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Focus: Distribution/Materials Handling

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From SCDigest's On-Target E-Magazine

- March 26, 2012 -

Logistics News: Undercover Boss Hits the Distribution Center for the Second Time, and Paints a Lousy Picture of Work in the Warehouse

Oriental Trading Company CEO Finds DC Work Hot, Hard - and that What He Thought Employees Valued Is Wrong

SCDigest Editorial Staff

For the second time, the popular CBS show Undercover Boss planted a CEO inside one of his company's distribution centers, and once again - to no surprise - found the work a lot more challenging that he imagined. But this time, the message was a little darker: working in a distribution center is just not really a very good job.

SCDigest Says:

One worker unsuspectingly comments to Taylor that "We claim to sell fun - but it's no fun inside this truck," also noting that "We make the same money as pickers and packers, when we have the most physical job in the building."

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The show is based on taking the CEO of a given company, and putting him or her in disguise in some normal work setting (a retail store, a factory, call center, etc.), usually introduced as a sort of special temporary employee. An excuse is made as to why the worker will be filmed doing various jobs at the site.

In 2010, the show featured the CEO of third party e-fulfillment firm GSI spending some time doing a variety of jobs in a Kentucky DC. (See How Many Companies would Benefit from Going “Undercover” in their Supply Chains?)

The message there was mostly focused on the fact that various warehouse jobs were a lot more challenging than the CEO realized, leading him to commit to improving processes and conditions there.

A similar scenario a couple of weeks ago when the show headed back into the DC, this time at Omaha's Oriental Trading Company (OTC), a $500 million retailer (mostly on-line) of primarily toys and party supplies. CEO Sam Taylor is disguised and then spends a few days picking orders, loading trucks, packing cartons and other warehouse tasks.

There was an interesting twist here, as Taylor notes at the outset of the show that OTC is all about bringing fun to its customers, and that he believes the company does well reaching out to DC employees right now with quarterly meetings out on the floor and an annual summer picnic event for DC workers and their families.

Of course, things do not go well from the start. He struggles with the voice picking system being used and can't keep up with and remember the voice commands. Indeed, at least as presented on the show, the average person would think it would be very difficult to keep track of what the robotic-like voice commands were coming from the terminals.

"The first thing that hit me was, 'Man, she talks fast,'" Taykor says (the voice speed can be slowed down). At several points, Taylor sort of yells back at the terminal when he gets frustrated.

The worker that is assigned to Taylor, who has been introduced as Dave Barton, a failed internet entrepreneur looking for a second chance, notes that if he hits his picking numbers, he can earn an extra $3.22 per hour, which would increase his pay about 33%. That put the base rate at somewhere in the $9.00 per hour range.

As the trainer and Taylor go on break over a soft drink, the picker tells the CEO that the OTC DC is "a god forsaken, grueling place to work. They don't pay real well. Anyone that says they want to work here is out of their mind. It's like saying I want to walk across the desert."

The picker adds that "I keep my percentages up to the point where I should be able to keep my job. They don't care about the employees enough to treat them more than they are just like a number."

Loading a Hot Truck

Taylor later moves on to floor loading cartons coming off a conveyor line into trailers.

"Welcome to the dungeon," is the first thing his trainer there says to the disguised Taylor.

(Distribution/Materials Handling Story Continues Below )

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After again dealing with the hard work and physical challenges of the job, his trainer notes how hot it can get inside the trailer - well over 100 degrees on summer days.

He unsuspectingly comments to Taylor that "We claim to sell fun - but it's no fun inside this truck," also noting that "We make the same money as pickers and packers, when we have the most physical job in the building."

He later takes Taylor to a break area, where coolers of sports drinks are locked up. In the past, these drinks were given free to workers on hot days. That was done frequently in the past, the loader says, but now managers "pick and choose a lot more" about when they are going to open the coolers up in a budget saving move.

Similar experience and insights come from time spent in packing and product induction on a high speed tilt tray sorter. One worker who complains about the lack of communications from management recognizes the CEO does come down to meetings occasionally, but that "it's just a bunch of numbers and stuff" - obviously of little interest to her.

Another says that instead of helping families with the summer picnic, OTC would do a lot more for their families by helping them in the DC instead.

That same woman says she fainted in the recent past due to extreme heat, and that the DC has limited easy availability of water recently, again due to budget issues. This packer also says she loses some of her bonus opportunity because she takes extra time making the insides of the customer boxes look especially nice, versus others who kind of just throw things in and seal them up.

Takeaways for CEO and Others

Our take here at SCDigest is that this show simply portrays DC work as lousy - we will say it just that simply.

Immediately after his experience, Taylor says that he is "rethinking some of budget cuts we made. We need to make sure we are investing sufficiently in our employees." He says it is important that management spend more time out in the DC, listen to employees, and show more appreciation for what they do.

To that end, Taylor commits to making a handful of changes, as is almost always the case in each Undercover Boss episode. Those changes include:

Increasing the wages of truck loaders 25 cents per hour, which Taylor says will cost the company $100,000 annually.

Opening the sport drink coolers to all "in the hottest two months of the year."

Installing more waters stations and fans in the building

Starting a new policy that senior executive members must spend two days a year working jobs on the floor.

The show ends with a now undisguised Taylor walking the DC floor and talking with employees. Whether that in the end really improves the lot of DC workers is another question.

The full episode of the show can be viewed on-line here: Undercover Boss Oriental Trading Company Show

Do you see this episode of Undercover Boss? What are your takeaways? Do DC have to be lousy places to work today? Let us know your thoughts at the Feedback section below

Recent Feedback

I watched the show and was a little surprised that Taylor was so out of touch with what was going on in the DC. I also believe he was moved by how out of touch he was. He seems to be a caring person. Hopefully he will stick by his vow to spend more time in the DC going forward. Having worked in many Distribution Centers since 1989 as an Engineer and Manager, I have seen that it's easy to neglect employee comfort in difficult times for a company. DC work is by nature not the cleanest environment, and includes many physically demanding tasks. As leaders and supporters of DCs, we can help greatly by making sure that we incorporate ergonomic improvements as we change equipment and processes to improve cost and productivity.

Gilbert Anderson
Industrial Engineer - Parts Distribution
Daimler Trucks North America
Mar, 27 2012

Oftentimes in much of the country, warehouse facilities are kept at ambient temps- marketplace ROI's rarely justify climate control. That being the case, the warehouse is hot in the summer and cold in the winter. It can be grueling- try stripping a floor loaded Boxcar filled floor to ceiling with 50 lb bags of dog chow on a hot July afternoon. Longer rest periods and liquids are highly advised! Warehouses can be a bit dusty too. Heck, I even recall the days when we had to ink-stencil the LTL freight after order selection before the proliferation of PC-based printers and adhesive labeling. That ink ruined many a shirt or pant! So, many will consider that to be lousy duty understandably.

The question though is what is the path to progression beyond this level? Is the leadership, training, methods, equipment, uniforms and so on supportive so there is at least a professional, team oriented environment? Desk jobs can be lousy too!

Tom Miralia
President & CEO
Distribution Technology
Apr, 05 2012