The nature of order fulfilment in ecommerce is changing radically, and with it, the demands placed upon the human resources needed to manage and support it.
With leading online brands looking to further upscale their operations for picking single items, conventional methods are starting to show the strain. In the wake of the Brexit vote, fewer eastern European workers appear to be available for work in distribution centres and yet, the UK consumer’s penchant for buying goods over the internet remains undiminished.
How are online businesses going to continue to expand and offer consumers the service they have come to expect, when labour is becoming harder to find?
“A great many eCommerce fulfilment sites are still very manual and labour intensive,” says Andy Kaye, CEO of Bis Henderson Group. “But, a marked falling away in the number of eastern European workers since the Brexit vote is making it very difficult to match demand for human resources with the growth in eCommerce.
“The result is, to improve service levels online businesses are now beginning to automate their fulfilment operations – bringing goods to the person – which may reduce the call for armies of order pickers, but changes the nature of the work for individuals and influences the skills needed by managers to run this type of operation,” says Kaye.
Using automation to support order picking creates a production environment wherein the warehouse worker is no longer actively moving about the facility to perform duties, but is expected to stand in one spot and pick from totes delivered to a pick station.
John Munnelly, Head of Operations at John Lewis’ highly automated national distribution centre in Magna Park, Milton Keynes, believes that the transition from a manual warehouse to an automated operation creates better jobs. “We have a strategy ‘Better jobs and better-performing partners on better pay’ and we are bringing that to life in our automated world,” he says. “Automation demands a different mind-set from people on the shop floor. We have quite successfully moved a number of people from the shop floor to quite important technical roles, helping capable people to find niche positions. In a manual environment you tend not to need that level of expertise, but in an automated operation there is a real requirement for people with more analytical skills and a bias to understanding systems – how material flows through a system.”
Munnelly describes the positive outcome of John Lewis’ investment into automated systems: “We employ around 700 people here. If we had continued with our manual operations, against today’s current demand, we would have needed ten times that number of full time equivalents. So automation has certainly had a huge beneficial impact on the number of people.”
He adds, “We still have a requirement for the traditional shop floor partner that is prepared to come in and give us a good day’s work for a good day’s pay, but increasingly, there is a growing demand for more technical jobs – such as stock management, maintenance, control room operators, and team leaders.”
However, motivating staff that are working in isolation, in static positions, requires management with highly developed personal skills that are more in-tune with the needs of the individual. These are skills more commonly acquired by managers experienced in running factories.
As Mark Botham, COO at Bis Henderson Recruitment points out, “There is a different management skill required for managing people in an automated warehouse as opposed to a manual warehouse. In a conventional setting there is more interaction between people as they travel through the warehouse. In an automated environment, individuals work in a fixed area, which could be a 15ft pick-face. So motivating people that are working in isolation is very difficult and requires a different management style.”
Tackling this issue at Connect Books, a leading book distributor with a number of channels to market, is Supply Chain Director, Ian Sheppard. He says, “While we have recognised that people are performing well in certain roles, we have implemented a rotation system so that people are not performing the same function for more than an hour at a time. By introducing a variety of tasks over a shift we are working to reduce isolation and improve interaction amongst colleagues – and based on feedback from our operators, it’s been received very positively. Importantly, they say that they are comfortable within the roles they are performing.”
What of the skills needed by team leaders in an automated e-fulfilment facility?
John Munnelly believes that the first line manager role in an automated environment is very different to that of a manual operation. “There is definitely much more of a technical requirement for first line managers in understanding their piece in the jigsaw puzzle and how it’s intrinsically linked to the next piece. So whatever goes on in an area will have a knock-on-effect upstream or downstream.” He adds, “We no longer act in silos, it’s one big machine.”
When it comes to listing the key attributes and skills required of a senior manager controlling an automated facility, Munnelly places commercial acumen, analytical skills and a keen focus on the customer as core qualities. He says, “We need someone who understands what the customer wants and who understands the capability of the equipment, how it can adapt to constant changes in customer propositions – whether that’s speed of delivery, order consolidation, or premium services such as gift wrapping.”
Importantly, automated systems need maintenance, so maintenance engineers are in demand. Not just mechanical and electrical engineers, but systems engineers for managing the numerous processors and computers deployed to control all the moving parts.
Botham sees a growing demand for automation engineers to run these highly-automated eCommerce facilities. Teams of 20 to 30 engineers can be employed with salaries between £40 – £60,000 in large installations. “Systems integrators have been providing these engineers at a significant premium, but now eCommerce companies are getting wise to this and are hiring their own engineers which they send to the integrators for training,” he explains.
But, does running an automated warehouse increase complexity? Ian Sheppard thinks automation shifts the focus of complexity. He says, “Automation enables my team to be more strategic in the way that the warehouse operates. We can think more clearly about how to produce greater efficiency in the warehouse, but organisationally, the structure of the warehouse team changes as, for example, we now employ engineers to maintain the system. The team structure and workflow planning processes become more complex, but executing the plan becomes more straightforward.”
The skill set demanded of a general manager in charge of a highly-automated eCommerce fulfilment operation is considered by Mark Botham to be significantly different than that required for a conventional distribution centre and consequently, those holding the skills and experience are in short supply.
Clearly, those eCommerce organisations looking to meet rising demand by adopting automated technology will need to consider very carefully the necessary commitments to the human side of the operation. Automation may reduce the total number of people required to run an e-fulfilment centre, but it does not remove the need for skilled individuals – far from it.