E-Guide - ORTEC | ORTEC 7 steps to...Complying HR constraints like labor rules, skills and experiences, and payroll Trends and challenges in logistics | Goos Kant If you work in the

7 steps to improve workforce planning in logistics

E-Guide

Logistics companies are struggling with employee retention and resource scarcity. How can you ensure you have the right people on board to meet customer needs? Implement this 7-Step approach to improve your workforce planning today.

2 | 7 STEPS TO IMPROVE WORKFORCE PLANNING IN LOGISTICS

This e-Guide presents ORTEC’s 7-step methodology to integrate workforce

planning in logistics. The Guide is written for operational managers and

decision makers looking to address this topic in their organization.

It offers practical advice to help you implement workforce scheduling,

enabling you to drive cost savings, keep employees happy and reduce your

miles travelled.

After reading this Guide, you will be equipped to develop and advocate for a

workforce planning agenda in your organization.

Happy reading,

Goos Kant

7 steps

to improve workforce planning

in logistics

Goos Kant is Professor of Logistics

Optimization at Tilburg University.

Goos is also a managing partner and

global director logistics at ORTEC

Why this e-Guide?

Companies in the logistics industry are struggling

with increasing volatility, uncertainty, complexity

and ambiguity. On top of this, talent is scarce. This

is compelling organizations to increase their focus

on employee engagement and satisfaction. Until

recently, most logistics companies were planning in

Excel spreadsheets, with fixed capacity and cyclic

rosters.

But planning and scheduling have become a lot more

complex and demand the use of more sophisticated

solutions. Especially with employees demanding

more flexibility and companies hiring more part-time

employees to meet the demands of the modern era.

This e-Guide explores the latest trends in logistics

and the impact these trends have on the process of

workforce planning and scheduling. We also look at

how industry leaders have improved their productivity,

efficiency and employee satisfaction by following our

7-step approach and investing in workforce planning

and scheduling optimization technology.


Contents

■ Not knowing the actual workload upfront

■ Coping with last minute orders

■ Poor interdepartmental cooperation

between independent teams

■ Diffi culty managing the collaboration

with temporary staffi ng partners

■ Driving employee retention through

engagement & satisfaction

■ Communicating quickly when plans

change

■ Complying HR constraints like labor

rules, skills and experiences, and payroll

Trends and challenges in logistics | Goos Kant

If you work in the logistics space, you will probably recognize some, if not all, of these challenges:

Employeeengagement:

Self-deploymentwhile automating

workforcemanagement

Flexiblecontracting:Increasing

demand forworkplaceflexibility

E-commerce and

promotions:Volatile and

market dynamics

Work life balance: Focus on employee

engagement, satisfaction, and morale

Workforcesafety

is getting more

important

4 | TRENDS AND CHALLENGES IN LOGISTICS

“How do I improve my KPI’s

while reducing overtime

and increasing employee

engagement and safety?”

Underlying Industry Trends:

Trends and Challenges in logistics

4

How to plan and schedule the right workforce

Designing shifts is a major challenge

for any large organization in which

workloads fl uctuate signifi cantly. Poor shift

scheduling inevitably leads to workforce

capacity shortages or overstaffi ng.

Capacity shortages, in turn, cause slow

response times, while overstaffi ng leads to

overspending and reduced profi t margins.

Companies in the logistics fi eld need to

assign the right number of people to the

right tasks at the right moment to live up

to customer expectations. The workforce

system they select should provide a rock-

solid foundation for staff planning in order

to meet forecasted demand. Ideally, the

system should include the ability to optimize

the amount of shifts to match workload

demand, while accommodating individual

employee characteristics and preferences.

The solution should also support ‘self-

rostering’ and ‘self-service’ functionalities

which give employees more control and

fl exibility.

Demand-driven workforce deployment

enables the company to provide the

appropriate level of service for customers at

minimum cost.




9

The challengeKatoen Natie is an international logistics

service provider and port operator with

operations in 32 countries and over

13,000 employees. Due to unpredictable

volumes, it is diffi cult for the company to plan

warehouse staff in advance. Add to this the

complexity of planning staff deployment to

cover over 5.2 million m2 in warehouse capacity

and you have a complex challenge at hand.

How we created valueWith ORTEC, Katoen Natie is better able to plan

staff and distribute planning over departments,

HR and with on-site interim partners. Staff is

assigned using optimization models, drawing

on a qualifi cation matrix that incorporates

employee qualifi cations, overtime restrictions

and more.

Katoen NatieBenefi tsThanks to ORTEC, Katoen Natie benefi ts

from improved communication and

effi ciency in the planning process. This

has resulted in more profi t, less over and

understaffi ng and less time spent on

planning, registration and payroll tasks.

Employee satisfaction had also increased

with improved communication using a

mobile and web app. The company’s staff is

in control of their own schedule and enjoys a

centralized planning process with improved

workload distribution. A large part of the

planning process was also automated,

freeing up time to focus on more pressing

tasks.

Customer Case

21 |

Customer Cases21

■ Not knowing the actual workload upfront

■ Coping with last minute orders

■ Poor interdepartmental cooperation

between independent teams

■ Difficulty managing the collaboration

with temporary staffing partners

■ Driving employee retention through

engagement & satisfaction

■ Communicating quickly when plans

change

■ Complying HR constraints like labor

rules, skills and experiences, and payroll

Trends and challenges in logistics | Goos Kant

If you work in the logistics space, you will probably recognize some, if not all, of these challenges:

Employeeengagement:

Self-deploymentwhile automating

workforcemanagement

Flexiblecontracting:Increasing

demand forworkplaceflexibility

E-commerce and

promotions:Volatile and

market dynamics

Work life balance: Focus on employee

engagement, satisfaction, and morale

Workforcesafety

is getting more

important


“How do I improve my KPI’s

while reducing overtime

and increasing employee

engagement and safety?”

Underlying Industry Trends:

Trend 1

Dealing with volatile market dynamics in

e-commerce and promotions

Historically, many logistics operations were

organized in a static way. Demand was

typically considered flat and certain, and

the supply chain was organized as a push-

process towards outlets and customers.

Nowadays, volume is much more uncertain

and volatile, and led by the customer.

Developments in e-commerce have resulted

in more dynamic staffing needs, especially

due to variability in promotions, special

events and product releases.

Trend 2

Flexible contracting

With the rise of individualization,

globalization and hi-tech tools, employees

are demanding more flexibility. Flexible

contracting is becoming the standard in

industries such as retail and logistics. As a

result, executives are looking for solutions

that offer more visibility into employee

availability. There is a strong preference for

mobile, real-time planning and scheduling

software.


Let’s take a look at underlying industry trends at the heart of these challenges:


Trend 3

Enabling self-deployment while automating

workforce management

A company’s workforce is its most valuable

asset, but also its largest expense. At the

same time, the amount of work required

of your staff is always subject to variation.

Optimized scheduling can help to improve

workforce efficiency and effectiveness in

this dynamic environment. But it can also

foster employee engagement: by enabling

staff members to influence and even create

their own schedules and rosters. In other

words, optimization solutions facilitate

self-deployment and many companies in

logistics are turning to these solutions to

address this.

Trend 4

Improving workforce safety

Combating employee fatigue should be on

every organization’s agenda. Productivity

losses, quality issues and accidents can

be averted by properly managing overtime

and designing shifts in an adequate

way. Government regulations are also

becoming more stringent, and consumers

as well as regulators are demanding more

transparency.

Companies are looking for solutions that

allow them to visualize and control work

hours in real-time in order to react to issues

instantly.


Trend 5

Improving work-life balance

Successful companies have engaged

employees and engaged employees must

feel at ease with their work-life balance.

Developing a culture that encourages

initiative, creativity and wellbeing is

becoming more important to create a more

committed and happier workforce.

Summing up:

logistics companies need to be more agile to deal with:

■ Volatile market dynamics

■ Uncertainty in demand

■ Complex workforce requirements

■ Ambiguous balance of productivity and employee

satisfaction

8 | WHITEPAPER - WORKFORCEPLANNING AND SCHEDULING IN LOGISTICS

Vincent Lemmens


Ask the expert:

Wouldn’t it be great to be more adaptable and make data-driven decisions to guarantee the best results for you and your staff?

In the next chapter Vincent Lemmens will take you through the 7 steps to improve workforce

planning in logistics. He has led many innovative workforce planning implementations across

the years and is a strong believer of participative rostering and its contribution to employee

engagement.

Vincent Lemmens is the

Director of ORTEC Benelux.

He has more than a decade of

experience commercializing

workforce solutions and set

up the first ORTEC workforce

knowledge center.

How to plan and schedule the right workforce

Designing shifts is a major challenge

for any large organization in which

workloads fluctuate significantly. Poor shift

scheduling inevitably leads to workforce

capacity shortages or overstaffing.

Capacity shortages, in turn, cause slow

response times, while overstaffing leads to

overspending and reduced profit margins.

Companies in the logistics field need to

assign the right number of people to the

right tasks at the right moment to live up

to customer expectations. The workforce

system they select should provide a rock-

solid foundation for staff planning in order

to meet forecasted demand. Ideally, the

system should include the ability to optimize

the amount of shifts to match workload

demand, while accommodating individual

employee characteristics and preferences.

The solution should also support ‘self-

rostering’ and ‘self-service’ functionalities

which give employees more control and

flexibility.

Demand-driven workforce deployment

enables the company to provide the

appropriate level of service for customers at

minimum cost.



Considering various planning horizons

From strategy development to evaluation,

an optimization software solution has to

support the entire workforce management

process. First, the software solution

must help determine labor demand and

required workforce. Sophisticated scenario

analysis techniques need to provide several

alternatives. For the coming workforce

planning, the solution should calculate

the number of shifts needed, and deliver

the right roster to each employee (or give

them the flexibility to create their own

roster). Changes must be possible based

on the latest information. During operation,

fast access is necessary to support in- or

decreasing volumes or make changes to

the schedule when an employee gets sick.

And of course, after execution, the right

information is necessary to support payroll

systems and internal evaluation.


DemandDriven

Planning

EmployeeInteraction

ResultDriven

Efficiency

Web PortalIntegration

7-step methodTo make it easier to implement this workforce management process, ORTEC introduces a 7-step method. The method allows you to easily integrate workforce scheduling in logistics.


Read on to learn about each step.

STEP 1

Forecastingthe amount

of work

STEP 2

Optimizenumber of shiftsand tasks within

a shift

STEP 3

Create rosterslocally and review them

STEP 4

Optimize numberof temporary

workers

STEP 7

Integrate workforce planning

STEP 6

Strive for real-time

visibility and adjustments

STEP 5

Boost employee

engagement

1. Forecast the amount of work

2. Optimize the number of shifts and tasks within a shift

3. Create rosters locally and review them centrally

4. Optimize the number of temporary workers

5. Boost employee engagement

6. Strive for real-time visibility and adjustments

7. Integrate workforce planning


The first step is to compute the amount of work for the coming period (e.g. next week, next month, next quarter). Having insight into the expected workload is key to calculate the right mix of people needed. When the right data is available, forecasting is a solid method to compute the exact amount of staff needed, and find out if you need outside help.

Step 1:

Forecast the amount of work

The amount of work can be forecasted

based on historical information or based on

data from different systems. Consider the

following situations, for instance:

Distribution Centers: Generally speaking,

the amount of work to be executed in a

Distribution Center can be forecasted

using expected customer orders. This data

can be extracted from master schedules

or contracts, or drawn from historical

information while adding marketing

and sales information and continuously

performing advanced trend detection.

Stores: In a store, historical Point-of-

Sale (PoS) data provides ideal input for

calculating a workforce forecast. You can

identify detailed (e.g. 15-minute) staffing

requirements per day, per week and for

each type of activity (like counter-work,

replenishment, etc.). In our system, an

algorithm computes the optimal number

of shifts (including type and start and end-

time) based on this PoS data, covering all

necessary staffing requirements and taking

trends into account.


Every order consists of various tasks (like picking and loading) with dependencies in between. Orders typically also have a start time and an end time in which they need to be accomplished. There is some flexibility between the start and end times which can be used to avoid peaks in the amount of workforce needed. You can use an optimizer in our system to calculate the number of required shifts for the coming period, based on skills, productivity and other dependencies. If you do this at a centralized level, you can also identify opportunities to combine activities at multiple workstations or departments.

Step 2:

Optimize the number of shifts and tasks within a shift

The following aspects should be

considered while creating these shifts:

■ Translate your work forecast into shifts/

tasks

■ Balance over- and understaffing

■ Obey restrictions such as minimum and

maximum shift lengths

■ Take current contracts into account (full-

time, half-time, part-time)

■ Flatten peaks (evaluate if work can be

done earlier or later) and reduce number

of people needed

The optimizer provides the number of

shifts required for each day in the coming

period. A shift might consist of different

activities (or routes per driver) at different

workstations. If the expected amount of

work is quite volatile, you can identify when

it makes most sense to deploy flex-pool

workers or make an arrangement with

staffing agencies. To compute this in an

accurate way, you will need to consider

labor laws and company-specific rules and

policies.

DEMAND

SHIFTGENERATOR

SHIFTS

RULES & REGULATIONS


After you determine required number of shifts (per type/skill), you can create rosters. Rosters should take workstation assignments and vacation planning into account, for all employees in the coming period. The optimizer used should respect all constraints and labor rules, while accounting for employee preferences, qualifications and regulations. Optimizing workforce capacity over a longer period of time helps employers follow seasonal patterns based on customer data.

Step 3:

Create rosters locally and review them centrally

Roster optimization can be done in multiple

ways. Typically, employees share their

preferences and restrictions in advance (e.g.,

fixed day off or a request for a free evening),

after which a plan is calculated for each

department. When this process is centralized,

imbalances between departments can be

seamlessly optimized. For instance, by

using a flex-pool of employees who can

work at various departments. Additional

employees can easily be requested locally

but a centralized internal optimization

process before appointing the unmanned

shifts to the external work agencies is highly

recommended for efficiency reasons.

Logistics companies tend to hire a large

number of temporary workers from HR

Service providers. Often, these service

providers even have a small office at the

distribution center and are responsible for

scheduling employee shifts. The logistics

organization often has an insufficient

understanding as to whether the number

of resources needed could be lower, which

makes them less strong in negotiations.

When the company is in control of its own

planning and scheduling, the relationship with

the HR Service providers and their knowledge

base is equal. The organization’s workforce

systems should also be integrated with the

HR Service provider’s in order to ensure that

communication runs smoothly.

CENTRALIZED DECENTRALIZED


Before hiring temporary workers or subcontractors, your company should first balance the workload over all its departments. When departments are located at the same site or in the same area (like terminals in a harbor), the benefits of being in control of the process that the determines the overall number of external workers can be particularly enticing.

Step 4:

Optimize the number of temporary workers

To achieve this, you need an advanced

system that empowers locally but allows

being in control centrally.

The objectives during the planning cycle

can be summarized as follows:

■ Equal amount of internal staff with

structurally available work

■ Consider own flex-pool

■ Optimize collaboration with external

agencies

■ Real-time request and approval process

flows

■ Clear and measurable KPI’s

It’s important to be in control of processes

that determine the number of external

resources required.

EXTERNAL FLEX

FLEXPOOL

FLEXIBILITY

STRUCTURAL TEAM


Employees should be able to view their roster (typically via smartphone or tablet) and exchange shifts with their colleagues if needed, once the schedule is published. An alternative bottom-up approach for assigning rosters to employees, which is getting traction in the industry, is allowing employees to ‘bid’ on certain shifts, implying a ‘self-rostering’ approach. After this step, a central optimizer can be used to finalize the plan, respecting employee bids as much as possible.

Step 5:

Boost employee engagement

Mobile apps can be used to:

■ View rosters and changes,

■ Enter leave requests & swap shifts

■ (Co) create your own roster

■ Get latest relevant company information

■ Get personalized relevant information

By involving employees and providing a

way for them to view their schedule even

on the go, you foster more engagement and

satisfaction. This, in turn, improves retention.


Ad hoc disruptions always occur. Changes in workload due to delays in the picking process, issues during production or absenteeism are a fact of life This means your planning must also be adaptable.

Step 6:

Strive for real-time visibility and adjustments

A system that suggests alternatives on how

to cover vacant shifts is incredibly useful. It

can help you identify whether to add extra

resources to the next shift versus adding

extra overtime to current shifts. All changes

made to the original schedule should be

registered accurately in order to spot delays

or slowdowns. Live feedback from clocking

systems (e.g., recognizing employees

moving to different departments) can be

used to update the existing plan in real-time.

Inefficient processes can thus be identified

and repaired, and work can be restructured

to meet agreed deadlines.

At the end of the day (or work period), all counters and reports must be updated with actual information. Labor and contract rules for salary payments must be applied, so that a seamless process towards payroll systems is in place. Avoiding manual checks and interference is a big win, not only in cost savings, but also in lead-times. It’s important to compare reports of the spent budget with the calculated budget, and to monitor overall costs against planned budget.

Step 7:

Integrate workforce planning


Work Hours

Invoicing

IllnessRegistration

PayrollProcessing

TimeRegistrations

PersonnelInformation

ORTECWorkforceScheduling

Strive for a seamless integration with payroll (e.g., actuals), HR (e.g., skill matrix) and Finance

(e.g., invoices, budgets & targets).

The benefits at a glance

To sum up, what can you achieve with optimized personnel planning?


1

4

7

2

5

8

3

6

More insight and more control.

Get real-time monitoring of

working hours and qualifications.

Get higher productivity by deploying the right

people in the right place.

Better coordination, both internally and

with external parties, such as employment

agencies.

Make it easy for planners to adjust and

intervene in various operations through a complete overview.

Save time on planning and communication

processes.

Deploy the right number of people, with

the right skills in the right place.

Less cost. No unnecessary hiring of temporary workers.


Functions & Features Suppliers of ERP systems use terms like scheduling and planning to describe what they offer, but these systems are actually administrative. For optimal workforce planning and scheduling, you need an extra layer to provide decision support as well as registration. Sophisticated optimization engines are necessary to create efficient and effective schedules.

Requirements are:

■ Integrated scheduling and time and

attendance monitoring

■ Fully automatic and semi-automatic

scheduling support: optimization of shift

schedules, employee schedules and

workstation / job assignments

■ Highly configurable checks on business

rules, legislation and complex working

time agreements

■ Highly configurable calculations for

remuneration and Key Performance

Indicators

■ Multi-process support: flexible employee

schedules, scheduling of project workers,

shift and vacation bidding and self-

rostering

■ Employee self-service and Manager self-

service supported by web-based mobile

and desktop apps

■ Outstanding application integration

support

Advances in technology have given us greater

insight into what is happening on all levels

within the supply chain. Data is available

during all stages, allowing us to identify

problems and correct, or even prevent them.

Additionally, clocking or time and attendance

functionality supports automatic payroll

pre-processing (registration of hours worked

and calculation of overtime) and entitlement

management (e.g. vacation balances). All of

this data can be aggregated for evaluation

purposes. By automating this process, a

large amount of manual work for salary

preparation and invoices towards payroll

systems vanishes completely.

Some references:

The challengeKatoen Natie is an international logistics

service provider and port operator with

operations in 32 countries and over

13,000 employees. Due to unpredictable

volumes, it is difficult for the company to plan

warehouse staff in advance. Add to this the

complexity of planning staff deployment to

cover over 5.2 million m2 in warehouse capacity

and you have a complex challenge at hand.

How we created valueWith ORTEC, Katoen Natie is better able to plan

staff and distribute planning over departments,

HR and with on-site interim partners. Staff is

assigned using optimization models, drawing

on a qualification matrix that incorporates

employee qualifications, overtime restrictions

and more.

Katoen NatieBenefitsThanks to ORTEC, Katoen Natie benefits

from improved communication and

efficiency in the planning process. This

has resulted in more profit, less over and

understaffing and less time spent on

planning, registration and payroll tasks.

Employee satisfaction had also increased

with improved communication using a

mobile and web app. The company’s staff is

in control of their own schedule and enjoys a

centralized planning process with improved

workload distribution. A large part of the

planning process was also automated,

freeing up time to focus on more pressing

tasks.

Customer Case

21 |

22 |

The challengeSOK Finland is a major player in the retail

sector with over 35,000 employees spread

across various Northern and Eastern

European countries. They wanted to raise

revenue through outstanding customer

service. Principally by matching the availability

of goods and frontline retail personnel with

the presence of customers. Through the

development of workforce schedules based

on forecasts of future Point of Sale (POS)

figures. One of the main challenges was the

significant POS figure fluctuations. There

was also a need to balance the company’s

dual goals of improved economies of scale

by greater standardization and centralization

on the one hand, while on the other giving

local managers the freedom and autonomy to

manage day-to-day operations flexibly.

How we created value We integrated the customer’s specific needs

into a suite of data driven ORTEC Workforce

planning and scheduling solutions, while also

replacing and upgrading legacy software as

required. By analyzing ‘big data’ from POS

figures, the solutions predict future POS

demand and generate automated optimal

shifts, staff schedules and annual employee

capacity plans.

Benefits SOK has seen increased revenue from

better service quality; increased productivity

per retail outlet; and an improvement in

on demand driven services, where the

number and quality of personnel matches

the consumer’s service needs. All achieved

within complex labor rules and with no

increase in HR costs. At the same time,

central and local management are now

empowered to innovate on workforce

deployment.

SOKCustomer Case

22 |

23 |

The challengeQuantore, a leading wholesale purchaser and

distributor of office supplies distinguishes

itself in the market through a wide product

range and high-quality logistics. The company

has a 20,000 square-meter logistics center

and processes over 21,000 products in

5.4 million order lines on a yearly basis. Such a

complex operation has its challenges, starting

with the need to quickly respond to ad hoc

disturbances in planning, ensuring warehouse

workers’ safety and accurately registering

actual hours worked, as well as absenteeism.

How we created valueWith ORTEC’s software, the company creates

an integrated schedule for 125 warehouse

employees.

BenefitsThis wholesale purchaser and distributor of

office supplies benefits from a rapid response

to workload changes. The company now

has optimized shifts that match workforce

capacity to dynamics in workload demand,

and more efficiency in its planning process

QuantoreCustomer Case

23 |

24 |

Conclusion Whether you are looking to improve your adherence to

regulations, increase worker satisfaction or determine the

right recruitment strategy to deal with talent shortages,

we hope that you feel inspired to improve your company’s

workforce planning after reading this e-Guide. Remember

to follow our 7-step approach for best results:

1. Forecast the amount of work2. Optimize the number of shifts and tasks within a shift 3. Create rosters locally and review them centrally4. Optimize the number of temporary workers5. Boost employee engagement6. Strive for real-time visibility and adjustments7. Integrate workforce planning

7 step approach

24 |

About ORTEC

ORTEC is one of the world’s leaders in optimization software and

analytics solutions. We make your business more efficient, more

predictable and more effective. Turning complex challenges into

easy-to-use solutions. We serve clients in almost every industry.

And with offices strategically located across the continents, we can

deliver solutions on a global scale. Always underpinned by local

know-how and service.

Do you have questions about implementing this approach at

your company? Contact us to discuss your challenges and

discover improvement opportunities. We would love to hear

from you!

ortec.com

https://ortec.com/

Documents

E-Guide - ORTEC | ORTEC 7 steps to...Complying HR constraints like labor rules, skills and experiences, and payroll Trends and challenges in logistics | Goos Kant If you work in the