Whole Foods' new inventory management system aimed at improving efficiency and cutting down on waste is taking a toll on employees, who say the system's stringent procedures and graded "scorecards" have crushed morale and led to widespread food shortages, reports Business Insider.
The new system, called order-to-shelf, or OTS, "has a strict set of procedures for purchasing, displaying, and storing products on store shelves and in back rooms. To make sure stores comply, Whole Foods relies on "scorecards" that evaluate everything from the accuracy of signage to the proper recording of theft, or "shrink."
Some employees, who walk through stores with managers to ensure compliance, describe the system as onerous and stress-inducing. Conversations with 27 current and recently departed Whole Foods workers, including cashiers and corporate employees — some of whom have been with the company for nearly two decades — say the system is seen by many as punitive. -BI
Terrified employees report constant fear over losing their jobs over the OTS "scorecards," which anything below 89.9% can qualify as a failing score - resulting in possible firings.
'Seeing someone cry at work is becoming normal': Employees say@WholeFoods uses "scorecards" to punish employees for failing to comply with its inventory management system https://t.co/AqpEaKPcbC pic.twitter.com/m16jHKznnW— Business Insider (@businessinsider) February 1, 2018
Store managers test employees twice weekly, according to company documents, while corporate employees from the store's Austin, Texas headquarters conduct monthly walkthroughs which stores must themselves pass.
"I wake up in the middle of the night from nightmares about maps and inventory, and when regional leadership is going to come in and see one thing wrong, and fail the team," a supervisor at a West Coast Whole Foods told Business Insider. "The stress has created such a tense working environment. Seeing someone cry at work is becoming normal."
Despite the heart-palpitating shortcomings of the OTS system, employees, supervisors and industry analysts have said that Whole Foods' previous inventory management system was inefficient and needed to be updated.
"Whole Foods had a very decentralized approach, which adds complexity, and complexity adds cost," said Jim Holbrook, CEO of private label and retail consultancy Daymon Worldwide, which recently started working with Whole Foods.
Under the old system, buyers at the store and regional levels had more sway over what to sell. With OTS, however, those decisions have been shifted to the Austin corporate offices - a similar approach to conventional supermarkets like Safeway and Kroger.
It remains to be seen whether this business model — and OTS — will work for Whole Foods. Holbrook believes it will. He said Amazon, which purchased Whole Foods last year for $13.7 billion, would be able to help Whole Foods work out the kinks with OTS.
"Amazon is very good at managing logistics behind the scenes," Holbrook said. "Whole Foods will be a better shopping experience as a result."
Many employees are also hopeful that Amazon will fix the new system.
"We all just hope that Amazon will walk into some stores and see all the holes on the shelf," a 12-year employee of a Midwest Whole Foods said. -BI
In their defense, Whole Foods says it's order-to-shelf (OTS) system allows employees more time to engage with customers - a poorly thought out response.
"The team members are really excited about" order-to-shelf, said Whole Foods EVP of operations David Lannon last year on a call with investors, adding "They're really proud when they're able to achieve that, which is lower out-of-stocks, less inventory in the store, being able to be on the sales floor talking to customers and selling more products."
Whole Foods employees around the country thought that was hilarious. One such disaffected West Coast supervisor said "On my most recent time card, I clocked over 10 hours of overtime, sitting at a desk doing OTS work," adding "Rather than focusing on guest service, I've had team members cleaning facial-care testers and facing the shelves, so that everything looks perfect and untouched at all times."
Many Whole Foods employees at the corporate and store levels still don't understand how OTS works, employees said.
"OTS has confused so many smart, logical, and experienced individuals, the befuddlement is now a thing, a life all its own," an employee of a Chicago-area store said. "It's a collective confusion — constantly changing, no clear answers to the questions that never were, until now."
An employee of a North Carolina Whole Foods said: "No one really knows this business model, and those who are doing the scorecards — even regional leadership — are not clear on practices and consequently are constantly providing the department leaders with inaccurate directions. All this comes at a time when labor has been reduced to an unachievable level given the requirements of the OTS model."
Other employees have complained about a lack of training as a key reason as to why the OTS system is failing.
"The problem lies in lack of training and the fact that every single member of management from store level to corporate is over tasked and overburdened," according to one former corporate employee who conducted walkthroughs at East Coast locations.
Some even suggested that Whole Foods corporate had no clue about working in stores - and that the new OTS protocols were absurd.
"In the beginning, we actually had a checklist where one task was to initial that you initialed off another task."
I worked at Whole Foods several years ago and left right as they were implementing on the spot quizzes and inspections for all departments. That family feeling was going away as team leaders left due to poor scores. I think Amazon just added to the issues.— Bullet Proof Uncle (@BikingTech) February 3, 2018