Technology Solves Supply Chain Warehouse Labor Challenges
Warehouse operators embrace leading edge technology to recruit train and retain labor resources
For decades or longer, working in warehouses meant completing simple, menial tasks often involving heavy-duty manual labor. Technology used in warehouse operations has changed, especially for third party logistics operations. Today, warehouse workers mobile computers, wearables or smart devices to scan and retrieve information about inventory as well as to provide inventory information into systems that run operations.
In addition, as 3PLs provide value added services, warehouse workers now handle quality inspections, track expiration dates, lot numbers and SKUs. They put together subscription boxes using kitting and assembly activities. They pack and ship goods across the world, shopping for the best shipping carrier rates to meet customer expectations and requirements.
In other words, it is a whole new world.
In this new world, phenomenal change has occurred over the past few years. Thousands of workers retired or were laid off due to the pandemic and millions more resigned. In addition, the population continues to age. Consequently, there are less workers to fill jobs in the supply chain industry. As the use of technology has grown in the supply chain, the demand for tech-skilled laborers has increased.
Many of today’s supply chain workers do not have the skills needed and companies lack adequate programs to train them on advanced technologies such as those that are used in warehouses. This has led to a lack of qualified workers. Experts predict that 2.1 million supply chain critical jobs will still be unfilled by 2030. With fewer workers, businesses are behind schedule on order fulfillment and delivery. Delays in getting products from manufacturers to warehouses or from warehouses to consumers creates bottlenecks that can lead to diminished inventory levels.
The labor shortage is one of the more problematic challenges that modern supply chains are up against today. Despite wage and benefit increases, the logistics and supply chain industry faces challenges in hiring and retaining qualified workers. Currently, 73% of warehouse managers cannot find enough workers. This is a 26% increase from 2021. Experts believe this to be problematic as the number of warehouses globally is expected to reach 180,000 by 2025. Without automated technology, experts predict that an additional 3.5 million warehouse workers will be necessary to fill the workforce.
Impacts of The Labor Shortage on The Supply Chain
- A lack of dockworkers has caused ships to face delays at U.S. ports of entry.
- The resignation of drivers in the trucking industry has resulted in shipping containers sitting in ports much longer than they should.
- The truck driver shortage has caused capacity constraints among trucking carriers. This has made it difficult for 3PLs and shippers to move inventory from ports to distribution centers.
- Short-staffed warehouses and distribution centers are unable to operate at full capacity, creating delays that result in material or inventory shortages for manufacturers and retailers.
- The rise in e-commerce order volume has made it challenging for shorthanded fulfillment centers to keep pace with order fulfillment volumes affecting business processes.
Employee Safety and Health
Workforce safety and health issues translate into labor shortages. As the frequency of employee injuries and health issues rise, there are less workers to handle the workload.
Experts believe that employees within Millennial and Generation Z age demographics are mistrusting of the supply chain industry in part due to the number of injuries that take place inside of warehouses. Injuries are not only keeping people from desiring employment, but also negatively impacting current employees.
The most common warehouse injuries are falls, slips, and forklift collisions. Repetitive movement– related injuries are also common. Experts have found that fatigue increases the likelihood of injury. When human workers are forced to handle repetitive, menial tasks, attention span wanes, muscle strain results, and injuries can occur. Automation is being used to mitigate these issues . Increasing the use of automated technology to reduce injury enables businesses to:
- Retain their workforce
- Reduce insurance premiums
- Reduce costs regarding worker compensation
By prioritizing happier and healthier workforces, warehouse operators and 3PLs tend to increase their appeal to potential employees and better retain their current workforce.
At Amazon, injury rates increased by 20% from 2021 to 2022.
Technologies That Attract Younger Workers
- Wearable technology to enable tracking of employees throughout the warehouse
- Data analytics and artificial intelligence programs to help determine better layouts to save steps and improve pick rates
- SMS services that enable workers to communicate inventory issues and ask questions quickly and easily
- Drones to check high shelves for stock to help determine whether a forklift is necessary
Warehouse Technologies That Help Retain Workers
The Great Resignation and a lack of qualified workers has helped to cause kinks in supply chains that have reduced productivity and increased wait times. Currently, 43% of 3PLs and 26% of shippers are investing in technologies such as intelligent data analytics and machine learning to help combat these issues.
3PLs and warehouse operators are also investing in robots and collaborative robots to support the available workforce. Connected to the Internet of Things, robots and cobots can assist or remove human workers from repetitive or dangerous tasks. This enables workers to focus on more valuable duties within supply chain operations. By taking over picking, packing, and shipping duties from humans, these machines can help eliminate human error. This leads to increases in productivity and efficiency in warehousing and distribution center operations. Automated guided vehicles such as smart forklifts can also perform heavy loading tasks, , replacing human workers, increasing their safety and health.
Investment in technology that educates warehouse workers can help retain workforces by advancing skills and self-improvement. By offering learning opportunities that make employee professional development a priority, companies increase the likelihood of workers being long-term employees by:
- Improving their overall well-being and job satisfaction
- Creating a culture that employees enjoy working in
Companies such as Amazon also invest in their workforces by offering certificate programs in technology. One of the more popular certificate programs offered by Amazon is a cloud computing certification. Programs such as these are useful because they validate workers’ technical skills. These programs advance knowledge development that can enhance an individual’s career within an organization.
The latest generation of skilled laborer places a high value on advanced technology that enables them to strengthen their technical skills.
Virtual reality (VR) warehouse training is a learning tool that attracts digital-savvy Millennial and Generation Z employees. This technology lets new workers digitally experience the tools and business processes necessary for their position without exposing them or the company to harm.
By simulating real-life scenarios within the working environment, employees can learn thecomplexities of their job duties by building upon previous lessons. VR training also enables employers to provide personalized feedback to the employee that can improve their understanding of operational processes. This provides a consistent learning experience and reinforces proper methods and behaviors. With the appropriate training, warehouse workers can feel more comfortable and confident in the warehouse environment making them more successful in their duties.
Generation Z Facts
91% say the technology offered by an employer would be a factor in choosing among similar job offers
80% believe technology and automation will create a more equitable work environment
80% want to work with cutting-edge technology
As tenured workers retire from positions across the supply chain, workers with less skill and knowledge must replace them. Without the correct knowledge to perform job duties, workers are more likely to resign, keeping labor in short supply. Digital supply chain twins are being utilized to train new workers so that they are confident in their decision-making skills when performing their job.
In terms of supply chain, the term “digital twin” refers to a digital replica of a physical supply chain. Organizations use digital twins so that they can duplicate their supply chain virtually and test scenarios, try out alternative models of different nodes, flows, modes and policies before putting them into practice in the real world. Tactically, using digital twins can help clarify how disruptions and decisions may impact network operations.
When using in warehousing operations, the digital twin records existing experiences of workers through the collection of data. During training sessions, the twin makes recommendations based on the data already gathered to guide less-experienced workers through their duties. The artificial intelligence of the digital twin not only tells users what to do, but also why certain steps are necessary and specific outcomes occur. After training, digital twins can be used to evaluate employees’ skills. By preparing workers to be part of a digitized supply chain, companies create a more holistic educational experience, which can increase worker retention.
Mobile Computers and Applications
3PLs and warehouse operators are also combating the labor shortage by investing in mobile applications. These apps are like social media platforms, which provides a range of comfort to newer generations of workers. These apps are useful in recruitment and hiring as they can store and share data within a centralized system. Mobile applications store candidate information, facilitate the on-boarding process, and allow current employees to refer positions to potential employees. This streamlines the employment process, saving businesses and potential employees time and effort.
Mobile warehouse applications can also monitor worker performance. AI systems configured to the software track productivity in real-time, directly from the warehouse floor. Mobile apps not only identify workers that may need improvement, but also those that are on the verge of resigning. This gives companies the ability to:
- Recognize and reward top employees
- Boost worker morale
- Build strong relationships with staff
Autonomous Mobile Robots (AMRs)
AMR technology is becoming a crucial part of modern supply chains. AMRs improve order fulfillment by maneuvering throughout warehouse space and accurately picking items. They then bring workers the items so that they can be packed and shipped. This helps improve worker retention by eliminating the amount of time employees walk inside of the warehouse.
The mobile robot market is expected to grow from $3.6 billion in 2021 to $18 billion in 2025.
Cloud computing software enables warehouse managers to supervise warehouse operations in real-time. This capability lets managers adjust workflows of employees and robots as needed to optimize the workforce. This allows employees to be more productive and meet performance goals.
Social Distancing Mobile Technology
The global pandemic gave workers more cause for concern for their safety and health when performing their job. Warehouse managers have begun utilizing IoT-connected mobile devices such as warehouse wearables to monitor the social distance between workers. Experts say that the implementation of technology that tracks employee social distancing increases real and perceived protections of employee well-being.
The e-commerce boom has increased the volume of orders that need to be fulfilled. At many traditional storage and distribution centers, the decision on which packaging to use for final product shipment is an employee decision. Human errors in this process can lead to decreases in productivity, a discontented customer experience, and costs for return shipping. All of these issues can lead to the resignation or termination of employees.
Cartonization software takes packaging decisions out of the hands of human workers by determining the best packaging type and size of packaging for orders. This in turn reduces the stresses that workers may face in making decisions, making them more comfortable and likely to remain in their job position.
Like AMR technology, automated forklifts can manage tasks that may be too dangerous or time consuming for humans. These machines mitigate the risks of forklift accidents by removing human workers from performing certain processes such as stocking and put-away.
Put-to-light technology is useful in retaining workers because it makes the picking process for employees easier. Light displays help workers know which products need picking and how many need to be picked. They are useful in:
- Minimizing picking errors
- Maximizing productivity
- Improving fulfillment times
- Enhancing worker training and confidence
The construction of dark warehouses is helping to solve supply chain labor challenges by nearly eliminating human workers from the warehouse environment.
Particularly useful in cold storage warehousing and e-commerce order fulfillment, dark warehouses utilize AMRs, AGVs, and other automated machinery to operate 24 hours a day, 365 days a year. They tend to be built-for-purpose and are gaining popularity in the food and beverage and retail industries. Most dark warehouses are constructed in densely populated areas to take advantage of urban real estate and traffic near cities. The locations of these warehouses help to expedite order fulfillment by optimizing last-mile delivery to meet customer expectations.
Dark warehouses are fully automated warehouses with technology that handle processes such as:
- Receipt and storage of goods
- Identification and retrieval of goods
- Sorting, picking, and packing
In the global supply chain and logistics industry, employees are a company’s greatest asset as well as its most significant cost. They play an integral role in the success of supply chain management and logistics. Whenever there is a labor shortage within an industry, resources and productivity levels are impacted. The modern logistics and supply chain companies of today are embracing technology. They utilize state-of-the-art equipment and software that not only improves operational efficiency but also positively impacts the environment for more resilient and sustainable supply chains.
The global pandemic caused issues across multiple industries that are impacting local, regional, and global supply chain networks. Amid labor shortages and product delays, companies are working to create supply chain resilience. Unreliable lead times, raw material scarcity and labor shortages in a highly fluctuating consumer market have made it imperative that supply chains find solutions to these issues. In efforts to combat labor challenges and create more resilient supply chains, 3PLs and warehouse operators are implementing technology configured to their management systems to transform traditional supply chains into digital ones.
3PLs are generally considered experts in supply chain management due to their use of technology and knowledge of and continual improvements upon supply chain processes. They are important because they help companies store and move products through the supply chain quickly. Despite the belief that automation and robotics will decrease the number of jobs, the opposite is in fact true. The introduction of automation has changed the ways that supply chains operate, subsequently increasing the number of jobs that require technical skills. Experts believe that 3PLs have a social responsibility to improve their outreach to tech-savvy generations to alleviate effects of the labor shortage.
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