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Artificial Intelligence (AI) and Its Application to Supply Chain Labor A RADIX CONSULTING POSITION PAPER

OVERVIEW: The intent of this document is to summarize the three (3) SCM enabling technologies being harnessed by AI to better optimize labor resources within a supply chain operation. The convergence of On-Demand Labor Scheduling & Labor Management Systems under the guidance of Artificial Intelligence is a quickly evolving and creative answer to today’s labor challenges.

Companies Highlighted in This Series:

1. AutoScheduler.AI

2. TZA

3. Veryable

On-Demand Scheduling & LMS Use Thus Far

Newly emerging On-Demand Labor Scheduling solutions are designed to help managers identify, plan and schedule part-time associates to achieve operational goals while maximizing productivity and minimizing costs. These systems provide real-time insights into workforce data, such as attendance, absences, and employee schedules. These tools are typically used to engage with a qualified work pool and allow the labor talent to self-schedule based on their availability, the facility expertise called for, the individuals personal needs.

Labor management systems (LMS), on the other hand, focus on the labor planning, monitoring and optimization of employee productivity and labor costs while on-the-job. LMS systems track employee performance and work activity against defined labor plans, measure productivity metrics such as pick rates, and provide feedback to employees and supervisors to improve efficiency.

The combining of these two solutions allows for a more holistic approach to employee management, enabling warehouse managers to better understand and optimize their labor resources. By integrating an on-demand labor pool and an LMS system, warehouse managers can gain a more complete picture of labor availability, employee performance, resource utilization, and labor costs. They can use this data to optimize staffing levels, adjust employee schedules based on demand, and identify opportunities to improve productivity and reduce costs. The combination also improves the morale and work environment for the associate who can now match their life scheduled to the available work opportunities of the employer.

As businesses have become more complex, managing workforce and labor resources have become increasingly intertwined. As a result, many companies are realizing the benefits (and competitive advantage) of integrating these component solutions into an overall labor program.

The Benefits of An On-Demand Labor Pool & LMS Joint Solution

Overall, the convergence of On-Demand Labor Scheduling and LMS applications represents a shift towards more comprehensive and integrated approaches to managing the workforce and labor resources to improve the employee satisfaction levels and thus retention while still optimizing the performance of the workforce. When employees have this greater degree of control over their work schedules their job satisfaction is increased. Then pair this with the employee engagement and coaching included in an LMS and overall morale improves as the company embraces a performance-based culture.

By combining the two types of software, companies can achieve better alignment between staffing levels and labor requirements, reduce labor costs and optimize productivity. Additionally, integrating these applications can help companies gain better visibility into their workforce and labor data, making it easier to identify areas for improvement and take action to address them.

A great example of this integration is when utilizing a dynamic workforce scheduling tool that supports a “gig based” employee scheduling environment – such as from Veryables, Inc. - where the employer and employee work together in the on-demand labor scheduling solution. The employer posts available jobs and the employee, comprising the contingent or variable labor needs of the employer, elects specific roles and hours that align with their lifestyle or other personal requirements. This flexible work arrangement replaces the traditional use of temporary, untrained workers with a pool of resources pre-qualified for the roles. In turn, the labor management system – such as provided by TZA, Inc. - not only measures work productivity relative to expectations but now also establishes employee development goals and tracks each associate’s coaching and training needs to make sure they feel engaged and valued. Many companies are also creating employee incentive programs that go beyond money to incorporate prizes and other types of compensation to recognize high performers.

A popular trend in these labor management applications is gamification, or incorporating competitive and reward elements as incentive for desired performance. In an LMS, gamification can be used to motivate employees to perform better, increase productivity and deliver on performance goals. This is typically achieved by introducing elements such as points, badges, leaderboards and challenges into the labor management system. For example, employees can earn points for completing tasks on time, and those points can be used to unlock rewards or access to higher levels of the system.

Gamification can also be used to promote healthy competition among employees, as they compete for the top spot on the leaderboard or to earn the most points. This can create a sense of camaraderie among employees and encourage them to work together to achieve common goals.

By incorporating gamification into an LMS, organizations can improve employee engagement, motivation, and productivity. Ultimately this can lead to better overall performance and help the organization achieve its business goals.

Harnessing the Power of AI with AutoScheduler.AI to Intelligently Orchestrate Labor

Where On-Demand Labor Scheduling and LMS solutions focus on the planning, monitoring, and potential maximization of labor resources, companies like AutoScheduler.AI add an additional layer using artificial intelligence to tackle the daunting task of warehouse optimization and ensuring that all personnel are in the right place at the right time. By planning the complexities of distribution tasks and constraints, this optimization not only ensures efficient distribution - with the right inventory leaving the right door at the right time - but also orchestrates the best use of labor resources, minimizes costs, and maximizes productivity. This ties into the execution system, most frequently the warehouse management system, to ensure that all customer deliverables are being met and balanced with the finite labor & equipment capacity levels working at the facility.

How this works in practice is that all data is extracted from the existing system of record, such as a Warehouse Management System, and passed into the orchestration platform for optimization. After the complex constraint optimization is run to determine the appropriate sequence of activities, location utilization, and personnel assignments, a plan is pushed back into the warehouse management system to automate the planning of work, personnel assignments, and positioning inside of the building. This optimization is then constantly updated to account for varying or unexpected factors (like a late shipment or personnel call-off) to ensure that the site is always optimized.

When paired with an On-Demand Labor Scheduling solution and an LMS, this can provide a more comprehensive and robust labor management approach to dynamically plan and direct work to the floor. This convergence aids managers in maintaining a complete picture of labor availability, performance, resource utilization, and costs, and using this data to further optimize staffing levels and schedules. These 3 solutions enable distribution facilities to maximize all phases of productivity: ensuring they have the personnel, getting those personnel to work to

the highest level of their capabilities, and optimizing the work they’re doing to drive productivity. This highlights how innovative technologies can streamline labor management processes, reduce costs, and increase productivity, ultimately enhancing the performance culture and employee satisfaction.

Conclusion

As firms wrestle with finding, attracting, and keeping labor within their supply chain operations, there are new approaches being discovered. Several of the best supply chain consulting firms have practices dedicated to guiding their clients on this journey to a high-performance culture. They are helping clients achieve performance improvements previously unattainable, all while making it easier to hire staff and train employees. Even in highly automated facilities that are leveraging advanced material handling or robotics equipment, firms still need to build a strong employee performance foundation before investing even more in robotics. Human capital continues to be a company’s most important asset!

Overall, the convergence of on-demand labor scheduling and labor management systems in the warehouse can provide managers with powerful real time tools including advanced business intelligence (AI) and analytics to improve operational efficiency, reduce labor costs, and enhance overall performance.

Radix encourages the downloading of information from this Resource Center page in order to more fully understand how these enabling technologies work.

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