Investing in people to improve warehouse/DC operations

How can we make working in a warehouse more interesting and appealing?

As I wrote last week, that’s one of the questions the industry needs to answer if it’s going to attract, and retain, a skilled workforce in the future.

One company that is answering that question is The Container Store, which will be our cover story in the August issue of Modern.

The retailer is credited with originating the storage and organization category of retailing. Founded in 1978, The Container Store operates 49 stores across the country, each averaging about 25,000 sq ft. Those stores are replenished from one central 1.1 million sq ft distribution center in Coppell, Texas. That facility also handles direct-to-consumer orders. The Container Store employees between 240 and 300 associates in operations, depending on the season.

According to Mike Coronado, the company prides itself on an employee-first culture, which is one of the reasons it has made Fortune’s list of the 100 best companies to work for 12 years in a row. “Since our doors opened in 1978, we’ve been a company full of heart and soul with what I like to call our “yummy” culture,” is the way CEO Kip Tindell explains it on the corporate website, who says they are an organization with heart. “We put our employees first and strive for excellence in everything we do. We want to be special, different, and to offer a retail experience unlike any other.”

Coronado adds that when The Container Store began to design its DC back in 2004, he and his team had two over-riding goals. To create a world class distribution center and a working environment that would reflect that the company is the best employer in Texas. “All of our employees, including associates on the floor in the DC, have a sense of ownership in the company,” he says.

Put aside the warm and fuzzies: How did that translate into a new distribution center?

For one, floor associates had meaningful input into the selection of the racking, lift trucks and battery management systems they would be working with. Management narrowed down the potential vendors for equipment types. Focus groups of associates then spent six weeks working with the different types of equipment and recommended what they wanted to work with. The voice recognition picking system about to go in was also selected by associates.

For another, The Container Store paid close attention to the look and feel of the DC – the working environment. Instead of industrial gray, they invested in a color scheme and design based on the Dutch painter Mondriaan. Seventy-one high-velocity low speed fans keep the air moving as does a bank of 48-inch exhaust fans.

Those fans and the lighting are computer controlled. Lights are only operating when someone is working in an area. The system compares the outside temperature and humidity with inside conditions. In the mornings, the exhaust fans exchange the warm air inside for cool dry air outside. “In August 2010, we had a day where it was 86 degrees in the DC at 2:30 in the afternoon when it was 105 degrees outside,” says Coronado.

The end result: The Container Store improved productivity and travel times by 30% in the new facility even though it is nearly double the size of the former facility. Yes, a lot of that is the result of improvements in design, layout and processes. But Coronado believes their continued year-over-year improvements are the result of the culture. “We are efficient from an operational standpoint,” he says. “But it’s also the result of the environment we created for our people.”