Investing in people has always been the cornerstone of Linda Hothem's professional life. Hothem has placed a firm emphasis on educating and training the people in her charge.

As chief executive officer of Oakland, Calif.-based third-party logistics (3PL) provider Pacific American Services LLC (PACAM), Hothem demonstrates on a daily basis that the true formula for success extends far beyond the four walls of the warehouse.

Voted top Woman-Owned Business of the Year by the Oakland Chamber of Commerce in 2002, PACAM has adopted the philosophy that it is a moral responsibility to make every effort to enhance the knowledge of its 90 full-time and almost 250 temporary employees. The varied programs offered at the company range from warehouse operation and computer system training to financial courses and instruction in English as a second language.

'It is important that people be taught to invest in themselves, first and foremost,' says Hothem, who founded PACAM in 1987 with her late husband, Ron. 'It's been my experience that individuals who attempt to better themselves become more invested in the organization and, as a result, in the customer.'

As one of the Bay Area's largest distribution, warehousing and logistics companies, PACAM has grown from 100,000 square feet in 1987 to 750,000 square feet today. Handling wine, spirits and other beverages, paper, and food commodities, the firm posted an impressive 15 percent sales gain last year, despite a challenging economy.

One secret to the organization's success has been educating its employees from within, rather than utilizing outside agencies. Essentially, employees are encouraged to teach each other what they know. In addition to teamwork, Hothem says this initiative instills in employees a sense of value, trust and family.

'One of the biggest mistakes an organization can make is to underestimate its own workforce,' says Hothem. 'Training individuals similarly and then assuming that everyone is on the same level is a big mistake. People learn differently. One employee may pick things up very quickly, another might be more creative and experiment with what they have learned, while a third may master one skill and use it much more effectively than the rest.

'By identifying unique skills and encouraging these individuals to teach others what they have learned, our entire company is challenged, given a sense of purpose and bonded together as a cohesive unit,' she continues.

Hothem points to a classic example of how internal training and education paid dividends at her company. As computers replaced more traditional forms of communication at PACAM, the need arose to teach employees the latest computer programs. Hothem opted for a train-the-trainer approach. Five of her employees were selected to learn specific programs. In turn, they taught others within the organization, and the circle continued to widen until all employees had the desired computer knowledge. As new employees enter the company, possessing new or more advanced computer skills, their knowledge and skill sets are incorporated into the teaching structure and the cycle begins anew.

It's clear that as distribution firms are asked to do more, training and education are becoming a greater part of the picture at both 3PLs and private warehouses alike. Michael Fostyk, vice president of distribution at American Eagle Outfitters Inc., agrees with PACAM's approach of providing internal education and training.

'Besides our ongoing training of specific job functions, we offer over 70 courses on diverse topics,' says Fostyk, who teaches an eight-class course on leadership skills. 'Because we are continuously changing our systems and processes, employees must be trained to accommodate the changes. It is also vital that employees are given opportunities to learn new skills that help them develop as a person and not just as an employee.'

Robert Baniach, president of Metro Park Warehouses Inc., a 3PL service provider headquartered in Kansas City, Mo., has also realized the importance of an educated - and empowered - workforce.

'It's essential to involve your employees in every aspect of the warehousing process and to give them the skill sets they need rather than dictatorially telling people how they should work,' he says. 'Getting people involved in the process, making them feel empowered and allowing them to have some fun are essential in producing employees with skill sets that will keep an organization highly competitive now and in the future.'

In PACAM's case, company-wide communication can improve significantly, as previously unknown gaps in operating systems can be identified and filled easily. For example, out-of-date or older computer programs at PACAM were identified quicker and brought to management's attention. Instead of running several versions of Microsoft Word, the company was able to homogenize all of its word processing systems and avoid potential work stoppages due to difficulties resulting from incompatible programs.

As the Internet brought PACAM's customers into daily communication with all members of the logistics team, the importance of the use of proper English became critical. Instruction was given in the use of diction to meet the challenges of effectively communicating with customers via e-mail.

'As technology continues to put everyone in the organization in more direct contact with customers, companies need to ensure that the correspondence between employees and clients represents the organization in the best possible professional light,' says Hothem. 'The proper choice of words in an e-mail, especially with regard to correctness, clearness or effectiveness, is especially important in today's tough business environment. Relying solely on spell check when your most important client's contracts are on the line leaves a lot of room for potential problems.'

Obviously, not all education and training can be done in-house. PACAM has developed several creative programs to help employees succeed not only at their jobs, but also in life outside of work. 'We noticed that many of our employees could benefit from programs above and beyond work-related topics,' says Hothem. 'We began to invite institutions such as banks to our facility to instruct our employees on vital things such as refinancing their homes, opening IRAs and even dealing with checking accounts.

'Many of our workers have been life-long employees. When they were younger, they were not concerned about healthcare plans or [retirement] options. Now as they are aging, these are becoming more of an issue. Bringing in these types of outside experts has helped to increase their peace of mind.'

Additionally, PACAM encourages its employees to take advantage of the local seminars and workshops offered by organizations such as the Warehousing Education and Research Council, the Council of Logistics Management and the International Warehouse Logistics Association. Management is encouraged to attend open houses offered by other logistics organizations whenever possible in order to compare and contrast operational protocols.

'Life can be a virtual banquet of educational opportunities for those who are motivated enough to take advantage of them,' says Hothem. 'However, organizations have to make a firm commitment to provide these types of educational opportunities to employees. Budgeting programs like tuition reimbursement for high school or college degrees is an important part of this commitment. Setting aside money for employees' education should be priority number one.'

As PACAM's final commitment to education and training, the company chose to implement an ISO 9002 initiative at its facilities. The standards are documented agreements containing technical specifications or other precise criteria to be used consistently to ensure that materials, products, processes and services are fit for their purpose. Training employees in ISO 9002 standardizes many aspects of the warehousing system. By enhancing cross training and allowing employees to fully understand the entire logistics process throughout the organization, the standards became an invaluable tool in educating employees regarding proper procedure during daily routines.

Investing in employees makes perfect business sense. As PACAM has discovered, educated and well-trained employees not only increase the value of individuals within the organization, but also enhance an organization's competitive edge in the market. As companies continue to look for ways to improve their value in a recovering economy, often the best place to start is with the existing workforce.