As you drive up I-35 through Waxahachie, a huge building on the west side of the interstate catches your eye. In November, 18 logistics students from the University of North Texas at Dallas got a close-up look at the imposing structure, a Walgreens distribution center (DC).
The high-tech, 680,000-square-foot center—one of 14 scattered around the U.S.—employs 825 people.
Security is very tight. Walgreens treats its DCs as closely guarded businesses. Guests check in with security to enter the parking lot and again to enter the building. No cameras are allowed inside. Renee James, manager of operations, tells the students that the only reason a tour was allowed is because of the recruiting possibilities with UNT Dallas.
Scott Ames, the logistics professor who arranged the tour, reminds his students that internships are a requirement of the logistics degree program.
One student asks if the internships are paid, and the group is obviously pleased to learn that they are paid.
Another requirement of the program, Ames says.
“Several years ago Walgreens started an intern and FMR (Function Managers in Rotation) program to recruit good employees,” Renee James says. With that, Scott Lemon, a.m. shift outbound manager, takes the students and their teacher on a tour of the cavernous building, shouting descriptions above the noise of the machinery and barely intelligible announcements on overhead speakers.
The building contains more than 20 miles of conveyors, at least 10 cranes and thousands of pallets of everything from Advil to Zarontin. The warehouse is a whir of activity with beeping “reach trucks” (the newest version of fancy forklifts) going by and large plastic bins called “totes” gliding along the conveyors high above the students’ heads.
The tour begins in an area where “team members” (Walgreens’ term for employees) pick orders by hand filling the totes. Computers make sure the right amount of products are assigned to each tote to maximize space and stay under 71 pounds. Once these are filled, they are shipped overnight to 773 stores in Texas, Oklahoma, Arkansas and Louisiana.
As Lemon talks about the logistics of picking orders, Ames tells his students that “no little bit of information is insignificant.” Because they have to fill each tote as efficiently as possible, employees carefully measure and weigh each new product as it comes to the DC. Even if a measurement is off only a quarter of an inch, it could mess up the totes, boxes and pallets that are stacked to the top of the 100-foot high ceilings.
“Everything is monitored,” Lemon says. “Team members have so much product they have to pick per hour. There’s nothing in here that’s not tracked.” Productivity and asset protection—known as “shrinkage”—are both important logistics issues.
Later in the tour, students are taken into the “warehouse within a warehouse,” where the highly protected prescription drugs are stored. Lemon reveals that “Rx” is 66 percent of the company’s revenue but only 20 percent of the DC’s volume. “Think markup,” Ames interjects.
The tour is as much recruitment and instruction as it is sightseeing. “There is lots of room for advancement here,” Lemon says. “Walgreens is very good at promoting from within.” Later he shares that he’s pretty sure he’s about to lose a good “FM”—Function Manager—in one area of the warehouse to promotion at another DC. “That’s why we’re always looking for good people.”
As students tour each area of the operation—and presumably proprietary systems that Walgreens wants to keep secret from its competitors—they are impressed by the magnitude of the operation. The DC runs an average of 140 cases per minute. They receive an average of 150,000 cases—76 semi-truck loads—every day.
The receiving area is the only department that runs 24/7. Employees are busy unloading trucks at many of the 42 dock doors. During the tour, it is obvious that the DC is filled to overflowing with pallets of shipments. Lemon explains that this is because of the impact of Hurricane Ike and a recent expansion that is not quite ready. This clearly bothers Lemon.
Perhaps the most impressive part of the tour is the new high-rise storage area. Here, eight 100-foot-tall, unmanned “stacker cranes” pick up pallets, quietly run down 500-foot-long rails and gently place the pallets into their assigned storage slot in a darkly lit warehouse reminiscent of the one at the end of the “Indiana Jones” movie, only bigger.
It is a kid-in-a-candy-store moment for students who desire to go into logistics.
“This is a dream come true,” says Jeannie Cooper, a senior from Wills Point. The tour is “wonderful,” she says, because “I’m very interested in warehousing.”
Cooper is a single mother who sometimes has to bring her daughter to class with her. The tour is evidence of how practical a UNT UNT Dallas degree is, she says. “They’ve covered everything that we’ve been studying, so I feel like my education is very relevant.”
Walgreens is one American company that had a good earnings report this fall during the global economic crisis. Lemon tells students that Walgreens opens a new store every 17 hours, though the company reported in October that it will slow that growth this coming year.
Readers who are fans of the TV show “Mad Money” may already know that Jim Cramer is bullish on Walgreens. The secrecy around the DC is evidence of the competitiveness of the retail pharmacy industry.
Recent graduates should note that Walgreens was ranked among the top five companies in America for hiring 2008 graduates, according to an annual survey by the job Web site collegegrad.com.
At the end of the tour, senior Wil Murphy calls the warehouse “amazing.”
“I thought it was great that Walgreens would open their doors to us. The amount of products that they push through their plant is incredible.”
Murphy is back in college after serving as director of operations for Quick, a publication of the Dallas Morning News, for 10 years. He has a high interest in logistics and new product development. “So I decided to go back to school and really dive in and learn as much as I could.
‘That’s one of the reasons that I think our program is amazing, because I’ve had several opportunities this semester to meet with executives and tour facilities and get more insight into new product development and logistics.”
“What the Dallas Campus offers,” Murphy adds, “is a really great facility with great technology and down-to-earth professors who have an understanding of working professionals.”
Ames is pleased over his students’ response to the tour. He has taught at UNTDC since 2007. He had his own logistics consulting business for 26 years. “Basically I’m an industry guy,” he says. “I fix warehouses.” His emphasis was on warehousing and order fulfillment.
“Logistics is the world’s fourth oldest profession after hunting, farming and personal services,” he says. “It’s about flows: flows of products, information and money. And what does it take to make those things flow?” he asks. “We talk about transportation modes, inventory, warehousing, material handling—which includes packaging—and management information systems that holds it all together.”
The UNT Dallas Campus is in a strategic location, he says, in part because Dallas is home to two of the world’s leading airlines—Southwest and American—and one of the world’s great railroads. “Burlington Northern now has an office in China so they can track five or six weeks ahead of time what their demand is going to be here.”
The Dallas Campus also is strategically placed only a few miles from the massive International Inland Port of Dallas. The “port” is also known as the Dallas Logistics Hub, is a 6,000-acre development with the potential of 60-million square feet of building space. Much of that would be distribution centers such as Walgreens’ facility. Organizers predict up to 60,000 new jobs—many of those in logistics—will be created.
Clearly he loves the topic, but Ames says he doesn’t miss his consulting business. “To everything there is a season. I had done the industry thing. I had always taught somewhere. I was about ready to move on from consulting when Dr. Price was ready to add the logistics program.”
Ames shares the excitement his students display over the Walgreens tour and the technology they’ve seen.
"People pay [us] money to solve problems every day. Where else can you do that?” he asks. “This is the kind of place where people can do something worthwhile, make a good wage, have some fun and at the end of the day know they contributed to their community.”
The UNT UNT Dallas operates under the authority of the University of North Texas in Denton, the state’s fourth largest university, and is a component institution of the University of North Texas System. The Campus currently offers junior-, senior- and graduate-level courses leading to bachelor’s and master’s degrees. The Campus will become freestanding and open as UNT Dallas, the city’s first and only public university, by 2010.
For More Information:
David Porter
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