Archive for Guest contributor


The Job Market is so Hot that Candidates are Ghosting Employers

The Job Market is so Hot that Candidates are Ghosting Employers

In today’s job market, companies have to compete harder than ever before and candidates, realizing their position, have begun ghosting employers. Ghosting has never been in an issue in the professional setting until now.


Highlights:

  • According to a new report, more companies and recruiters are getting ghosted, with thousands of users on LinkedIn chiming in about what seems to be a uniquely-millennial phenomenon moving into the workplace.
  • Ghosting’s prevalence speaks to a talent attraction and retention problem that many companies are having in this marketplace.
  • Recruiters who are specialized in your vertical have an established base of candidates, so you can remove ghosting from the equation entirely.

This guest post comes to us from Argentus Supply Chain Recruiting, a boutique recruitment firm specializing in Supply Chain Management and Procurement.

Many of us have (thankfully) been out of the dating game long enough that we’ve never experienced what most millennials have:  the dreaded ghost. You meet someone new, hit it off, go on a few dates, maybe even tell your friends and parents about an exciting romantic prospect. Then the hammer drops: all of a sudden, radio silence.  No “dear John” letter, no break-up text, and no explanation whatsoever. It’s a digitally-enabled way of severing ties that’s so casual it hurts, because the affected (dare we say victim?) never gets to find out what exactly happened. The imagination runs wild with possible motivations for this disrespect: was it them? Was it me?

You never really know. That’s what makes it so tough.

Now, according to reports, this peculiar social phenomenon has metastasized into the workplace:

The job market is so hot, more candidates are ghosting their employers. Or prospective employers.

Welcome to 2019.

It’s no secret that the hiring market is strong, with near-historic low levels of unemployment. Now, according to a recent NPR report, more companies and recruiters are getting ghosted. It’s also become a hot topic on LinkedIn, with thousands of users chiming in about what seems to be a uniquely-millennial phenomenon moving into the workplace. Reports about ghosting even made their way into a recent report from the U.S. Federal Reserve – which shows that ghosting isn’t just a meme, but something that’s really affecting companies’ hiring practices and their bottom line.

NPR – as well as this great article by LinkedIn Contributor Molly Mosley – identify three key species of ghost:

  • The employee who accepts a role and gets into the job – thankfully, it’s not often a long-term employee, otherwise a missing person report might be in order – and leaves without a trace.
  • The job candidate who books a job interview, or accepts a role, and doesn’t show up, or send any kind of communication or response when contacted.
  • The candidate who works with a recruiter, asks to be submitted for a role, and then stops responding. There are quite a few reports about this, but we’re lucky that we haven’t experienced it as much in our recruitment practice at Argentus.

Ghosting is a very modern-feeling phenomenon. It’s a symptom of a more relaxed – dare we say, lax – approach to interpersonal and professional relationships brought about by digital technology. But it’s also a symptom of something more fundamental about this job market:

It’s a candidate’s market – especially in high-demand STEM fields like Supply Chain.

We’re willing to bet that in a recession, all these ghosts would become corporeal again. But for now, candidates have all the leverage, and what’s more, they’re beginning to realize this, which means that companies have to compete harder than ever before.

Don’t get us wrong: ghosting is unacceptable, and we don’t mean to excuse it. No one would want to hire a candidate who’s ghosted an employer in the past, and we’d stop working with anyone if we found out they’ve done it before. It’s, in short, the height of unprofessionalism. Any company who gets ghosted on has really dodged a bullet: who would want to work with someone who would resort to such a childish and cowardly tactic?

But ghosting’s prevalence still speaks to a talent attraction and retention problem that many companies are having in this marketplace. Consider this: if your company interviews someone, and never gives any form of feedback or follow-up – which still happens, believe it or not – you’re ghosting candidates as well.

It cuts both ways. And that gestures towards a few changes that companies can make to help minimize the risk of ghosting – which can waste thousands of dollars of company resources:

Smooth out the onboarding process.

In short, treat prospective candidates like a valuable strategic asset instead of a disposable endless resource. The accounts of ghosting from the workers in the NPR story, as well as others, share something in common: the workers felt disrespected or disregarded by their employers.

The accounts of ghosting from the workers in the NPR story, as well as others, share something in common: the workers felt disrespected or disregarded by their employers. Click To Tweet

Treating candidates with respect is table stakes in this hiring environment. But consider the ways that you’re unintentionally depersonalizing the hiring and onboarding process: letting it get drawn out with endless approvals and interviews, resorting to impersonal communication methods, failing to have succinct and effecting onboarding policies to get new candidates up to speed.

Lastly, because we can’t resist: a specialized recruitment partner will forward pre-vetted candidates, often ones that they’ve known for years, who you know won’t ghost. Recruiters who are specialized in your vertical have an established base of candidates, so you can remove ghosting from the equation entirely.

But what’s your experience? Have you been ghosted by an employee or job candidate before? Why do you think this issue is coming into the zeitgeist right now?

Related posts:

New Call-to-action

Archive for Guest contributor


Six Tips for Warehouse and Distribution Center Efficiency

Six Tips for Warehouse and Distribution Center Efficiency

If you want to keep your customers satisfied, you need to keep things moving in your facility. Use these tips to keep up the pace and increase warehouse and distribution center efficiency.


Highlights:

  • Speed has become the name of the game when it comes to staying competitive in the global supply chain.
  • Keep your priorities in mind when organizing your warehouse, including your fastest-moving products.
  • Digital technology can take the guesswork out of inventory and warehouse management with employees scanning products every step of the way.

This guest post was written by David Madden for Argentus Supply Chain Recruiting, a boutique recruitment firm specializing in Supply Chain Management and Procurement.

Things can always be faster when you work in a warehouse or distribution center. Speed has become the name of the game when it comes to staying competitive in the global supply chain. Major players like Amazon and Walmart have distribution centers all over the world, pumping out packages at lightning speed.

If you want to keep your customers satisfied, you need to keep things moving in your warehouse or distribution center. Use these tips to keep up the pace and make your facility as efficient as possible.

1. Keep your warehouse organized

Nothing stymies operational efficiency like a poorly-organized warehouse. Your facility should have a thoroughly thought-out floor plan that your employees can navigate with ease. The space should be organized so that your staff members can access products and packages without getting in each other’s way. Your employees may need to process different orders simultaneously, so they should have plenty of space to avoid stepping on each other’s toes. Today’s warehouses are much larger than they were in the past, creating more space for speed and efficiency.

Items should be clearly labeled on the shelf and organized in a way that makes sense for your facility. You can group packages by their contents, destination or point of origin. This layout should make sense to your employees, so they’ll be able find the items they need without having to look at a spreadsheet.

2. Prioritize fast-moving products

Keep your priorities in mind when organizing your warehouse. Every element of your chosen layout should favor your fastest-moving products. Bestsellers don’t tend to sit on the shelf for very long, so make sure your employees can easily retrieve them at all times. Your employees shouldn’t have to go all the way to the back just to retrieve a product, especially if it’s one of your most popular items. You can help everyone save time by moving these fast-selling products to the front of your warehouse. They should be kept low to the ground and close to the loading dock.

Your entire warehouse layout should focus on moving better-performing products to the front, while keeping the less popular products at the back. Go over your inventory and rate your products based on how often your employees need to retrieve them. This should inform your thinking as you change the layout of your facility.

3. Automate the data collection process

Running a warehouse these days is all about data. Digital technology can take the guesswork out of inventory and warehouse management with employees scanning products every step of the way. Your facility should collect as much data on your products as possible, including where they’re coming from, when they arrive, what condition they are in, where they’re going and when they’re set to leave. You can use this data to keep tabs on the location of your products. At any given moment, you’ll know exactly how many products are being stored at your facility.

But in order to improve efficiency, you need to automate the data collection process as much as possible. Your staff members should automatically retrieve this data as they go about unloading and scanning items that have just arrived at the facility and getting them ready for the last leg of their journey. You can use handheld scanners and radio frequency identification tags to simplify this process. Automating data collection also reduces costly errors like inaccurate data entry.

Warehouse automation technology is already a $1.9 billion industry, and it’s expected to balloon to $22 billion by the year 2021. If you want to stay competitive, it might be time to invest in automation. You’ll have all the information you need at your fingertips without adding any additional steps to your operations.

4. Use inventory management software

As you collect all this data on the shipping containers and products moving in and out of your facility, you can save time by sending that info right to your company’s inventory management software. This technology helps you make sense of all the data in a matter of seconds. You can quickly see how many products are on the shelf, when shipments need to go out and when new shipments are due to arrive. Software programs are synced to your data collection devices, so you won’t have to worry about entering that information twice.

Artificially intelligent software programs can even help you anticipate future outcomes like inventory shortages, delivery delays and other potential problems. Click To Tweet

Certain artificially intelligent software programs can even help you anticipate future outcomes like inventory shortages, delivery delays and other potential problems. They keep a log of the history of your facility’s operations to help better predict what’s going to happen in the future.

5. Save time with cross docking

If you have fast-moving products coming through the door, you can save time with what’s known as cross docking. Instead of putting these products back on the shelf only to have your employees retrieve them hours later, direct them to a temporary staging area for scanning and inventory purposes. This temporary staging area should be close to the loading dock. When the products are ready for the next leg of their trip, your employees can quickly retrieve them and get them out the door without having to look for them on the shelf.

6. Increase visibility with better lighting

The key to operational efficiency isn’t always as complicated as it seems. Sometimes all you need is better lighting. Warehouses tend to have tall ceilings, and lighting the space, including all those individual shelves, can be a challenge. If you want to be speed up your warehouse operations, everyone should be able to see clearly as they go about their business. Staff members should be able to read labels and use containers without having to squint. Keeping the lights on also helps your employees stay awake, especially if they’re getting a shipment ready in the middle of the night.

Working towards warehouse efficiency

Making your warehouse more efficient starts with having the right layout in place. Your products should be organized according to their popularity. You should automatically collect data on your products as soon as they enter the facility. And always make sure your employees have enough space and light to do their jobs. Follow these steps and you’ll get orders out the door in record time.

Related posts:

New Call-to-action

Archive for Guest contributor


How Rogue Ales is Leveraging IoT to Revolutionize the Beer Brewing Industry

How Rogue Ales is Leveraging IoT to Revolutionize the Beer Brewing Industry

Rogue Ales believes that their “Ground to Glass, Grow your Own Revolution” is a key tenet to their success. The company leverages the Internet of Things (IoT) to ensure that their supply chain is able to deliver the highest-quality ingredients to their breweries just in time.


Highlights:

  • Consumer desire for freshness and high quality is influencing the beer brewing industry.
  • Rogue Ales owns Rogue Farms giving the brewery a unique advantage in being able to produce specialty ingredients.
  • The Internet of Things has enabled Rogue to capture and act on the data surrounding their supply chains.

Rogue Ales, headquartered in Newport, OR, is an alcoholic beverage company founded in 1988 that produces beer, wine, cider, and distilled spirits. Their ales have won over 1,800 awards at various brewing competitions.

Rogue’s brewing operation is unique in that the company’s subsidiary, Rogue Farms (founded in 2008), grows all of the ingredients used. The company believes that their “Ground to Glass, Grow your Own Revolution” is a key tenet to their success. Rogue Ales leverages the Internet of Things (IoT) to ensure that their supply chain is able to deliver the highest-quality ingredients to their breweries just in time.

The trend toward freshness

According to AT Kearney, 93% of consumers consider freshness to be the most important criterion when purchasing foods. According to the USDA, the sale of organic foods in the U.S. has more than tripled from approximately $12B in 2005 to over $35B in 2015 (data for 2016-2018 was not immediately available).

US Organic Food Sales

Consumer desire for freshness and high quality is influencing the beer brewing industry. According to the American Brewers Association, the number of craft breweries in the United States has increased from 122 in 1973 to over 6,300 in 2017.

number of craft breweries

As the competition between breweries intensifies, brewers are constantly looking for key ways to differentiate their beers from their competitors in this $111.4B market. Most beer sales are through microbreweries (defined as a brewery producing less than 15,000 barrels per year and at least 75% of beer sold off-site via distributors or wholesalers). Rogue Ales has made freshness a key value-add differentiator for its brand, selling over 325,000 gallons in 2016. In a Market Watch article, Rogue’s president, Brett Joyce, says:

What it means is that we have to get better all the way around. The quality has to go up. Just having products isn’t enough. You better have a strategic plan to go to market, retailer support, good follow-up and good sales people. It’s a real business now.

With the establishment of Rogue Farms in 2008, Rogue began producing their own ingredients, breaking tradition with most breweries, who acquire ingredients from traditional wholesalers. Rogue has a 52-acre hop farm, located approximately two hours from the brewery, where it produces its entire hop supply. Rogue states that:

Growing hops is an expensive and time-consuming endeavor, but it also helps to guarantee our supply and quality while allowing us to keep our Brewmaster, John ‘More Hops’ Maier, happy with unique, aromatic hops.

The control Rogue Ales has over Rogue Farms gives the brewery a unique advantage in being able to produce specialty ingredients for its core and specialty beers. At Rogue Farms, Rogue grows or produces:

  • 10 varieties of hops
  • Two varieties of malting barley
  • Rye
  • Pumpkins
  • Marionberries
  • Jalapeños
  • Honey

The challenges of using fresh “wet” hops in beer

A basic beer recipe only has four ingredients: malted barley, water, hops, and yeast. Of these ingredients, hops are the most difficult to source, store, and transport due to their perishability. Most brewers use pelletized, dried, hop pellets. Rogue uses fresh (or “wet”) hops in their ales, harvested from Rogue Farms. Fresh hops give their beer a fresher taste, as the hops’ aromatic qualities are not damaged by drying and pelletization.

Fresh hops, once harvested, must land in a brew vat within 12 hours and cannot be exposed to excessive heat, air, or humidity during transport or their volatile aroma compounds will degrade and produce aromas of “skunk” and “compost”. To ensure the highest quality of hops, Rogue has turned to technology to ensure that its supply chain is delivering the freshest possible hops to the brewery.

Using the Internet of Things to build quality into Rogue’s supply chain

The vertical integration of Rogue Ales and Rogue Farms gives Rogue a unique advantage in being able to leverage new technologies to ensure it sources the highest quality ingredients possible directly from their farm to their brewery. Rogue Ales uses Intel’s Connected Logistics Platform to manage its hops supply chain. Intel’s platform is a logistics management solution that couples Internet of things (IoT) devices with a cloud-based data analytics system. These IoT devices are one-time-use sensor tags that attach to shipments and collect data (e.g. temperature, humidity, location, etc.). This data is sent over a proprietary wireless protocol to a central server where the data is aggregated and analyzed in real time.

The Internet of Things has enabled companies like Rogue to capture and act on the data surrounding their supply chains. Companies are able to make smart decisions that bring cost savings and flow directly to their bottom line. Click To Tweet

The system tracks shipments and collects data during every facet of the supply chain, ensuring that quality thresholds are maintained and any problems with the shipped goods can be immediately corrected (for example, if one of the trucks runs into traffic, the others can be intelligently rerouted). It is estimated that 30% of all perishable products shipped in the United States become spoiled during their journey from the farm.

After the wet hops are picked, Rogue attaches three trackers to each shipment: at the top, middle, and bottom of the bale of hops. These trackers measure temperature, humidity, and location. Rogue can ensure that the hops have been kept in the proper environment and that they have not spent too much time in transit.

If a shipment does not meet quality standards, it can be discarded before it is used in a beer batch, reducing waste and ensuring that Rogue does not waste its precious brewing capacity brewing beer that will later need to be dumped for quality reasons. The location of the shipment is updated every ten minutes, and once the hops have reached the halfway point, Rogue starts the brewing process. This ensures that the hops arrive just in time and go directly from the truck into the brewing kettle.

The Internet of Things has enabled companies like Rogue to capture and, more importantly, act on the data surrounding their supply chains. Companies are able to make smart decisions that bring cost savings and flow directly to their bottom line.

This article was written by Zachary Richards, an MBA student at the Peter T. Paul College of Business and Economics at the University of New Hampshire. Zach is a Software Engineer at Pegasystems, Inc., where he specializes in back-end Java development, data structures, and agile development practices. He graduated from Worcester Polytechnic Institute in 2016 with a B.S. in Computer Science.

Related posts:

 

New Call-to-action

Archive for Guest contributor


What’s the Best Degree for Supply Chain Management?

What’s the Best Degree for Supply Chain Management?

Supply Chain skills have never been in more demand and the work has never been more interesting. Here’s a look at the best degree for supply chain management.


Highlights:

  • Today’s supply chain professionals need to be well-versed in data analysis, presentation skills, negotiation skills, project management skills.
  • Individual career objectives and educational options can help determine the best degree.

This guest post comes to us from Argentus Supply Chain Recruiting, a boutique recruitment firm specializing in Supply Chain Management and Procurement.

Supply Chain Management was seen as a back-office profession. People tended to rise from shop floors and warehouses into management roles and eventually – for the most high-performing individuals – Senior Director and C-Suite positions. It’s always been one of those fields that people “fall into.” Once they found themselves in a Supply Chain or Procurement job, people tended to look around and see how important it was to the business. They’d experience the fast pace, see the immense ten-dimensional puzzle involved in getting a product to market, the global scope, and be hooked.

It used to be a truism that no teenager decides that they want to get into Supply Chain, even those who had their sights set on the corporate world and not other paths like medicine or law. Supply Chain used to be the kid brother to other, more “glamorous” corporate functions like marketing and finance: misunderstood, transactional, and frankly thankless work.

No longer.

In 2018, Supply Chain Management is a key market differentiator for companies in industries as diverse as consumer goods, retail, pharmaceutical, manufacturing, you name it. Supply Chain skills have never been in more demand in the corporate word, and the work has never been more interesting. Many of the top companies in the world are waging a constant war for Supply Chain talent, with baby boomers retiring and strong economic growth driving demand.  Young people are starting to wake up to the huge amount of opportunity in the field.

Today’s Supply Chain professionals need to be well-versed in data analysis, presentation skills, negotiation skills, project management skills, as well as the know-it-when-you-see it overall skill of “business acumen.” Click To Tweet

At the same time, companies are increasing educational requirements, which makes sense: today’s Supply Chain professionals need to be well-versed in data analysis, presentation skills, negotiation skills, project management skills, as well as the know-it-when-you-see it overall skill of “business acumen.” In our recruitment practice, we’re noticing that more clients are requiring a university degree as a hard-and-fast requirement for jobs.

The requirement often ends there. “A degree.” Which means that there are lots of educational avenues aspiring Supply Chain professionals can take to set themselves apart from the competition. But it can be daunting: should you do an Engineering degree with a focus on Industrial Engineering? Should you do a business degree? A liberal arts degree and then an MBA? Or should you forgo a formal degree and pursue certifications like CSCMP and APICS from industry associations?

It depends. It’s hard to arrive at a definitive answer. Why is that?

  • Individual career objectives vary. For example, someone who wants to pursue a career in sourcing and Procurement will probably be better served by a business degree than an engineering degree. And someone who’s interested in Production Planning, Supply Planning, and/or Demand Planning is probably best served by a STEM degree that features a lot of quantitative analysis.
  • Educational options vary. More schools are offering Supply Chain specialties as part of MBA programs, as well as at the undergrad and college levels. More traditional programs (engineering, business, etc.) are taking steps to prepare students for careers in Supply Chain Management. But options for programs vary based on geography and the grades that any one candidate brings to the table.

That said, we still think it’s worthwhile to give some tips for people exploring their education options in the field. So we put the question to our network of established Supply Chain professionals to see what they had to say.

Here are some of the more insightful responses:

 “Engineering degree with focus in database structures and statistics can equip one with the required skills for this domain. Presently all SCM jobs require one to be able to work with ERP systems so it is nice to have understanding about the underlying concepts.”

The easiest that i can think of is Industrial Engineering which is a mix of Engineering/Mgt/commercial/statistics subjects. My degree in IE was a sound base to launch me into a SC/Logistics career. Then top it off with a certification after gaining some work experience. Certifications without some work exposure may turn to be useless. Certifications should be a source of validation of what you know in the discipline. I do hear there are schools/community colleges these days offering SC/Logistics as a degree. In all, any course that exposes and builds a person’s critical thinking skills is ok to get into supply chain.”

“Best degree would be to start working in a warehouse. Try some scheduling work also if you can. For all the value that a degree gives you, nothing beats knowing how goods flow and how truck drivers get stuff from point A to B. Do this for a year, then worry about which degree to get.”

“1) Chemical/Industrial/Mechanical Engineering 2) Economics 3) Business/Commerce with a major in finance 4) a solid liberal arts education from a university that will propel you into a top business school.

Engineering or Business provide a great foundation for logical, innovative and strategic thinking.”

Hopefully the above comments can help offer some guidance to anyone who’s interested in embarking on Supply Chain Management as a career path. There are lots of paths to go down. But whether you choose the university, college or certifications route, it’s pretty undeniable that more education is never a bad thing.

Related posts:

New Call-to-action

Archive for Guest contributor


Send in the Drones: How PINC & Amazon Have Optimized Inventory Management

Send in the Drones: How PINC & Amazon Have Optimized Inventory Management

Drones and other autonomous technology are actively being utilized in supply chains. Here’s how companies like PINC and Amazon are leveraging this new technology for inventory management.


Highlights:

  • Drones and other autonomous technology are actively being utilized today in supply chains.
  • PINC and Amazon are using autonomous technology for inventory management.
  • By implementing new technologies, operating costs decreased by 20%, successfully boosting operating margins.

It’s been five years since Charlie Rose interviewed Amazon CEO Jeff Bezos on 60 Minutes about new innovations that Amazon was working on. Bezos revealed that Amazon was on the brink of a supply chain revolution involving octocoptor drones transporting parcels: Amazon Prime Air.

Tweets and status updates immediately conveyed consumer excitement that flying Amazon drones could deliver packages directly to doorsteps. And on the flipside, some employees of shipping carriers and brick-and-mortar retailers expressed fear that their respective industries would become obsolete.

Fast forward to the present… While advancements have been made in drone and autonomous technology, such as Amazon’s tests in the United States, Dominos’ self-driving delivery car, and Tesla’s self-driving truck, Bezos’ grand vision still remains a dream for impatient online shoppers.

That aside, drones and other autonomous technology are actively being utilized today in supply chains, and their usage extends beyond the conceived purpose of package delivery. One such use case that companies PINC and Amazon leverage this technology for is inventory management.

PINC: Aerial Inventory Robots

Less than 10% of the 250,000 warehouses and manufacturing facilities in the United States utilize automated storage and retrieval systems (AS/RS) for managing their inventories. Instead, they resort to manual human labor coupled with outdated storage solutions and antiquated inventory management measures. The need for automation in the factory setting is paramount.

PINC, a top provider of yard management systems, pioneered the use of drones in warehouses. Since 2014, PINC enacted the use of flying drone technology (PINC AIR, Aerial Inventory Robots) to track assets in warehouses.

PINC AIR Hardware

These “inventory robots” leverage barcode-reader technology and roam premises in an automated fashion, ensuring efficient inventory tracking. Technically speaking, the drones are equipped with optical sensors which allows them to take pictures of barcodes and obtain information for identifying and counting inventory.

Indoor aerial drones have limited GPS capabilities compared to their outdoor counterparts, and instead rely on indoor location services software to aid in setting the devices’ “travel boundaries” within warehouses.

PINC AIR Benefits

 PINC AIR saves time, money, and offers a safer alternative to traditional rolling ladders for companies wishing to upgrade their inventory management system. Businesses spend less on workers’ compensation claims by reducing on-job injury rates. Their robots operate at the leisure of the company, are 300 times faster than a human performing the same work, and possess high accuracy levels. Even a daily inventory check provides a company a plethora of data.

PINC’s aerial drones replace the clipboards and spreadsheets of inventory counts by giving companies a platform that automatically displays the needed information in real time. Businesses could use this data to answer a variety of questions such as, “How many days do certain television brands sit in stock at certain facilities during the holiday season?”

Amazon Robotics (Kiva): Robots

In 2012, Amazon acquired Kiva for $775 million, phased-in its technology in its warehouses a few years later, and formed the subsidiary Amazon Robotics. Kiva robots replaced forklifts, large conveyor systems, and other human-operated machines. They’re efficient at performing monotonous tasks that previously fatigued employees, such as carrying and stacking bins around all day.

In 2012, Amazon acquired Kiva for $775 million, phased-in its technology in its warehouses, and formed the subsidiary Amazon Robotics. Kiva robots replaced forklifts, large conveyor systems, and other human-operated machines. Click To Tweet

Amazon made the move to continue pursuing competitive advantage in the e-commerce space along with maintaining control of the thousands of products in their fulfillment centers.

Some of Amazon’s robotics are large, 6-ton “Robo Stow” mechanical arms that move and stack bins around the factory. Others are used for carrying, transporting, and storing merchandise up to 3,000 pounds in an orderly fashion. Using these robots to stack and transfer merchandise saves aisle space in warehouses, allowing facilities to carry more inventory, meaning customers will be able to receive their goods quicker.

But what happened to the human employees? Did Kiva’s technology truly destroy thousands of jobs within Amazon’s warehouses? Is this the part when we rage against the machine due to the “robot uprising” stealing jobs?

Put your pitchforks down. No layoffs occurred, and, instead, robots and humans began working together. Despite skeptics’ views that automation is a job disrupter, SVP of Operations at Amazon Dave Clark assured,  “[…] automation increases productivity and, in some cases, demand from consumers, which ultimately creates more jobs […] Warehouse workers would continue to work in technologically rich environments.”

In fact, since the Kiva acquisition, Amazon increased the number of warehouse employees by nearly 200% to an upwards of 125,000 workers due to the increased volume of orders. Signs show no stopping either with the rising demand of high-skilled programming jobs, technicians, as well as those working hand-in-hand with robots.

Existing employees took on new roles and increased their skillset. For example, some employees moved to “stow” products on shelves for the robots to move away, following computer instructions to optimize where merchandise goes.

From there, the robots line up when customer orders arrive. Human “pickers” grab the products from the robots’ shelves and place them in plastic bins. At this point, merchandise is packed in cardboard boxes for customers. Warehouse jobs become less monotonous as the products that employees place on the robots vary.

And with that said, the cost savings from this technology is astounding…

Cost Savings → Increased Efficiency

Operating costs decreased by 20% at a $22 million savings from each fulfillment center, successfully boosting operating margins. These savings are attributed to enhancing warehouse efficiency. Amazon found that cycle times decreased between 75% and 80% to just 15 minutes. As a side effect, additional space was allocated for inventory, increasing the amount of storage by 50%.

Drawbacks & Limitations of Autonomous Technology in Supply Chains

PINC: Barcodes & Drone Power Source

PINC’s optical technology requires packages to display barcode tags in plain sight for the drones to process accurately. This raises concerns for companies who do not have this ideal setup in their warehouses, potentially raising costs.

Another issue is the drone power source. AIR drones are powered with hydrogen fuel cells instead of batteries as they last longer and charge faster. PINC CEO Matt Yearling revealed that the hydrogen-powered technology can fly up to three hours, and only needs a few minutes to refuel. Companies therefore need to strategically consider when the drones are scheduled to fly and follow-up with refueling procedures when the drones’ power is depleted.

Amazon Robotics (Kiva): Robots Cost & Limitations

The robots themselves are also limited in the tasks that they can perform. For example, the “robotic arm” was designed to pick up packages of certain sizes. Amazon has been in the process of researching their flexibility to complete more advanced tasks, though for now human workers help in that regard. After all, “There are many things humans do really well that we don’t even understand yet,” says Beth Marcus, an Amazon employee who specializes in robotics.

While autonomous technology clearly has its benefits, it comes with a cost. Aside from the initial expense Amazon incurred with Kiva’s acquisition, an installation cost of $15 million per location is required, costing Amazon nearly $1.7 billion to fully deploy robots in all 115 locations. Despite this cost, Amazon nets a savings of $7 million per facility when compared with its recurring annual savings.

Conclusion

While introducing new technology into the supply chain space is sometimes deemed as “disruptive,” the ends justify the means for autonomous technology. Along with new jobs being created, modern manufacturing workers are gaining more skills by learning to operate robots. Drones and robots allow companies to effectively match their scale and flexibility with increased consumer demand.

PINC’s drones are a great way to establish an accurate representation of inventory in real time from past to present. This further strengthens a company’s promise to fulfill needs for its customers.

Amazon Robotics enables companies to maintain incredibly efficient workflows in their warehouses and fulfillment centers.

In a poll of executives by Techpro, an astonishing 64% reported that there were no plans to leverage autonomous technology in their businesses. Applying drones and robots to inventory management gives companies a competitive advantage and a head start in taking advantage of cutting-edge technology.

It just goes to show that autonomous technology further streamlines operations and supply chains by allowing companies to reach new heights.

This article was written by Spencer Black, an MBA student at the Peter T. Paul College of Business and Economics at the University of New Hampshire, specializing in Information Systems & Business Analytics. After graduating summa cum laude from UNH in Computer Science in 2015, he has been working at Pegasystems as a Software Engineer.

Related posts:

New Call-to-action