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."
Congestion on U.S. highways is costing the trucking industry big, according to research from the American Transportation Research Institute (ATRI), released today.
The group found that traffic congestion on U.S. highways added $108.8 billion in costs to the trucking industry in 2022, a record high. The information comes from ATRI’s Cost of Congestion study, which is part of the organization’s ongoing highway performance measurement research.
Total hours of congestion fell slightly compared to 2021 due to softening freight market conditions, but the cost of operating a truck increased at a much higher rate, according to the research. As a result, the overall cost of congestion increased by 15% year-over-year—a level equivalent to more than 430,000 commercial truck drivers sitting idle for one work year and an average cost of $7,588 for every registered combination truck.
The analysis also identified metropolitan delays and related impacts, showing that the top 10 most-congested states each experienced added costs of more than $8 billion. That list was led by Texas, at $9.17 billion in added costs; California, at $8.77 billion; and Florida, $8.44 billion. Rounding out the top 10 list were New York, Georgia, New Jersey, Illinois, Pennsylvania, Louisiana, and Tennessee. Combined, the top 10 states account for more than half of the trucking industry’s congestion costs nationwide—52%, according to the research.
The metro areas with the highest congestion costs include New York City, $6.68 billion; Miami, $3.2 billion; and Chicago, $3.14 billion.
ATRI’s analysis also found that the trucking industry wasted more than 6.4 billion gallons of diesel fuel in 2022 due to congestion, resulting in additional fuel costs of $32.1 billion.
ATRI used a combination of data sources, including its truck GPS database and Operational Costs study benchmarks, to calculate the impacts of trucking delays on major U.S. roadways.
There’s a photo from 1971 that John Kent, professor of supply chain management at the University of Arkansas, likes to show. It’s of a shaggy-haired 18-year-old named Glenn Cowan grinning at three-time world table tennis champion Zhuang Zedong, while holding a silk tapestry Zhuang had just given him. Cowan was a member of the U.S. table tennis team who participated in the 1971 World Table Tennis Championships in Nagoya, Japan. Story has it that one morning, he overslept and missed his bus to the tournament and had to hitch a ride with the Chinese national team and met and connected with Zhuang.
Cowan and Zhuang’s interaction led to an invitation for the U.S. team to visit China. At the time, the two countries were just beginning to emerge from a 20-year period of decidedly frosty relations, strict travel bans, and trade restrictions. The highly publicized trip signaled a willingness on both sides to renew relations and launched the term “pingpong diplomacy.”
Kent, who is a senior fellow at the George H. W. Bush Foundation for U.S.-China Relations, believes the photograph is a good reminder that some 50-odd years ago, the economies of the United States and China were not as tightly interwoven as they are today. At the time, the Nixon administration was looking to form closer political and economic ties between the two countries in hopes of reducing chances of future conflict (and to weaken alliances among Communist countries).
The signals coming out of Washington and Beijing are now, of course, much different than they were in the early 1970s. Instead of advocating for better relations, political rhetoric focuses on the need for the U.S. to “decouple” from China. Both Republicans and Democrats have warned that the U.S. economy is too dependent on goods manufactured in China. They see this dependency as a threat to economic strength, American jobs, supply chain resiliency, and national security.
Supply chain professionals, however, know that extricating ourselves from our reliance on Chinese manufacturing is easier said than done. Many pundits push for a “China + 1” strategy, where companies diversify their manufacturing and sourcing options beyond China. But in reality, that “plus one” is often a Chinese company operating in a different country or a non-Chinese manufacturer that is still heavily dependent on material or subcomponents made in China.
This is the problem when supply chain decisions are made on a global scale without input from supply chain professionals. In an article in the Arkansas Democrat-Gazette, Kent argues that, “The discussions on supply chains mainly take place between government officials who typically bring many other competing issues and agendas to the table. Corporate entities—the individuals and companies directly impacted by supply chains—tend to be under-represented in the conversation.”
Kent is a proponent of what he calls “supply chain diplomacy,” where experts from academia and industry from the U.S. and China work collaboratively to create better, more efficient global supply chains. Take, for example, the “Peace Beans” project that Kent is involved with. This project, jointly formed by Zhejiang University and the Bush China Foundation, proposes balancing supply chains by exporting soybeans from Arkansas to tofu producers in China’s Yunnan province, and, in return, importing coffee beans grown in Yunnan to coffee roasters in Arkansas. Kent believes the operation could even use the same transportation equipment.
The benefits of working collaboratively—instead of continuing to build friction in the supply chain through tariffs and adversarial relationships—are numerous, according to Kent and his colleagues. They believe it would be much better if the two major world economies worked together on issues like global inflation, climate change, and artificial intelligence.
And such relations could play a significant role in strengthening world peace, particularly in light of ongoing tensions over Taiwan. Because, as Kent writes, “The 19th-century idea that ‘When goods don’t cross borders, soldiers will’ is as true today as ever. Perhaps more so.”
Hyster-Yale Materials Handling today announced its plans to fulfill the domestic manufacturing requirements of the Build America, Buy America (BABA) Act for certain portions of its lineup of forklift trucks and container handling equipment.
That means the Greenville, North Carolina-based company now plans to expand its existing American manufacturing with a targeted set of high-capacity models, including electric options, that align with the needs of infrastructure projects subject to BABA requirements. The company’s plans include determining the optimal production location in the United States, strategically expanding sourcing agreements to meet local material requirements, and further developing electric power options for high-capacity equipment.
As a part of the 2021 Infrastructure Investment and Jobs Act, the BABA Act aims to increase the use of American-made materials in federally funded infrastructure projects across the U.S., Hyster-Yale says. It was enacted as part of a broader effort to boost domestic manufacturing and economic growth, and mandates that federal dollars allocated to infrastructure – such as roads, bridges, ports and public transit systems – must prioritize materials produced in the USA, including critical items like steel, iron and various construction materials.
Hyster-Yale’s footprint in the U.S. is spread across 10 locations, including three manufacturing facilities.
“Our leadership is fully invested in meeting the needs of businesses that require BABA-compliant material handling solutions,” Tony Salgado, Hyster-Yale’s chief operating officer, said in a release. “We are working to partner with our key domestic suppliers, as well as identifying how best to leverage our own American manufacturing footprint to deliver a competitive solution for our customers and stakeholders. But beyond mere compliance, and in line with the many areas of our business where we are evolving to better support our customers, our commitment remains steadfast. We are dedicated to delivering industry-leading standards in design, durability and performance — qualities that have become synonymous with our brands worldwide and that our customers have come to rely on and expect.”
In a separate move, the U.S. Environmental Protection Agency (EPA) also gave its approval for the state to advance its Heavy-Duty Omnibus Rule, which is crafted to significantly reduce smog-forming nitrogen oxide (NOx) emissions from new heavy-duty, diesel-powered trucks.
Both rules are intended to deliver health benefits to California citizens affected by vehicle pollution, according to the environmental group Earthjustice. If the state gets federal approval for the final steps to become law, the rules mean that cars on the road in California will largely be zero-emissions a generation from now in the 2050s, accounting for the average vehicle lifespan of vehicles with internal combustion engine (ICE) power sold before that 2035 date.
“This might read like checking a bureaucratic box, but EPA’s approval is a critical step forward in protecting our lungs from pollution and our wallets from the expenses of combustion fuels,” Paul Cort, director of Earthjustice’s Right To Zero campaign, said in a release. “The gradual shift in car sales to zero-emissions models will cut smog and household costs while growing California’s clean energy workforce. Cutting truck pollution will help clear our skies of smog. EPA should now approve the remaining authorization requests from California to allow the state to clean its air and protect its residents.”
However, the truck drivers' industry group Owner-Operator Independent Drivers Association (OOIDA) pushed back against the federal decision allowing the Omnibus Low-NOx rule to advance. "The Omnibus Low-NOx waiver for California calls into question the policymaking process under the Biden administration's EPA. Purposefully injecting uncertainty into a $588 billion American industry is bad for our economy and makes no meaningful progress towards purported environmental goals," (OOIDA) President Todd Spencer said in a release. "EPA's credibility outside of radical environmental circles would have been better served by working with regulated industries rather than ramming through last-minute special interest favors. We look forward to working with the Trump administration's EPA in good faith towards achievable environmental outcomes.”
Editor's note:This article was revised on December 18 to add reaction from OOIDA.
A Canadian startup that provides AI-powered logistics solutions has gained $5.5 million in seed funding to support its concept of creating a digital platform for global trade, according to Toronto-based Starboard.
The round was led by Eclipse, with participation from previous backers Garuda Ventures and Everywhere Ventures. The firm says it will use its new backing to expand its engineering team in Toronto and accelerate its AI-driven product development to simplify supply chain complexities.
According to Starboard, the logistics industry is under immense pressure to adapt to the growing complexity of global trade, which has hit recent hurdles such as the strike at U.S. east and gulf coast ports. That situation calls for innovative solutions to streamline operations and reduce costs for operators.
As a potential solution, Starboard offers its flagship product, which it defines as an AI-based transportation management system (TMS) and rate management system that helps mid-sized freight forwarders operate more efficiently and win more business. More broadly, Starboard says it is building the virtual infrastructure for global trade, allowing freight companies to leverage AI and machine learning to optimize operations such as processing shipments in real time, reconciling invoices, and following up on payments.
"This investment is a pivotal step in our mission to unlock the power of AI for our customers," said Sumeet Trehan, Co-Founder and CEO of Starboard. "Global trade has long been plagued by inefficiencies that drive up costs and reduce competitiveness. Our platform is designed to empower SMB freight forwarders—the backbone of more than $20 trillion in global trade and $1 trillion in logistics spend—with the tools they need to thrive in this complex ecosystem."