By Craig Dowley
In 2021, roughly 33% of the non-agricultural workforce quit their jobs. It’s a new record, at least since 2000 when the Bureau of Labor Statistics (BLS) started tracking “quit” rates. Granted, 33% sounds like a lot, but this has been an emerging trend, about 28% of the entire U.S. workforce also voluntarily left their jobs in 2020. In fact, this can be more than just a new trend and reflect the new normal; and as business owners we need to pivot or risk falling behind.
For warehouses and distribution centers, there have been specific labor challenges that predate the pandemic. As recorded by the Bureau of Labor Statistics (BLS), for the industrial sector that includes warehousing, turnover rates were at 40.3% in 2016 and 44.0% in 2018. Of course, it rose even higher during the pandemic, to 59.5% in 2020.
For a few years now, the logistics sector has been offering hiring bounties to attract new employees. Some warehousing employers offer free meals, daycare benefits, education reimbursement, and other benefits to increase employee satisfaction and decrease turnover. Vimaan customers have told us that throwing money at the problem does not address it long-term, or even mid-term for that matter.
Even with these incentives, warehouses continue to struggle due to increasing competition outside our industry. Other less labor-intensive jobs are available that did not exist 10 years ago. For example, working for companies like Uber, Door Dash, InstaCart and Lyft are providing workers with a more independent work/life balance all from the comfort of their own cars. Workers are becoming their own bosses and, in many cases, making more money than they would in the warehouse.
Automation has been coming on strong to cope with these labor shortage and attrition trends. For example, order-picking is a labor-intensive warehouse task and even more so with the rise of eCommerce. Autonomous Mobile Robots (AMRs) that automate the traveling within the warehouse relieve employees of the burden of walking 10 to 15 miles per day. Studies have shown employees like the robots and appreciate being able to offload some of the dull and exhausting tasks to their mechanical associates. So, while there have been advances in automation in the area of order picking, there are other labor-intensive jobs that warehouses need to digitize in order to stay competitive, and reduce their reliance on the increasingly fickle workforce.
In contrast to the order-picking automation, maintaining accurate inventory counts has remained a labor-intensive task. Most warehouses have a goal of taking stock twice per year, and many don’t make it. Manual inventory auditing is intrusive to the day-to-day operations of a warehouse. In many cases, workers need to climb ladders and use paper-based methods to record inventory. Even if associates use handheld barcode scanners, it’s still exhausting and tedious work. It is also prone to human error. The impact of skipping audits is felt throughout the year with lost inventory, mis-shipments, missed sales opportunities, delayed order fulfillment, and costly write offs. Some warehouse managers see this as a cost of doing business, but it doesn’t have to be.
Inaccurate inventory comes with high costs. An employee tries to fill an order, relying on erroneous data. When the item is not there, the order-picker asks for help from the supervisor, who now has to take time to find the item in the warehouse. Meanwhile, the truck waits at the shipping dock for the shipment to be ready, or the production line goes idle, waiting for that missing part. All of this is wasted time, leads to unhappy customers, and, worst of all, wasted budget. This all makes inventory tracking a prime candidate for automation.
Over the last few years Vimaan has partnered closely with our blue-chip customers to understand their inventory management pains and how automation could alleviate these specific challenges. This time investment has led to the development of computer vision solutions that bring inventory tracking to a whole new level. For example, by using Vimaan tracking technology, 3 out of the top 5 distribution companies have been able to reduce their inventory audit and search related spend by 75%! Additionally, the inventory accuracy of these warehouses have universally jumped to nearly 100%, so the savings keep on coming!
Vimaan customers are seeing the great resignation as a great opportunity to stop the vicious hiring and attrition cycle. Instead of investing in recruiters, hiring bonuses and continuous training cycles, these companies have embraced automation to tackle their inventory management roles and the results have been staggering:
And most important these Vimaan customers have seen a return on their investment in months, not years!