Cliff Holste, Materials Handling Editor

CBS has a small hit on its hands with its “Undercover Boss” series, in which corporate CEOs disguise themselves and go work among the troops across a wide variety of companies and industries.

If you missed it, in late March one of those executives was Michael Rubin, CEO of the billion dollar e-commerce giant GSI Commerce, which does outsourced e-commerce development and order fulfillment for dozens of leading e-tailers and consumer brands.

As with other CEOs, Rubin disguises his look, changes his name to "Gary Rogers," and then spends time in both the company’s major distribution center in Richwood, KY as well as a call center in Florida.

The set up isn’t totally disguised, as “Gary” is supposedly doing some research for a documentary on seasonal work, but the workers and supervisors certainly do not know it is the company’s own founder and CEO.

The full program can be viewed here: Undercover Boss GSI Commerce. We summarize details in text and pictures below.

Rubin decides to do this during the company’s peak Christmas fulfillment season, when order volumes increase by as much as six times over other periods. Volumes at the Richwood DC soar to as many as 75,000 cartons per day, virtually all “pick and pack” business. It’s also a time when GSI’s use of temporary workers soars, and Rubin realizes that he has had “little exposure to our seasonal employees. This is a great opportunity to go into the company as a seasonal employee and see the job through their eyes.”

He is first assigned to truck loading, where packed cartons are loaded into an empty trailer for parcel shipment.

His work partner, another temporary employee who has been there just three weeks, lets him know right away that “We want it high and tight. All the way up, floor to ceiling.”

“Rashelle” recommends loading boxes of the same size in columns at the back of the trailer, and building a pattern forward.

But Rubin is not very good. Boxes keep coming and coming.

“They don’t stop,” Rubin later notes.

One thing he quickly learns: distribution center jobs are tough. He is extremely tired within the first hour, and exhausted by the end of the day. Boxes on his side of the trailer look horrible, and continue to fall to the ground. At one point, he swings around with the box and smacks Rashelle hard right in the face with it.

“For the first time in my career, I wish orders would stop coming,” Rubin says. “I was embarrassed that I couldn’t keep up, the job was so hard.”

On to the Call Center before Back to the DC

Rubin next moves on to the GSI call center, where is placed into the “escalation” area, where customers who can’t be satisfied by front line customer service reps are transferred for additional handling.

It’s an eye opener. First is the recognition of the sheer scale of the different customer problems that must be solved – and with a relative lack of clarity on how to resolve them.

Many of the customer issues in fact relate to logistics.

“The main thing we do here is apologize,” his first escalation trainer tells him.

“I have one thing to say - we opened the box and the item was crushed,” one customer is heard saying.

“Why would it take until day of shipment to notify me?” asks another.

He soon finds some system issues. A customer is entitled to a $50.00 credit on an item being purchased, but GSI’s order management system cannot just deduct the credit from the purchase price. The customer has to pay full price, and then get the credit back a few days later – and she is not happy about it. (See new white paper on Next Generation Order Management.)

Rubin himself tries to deal with the customer for awhile – but doesn’t do very well, and clearly doesn’t have any real idea what his moves should be.

“She is overpowering you right now,” a new trainer tells Rubin after putting the customer on hold. She takes back control of the call, and in the end, the CS rep gives the customer a number to “call corporate.”

Rubin would like to fire the CSR on the spot, but can’t.  

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From SCDigest’s view, although clearly the CSR has some issues with attitude, she is also limited by GSI’s systems and likely rules under which she can make concessions. In this case, the system literally would not allow GSI to do what the customer wanted – so what was the alternative.

“Sometimes we can’t please them – it’s impossible” the CSR says, probably more accurately than Rubin wants to admit.

Another interesting question: do you really know how your fulfillment partner is handling these kinds of issues?

Back to the DC

Rubin returns to the DC on another day to do some pallet building, order packing and order picking – with an equal lack of success.

His trainer in the packing area notes she is lucky to be “able to work multiple jobs, so I’m not stuck in one area every day.”

In order packing, he starts slow, trying to reach the goal of 90 packed cartons per hour – one every 40 seconds.

Early on, he is well short of that goal, and a supervisor arrives to tell him it is OK – sort of.

“We want to see you are improving each hour, getting towards the 90,” the supervisor says.

He can only reach a little over 40 cartons per hour, less than half the 90 that are expected, and has several problems with label placement that will result in the inability to scan the carton on the conveyor line and thus an expensive divert to the “reject” line.

“I was embarrassed – more nervous packing boxes than I was in my own office running the company,” Rubin says.

He is subsequently told by a supervisor that his “services are no longer needed” in the packing area.

He somehow moves on to pallet building, where is finds a worker who has made up her own process for scanning, which includes putting pallet labels on her forearm instead of the pallet itself.

She says it allows her to handle 25% more cartons per hour that way, leading Rubin to wonder if there are many more additional smart ideas from employee out there to improve productivity.

Finally, he heads to order picking, where he dons a “wearable RF device” with voice capabilities (see Wearable RF Devices Gaining interest as Hands-Free Option; OHL Finds 10% Gain even over Voice) and tries to keep up with an experience picker.

It’s no contest, as the experienced picker beats his output by almost three times.

Lessons for Rubin

Like most CEOs in the program, Rubin comes away with a far deeper appreciation of how tough it is to be a rank and file employee at his company, and promises changes.

“I’ve been focused on growing the company, and I realized I need to put more time in our policies and systems to create a better environment for all of you,” he tells a group of employees later.

He also says it taught him that he needs to get a bit more balanced life.

“I never thought this experience would be so impactful on my life,” he says.

Will either of those things really happen at GSI and with Rubin personally? That’s a lot harder to say.

The larger message here is the need for logistics managers and executives to do a lot more “management by walking around,” and to have a bit more faith in the “wisdom of the troops,” or, as we wrote in a recent article, consider use of “crowd engineering.” (See Using the Wisdom of Crowds to Improve DC Performance.)

We would also add that the video clearly highlights the need for “preferred methods” to go along with labor standards.

Regardless, while a bit contrived, the episode is a good one for anyone involved in logistics and order fulfillment to watch.

Did you see the GSI Commerce Undercover Boss episode? What was your reaction? What are the overall lessons for logistics managers and executives? Let us know your thoughts at the Feedback button below.

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