NASHVILLE, Tenn. -- Even as distribution executives increasingly depend on sophisticated automation and information technology to get products to the right place at the right time, old-fashioned issues of recruiting, hiring and retaining good employees remain pressing problems in the industry.
"Labor-pool issues, and getting the most out of the pool you have, are on everyone's mind," said Corwin Karaffa, vice president of distribution at Certified Grocers of California, Los Angeles.
"The people side of the business, from hourly workers through management levels, could be a No. 1 issue," said Mark Ortenburger, general director of distribution at Supervalu, Minneapolis. "You need people to run the business and they need to be good people."
Seeking solutions for the people shortage, as well as viewing the latest IT, transportation, warehousing and logistics advances, will be on the agenda for attendees at the 1998 Food Industry Productivity Convention and Exposition, to be held here next week.
Associations sponsoring the convention include Food Distributors International, Falls Church, Va.; the National Grocers Association, Reston, Va.; the Grocery Manufacturers of America and the Food Marketing Institute, both based in Washington.
Human resources concerns are present throughout the supply chain, distribution executives told SN. "There's a driver shortage issue, especially in the supermarket industry," said John Boultier, corporate director of transportation and traffic for Fleming Cos., Oklahoma City. Boultier is transportation chairman for this year's Productivity Convention.
"One issue in our industry is the intensity of labor needed in unloading trucks," he added. "It's difficult to maintain employees."
A tight labor market and the particular demands of this industry add to the problem, said Prudencio Pineda, senior vice president of distribution at Minyard Food Stores, Coppell, Texas. "It's difficult to get people to work nights, in both the warehouse and retail areas, but it's needed with more stores open 24 hours," he said.
"In talking to my colleagues, I've been surprised at the lengths people have gone to to hire people, including [offering] signing bonuses," he added. "We're talking about warehouse people, not athletes."
But bonuses and incentive programs may provide one solution to personnel problems, said Certified's Karaffa, who is scheduled to speak on this topic. Incentive programs are relatively underused in the distribution area, he noted. "In southern California, for example, everyone has engineered standards for at least parts of their operations, but few have incentive programs" for their employees.
"Most distribution people pay their drivers by the mile, not by the hour," noted Pineda. "It depends who you talk to about which way is better. I'll be looking for the best way to structure drivers' pay. If it's done right, a company can reduce its driver staff by as much as 15%."
IT issues, especially the fast-approaching train that is the year-2000 computer problem, are also on the minds of distribution executives.
"The Y2K problem has already affected our reclamation process, when we discovered the software we use for it wasn't year-2000 compliant," said Ron Sauls, vice president of distribution for Piggly Wiggly Carolina Co., Charleston Heights, S.C. "Next we'll be looking at our electronic data interchange programs," he added.
"All the equipment we use has some [computer] chips, including truck engines and other components," said Fleming's Boultier.
"For those companies already working on year 2000, it will tie up their resources for the next six to nine months," said Karaffa. "For companies that haven't started, it's really too late.
"I think a lot of companies will be looking for modular tools and systems [for distribution functions] that they can plug in easily, rather than working off a mainframe that may be experiencing year-2000 problems," he added.
The concern about year-2000 problems in the supply chain is one measure of how crucial IT has become in this area, executives told SN.
"Ongoing issues with IT are absolutely critical in order to manage resources, and to get systems to support what companies are trying to accomplish," said Supervalu's Ortenburger. "This applies all through the supply chain -- distribution centers, transportation and logistics."
"Three or four years ago, distribution was the stepchild as far as information systems," said Minyard's Pineda. "Now, upper management realizes the importance of these systems in the distribution center."
Pineda will be looking for feedback from colleagues about their warehouse management systems. "We're at the tail end of implementing such a system, and I want to know what other people are getting out of their systems," he said. "I'll also be looking at ways to tie it in with a transportation system.
"Our next step is to move to a radio frequency program within the warehouse itself," Pineda added. "We'll be looking into that early next year."
"People come to this conference to find out about newer technologies," said Karaffa. "They want to know what tools are available to assist in transportation tracking and measuring productivity in warehouse management."