John Johnson joined the DC Velocity team in March 2004. A veteran business journalist, John has over a dozen years of experience covering the supply chain field, including time as chief editor of Warehousing Management. In addition, he has covered the venture capital community and previously was a sports reporter covering professional and collegiate sports in the Boston area. John served as senior editor and chief editor of DC Velocity until April 2008.
When Walgreens began its search for a DC site in the Southeast, all signs initially pointed to Atlanta. But when the dust settled, the drugstore giant had chosen a 110-acre parcel in Anderson, S.C., a community less than one-tenth Atlanta's size and more than 100 miles away.
When its original plans to build in Atlanta didn't pan out (Walgreens was unable to find a suitable plot of land), the company was compelled to expand its search to communities within a 125-mile radius of the city. From a geographic perspective, Anderson, which is tucked away in the northwest corner of South Carolina, might not have seemed the most obvious choice. But Anderson promised something competing locations couldn't: a steady supply of workers with disabilities.
Before embarking on its site search, Walgreens had made a commitment to hire as many disabled workers as possible at the new facility. As it went through the usual site-selection steps, such as soliciting grants and tax incentives, it also considered which communities offered a large enough labor pool of disabled workers and the support services that would be needed to help them succeed. Talks with community groups convinced it that Anderson could meet its labor demands and would come through with the necessary resources and support. "We met with local agencies, and we said we were going to hire 600 people and that 200 will likely have severe disabilities," says Randy Lewis, the company's senior vice president of distribution and logistics. "Though nobody had ever done anything on this scale, [the Anderson community] responded very well and they really believed us. They circled the wagons and said they would work with us, and they've been very true to their word."
Once Walgreens' management had signed off on the plan, the Anderson County Disabilities and Special Needs Board and the South Carolina Vocational Rehabilitation Department began working with Walgreens to develop training programs for people with special needs. The agencies built a training center, which Walgreens outfitted with equipment that would be used in the DC.
Anderson also contributed trainers and even arranged for transportation to get disabled workers to and from the DC. "We wanted a sustainable model, and part of our model was not running a transportation system, so the community stepped up on that," says Lewis. "We told them we'd build the distribution facility and provide jobs and some training, but that their community needed to step up. They have done that. In retrospect, [choosing to build in Anderson] is one of the great decisions we've made."
The $175 million, 700,000-squarefoot facility, which opened in June, currently employs 335 workers, 47 percent of whom have a physical or cognitive disability like autism or mental retardation. For many of them, these jobs represent the first opportunity to bring home a paycheck. The company plans to expand the workforce to nearly 600 within the next few years. At full capacity, the facility will ship approximately 80,000 cases daily to more than 700 Walgreens stores in the Southeast.
Although Walgreens' program for hiring disabled workers has been featured in The New York Times, The Wall Street Journal, and on network television, Randy Lewis, Walgreens' senior vice president of distribution and logistics, makes it clear that the company isn't in it for the publicity.
"This is not cheering, guys," he says. "We'd be glad to share what we've learned about this from the human resources side with anybody. A lot of people have taught us a lot of things, and we'll be glad to share what we learned."
Lewis, who is leading Walgreens' drive to hire 1,000 disabled workers at its DCs over the next three years, has a personal story to tell. Austin Lewis, his 19-year-old son, is autistic. Lewis notes that 95 percent of autistic people never find work, and that the unemployment rate for those with other severe disabilities approaches 75 percent.
"Employment opportunities are very limited," he says. "I'm very interested in talking to my peers out there who want to do something like this. It's not as hard as they think, and it makes a big difference. When you read the letters I get from parents, you realize that a crumb from our table is a feast for these parents. The thing is, it was so easy that it makes you ask 'Why did I wait so long?'"
A personal stake
Walgreens' innovative hiring program grew out of a plan devised by Lewis, who oversees all of the company's distribution centers across the country. For him, the quest to create more employment opportunities for people with disabilities is personal. He has a 19-year-old son who is autistic and is keenly aware of the employment challenges facing disabled people.
The plan began to take shape in 2004, when Lewis was investigating technology for the DCs the company would be building in the next five years. "Our typical approach to technology and automation is to make [each generation] of DCs more efficient [than the last]," says Lewis. When he realized the extent to which advanced technology could reduce demands on the workforce, he began brainstorming with colleagues about possible opportunities for people with physical or mental challenges. "We decided to look into what we would need to tweak so we could employ a group of people who might otherwise not be able to work," he says.
When he approached the Walgreens board of directors with the idea, the directors were quick to offer support for the plan. "I said that we're building a new [center] that will be 20 percent more efficient, and by the way, one-third of the employees will be people with disabilities, and they said 'great,'" says Lewis. "The only thing they've said since then is 'thank you.'"
The company now has even more aggressive plans to hire disabled workers. Walgreens intends to adopt a similar workforce strategy at a DC it's building in Windsor, Conn., that will open in 2009. By 2010, the company hopes to employ 1,000 disabled workers at its 15 distribution facilities nationwide.
Though he acknowledges that 1,000 workers is an ambitious goal, Lewis believes it's attainable. "We needed a number that was achievable but tough enough to ring a bell," he says."We looked around at all of our other distribution centers, and decided on 1,000. It's a big number, but three years is far enough out there, but also close enough that it keeps some heat on us." He adds that Walgreens hopes to have 3,000 disabled people on the payroll by 2015.
Equal opportunities
The Anderson DC's workforce includes people with a wide range of disabilities, including autism, cerebral palsy, and Down syndrome. "It's the most interesting crowd you've ever seen. We've got every kind of walk you can imagine," Lewis says, with total empathy. "It is our most interesting place, and it's just an overwhelming experience to visit the facility."
Many of the disabled workers at the Anderson DC started out by attending pre-hire training, spending as much as a year and a half at the training center—without pay— learning the skills they'd need to qualify for a job. Though training does not guarantee a job, trainees who do well are eligible for a paid tryout at the DC. During the transitional phase, employees are accompanied by a job coach who assists with on-the-job training. At the end of the 45-day trial period, Walgreens reviews performance—including productivity and accuracy rates—and decides whether or not to offer the worker a job.
Walgreens has taken a number of steps to accommodate its disabled workers. For example, it has installed wheelchair ramps and redesigned work stations to be more ergonomically friendly for people with physical challenges. As part of that process, it replaced traditional computer keyboards with touch-screen monitors with large icons. It also uses pictures where possible to accommodate those with visual and other impairments. Instead of relying on traditional signage to remind workers to have their bags inspected, Walgreens uses a video of someone opening a bag. In addition, the company convinced vendors to include more information in bar codes on merchandise to cut down on the amount of data employees would have to enter.
Lewis reports that adapting the equipment to employees' needs turned out to be a relatively simple matter. "When it really came down to it, the selection of the technology didn't make that much of a difference," he says. "The biggest thing from a technology point of view was that it got us thinking about how people interact with our IT systems."
The jobs at Anderson aren't limited to production jobs on the DC floor. Today, disabled workers can be found throughout the distribution center, working in receiving, de-trash (where cartons are unpacked), full-case picking, split-case picking, and shipping. They also drive forklifts and the scrubbers used to clean floors. It's not unusual for disabled workers to be assigned to train typically-abled employees, as the disability community refers to workers without a handicap.
Disabled employees can be found in the management ranks as well, from managers with missing limbs to people like Angie Campbell, the facility's outreach manager, who has cerebral palsy (see box below). Campbell graduated from her master's degree program with a 4.0 grade average, sent out 300 resumes, and had 40 interviews. Even so, she didn't receive a single job offer until Walgreens finally gave her an opportunity.
Real work for real pay
When he talks about the center's hiring program, Lewis stresses that Walgreens is running a business, not a charity. The company holds employees with disabilities to the same performance standards as all team members, he says, and it offers them the same pay and benefits as other employees for the same work. "We said we want them to perform at the same level, at the same standard, side by side with other workers at the same pay.We said we want the DC to be an integrated work environment," he says, "and that's what this turned out to be."
In fact, Lewis reports that the Anderson DC is about 20 percent more productive than any of the corporation's other facilities. Although some of that can be attributed to the automated equipment that was installed to allow disabled people to perform the jobs, Lewis emphasizes that motivation plays a big part as well. The disabled workers are very concerned about performing at the highest levels possible, he says, noting that they constantly check their performance against the DC's productivity goals.
Like productivity, morale appears to be unusually high at the Anderson DC. "We've had managers intentionally transfer there or join us because of its mission," Lewis reports. "When I walk through the building, the typically-abled come up to me and say 'This is the best place I've ever worked.' Everybody focuses on two words what you can do, not what you cannot do. It's the building with the best attitude, the best spirit, and the most cooperation. I wish every building was like that."
The day when all buildings are like that may never come. But if Walgreens keeps its word, there might be a lot more of them in the not-so-distant future.
faces in the crowd at Walgreens' Anderson, S.C., DC
Angie Campbell, Career Outreach Coordinator
Disability: Cerebral palsy
Angie Campbell has a master's degree from Clemson University. Her job encompasses a little bit of everything, including coordinating the job referrals Walgreens receives from local disability agencies and supervising the agencies to make sure they're conforming to Walgreens' culture.
Best thing about working at Walgreens' DC:
"It's almost like I have an opportunity to create jobs for others with disabilities. When somebody comes to work here, I'm able to stay with them and ensure that they are successful."
How working here has changed my life:
"Professionally, it's made me have a broader skill level. Walgreens has let me try new things, and most of the things we've done have been successful. It's really a thrill. I can help the disabled community more than I could in my previous job. I know through my own struggles what somebody needs to be successful."
Harrison Mullinax, Receiving
Disability: Autism
Harrison Mullinax is working his first full-time job at Walgreens. The 18-year-old uses a hand scanner to check in items as they arrive at the DC. He says he probably wouldn't have a job if it were not for Walgreens. He spent 18 months volunteering in a training program to prepare for his position.
Best thing about working at Walgreens' DC:
"Being able to see different people and meeting new people that I've never seen before."
How working here has changed my life:
"It's changed my life a lot. There are good benefits here with the company and you get paid pretty good here."
Desiree Neff, Receiving
Disability: Myotonia congenita (a neuromuscular disorder)
Desiree Neff works in the receiving department scanning pallets as they come in the receiving doors. A former human resources manager for a retailer, she has worked at the DC for four months. She has already been involved in training and aspires to do more of that in the future.
Best thing about working at Walgreens' DC:
"It's a very safe and warm atmosphere where you can come to work and be yourself without having to try to hide your disability."
How working here has changed my life:
"I used to dread my old job. I was constantly threatened that if I didn't meet expectations, I would lose my job. But I look forward to coming to work here in this environment every day."
Julia Turner, Receiving (case check-in)
Disability: Down Syndrome
Julia Turner spent 12 months at the voluntary training program before being hired for her first full-time job ever at age 52. She has been involved in training some new managers at the DC as well as new workers in receiving. She'd like to be more involved in training in the future.
Best thing about working at Walgreens' DC:
"This is the best place to work. It's one of the greatest places I've ever been."
How working here has changed my life:
"This is the kind of job I've always wanted. By working, it keeps my mind occupied, instead of sitting around at home with nothing to do. I'd like to help other team members who aren't able to do something for themselves. This is what I've always wanted."
Jeremy Van Puffelen grew up in a family-owned contract warehousing business and is now president of that firm, Prism Logistics. As a third-party logistics service provider (3PL), Prism operates a network of more than 2 million square feet of warehouse space in Northern California, serving clients in the consumer packaged goods (CPG), food and beverage, retail, and manufacturing sectors.
During his 21 years working at the family firm, Van Puffelen has taken on many of the jobs that are part of running a warehousing business, including custodial functions, operations, facilities management, business development, customer service, executive leadership, and team building. Since 2021, he has also served on the board of directors of the International Warehouse Logistics Association (IWLA), a trade organization for contract warehousing and logistics service providers.
Q: How would you describe the current state of the contract warehouse industry?
A: I think the current state of the industry is strong. For those that have been focused on building good client relationships over the years, I think it’s a really exciting time. Coming out of all the challenges of the past few years, I think there’s a lot of opportunity for growth and deeper partnerships. It’s fun to see the automation and AI (artificial intelligence) integration starting to evolve [in a way that’s] similar to what we saw with WMS (warehouse management systems) in the early 2000s.
Q: You are now president of your family firm. Is it an advantage having grown up in the business as opposed to working elsewhere?
A: I definitely believe it was an advantage growing up in the business. Whether it’s working with family or someone else in the industry, there’s always an advantage when you have mentors[to guide] you. I’ve been blessed to have several mentors, some in the industry, others just in life, and I’m thankful that they were willing to mentor me and that I was willing to listen to them.
Q: What are the biggest challenges currently facing 3PLs, and how are you addressing them?
A: Labor and legislation are both tough right now. The two seem to have a lot to do with each other, and it can make it tough to find and retain people. So I think we’ll see more and more automation of processes industrywide.
Q: Third-party service providers often must handle a wide variety of products for a lot of different clients. Does this variety make it difficult to invest in automation and other new technologies?
A: It can make things more difficult when looking at certain automation, but it’s in the “difficult” that a lot of opportunities lie. It would be tough to find a single solution that fits every client’s needs, but there are always opportunities to improve in certain areas. It just takes a bit of vision and commitment, and a willingness to invest in your own long-term success.
Q: As a 3PL, what do you look for when selecting the clients you work with?
A: Quality relationships that will last a long time. When both parties are happy and working together in the same direction, everyone wins.
Q: You’ve been a board member of the International Warehouse Logistics Association since 2021. Why is your involvement with this organization important to you?
A: I think it’s important to understand what’s happening in the industry. IWLA is a great resource for staying up to date and getting a solid education when it comes to the latest logistics trends. I also think it’s important to give back and pass along what we’ve learned to those just getting started in the business. As important as it is to have a mentor, it’s just as important to mentor and help others.
“While there have been some signs of tightening in consumer spending, September’s numbers show consumers are willing to spend where they see value,” NRF Chief Economist Jack Kleinhenz said in a release. “September sales come amid the recent trend of payroll gains and other positive economic signs. Clearly, consumers continue to carry the economy, and conditions for the retail sector remain favorable as we move into the holiday season.”
The Census Bureau said overall retail sales in September were up 0.4% seasonally adjusted month over month and up 1.7% unadjusted year over year. That compared with increases of 0.1% month over month and 2.2% year over year in August.
Likewise, September’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were up 0.7% seasonally adjusted month over month and up 2.4% unadjusted year over year. NRF is now forecasting that 2024 holiday sales will increase between 2.5% and 3.5% over the same time last year.
Despite those upward trends, consumer resilience isn’t a free pass for retailers to underinvest in their stores by overlooking labor, customer experience tech, or digital transformation, several analysts warned.
"The 2024 holiday season offers more ‘normalcy’ for retailers with inflation cooling. Still, there is no doubt that consumers continue to seek value. Promotions in general will play a larger role in the 2024 holiday season. Retailers are dealing with shrinking shopper loyalties, a larger number of competitors across more channels – and, of course, a more dynamic landscape where prices are shifting more frequently to win over consumers who are looking for great deals,” Matt Pavich, senior director of strategy & innovation at pricing optimization solutions provider Revionics, said in an email.
Nikki Baird, VP of strategy & product at retail technology company Aptos, likewise said that retailers need to keep their focus on improving their value proposition and customer experience. “Retailers aren’t just competing with other retailers when it comes to consumers’ discretionary spending. If consumers feel like the shopping experience isn’t worth their time and effort, they are going to spend their money elsewhere. A trip to Italy, a dinner out, catching the latest Blake Lively and Ryan Reynolds films — there is no shortage of ways that consumers can spend their discretionary dollars,” she said.
Editor's note:This article was revised on October 18 to correct the attribution for a quote to Matt Pavich instead of Nikki Baird.
A real-time business is one that uses trusted, real-time data to enable people and systems to make real-time decisions, Peter Weill, the chairman of MIT’s Center for Information Systems Research (CISR), said at the “IFS Unleashed” show in Orlando.
By adopting that strategy, they gain three major capabilities, he said in a session titled “Becoming a Real-Time Business: Unlocking the Transformative Power of Digital, Data, and AI.” They are:
business model agility without needing a change management program to implement it
seamless digital customer journeys via self-service, automated, or assisted multi-product, multichannel experiences
thoughtful employee experiences enabled by technology empowered teams
And according to Weill, MIT’s studies show that adopting that real-time data stance is not restricted just to digital or tech-native businesses. Rather, it can produce successful results for companies in any sector that are able to apply the approach better than their immediate competitors.
“ExxonMobil is uniquely placed to understand the biggest opportunities in improving energy supply chains, from more accurate sales and operations planning, increased agility in field operations, effective management of enormous transportation networks and adapting quickly to complex regulatory environments,” John Sicard, Kinaxis CEO, said in a release.
Specifically, Kinaxis and ExxonMobil said they will focus on a supply and demand planning solution for the complicated fuel commodities market which has no industry-wide standard and which relies heavily on spreadsheets and other manual methods. The solution will enable integrated refinery-to-customer planning with timely data for the most accurate supply/demand planning, balancing and signaling.
The benefits of that approach could include automated data visibility, improved inventory management and terminal replenishment, and enhanced supply scenario planning that are expected to enable arbitrage opportunities and decrease supply costs.
And in the chemicals and lubricants space, the companies are developing an advanced planning solution that provides manufacturing and logistics constraints management coupled with scenario modelling and evaluation.
“Last year, we brought together all ExxonMobil supply chain activities and expertise into one centralized organization, creating one of the largest supply chain operations in the world, and through this identified critical solution gaps to enable our businesses to capture additional value,” said Staale Gjervik, supply chain president, ExxonMobil Global Services Company. “Collaborating with Kinaxis, a leading supply chain technology provider, is instrumental in providing solutions for a large and complex business like ours.”
However, that trend is counterbalanced by economic uncertainty driven by geopolitics, which is prompting many companies to diversity their supply chains, Dun & Bradstreet said in its “Q4 2024 Global Business Optimism Insights” report, which was based on research conducted during the third quarter.
“While overall global business optimism has increased and inflation has abated, it’s important to recognize that geopolitics contribute to economic uncertainty,” Neeraj Sahai, president of Dun & Bradstreet International, said in a release. “Industry-specific regulatory risks and more stringent data requirements have emerged as the top concerns among a third of respondents. To mitigate these risks, businesses are considering diversifying their supply chains and markets to manage regulatory risk.”
According to the report, nearly four in five businesses are expressing increased optimism in domestic and export orders, capital expenditures, and financial risk due to a combination of easing financial pressures, shifts in monetary policies, robust regulatory frameworks, and higher participation in sustainability initiatives.
U.S. businesses recorded a nearly 9% rise in optimism, aided by falling inflation and expectations of further rate cuts. Similarly, business optimism in the U.K. and Spain showed notable recoveries as their respective central banks initiated monetary easing, rising by 13% and 9%, respectively. Emerging economies, such as Argentina and India, saw jumps in optimism levels due to declining inflation and increased domestic demand respectively.
"Businesses are increasingly confident as borrowing costs decline, boosting optimism for higher sales, stronger exports, and reduced financial risks," Arun Singh, Global Chief Economist at Dun & Bradstreet, said. "This confidence is driving capital investments, with easing supply chain pressures supporting growth in the year's final quarter."