Aligning Warehouse Labor Management with Omni-Channel Strategy

How are e-commerce and omni-channel fulfillment impacting warehouse operations and labor requirements?

That was my opening question to Tom Kozenski, VP of Solution Strategy at JDA Software, in a recent episode of Talking Logistics. Here’s a snippet of his response:

In my opinion, it’s the reason why there are so many growth initiatives in this space right now.

Most warehouses are equipped to ship pallets and cases to distribution centers and stores instead of shipping 1 or 2 items out in a small package or envelope to a customer’s home. Hitting the shipping volumes [involved with shipping individual items] is very difficult and labor intensive because most warehouses aren’t set up or designed to handle it efficiently.

On top of that, it’s difficult to gauge when online orders are going to come through, so there’s a high level of volatility.

So, the process is both labor intensive and more difficult to predict — that is why there is a labor management opportunity in supply chain today.

Implementing warehouse automation technology, especially the more modern and flexible systems available today (think robots and “goods-to-person”), is one way companies are addressing this challenge. But is warehouse automation a silver bullet to eliminating labor requirements? The short answer is no, as Tom explains:

When you look at automation, it’s what I often like to call “islands of automation” or “islands of processes.” If you have a goods-to-person operation, for example, there’s a whole bunch of people around that area that are loading and unloading trucks, doing cycle counts, replenishing pick locations, putting away pallets, moving cases out of bulk locations, doing the packing, performing quality audits — in short, there’s a lot of people around that automation area that companies can better optimize using a warehouse labor management solution.

The best solution is to take the best from automation and the best from software and utilize them both in your operation.

Today’s warehouse labor management solutions provide greater capabilities and more value than in the past . “It’s much more than just a labor reporting tool,” says Tom. Watch the clip below where he discusses how companies can use warehouse labor management solutions for:

  • Long-term labor planning and forecasting — e.g. how much labor will I need next month or next season?
  • Short-term labor planning, including intra-day planning in response to unexpected events
  • Creating incentive pay programs
  • Modeling “what if” scenarios — e.g., what if we we move from RF to voice in the case pick line, is it really going to save us money?

Tom also discussed some misconceptions people have about WLM solutions, such as “Oh, a labor tool is just a hammer to get people fired…when in reality, it’s a planning tool that companies use to incent employees and remove barriers to productivity.”

So, what questions should logistics executives ask themselves to determine if their labor management capabilities are well-aligned with their omni-channel strategy? Watch the short clip below for Tom’s response.

One question is, “Are we throwing labor at the problem, manifesting itself in growing labor costs with little or no increase in performance or throughput?” If the answer is yes, then “that’s a good sign that you need to look at your labor tools, at how you look at labor operationally, and that there might be an opportunity to get value from a warehouse labor management solution.”

I encourage you to watch the rest of my conversation with Tom for additional insights and advice on this topic. Then post a question or comment and keep the conversation going!