Labor represents two-thirds of the total cost of operating a warehouse.
However, when an organization wants to improve its overall performance and profitability, processes and systems are typically the first to be attended to.
While these are critical components to any company’s short and long-term success, consider the potential impact of a disengaged and inefficient work force.
It is estimated that disengaged employees cost the United States over $450 billion per year.*
Disengagement of employees leads to inefficiencies in process, resulting in waste or disorder, known as entropy.
In a supply chain context, we utilize LEAN best practices to remove waste from inefficient processes and systems.
However, there is an opportunity to have an even bigger positive impact on entropy — by developing the culture within the supply chain facility. Improving the culture translates directly to bottom line profits.
Employees and their environment make up the company culture
Culture is a structured system of people, beliefs and behaviors that can be analytically evaluated and intentionally developed. A strong company culture permeates the supply chain workplace environment through its structure, ideas, language, customs and attitude.
Company culture trickles down into workplace attitudes, work ethic and daily routines.
A well-developed company culture with an engaged workforce ultimately results in:
- Fewer injuries and improved on-the-job safety
- Higher productivity
- Increased job satisfaction and customer service
- Lower turnover rate and decreased supply chain costs
By properly building and developing your culture, you can improve the performance of your supply chain, and will see measurable results in to your bottom line.
*2013 Gallup Report: State of the American Workplace: Employee Engagement Insights for U.S. Business Leaders
To learn more about culture’s impact in supply chain operations, download the whitepaper Company Culture Counts