Trending Now

Building a Resilient Supply Chain with Advanced Predictive…

New Articles

The Labor Shortage is the Next Major Issue Facing the Supply Chain

labor shortage
3pls, Archives, Global Logistics, Global Trade Daily

The Labor Shortage is the Next Major Issue Facing the Supply Chain

Leave a comment

The labor shortage is fast becoming the next significant problem for the supply chain. Many frontline warehouse employees fall into the category of shift workers who have yet to return to the workforce, even as the economy bounces back, and the demand for workers still continues to climb. While these critical jobs remain difficult to fill, employers are focusing on optimizing the labor force they have and introducing incentives and employee recognition programs to keep the team they do have engaged and happy. 

A particularly painful category of workers that’s in short-supply and high demand is supply-chain planners. Now, in addition to having to manage the current logistics issues and shortages, employers are having to figure out how to fill the position that would have traditionally helped alleviate some of these bottlenecks or re-allocate duties to current employees who are likely already overworked. With job openings close to a 20-year high, supply chains are struggling to keep up with a new boom in consumer demand.1  

The labor shortage within the supply chain will ultimately end up costing manufacturers and the end customer more money as distribution teams continue to be backlogged and understaffed. While manufacturers and suppliers work to hire and train as quickly as possible, many are utilizing supply chain visibility tools to alleviate the strain of labor shortages within operations. With much of the strain falling on frontline employees, real-time warehouse visibility is more important than ever.

Industries Where Labor Shortages are Having the Greatest Impact 

Several companies, from fast food chains like Chipotle Mexican Grill, Inc. to chicken producer Pilgrim’s Pride Corp., and MGM Resorts International say they can’t find or even attract enough workers.2 In addition to the hospitality and warehousing industry suffering labor shortages, the automotive industry is also experiencing their own shortages due to reduced demand due to the chip crisis.3 Short-term shutdowns to sanitize facilities combined with difficulties hiring workers continues to cause strain and slow down growth for manufacturing.4 Because of this, many companies are now turning to labor management visibility for a better understanding of how to utilize their existing workforce more efficiently.  

Labor Management Solutions Producing Measured Success 

When short-staffed, it’s imperative to make smart decisions about the different tasks and activities being allocated to each employee inside the warehouse. Incorporating a warehouse visibility tool focused on labor management allows employers to see how the workforce is performing at the company, region, warehouse, shift or any other level defined in real-time. Having the ability to drill-down into the metrics and pinpoint measured versus unmeasured work issues helps identify the next steps needed to optimize labor utilization and productivity.  

Having a labor management visibility solution in place also provides real-time insight into those employees that are going above and beyond their assigned job functions. Employee recognition, pay for performance, and high-performance incentives for employees is more important than ever before to keep the existing workforce satisfied as well as engaged with their work. 

In a recent Rebus by Longbow customer case study, it was reported that the implementation of a labor management visibility solution enabled labor sharing across multiple sites, which reduced the need for two full-time equivalent employees per site as well as most of the overtime hours. This ultimately equated to 9% in labor savings equating to $1.3 million.5 

Intelligent Labor is the New Normal  

In the era of the “New Normal”, many of the former workforce remains unable to return to work due to health fears or the inability to find child or elder care. Because of this, it’s more important more than ever to utilize warehouse visibility and labor management tools to optimize productivity. The important thing to remember is to find an appropriate labor management system that is built for measuring tasks on the floor, not just reporting on them.  

With this enhanced real-time visibility, warehouse operators will be able to see where they can reallocate their labor force on the spot to maximize daily supply shipments in order to fulfill more orders each day.  

___________________________________________________________________

Alex Wakefield is the CEO of Longbow Advantage with over 20 years of experience in supply chain technology and implementations including leadership roles at IBM and Blue Yonder (formerly JDA/Red Prairie). His focus is on enabling distribution teams to better manage, leverage and action their data across the supply chain through the use of Rebus, the only real-time warehouse visibility and labor platform purpose-built for the supply chain. 

 ____________________________________________________________________

Sources: 
1: https://www.bloomberg.com/opinion/articles/2021-04-30/labor-shortage-rising-costs-supply-chain-hiccups-hit-manufacturers    
2: https://www.bloomberg.com/news/articles/2021-05-06/companies-warn-of-u-s-labor-shortages-economists-call-temporary  
3: https://www.autonews.com/manufacturing/plants-big-worry-missing-demand-because-chip-crisis  
4: https://www.industryweek.com/the economy/article/21156586/manufacturing-in-february-rapid-growth-checked-by-supply-hurdles  
5: https://meritmileinc-my.sharepoint.com/:b:/g/personal/jsternal_meritmile_com/EV7ZODTg1mhKrTWuE31cOw0BVB2L85t–qJckupxvHaWPg?e=Uu1KM0 

supply chain issues
Archives, Global Logistics, Global Trade Daily, Warehousing

What Warehouses Can Do to Minimize Supply Chain Issues

Leave a comment

While the integral Suez Canal supply channel is no longer blocked, other supply chain issues remain. In fact, according to a recent report, 24 container ships – with a combined maximum carrying capacity nearly 10 times that of the Suez Canal ship – were recently anchored off the coast of Los Angeles and Long Beach holding up millions of dollars worth of cargo.1 While both instances of bottlenecks took place within days of each other, these traffic snarls are not the primary culprit of clogged supply chains. 

While shipping and data today are an important part of building successful logistics operations, these areas alone cannot solve real-time supply chain issues. If logistics operators and organizations don’t have the proper visibility into their warehouse data and operations, they are unable to make quick changes in response to supply chain snarls and backlogs. The lack of complete end-to-end visibility was also a reason so many manufacturers and suppliers suffered during the pandemic.2 Unfortunately for many organizations, this real-time visibility gap starts in the warehouse. 

Bridging the Gap Starts in the Warehouse

Various factors are being blamed for the recent supply chain disruptions – the size of ships and containers, congestion at the ports, and how narrow the canal channels remain. In fact, the Port of Los Angeles in North America is one of the busiest channels, but can’t regularly receive 20,000-container vessels due to the lack of infrastructure.3 Even so, fixing any one of these factors will not truly solve the primary causes of supply chain backlogs. 

Enhanced visibility technology into the warehouse, yard management and labor resources is yielding both time and cost savings for companies dealing with supply chain backlogs. For example, real-time access to data to determine which trucks have been sitting and for how long has become key to prioritizing and assigning tasks within the distribution center to improve customer fulfillment, minimize risks, and avoid costly and unnecessary fees. But without real-time visibility into the yard, appointments can get de-prioritized, delayed or missed. The warehouse is the heart of the supply chain, yet very few end-to-end tools are solving the problems of warehouse visibility and labor management. 

Shifting Supply Chain Strategies

While the warehouse is already the most technologically advanced area of the supply chain, it’s the transportation network within the supply chain that usually incorporates real-time data tools, leaving a massive gap in end-to-end supply chain visibility. Most operations find that there are simply too many data points and too much information to process to create real-time views that don’t time out and that are actionable when distribution teams need to make point-in-time decisions. Warehouse data without science is just noise, and analytics without actionable insights is just a spreadsheet. Shifting the strategy to fill the gap includes a series of industry-standard KPIs, live operations views, productivity metrics, inventory visibility, and labor management that’s actually helpful to enhance Warehouse Management Systems (WMS) already in place.  

As evidenced with the recent blockages, the impact of this lack of real-time warehouse visibility on the global supply chain is still in critical condition. What’s more is that even without substantial issues like canal blockages or a global pandemic, the supply chain regularly suffers from thousands of “mini disruptions” that both distribution operations and customers end up suffering from as a result.4 Without supply chain visibility tools for the warehouse, manufacturers, and suppliers suffer the same consequences from that of a channel backlog or global pandemic, but on an ongoing and daily basis.  

Supply chain executives must incorporate real-time warehouse visibility in their end-to-end supply chain optimization strategies to increase overall distribution efficiencies and reduce risks associated with problems from within the warehouse that arise not only from blocked canals, but from unseen blockage within their own four walls.  

________________________________________________________________

Alex Wakefield is the CEO of Longbow Advantage with over 20 years of experience in supply chain technology and implementations including leadership roles at IBM and Blue Yonder (formerly JDA/Red Prairie). His focus is on enabling distribution teams to better manage, leverage and action their data across the supply chain through the use of Rebus, the only real-time warehouse visibility and labor platform purpose-built for the supply chain.