DC Velocity - February 2019

St rat e g y

Integrating Automation with your
ERP/WMS Doesn’t Need to be Complex

Real-time Distribution Software, RDS™ WES-WCS Suite of Automation Technologies Solves the Order Fulfillment Puzzle!

10331 Werch Drive, Woodridge, IL 60517 www.numinagroup.com 630.343.2622

SEE US AT
ProMat Booth #S4237

42 DC VELOCITY FEBRUARY 2019 www.dcvelocity.com RUNNING HOT

Many of the pressures and goals
cited by retail executives during this
year’s interviews are not new. For
instance, last year at this time, many
of the executives Gibson spoke with
identified better management of
omnichannel commerce as a top
priority. This year’s interviews sug-
gest that most have made good
progress toward reaching that goal.
“They are more comfortable that
they have enough inventory allo-
cated effectively and that they are
doing a better job filling orders
efficiently,” Gibson says.

But that doesn’t mean that retailers have omnichannel fulfillment completely figured out. Fulfillment of e-commerce orders remains expensive, and retailers are still trying to find the most cost-effective way to get product to customers, as they explore options like “buy online, pick up in store,” or BOPIS. “They are still all striving for the perfect combination of where best to fill orders from and how to avoid a lot of split shipments,” Gibson says. “There are still opportunities to enhance in-stock availability from the point closest to the last mile.”

MAKE A GROWN MAN(AGER) CRY

These efforts to find that perfect combination, however, are happening in a tight labor market. While a 3.9-percent unemployment rate is great news for the general economy, it’s enough to make distribution center (DC) managers cry.

That’s because the better the employment picture gets, the harder it is for them to retain workers. In periods of low unemployment, people tend to leave distribution center jobs, which are often physically demanding and have less-than-desirable hours, for work in other industries.

“Retailers have had to get creative over the past year in order to overcome labor availability shortages,” Gibson says.

According to Gibson, some of the strategies that companies have deployed in a bid to retain workers include:

; Raising pay to compete with the $15-an-hour wages that Amazon now pays its distribution center associates.

; Accelerating pay-scale escalation. For example, in the past, a company’s policy might have been to start new employees at $12.50 per hour and then bump them up to $15.50 per hour after three years. Now, new employees may be earning $15.50 an hour after just 18 months.