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01.12.2020

Blog series | Trends and issues in the supply chain: labor challenges

Hiring and keeping workers has long been a struggle in the supply chain industry. Whether there is a shortage of quality workers, difficulty retaining them or keeping them happy, labor challenges can take a toll on an operation.

As a result, companies often invest in technology to get more out of their current workforce. This can either be a) happening behind the scenes to optimize the warehouse to make work easier or b) directly enabling workers by giving them tools or equipment to make their work experience more enjoyable and efficient.

What is happening in the market?

While warehouse work can have its benefits in terms of work–life balance, flexibility, and greater control of income through incentive schemes, it can be repetitive and physically demanding. This is especially true if the warehouse in question is cold storage where workers are exposed to chilly temperatures all day or where lifting of heavy materials is required.
Seasonal peaks are also a significant issue, as more temporary workers often need to be hired to keep up with demand. This comes with many expensive pitfalls, including recruitment and training costs. Plus, this is all for employees who will usually move on when the season ends. As a result, this is a costly role to the business with an especially high turnover rate.
Meanwhile, the rise of e-commerce and the popularity of distribution sites such as Amazon are creating havoc in the industry. Nearly every supply chain is being challenged to deliver faster and reduce costs for the customer, like offering free and same-day delivery. Subsequently, an increase in demand throughout the year (as opposed to seasonal) has resulted in labor shortages across several industries.

Impact of technology and worker age

Worker skill is also becoming a major factor, as jobs in the warehouse are rapidly changing. The introduction of automation has created a need for technologically adept employees. Again, finding these workers can be difficult AND costly which quickly impacts the bottom line.
Finally, baby boomers are now starting to retire, making room for younger generations. Unfortunately, these new generations are less likely to work in warehouses. If it is their career choice, they look for an employer utilizing technology which, in their eyes, make for a more desirable workplace. This requires operations to invest just to be considered by candidates.

How can companies in the industry set themselves apart?

These pressures bring forward questions for companies looking to solve labor challenges quickly:

  • How can I make my warehouse attractive to potential employees, and once we hire them, how can I keep them?
  • What are other warehouses in my area offering their employees?
  • What technology investments can we make that won’t significantly impact our bottom line?
  • How can I get seasonal employees up to speed quickly and without high costs?
  • How can I incentivize employees while increasing efficiency?

How can technology help with this?

Autonomous Mobile Robots (AMRs):

Automate low-value tasks, such as pushing the items around or delivering picked pallets or bins, with AMRs. Staff can then pick up higher value tasks. This not only allows you to get more from the current workforce but also improves their quality-of-life by allowing the AMRs to do the heavy lifting. AMRs are also easily scalable, allowing operations to increase the number of robots to handle seasonal peaks rather than hiring seasonal workers. Plus, they do not need to be purchased but can be rented as required without huge upfront costs.

Voice and Vision Technology:

With voice and vision, workers will often see a significant increase in productivity due to the hands and/or eyes-free nature of the technology. This can help the current workforce handle the increase in demand without significant seasonal hiring. Voice also makes training easy, with new employees able to get up to speed in a matter of hours. As the worker becomes more proficient, the technology allows the picking cadence to increase. Add gamification to voice picking and you start to see an increase in efficiency and productivity as younger workers enjoy the challenges that gamification adds. Additionally, voice and vision provide enhanced information about worker productivity and accuracy, helping provide data for incentive programs. 

Warehouse Management Systems (WMS):

Many operations will look to their WMS to help monitor, analyze, and make changes to labor planning. By providing insight into labor analytics, with a Labor Management System or various other productivity tools, companies can see how their workers’ time is being used, eliminating excess labor hours, and reducing overall costs. The WMS is really the workhorse of the warehouse, helping companies develop the best picking routes and put away locations, replenishment strategies and measuring travel time. This helps to make their employees most efficient and productive.

Warehouse Simulation Software:

Warehouse simulation software allows operations to create a digital twin of their operation, and test the impact of potential changes to their warehouse. This can be helpful to determine exactly how many workers need to be hired, the impact of new technology, and how changes to warehouse layout can improve productivity during seasonal peaks.

Automation:

Of course, automation alone makes a significant difference in the expectations of workers in the warehouse. Whether the issue is recruitment difficulties or retention, automation can assist warehouses to store, retrieve and deliver goods quickly, efficiently and safely, while maximizing available space and reducing manual labor.

In a nutshell

Labor challenges can be a complex issue, as the market is constantly changing. There may not be a single solution, but you can be confident that Körber is here to be your partner in labor challenges, no matter how complex the issue

Related solutions

Supply Chain Software

From warehouses, factory yards and industrial plants, to marine terminals and transportation fleets, Körber’s all-encompassing suite of Supply Chain Software is designed to help manufacturing and distribution organizations to maximize space, improve efficiencies and increase productivity across the entire business.

System Integration & Automation

Manufacturing and distribution organizations know that automation can improve efficiencies, maximize space and increase productivity across their supply chains.

Voice, Vision & Mobility

Körber’s voice, vision and mobility solutions will help you to reengineer and improve your processes while optimizing business efficiency.

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