Blog Posts Labor Rates as Top Peak Season Fulfillment Challenge
- High demand for labor and low availability plagued fulfillment operations over the holidays.
- To avoid similar issues for the 2022 peak season, retailers and brands should start planning now.
- Areas to focus on include optimizing processes, enhancing technology, and expanding support.
Votes are in for the top peak season fulfillment challenge in 2021. The labor shortage won by a landslide in our recent LinkedIn poll. Over half of respondents (56%) said finding help was their biggest headache in Holiday 2021 – far ahead of supply chain disruptions (24%), delivery time/cost/options (16%), and spikes in order/return volume (4%).
If seasonal labor was a pain point for your fulfillment operations, you might want to get a head start on Peak 2022. While the labor supply has picked up, experts believe that demand will remain elevated in 2022. And even if things start to normalize later this year, fulfillment operations are typically strapped for workers during peak season.
5 Tips for Peak Planning
What can you do now to position your operations for a better holiday season in 2022? Following are five helpful tips:
- Optimize existing operations
Make sure your fulfillment operations are performing at peak capacity, so you can accomplish more with a smaller staff. Always approach process optimization with a Lean mindset. Look for opportunities to create efficiencies and minimize touches for put-away, picking, kitting, and packaging. Finetune processes to enhance productivity, such as setting up specific work cells for holiday promotions.
- Incorporate advanced technology
Many of the latest advancements in automation technology focus on helping operations to address the need for greater productivity and reduce labor dependency. Autonomous mobile robots (AMRs), for example, can achieve two to three times more productivity than traditional manual cart picking. With today’s labor shortage and rising costs, the business case for technologies like these continues to improve.
- Expand strategically
Planning to add or change distribution facilities this year? Make your move as soon as possible so that you’re in the swing of things when peak season begins.
When selecting a new distribution location, take your labor needs into account. A competitive job market can drive up wages and increase your recruiting and retention costs, so it may make sense to position facilities in areas where workers are more readily available.
- Be proactive about staffing
Arrange for extra personnel well in advance of the season and provide sufficient training so they feel confident in their positions. For extra support, consider cross-training employees, so they can handle multiple job functions if needed.
Be sure to factor holiday returns into your staffing plans. Returns processing can be very labor intensive and often requires more experienced employees with strong decision-making skills.
To help to keep employees engaged and prevent burnout, set measurable and attainable performance goals and reward success. Consider offering a bonus to incent seasonal employees to work through the season.
- Enlist a 3PL partner
Fulfillment outsourcing offers a number of advantages from a labor perspective. Third-party logistics providers (3PLs) generally have an existing pool of workers and established relationships with temporary staffing agencies. In a multi-client environment, they may be able to move staff from one account to another as needed. This gives you flexible capacity available to meet your needs without making a permanent, long-term investment.
Peak season starts earlier every year. Start now to make sure you’re at the top of your game for Holiday 2022.
Related to: Holiday Fulfillment, Increasing Productivity, Labor Management, Selling Online