Many ecommerce fulfillment centers are largely dependent on manual labor. Direct and indirect labor costs generally make up 50% or more of the total cost per order (excluding outbound shipping). In many businesses as hourly wages have increased, overall DC productivity has remained flat resulting in an increased cost per unit produced (orders shipped, units picked, returns processed).
In many markets, even before the COVID crisis, the quality and availability of warehouse workers had decreased. High employee turnover in many distribution centers adds costs and instability to operations. The operations mantra is do more with the resources they have and to reduce cost per order.
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