percent productivity improvement from legacy methods and up to 50 percent error reduction where voice fits the use case. (Honeywell Automation)
Do I Need Automation for My Warehouse Operations?
Automation should follow a clear cost case. In many mid?sized facilities, process discipline, data?driven slotting, and cross?training can deliver quick wins. For higher volumes or SKU complexity, goods?to?person and AMR solutions can provide variable capacity and remove walking from the process, with retail examples showing payback in roughly two to three years when consumption is structured as Robotics?as?a?Service. (McKinsey & Company)
Adoption intent remains high across logistics. The 2024 MHI Annual Industry Report, produced with Deloitte, shows strong five?year plans for AI and robotics across respondents, reinforcing the importance of a roadmap rather than piecemeal pilots. (Locus Robotics)
Expert insight: “Automation’s trade?off is upfront capex against storage density, throughput, and reduced manual handling. You still need a realistic payback plan, not just a machine.”
How Does Voice?Picking Improve Productivity?
Voice?directed picking is an established option that can keep hands and eyes free, reduce scanning steps, and improve first?time accuracy. Vendor benchmarks cite up to 35 percent productivity improvement and up to 50 percent error reduction versus legacy methods when correctly deployed. Suitability depends on product mix, ambient noise, and the maturity of existing RF processes. (Honeywell Automation)
What Role Does Slotting Play in Travel?Time Reduction?
Slotting is one of the most reliable levers for cutting labour cost because travel time typically accounts for around half of manual order?picking time. Placing high?velocity SKUs closer to despatch and co?locating items that are often picked together reduces walking and truck movements, which directly lowers labour minutes per line. (informs-sim.org)
Modern 3PL slotting programmes analyse 52 weeks of rolling demand and apply per?SKU forecasting, then assign locations using distance?minimising rules to cut travel and congestion. This approach is increasingly common in large 3PLs. (geodis.com)
Expert insight: “Use transactional pick data through BI to identify fastest movers, then physically place them near your goods?out and set walk sequences accordingly. The physical layout still governs your cost.”
Traditional Methods vs. Clarus WMS for Labour Management
Traditional time?and?motion exercises are slow and quickly outdated. A better approach is continuous measurement of lines per labour hour, travel sequences, and replenishment triggers, then weekly slotting adjustments. Clarus WMS supports this by giving teams real?time visibility and clean data for BI, so you can act on facts rather than periodic studies.
Where organisations implement voice in suitable contexts, independent vendor data suggests up to 35 percent productivity uplift. Treat these as industry comparators rather than a guarantee, and validate with a pilot in your process. (Honeywell Automation)
Why Teams Struggle with Labour Cost
- Limited automation in picking, causing high travel time and overtime reliance
- Manual slotting processes that increase errors and ergonomic strain
- Poor analytics for forecasting that weaken incentive programmes
- Inadequate cross?training that reduces flexibility during peaks
How Does WMS Handle Labour Cost?
Clarus WMS emphasises real?time visibility, accurate master data, and configurable walk sequences to reduce travel and waiting. It also supports demand pick faces to balance replenishment effort with pick density for each client account in 3PL settings. In one recent customer story, Interspan reports cutting reporting time by about 90 percent after moving from on?premises WMS to Clarus, which freed leaders to focus on operational improvement. (Clarus WMS)
Expert insight: “Demand pick faces help absorb seasonal spikes, but you must plan space, replenishment rules, and staffing, otherwise you simply move the bottleneck.”
Real?Time Monitoring
Dashboards should surface exceptions such as mispicks, repeated long walks, and slow replenishments. Tracking these in real time enables you to correct before overtime accrues and before errors cascade into rework. This is where clean, timely WMS data pays for itself.
Scalable Adaptation
When SKU counts grow, process rules remain the same, the cost impact depends on space, pick?face design, and replenishment settings. Use min?max and demand?triggered pick?faces to keep fast movers accessible as accounts scale.
Full Visibility
End?to?end visibility across inbound, storage, and outbound helps you prevent idle walking, align labour with demand, and maintain audit trails. This enables realistic incentive schemes and kaizen cycles based on facts, not averages.
Ready to See It in Action?
Implementing labour cost optimisation with Clarus WMS can transform warehouse productivity, reducing overtime and improving ergonomics with fewer surprises. Imagine a weekly cadence of small, data?driven slotting moves that compound into lasting savings. Contact Clarus WMS for a demo to explore these benefits.
References
Using digital twins to unlock end-to-end supply chain growth, McKinsey
Average Weekly Earnings, series K5B7 (Transport and storage)
Average weekly earnings in Great Britain: December 2024, ONS
Honeywell Guided Work Software (voice picking benchmarks)
Travel time’s share of picking time, Elbert & Müller citing Bartholdi and Hackman, 2017 IEEE WSC
Warehouse & Distribution Science, Bartholdi & Hackman
GEODIS slotting optimisation, 52-week rolling analysis
MHI Annual Industry Report 2024 (with Deloitte)
AI in distribution operations, McKinsey
Automation payback and RaaS, McKinsey
HSE Key figures for Great Britain 2023/24, including MSDs and total cost
Interspan to cut reporting time by 90%, Clarus WMS customer story