Stress and The Warehouse Worker: What are the Issues?
Warehousing & Manufacturing Insights February 2024
This month, we delve into the stresses faced by warehouse workers, and how that may play into the sector’s competitiveness for labor as the available pool continues to contract. Also: detailed data on manufacturing output, ROI for industrial capital spending, and a bit more.
Warehousing: The most stressful industry?
According to a study published in Supply Chain Brain, warehousing is the most stressful industry in the United States. Warehousing scored 28.92 out of 100, making it slightly more stressful than nursing and residential care. The deadline pressure, physical stress, turnover and difficulties in the labor market that have plagued the sector for years make this easy to believe. Some of the factors that drive the conclusion include:
- 11% of warehouse workers have second jobs
- A whopping 16% of warehouse workers say they’re using depression or anxiety medication
- The main theme for workers in these industries seem to stem from inability to pay medical bills
- Another prevailing issue for warehouse workers is that they are hourly and cannot afford to miss work due to illness or personal issues
As labor markets tighten, warehousing will continue to compete with other industries for labor and will likely need to address these ingrained issues. Other sectors that suffer high stress levels are food manufacturing, waste management, administrative support, hospitality and mining. The sector has generally revolved around labor availability that is now constricting every year.
Workers will have more options when it comes to where they work – and in what sector. Dealing with these issues will be a challenge, even as automation fills some of the gaps.
Read more: Improve Productivity with Ergonomic Storage System Design
St. Onge: Can You Move Your ROI Beyond 3 Years?
When warehousing and distribution companies want to automate, there is often agreement between those who understand the warehouse operation that the investment is necessary. The problem often comes when you’re asked to provide a defined return-on-investment over a short window. CFOs, according to this article by St. Onge, often require ROI of less than 36 months.
That’s reasonable, of course: money is a limited resource that must be controlled. There are other priorities for that money, too. Upgrades to information infrastructure, investment in new business units, paying down debt, new market expansions and any number of other corporate priorities must be considered alongside the distribution center’s needs. St. Onge calls this 36-month standard an “ROI hurdle.” It’s meant to force you to think through the process and find your own weaknesses.
The ROI hurdle problem: it’s more tactical than strategic
Some things simply take more than 3 years to pay off. You still have to do them.Â
If your distribution center is overcrowded and can’t accurately and quickly ship, new business cannot be executed. If you’re struggling to hire people today, you can expect that to get worse over the next three years (and longer). And as we know, order fulfillment is probably your most important customer experience factor.
As St. Onge argues, “what happens if you can’t ship product?”
Above: panel discussion on longer term ROI and how it can apply to warehousing and order fulfillment projects.
Key takeaways
- If you need to automate not to operate more efficiently, but to operate at all, does the 36-month payback standard make sense?
- Companies need to think strategically about operations. If you make your argument for automation from that standpoint, you are more effective.
- Automation often enables other investments. Higher sales, new lines, better IT infrastructure or new lines don’t matter if you cannot fulfill orders effectively.
- You should calculate your ROI, of course. You should come armed with the period of time you believe it will take to pay off.
- Your house should be clean: make sure you have fixed processes, documented issues, and otherwise done everything you can short of automation. This increases your credibility when you’re making arguments for longer term investments.
- Make certain labor is available in your operational area. What is the cost of people in your town? Even if you automate, can you staff? What’s the cost of that staff?
Make sure you have command of the facts before you have conversations with your CFO and CEO. Cover your bases: where are we today? What will tomorrow look like if we fail to do this? Will our other priorities become moot if order fulfillment is compromised.
Moutray: “Growth in Exports Key to Manufacturers’ Growth”
Chad Moutray of the National Association of Manufacturers, analyzed the latest manufacturing data. Always worth a read, and a follow:
- A total of 84.4% of manufacturers surveyed consider international markets important to their future growth. American manufacturing continues to rely on export markets.
- America’s two top export markets are China and Mexico. Both grew in December. Manufacturing activity in Canada contracted for the eighth month in a row.
- The U.S. trade deficit fell this fall overall, by about $1 billion. Much of that was driven by the service sector surplus.
- American manufacturers continued to work to open international markets with trade agreements. Some of these efforts included attempts to passage of the Miscellaneous Tariff Bill, work on deals with India and urging the Biden Administration to work on national standards strategy for critical and emerging technology.
- You can read the entire list here.Â
Quick hits
- In ‘It hasn’t delivered’: The spectacular failure of self-checkout technology, the BBC goes into issues involving automated checkout machines. This underlines some of the problems that arise from automated systems that are built solely to save money and damage customer experience. The main focus is on how much customers dislike the machines. Also, they contribute to higher loss rates for many retailers. In some cases, the promised labor savings have fallen short due to customer inability to operate the checkout systems without employee assistance.
- Industrial Distribution covers The Top Warehouse Trends for 2024, which include more and better warehouses, using automation to address labor shortages, AI/machine learning, immersive technology, the internet of things, and cloud computing.
- The Philadelphia Federal Reserve says that manufacturing’s “factory gauge” has remained in negative territory for the fifth consecutive month. Activity in January increased by 10.6% vs. -12.8% in December. At the same time, manufacturing construction has surged by 60% year-over-year, so it’s important to note that the manufacturing sector believes it will need these new plants and facilities over the next few years.
Tags: Automation, Manufacturing, labor
Scott Stone is Cisco-Eagle's Vice President of Marketing with more than thirty years of experience in material handling, warehousing and industrial operations. His work is published in multiple industry journals an websites on a variety of warehousing topics. He writes about automation, warehousing, safety, manufacturing and other areas of concern for industrial operations and those who operate them.