By Kevin White, Managing Director of Working Time Solutions.
In the margin-pressured world of manufacturing and logistics it increasingly falls to the warehouse operation to deliver savings by increasing efficiency and lowering the cost per unit.
Whilst scanning, voice and automation technology are having a significant impact, one often overlooked discipline is workforce optimisation.
Many warehouses operate a 'traditional' approach to resourcing, with rotas that see employees work fixed eight-hour shifts regardless of how busy a department actually is.
These patterns are designed to provide enough man-power to cover the average annual demand and to minimise unfulfilled hours in quieter periods.
In most cases the expectation is that peak times will require extra premium-paid hours of overtime or the services of inexperienced agency workers.
Far from being unique to this industry, the imbalance between labour supply and demand is a common feature within many large workforce organisations.
In sectors where significant productivity gains are a strategic necessity, the issue is being tackled through the adoption of a radical but proven workforce optimisation methodology called demand-led rostering.
Central to the concept is the principle of ensuring that the right amount of resource is available at exactly the time it is needed - thereby removing any under or over supply of labour.
The use of predictive analytics to better anticipate future requirements is becoming widespread in industry and this type of modelling can be used to better plan and manage a workforce.
Warehouses are in a strong position data-wise, with many systematically generating high-quality information across departments.
When an organisation uses this data to build a detailed picture of 'true demand' it can analyse in detail the short, medium and long-term variables that influence its resourcing requirements.
Identifying and understanding patterns of fluctuation and volatility provides planners with powerful insight that can be used to accurately forecast hourly resourcing requirements for each and every day across the year.
It is the start of a process to ensure that the contracted hours which had previously been paid unnecessarily in quieter periods can be re-deployed to support periods of high demand - eliminating the need for overtime and temporary labour.
Designing demand-led rosters
Undertaking the analysis opens up a staggering number of possibilities for planners to create rosters which are exactly aligned to the variability in demand.
To put the scale of options into context, there are 441 ways to allocate 5 day shifts per week for a team of only two employees.
This degree of flexibility unlocks the potential for truly responsive resourcing patterns with shifts that maximise hour-to-hour performance and efficiency levels.
In many businesses this opens the door to innovative solutions such as 'stand by' shift patterns, which allow the core workforce to efficiently flex-up during peak times using contracted hours that have been 'saved' during quieter periods.
Technology has a key role to play in designing and maintaining demand-led rosters. Whilst most planning managers will be familiar with workforce management tools, these are focused more on recording hours or allocating tasks rather than proactive strategic workforce optimisation.
Specialist software allows shift patterns to be designed around demand data using simple 'drag and drop' functionality and real-time interactive modelling that automatically identifies under or over-provision.
This removes the complexity associated with creating and updating purpose-built rosters so they remain constantly aligned to operational requirements.
The power to quickly and easily customise shifts also enables internal working parties and employees to provide valuable input into the design and management process.
'Self-service' functionality can allow individuals within a team to change or trade their shifts safe in the knowledge that they fall within the parameters set by the demand data and contractual or regulatory requirements.
Demand-led rostering is proven to generate transformative gains for both a business and its employees.
Removing the gap between supply and demand delivers significant bottom line benefits by improving asset utilisation, eliminating reliance on expensive overtime or inexperienced temporary labour and ensuring that the workforce is operating at maximum productivity.
Adopting this methodology may require changes to employment contracts so organisations must take a considered approach to engaging the workforce in the process and ensuring employees understand the benefits it delivers for them.
This includes avoiding short notice overtime which provides valuable certainty around working time and avoids disruption to home lives. Likewise the ability to more easily adapt shifts can deliver huge work-life balance benefits for employees who find their personal circumstances are changing.
Reducing or eradicating 'last minute' overtime and providing more flexible and adaptable resourcing patterns is also proven to reduce absenteeism and can provide a key point of differentiation in a competitive labour market.
Crucially workforce optimisation puts organisations in a strong position to anticipate and react quickly to changes, making them more successful and resilient for the benefit of all stakeholders.
This flexibility will be key if manufacturing and logistics businesses are to deliver the continuous improvement in productivity, efficiency and performance demanded by an increasingly competitive global market.