How labor shortages could stimulate automation

A tight labor market and a diminished supply of skilled labor makes it difficult for manufacturers to find the talent they need to keep up. The rate of Baby Boomer retirements accelerated by the pandemic and the Great Resignation^[1] have been the drivers that increase investments in automation, not only to sustain operations, but also to maintain the workforce while attracting new talent.

According to the latest research from Korn Ferry ^[2], companies around the world could face a labor shortage of 85.2 million skilled workers by 2030. In the United States, for example, employment levels in distribution centers are at record highs and wages have risen well above $18 an hour, but attracting and retaining warehouse employees remains elusive.

In the short-term strategies such as bonuses, accelerated wage increases and tuition reimbursement are helping. “But the long-term implications of a high reliance on labor are clear: automation in warehousing is no longer just nice to have, but an imperative for sustainable growth”^[3].

So, to get around this shortage, intelligent Supply Chain applications automate key processes, from planning, through execution, to the final transaction. For example, using Artificial Intelligence (AI) recommendations to improve customer service has reduced sales order processing time which helps our customers save time and money by ordering the right combination.

Keeping on target

The most relevant point here is to be clear that this is not about replacing humans with machines, but to take advantage of this circumstances to get people on site highly specialized training in AI, automation, systems technologies, and more.

By bolstering investments in automation and providing employees with training opportunities to maximize the potential of technology, employers can more effectively combat the current labor shortage and prepare their employees for the future of work and even reverse the trend.

When emerging technology is adopted, it offers more attractive career paths, increases safety, and decreases the physical cost of workers, which will attract to Generation Z and Millennials, who prioritize workplace conditions.

The inclusion of automated processes in transactional activities generates optimizations in the use of resources that can be of benefit in the service offering, the cost structure, and in the rethinking of the final pricing strategy. That is, “it would be a mistake to miss the competitive advantages derived from automation at the level of the added product offering”^[4].

We know that your biggest challenge is to find the necessary tools and designs to respond to the “perfect storm” that has formed with supply cuts, wars, pandemics, high transportation costs, labor shortages, and extended delivery times.

We have experience and specialists who accompany you from the beginning to the end of the project, we analyze your needs, we use what you already have and look for the best options to deliver a customized solution. Let’s talk about your efforts to leverage your existing workforce, meet the requirements of each link in the chain, stay competitive, increase profitability, and attract new talent.

The inclusion of automated processes in transactional activities generates optimizations in the use of resources that can be of benefit in the service offering, the cost structure, and in the rethinking of the final pricing strategy. That is, “it would be a mistake to miss the competitive advantages derived from automation at the level of the added product offering”^[1].

We know that your biggest challenge is to find the necessary tools and designs to respond to the “perfect storm” that has formed with supply cuts, wars, pandemics, high transportation costs, labor shortages, and extended delivery times.

We have experience and specialists who accompany you from the beginning to the end of the project, we analyze your needs, we use what you already have and look for the best options to deliver a customized solution. Let’s talk about your efforts to leverage your existing workforce, meet the requirements of each link in the chain, stay competitive, increase profitability, and attract new talent.

[1] BBC, June 2021, “La Gran Renuncia”: por qué los trabajadores en Estados Unidos están dejando sus empleos a un ritmo récord retrieved April 2022.

[2] Ferry Korn, May 2018, The Global Talent Crunch retrieved April 2022.

[3] McKinsey & Company, December 2021, Automation has reached its tipping point for omnichannel warehouses, retrieved April 2022.

[4] Deloitte, September 2016, La era de la Automatización Implementación de Robotics en los Centros de Servicios Compartidos, retrieved April 2022.