Chapter 2: Managing Warehouse Employees: Best Practices and Procedures
Labor logistics are a fundamental part of managing a warehouse. Yet on the surface, labor demands can seem like challenges or burdens on a bottom line, with labor-related expenses making up one of the most significant costs of operating a warehouse. Managers often feel a tug-of-war pressure to keep operating expenses reasonable while also fostering a good environment for employees — one that attracts committed workers, retains necessary talent and justifies how your warehouse fits in the supply chain.
How do warehouse managers negotiate all this? How do they support employee needs, education and training while keeping budgets cost-effective and competitive?
Warehouse labor — temporary and permanent — falls under the “handling” segment of warehouse management best practices. Typical warehouse labor costs include:
Overtime pay policies
Employee benefits, such as health and life insurance
Employee perks, such as paid vacation or paid sick days
Taxes, FICA, workers compensation and unemployment
Warehouse employee training
Other financial bonuses if in place, like education allowances
Strategies to Improve Warehouse Employee Output
There are solutions even amidst the pressure on warehouses to keep operating costs tight — solutions that justify labor costs not by trimming or downsizing them, but by hacking current employee output.
Managing warehouse employees can begin seeing advancements with the following output-improving strategies, some of which you can adopt today:
1. Advanced Operational Equipment
In a 2017 Peerless Research Group industry survey, 54 percent of warehouse managers said they intended to invest more on material handling systems and related technology across the next two years.
Innovative or updated material handling equipment can boost the number of units organized and moved on your warehouse floor without hiring more employees. This means an increased number of units handled per hour and an increased per-employee output — all music to a manager’s ears.
You don’t have to break the bank with operational equipment, either. Improvements can be made in stages. Or you can focus solely on updating the basic operations of your warehouse, such as better pallet stacking and moving or small-scale conveyers installed in strategic places.
2. Inventory and Spatial Reorganization
Warehouse floor shelving and storage arrangements are simple yet effective ways to heighten worker capabilities. Consider the way you organize storage shelving alone — Are the most in-demand products located front and center on the warehouse floor? Is stock clearly labeled and organized?
What about the shelving heights where products sit, or their physical arrangement on shelves? All these spatial variables dramatically influence how fast employees can find, grab and transfer ordered goods, further boosting units handled per hour.
3. Specialized Training
Warehouse employee trainings should be regularly scheduled and process-oriented. While all employees must be trained to know their way around the warehouse, education shouldn’t stop there.
All employees should perform some sort of specialized warehouse role yet experience a degree of variance, minimizing task monotony yet maximizing efficiency. They should also understand the context of their role within the broader supply chain and organizational structure.
4. Customize an Automated Inventory Management System
Human error in inventory analysis and management accounts for a nearly 65 percent inventory inaccuracy in a study conducted by Management Science. This highlights the importance of digital inventory systems to complement human management — but not replace it.
Automated systems help catalog customer orders, pinpoint where products are in the warehouse, how much sits in stock, how quickly stock moves off the shelves and when to order more. They reduce the chance of human error while expediting your entire order workflow.
5. Assess Vendors and Third Parties
Examine all data on the lead times of external partners, vendors and third-party services your company uses — especially those directly related to warehouse product levels, parts and operations. Review who is continually on time, early or late, then reevaluate that relationship.
This is an often-overlooked output strategy because it as seen as falling outside of in-house administrative domains. Yet if your warehouse frequently receives late or erroneous shipments, it directly affects the capabilities of your own lead time to turnaround orders. This adds to your inventory holding costs, stagnates orders, stalls stock levels and decreases customer satisfaction. There is no reason for your warehouse — or business — to tolerate this.
6. Ask the Crew
Adopt regular brainstorming sessions with actual warehouse employees to hear their operational ideas and feedback.
Not only does this innately generate more employee buy-in to new procedures, but it adopts a horizontal approach to organization changes, innovation and restructures. It will also help you spot untapped talent within your employee base in a way perhaps unexplored before.