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Supply Chain Risk

Modernizing Warehouse Working Environments With Automation

The 2020 peak holiday shopping season promises to break all records for order volumes, especially for e-commerce. The outlook has brought renewed focus on the supply-chain resources needed to accommodate the spike in demand.

The warehousing industry faces a unique challenge, driven by the hockey-stick growth of e-commerce over the last decade, a shortage of warehouse labor, and seasonal fluctuations. Add in the disruption brought about by the COVID-19 pandemic, and you have a perfect storm for the busiest shopping season of the year.

In order to succeed and position themselves for the future, supply-chain leaders must embrace strategic warehouse automation in a way that will stimulate employee retention, attract new talent, and increase operational efficiency during seasonal peaks.

Solving the Retention Problem

While more Americans are retiring later in their lives than ever before, that trend doesn’t apply to manual workers like warehouse operators, who tend to shift into less physically demanding jobs or completely leave the workforce by the time they’re 55. With warehouse employment exceeding pre-pandemic levels, logistics leaders are faced with a tight labor market at a time when the demand for e-commerce fulfillment is at an all-time high. This places a premium on retaining experienced warehouse operators. In response, supply-chain and operations managers are beginning to implement human-centric warehouse automation, to reduce physically demanding tasks such as excessive walking and lifting.

On average, warehouse operators walk about 10 miles a day, or 2,400 miles a year. Multiply that by a midsize warehouse of about 100 workers, and that’s more than 240,000 miles of employees walking from aisle to aisle in any given year — the equivalent of walking from the Earth to the moon! By implementing robotics technology such as goods-to-person systems that move products to operators, warehouses can significantly reduce, if not eliminate, excessive walking, allowing employees to focus on more complex but less physically demanding tasks. In turn, this reduces operator fatigue and risks associated with pedestrian traffic in the warehouse, ultimately creating a better working environment that leads to longer careers and reduced employee churn.

Solving the Pipeline Problem

Retention isn’t the only challenge logistics leaders face. They’re also hard pressed to attract the next generation of talent to the logistics industry. Fewer young people choose to join the field, as the work tends to be highly manual and often located far from the urban centers where most young people live.

Even after garnering a candidate’s interest, employers find logistics talent to be highly competitive. There’s constant pressure to compete with giants like Amazon that leverage their scale to outbid most warehouses for talent with monetary benefits and brand-name recognition. Just between the months of March and April, Amazon advertised 175,000 new jobs, ranging from warehouse staff to delivery drivers.

Applying strategic automation can help mitigate these issues by making warehouse jobs more desirable to younger employees. Not only does automation reduce the physically intense aspects of the work, it makes the work environment more enjoyable, and offers opportunities for prospective employees to gain highly marketable tech-oriented skills that contribute to their overall professional development. Logistics leaders can attract ambitious candidates interested in working with cutting-edge technology, and help them stand out in the highly competitive labor market.

Solving the Seasonality Problem

Seasonal and holiday peaks often force warehouse operators to hire temporary workers to keep up with demand. This year is no different, with giants like UPS announcing they’ll add 100,000 seasonal jobs.

The volume of seasonal hiring depends directly on sales forecasts, which often are unpredictable. Warehouse operators either risk delays by being too conservative with their hiring practices, or they hire too many employees and end up paying premium seasonal salaries at a time when the labor market is most stretched.

Scalable automation systems allow warehouse operators to increase fulfillment capacity by adding more robots on short notice. In the process, they rely less on forecasts and are able to scale operations up and down depending on seasonal needs. Logistics leaders can focus on retaining and training long-term talent, instead of ramping up hiring for seasonal employees, only to lay them off a few months later when the holiday season passes.

Hiring and retaining warehouse talent has been a constant problem plaguing the logistics industry, and it’s only getting more pronounced as sales continue moving online. With COVID-19 further reinforcing online shopping behaviors, leading businesses are rethinking how automation can help make warehouse operations more efficient, safe, and profitable.

Fortunately, automation initiatives don’t have to be all-or-nothing projects, and they don’t have to break the bank. With human-centric automation tools, supply-chain managers can create better experiences for existing employees, attract top talent, and improve the efficiency of their operations.

Rudi Lueg is managing director of Exotec North America.

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