November 16, 2021

“Turn and face the stranger…cha cha Changes” David Bowie Changes.

It is highly unlikely that the Thin White Duke was thinking about industrial automation in warehousing and distribution when he wrote Changes in 1971. Regardless changes are coming and we will be (and have been) facing the “stranger.”

What is changing?

Why is it changing?

Can we stop it, please?

The marketplace is changing

Consumer demand has been driving increases in e-commerce distribution models. E-commerce drives more labor needs to pick and pack smaller orders. As opposed to shipping pallets and cases to retail stores using traditional material handling equipment, shippers are sending more parcels direct to the consumer and even to replenish stores. The data supports that:

• For the first quarter of 2021, the major parcel carrier volume is up between 11% and 18% year over. Logistics Management June 29, 2021
• Online sales project to grow by 25% between 2021 and 2025. Ecommerce Growth [Sep 2021 Update] (oberlo.com)
• E-commerce operations require two to three times more labor than a traditional warehouse. Colliers Jan 16, 2018
• Bureau of Labor Statistics reports 537k open jobs in Transportation, Warehousing, and Utilities as of August ’21. This is even before peak shipping season! August 2021 (bls.gov)
• For September, there are 10.4 million open jobs across all industries and only 7.7 million people available to fill them. September 2021 (bls.gov)

Labor and technology create strain

We have increasing demand and a short supply (labor) to meet it. That creates wage pressure. The thin labor pool is also driving employers to reduce their previous requirements for hiring new employees. Employers are paying more for less and yet they still cannot fill all the jobs.

Technology to the rescue!  The industrial automation market is expected to almost double, increasing by $157 billion by 2027. Forecast Report [2020-2027] (fortunebusinessinsights.com)

That will create a lot of strain on operators and operations.

Why worry? Because humans struggle with change. Uncertainty can drive stress and bad behavior. Imagine an army of robots showing up one day at your warehouse. They don’t get sick. They don’t get tired. They don’t need a raise. They don’t take PTO. They work all day and night and just need some power and a little preventive maintenance. Any chance people might feel threatened?

Yep. You need a robust change management process.

Why employees react adversely to change at work

Immediate concern: Will this change cost me my job? How will this new technology impact my ability to earn a living?

Historic concern: Been there, done that. Is there a history of failed operational enhancements at the company? Is this just one more disruption, only to revert back to how we used to do it, or, even worse, will this add new complexity?

Skill concern: Do I have the skills to be successful in this new model? Will the company train me and be patient while I learn?

Rumor concern: I heard this new system is hard. I heard that this is just the start of automation. I heard the company is spending a fortune on this project rather than added a few more people.

Capacity concern: I cannot deal with another change right now. I finally learned the new WMS system, and now I must absorb this new technology. I just can’t.

Trust concern: I don’t have faith in leadership to make this work.

The theme that resonates through all the concerns is trust. Does the team have faith in leadership to be upfront and honest about how their environment is changing?

Developing a change management process

Understanding the level of trust between leadership and the workforce is the first step in developing a change management process. A survey is a great tool to get feedback to measure the level of trust in your organization. A quick internet search will provide numerous examples of survey questions. The focus needs to be on competence and integrity. The perception the workforce has of the ability of the company to execute to the plan and their confidence to not mislead the workers about the impact on them is the answer you need. Be prepared for some painful responses. The development of your change management process requires an understanding of the baseline culture.

An organization needs to convince the team that they are putting the employees first during this transition. If this is a headcount reduction program, that is a challenge to communicate. It is better to address that at the beginning than to let the rumor mill churn. In this case, we are recognizing the pending growth and hiring challenges.

You need to convince your team that the pending addition of automation allows for:

• increased levels of service
• improved cost control
• business growth.

The result for the employee is security and opportunity. That is the message. Repeat it early and often.

Executing your change management process

One tactic in executing the strategy is cutting off the rumor mill.

Nothing can derail a culture change faster. This is even more damaging where trust is weak. Over-communicate and use multiple communication modes. Think about the open enrollment period at most companies as a good example. It is communicated well in advance. It is communicated via email, posted on walls, broadcast on monitors, sent to employees’ homes, discussed in department stand-up meetings, and at all-hands get togethers. The company knows this is important and it is demonstrated by how heavily it is communicated. Heavily communicate. No one should be able to honestly say they did not know.

Another tactic is to enlist the informal leaders in your facility to support the change.

You will need to convince them of how the change will provide a benefit for everyone because there is a remarkable phenomenon that sometimes happens in operations. A company can have a robust training process, they can invest the time in teaching the new associate how to do the job properly, and they can leave them feeling prepared to do the task correctly. All of that lasts until a seasoned co-worker utters the phrase: “That’s not how we do it.” The same can happen as the team absorbs the concept of the new process. Getting your informal leaders to be advocates of the change can go a long way to combat that.

A third approach is to increase leadership visibility in the operation.

The team may have questions. Make it easy for them to ask. Many people are not comfortable speaking in group settings. Give them the opportunity to speak to you one-on-one in an informal setting. Being seen during the process is always important for leaders but during times of great change, it is vital.

The fourth concept is to express empathy for any concerns expressed by employees.

Make sure you are listening. A good way to do that is to repeat what you heard someone say. If you can’t answer their questions, tell them that, but set a follow-up time to get back to them. Empathy can be a struggle for a leader. Often the concerns expressed are not founded in reality but they are a reality to that person. Listen, acknowledge concerns, share anything that may help address their worries, and avoid lecturing.

Finally, do what you can to make it fun.

Celebrate the wins along the way with the team. I read recently about a company that added robots. They let the team name their new co-workers and personalize the new teammates to help get everyone more comfortable. Inserting some fun and celebrating successes along the way is motivating and builds on the culture.

Industry data suggests that a time of great change is here already and is coming fast in our distribution centers and warehouse operations. Demand has created increased parcel shipments, adding touches and people into the shipping process. Labor shortages show no signs of improving. Industrial technology is advancing rapidly. Operators need to be able to absorb this swift change. The need to take advantage of opportunities to improve service and gain market share is imperative.

Changes, we can’t stop ’em

Resistance to change is common among people. This is widely known. People worry about the impact on their job security. They worry about the competency of their leadership to execute. They worry whether or not they can increase their skills to succeed in the new model. They worry if what they are being told is true. They worry if the rumor mill is correct. They worry that this is more change than they can handle. All of these worries point to trust issues.

Having a thoughtful change management process can help you bridge concerns, build trust and support successful projects.

Some strategies:

• Launch an internal marketing campaign about the change. Create a buzz.
• Increase leadership visibility on the floor. Be present. Be available.
• Use boots on the ground; enlist your informal leaders to be change advocates among the team.
• Have empathy for the concern of the team. Actively listen without arguing.
• Celebrate wins along the way. Have fun.

You can “face the stranger” and “be heroes” for more than one day with these strategies.