Optimizing Warehouse Efficiency: Balancing Fixed and Variable Labour for Variable Goods Receipt Rates

(i) Fixed Labour

If the supply of labour is fixed, then the manager can only maximise the efficiency of the available labour if most receipting activities occur inside normal hours of business. This may be possible with some goods, and impossible with others. Also, if fixed labour is truly fixed, i.e. under all conditions invariable, then the fixed labour becomes an agility-limiting factor. All deliveries and despatches must occur inside normal working hours. For some categories of goods, this pattern of working may be sufficient. However, if just-in-time or on-demand fulfilment is being offered, then fixed labour is unlikely to suffice as an operational approach.

(ii) Variable Labour

If the availability of labour can be varied however, then much more agility in the fulfilment of orders becomes possible. Also, to meet demand spikes and to efficiently address the highs and lows of operational activity inside the warehouse, variable labour is a highly advantageous enabler. Variable labour should be applied whenever demand patterns and operational activities are likely to require more labour than is available in the fixed labour provision. Short-term contracts, direct hire day labour, and temporary or seasonal agency workers can help the warehouse perform efficient operations during calendrical (predicted) activity peaks.

Unpredictable demand peaks are less easy to plan for. However, these can be addressed through overtime incentives offered to full-time contracted workers.

With both fixed and variable labour, the flattening out of receipts offers maximisation of shift efficiencies, because labour can be utilised on a steady state rather than a sudden crash basis. In other words, scheduled receipting helps management leverage all labour that it is paying for, fixed or variable.

Multiskilling of available staff so that as many workers as possible can perform as many tasks as possible is also a valuable undertaking on the part of management. Staff who are multiskilled can be utilised in more roles, which has positive implications for the management of warehouse work and the matching of orders with people capable of processing them.

The use of Standard Operating Procedures to guide staff through unfamiliar operations at short notice and to skill them to perform new tasks with minimal learning time is also prudent management practice. With effective SOPs, relatively novice workers can perform tasks nearly at the efficiency of more experienced workers. This too maximises the output of labour and allows the fairly rapid onboarding of casual labour when activity is peaking.