Warehouses wrestle with worker turnover
By James A. Cooke -- Logistics Management, 8/1/2005
ATLANTA—High rates of turnover among workers continue to plague warehouses, making it the top issue for management, according to the results of a new study. The "2005 Warehouse Benchmarking Report," issued by the Warehousing Education and Research Council (WERC) and The Logistics Institute (TLI) at Georgia Tech University, found that on average, warehouses turned over 16 percent of their employees in a given year. "The number one issue is workforce turnover," said the study's author, Dr. Edward H. Frazelle, president of Logistics Resources International and a director of the Logistics Management Series of educational programs at Georgia Tech University in Atlanta.
A total of 139 companies representing a cross-section of American industry took part in the study. Almost all (96 percent) represented facilities that store finished goods. The median size of respondents' warehouses was 147,500 square feet; the largest building totaled 1.5 million square feet. The median number of warehouses in survey takers' North American networks was three. In addition to the warehouses in their own networks, respondents also used an average of .67 overflow warehouses for temporary storage.
Study participants appeared to be heavily involved in handling products manufactured overseas. On average, 32 percent of their warehouses' inbound volume arrived from a foreign country. On the other hand, this same group shipped only 11 percent of its outbound volume to destinations outside the United States.
Trucking was the most commonly used mode of transportation. Truckload carriers delivered 40 percent of all inbound shipments and 54 percent of outbound loads. Interestingly, 17 percent of the inbound goods arrived in ocean containers, but less than 1 percent moved outbound the same way.
The survey results indicate that more companies have embraced the use of metrics in warehousing. Seventy percent of the respondents reported using 11 to 15 different metrics to evaluate their warehouse operations. The most common metric was "order shipping accuracy," used by 81 percent of the respondents. The second most-common metric was "item inventory accuracy," employed by 78 percent.
Warehouse managers reported that inventory turns on average 9.9 times annually. When it comes to labor productivity, warehouse workers handled an average of 64.8 cases per hour and 12.8 order lines per hour.
The report also explored technology and software usage in warehousing. Seventy-one percent of the participants said that they were scanning bar codes. Interestingly, 7 percent of participants reported using radio frequency tags—the same percentage as are using pick-to-light equipment. Some 64 percent of respondents said they had no plans to implement RFID.
When asked what changes they would like to make in their warehouses, 57 percent of survey participants said they would install more dock doors. Another 31 percent wanted higher ceilings in their buildings.
As for workforce challenges facing warehousing operators, 47 percent of respondents cited concern over high rates of labor turnover, and 45 percent said that an aging workforce was a concern. Twenty-one percent said that dealing with multiple languages in the warehouse was also a challenge.
| Size: | 150,000 square feet |
| Clear height: | 28 feet |
| Dock doors: | 15 |
| Workforce: | 60 full-time employees |
| Shipping: | 564,000 lines/yr; 60,500 orders/yr |
| SKUs: | 5,001 total; 3,502 active |
| Inventory turn rate: | 5.1 |
| Order fill rate: | 97.1 percent |
| Source: 2005 TLI/WERC Warehouse Benchmarking Survey | |
View All Blogs
