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Optimizing warehouse efficiency with labor standards

Originally published on July 11, 2024, Updated on July 11, 2024
Optimizing warehouse efficiency with labor standards
One of the biggest problems fulfillment organizations face is attracting and retaining workers. Turnover is notoriously high, and, like with any job, new employees need time to get up to speed on their responsibilities, which can take a toll on the overall efficiency of a warehouse.

Today’s fulfillment organizations are looking for ways to enhance worker productivity and reduce problems associated with turnover, including worker injuries, mistakes, and higher costs. One such method is labor standards.

Setting labor standards helps warehouses root out inefficiencies and set baseline expectations with their teams. Over time, labor standards can reduce workplace injuries and decrease errors that harm a fulfillment center’s reputation.

Understanding warehouse labor standards

In the context of warehousing and fulfillment, a labor standard refers to the time it takes a trained employee putting in average effort under normal operating conditions to complete a specific task. Labor standards are critical to fulfillment organizations since they provide a benchmark to evaluate worker efficiency.

Historically, it was quite difficult for fulfillment organizations to set meaningful labor standards since they lacked the ability to collect complex data at all points of the fulfillment process. Many companies set arbitrary standards for their employees, while others relied on historical data gleaned from a warehouse management system or relied on time studies conducted by consultants.

Today’s tools, including AI and predictive analytics, make it much easier to establish realistic labor standards based on accurate data.

Current challenges in warehouse labor management

Many warehouses constantly battle issues stemming from unstandardized labor practices and high turnover.

One such challenge is the choice between batch picking vs wave picking. How do you decide on a picking method? Both batch picking and wave picking offer strong advantages, but the best choice will vary based on the specifics of your warehouse.

If wave planning isn’t properly managed, it may lead to higher costs and reduced warehouse efficiency. During a wave planning “peak,” the workforce operates at full efficiency, while “lulls” may leave workers with extra time on their hands.

Watch the video above to see Logiwa IO’s Jobs & Waves functionality is where scheduling meets smart automation, ensuring every step in you fulfillment center is optimized

Another issue is labor planning. Warehouses need enough employees on hand to manage busy periods. Employees may overwork themselves if staff isn’t available, increasing the risk of injuries and errors.

Employee turnover is another big concern at warehouses. Whenever workers leave, a warehouse must find replacements and train them. The training period may last anywhere from a few days to months, depending on the worker’s responsibilities and existing skill sets. One way

Warehouses can be dangerous places, especially for workers handling heavy items, machinery, and equipment. Implementing labor standards can help improve workplace safety since workers learn the best practices for doing their jobs.

The role of technology in enhancing labor standards

Technology is finding a new home among warehouses seeking to improve worker performance, safety, and efficiency. The latest developments in artificial intelligence and predictive analytics make it easier than ever to provide workers with the tools to perform their jobs at their maximum capabilities.

Analytics and automation make forecasting labor needs and capacity less error-prone. Analytics software can review incoming orders, seasonal data, and labor performance metrics to optimize shift scheduling and batch processes. Data analysis using predictive analytics is fast and less susceptible to the errors that tend to occur with manual analysis.

While much of the focus on AI so far has been on its generative capabilities, it is particularly beneficial for warehouses. Powering analytics with AI can significantly enhance forecasting capabilities, helping to catch errors and prepare accurate data.

Developing and implementing effective labor standards

Establishing new labor standards requires a comprehensive approach. Here are a few steps to get started.

1. Assess current conditions

Start by evaluating the overall worker performance. How do workers handle their tasks? Are there better techniques that could save time or improve warehouse safety? Think in terms of establishing key standards or best practices for employees to follow.

2. Hold employees accountable

After narrowing down the best practices for each role, explain them to your team. Everyone should have a standard to meet, from pickers and packers to warehouse managers. Tell employees how you plan to track adherence to the new best practices and standards and why you’re implementing them. When workers understand your reasoning — saving time, reducing costs, enhancing productivity, and improving warehouse safety — they’re more likely to adapt to the new rules.

3. Provide an incentive to get workers on board

Established warehouse workers may need encouragement to adopt new practices, especially if they’re set in their ways. If your organization allows it, you might provide an extra incentive for meeting or exceeding labor standards, such as a small bonus or other personal recognition.

4. Measure individual performance

As you cement your new labor standards, collect data to evaluate individual performance. You can separate each worker’s tasks and then set key performance indicators for average performance based on historical data. Then, compare actuals to benchmarks to identify top performers and workers who may require additional training.

Benefits of optimized labor standards

Setting clear labor standards and implementing them throughout a warehouse makes evaluating employee and location performance much simpler. The benefits have a trickle-down impact on the overall company to individual employees.

Labor standards can improve employee productivity dramatically. When employees understand the best practices for performing their jobs and stick to them, warehouses see an uptick in efficiency. There are far fewer picking and packing mistakes, discrepancies in labor planning, and worker injuries.

Fulfillment centers may see reduced inventory carrying costs as employee performance improves. All the cost savings obtained from labor standards make investing in further enhancements, including AI, predictive analytics, and automation, easier.

Future trends in warehouse labor management

The future of warehouse labor management lies in the continued assimilation of AI, automation, and robotics. The development of robots or cobots using AI can aid in performing basic warehouse tasks, including directing workers to specific picking locations or using camera feeds to identify safety hazards on the warehouse floor.

Robotics that rely on AI may be able to pick some items and bring them directly to workers for packaging, reducing the time spent traveling between locations. As technology develops, robots may perform exceedingly difficult tasks with less human intervention.

Today, little regulation exists concerning AI usage and implementation. In future, as the impact of AI becomes more apparent and companies adopt it in different ways, governments may introduce new rules to safeguard the technology. As always, warehouses and organizations remain responsible for adhering to labor laws and protecting employee and employer rights.

Implementing labor standards enhances warehouse performance

Warehouses often suffer from low employee retention and high turnover levels. Increased turnover makes it very hard to maintain steady optimum performance, but fulfillment organizations can take charge of the issue by developing labor standards. With set labor standards, all employees understand the best practices for getting things done the right way during their shifts.

Logiwa’s automation technology and strategic warehouse fulfillment management system can help fulfillment centers maximize employee efficiency. To learn more, schedule a demo with a Logiwa fulfillment specialist.


FAQs about warehouse labor management

What are warehouse labor standards?

Warehouse labor standards define the amount of time an individual takes to complete specific warehouse tasks, such as picking or packing, under normal operating conditions.

How can warehouses improve efficiency?

Warehouses can enhance efficiency by adopting labor standards for typical employee tasks and sharing best practices to ensure employees perform their jobs effectively. Technology solutions, including predictive analytics and automation, can complement labor standards and make it easier for warehouse management to forecast labor needs.

How is AI used in warehouse management?

Predictive analytics warehouse models powered by AI can accurately forecast labor needs and staffing requirements, eliminating labor shortfalls and overhiring.

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