In pandemic times, DC managers rethink their labor strategies
As warehouse workers juggle Covid safety policies with productivity goals, employers are recalibrating their labor management software to reflect the new reality.
Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
The coronavirus pandemic has created challenges for almost every aspect of logistics operations, forcing companies to balance the competing demands of keeping workers safe and keeping inventory flowing. Now, with the country entering its ninth month of pandemic-influenced operations in November, many organizations are finding solutions in logistics technology.
In the early days of the Covid-19 pandemic, distribution centers focused on making basic tweaks to their operations to ensure worker safety. For example, many DC leaders used their warehouse management systems (WMS) to adjust workflows and maximize social distancing by limiting the number of pickers allowed in a zone at one time or creating one-way aisles to avoid traffic congestion.
But employers quickly discovered that those safety measures had an unintended consequence: reduced productivity. Forced to follow longer pick paths or take turns at pack stations to avoid physical contact with co-workers, employees could no longer hit the productivity targets of a pre-pandemic era.
With the old goals now out of reach, DC leaders realized they had more software adjustments to make. In addition to tweaking their warehouse management systems, they would also have to adjust their labor management software (LMS)—long used by warehouses to measure employee performance and calculate compensation—to reflect the new realities.
“Covid will limit throughput,” says Fab Brasca, global vice president for global solutions and presales at Blue Yonder, a Scottsdale, Arizona-based logistics software vendor. “Labor management software accounts for the standards of an activity, so users need to layer in adjusted expectations accounting for the new normal.”
That need for LMS adjustments may extend beyond the DC labor force, says Peter Schnorbach, senior director of product management for the logistics technology provider Manhattan Associates. Companies might also find they have to adjust their LMS platforms to account for creative workarounds they devised during the pandemic, such as using retail stores as fulfillment centers. That, in turn, may present additional challenges, since retail store associates have long argued that they can’t be held to the same standards as warehouse pickers due to interruptions by shoppers in the building. But employers will just have to find a way to adapt, Schnorbach says.
ENGINEERING SYSTEMS FOR SAFETY
Software developers have taken note of these developments and are adapting their software in response. For example, Blue Yonder says the latest version of its logistics software, known as Luminate, allows companies to make labor standards adjustments fairly easily because it applies dynamic processes as opposed to set rules, allowing for real-time reprioritization.
Under that approach, customers can set a new “preferred method” for a given warehouse activity—such as requiring pickers to go to the very end of an aisle instead of doubling back—and change the time goal accordingly. Previous generations of LMS software would have required companies to conduct engineering studies, measure the efficiency of the new process, and make those changes manually, Brasca says.
Another way that employers can adapt their LMS platforms to the new workforce realities is by building tighter integrations with WMS software, says Dan Gilmore, chief marketing officer with Softeon, a Reston, Virginia-based supply chain software vendor.
The company offers a tool called “distancing-enabled task management” that combines the timing and labor standards of an LMS, the task-management ability of a WMS, and digital warehouse maps drawn from computer-aided design (CAD) files. When used in conjunction with wireless real-time location system (RTLS) tags worn by workers, the system allows managers to know where every employee is, where their next pick will be, and how fast they’ll reach it, Gilmore says.
“If one worker is still in an aisle, we could broadcast a message to a second worker, saying ‘Do not enter that aisle; don’t go to the assignment yet because the worker ahead is not [finished].’ So we will never allow a picker in a narrow-aisle situation to overtake the first picker,” Gilmore says. “Or we could allocate inventory from a secondary location even if it’s slotted a little farther away and dynamically vary the order of picking in real time.”
Like other experts, Gilmore says the new approach may not be quite as fast as previous practices, but it will allow DCs to continue operating while also keeping workers safe. “You’re probably going to take a little bit of a hit on productivity,” Gilmore says. “But taking a little bit of a hit on productivity to avoid shutting a warehouse down for deep cleaning is probably a pretty good investment.”
KINDER, GENTLER MANAGERS
At the same time they’re adjusting their labor standards—and labor management software—to reflect the new pandemic-era realities, many managers are also adjusting their style. Faced with a severe shortage of labor, they’re doing everything in their power to coax fearful employees to show up for work. To that end, they’re relaxing their usual rules—and in some cases, suspending their absence and tardiness policies—to encourage employees to keep coming in, Schnorbach says.
The question now is, are these changes here to stay? Companies may view them as temporary measures. But workers may decide they like the new normal and resist attempts to reimpose the old standards once the pandemic subsides. And now that the balance of power has shifted, it’s anybody’s guess who would prevail.
“It will be interesting to see what happens with labor in the long term,” Schnorbach says. “Going into the pandemic, our customers were seeing an enormous shortage of labor. And now workers have gained a little leverage because [companies] have realized how important it is to have them in the building.”
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.