Automation’s Role in Alleviating Labour Shortage Pressures

The pandemic has undoubtedly had a knock on effect across the global labour force, as many companies were forced to downsize operations or shut their doors, either temporarily or permanently. This jolt to business-as-usual, followed by a mass exodus of workers from the labour force during the Great Resignation and a hangover from Brexit created a ripple effect in the UK workforce that continues to impact employers today.

In fact, ONS data has revealed that nearly one third of UK businesses are experiencing labour shortages after an increase in economic inactivity post-pandemic. The number of workers has declined by 545,000 in what became known as ‘The Great Resignation’, a drop that contributed to worsening inflation and which also limited public service funding. Other factors, such as Brexit, have also resulted in a damaging effect, with research suggesting that the UK has lost over 330,000 workers due to Britain’s decision to leave the EU in 2016.

Andrew Tavener, Head of Marketing for Fleet Solutions at Descartes Systems, explains how automation can help alleviate the UK’s labour shortage pressures.

Recruitment SOS

As a result of this ongoing worker supply and demand imbalance, organisations are struggling to secure the labour, knowledge workers, and leaders they need to thrive—and logistics and supply chain-focused businesses have been hit particularly hard. According to a recent survey, 76% of supply chain and logistics leaders are experiencing notable workforce shortages in their operations, with 37% of respondents characterising the resource shortage as high to extreme.

Although competition for resources is an enterprise-wide issue, the acuteness of the labour challenge varies by organisational function. According to survey data, transportation operations (61%) and warehouse operations (56%) were hardest hit by resource shortages, from truck drivers to the fulfillment team on the warehouse floor, as companies struggle to meet customer demands with fewer workers.

While these areas are admittedly highly labour-intensive, 55% of supply chain and logistics leaders said knowledge workers are the hardest to hire—and they are becoming increasingly important as supply chain and logistics operations become more technology-enabled and data-driven.

Throw the extreme demands of peak season into the mix—only 9% of logistics and supply chain leaders said workforce shortages did not impact peak season performance at some level—and companies are feeling the pressure. And not only is the labour shortage affecting companies’ peak season, financial, and logistics partner performance, but it’s also taking a toll on customer service performance, with 58% of respondents specifying that workforce shortages have negatively impacted service levels.

How technology helps turn the tide amidst workforce constraints

Staring down the barrel of critical labour shortages, logistics-focused organisations are centering their operational strategies around automation and technology solutions to ease the resource burden. A recent study that examined which strategies and tactics companies are implementing to survive the current labour shortage revealed that 54% of the supply chain and logistics leaders surveyed are focused on automating repetitive tasks and non-value-added services —a logical step in reducing the resource footprint to perform at higher levels with fewer workers.

The survey also found that 50% of the logistics-focused organisations surveyed are leaning into centralising operations (e.g., centralised transportation planning). Typically executed through cloud-based solutions leveraged as shared services across the enterprise, this strategic approach helps increase operational efficiency without increasing headcount.

Tech in action

How does the goal of automating repetitive, low-value tasks and leveraging technology to drive efficiencies translate to the warehouse floor or to transportation operations? Driverless vehicles, robotics, drones, and soft and hard automation in the warehouse are all on the table for supply chain and logistics decision-makers but there are some clear productivity-boosting technology winners in the pursuit of mitigating current labour challenges in these areas.

To help drive productivity gains for labour workers, a late 2023 survey of 1,000 supply chain and logistics decision-makers across three sectors: 1) manufacturing, distribution and retail; 2) carriers; and 3) logistics services providers revealed that delivery route optimisation (54%) and driver mobile productivity (45%) solutions are the top technology choices. To mitigate the impact of the shortage of knowledge workers, automated real-time shipment tracking (53%) emerged as the top technology choice.

Indeed, for distribution-focused organisations, deploying automated technology solutions that optimise route planning and execution and mobile apps that help drivers perform more efficiently (and safely) on the road translates to productivity gains that reduce labour requirements.

For instance, strategic route planning solutions increase route density and asset utilisation, while reducing planning time and resources required to deliver maximum efficiency. In another example, intelligent dispatch and tracking software uses real-time GPS to ensure responsive, more consistent on-time delivery performance that helps to keep customer service standards high.

In the warehouse, some companies are turning to robotics and automated guided vehicles (AGVs) to eliminate the need for manual labour. On the back end, warehouse management systems (WMS) with barcode-based pick and pack workflows, multi-carrier parcel/LTL shipping automation and capabilities for real-time visibility into the order journey help companies minimise labour costs and fulfil more orders while enhancing the customer experience.

Perhaps even more importantly, automated logistics and supply chain technology solutions not only ramp up productivity but play a role in improving employee retention by simplifying and streamlining daily workflows for warehouse staff, planners, dispatchers, and drivers —a valuable advantage amidst ongoing labour constraints.

AI making waves

In the wake of the launch of ChatGPT, interest in Artificial Intelligence (AI) has surged and generative AIs have raised awareness and expectations related to AI technologies, as well as opportunities to bring new capabilities into the market. Supply chain and logistics leaders are also looking to AI to help improve operational efficiency and worker productivity. According to the survey, almost 30% of respondents are in the process of investigating AI technology while 53% are planning to deploy/partially deployed/fully deployed in their AI implementations.

As logistics becomes increasingly data-driven, the ability of AI to analyse vast volumes of data in the blink of an eye will continue to propel technology innovations. While AI-based capabilities like, for example, predictions and event detection in the context of route planning and transportation management, have been embedded in logistics technology for years now, the capacity of AI to continuously evaluate tens of thousands of data points and variables and make learned adjustments will help to further automate and accelerate logistics processes, eliminate redundancies and inefficiencies, and increase worker productivity.

Looking ahead

For supply chain and logistics leaders faced with the challenge of keeping operations profitable with fewer resources post Brexit, post pandemic and after the Great Resignation, technology is changing the face of the strategies, tactics, and best practices used. For labourers bogged down with repetitive and time-consuming low-value tasks and for knowledge workers spending an inordinate amount of time preparing data, compiling reports, or tracking shipments manually, automation is a gamechanger.

With technology-powered tools doing the bulk of the heavy lifting, workers can free up valuable productive time to focus on more meaningful tasks, while enjoying more simplified and streamlined workflows that enhance their daily work experience and, ultimately, help improve retention rates. From the C-suite perspective, the combined power of automating low-value, repetitive tasks and adopting technology-driven solutions spurs increased productivity, supply chain visibility, and top- and bottom-line performance while fostering more positive employee, partner, and customer experiences.

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