The labor market is under heavy pressure. Finding flex workers with the right skills to handle demand peaks is increasingly challenging and costly. Attracting, training, and retaining skilled flex workers have become expensive, and there are no signs of recovery in the coming years.
To reduce their dependency on human labour many logistics companies choose to invest in automation of their warehouse operations – like installing futuristic robots and automated vertical storage carousels to perform highly repetitive tasks and streamline their warehouse operations. However this involves heavy investments and takes many manhours and a long lead time to implement. Once implemented, it takes considerable effort to adapt work processes to use this automation in an effective way.
Even then people will remain a crucial and important asset in contract logistics. And the timely availability of specific skillsets will only grow in importance as a competitive differentiator, making the difference between running a profitable operation or being priced out of business.
A recent survey revealed that the logistics sector lags behind in passing on their rising costs, fuelled by inflation, to their customers. With logistics typically operating with thin margins, this is a dangerous development.
Logistics companies need to act now to remain cost efficient, while accepting increased flexibility towards their customers in these volatile times. However people with the right skills cannot just be switched off and on like that. The flexibility game needs to be played in the right way. People can be asked to work ten hours shifts instead of eight hours to handle a temporary peak, or shifts can be scaled up from two to three. If the activity mix changes due to a changing demand mix, for example less pallets and more parcels, people can be trained to ensure matching skills. Agreements with employment agencies can be made, involving education & training and good secondary benefits to create a reliable flex pool with the right skills.
That being said, flexibility has its limits. It is key to restrict the need for short-term flexibility as much as possible, while knowing which flex pool size still needs to be in place in due time. To deal with these flex challenges and to run an efficient operation in today’s volatile times it is essential to forecast and plan further ahead.
However this is not something many logistics companies are used to. At the same time several cases show that it is possible to know what is coming by forecasting expected inbound/outbound volumes with proven analytic methods, and to translate these volumes into activities and required workforce skills.
Unnecessary workload can be easily avoided by better anticipating inefficient situations and nipping them in the bud before they arise, preferably in cooperation with the customer.
High-quality forecasting and planning creates the opportunity to be the true value partner that your customer needs. Next to providing in-depth insights into the root causes of past performance, mutual benefits are achieved by discussing the workload forecast patterns and collaborating on better upfront planning. More efficiency, hence lower integral costs, can be reached by proper workload demand levelling.
People are not robots, and this actually makes them a very valuable asset. By applying high-quality forecasting and planning logistics companies can successfully meet evolving customer needs, with controlled labour costs and boosting flex worker retention by providing a more predictable and attractive place to work.
Logistics can now profit from the proven forecasting and planning best practices that EyeOn developed for our industrial and retail customers throughout the years. EyeOn Planning Services has bundled these best practices and related data science capabilities in unique services for logistics companies. Allowing logistics companies to immediately harvest the benefits, while progressing on a steep learning curve to effectively acquire actionable insights in ‘what happened’ and to accurately forecast and plan ‘what is coming’.Contact us