6 Ways to Improve Distribution Center Efficiency

If you speak to anyone in the warehousing and distribution industry, they will most likely tell you that staffing is the number one challenge to a more efficient operation. Becoming efficient starts with the foundation of getting people to come into work every day and being staffed to the plan. A solid team will consistently come to work when they are scheduled.

On top of that, it’s more important than ever to be competitive - wage pressure is a real issue, creating a constantly increasing pay rate that will be large enough to get workers to show up consistently. In this economy, there are bidding wars (in a sense) within the industry and it makes it tough to match and compete with the compensation packages being offered by the fortune 500 companies.

There are countless new scenarios that impact your ability to fully staff your warehouse and run efficiently. But proactive facilities are finding ways to adjust and overcome these challenges. Let’s look at some actions your distribution center can take to improve staffing and cut down on operational inefficiencies.

Be Flexible with Attendance Expectations

The realities of life often compete with traditional workplace attendance policies. If you want to attract good workers and improve attendance rates, consider relaxing your attendance policies.

If you have a workforce with unique personal demands, they may not be able to commit to a Monday through Friday 8-to-5 schedule. Perhaps their child has an appointment every Tuesday afternoon, or they can’t get childcare on Wednesdays. Distribution centers that are willing to work around those schedules will build loyalty and increase overall attendance.

There’s also the impact on employees who stay. When understaffed teams are expected to make up for missing workers, the impact on morale can reduce productivity. And new workers take weeks or months to reach the productivity you lost when an experienced worker quit.

Create an Enjoyable Environment

Getting people to stay helps you reach an optimum level of productivity. Make your distribution center a place that people want to keep coming back to. The physical environment itself can play a major but underappreciated role in retaining good workers.

More and more distribution centers are increasing their emphasis on safety and cleanliness. Studies show that a clean and organized atmosphere makes people want to keep coming back to work. But people won’t want to be in a warehouse that looks like an unsafe disaster. No one wants to spend the majority of their waking time in a workplace that isn’t well cared for.

Some facilities have cafeterias with outrageously low lunch prices. It’s great for the workers because they don’t have to spend their hard-earned money paying too much for lunch. Employees eat together, which helps foster interpersonal relationships and a stronger company culture.

Provide Meaningful Incentives

Employees rarely quit because of pay alone, but you can use incentives as part of a larger, overall program to retain top talent. Incentives show employees that you value their work, and that can go a long way.

Get creative with your retention incentives. Here are a few ideas:

  • Give 30-day, 60-day, and 90-day retention bonuses
  • Provide productivity incentives
  • Offer referral bonuses
  • Give sign-on bonuses
  • Paid time off

Promote a Healthy Work Culture

healthy work culture kills two birds with one stone: it helps retain your best workers, and it increases production. Happy employees are engaged employees, and that boosts your productivity and operational efficiency.

Healthy work cultures are characterized by commitments to punctuality, transparency, integrity, honesty, and mutual respect. But it can only happen if it’s lived out by executive management and if people are held accountable.

Invest in All Positions

Entry-level positions, such as order selecting, pay the least amount of money and have the highest turnover. But just because a job is the most entry-level position, that doesn’t make it unimportant. In fact, you could argue that order selecting is more important than most other positions in the warehouse.

On top of that, order selecting is difficult. There’s a lot to learn, and you need to be accurate and efficient. Yet, many companies don’t invest in that important position by helping workers to be as successful as possible.

The more you invest in entry-level positions, the more you’ll increase retention rates and improve proper picking methods on the floor. Better work habits boost productivity and efficiency, while cutting your operational losses.

Hire Temporary Workers

The seasonality of the industry can make it difficult to reduce inefficiencies. Suddenly you need to bring on 50 more people, and just as suddenly you need to lay them off. That kind of seesaw staffing can damage your reputation with workers and make it more difficult to fill your staffing needs.

On Time Staffing can provide short-term labor, with employees who expect to be at your facility for a limited time. That means no surprises or damaged reputation when it’s time to let them go.

Better yet, when you need to bring them back at the start of the next season, those same workers are eager to return. That means less training needed, quicker ramp up on productivity, fewer costs of hiring, and less work on your part to staff up. As a result, you enjoy greater efficiency, lower expenses, and fewer losses.

Temporary workers also bring another benefit that may boost your efficiency because they see how operations are done at other companies, they can provide fresh feedback and new ideas to your warehouse. Temporary workers are a tremendous source of input for operational improvements and boosting production.

Find out how On Time Staffing can support your labor needs. Get started today!