218. Redesign Warehouse: Value Productivity and Pay Or Lose

Warehouse Wage-War News

What’s driving this hourly-labor, news stream?

  1. Oct 2018: Amazon (which sets the bar) upped the ante for warehouse workers (and Delivery Partner drivers) to $15/hr. plus benefits. And, Bernie Sanders applauded!
  2. July 2019: AMZ announces a $700MM training budget to advance, self-selected warehouse workers to: better, technical-jobs, career paths.

Next, Pandemic-Christmas Season demand:

  1. Sept 15th: Uline – a catalog, packaging distributor – announces $23/hr. warehouse spots with a $6K signing bonus.
  2. Sept 17th: Walmart will pay $18 -21/hr. with a path to $30 for service teams at SuperCenters.
  3. October 1st: Hobby Lobby – an arts and crafts store chain – starts paying $17/hr. for retail clerks.
  4. October 7th : Lowe’s announces $100MM in bonuses for hourlies: 6th increase during the pandemic!
  5. UPS, FedEx, DHL, etc. must join this seasonal fray.

Causes?

  1. A huge, on-going shift of consumers (and tradesmen) going to stores (and branch counters) to buy goods to now ordering on-line for direct delivery (in 1-day and then less from AMZ).
  2. New monster warehouses are good targets for unions. So, pay the most, to get and keep the best work ethic employees who don’t need unions.
  3. The productivity increase per worker from strategic effectiveness and automation more than pays for the high wages. Goal: pay 150% of the going job-niche wage to get 150 to 200% of the Gross Profit Dollars per Head plus perfect-service output.

 Distributors!  

 To offer perfect service on web orders, you must have:

  1. Web-visible, accurate inventory
  2. Highest effective, local fill-rates
  3. 100% on-time shipment/delivery (even with random order surges).

These capabilities require:

  1.  95% cycle-count accuracy on top-100, most-picked SKUs
  2. 100% same-day receiving to boost fill-rates the next day
  3. Cross-trained employees to do all tasks perfectly and inter-changeably.
  4. Team-tackling of order surges to insure on-time shipment with zero errors.

Will you pay up to get and keep top 5% work-ethic employees to stay in the game?

How Do You Migrate From Average -Pay, Talent, Service, Productivity – To Outstanding?

Three, free resources:

  1. My 12 webinar series . Learn how to grow strategic, order-size-economics and productivity.
  2. My “Core Renewal Roadmap”.
  3. My YouTube playlist #5 and most narrowly video-clips 64 to 72 .

And/Or, be in touch with questions:  bruce@merrifield.com

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