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February 15, 2023

Doing More with Less: Solutions to Warehousing Labor Shortages in the Distribution Center

Pandemic aside, the nation has been steadily flirting with full employment for the better half of a decade. In October 2022, the unemployment rate in the United States dropped to 3.7%. While this clearly attests to the good health of the American economy, there are some for whom such numbers rather spell trouble.

With fewer people on the job market, labor shortages have become a persistent thorn in the foot of many American companies. In the transportation and warehousing industry, the problem is now endemic. A recent survey shows that 73% of warehouse operators are unable to fill their roster—and that’s not accounting for seasonal surges in required employee numbers. Meanwhile, recent reports from the U.S. Bureau of Labor Statistics indicate that American companies in that segment were looking to fill 553,000 positions in September as an estimated 229,000 workers quit their job during the same period.

Why are labor shortages hurting the transportation and warehousing industry more than other sectors? What solutions can companies leverage in the distribution center to mitigate their impacts and continue to meet their objectives? Are robots and automation the only way forward? Let’s take a look.


Warehousing Woes: Attracting & Retaining New Employees

It’s been argued that the main reason distribution centers (DC) suffer labor shortages more than other types of businesses is because the new generation of employees is just not inclined to work in that type of environment. Again, the Department of Labor Statistics seems to support this: data shows that the average tenure of individuals between the ages of 18 and 24 is somewhere around 1.1 years.

There’s no denying that generational differences partially explain why supply chain operators struggle to attract and retain new employees. Kids who were born the same year as the first iPhone was released are likely more foreign to a warehousing environment than previous generations. Raised in a digital world, these kids also have different expectations as to what a workplace should look like. In their efforts to attract new workers, employers would do well to be attuned to those expectations.

Having said that, no matter how “cool” companies make their DC—through gamification, for example—, one simple fact remains:

Warehouses make for a tough working environment.

Warehousing jobs are physically demanding. Workers on the floor walk miles and miles every day—more than 9 miles in a day is not uncommon. Automated environments may cut down on walking, but then employees are often called to stand at their station for 8, 9, or 10 hours a day. What’s more: automated environments can exacerbate another pain point: task repetitiveness.

Unappealing work schedules also make it difficult to attract new employees. Distribution centers regularly run all day and all night, seven days a week. More often than not, the unpopular shifts fall to the new guys. To no one’s surprise, not everybody is willing to pull night shifts and weekends, even when the pay is a bit better.

And then, there’s the stress.

DC operators are under constant pressure to achieve higher throughputs with fewer workers on the floor and new supply chain disruptions every other week. Unsurprisingly, some of that pressure is passed down to employees, which creates a stressful working environment. When overburdened workers are pulling more hours on the floor than they should, they become more likely to call in sick or, worse, cut corners and risk injuries, which of course leads to further shortages—DC managers working in industries that were designated as “essential” during the Covid crisis are probably having painful flashbacks at this point.

What Can DC Operators Do?

Robots! We need more robots!

It’s no secret that the scarcity of warehouse workers has sped up the automation of DCs and fulfillment centers. Companies that can afford it have responded to labor shortages by leveraging mobile robots to shuttle goods across their facilities, robotic arms to handle goods and boxes, and intelligent tracking and conveyor systems. Amazon, to no surprise, stands out as a prime example. So does Kroger, in the F&B industry, who has recently invested in Ocado’s automated fulfilment centers in a plan to deploy 20 across the nation over the coming years.

Robots, however, are not a solution that all can afford.

Small- and Medium-Sized businesses (SMBs) generally do not have the capital for the high initial expenditure required to implement such solutions. Meanwhile, fast-growing companies need to prioritize operational flexibility to ensure that they can scale their processes efficiently without losing control of their budget—fully automated environments are typically very rigid.

Whether robots are on your company’s digital roadmap or not, a Warehouse Management System (WMS) is the first solution companies must implement to alleviate the pains caused by labor shortages.

A WMS is an efficient and far more affordable technology solution for companies to reduce their dependence on a large workforce. What’s more, a WMS can also help DC operators attract and retain employees by improving the quality of the working environment.

Implementing a WMS is an absolute necessity for operators looking to automate processes and implement inventory management best practices in their DC. More than a window on inventory levels, a decent WMS gives companies the means to optimize workflows and task assignments, which in turn empowers them to improve their operation’s capacity with a smaller workforce. A well configured WMS will, for instance, reduce walking distances and minimize motion waste by maximizing the value of every step taken by workers on the floor, enabling operators to augment throughput with fewer resources.

DC operators can integrate their WMS with mobile platforms, such as iPads or other handheld touchscreen devices. Workers on the floor then benefit from system support on intuitive interfaces as they perform their tasks without wasting time—and energy—having to return to a computer station.

Thanks to these features, a WMS also helps with the onboarding of new employees. Managers by and large report that it’s easier and faster (which also means: cheaper) to train new workers when leveraging a WMS that provides them clear instructions and a map to navigate the DC.

End-users generally enjoy working with electronics. The younger generation, well trained in the ways of the handheld device, sees it as a clear improvement to a DC’s working environment. A WMS not only cuts down on the time needed to complete their work, it also gives them the sense of being more independent, more accurate, and more productive.

Far more accessible than a fully automated distribution infrastructure, and a necessary condition to the implementation of warehouse management best practices, a WMS stands as a powerful solution to DC operators looking to overcome their labor shortages woes.


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