Siggins blog

You’re probably thinking about labor and automation wrong

Plenty of DCs are automating their operations. They don’t just want more throughput, they need it. And when stuffing more workers (if you can find them) on the floor provides diminishing returns, automation promises a solution.

But you already know that a DC isn’t just a warehouse — it’s a source of people’s livelihood. A touchy subject.

Talking about automation and labor often feels tainted by the imagined specter of mass layoffs and robots dumping hardworking people out on the streets. But spend enough time in enough warehouses and you see things differently.

Do systems integration the right way — meaning an engineered, targeted approach to improving DC efficiency — and you aren’t making ethical compromises. Really. Let’s talk about why.

Myth 1: DC automation means displacing workers

A typical Siggins retrofit can often reduce labor requirements by 50%. But that never involves a recommendation to lay off half your workforce.

Why? Spend enough time in DCs and you start to understand how they tick. These are complex systems, practically unique organisms — but they function in similar ways and face similar challenges. Like turnover.

It’s rare to find a DC manager who hasn’t invested weeks of training into an employee only for them to leave immediately after. DC jobs are notorious for high turnover — even employees who stick around usually don’t plan on spending their whole life doing this work. That adds significant (and often underestimated) costs.

But in our experience, turnover also means that DC retrofits don’t unemploy workers. A full DC upgrade takes months, so labor savings come from natural attrition — you just don’t replace the workers who leave.

And, in any case, you might want employees to stay. The most successful DCs all have some variation of an operational excellence initiative. That might look like taking advantage of additional team capacity to clean the facility, make repairs or create process improvements.

Your employees can only do this if they’re not behind on shipping orders. The added efficiency from automation allows people to do jobs that only people can do.

Myth 2: Most workers are afraid of automation

Years ago, when Siggins engineers would first visit a DC, management asked us not to tell employees on the floor what we were there for. The worry was that news of impending automation would terrify the workforce. Now, they tell us the opposite – employees want help from automation.

DC work is stressful. And without upgrades for efficiency, DCs that expand and push throughput limits offer their employees nothing but added frustration.

So systems integration ends up being popular with employees. Some immediate benefits are obvious: A conveyor system reduces walking within the warehouse, redesigned operations avoid rushing packages out the door without due process and better SKU management prevents DC traffic jams. These are the low-hanging fruit of industrial engineering.

But there are also subtle ways that automation improves employee morale. Modern WES systems can be configured to “gamify” work, providing employees with real-time insight into their performance. This type of software carries some stigma — you’ll find plenty of reports accusing giant fulfillment centers of harassing their employees with it. But done right, this technology rewards employees who might otherwise have gone unnoticed.

Your quiet, shy picker has difficulty standing out among her peers. But with software in place, she receives recognition for her work. And after a DC is retrofitted to include the separation and tracking of tasks, you might discover that your “lazy” shipper is a great picker, or vice-versa. We see it all the time.

Gauging your employees’ feelings toward automation is part of the Siggins site survey process. Within reason, we don’t compromise on the needs of anyone in your organization — from the floor to the C-Suite.

Myth 3: Automation is the best way to cut headcount

Automation likely won’t pose any danger to your employees. But if you’re running a DC, it might pose a danger to you.

The most devastating mistake a DC can make is investing in automation before it’s ready. If your DC isn’t at a stage where an investment in automation has sensible ROI, automation needs to be off the table. Most systems integrators don’t follow that rule — they’re financially affiliated with manufacturers and shoehorn their partner’s equipment into your DC. You’ll bear the cost of that.

In contrast, a solutions-agnostic integrator places a suite of options on the table. Depending on your DC, your budget and your goals, automation might be one of them. But if automation doesn’t make sense for you, mechanized equipment can sometimes offer the same reduction in labor requirements at a lower expense. Or even a rearrangement of your current assets that doesn’t involve any new equipment at all.

If you do opt for automation, work in stages. It’s a recipe for disaster to suddenly retrofit a DC with the assumption that 5 new software packages and 3 new robots are all going to work harmoniously together.

Siggins doesn’t make that assumption. We implement in phases to ensure your operations remain stable.

Want to talk more?

Then let’s get in touch.

DC growth is complex. But an honest take on how you’re handling throughput, labor and space makes it all a lot more clear — and provides a roadmap for future growth.

Request a site survey now.