Current Trends and Business Challenges in Supply Chain Labor – Part 1

Last week, several Connors Group Consultants were in Chicago for the JDA Autonomous Supply Chain and Workforce Labor Summit. As a sponsor of the event, we were very pleased with the turnout and content. The speakers presented case studies and industry insight that helped frame deeper conversations with our industry peers and clients.

During our panel discussion, Connors Group provided a summary of the Current Trends and Business Challenges in Supply Chain Labor

Here is what we are seeing…

Staff Sourcing and Retention is a recurring challenge for all industries, but retail and distribution seem to be feeling the brunt of the tight labor market. High-quality workers are hard-to-come-by and turnover continues to escalate as workers leave for higher wages, the promise of better schedules and work environments…Some of the trends we are seeing to address staffing and retention issues are employee engagement initiatives, performance recognition, schedule equilibrium, and reward programs.

Another challenging area is with Forecasting Labor Demand. Inaccurate forecasts are causing wide swings in labor demand, primarily at the day level, but weekly challenges also exist. We are also seeing an uptick in special events and promotions becoming more difficult to accommodate using current forecast models…To remedy this, most of our clients are seeking assistance in researching and implementing systems that can forecast a variety of complex labor models and scenarios, no matter what time of year or event.

Schedule Optimization is also an issue… “We have heard several DC managers say that they still create schedules like they did in the 1950’s, with fixed shifts, that neither adjust for demand, nor easily accommodate for the changing labor market.” Says, Ty Law, Senior Director and Labor Specialist. He adds, “The workforce management scheduling systems coming to this market both optimize shifts based on labor demand as well as generate schedules that are equitable for the employees – which helps drive retention”.

The bottom line…

Labor continues to be the largest controllable cost in warehouses and distribution centers. As a result, companies must continuously reassess their current processes and technology, while looking for new ways to maximizing the value they get from their labor investment.

In Part 2 of our follow-up, we will discuss the specific ways that best-in-class companies are tackling these challenges in the workforce today.

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Jonathan Huesdash, industry thought-leader and Director at Connors Group, leverages his deep experience both in distribution and consulting to craft innovative workforce management and execution solutions for clients. He can be reached at [email protected]
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