Fractional Operations Leader and Consultant - Warehouse, Fulfillment, Operations, and Supply Chain
Incorrectly planning your labor shrinks your margin and pisses off your employees. How? When you're overstaffed, capacity idles and your cost per package naturally rises. When you're understaffed you will solve with OT which raises your labor costs quickly. When you have inconsistent hours and inconsistent flow, your employee's lives and earnings become inconsistent. That's frustrating. Now you have turn over and need to spend resources to hire and train... New employees are less productive... Uh-oh, now we're in a death spiral. TL;DR - Forecast demand, plan labor, reap the benefits with your teams and your bottom line. PS: Demand forecasting for 3rd Party fulfillment providers is possible and affordable. Hone in your baseline demand and staffing! #operations #capacityplanning #fulfillment #logistics #operationsmanagement #ecommercefulfillment #ecommercelogistics
Theodore DiVito
8mo
one of the quickest ways to lose employees is to overwork them. I left an extremely convenient job that was close to home last year because I was being worked to death. I never had a day off and I was always on call. Despite repeated warnings, my complaints were ignored. So I left. In the end the company lost the contract they had with their customer. My replacement also quit after a month. Then a former subordinate manager told me that the company finally realized my position required at least 2 more people - after it was too late.
Michael Kavaky
8mo
How bad off you are also depends on the type of contract you have with a customer. If it’s transactional based or cost plus. Having too many or too few people can create major headaches and stress a relationship. Factor in container delays, reverse logistics, and e-commerce B2C, volumes become erratic. That is exactly why distribution companies should consider flex labor models like Veryable to better position themselves in the event day to day planning is not so accurate. A major solution for the unexpected.
Rachel Allard
8mo
YESSSS!! This is also why automating the tasks people don't need to do is so critical, like charging. It creates predictability for you and your team. Nobody likes the days when nothing goes according to plan. We know we'll have them and we owe it to our teams to do what we can to minimize them.
Good employees don't like to be idle and employees don't like to be overworked. Yes, employees like overtime but after several days of extended hours you start to get frustrations. Great points here and very important to get a hold of your planning to keep your labor in the sweet spot.
Quintin Walker
8mo
100% on all points! Understaffing also puts SLA’s, quality and performance at risk! It negatively impacts morale, team culture and often fuels burnout. Labor planning is 🔑
Keith Roper
8mo
Joe McIntyre- This is a great point and all so true. It happens throughout the entire logicist steam: Fulfillment- First Mile, Middle Mile, Last Mile. Forecasting across the board should be better to create a positive employee experience and drive costs down throughout the network. It does not work if each leg is only in it for themselves.
Christian Garner
8mo
Now, imagine managing this labor force when the higher-ups are pulling the strings with no communication. Fun times.
Ken Smith
8mo
Great post, workforce planning and flex staffing models based on demand are key to success.
Co-founder & CEO @ Response (YC S20) - Control indirect spend from end-to-end.
8moJoe McIntyre - what co's are doing the best job at this and what tools / strategies are they implementing? Would love to see a post on it 🙏