Labor is the single largest operating expense in most warehouses, eating up 50% to 70% of the total budget, according to a Bostontec study. And it’s only getting more expensive. The average cost per hire jumped 14% in just four years, from $4,129 in 2019 to $4,700 in 2023 (SHRM).
Meanwhile, distribution centers and manufacturers continue to grapple with a shrinking labor pool, rising turnover, and the need to meet growing customer demands. Many try to bridge the gap with overtime and temporary workers, but those solutions come with significant tradeoffs. Overtime inflates payroll costs and leads to burnout, while temp workers require additional training and supervision, often delivering lower quality performance.
A costly cycle of inefficiency, low morale, and higher recruitment spend is the result.
Warehouse automation can cut labor costs while offering a smarter, scalable alternative to traditional labor-heavy models.
Higher wages and hiring difficulties have prompted many businesses to consider automation to mitigate challenges brought on by:
Labor shortage and high turnover
Distribution centers and manufacturers are struggling to find and retain qualified workers, especially during peak seasons. Temporary employees are often unreliable and lack required skills.
Rising labor costs
Higher costs are associated with overtime and temporary staffing used to cover labor shortages.
Increased order volume
As businesses tap new markets, higher order volumes and faster fulfillment deadlines put added strain on existing employees.
Elevated customer expectations
Today’s buyer demands a fast and reliable purchasing experience; any delays can damage the customer relationship and company reputation.
Higher error rates
When warehouses rely heavily on manual processes or fluctuating labor sources, mistakes increase, leading to more order discrepancies, returns, and dissatisfied customers.
Safety concerns
Inconsistent staffing in warehouses contributes to more workplace accidents and injuries, driving up costs and downtime.
Labor shortages and rising costs are straining distribution operations. On top of manual picking, packing, and shipping, warehouse pickers often spend up to 60% of their day walking, some covering as much as 12 miles per shift.
That’s wasted time and energy that doesn’t contribute to the bottom line.
To stay competitive and meet customer expectations, warehouses must streamline labor through automation. Here’s how:
Reducing labor dependency is the most effective path to cost savings and improved throughput. To accomplish this, businesses need to eliminate non-value-added human intervention and optimize warehouse processes.
To begin, we recommend developing a project roadmap that outlines strategies and process improvements needed to streamline operations.
Numina Group uses an engineering design study to assess current distribution center (DC) processes and define clear objectives. The study will benchmark end-to-end order flow to identify opportunities for improvement that optimize processes and improve cash flow.
This approach enables us to identify process improvements and “engineer out” wasted steps and manual touches via:
This data-driven design approach helps us determine the automation technologies that offer the best value for your warehouse improvement initiative.
Gathering data before selecting technologies is vital. This helps stakeholders and decision-makers, like the CFO, ensure the automation investment aligns with the following company goals:
The data can be used to create a smart warehouse with technology that reduces human error, lowers injury risk, and improves throughput. Some examples of these automated technologies include:
You may be wondering how to get the most out of these technology solutions and create a seamless workflow?
Automated technology combined with intelligent software is the solution.
Our Tier 1 WES-WCS platform enables a low-touch pick, pack, and ship process that optimizes order release, maintains continuous order flow, and executes critical order shipment based on cube, weight, and priority shipment logic.
Warehouse Execution System (WES)
Order orchestration is the process of optimizing release and cantonizing orders in waves or batches along automated workflows that increase picking rates, and meet time-sensitive shipping deadlines. Falling short on these commitments can damage customer expectations and company reputation, resulting in lost customers.
A key issue in warehouse automation is choosing the right software to optimize your warehouse automation. That’s why we developed our Real-time Distribution (RDS™) WES software, the answer for an efficient, paperless order release orchestration process.
Capabilities include:
Warehouse Control System (WCS)
Without real-time control of automation, warehouses can’t obtain the full benefits of optimized order release. That’s why our comprehensive RDS™ Warehouse Control System (WCS) is critical for warehouse efficiency.
Capabilities include:
When integrated with your existing ERP and/or WMS, you can experience seamless labor synchronization across operations with Numina Group’s RDS WES-WCS.
Order orchestration solutions like our WES system coordinate the movement of people and orders simultaneously to achieve timely and accurate order fulfillment. When combined with automated technologies like pick-by-voice, pick-to-light, AMRs, G2Ps, and conveyor systems, you can achieve:
Want to learn about how our solutions help businesses like yours? Green Rabbit partnered with Numina Group to double productivity for rapid growth.
Here’s what we did:
Challenge: As Green Rabbit’s order volume skyrocketed from hundreds to tens of thousands per day, their paper-based, manual fulfillment processes could no longer keep up.
Solution: Green Rabbit selected The Numina Group to design a new Indianapolis-area distribution center and identify scalable automation solutions. Following an engineering study, Green Rabbit deployed pick, pack, and ship automation managed by the RDS™ WES-WCS Real-Time Distribution Software suite in three distribution centers. It offers flexibility, scalability, and strong ROI.
Results: Green Rabbit doubled order throughput, achieved their goal of a one- to two-day delivery window across the United States, and experienced 99.9% order accuracy. This order fulfillment automation provided the ability to increase capacity by several million orders a year across their network of distribution centers.
Read the customer success story.
If you’re looking for a solution to counter a limited labor force and amplify productivity, automated technology is the way to go. Numina Group can help you reduce costs, boost throughput, and improve the profitability of your warehouse, all with faster payback on your investment.
Contact Numina Group to assess your labor-saving automation strategy today.
