The temporary labor pool, which many companies rely on during peak periods, is also shrinking. With a near-record number of job openings in this sector, companies are not able to hire the labor they require, resulting in the “strongest wage growth we’ve seen in half a century,” said Mark Zandi, Moody’s Analytics chief economist.
Higher wages will eventually put pressure on profit margins. Labor costs add up quickly. Higher wages, combined with the costs of continuous recruiting, incentives, and training all cut into profitability.
“Labor costs are sticky, according to Jonathon Golub, chief equity strategist at Credit Suisse. Unlike temporary increases in raw materials or goods impacted by bottlenecks in the supply chain, labor costs remain on a company’s balance sheet.”
Invest in Warehouse Automation Rather than Spending More on Labor
Instead of chasing the elusive labor market, many distribution operations are choosing to invest in material handling automation technologies. It’s a wise approach – warehouse automation systems can double or triple warehouse productivity.
However, to adapt and win in the changing labor market, distribution operations must first have a warehouse design plan that outlines leaner, less labor-intensive order fulfillment processes.
Learn More About Numina’s Warehouse Design Services
Traditional material handling automation technologies such as conveyor systems, voice picking systems, pick to light, and automated parcel manifesting using print and apply labeling are proven to increase productivity and accuracy and reduce reliance on temporary workers to meet peak demand season.
Combining traditional warehouse technologies with pallet and tote-based automated storage and retrieval systems (ASRS), along with warehouse robots such as Autonomous Mobile Robots (AMRs) that can act as collaborative robots working alongside warehouse employees, eliminates non-valued tasks such as walking and cart pushing.
Studies show that AMRs can eliminate up to 40% of non-productive daily work across the entire order fulfillment operation.
Today’s collaborative robots are flexible, easy-to-deploy, and can automatically pick up and move dozens of orders at a time, creating a highly effective work environment that operates with 30% to 40% fewer workers.
The entire spectrum of DC work becomes less strenuous and demanding, making it easier to attract, train and retain associates.
Warehouse robots, when applied correctly, can reduce the cost of traditional material handling automation. This requires using the right blend of technologies integrated into a united warehouse automation solution to streamline and eliminate non-valued labor.
Implementing AMR collaborative robots and pick and pack automation technologies such as pick by voice, AMRs, and pack automation is a proven strategy to increase productivity while reducing labor costs by 40 to 50% or more in manufacturing and distribution operations.
Voice picking technology yields a 12 to 18-month return on investment (ROI).
Pick by voice is quick to deploy and immediately increases picking productivity.
It is well suited for omni-channel picking, e-com, B2B fulfillment, and orders that require capture of lot code, serial numbers, and sell-by data.
Today’s voice technology is speaker-independent and easy to learn, which virtually eliminates operator voice training.
New and temporary workers become instantly productive.
Voice-directed pick, pack, and ship order fulfillment outperforms manual processes like paper-based picking or RF terminal-based picking with 25% to 30% gains in productivity and accuracy rates of 99.9%+ with no secondary inspection.
Pick-by-voice enforces uniform work output with the most efficient and accurate order picking process. Barcode scanning validation eliminates the need for workers to read check digits.
Employee performance can be captured by RDS’s labor management module, which measures and reports worker productivity and provides additional tools to analyze order fulfillment operation costs.
An order fulfillment operation is a three-component process that requires balanced order flow and the right technologies to eliminate labor and bottlenecks in the operation.
Faster picking requires automated pack and ship technologies, including in-line pack area automation lines that combine:
– Scan-weigh-audit
– Pack sheet print and insert
– Void fill and auto carton taping/sealers
– Automated print and apply labeling
– Shipment manifesting
Automation in packing can increase daily shipment capacity, eliminate overtime, and cut labor costs by 50%.
Numina Group has developed RDS™ WES-WCS warehouse execution and control software to manage the integration of multiple technologies, providing unparalleled flexibility and scalability.
RDS integrates with all existing and homegrown WMS/ERP systems to control tasks, execute business rules, and provide real-time control of material handling automation.
If you operate a 3PL, e-commerce, omni-channel fulfillment center or manufacturing distribution operation, investment in automation is now more justifiable, with a faster ROI than ever before. To compete in the on-demand market and to remain profitable, a warehouse operation needs to be less dependent on manual processes.
Numina Group can show you how to make this happen. As a warehouse automation company with 35 years of experience, we offer the in-depth application know-how and software expertise necessary to ensure that your automation investment is successful.
We collaborate with clients to define and develop order fulfillment process improvements. As an independent system integrator, we help you evaluate, select, and implement the optimum blend of automation technologies for your operation.
Learn More About Numina’s Systems Integration Services
With this approach, we’ve helped numerous companies reduce their dependency on an unpredictable labor market, quickly adapt or scale to meet changes in demand, and increase throughput and profitability across their entire distribution operation.
The Numina Group is here to help. Call (630) 343-2600 or Fill out a Contact Form to arrange a complimentary site consultation.
