The Ultimate Guide to Dynamic Workforce Management for Warehouses

What is workforce management?

Workforce management is the process of managing and optimizing the use of a company's workforce to meet its business objectives.

The process involves identifying how many employees are necessary for every required task in the process to meet the forecasted demand, assigning employees to the best-fitting shifts and tasks and creating work schedules optimized for peak production to push the warehouse closer to achieving its goals without sacrificing the employee experience.

The last thing your workforce needs is exhausted employees plagued by burnout. Work-life balance is crucial to long-term productivity, a safe, compliant work environment and employee retention.

The larger the workforce, the more difficult it is to complete workforce management manually. Software solutions use advanced algorithms and automation to streamline that process, producing optimized schedules in a fraction of the time.

What is included in a workforce schedule?

Workforce schedules outline when employees are expected to work, what tasks they must complete and when their breaks may take place. As input it takes employee availability, preferences, and skills.

For example, employees may be assigned to receive, pack or ship certain products. They may also be assigned to manage inventory, which makes them responsible for having the products reach their intended destination by a specific time.

Safety restrictions and training requirements dictate which employees are scheduled for more complex tasks, like those operating certain pieces of equipment.

Workforce management also coordinates with the departments necessary to determine which employees will work overtime and weekend shifts when customer demand spikes or fulfillment runs behind.

This information may seem simple, but it is key to ensuring the warehouse has enough employees to meet demand. workforce management also ensures employees assigned to a specific task have the necessary skill and experience to succeed.

An effective workforce management system can raise the warehouse’s productivity, make operations more efficient and minimize labor costs.

Why workforce management is vital in today’s market

While the potential for an actual recession is still up for debate, it’s clear that 2023’s market will be volatile. We’re still feeling the effects of pandemic-related supply chain issues. China is currently experiencing its worst Covid-19 outbreak to date, inflation continues to rage and global conflict has many countries holding their breath. To top it all off, the warehousing industry continues to be impacted by the labor shortage. Some businesses were forced to hire disproportionate numbers of contract workers just to keep up with demand.

Despite these economic uncertainties, consumers continue to spend money. Warehouse managers are forced to juggle too few skilled employees with constantly fluctuating e-commerce demand. The end result? Managers spend too much time manually scheduling and rescheduling employees according to ever-shifting demand and employee availability.

This may have worked well enough in the past, but the volatile nature of supply chains in 2023 means there are way too many variables to consider without the support of automation.

Workforce management software uses pre-determined employee profiles with availability, skills, skill levels, union or labor regulatory requirements and other relevant information to match employees with the compatible shifts that best support current warehouse demand. The software creates schedules with optimized shifts that follow the ebb and flow of warehouse activity, group multiple tasks within a shift or identify flexible start times.

Benefits of workforce management

The benefits of workforce management software extend beyond an efficient employee scheduling system, improving metrics like employee retention, customer satisfaction, warehouse productivity and more. Here are some of the most common benefits to expect:

Efficiency

Workforce management enables managers to configure employee schedules in the most efficient, productive way possible. Schedules are easily adjusted according to changes in demand or employee availability, maintaining that efficiency no matter the conditions.

Reduced labor costs

Optimized employee scheduling reduces labor costs by ensuring the right employee is on the right shift at the right time. Employees are scheduled according to their skills and experience, which increases the workforce’s overall efficiency.

Customer service

More efficient operations produce better quality work– and happier customers. Quality control will improve, orders will dispatch and arrive on time and fewer mishaps and errors will occur along the way.

And with managers not using up all their working hours scrambling to maintain manual schedules, they’ll have more time to oversee and optimize workflows.

Employee satisfaction

Employees expect management to schedule them according to whatever time constraints they set. Without intelligent workforce management, individual employee preferences often slip through the cracks. This can leave employees feeling disrespected and undervalued, which is a recipe for a higher turnover rate.

The UK’s estimated number of job-to-job resignations (in thousands) was 382 in Q4 of 2022, up from 378 in Q4 of 2021. In the United States, warehousing resignations increased by 10,000 from December 2022 to January 2023 alone, totaling 232,000 in January 2023. Every lost employee can cost the warehouse more than 25% of the position’s salary to replace. That includes the costs of departure, overtime and contract work, recruitment and new hire training, but doesn’t come close to accounting for lost productivity, potential damage to reputation or customer dissatisfaction.

Workforce management software gives organizations the ability to ensure all employee preferences and requirements are met. It can also give employees the power to adjust their schedules as needed. Mobile employee self-service is a huge selling point for warehouse workers, so adding this functionality can help attract new talent. workforce management also improves the work-life balance of employees, creating a more productive, engaged workforce in the process.

Communication

The ability to communicate availability and expectations through workforce management software drastically improves communication between employees and managers. Both parties can view schedules, tasks and desired outcomes in a few clicks. It helps put the entire team on the same page.

Flexibility

The highly flexible nature of workforce management software enables rapid response to changes in warehouse workload, new labor regulations and even employee availability. Managers can even enable automatic shift swaps that allow employees to officially trade shifts that are compatible according to their skills and other predetermined criteria. That flexibility reduces absenteeism by letting employees quickly swap shifts during an emergency,

Mobile availability management also enables employees to easily pick up extra shifts, refuse shifts they can’t take and volunteer for overtime hours.

Giving employees more flexibility in their work schedules improves metrics like employee engagement and morale, which have a domino effect on HR metrics and warehouse performance.

Workforce management components

Workforce management is made of the following key components:

• Demand forecasting: outlines how many customers are expected and their impact on staffing requirements.
• Employee availability: when each employee is available to work.
• Skills and experience: experience and skill levels for each employee, which dictate who can effectively fill each shift.
• Labor laws and regulations: requirements for minimum wage, overtime, breaks, etc.
• Communication: employee feedback to address employee scheduling issues.
• Flexibility: the ability for employees to adjust their schedules as needed, as well as the ability to accommodate unexpected demand shifts.

Warehouse management vs warehouse planning vs warehouse scheduling

Workforce management is the process of overseeing warehouse operations. It involves managing how goods move through the storage facility and requires the optimization of space, labor and equipment. Effective warehouse management ensures products are properly stored and handled, inventory levels are maintained and orders are fulfilled with accuracy. Detailed records are kept throughout the entire warehouse management process to protect employee safety and compliance for the organization.

Warehouse planning and warehouse scheduling are two components of workforce management.

Workforce planning is about ensuring the organization's workforce needs are met both now and into the future, which requires a detailed assessment of current workforce needs, forecasting of future workforce needs and a strategy that enables success.

Warehouse scheduling takes that plan a step further. It meticulously outlines the sequence and timing of all warehouse activities. It manages employee schedules in accordance with the flow of goods through the warehouse, monitoring and adjusting shifts to maintain efficiency despite demand fluctuations, equipment breakdowns, labor shortages and any other obstacles encountered along the way.

Warehouse management uses warehouse planning and warehouse scheduling to ensure products are received, stored and dispatched in the most productive, accurate way possible. The result of properly deployed warehouse management? Better ROI and excellent customer service.

What are optimization methods

Optimization methods are mathematical algorithms that automatically create employee schedules using predetermined goals and constraints. They allow the software to generate the best possible schedules according to factors like current employee availability, skill level, labor laws and budget. For this, the first step is to have a clear and measurable definition of what a good schedule is. This can be various aspects, like boosting efficiency, improving employee engagement, or minimizing violations, or a combination of it.

To create a good schedule, you need an optimizer. In general, the schedules are far too complex to have a perfect answer. Also, there can be restrictions that can conflict with each other. Therefore, workforce scheduling optimizers are based on heuristics. These are optimization methods to create a very good schedule in a reasonable amount of time. Typically, the outcome cannot be improved without drastically changing the answer. We call this ‘locally optimal’.

Underlying mathematical optimization techniques can be genetic algorithms, simulated annealing, or others, like advanced neighborhood search. Nowadays it is a combination of various techniques, which is called hybrid optimization. The algorithm first creates a schedule after which it tries to improve the schedule by applying small or larger changes until the time is up or no improvement has been found over a period of steps of time.

The latest developments are on Machine Learning. Based on historical data, the algorithm tries to learn what the restrictions and wishes are and tries to find data patterns, which can be used to create a good schedule. However, this research is still in the preliminary stage and hardly applied in commercial software packages.

5 warehouse workforce management best practices

For workforce management to have the best ROI, its implementation should start with clear objectives, communication and consistent re-evaluation. Here are five best practices to jumpstart your workforce management revamp:

1. Define objectives with KPIs

Define the main objectives you wish to achieve with workforce management software. Your main goal might be to improve efficiency, boost productivity or decrease turnover. Choose relevant KPIs so that you can track progress.

2. Input all relevant data

For the employee scheduling software to work, you need to input all necessary information at the start of implementation. This means accurate input of employee, shift and task data, including all personal information, job titles, skill levels, shift lengths and task assignments, as well as constraints like shift patterns, availability information, skills requirements per task and labor laws.

3. Monitor the flow of goods

Accurately predicting workforce needs requires an intimate understanding of how goods flow through the warehouse. Warehouse schedulers must gather data on employee schedules, attendance and productivity in addition to demand patterns, customer flow and equipment utilization, then analyze the data to identify patterns and trends. Use those trends to inform future employee scheduling decisions.

4. Streamline communication and coordination

Getting the most out of workforce management requires good communication and coordination, not only between managers and employees but also within your tech stack. Integrate the employee scheduling software with other software platforms used to run the warehouse– like time tracking and attendance software, for example.

Ensure all employees are aware of the new system well in advance to avoid resistance. Be sure to offer training and support during the adjustment period. You might even use that training to communicate all the flexible workforce scheduling benefits employees can now take advantage of.

5. Gather employee feedback on the workforce scheduling system

Once the new system has been running for a while, survey employees on their experience so far. Employee satisfaction makes up a significant part of workforce management software benefits, so gauging their response is a good litmus test for how successful the implementation has been.

Take employee feedback and use it to inform future training and improve the workforce management system as a whole.

Takeaways

ORTEC workforce management Software is key to thriving in 2023’s volatile market. No matter what fluctuations in demand or labor availability come your way this year, intelligent algorithms and flexible employee scheduling features can give your organization a competitive advantage.

Improve warehouse efficiency, productivity and employee retention all by streamlining your scheduling processes with ORTEC’s workforce management solution.