A shortage of warehouse workers is leading to an uptick in automation. But can automation alone help your operations keep up?

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The pandemic delivered both supply and demand shocks to the global supply chain, but one constant has been labor challenges. According to SupplyChainBrain, prior to the pandemic, industry labor demand outpaced the labor pool by a six-to-one ratio. As warehouse employment needs continue to peak, we can safely predict that this gap will continue to widen.

With more jobs available than job seekers, it’s no wonder that more warehouse operations are turning to smarter, more versatile automation solutions, namely robotics. As robots become increasingly able to replace some activities in the warehouse typically performed by human workers, they will continue to grow in popularity, despite the high cost of ownership.

In 2012, Amazon spent $775 million to purchase robotics company Kiva Systems. Today it’s estimated that Amazon has more than 200,000 mobile robots working inside its warehouse network. While that number might seem astronomical, it’s important to note that those robots work alongside hundreds of thousands of human workers.

Fact is, at the end of the day, robots can’t replace your entire workforce. Even with the growing use of warehouse automation, it’s your workforce that performs the most value-added activities in the building and keeps fulfillment on track.

 

Automation does not negate the need for an advanced Labor Management System

According to Evan Danner, Chief Executive Officer at TZA, “The adoption of automation does not negate the need for a Labor Management System (LMS). If your organization is large enough to invest in automation, it’s likely that you will still have a significant labor force present. An LMS will help you increase human performance by 15 to 25 percent, which in turn, like automation, will help you reduce your need to for human workers. An LMS will also help you ensure that your investment in automation is producing optimal payback, enable you to improve engagement, and reduce turnover.” Functionality like incentive management, recognition, coaching and gamification are key in making the latter possible.
 

Incentive management, recognition, coaching and gamification

Real-time access to performance metrics and specific incentive functionality built directly into an LMS can help you quickly and easily build a self-funding incentive program. Incentive pay is an excellent way to bridge the gap between your particular market and your starting and or average pay rate. This in turn will put you on the path to higher levels of retention which can potentially save you hundreds of thousands of dollars per year.

Today’s LMSs also provide sophisticated Production Boards allowing for real-time announcements, recognition and competition. These Production Boards can be configured to include specific messaging and data per department or function within the building or set up to be viewed by all associates in a central area. Gamification offers an excellent way to keep your employees engaged in their work and your organization by creating competition between departments or encouraging individuals to achieve “Top Performer” status. With these programs in place, you’ll create a positive culture where groups and individuals are consistently recognized for the excellent work they perform.
 

Integrating the two worlds

The most forward-thinking companies are utilizing automation and an LMS hand in hand. This is because an LMS provides both the necessary tools to effectively manage your labor force and the analytical capabilities needed to determine the true payback associated with an investment in automation. According to Danner, “More data leads to better decisions. An LMS specifically integrated with your WMS and WES, delivers the data needed to not only manage the effective use of automation, but also the effective use of your most important and expensive operating cost – your human labor force.”
 

In summary

New peaks in e-commerce sales have driven warehouse employment levels to reach all-time highs. Automation will reduce your labor needs but not replace them all together. If you aren’t currently utilizing an advanced Labor Management System to manage your workforce, you’ll face an uphill battle to recruit and retain the supply chain talent you need to survive and thrive. TZA is here to help. Schedule a demo to see what we can do for you.

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