Ecommerce and the Growing Demand for Technicians

April 2, 2017

By Steve Harrington

In the year 2000, speculation in internet technology firms and web based companies became frenzied. People were talking about the incredible rise of the NASDAQ, their foray into day trading and the unique opportunity presented by the “Worldwide Web”. In board rooms across the country retailers and their suppliers were scrambling to develop e-commerce strategies, evaluating the role of bricks and mortar operations and trying to figure out how to meet the evolving needs of their customers. Very few people actually knew what they were doing and nobody wanted to be left out of the internet boom. Is short, it was a crazy time and the internet bubble burst sending paper millionaires into bankruptcy.
Flash forward to 2017. Technology and the Internet have become amazing tools for society in numerous and unforeseen ways. Social media was responsible for the “Spring Uprising” in the Middle East. Smart phones, in a constantly connected world, direct our lives giving us incredible tools right in the palm of our hand. In stark contrast to the year 2000, retailers now have internet technology experts on staff, ever evolving ecommerce strategies and are developing Omni-channel supply chains designed to meet both business and retail customer needs.

E-commerce has now reached the critical mass speculators had envisioned in the year 2000. According to US Department of Commerce statistics, ecommerce retail sales now exceed $400 billion annually. Forester Research puts ecommerce currently at 7.2% of the total US retail market growing at 10+% per year increasing an additional $50B in the coming year. At a Journal of Commerce logistics conference, IMS Worldwide President Curtis Spencer cited Dematic figures stating global retail sales are expected to expand to roughly 30% of total retail sales by 2025 translating to $2.7 trillion.

When you consider the unparalleled momentum and current critical mass occurring in the mobile world of e-tailing, there is no doubt a “Revolution” in retailing is underway! Some questions come to mind in this new world: What will the retail landscape look like in 2025 when 30% of sales are done via ecommerce? What traditional retailers will fade into the sunset? How will all of this effect the retail supply chain? The list of questions could go on and on.

Recently, representatives from the National Center for Supply Chain Automation (SCA) visited dozens of logistics operations run by major retailers, consumer goods suppliers, third party logistics firms and small package shippers. Interviews with logistics experts were conducted and the facilities they managed were toured. These meetings, interviews and tours were part of a broader research effort designed to investigate how logistics professionals were managing double digit e-commerce growth in the face of the e-tailing revolution.

Across the board, one response emerged in a resounding way with all of those interviewed. These firms were using logistics technologies in a more comprehensive way than ever before to meet customer demands. Everyone agreed that e-commerce was the main factor driving this technology investment forward in a rapid fashion.

Times have changed. These facilities SCA toured were very clean; their staff members were smartly dressed and well educated. The “Supply Chain Technicians” responsible for installing, operating, maintaining and supporting these automated material handling systems were highly trained, nicely compensated and in demand. The 21st Century warehouse of today is much different than your father’s warehouse of yesterday.

Ecommerce is also driving a yet to be documented workforce change. Traditional retail cashiers, stock clerks and store clerks jobs are vanishing and evolving into jobs for highly trained warehouse workers. Retail store formats are shrinking. Touch and feel stores with on site ordering are a concept of the future termed “Showrooming”. Click and Collect pick up locations are emerging at many stores. Bricks and mortar stores are closing and becoming pure play online retailers.

One emerging theme that became clear during this research: There is significant a shortage of trained, skilled technicians to keep all of the new automated material handling equipment and systems operational. Companies typically fill this void by stealing talent from one another by paying ever higher wages and benefits which is an unsustainable workforce solution.

The National Center, in partnership with industry, has embarked on a mission to address this Supply Chain Technician shortage. As part of this mission, SCA is working with industry partners to host “Technician Workforce Development Forums”. The objective of this work is to introduce firms with a strong and ongoing demand for skilled Technicians to academic leaders at colleges. These schools have viable training programs that with key similarities to the National Center model program. A critical element of these forums includes a tour of an automated logistics operation which provides meaningful occupational context to academics unfamiliar with automated logistics operations.

In aggregate, the industry partners involved with the project have enough regional demand for Technicians to justify dedicated Community College or Technical School CTE programs. Colleges with existing programs focused on industrial automation, mechatronics, industrial maintenance, electro-mechanics and integrated systems technology are invited to participate.
Together, participating firms have an annual need to hire 1,000+ skilled Technicians and currently employ over 8,000 nationally. Industry partners include senior representatives from major retailers, small package shipping companies and material handling equipment suppliers. With each convening the list of companies involved in supporting this project grows.

In these forums, direct competitors come together to discuss collaborative ways to grow the Technician workforce pipeline rather than continuing to steal talent from one another. A key strategy is to demonstrate significant industry involvement to the academics which, along with the automated warehouse tour and National Center research data, builds a strong business case for the expansion of programs to support the Technician occupation.

The industry and educator forums highlight the Center’s progress, web-based resources and industry research data on why warehouses are now installing automated material handling equipment and systems. This trend is driving the need for more technicians, as every new system that is installed requires skilled people to keep it operational. Contact Steve Harrington, steve@supplychainautomation.com if you are interested in getting involved.