Back in 2019 the UK Logistics Monitor report from the Chartered Institute of Logistics and Transport (CILT) and Statista predicted that 54% of logistics companies were expecting skills shortages to increase over the next five years. Brexit, the global e-commerce boom and changes to shopping habits as a result of Covid have all contributed to making this huge staffing and skills shortage across the logistics sector even more acute. The issue of having enough staff to sustain warehouse and logistics operations is becoming a real problem and employers are increasingly having to offer higher rates of pay and other incentives to retain or attract staff and overcome these critical labour shortages.

One factor behind the situation is that a lot of the people who used to work in the UK logistics sector have left the country. Logistics UK’s Skills and Employment Report 2020 found that nearly 80,000 EU nationals had left the country in the past 12 months due to the twin challenges of the pandemic and Brexit, leaving a significant skills gap.  This shortage is especially acute among heavy goods vehicle (HGV) drivers and forklift truck (FLT) operators.

Finding more lorry drivers is not so straightforward but mitigating the impact of labour shortages inside the 4 walls of a warehouse is more easily remedied with the adoption of technology. Many warehouse managers are looking to accelerate their switch to automation in order to reduce their reliance on staff to operate traditional materials handling equipment. It is well documented that human labour is one of the most significant costs in a warehousing operation and investing in technology will significantly reduce the outlay. To mitigate the impacts of the FLT driver shortage some companies are switching to AGVs (automated guided vehicles). They can be fully integrated with a best-of-breed WMS (warehouse management system) solution to support operatives with their picking tasks. Using AGVs will also benefit companies by reducing labour costs and significantly increasing productivity. They typically offer a rapid ROI of 12 and 36 months. A WMS can start to deliver a payback even more quickly, very often in under a year and will continue to deliver savings indefinitely.

Given that warehouse resources are in such short supply, finding additional ways to ‘do more with less’ and make the warehouse more efficient without having to employ more staff is essential. Using a WMS to control warehouse processes instead of a paper-based management system has a big impact on daily order completion volumes and it is possible to process up to a third more shipments when processes are technology driven. This is achieved because a WMS system will automate and standardise inventory movements, picking methods and inventory locations. It supports the introduction of automated replenishments and will lower error rates because quality checks are built into every process.

A WMS will also identify the best way to organise the warehouse, with items grouped together according to sales frequency, sell-by date, and through dynamic location management, stock can be stored wherever there is available space. In doing so, it is possible to achieve additional cost efficiencies and avoid supply disruption problems because up to 30% more stock can be stored in the same warehouse by making better use of available space.

If you would like to identify how to reduce your reliance on labour and achieve greater cost efficiencies, contact Indigo Software.