October 31, 2007

Mass customization = warehousing labor woes

By DC Velocity Staff

The push to mass customization in the retail supply chain will place more strenuous demands on labor in distribution and manufacturing, according to Professor Robert B. Handfield of North Carolina State University.

Mass customization in retail requires distribution operations to perform special services. "Retailers want specialized services these days and everyone wants something different," said Handfield. "Stores want their own regional displays as well as specialized packaging and markings for products and customized promotions."

Many times, however, warehouses must rely on temp laborers to handle surges in shipments—workers who often lack the training and experience to meet these kinds of demands. Making things worse, warehouses are already struggling to find an adequate supply of temporary workers to keep up with present needs. "Wages are going up for temp labor," said Handfield, "and still shortages are occurring."

To deal with this labor issue, Handfield suggests that warehouses develop a human resources strategy to ensure an adequate, skilled workforce. He recommends that companies consider using the services of more contract labor firms that specialize in temp employees. He also advised companies to consider paying workers on a "piece rate" for work performed rather than on a traditional hourly basis.