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The Warehouse Is VUCA

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The Warehouse is VUCA

The warehouse is VUCA - volatile, uncertain, complex, and ambiguous.

As warehouse operatives know, the warehouse is a source of constant volatility, and things keep changing constantly.

On the one hand, customers tend to make the warehouse unpredictable. They change their buying behavior in the long and short term. Let’s take a pandemic that heavily affects how people will buy over the next months or years. Or you send out a promotion or advertise specific articles, and two days later, the orders increase by 20%. Even the weather might influence the order profile within a day.

On the other hand, there is the supply chain. It’s becoming more unpredictable in times of crisis. Goods may be out of stock for days or weeks; traffic routes are blocked, low tides in rivers hinder the transport of goods, roads are jammed by traffic, etc.

Not only do customer demand and supply chain contribute to the VUCA of the warehouse. The warehouse itself is a highly complex system - thousands of square meters of interconnected processes, areas, and technical components. A technical downtime of a component might cause a backlog of orders in one area. Then, as soon as the downtime has been resolved, the backlog must be processed and passed on to the next area. It creates a bullwhip effect throughout the warehouse; seemingly minor effects cause significant and hard-to-foresee effects.

Intralogistics - From Cost Center to Value Creator

Intralogistics has evolved from being a cost center to a value creator. The one who fulfills customer demands quicker gains a clear advantage. The one who delivers reliably and consistently will become a trusted supplier. Others will lose customers.

So intralogistics has become the backbone for all kinds of business models.

It seems like a slight contradiction in itself. While your business operations should be quick and reliable, the warehouse is VUCA.

Balancing People and Material Flow is Key

Who are the ones who cope with the VUCAs in the warehouse all the time? It’s the warehouse operatives. Based on their experience, they know how to deal with fluctuations, unstable order profiles, late or early haulers, technical outages, etc. They bring balance to the chaos.

Personnel Flow in Warehouses lags behind Material Flow

In modern warehouses, highly automated or manual, the material flow and other supply chain processes are well structured, planned, and monitored well, whereas the personnel flow is not. Tools like supply chain-, transport- and warehouse management systems are sophisticated and well integrated. Customer journeys are digitally covered by e-Commerce and customer relationship solutions. Unfortunately, this is not the case for personnel management. It’s often done ad-hoc, reactively, and intuitively, especially regarding short-term changes.

Comprehensive, proactive, flexible Planning is the Basis

Before trying to balance people and material flow, we need to start with solid yet flexible personnel planning. Just like we are planning the aforementioned supply chain processes, we need to plan our personnel with the same level of professionalism.

In our experience, successful planners start with strategic, long-term personnel planning, derived from the respective budget and business goals. From thereon, they refine it down to the level of the daily operations.

All planning levels have to intertwine, and the people involved need to exchange constantly. There is an overall feedback loop; each step of the planning and the learnings from the real-world operations are the basis for continuous improvement.

But this is another story.

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