Ensure Your 2021 Warehouse Is Prepared for Disruption

Nov 12, 2020

Short-Term Changes with Long-Term Impact
Many companies went into survival mode in the early months of 2020 as they struggled to deal with the impact of the COVID-19 pandemic. For some, there were surges in demand. For others, orders completely dried up. 

Warehouse facilities had to weather temporary shutdowns, employee layoffs, and furloughs in order to right-size workforces. Some saw spikes in demand while simultaneously having trouble getting employees to show up for work. In both cases, operations managers needed strong cost-control measures wherever possible. Unfortunately, running with reduced teams often meant having associates complete tasks they hadn’t been trained for, leading managers to relax or even abandon expectations for how well jobs were performed. IT seemed supply chain best practices would just have to wait. 

New Challenges in Workforce Retention
Now we are transitioning to life in the COVID-19 era, and many of 4SIGHT’s customers are beginning to ramp back up in new ways. Exiting survival mode means businesses need to once again focus on the total cost to deliver. But warehouse managers are finding the supply chain environment has changed dramatically in several ways:

· Previously furloughed employees are not returning because they have found opportunities at new facilities (i.e., Amazon) with higher wages.

· Warehouses are not running as efficiently as they used to because relaxed standards have become the norm. The need for workers to don additional personal protective equipment (PPE) can also delay the start of a shift or hamper efficiency.  

· Some operations must now include new steps to meet requirements related to COVID protocols, such as additional bagging or tagging tasks.  

Make Your Warehouse More Competitive—and Flexible
As you look to update how your facility and workforce run, you’ll benefit from increased flexibility overall. This could be in the form of re-evaluating your processes and procedures, or you could look to a Labor Management System (LMS) and engineered labor standards for maximum benefit. An LMS will enable you to model what operations would look like if a portion of your workforce has to be quarantined for a period of time, or if you have to shut down for several days for thorough cleaning. 

Real-World Examples

· Grocery: We work with a grocery chain that’s struggling to keep its employees now that an online retail giant has opened a new warehouse nearby. This has led the chain to have to raise wages in the warehouse, which necessitates savings in other areas. They’re looking to an LMS to manage individual standards and calculate individual pay-for-performance incentives for warehouse associates as they strive to create a better working environment than the competition.

· Automotive: A leading automotive company shrank its workforce to a skeleton crew during the initial stages of the pandemic when demand disappeared. Now buyers are back, but they need to re-evaluate the efficiency of their operations to protect against another downturn, and technology will be key.

Benefits of Introducing Labor Standards and an LMS

· Implementing standards that are fair and attainable is a great way to retain employees. A predictable working environment free from the pressure of unattainable standards is a major plus for workers.

· Recognizing jobs well done goes a long way toward creating an environment where employees are comfortable and loyal. 

· Introducing a labor management program where supervisors act as coaches enhances the workday for everyone. The positive word of mouth this can generate may give you an opportunity to recruit from your neighbors that run warehouses like sweatshops. In fact, Reveal News recently reported that Amazon has a mounting worker injury crisis.

· Evaluating opportunities for continuous improvement and making sure you’re maximizing your use of existing material handling equipment (MHE) also helps make the most of limited resources.

· All of the above are essential to building a strong foundation for a pay-for-performance incentive program that creates a win-win for both the employer and the employee.

Don’t Overlook the Value of Interpersonal Relationships
Remember that there is still an important supervisor-employee interaction that should happen in warehouses. It’s the people element. It may sound old school, but it works. Technology shines a light on where to spend time and effort for particular tasks, but people still want to talk with others and feel they’re doing a good job at the end of the day. 

Prepare for the Long Haul with COVID
As we get closer to 2021, there is still a tremendous amount of uncertainty when it comes to the supply chain. Now is the time to take stock. 4SIGHT can help you streamline and standardize your processes and procedures with a fresh set of eyes.

Particularly if you have fewer people to train or retrain, it may be the perfect time to evaluate how an LMS could enhance your daily operations. Contact 4SIGHT today to help you begin your operational assessment. It’s a new world out there, and we all have to make adjustments to how we do business.

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