How to Overcome C-Level Reluctance to Automate Distribution and Fulfillment
The current distribution and fulfillment labor shortage does not discriminate. Whether it’s a private, family-owned company operating a single facility, or a large, Fortune 100 organization with multiple DCs located across the country, everyone’s struggling to attract and retain warehouse workers.
We advise companies from one end of the spectrum to the other. In our observation, the larger the organization, the less objection there can be to adding automation. As for smaller companies — particularly those that have always been 100% dependent on manual labor — there’s often considerably more reluctance among C-level leadership. Here are a few points that address their concerns.
Cost justify automation based on lost revenue, not just headcount reduction.
Historically, justifying an investment in warehouse automation relied heavily on projected increases in accuracy and efficiency with a reduced head count. Today, that is only part of the equation. If an operation cannot adequately staff shifts, then orders go unfilled. That leads to a loss of clients, market share, and revenues.
While that can be difficult to quantify, smaller companies’ leaders are more likely to hear complaints directly from unhappy clients. Without automation, those complaints will only become louder and more frequent… until clients give up and switch to competitors.
Address fears about automation reliability head-on.
Many C-level leaders at companies with manual operations worry that an automated solution may not be reliable. They fret about what happens if the system breaks down or if the power goes out in a massive storm.
In actuality, unexpected downtime with properly designed automated systems is quite rare due to built-in redundancy. As for power outages, automation — or the facility itself — can be equipped with backup power generators.
Additionally, in a major snowstorm or hurricane, an operation would be unable to ship orders anyway, as both personnel and carriers would be unable to reach the facility due to road conditions.
Understand that automation improves retention by making jobs easier.
Automated systems perform repetitive, labor-intensive, and dangerous jobs. Automated goods-to-person systems, for example, virtually eliminate the need for employees to walk miles a day, picking orders. Automatic guided vehicles (AGVs) move heavy products from one location to another, reducing the risk for workers to experience ergonomic injuries. Automation helps streamline warehousing processes and allows employees to focus on more value-added tasks.
By introducing automation into a process, the best of automation can be used to complement the best of human workers. By blending robotics to perform specific jobs, working in coordinated efforts with humans, productivity and job satisfaction can increase. Automation can bring specific safety improvement by removing workers from potentially dangerous situations with heavy products. Further, when it comes time to train new employees, automated systems can reduce the time needed from initial training to productivity from an average of 90 days to mere hours.
Need more help overcoming C-level reluctance to automate distribution and fulfillment? KPI’s consultants are happy to join the discussion. Contact us today.