CIFFA was a sponsor and exhibitor at the recent Distribution
Logistics Summit which took place November 5 and 6 in Brampton, Ontario.
Julia Kuzeljevich, Public Affairs Manager, led a discussion on the topic of Labor: Fulfilling the Next Generation, which discussed how the warehousing, and the related labor market, are changing rapidly, including recruitment, retention, adaptability, and evolving skill sets.
Discussion also revolved around e-commerce pressures and
The speakers were Paul Jan, a Managing Partner with Tevah
Advisory, and a Supply Chain Strategy Instructor, UC Irvine, Ryan Susteras,
Owner, ZiggyJobs, which aims to create an On-Demand Workforce for the supply
chain industry, and Derek Lynch, Director, Sales, with Dematic.
The warehousing industry faces a near-constant shortage of
workers and an aging population, with a third of the workforce over 65.
According to a 2019 U.S. study on statistics around
warehouse trends, warehouses and DCs can experience up to 15% turnover, and
nearly half of all new hourly warehouse workers abandon their jobs within the
first three months.
Also, the direct cost of replacing a warehouse worker can
reach as high as 25 percent of the resource’s annual salary. E-commerce is
amplifying the effect with its more complex customer requirements.
According to 2019 US Supply Chain Warehouse Trends, the
usage of paper-based systems decreased to 48%, labor management system use increased
to 15% and the use of WMS increased to 93% for the first time.
In this climate, the productivity of warehouse workers
Automation is being adopted in many settings but it doesn’t
necessarily mean elimination of jobs, but the potential for improvement. Automation can play a role in taking away the
undesirable and dangerous jobs, and improving/assisting picking accuracy.
Even taking into consideration situations where automation
can be applied, peak season volumes often mean that human labor is always
So there is some focus on making the warehousing industry
appealing to a more “transient” workforce that is interested in temporary,
seasonal and stop-gap employment, at least in the “lower end” positions.
Says Ryan Susteras, “We’ve been in a situation where there
has been shortage of staff for a long time. Maybe focusing on retention is not
the thing to do. We should start thinking about adapting to the flexible
workforce,” he said. Companies need to know how to optimize in terms of their
The idea of an “on-demand workforce” is one that has a pool
of available labor that have been verified, and is more readily accessible via
an online database vs. a time-consuming paper process.
“On-demand” is not as established for the Canadian supply
chain, Susteras said, but has been more widely used in the U.S.
According to the panelists Canadian businesses are often
late to follow some trends.
Paul Jan noted that Canadians take more of a wait and see
attitude on results, for example automation.
“We want to see someone else try and test things before we
take a chance. Canadians are generally late adopters,” said Susteras.
But there has still been a huge appetite for ramping up
automation in the last five years, he added.
Early adoption of automation is in areas such as voice
picking, and there is a smattering of vision-enabled technologies being tested
in the warehouse environment, said Lynch.
“Automation can be as low-level as moving from paper-based
to voice picking,” he said.
As you go up the chain of complexity of technologies, it’s
toward mobile robots and other more sophisticated applications.
In the e-commerce warehouse environment, people are adapting
to many of the technologies which are easy to grasp and can be especially enabling
for the disabled or the aging workforce.
What makes for a successful implementation of automation?
“The company has to understand its business case, and giving
employees the clear picture of what you want to achieve helps the
implementation,” said Jan.
“If you decide to go down the automation path it will work
best if you communicate to your staff why you have decided to make this
decision,” Lynch said.
“Make sure that the right person is responsible for
training, or you’re setting yourself up for disaster,” Susteras said.
The timing is good with regard to the new technologies in
terms of attracting a younger workforce.
“These are the right people to figure it out,” said
Jan said that with the younger generation, the technology is
an appealing draw, but beyond that lies the opportunity for collaboration and
interest in becoming supply chain leaders.
The “gamification in the industry” means that a lot of the
technology is intuitive.
How do you train to that?
It’s about integrating different working styles.
“It’s about engagement more than anything,” said Lynch.
The metrics that can be built and the data that can be
harnessed boils up to a persona that gives better insight into the overall
network of the operation. And the transparency of productivity that can be
measured can be a motivating factor for employees (albeit also a source of
How do we reach out to potential new hires for warehousing?
The way to do this is to focus on the technology aspects
which make the job attractive, and on the potential for a job that comes with a
flexible work environment, for that population that is trying to get into a
first job or add a part time job as a sideline to something else, said
What will continue to need a human touch in warehousing?
In the context of automation, those boundaries are really
changing daily, said Lynch.
The human touch is always needed to handle the “uglies”,
i.e. items that could be seasonal and require specific handling, like canoes,
and those sorts of things that will still rely on forklift drivers.
There is always going to be a segment of the volumes going
through the DC that’s going to need a human interaction.
In grocery DCs, for example, with automated palletization,
automation in freezers is a great result for “staffing” an area where fewer
people want to work.