Warehousing is tough. Manufacturing is tough. Order fulfillment is tougher; the longer the operation runs the more difficult it can get.

You deal with constant disruptions , and the system you carefully designed a few years ago may not be working as well today, after changes in your business climate, personnel changes, SKU alterations, new lines, changing storage requirements, corporate policy changes, or issues with key suppliers or customers. These things happen, and at some point, all or most of them will occur in every operation. If a series of small changes have added up to big headaches, what can you do?

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Here’s a figure you can relate to: labor is typically about 65% of the operating costs of the average warehouse according to this article in the May 2008 issue of Inbound Logistics. On top of that, 20% of your warehouse workers describe themselves as “disengaged” from the process. Sobering enough to think about, if your business depends on storing, stocking, shipping and receiving to please customers.

The first thing I think of when I see those kinds of numbers is that the cost of labor in a warehouse isn’t something that must stay at 65%. Sure, we all understand that the cost of people in any operation will be at or near the top of your cost lists. Warehouses aren’t special in that regard. The problem is one of productivity per worker. Due to computerization, offices have seen excellent per-employee productivity gains the last twenty years. Some of that has translated to the warehouse or plant floor, but certainly the revolution that has swept the office hasn’t translated entirely to, say, a picking and shipping department. WMS has come for some, sortation systems for others, and those things have made a difference in companies like Robroy who have deployed them correctly.

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