Optimizing DC Labor Balancing with Software Automation

What is labor balancing?

People and equipment in distribution centers (DC) are responsible for completing work such as replenishing inventory, picking items, and shipping orders. To perform this work and meet shipping deadlines, DC supervisors allocate resources to different functional areas of the facility (e.g., replenishment, forward, and shipping).

Labor is allocated to different facility areas based on the expected volume of activity in the areas for the upcoming planning period. DC supervisors typically monitor work progress using dashboards that show DC supervisors the current state of activity across the facility areas. In theory, this is a good approach. However, there are issues with this methodology:

• Even when the estimated work for the functional areas for the planning period is a good estimate, real-world variations from designed order profiles and disruptions from exceptions can create subperiods of feast and famine in different functional areas during the planning period, where some areas can't keep up with work due to being understaffed and other areas are underutilized with idle labor.
• Although dashboards can help visualize real-time conditions in the facility, asking DC supervisors to digest and process the large volume of data and then decide how to re-allocate labor on the fly optimally when areas start to fall behind or exceptions pop-up can is challenging. It’s just too much data to analyze and requires too many decisions to be made quickly.
• It is even more challenging for DC supervisors to balance labor across multiple functional areas; for instance, between reserve, forward, and consolidation areas. Different functional areas can have different deadlines and different metrics to quantify pending work. DC supervisors also must consider worker skills/cross training when deciding which people need or can be relocated.

What are the challenges with WMS-based labor balancing tools?

Most warehouse management software (WMS) includes orchestration tools to schedule work based on work priorities and available resources. Having facility resources fully utilized improves operational efficiency and helps to get the work done at the lowest costs. However, these orchestration tools can run into situations where no available priority work exists to keep famine areas with available capacity busy as feast areas are overloaded with work. Some orchestrators are designed to keep the under-utilized areas busy by activating low-priority work. In some cases when not even low-priority work is available then the resources in the area become idle. While prioritizing low-priority work helps utilization metrics, this approach can result in missed shipping deadlines for urgent orders.

A better approach is to complement the work of the WMS orchestrator with software that can reallocate labor automatically based on the real-time conditions in the DC, such as Fulfillment Engines Self-balancing Labor Management.

What are the benefits of Fulfillment Engines Self-balancing Labor Management?

Fulfillment Engines Self-balancing Labor Management can analyze much larger volumes of data in real-time than supervisors can process manually. It increases your operational flexibility by checking for unbalances continuously, preventing any area in the facility from getting too far out of synch. With Fulfillment Engines Self-balancing Labor Management, your DC labor utilization is not only optimized, but the staff is focused on completing the highest priority and most critical work to ensure all orders ship on-time and correct.

Fulfillment Engines Self-balancing Labor Management uses many of the same criteria that supervisors use to re-locate labor (e.g., pending work in the areas, individual productivity and skills of the labor, cost of moving workers, etc.). The system provides you context about each change, including why the system is recommending the change and the benefit you can expect. For example, that it is recommending moving a picker from one pick zone to another because the latter pick zone is falling behind and moving the picker is projected to get the pick zones back in-synch. Self-balancing Labor Management also includes configurable guardrails to ensure workers are not relocated too often (e.g., minimum time in role of at least 30 minutes) and to prevent low-ROI moves. Fulfillment Engines Self-balancing Labor Management can be used to balance labor within functional areas (for instance, across pick zones) and across functional areas (reserve, forward, consolidation, etc.)

By using Fulfillment Engines Self-balancing Labor Management to optimize labor allocations in your facility, a typical facility can reduce its labor costs by 20% to 30% compared the manual supervisor-directed approach. You can use Fulfillment Engines Self-balancing Labor Management alongside Fulfillment Engines Order Fulfillment and Replenishment, or to complement your existing WMS.

A common concern I hear from facility operators is the risks from allowing software to take over all labor management allocation decisions immediately. Fulfillment Engines Self-balancing Labor Management is highly flexible. It can be configured to manage all labor balancing automatically and autonomously, or to provide supervisors with recommendations that supervisors can first evaluate then decide whether to execute. You have the choice of either accepting some or all of the system’s recommendations by default or to only execute the recommendations allowed explicitly by the DC supervisor.

My recommended conservative approach for facilities that don’t want to enable full automation of labor balancing decisions to start is opt for the recommendations-based configuration to test the performance and decisions of Fulfillment Engines, then automate recommendations as you get more comfortable with the decisions. This process can go all the way up to full automation or stop at a setup that works best for the facility.

Next Steps

Fulfillment Engines offers a highly flexible labor balancing solution. It helps you ship orders on time and cost-effectively by processing large volumes of data continuously and in real-time to optimize labor allocations and reduce labor costs by 20% to 30%. It offers configurable guardrails and automation settings.

Contact us to learn more about Fulfillment Engines Self-balancing Labor Management, including how we can offer you a no-cost assessment to understand the potential benefits and savings for your specific organization.