Labor, the Holidays and E-Commerce in the U.S.

Labor, the Holidays and E-Commerce in the U.S. - Image 1

Black Friday is the beginning of the Christmas shopping season

The holiday shopping season has arrived. This year, retailers are faced with big challenges, including the emergence of smartphone shopping and the continued e-commerce boom. For the first time in history, Black Friday online sales in the U.S. via mobile phone surpassed $1 billion, and, according to Forrester’s U.S. Online Holiday Retail Forecast, online holiday retail sales are expected to increase by 15 percent in 2012.

 

At no time of year is retail order fulfillment more important than the holiday season. It is no secret that e-commerce shoppers expect to receive items quickly. Since retailers frequently offer comparable products at similar prices, speed of delivery is becoming an increasingly important factor for many holiday online shoppers.

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Santa Claus vs. online retailer

During the holidays, distribution centers serve as the primary connection between company and customer, adding additional strain on already busy facilities. Increased volume, holiday deals and shipping promotions frequently require retailers to be able to fulfill fluctuating volumes of online orders for delivery on a real time basis. In addition to scheduled store deliveries of pallets and cases, retailers must factor split-case picking, item-level touches and multi-line item sortation in to their fulfillment processes to accommodate for demand fluctuations.

Effects on Labor

Seasonal workers can add a strain on busy facilities. Since safe and satisfied workers are integral to maintaining a successful fulfillment center, it is crucial that retailers place a high level of importance on environmental conditions and concerns that can impact workers’ quality of life. According to a study published in the Journal of Service Research, companies that attend to employee satisfaction can improve internal morale, reduce turnover and enhance customer satisfaction. In the hype competitive e-commerce marketplace, insuring customer satisfaction is absolutely critical for success.

Order fulfillment involves physically taxing, repetitive movements including lifting, carrying and bending. Workers are responsible for large volumes of orders each day, and in larger warehouse facilities with traditional operations, automated sortation and/or intra-DC transport, pickers may walk more than 15 miles each day. In smaller distribution centers, operators may walk up to five miles over the course of a shift. As workers age, excessive bending and stretching can lead to higher rates of injury and associated workman’s compensation expense. In addition, fatigued workers are less efficient and more prone to error.

To help meet 2012 demand, Amazon has hired 50,000 seasonal workers; this number represents more than double their non-holiday workforce. While the company said it expects thousands of seasonal workers to be hired to full-time positions after the holidays are over, there is no guarantee and few statistics available on these hiring methods from past years.

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"Picker" at an order fulfillment center

Earlier this year, Mother Jones published an article, by journalist Mac McClelland on her experience as an ‘undercover’ assignment as an order picker. It is a graphic account outlining that in many instances the job of a ‘picker’ at an order fulfillment center, is a position of last resort. In addition, many of these temporary staffers are labeled as short-term contractors, and are not entitled to healthcare benefits, vacation, raises, or job security (McClelland). They are paid up to $3 less each hour than full-time workers. As a temporary worker for Amalgamated Product Giant Shipping Worldwide Inc., regular shifts spanned 10.5 hours. When additional overtime was necessary, including during the holiday season, workers were expected to work an additional 1-1.5 hours each shift, for a total of 12-12.5 hours.

Leveraging New Technology

While it might be too late for this holiday season, new technological and ergonomic advances can help retailers improve the worker environment while meeting e-commerce demand. Automation has become more affordable and productive than ever, and companies around the globe are leveraging such technology in their warehouses to improve the distribution center work environment. Human interface with modern robotic systems present very little risk compared to the randomness of such warehouse equipment as the forklift, jack truck and other manually guided power equipment. Typical fixed aisle ASRS and systems with high-speed robots for put away and storage are designed to work in confines that are limited or even completely off-limits to workers.

With the latest automated storage and retrieval technologies such as AutoStore in place, operators merely insert bins into the storage cube via one or more receiving stations. Robots bring inventory to pickers for order fulfillment selection and then replace any remaining material back into storage. This saves time, increases productivity and eliminates thousands of miles of walking for pickers in a typical fulfillment center.

Automated fulfillment systems leverage faster robotic technology, data inventory systems and a reexamined strategy of how warehouse space is utilized. They also rethink the sometimes harsh labor conditions that e-commerce has caused, and can save workers time and energy. As e-commerce demand grows, companies need to consider automated storage and retrieval technologies especially to accommodate holiday fulfillment and simultaneously improve workers’ quality of life.

McClelland, Mac. “I Was A Warehouse Wage Slave.” Mother Jones. March 2012. Web. 05 Dec. 2012. http://www.motherjones.com/politics/2012/02/mac-mcclelland-free-online-shipping-warehouses-labor.

One Response to Labor, the Holidays and E-Commerce in the U.S.

  1. ecommerce fulfillment says:

    This saves time, increases productivity and eliminates thousands of miles of walking for pickers in a typical fulfillment center.

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