The technology sector isn’t the only front in the war for talent. The battlefield extends to manufacturing and distribution too, where employers face a shortage of talent with the skills to operate plants, staff warehouses, and drive delivery trucks. In particular, consumer demand for convenience and same-day – even same-hour – delivery, combined with mass customization and a work force that no longer wants to pursue these career paths, is putting tremendous strain on distribution centers. Eventually, as in any business war, there will be winners and losers. The former will be distinguished by successful efforts to maximize productivity among their existing workforces through automation and process efficiencies. They will also be able to address the skills gap when moving employees into management and leadership roles. The key to success is maximizing productivity within your front-line managers.
Economic factors aside, distribution centers are always hyper-focused on reducing labor cost. Programs such as automation, standards, and incentives focus on either decreasing headcount or increasing throughput (or a mix of both) while maintaining or improving safety, service, and quality. What is often overlooked is the tools and capabilities of the frontline management team.
Our experience tells us that most companies are aware, but severely underestimate, the gap in frontline supervision ranks. Leveraging our Manager Effectiveness approach, West Monroe has worked with our clients to quantify the size of that gap. Through a mix of observation and interviews, we’ve quantified and analyzed the gap between where leadership perceives a supervisor’s time is spent and where the supervisors are actually spending their time. The results are eye-opening and show a profound effect on the overall health of the operation.
In many distribution centers, frontline supervisors are promoted from within. They represent the best of the workforce, have the desire to join the management ranks, and continue down a leadership career path. But these new supervisors often struggle to translate their skillset (usually, they are strong individual contributors who have mastered their hourly functions) into the habits and leadership required of an effective manager. And many companies do not have the tools, training, or processes necessary to equip new supervisors with these critical leadership skills.
Instead, most learn through trial and error. For those who eventually figure it out, the process can be arduous for both the new supervisor and their supervisees.
Recently, West Monroe surveyed 500 managers to understand how well-equipped they feel they are as managers. Our survey found that 34% had no management training prior to becoming a manager. Another 32% of respondents had received less than eight hours of training prior to becoming a manager. Even in those organizations that have management training programs, many respondents consider the training to be irrelevant or lacking. Out of the 500 managers surveyed, only 17% pointed to their company’s management training as the main influence on their management style. This is consistent with what we see among our distribution clients.
These are the most common gaps hindering management efficacy:
Despite the challenges, there are some positive findings in our survey, interviews, and distribution center observations. Many supervisors and managers identify the part of their responsibilities with the biggest reward as the part where they help their teams and people succeed – 56% cited team and company success as the most rewarding part of their jobs. Equipped with the right skillset and automation technologies, managers can focus the appropriate amount of time on coaching their teams. That can be the difference between a workforce that is engaged and one that is not.
In recent studies by Aon Hewitt and Gallup, companies in the top quartile of engagement were compared to those in the bottom quartile. The research found that an engaged workforce experiences 59% lower turnover, 70% fewer safety incidents, and 17% higher productivity. In addition, the research showed that when the managers are engaged, workforces are 59% more likely to be engaged.
Distribution center executives should focus on how to reduce administrative and non-value-added time by addressing the skills gap, implementing robotic process automation, and streamlining processes so that their supervisors are equipped to lead successfully. In today’s economy, that translates to growth, scale, and profitability. When there is a downturn, you’ll need high-performing supervisors to manage through change, retain talent, identify efficiencies and cost reductions, and handle adversity. With so much at stake, smart companies aren’t waiting until the market turns to ready their operations.