This Place Sucks!

by Rene' Jones, President and CEO of AHN Corporation

The headline of this article is a direct quote from logistics workers who've confided in me when I visited their work sites or when I talked to them at our educational seminars. They say it in a way that only a warehouse employee could say it. There are various translations: "That new WMS (Warehouse Management System) will never work at this company because 'This Place Sucks!'" Or, "I don't care about moving up the career ladder at this company because 'This Place Sucks!'" And my favorite, "Management knows 'This Place Sucks' and they don't care, so why should I!" These people don't mean any harm to their companies or the people who run them, they just wanted to express their opinion to the first person who came along and would listen. That just happened to be me.

What do your people say about your organization? At every company I have ever worked with, I have to tell the leaders not to be hurt or even rancorous about what we find or what people tell us.

In the beginning, in the conference room pilot, everyone is open to any and all criticism. But as the project progresses, they want to know who would say such things about the company and almost demand that I provide them with a name so that the person can be dealt with. Then those same people who were open in the beginning begin tossing into the air the names of people they think would say such negative things about the company. But I have to admit, this is when the fun starts. Because now I ask, as I document the names, why do you think so many people feel this way about the company? And as we read off the names, I tell them what's important is not what they feel, but why those people feel that way. That simple question and observation usually get us right back on track.

While working with one company, we were discussing dead inventory. A few of the sales people laughed and said, "'This Place Sucks!' because we have in stock a lot of things we can't sell, which leaves us with not enough resources to stock more of the things that we sell a lot of." The owner disagreed with that and said, " There is no such thing as dead inventory, just dead sales people. We can always sell it, if we had the right people." Since they hired our firm to ask the tough questions, I asked, "If that's the case, when will you get the right people and what are the right people worth to the organization? Are they worth 30% of the total value of your inventory?" We had determined that amount of inventory had not moved in more than 24 months.

At another company I was told "This Place Sucks" by a person in the purchasing department, because the numbers in their inventory system were so inaccurate that their jobs were made extremely difficult. I was later told by one of the executives of that organization that there is no such thing as an accurate inventory. "There will always be problems with inventory—as long as there is inventory!" I had to agree. That was a pretty prophetic statement that made a lot of sense. But as I began evaluating their processes, I noticed that there was no detail receiving process in place. They took the word of the vendor's packing slip and put the product directly into stock without any type of inspection for accuracy. Sometimes in the primary location(s), but if it was a busy day, an entire pallet of mixed product could be placed into an overstock location without ever being inspected for accuracy.

When I asked the self-proclaimed profit about this his reply was, "Do you know how long it would take to break each pallet down then inspect and count every item? We would spend the entire day just receiving merchandise." Again I had to ask the tough questions, beginning with "Well, how much is it worth to you and the company?"

I had just spent the entire day watching your order pickers perform the "Warehouse Dance." That is when the picker goes to the location on the pick-ticket and sees that the product is not there. They then look up to the overstock locations on that rack, then turn around to look in the overstock locations behind them, and then walk up and down the aisles with their heads pointed straight up in the air looking for the product. Since that wasn't convincing enough, we timed each picker over the next several days and found they spent an average of 1.5 to 2 hours a day searching for product. The prophet was then converted.

And last but not least, one of my all time favorites. We were talking to an organization about space allocation and the under-utilization of the current space available in the warehouse, when I noticed my argument was not sinking in. The warehouse supervisor was not convinced that dead/slow-moving items should be up in air and faster moving items should be eye level, with overstock on the bottom of the shelves. I tried to explain that their people were spending a considerable amount of time going up and down ladders because the receivers were not filling the primary bins, they were just placing the new inventory into overstock. So we called a picker into the room with all of us and asked her what the most frustrating part of her day was. After spending several minutes trying to convince her to believe that there would be no repercussions, she said, "Not being able to find material and having to carry so many items down the ladders because the receivers were too lazy to put the items away properly when they came in." She also said she could not understand why the slower-moving items couldn't be placed up high so the pickers did not have to go up the ladders so frequently.

After our meeting, she pulled me aside and said, "You know, things will never change around here." When I asked why, she said—you guessed it—because "This Place Sucks!" These are only a few examples of what takes place in a lot of organizations today. I am sad to say that they happen in more warehouses than I care to admit.

Many people, especially leaders, do not want to know the truth about their organizations. Most middle managers shield the truth about the internal performance of the company from their managers until it is too late. Then you have an elephant of a problem sitting on the conference table with everyone afraid to take the first bite. Our economy is forcing companies to take a long hard look at the way they do business. In the book Control Your Destiny or Someone Else Will, Jack Welch said, "Ninety-five percent of the world' s organizations still organize work the way they did at the turn of the last century." Is that true for your organization?

I am astonished when I enter a warehouse and see an order picker picking into a shopping cart with the grocery store's name and logo still affixed. I am also amazed when I see a customer service representative, who should be taking sales calls, in the warehouse to check stock because the numbers in the system are so inaccurate. And I am blown away when I see the lack of training that takes place in most organizations, causing the warehouse supervisor to pick orders because in his words, "These people will just screw it up!" When was the last time you took a long hard look at the way work is organized in your warehouse, purchasing department, or company?

Ashley Montague said something long ago that still holds true today, "The only measure of what you believe is what you do. If you want to know what people believe, don't read what they write, don't ask them what they believe, just observe what they do." You see, there are a lot of people out there talking about Supply Chain Management, Demand Flow Management or Logistics Management but what is really going on between the four walls of many organizations today is a lack of management in the warehouse. We are reading the books, attending the seminars, but what we are doing when we return to work is something completely different.

Jobs in your warehouse are entry-level positions in your company. Warehouse employees work on the front lines with your customers every single day. They work in the trenches that have been dug by all the weary souls that came before them. So it seems only natural for one, or several, of them to say, out of frustration , "This Place Sucks!" But you have to ask yourself as a leader of the organization, "What makes them feel this way and what can we do to change their perception"? It begins with a reeducation process.

The warehouse is typically looked down on in many of our largest businesses. That is because warehouse employees don't know the value they bring to the table and the people in charge of them are clueless about that value as well. We look at warehouse people as being uneducated, lacking motivation, and—more politically correct—unskilled workers.

I have worked in places where the managers have told me that no one in the warehouse speaks English. But after working there for a while and speaking my broken Spanish, I found all of them spoke some English. However, as one of the employees told me, "If they know you speak English, they will give you more responsibility without teaching you how to handle it, then you will be fired."

At another warehouse, I was told flat out that the guys just weren't intelligent enough to bring in at the beginning of a project to provide valuable input. Later, when I asked some of those same people if they knew they had two guys with bachelor's degrees and one guy working on his masters in mathematics; they looked at me with blank stares. The economy had forced the first two to take a job in the warehouse because they had been laid off and could not find work. The employee working on his masters felt that was the best place for him to be so he could work hard on his studies without the pressures of an office job.

And my last scenario! I worked at a company that was looking desperately to sell to contractors. That was a new area for them and they were not sure how to break into that particular market. One of their warehouse guys was a former large contractor who decided it was better to make a lot less money and not have to deal with the ups and downs of owning and running a business. He said his wife was going to leave him because he spent so much time running the business and so little time at home. The irony is, the company he now worked for had someone they could consult and who could even run the show that they had no idea about. So we have to reeducate ourselves about what value our warehouse personnel bring to the table regardless of the position they hold.

The next step in changing the perceptions of your people is to listen to them. I worked at a company that thought I was a genius because I got the guys to do some things that they had not been able to get them to do. Simple things such as not losing their equipment, reporting broken ladders/forklifts, and keeping the warehouse clean. All I did was listen to what the guys had to say. For example, "You set your knife or tape measure down to pick an order and when you come back to get it, it's gone!" So we went out and bought all of them work belts. They also said it would be much easier if there were forms they could fill out when an item breaks. So we created a simple from that solved problem number two. And they complained that when they cleaned a section in the warehouse, it was dirtied up and no one was held responsible for it. So we assigned each individual a particular section in the warehouse and they policed their own sections throughout the day. The problems immediately went away.

What managers don't seem to understand is that most people want to do a good job, because they want to feel appreciated for the job they do. The best way to make them feel appreciated, with more than just their check every Friday, is to listen to what they have to say about the organization or their typical workday and act on what they tell you.

Last but not least in our reeducation process, "Hire good people and pay them well!" If you are involved with a warehouse in any way, you know there is a lot of turnover. The average warehouse hourly person will leave your company for 25 cents more per hour. Which of your customers is only worth $520 a year? That is only $10 a week! If your people are working in a supportive environment, they will not mind sacrificing ten dollars for peace of mind. But what usually happens when we need a warehouse supervisor? We typically hire someone from within, usually the best: picker, packer, or receiver. Our new supervisor knows nothing about inventory management, labor laws, or how to manage people. They have no desire to learn these things either, because the day is so hectic that they barely have time to go out and eat lunch.

I am here to tell you that I do believe in hiring people from within. But have you ever thought that maybe the best person for the job is not always the one you would normally select? Again, we usually select the best picker, packer, or receiver. However, if you look at sports, very seldom do the star athletes make good coaches. They seem to have all the skills: they were winners, they were able to get their teammates to play at high levels, and they were usually the first one on the court and the last ones off. Yet when they become the coach, why do they fail so frequently? Because performing a task well and teaching another person to perform that same task well requires different talents. Will the person you hire have star talent and communicate like a coach? Will this person be a coach who has the abilities to make stars out of others? You have to ask yourself, "Is this person you are putting in charge capable of leading your revolution or will they maintain status quo?" A revolution may seem too dramatic for your warehouse, but think of all the articles being written about WMS (Warehouse Management Systems) implementation that went wrong. Think of the relocation projects that had little or no significant impact on the overall operation of the organization. Or consider the previous statements about why so many companies still operate the way they did at the turn of the last century.

Your warehouse is the first to touch the product when it arrives and the last to touch it when it leaves. Your warehouse employees are usually the first people in the building in the morning and the last to leave at night. Your warehouse personnel quite often will tell a complete stranger, "This Place Sucks!" What are you going to do about that? Are you going to listen to why the y feel that way? Or are you going to let them translate those feelings to your customers with the orders they: pick, pack, and deliver. Because even though "This Place Sucks," sounds harsh, think about how harsh it will sound coming from one of your customers because they got the wrong product.

Rene' Jones was the founder and President of Total Logistics Solutions, Inc. ( http://www.logisticsociety.com ). He is now taking on a new role as President and CEO of AHN Corporation (www.ahninc.com). With over 18 years of experience in training, warehousing and logistics he has used his knowledge to assist and turnaround small and large companies alike, making them more efficient and profitable. He has been published in several industry magazines and is the author of, "This Place Sucks" (What Your Warehouse People Think About Your Company) and "Inventory Control Workbook" (A Complete Guide to Inventory Control)". Rene' can be reached by phone at (818) 353-2962 or by email at rene.jones@ahninc.com)

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