Looking for warehouse workers you can rely on? Older folks can be highly reliable and productive, provided you give them the support and benefits they need.
Contributing Editor Toby Gooley is a writer and editor specializing in supply chain, logistics, and material handling, and a lecturer at MIT's Center for Transportation & Logistics. She previously was Senior Editor at DC VELOCITY and Editor of DCV's sister publication, CSCMP's Supply Chain Quarterly. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.
If you have anything to do with staffing warehouses and distribution centers, then you've probably given some thought to the subject of demographics lately.
Demographics? That statistics-heavy stuff you read about in social studies? Yes, indeed—and let's hope you paid attention in class that day. That's because any long-term strategy for staffing warehouses and DCs has to consider the changing demographic profile of the American workforce—or else risk being caught shorthanded.
Most likely, what you've heard on the topic has focused on today's multilingual workforce. That's something virtually all warehouses and DCs are dealing with, whether they're located in urban or rural locales. (See "¿habla warehousing?" DC VELOCITY, September 2007.)
Important as that is, it's not the only demographic issue you need to be aware of: Age should also be on your radar screen. The U.S. population is getting older; people are living longer and working longer. According to "65+ in the United States: 2005," a National Institute on Aging report compiled by the U.S. Census Bureau, the number of senior citizens in this country is expected to double by 2030, when nearly one in five Americans will be 65 or older.
Right now, that trend may not be apparent in many warehouses (youthful immigrant workers still dominate the average DC's workforce). Yet it's a big enough worry that the Council of Supply Chain Management Professionals (CSCMP) annual conference in 2007 included two sessions on "disruptive demographics," including lengthy discussions of the impact of an aging population on supply chains. At last year's Material Handling Logistics Summit, moreover, a group of business executives, material handling equipment vendors, and academics identified the impact of demographics on distribution and logistics as their top concern.
The graying of America is a trend that will affect most, if not all, warehouses and DCs. The downside, of course, is the inevitable loss of knowledge and experience when large numbers of baby boomers retire. But there is an upside, especially if you're willing to think of an aging population as an opportunity instead of a problem: Employing "over 50" workers can actually boost warehouse productivity.
16 steps to a safer workplace
The American Society of Safety Engineers (www.asse.org) suggests the following steps to make industrial workplaces safer for older employees. Though the list was created with older workers in mind, the group says the changes will benefit workers of all ages.
Improve illumination and add color contrast.
Eliminate heavy lifts, elevated work from ladders and long reaches.
Design work floors and platforms with smooth and solid decking while still allowing some cushioning.
Reduce static standing time.
Remove clutter from control panels and computer screens, and use large video displays.
Reduce noise levels.
Install chain actuators for valve hand wheels, damper levers, or other similar control devices. This brings the control manipulation to ground level, which helps to reduce falls.
Install skid-resistant material for flooring and especially for stair treads.
Install shallow-angle stairways in place of ladders when space permits and where any daily, elevated access is needed to complete a task.
Increase task rotation, which will reduce the strain of repetitive motion.
Lower sound-system pitches, such as on alarm systems, as they tend to be easier to hear.
Lengthen time requirements between steps in a task.
Increase the time allowed for making decisions.
Consider necessary reaction time when assigning older workers to tasks.
Provide opportunities for practice and time to develop task familiarity.
Older achievers
That older workers should be more productive than the young 'uns may sound counterintuitive. After all, everyone knows that as people age, they think and move more slowly, and their eyesight, hearing, and muscle strength decline. That's true, but medical researchers, gerontologists, and safety engineers all agree that it's no reason to write off the over-50 crowd in a warehouse setting. In fact, research cited by the American Society of Safety Engineers and federal health agencies shows that workers 55 and older have fewer accidents on the job than do younger people. (When they are injured, though, they often take longer to recover.)
As for why older workers outperform their younger counterparts, there are a number of possible explanations, says Brian R. Sherman, director of ergonomic services for The Ergonomics Center of North Carolina at North Carolina State University. "They have more experience, and they may have moved up in their jobs so that now they're managers, or they may be leveraging support within their group," he suggests.
Another factor in their favor: Mature workers tend to subscribe to the "work smarter, not harder" philosophy. Forty-five percent of productivity increases in warehouses and DCs comes from more effective use of time, says Jeff Boudreau, a partner at workforce productivity specialists XCD Performance Consulting. In his experience, older employees excel in this area. "They are less easily distracted, and they know how to stay on task," he says. "The more senior warehouse associates usually are at the top of the list in terms of productivity, quality, and consistency. I've never found somebody who's not been able to achieve performance incentives due to age."
That's significant, because performance standards are not adjusted for specific groups of employees, says Evan Danner, president of TZA Consulting, which develops engineered performance standards and labor management systems. "You set specific standards for different functions … but in a world of engineered standards, you cannot set different standards based on age," he explains.
What about positions that require working with technology, such as highly automated material handling equipment? Boudreau says that seniors may not always be as tech-savvy as their younger co-workers, but he strongly disputes the notion that they can't be successful in technology-related jobs. "We've tracked all different types of [warehouse] workers on training curves. Even when we have set up moving goals, we have always found that older workers progress up the training curve the same as anyone else," he says.
Sherman agrees that older folks can make the grade when it comes to mastering tasks. "A number of studies on worker performance, including research papers that compare job performance and age, generally have found no correlation—either positive or negative—between the two relative to technical competence," he says.
Hiring mature workers can be an antidote to one of warehousing's most intractable problems: employee turnover. Danner has found that older workers tend to stay in their jobs longer, particularly in a unionized environment with good pay and benefits. They usually care more about benefits than 20- somethings and are more rooted in their communities. As a result, they're less likely to change jobs when something new comes along—like the oil companies that Boudreau says are "literally poaching people in the parking lot" of a West Texas warehouse operated by one of his clients.
Not ready to hang it up
The advantages of hiring mature workers seem clear enough. But do they actually want to work? Apparently, they do. A 2004 survey of 2,300 baby boomers conducted by Merrill Lynch, pollsters Harris Interactive, and the consulting firm Age Wave found that 76 percent of the respondents planned to continue working after retirement. In an earlier study of 1,000 people aged 55 and older, conducted by Age Wave on behalf of insurance giant AIG SunAmerica, about 95 percent of respondents said they expected to work at least part time after they retire, either by choice or by necessity.
Add those findings to current worries about the future of Social Security and the state of the U.S. economy, and you can't help but expect more mature workers to be knocking on your door looking for work. That could well happen, but they won't all be looking for a 40-hour week: Only 6 percent of the respondents to the Merrill Lynch study said they would want full-time work.
Flexible scheduling and good benefits are the biggest lures for mature workers. Adjusting work flows and scheduling to accommodate part-time workers takes some effort, of course, but the benefits often make up for it. Boudreau tells of one retailer who went to high school PTA meetings to recruit middle-aged and older mothers to work in a DC during school hours; the company also gave the part-timers a discount on merchandise and made the work environment as pleasant as possible. That strategy netted the retailer a number of reliable long-term employees, he says.
Another example is that of a company that moved its DC from northern New Jersey to a rural community in the southern part of the state because of the availability of large tracts of land. It soon found that the labor pool in its new location was too small to fully staff the DC with fulltime workers. Instead, Boudreau says, the company found the reliable—mostly part-time—workers it needed among the retirees in the "55-plus" communities that were springing up in the area.
Safe and sound
Although mature workers easily match (or outpace) their younger counterparts when it comes to productivity, there's no denying that their reactions may be a little slower, their eyesight may be a little fuzzier, and they may tire a little sooner than their younger colleagues. There are some basic steps you can take to help older workers consistently perform at high levels in the safest possible environment. For a quick rundown, see the sidebar titled "16 steps to a safer workplace." Here are a few additional recommendations:
Consider each person individually, and screen carefully (in accordance with labor laws, of course). Be alert for potential problems, such as a decline in memory or eyesight, but don't assume that everyone over a certain age is unfit. "It's kind of like an upside-down funnel," explains Sherman of The Ergonomics Center. "Young children's strength capabilities don't vary much, but as we get older, capability can differ greatly among people in their 50s and 60s." Boudreau, too, cautions against stereotyping: At one client's DC, a woman in her 70s is among the most productive trailer loaders.
Pay special attention to ergonomics. Workers of different ages may be prone to certain types of injuries; read up on the research and take steps to prevent those injuries from occurring. Of particular concern: hazards that could cause a loss of balance, trips, and falls.
Take the "vision test." Look around your operation. Does it present any obstacles for someone whose vision is no longer 20/20? Better lighting and clearly readable signage improve visibility, as do uncluttered screens and larger characters on terminals and scanners.
Match employees with the right jobs. Since engineered performance standards can't be adjusted for individuals, the smart route is to place people where they're most likely to be successful, says Danner. "If a worker is over 60, I would question whether you want to put him in a pick module where he has to handle 400 cases an hour," he says. "But he could probably be very successful in a piece-pick area where weight is not a big factor and there is more emphasis on dexterity and skill."
Offer health and wellness programs for mature workers. Making those programs available is an effective way to help them stay in the workforce longer, agree all of the experts consulted for this article. Health is a major concern for even the halest and heartiest of this generation; by supporting older employees' health needs, you'll not only keep them working longer but will earn their loyalty, too.
Respect for all
Health and safety considerations aside, there are a few other factors that come into play in managing an older workforce. For instance, it's important to keep in mind that boomers and their elders have a very different way of looking at work, authority, and personal development than do the current crop of young professionals. In some DCs, there now are four generations working together— and that creates some managerial challenges.
Danner notes, for example, that friction sometimes occurs between young people with degrees in logistics or supply chain management and the older, more experienced workers they may supervise.
Yet for all their differences, workers from the various generations have this in common: they want respect. Regardless of their age or experience, they want to be treated as individuals with valuable ideas and knowledge that can be tapped for the benefit of all.
That's not something older workers can always take for granted. In some companies, there's still a tacit assumption that older folks are inflexible, uncreative, and generally less capable than younger co-workers. Therein lies an opportunity to make your DC stand out from the crowd. Give older workers what they want and need—including respect—and you could gain some of the most reliable, self-directed, and productive employees you've ever had.
CVS puts demographics to work
To see what the DC workforce of the future might look like, just go to one of the DCs run by CVS Caremark, the Woonsocket, R.I.-based drugstore chain. In 2007, 10 percent of new hires in the company's distribution centers were over 50 years old. Currently, 25 percent of the DC workforce is over 50, and in 10 years that figure is expected to top 33 percent, says Kevin F. Smith, the company's senior vice president-supply chain and logistics.
Though that wasn't planned, Smith says he's not alarmed by the trend. He believes that having older workers on the job is an asset. "Older workers are more experienced and knowledgeable, and this helps in creating a safe and productive workplace," he says.
Over the past eight or 10 years, CVS has been automating more of its operations and making ergonomic enhancements to its DCs. Smith says the retailer made that decision to improve processes, boost productivity, and lessen the likelihood of repetitive stress-related injuries in the workforce in general, but those measures have proved to be especially helpful to older workers.
The combination of efficiency and more mature workers has produced a steady increase in productivity and improvements in customer service. Smith believes that CVS's distribution centers are safer and more productive than ever. That's a tribute to all of the company's associates, both young and old, he says. But older employees have played a big role in that success. "We believe that our current mature workers add to that productivity, rather than detract from it, because of their experience, knowledge, and expertise," Smith observes. "These are associates who know our business and continually help us to fine-tune processes that help us to serve our customers better. These individuals understand the processes they work with better than anybody else and therefore are more apt to recognize ways to improve those processes."
Robotic technology has been sweeping through warehouses nationwide as companies seek to automate repetitive tasks in a bid to speed operations and free up human labor for other activities. Many of those implementations have been focused on picking tasks, a trend driven largely by the need to fill accelerating e-commerce orders. But as the robotic-picking market matures and e-commerce growth levels off, the robotic revolution is shifting behind the picking lines, with many companies investing in pallet-handling robots as a way to keep efficiency gains coming.
“Earlier in this decade and the previous decade, we [saw] a lot of [material handling] transformation around e-commerce and the handling of goods to order,” explains Josh Kivenko, chief marketing officer and senior vice president at Vecna Robotics, which provides autonomous mobile robots (AMRs) for pallet handling and logistics operations. “Now we’re talking about pallets—moving material in bulk behind that line.”
Kivenko explains that whether items are being packaged and shipped directly to a customer’s home address or moved as finished goods to a shipping bay for store delivery, those items are first moved in bulk in some way, often by human hands and with human-operated equipment. He describes warehouses as chaotic environments in which humans move pallets and cartons in multiple ways—up and down, side to side, from receiving to storage, from storage to shipping, or via cross-docking. Automation can help bring order to that chaos.
“What we’re trying to do is relieve some of the pressure [on the] humans [doing] this work,” Kivenko says of companies that develop pallet-handling robotic technologies. “At the end of the day, we’re trying to automate some of those flows, relieve labor pressure, save costs, and keep the goods flowing.”
But automated pallet handling isn’t right for every situation, so it’s important to understand the warehouse conditions required and the protocols and best practices needed to make it a win. Here are some guidelines for applying pallet-handling robots and gaining the most from your investment.
FIRST, UNDERSTAND THE TECHNOLOGY
Pallet-handling robots fall into four general categories, explains Rich O’Connor, vice president of storage and automation for Raymond West Group, a business unit of lift truck manufacturer The Raymond Corp. They include:
Palletizing/depalletizing robots, which are used to load or unload items onto and off of pallets, usually with the use of a robotic arm for picking and placing. Today, these systems are being increasingly integrated with automated storage and retrieval systems (AS/RS) to further streamline pallet handling in the warehouse, O’Connor explains.
Autonomous guided vehicles (AGVs) and autonomous mobile robots (AMRs), which are used to transport pallets within the warehouse. Often outfitted with lift decks or conveyors, or designed to tug or tow items, these robots move pallets from point A to B within a facility. AGVs, which often follow a marked guide-path or wire in the floor, have been around for many years, but the advent of high-performance guidance and vision systems is allowing them more flexibility today, O’Connor says. AMRs are self-guided vehicles that use software and sensors to navigate their way through the warehouse.
Forklift AGVs and AMRs, which can move products both horizontally, from place to place, and vertically, into and out of storage racks. They come in various styles—including stackers, counterbalanced trucks, reach trucks, and even very narrow aisle (VNA) vehicles for use in densely packed warehouses. These vehicles are more complex than those used only for horizontal transport, O’Connor explains. They must be “highly integrated” into the facility’s warehouse management system (WMS) or warehouse execution system (WES) so that they know precisely where to retrieve and deliver pallets within the facility.
Robotic pallet shuttles, which move pallets into, out of, and within dense storage racking. The Raymond Corp. describes such a system as “a standalone, automated deep-lane pallet storage system that utilizes self-powered shuttle carriages to move pallets toward the back or front in a racking channel. Shuttles are motor driven and travel along rails within a storage lane.”
O’Connor and others say that no matter which of these technologies you’re investing in, it’s important to remember that they are all part of a larger system designed to optimize operations throughout the warehouse.
“The expanding role of all these different styles working together is what’s amazing today,” O’Connor says.
SECOND, ENSURE THE TECHNOLOGY IS A FIT
Kivenko, of Vecna, also emphasizes the importance of pallet-handling robots working in concert, particularly AMRs and AGVs.
“The magic isn’t just that the robots are autonomous and driving by themselves. The magic is multiple robots—when you have a [whole integrated] system [in place],” he says. “[It’s] how the fleet operates autonomously and optimizes itself for continuous improvement. That’s where the exponential gains are. [It’s] not just about automating what a worker does; it’s about automating a system.”
But you can’t install these systems in just any warehouse and expect magic. Kivenko and others point to certain conditions that enable the best robotic pallet-handling outcomes, especially when it comes to transportation-based and forklift-type AMRs and AGVs.
“The robots that I sell are large-load machines with very expensive technology,” Kivenko explains. “They move material, generally, in larger facilities. And in order for them to produce a return [on investment]—because that’s the name of the game here—they have to be higher-velocity facilities.”
He says pallet-handling robots work best in large facilities running multiple shifts, usually more than five days a week. Wider aisles allow the equipment to move more freely through the facility and at higher speeds, to optimize efficiency and productivity. Strong Wi-Fi networks and clean, dry environments also help keep equipment running at top performance.
O’Connor agrees that pallet-handling robots are best suited to facilities with multishift operations, where they can ease labor constraints and boost productivity. And he says many customers are willing to extend the typical two- to three-year ROI period to five years in order to achieve those gains. But there is even more to it than that. O’Connor’s colleague John Rosenberger says customers must first step back and analyze their processes to ensure that, even if they have the right facility for pallet-handling AMRs or AGVs, they are moving material in the most efficient way to begin with.
“Many times, we find that the processes in place [are inefficient],” says Rosenberger, who is director of iWarehouse Gateway and global telematics for The Raymond Corp. He emphasizes the importance of analyzing existing data—from an equipment telematics system or similar—to determine the best path toward automation.
“Do you have congestion zones now?” he asks. “They’ll still exist if you automate [those processes exactly].”
THIRD, MAKE SIMPLICITY A PRIORITY
Another basic rule of thumb when implementing pallet-handling robotics: Keep it simple.
Andy Lockhart, director of strategic engagement for global warehouse and logistics process automation company Vanderlande, says that when designing a pallet-handling robotics system, “you want to minimize the processes you [automate]. When you can create [an automated system] that focuses on one task—for example, AMRs delivering pallets from a high-bay [storage rack] directly to the palletizing cell—you can do that efficiently and effectively. When you ask the AMR to do this and this and this … you are adding risk of failure.”
Lockhart’s colleague Jake Heldenberg advises customers to first test their target processes via pilot programs within the warehouse or DC. Heldenberg is Vanderlande’s head of solution design, warehousing, North America.
“If AGVs or AMRs for pallet handling are interesting [to a customer], the best thing to do is pilot one or two in an existing DC,” he says, explaining that the process can help companies troubleshoot, understand integration timelines, and gauge ROI. But pilot programs can add expense to a project, making it unaffordable for some.
“If that’s the case, then the best advice is work with a vendor who has experience integrating [the technology],” Heldenberg says. “Use their experience to benefit your business. You won’t have the same hiccups and challenges you would with a less-experienced vendor.”
“While there have been some signs of tightening in consumer spending, September’s numbers show consumers are willing to spend where they see value,” NRF Chief Economist Jack Kleinhenz said in a release. “September sales come amid the recent trend of payroll gains and other positive economic signs. Clearly, consumers continue to carry the economy, and conditions for the retail sector remain favorable as we move into the holiday season.”
The Census Bureau said overall retail sales in September were up 0.4% seasonally adjusted month over month and up 1.7% unadjusted year over year. That compared with increases of 0.1% month over month and 2.2% year over year in August.
Likewise, September’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were up 0.7% seasonally adjusted month over month and up 2.4% unadjusted year over year. NRF is now forecasting that 2024 holiday sales will increase between 2.5% and 3.5% over the same time last year.
Despite those upward trends, consumer resilience isn’t a free pass for retailers to underinvest in their stores by overlooking labor, customer experience tech, or digital transformation, several analysts warned.
"The 2024 holiday season offers more ‘normalcy’ for retailers with inflation cooling. Still, there is no doubt that consumers continue to seek value. Promotions in general will play a larger role in the 2024 holiday season. Retailers are dealing with shrinking shopper loyalties, a larger number of competitors across more channels – and, of course, a more dynamic landscape where prices are shifting more frequently to win over consumers who are looking for great deals,” Matt Pavich, senior director of strategy & innovation at pricing optimization solutions provider Revionics, said in an email.
Nikki Baird, VP of strategy & product at retail technology company Aptos, likewise said that retailers need to keep their focus on improving their value proposition and customer experience. “Retailers aren’t just competing with other retailers when it comes to consumers’ discretionary spending. If consumers feel like the shopping experience isn’t worth their time and effort, they are going to spend their money elsewhere. A trip to Italy, a dinner out, catching the latest Blake Lively and Ryan Reynolds films — there is no shortage of ways that consumers can spend their discretionary dollars,” she said.
Editor's note:This article was revised on October 18 to correct the attribution for a quote to Matt Pavich instead of Nikki Baird.
A real-time business is one that uses trusted, real-time data to enable people and systems to make real-time decisions, Peter Weill, the chairman of MIT’s Center for Information Systems Research (CISR), said at the “IFS Unleashed” show in Orlando.
By adopting that strategy, they gain three major capabilities, he said in a session titled “Becoming a Real-Time Business: Unlocking the Transformative Power of Digital, Data, and AI.” They are:
business model agility without needing a change management program to implement it
seamless digital customer journeys via self-service, automated, or assisted multi-product, multichannel experiences
thoughtful employee experiences enabled by technology empowered teams
And according to Weill, MIT’s studies show that adopting that real-time data stance is not restricted just to digital or tech-native businesses. Rather, it can produce successful results for companies in any sector that are able to apply the approach better than their immediate competitors.
“ExxonMobil is uniquely placed to understand the biggest opportunities in improving energy supply chains, from more accurate sales and operations planning, increased agility in field operations, effective management of enormous transportation networks and adapting quickly to complex regulatory environments,” John Sicard, Kinaxis CEO, said in a release.
Specifically, Kinaxis and ExxonMobil said they will focus on a supply and demand planning solution for the complicated fuel commodities market which has no industry-wide standard and which relies heavily on spreadsheets and other manual methods. The solution will enable integrated refinery-to-customer planning with timely data for the most accurate supply/demand planning, balancing and signaling.
The benefits of that approach could include automated data visibility, improved inventory management and terminal replenishment, and enhanced supply scenario planning that are expected to enable arbitrage opportunities and decrease supply costs.
And in the chemicals and lubricants space, the companies are developing an advanced planning solution that provides manufacturing and logistics constraints management coupled with scenario modelling and evaluation.
“Last year, we brought together all ExxonMobil supply chain activities and expertise into one centralized organization, creating one of the largest supply chain operations in the world, and through this identified critical solution gaps to enable our businesses to capture additional value,” said Staale Gjervik, supply chain president, ExxonMobil Global Services Company. “Collaborating with Kinaxis, a leading supply chain technology provider, is instrumental in providing solutions for a large and complex business like ours.”
However, that trend is counterbalanced by economic uncertainty driven by geopolitics, which is prompting many companies to diversity their supply chains, Dun & Bradstreet said in its “Q4 2024 Global Business Optimism Insights” report, which was based on research conducted during the third quarter.
“While overall global business optimism has increased and inflation has abated, it’s important to recognize that geopolitics contribute to economic uncertainty,” Neeraj Sahai, president of Dun & Bradstreet International, said in a release. “Industry-specific regulatory risks and more stringent data requirements have emerged as the top concerns among a third of respondents. To mitigate these risks, businesses are considering diversifying their supply chains and markets to manage regulatory risk.”
According to the report, nearly four in five businesses are expressing increased optimism in domestic and export orders, capital expenditures, and financial risk due to a combination of easing financial pressures, shifts in monetary policies, robust regulatory frameworks, and higher participation in sustainability initiatives.
U.S. businesses recorded a nearly 9% rise in optimism, aided by falling inflation and expectations of further rate cuts. Similarly, business optimism in the U.K. and Spain showed notable recoveries as their respective central banks initiated monetary easing, rising by 13% and 9%, respectively. Emerging economies, such as Argentina and India, saw jumps in optimism levels due to declining inflation and increased domestic demand respectively.
"Businesses are increasingly confident as borrowing costs decline, boosting optimism for higher sales, stronger exports, and reduced financial risks," Arun Singh, Global Chief Economist at Dun & Bradstreet, said. "This confidence is driving capital investments, with easing supply chain pressures supporting growth in the year's final quarter."