Introduction & Outro: 0:00

Welcome to the Tennessee on Supply Chain Management podcast. Listen in as co-hosts Ted Stank and Tom Goldsby set sail into the world of end-to-end supply chain management, diving deep into today's most relevant business topics. They'll share insights in pressing industry issues and tackle the challenges keeping supply chain professionals up at night. If you're enjoying the ride, download and subscribe to Tennessee on Supply Chain Management on your favorite podcast platform now.

Ted Stank: 0:28

Welcome to the Tennessee on Supply Chain Management podcast. This is our November 2024 episode, second episode of the third season. Right, I think that's where we are. So we're signing up promotional opportunities now, for we'll start going to commercials at some point.

Tom Goldsby: 0:45

Let's make it happen. Always a revenue opportunity for sure.

Robert Martichenko: 0:48

The Ted and Tom show I always wanted to be on that Finally here, finally, finally, you made it. And I would never ever ever correct Dr Stank, but he's not actually an old boomer, he's a young boomer. So if we're going to and considering you wrote this you should know the difference between a young boomer and an old boomer.

Ted Stank: 1:07

I'll accept that On the front edge, I'm feeling more and more every day like an old boomer. But that notwithstanding, I'll take the young boomer designation.

Tom Goldsby: 1:16

Well, we are so excited to have this session Should also probably provide our listeners with a little bit of background where we're coming from.

Tom Goldsby: 1:23

We're coming to you live recording at the Supply Chain Forum, coming to you from Rocky Top, your host, Ted, and Tom here. But we're thrilled to be joined by three guests today Our panelists, Robert Martichenko, who is board chair of Trailpath Workplace Solutions, working with Supply Chain Forum partner company, Sunland Logistics Solutions, and we're delighted to have the CEO, Arch Thomason, and the vice president of human resources, Diane Lohman, to talk about what I think is perhaps the most, dare I say, pesky pervasive I don't know what term we want to put on talent in supply chain management. Regardless of where we go around this nation, around this world, people say a top one, two, three challenge we have in supply chain management, in business, dare I even say in society, is attracting, developing and retaining talent. The problem is sufficiently framed. We all feel it, we understand it to an extent, but I've not seen much in the way of solutions and in that regard, I'm really thrilled that we have a white paper that we're unveiling here at the forum, called Unlocking the Potential of the Gen XYZ Labor Force, which is an effort we've made right here at UT to again try to understand and maybe work toward solutions.

Tom Goldsby: 2:45

Ted, you are a co-author on this report. What's kind of the upshot of what you learned in doing this research?

Ted Stank: 2:52

The upshot is that we need to be aware of how different generations look at work and what they want to get out of work. Particularly as leaders of these organizations, we need to be sensitive to what these different generations are looking for from work and how do we keep them engaged and actualized, if you will, so they stay with us, because retention is a huge issue for all of our organizations. It costs us a lot in ways that show up definitely on our income statements, but also in ways that impact our cultures and our ability to serve customers in many, many ways, and so all of our executives that make their way here to Knoxville, tennessee, which is not easy for most of them, will tell us that they come because we are a primary talent provider for them, and anything we can work on together to help improve not only talent development, but talent retention is something that's really beneficial because it is on every leader's top three Arch. I would refer to you. Is it a top one? It's top one today? Yeah, I would believe that and, by the way, this isn't a temporary issue. It's not going away.

Ted Stank: 3:55

Every industrialized country in the world is seeing a shrinking population by I believe it's 2050,. The UN believes that we will start seeing a global population decline. Just to give you a little bit of a note that the US is in this. It's hit Western Europe and some of the nations in Asia already China, korea, japan. But the United States over the last three years has had a 1.63 births per woman statistic. So statistically you have to have 2.1 children born for every woman in a country just to maintain a stable population. We have had 1.63 over the last four years, which means we're shrinking. I believe Italy is like 1.2. I think South Korea is 0.8. So all of our industrialized countries, including China. You know, if you think of China as growing, they're not, they're shrinking. And so talent and talent retention is going to become a bigger and bigger issue for the youngest one of you in here as you go through your careers.

Tom Goldsby: 4:57

So that would seem to suggest it's going to be a problem that gets even worse than it is now. And it's already, as Arch indicates, the number one problem perhaps within our industry. And as I look at this report, gen X, y, z I'm Gen X, all right, and you might say, well, ok, to satisfy someone like Goldsby, all you got to do is pipe in Pearl Jam and Nirvana into the workplace and it's all going to be fine. But I got to tell you I'm getting influenced by Gens Y and Z. Right, they're expecting more of the workplace and I'm like, well, if they can expect more, why can't we right? It's not just our ability to influence those future generations, but those generations coming into the workplace now are influencing the Xs and the boomers.

Ted Stank: 5:41

That's why I live in Beaufort, North Carolina.

Tom Goldsby: 5:51

That's fair enough. Yeah, good point. Well, again I think we've kind of framed the global circumstance and again it's right here in front of us. I think everyone in the room is experiencing it one way or another. So, robert, you come to us with deep, deep experience and background lean thinking. I think I've written a few books and articles with you on that subject.

Tom Goldsby: 6:08

You have it was you right and you built your career. You started a company called LeanCore that became the global brand in lean thinking applied to supply chain practice. You built the company. What about four years ago? Yes, and what has been your passion since selling Linkor, and why is it in this area of meaningful employment opportunity?

Robert Martichenko: 6:32

Well, after my company was sold, I thought my passion was going to be hiking and figuring out how to get all the 14ers done in Colorado, in Colorado, but then my pal Arch called me and told me that our industry, the third-party logistics industry, has a challenge on its hand relative to people, operations industries think transportation, think warehousing, think manufacturing, the supply chain industries we're dealing at normalizing for regional differences, companies that are ran by very caring people like Arch and Diane are dealing with turnover rates in the 40, 50, 60, 70, 80 percent per year, and so it's not because they're not trying.

Robert Martichenko: 7:17

There's something going on, and it's about the perfect storm of the population, demographics changing attitudes, the fact that what all those things result in, though, is we have a shrinking workforce, which means if there's five jobs, there's only four people, which means people have choices, which means you're going to use the power of choice and you're going to work where you want to work, where it's going to feel purposeful, where you're going to feel ownership, where you're going to feel like you can engage in continuous improvement and be a life learner and all of the things that you want in life.

Robert Martichenko: 7:49

And the fact is, is that that changing, that modernizing of the attitude of the employee. As industry, our organizations have not kept up. It's not like we haven't tried, but we've been busy doing other things, because every single industry in the world is being disrupted by now somehow by competitors or technologies or so forth, and we didn't keep up with the people side of things. We kept up with the process improvement side, we kept up with the tech side, we didn't keep up with the people side of things, and so that's what we're going to try to do. We're going to attempt working with people like Arch and Diane and other people who believe in the people side of industry. We're going to see if we can't scale some things that have never been scaled before, like leadership behaviors, like team member participation, like team member participation, and with the end goal being to see if we can design and articulate what a meaningful employment environment would really be for everybody, regardless of your generation or your age in the workforce.

Tom Goldsby: 8:54

So that's the mission and Arch, you said this is the number one concern that you have as CEO at Sunland. Can you kind of frame that up for?

Arch Thomason: 9:02

us. Sure, this really started our conversations in 2020 with the advent of COVID, and everyone in the supply chain remembers that. And we, literally in multiple markets across the country, we couldn't find labor. They were not existent. And so we see that in the marketplace and I'm traveling throughout the country and everywhere is a labor problem. The dental hygienists are attorneys Right, it was across the board.

Arch Thomason: 9:30

And I'm talking to Robert, who's actually studying demographics and he's saying this is going to get worse. And so for us as an organization, as a 3PL, as a service provider, people are the foundation for our success. Now, everyone says that, but company doesn't say that. But, like, this is the essence of our organization 72% of our costs of a 3PL are employee related. This is a big deal.

Arch Thomason: 9:59

And so in our industry, in our company, our industry's 40% turnover is a standard, and Diane was even telling us last night across the board and I'll let Diane talk about it it's 46%. Well, how do you build a team when you're turning over half your people every year? It's hard to do that. So, you know, from my perspective, it was. I keep hearing the problem, but I don't hear a definitive solution anywhere. Everybody complains, but I don't hear we're doing this other than we're throwing money at the problem, and Robert, being the thinker, he is really had time and took a lot of hikes and came up with, I think, with his team, a really valid solution to maybe take us out of this. So that's why we're here and that's why we're joined, and it's very exciting from my perspective.

Tom Goldsby: 10:47

Well, that's amazing and again, I think you've just iterated, dare I say, some of the frustration that I spoke of just moments ago. Again, we understand it's a problem. What are we going to do about it? Diane, as vice president of human resources, you're at the front lines of it. I think a lot of organizations just say, well, just keep, devise strategy to refill the leaking bucket, but what are you doing in the way of putting a seal, maybe, on that bucket and developing the people that you actually attract? Retain?

Diane Lowman: 11:18

So many of our team members have expressed desires to move up in the company, and we've looked at ways to do that. But there's some very basic elements to having a workforce that wants to stay with your company and that's them believing that they can trust us. And as I'm speaking today, I would like for you all to not just think about your employees, team members, associates, whatever you may call your support functions on the floor. Think about yourselves. When we talk about trust, when we talked about dignity, and when we talk about a work environment where you find purpose, think about yourself in addition to thinking about those people that you're responsible for.

Diane Lowman: 12:14

So, back to your question we have tried many initiatives in engaging with our team members. It's very important engaging with our team members. It's very important, specifically from the HR team. We need to be out on that floor every day, engaging with our team members, diffusing issues that can fester, understanding what's going on in their lives, making them know that we do care about them.

Diane Lowman: 12:44

In conjunction with that, we also have to run a business. In order for us to be able to retain our team members and have them grow with our company, we need to make sure that they know that we care that they can trust us, and you have to think about what does trust mean to you and what does trust mean to them. We can certainly say many things to our team members, but if they don't see us walking the walk, it doesn't mean a thing to them, and I think sometimes we as leaders don't give our team members enough credit. If you're not sincere, they know you're not sincere, so don't even bother trying. The most important thing is we have to be sincere. They know that we care and they're working for a company that will help and work with them.

Tom Goldsby: 13:42

Well, there was a lot there, diane for sure. So how do you get this organized? And I'm thinking about your hikes, robert, all right. So, given the problem, given the need, how do you get organized around this? What is a meaningful employment environment to start off with?

Robert Martichenko: 14:00

So this initiative started when Arch called and we also have the pleasure of having a lot of friends who care about this stuff Dr Langley, who's here the first time I was ever at the school, I moved from Canada to Evansville, indiana, and the first time I was ever at U of T was like I was seeing it last night, like 1999, 2000. I was here helping Toyota build their infrastructure in North America. So I have the honor and pleasure of having a lot of very good friends that I love dearly and they own companies, many of them and they're dealing with the same thing with art. So we got two years ago we got beta sites. Three organizations one in Canada, one in California, one in South Carolina said come in, do whatever you need, ask for data whatever, just come in.

Robert Martichenko: 14:49

And we did the work. We did it in a scientific way, as a kid from Timmins, ontario, could do, and I tapped into people that know how to do this work properly. And we built the framework. We started we had about 100 things that people want as the characteristics of a meaningful employment environment and then we said that's too much. We can't deal with 100 things. It's not possible in a workplace. It's too complicated, too complex. So we got it down to two things, and these two things are dignity and meaningful work. I want to be treated like a valuable for no other reason than I'm a human being, not because I'm successful, not because I have a great resume, not because I aced that project. Treat me with value because I'm a human being.

Robert Martichenko: 15:39

And then, second, meaningful work. The work has to be meaningful. We did our value stream mapping, which we've done a thousand times, doing flow on material and information flow. We did it on people and we watched people and when you remove breaks and lunch, 78% of the day is doing the work. So if the work is miserable, then your day's gonna be miserable. You can't get around that. This is not complicated 16 second hit and runs. And at a hit and run, only two things happen you walk away feeling like you just had something taken from you or you walk away feeling like you were given something.

Robert Martichenko: 16:34

This is the dignity aspects. Two things dignity and meaningful work. Now they cascade. So you go how do you implement that? Because we can't just leave it at that and they cascade to trust and fundamental needs for dignity and they cascade to the work environment and the work itself for meaningful work. So a framework was created, and now the work that's being done is to vet out and understand where the framework will be easily validated, where it won't be easily validated, and what we're going to need to do. People's stuff is complicated. It really is. My wife's been telling me that about myself for years and I never believed it. Now I'm going you're right, we are complicated, apparently.

Ted Stank: 17:20

So can you all give us some concrete examples of what this means? I mean, dignity is a great construct, but, as a professor, a construct is latent, right, it's up there in the cloud and it's hard to define and operationalize. So what are some of the keys to treating people with dignity in the workforce? And then the secondary question is how do you make what often is routine work meaningful?

Diane Lowman: 17:48

So one of the most important things and again looking at yourself as well is how can we make our team members feel a part of what we do every day? We talked about generations, boomers. I'm one. Give me my cold watch, I'll go away, okay, but there are others that are looking for meaningful work. Teach me about who the customer is, because we're a 3PL organization. Who are we servicing? Why is what I do every day important? I want to be part. I want to have ownership in shipping that faucet. Let me understand more and more the purpose of me shipping this correctly Ownership, feeling a part of something. Also, many times, your team members on the floor know a lot more than that supervisor and a lot more than that ops manager, and we don't give them credit for that. We need to honor their contribution to their work and also their knowledge and their ability to help us to do our jobs more efficiently, and they will feel a part of Sunland and by feeling a part of it, they will want to leave less.

Arch Thomason: 19:09

We had an example recently, a couple of weeks ago, we had a storm in South Carolina, where I live, and just we're talking about structures, right, that have been existing forever and as we talk about dignity, so we had a couple of sites go down for a couple of days. One site in particular went down for eight days and 44 people at that site, no transactions, no trucks in, no trucks out, and under the current structure, salary got paid. But under that current structure, if the hourly team members did not work, they would not get paid. Now, who can afford at this point in time to not get a paycheck for eight days of work, right, and so we paid it, like we were in a position where we could do that and we would. But I think, just thinking about challenging structure, I mean the thing where I'm coming from and Robert and I talked is the people who are making our beds, who are cooking, who are picking orders in our warehouses live a very different life than we do. They just do Right. I mean, the decisions they're making, the choices they're making, are very different from the people in this room. Now, from my perspective, I don't want the government, I don't want unions to tell us. We need to do this. I think it's a business problem and I think we can solve it, but I think it's going to take some challenging of the current status quo and how we think about things. Robert and I talked last night From my perspective.

Arch Thomason: 20:37

I'd rather pay less people, more money. I just would right. How do we become more efficient? How do we help people develop and grow and to be competitive? But there are some basic needs. Think Maslow's hierarchy. This is Robert's baseline. You got to take care. Are they safe? Are they secure? Are they struggling If they can't get their kids new shoes when they go back to school? These are the decisions they're making. As an employer, I don't want that for anyone on my team, right, and neither does Diane. So we've got to look at this. We've got to change some paradigms, I think and we're just addressing that this software and we take the hikes they call them hikes and we're asking questions of our frontline team members that we've never asked before, and I think it's something that is really going to benefit us as a for-profit organization long term.

Tom Goldsby: 21:26

So when you say go take a hike, that's actually a positive thing.

Robert Martichenko: 21:30

Well, yes, yes. Well, to introduce another term, which is we call a rollback, no-transcript, just surviving, which means I've got to stay because I have bills to pay, but I'm absolutely. There's zero joy in this for me, then, or growing meaning you know what. This might just work, this might just work, and then thriving is this is working for me and our data and we now have thousands of data points because we've been able to digitize the work now 50% of people in the workplace, regardless of position, are identifying with declining or just surviving in their workplace. Go to the Bureau of Labor and Statistics. The national turnover rate in the United States across all industries private and government and not-for-profit is 47% a year. That's the churn at a macro US level. This is a problem. Yes, it's an opportunity to improve and I get that. I'm from that world. Changing the narratives. It's not a problem, it's actually an opportunity. I understand that this is a problem and it's going to impact all of us, and it's a human problem. It's not just a workplace problem.

Robert Martichenko: 23:17

The paradigm shifts that Arch just mentioned about and we can get into these these aren't workplace paradigms, these are human belief paradigms. Dr Elijah Ray, one of those cherished friends I told you about. He understands all this stuff when we talk about it. This idea that our home life and our work life and our personal lives and our professional lives are somehow separated and are in different buckets that's a false notion. It's fundamentally false and we have to get our arms around that.

Robert Martichenko: 23:50

And industry has to play a role and we as team members have to play a role, has to play a role and we as team members have to play a role. If Arch makes the investment as the owner and Diane does the work as the leader, then team members have to participate and if you don't, then maybe you don't need to be there because they're doing their part. And this is extremely important for us to understand that this is everybody's got a helmet on, everybody's on the field and this is full contact, because this is a big problem and big problems only get solved by full contact kind of mentalities. Is that a football?

Tom Goldsby: 24:27

thing. Yeah, I think so that works for a Canadian. I told Tom I'd try my best. Man, I was a little worried there we're not hiking anymore.

Ted Stank: 24:37

We're not hiking anymore. We got the pads on now.

Tom Goldsby: 24:40

So, robert, as it would happen, yesterday we were pontificating, we were out on a hike.

Robert Martichenko: 24:44

We were out on a digital. We were. We went to Norris Dam.

Tom Goldsby: 24:47

And we were talking about again the lean journey which we've been a part of and so many organizations with which you've worked have been a part of, and the effort that we made for so many years to kind of quantify the problem. We refer to it as the hidden factory right, these hidden factories of waste that permeate and perpetuate throughout our organizations. And you likened what we're going through now with this search for a talent solution to what we've experienced with the old hidden factory discussions we were having of bygone years. It's just as you point out, we were focused on process, process, process. Now you're focused on people.

Robert Martichenko: 25:24

Well, and I'll introduce it and then I'll throw it over to Arch because he's got some great opinions on the cost of this instability. But there was a term called the hidden factory. This has been a manufacturing term for decades and what the hidden factory was was inventory people doing rework machines that weren't running, so you're doing things manually. That was called the hidden factory and it wasn't captured in P&Ls. But we've done a very good job with the hidden factory. Any manufacturing organizations that have embraced operational excellence or lean thinking or continuous improvement cultures have done a very good job. But there's a new modern day hidden factory and that is the cost of workforce instability Because like the old hidden factory, it's not visible and, arch, I know you and your team did some work just around the cost stuff of this right, the turnover.

Arch Thomason: 26:17

Yeah, we did. And, as we think about it, we have a Sunland management system and it's fundamentally five things people, process technology and then quantified value to customers and financial performance. Our president, hari, always says in people process technology, people is 80%, process tech is 10 and 10. So I think that kind of puts it into perspective of what we're dealing with. But you talk about that instability we have at Sunland, just with our turnover annualized last year about a $2 million problem. And so from my perspective, supply chain, we go for low hanging fruit. Right, that's what we do. Where's the pain?

Arch Thomason: 26:56

And so we made what I would say is a small investment. This is a software as a service platform with some training relative to other CapEx projects we're doing. This is so small for such a big potential win Two million bucks. That is in our P&L today. Now, where does it show up? All over the place, it's not in that one line item. That sometimes to your waist. Where is it? It's hard to quantify, but we know it exists and it's probably higher when you take out non-productivity and some things like that that we know exists. So it's a really big issue relative to our overall spend and we have to do something. We can't sit around and point at the trash can and say there's trash on the floor, let's go pick something up and see what happens. It really, for us was a no-brainer and we're committed to this and we will see results.

Ted Stank: 27:49

From my perspective, Can you all define for us specifically what the framework is? And you mentioned the software as a service. What is?

Robert Martichenko: 27:56

it. So the framework itself, meaningful employment environment are the things that are the meaningful employment environment. Dignity, meaningful work, trust. Fundamental needs need to be in place the work environment and then the work, and then that cascades to some things. And then it would have said, ok, well, this would have made a fantastic consulting product. We could go in and we could consult and you could do your work. But that was never the objective here, because LeanCore had three things going on and one of it was consulting.

Robert Martichenko: 28:26

I know what it's like to run a consulting company. You can't scale it. Consulting is not scalable. And I'm 60 now. I only have, you know, whatever 10 more really good years where I'll be smart or as smart as I am, if that's even smart. So I'm not interested in building a consulting company. I want to scale something. Man, I want to make a difference. Like, really, I don't want to impact a thousand people, I want to impact a million people, 10 million people. So we said we got to be able to scale this. And but what are we scaling? We're scaling behaviors and participation. How do you do that? Let me give you one, and I don't want to steal the thunder, because Manuel and Shannon and Clint and Ben have a breakout session.

Robert Martichenko: 29:15

But, ted, you asked OK, well, how do you build trust? Well, one of the elements of building trust is to tell your story. You know like people come into work, they've come from a different organization. They might've had a good boss, a bad boss, a good experience, a bad experience, and nothing in the system gets you to know about that. So you come in. The person might have just had an experience where the boss was a taskmaster, toxic. Well, wouldn't it be helpful to know that, to maybe know that they've been kicked a little bit in their life? Well, how do you do that? What system does that? So we're saying, well then, the system's got to collect that. So, through the platform, we're saying, well then, the system's got to collect that. So, through the platform, we're forcing that conversation. Diane, maybe you've got some thoughts on that too.

Diane Lowman: 30:00

Well, I think that one thing is, when we go and meet with our team members, we're tellers. This platform allows us to be partners so that they can share with us what's going on in their life. So they come in and they say I'm having a bad day, well, what's going on? And they have an opportunity to record what's going on. There's a ping. Their supervisor goes and reads okay, something's going on. So that's an automatic flag. I need to go and meet with that team member to find out what's going on. So that's an automatic flag I need to go and meet with that team member to find out what's going on.

Diane Lowman: 30:40

We make such assumptions about what's going on in our team members' lives. What about they're having problems getting back and forth to work? They've been late three days. Okay, you've been late three days. You're going to get three points. Once you get to eight, you're going to be fired. Whoa, there's got to be a reason why you've been late three days in a row and this platform gives that team member an opportunity to be able to explain that. And then they get together as their supervisor and team member and they talk about it. Then they get together as their supervisor and team member and they talk about it. Maybe there's a way we can help this person. We're not a firing company. We want good people to stay with us. We have to understand what's going on in their lives and how can we help them.

Ted Stank: 31:30

Is this something they log in every day when they come into work and answer a series of questions or have a chance to provide feedback?

Robert Martichenko: 31:37

50% learning and 50% participation. So let's go hone in on stories. Well, the first thing, before you go and ask somebody to tell you whether they were ever kicked by a boss, before they need to understand why, it's even important to know that they were kicked by a boss before context. My oldest daughter is in manhattan working at trying to be a working actor, and I have these amazing conversations with her, and I'm a writer as well. So, but she's told me about the plot of a story. So when I watch movies now I get get them. There's dialogue. What's being said? There's the subtext. What's really being said. Do you mean you want me to tell you whether I was kicked before by a boss? Like, why would you want that? Right, because, let's remember now, people that have don't have never had trusting relationships. They don't just trust because you tell them you will. You know, you've got to earn that trust and so, yes, it's very interesting and we're in the system, right.

Arch Thomason: 32:53

And so if you've been in automotive, you understand plan for every part, how much money, time, value chain mapping goes into plan for every part. Well, this is plan for every person, right. And so they have their own page and they're going into their one to ones and we're having conversations that we've never had before, frankly. And so you know, I think one of the things that really kind of jumps out to me is you, in order to lead someone effectively, you have to know them as an individual, to understand them, obviously, to help improve them, and different people want different things, which is kind of a big call out for us. So, and then every week they're hitting. Are they growing, are they declining? I've messed up the numbers because, as a supply chain executive, I've had a few bad weeks where I'm surviving that I'm just hanging in there by my toes, and so it really just opens up that dialogue and you really get farther getting to know someone on an individual level, to engage them, to win. So that's, that's what we've seen.

Diane Lowman: 33:54

So if we weren't participating in this platform and I was late three times?

Diane Lowman: 34:00

I came in, I went to my workstation probably my supervisor didn't have time to talk to me because he or she is so busy getting orders out.

Diane Lowman: 34:10

So I'm either going to decide well, I'm going to stay and be late five more times and get fired, or maybe this isn't the place I want to be, because no one's even engaging with me to find out what's going on. The workforce today, like the school children today, they bring their problems to work and they're looking for the teacher to solve it, to work, and they're looking for the teacher to solve it. Many of those people that come to work for us bring their problems and they're looking for us to solve them. So it's a much more dynamic environment than what perhaps you may not even have experienced it, but from our standpoint it. But from our standpoint what we have experienced in the past and we have got to do a better job taking care of our people when I say that of course, everyone wants to make more money, but we need to be engaged with them, understand what's going on in their lives and if we can help them, we need to.

Tom Goldsby: 35:13

Well, it occurs to me, Dinah, when you're describing that again we're trying to address the problem so much of the focus is on the frontline worker I mean, that's where the churn is so immense and again the drive to get the orders out, and it's very easy then to fall back into that mode of let's just tell them what to do, let's try to pay them a competitive wage, cross our fingers and hope that that's enough to retain. But it also occurs to me that we're asking a lot of those team leaders then, to adapt to this new environment and this new way of thinking and looking toward the team member. And so can you talk a little bit about how this methodology and tools really help to develop the team leaders to make that pivot and be ready to embrace their new role?

Robert Martichenko: 35:58

So let's talk team leaders Team member, team leader, supervisor, manager, director, vp, ceo. It's a pyramid, and so the team leader is the very first leadership position and it's the one you have the most of in an organization. Okay, here's a little stat for us 80% of team leaders were never expecting to be in a leadership position. They were tapped on the shoulder because they were a great, whatever it was individual contributor, whatever your industry is doing. So they never intended to be a leader. They got tapped on the shoulder and the data is showing that 90% of them received zero training when going into the new team leader position. 100% of them are saying I need some development in the research that's being done at the team leader level.

Robert Martichenko: 36:58

So, from a meaningful employment environment point of view, we're obviously focusing on that and we're saying look, if Diane and her management systems are promoting people from the floor to a team leader for very good reasons, make sure that you A end up with a good leader and make sure B you just don't end up losing a good individual contributor. It's a double-edged sword. Not only do you end up with a poor leader, but you actually lose a really good individual contributor. This is like you're ruining both sides of the coin in this case. So there's a big focus on when you promote, make sure people are taught, and so forth.

Ted Stank: 37:38

So it also suggests that it puts a big additional burden I don't want to call it a burden, that makes it really negative Additional responsibility on those team leaders to really dig in and get to know their people. There's a lot resting on those team leaders. Does it mean additional investment in headcount of team leaders? Because the way the world has gone, I'm going to use my wife as a nurse and you know she was a floor nurse for several years and she used to have five patients in a shift and, as hospitals did, leaning and cost cutting and all that kind of stuff. Today, if you have a nurse on a floor, they probably have 10 patients and a team leader, and the team leader often is engaged in dealing with patients because somebody didn't show up for their shift, and so that team leader also needs a meaningful work environment, right? So how do you help that team leader? Do you hire more team leaders in addition to giving them training? Is that part of the investment?

Arch Thomason: 38:35

You know, from our perspective, one of the things and I don't know if you guys have experienced this a lot of times it's easy to throw directives down downstream, right, and it lands somewhere. And so one of the things that we've worked with and the Trail Pass team has done a great job is this can't be about adding work. We're already stretched and the way our structure is with these contracts, where we're working, we're not adding headcount, right. So we really the focus was how do we make this easier? And so we've worked with the team Ben and the team and there is actually a session this afternoon where the people who are actually doing the work Manuel and Shannon are driving this at the operational level. We want to make it easier where you walk in and you get four things to do. Today. Go say hi to John, because John took the hike on trust. Good job, john.

Arch Thomason: 39:25

Lisa requested a one-to-one. We're big on one-to-one, so we think it's very important. Every two weeks you need to spend 15 minutes. Even if it's 15 minutes with an individual, understand what's going on. So we made that part of our process and Lisa had an event happen and was requesting 15 minutes. Great, well, guess what happens today? Without the system, we don't know what we don't know and that is being impacted on the floor and it may impact the entire team. This gives us visibility to problems In supply chain. We like visibility. We like control towers. This is a control tower for our human capital. It's from where we come from.

Tom Goldsby: 40:04

So the question I'm dying to ask, we've got to the why, the what, the how. So what Is this making a difference? I mean, given where you are in this journey, given the work that you've undertaken. I know this guy. He's always learning, he's always adapting. But, with regard to implementation, can you kind of share with us where you are and what you've learned thus far, and maybe any benefits that you're willing to share?

Diane Lowman: 40:33

First of all, this is the fourth time I've retired and Sunland called me back in June and said, could you come back for maybe three or four months? And I said, sure, now I'm going to stay a year. But the point of it is that I had visited the site where we have the pilot it's in Goose Creek Four years ago prior to my departure. I came back and went and visited the site and there is a remarkable difference in how the team members engage with you. They just it's a feeling they're sharing when you go and talk with them. They're sharing what they're doing and why they're doing it. How remarkable is that? And we're just in the infant stages of this platform, and if this is an example of how it has affected that site and those 40 team members, then I'm excited about what it's going to do for our organization.

Arch Thomason: 41:39

And it doesn't take a lot of time. We have Friday weekly kickoff meetings where the team gets together and we will have a discussion on the hike from last week. It's a group element. Every other week you sit down and you have a 15 to 20 minute one-to-one and then you also have, on that off week a 20 minute hike. So that's the input and it's not a lot of input.

Arch Thomason: 42:01

And I can tell you we've found leaders, potential leaders, that we never knew wanted to be leaders in that site. We have not lost some people we probably would have lost had we not had the dialogue they would have pointed out because their car broke down and they're sharing a car between three people. Okay, we can work with that. So it really brings those problems to the surface, and Robert taught us lean and we're just trying to build that out. So if we can keep them, if we can retain them, if we can help them grow and maybe get out of that economic issue that they're dealing with with the car, then it's a win for us and a win for them. That's what kind of the way we're looking at it.

Diane Lowman: 42:41

It really has also helped those supervisors that find it difficult to interact. They want to, but they are uncomfortable. So this gives a great platform to be able to start that dialogue and once it starts, it just blossoms.

Tom Goldsby: 42:59

Well, it's amazing to me. It sounds like it enriches the work, it helps to solve problems with that frontline workforce, but also the development of, you say the team leads the work. It helps to solve problems with that frontline workforce, but also the development of, you say the team leads the supervisors.

Ted Stank: 43:11

And again, that dialogue that needs to happen throughout the organization, up and down, up and back and forth, is fantastic, tom, we have a really interesting question from the audience here about what role alternate sources of labor, such as temp and gig work and cooperative labor, play in building this meaningful workforce. I don't know if you all use any kind of temp work or anything like that, but it's intriguing to me how that would plug into this whole system.

Diane Lowman: 43:36

So our goal is to hire direct. We do use temp agencies for peak seasons or for special projects. I'm not telling you we still don't use temps. But our goal is to hire direct because our experience has been that those team members will stay with us longer. Now we've had some success with temps, but again our goal is to hire direct.

Robert Martichenko: 44:04

So if dignity is the guiding principle and the operating principles trust, and your intake strategy is to bring 10 people in, hoping three will kind of work out, what does that tell people right out of the gate? If you're not willing to have a HR department big enough to interview people, go through the process, build a relationship and then hire somebody. These are the types of paradigm shifts that Arch mentioned when we first began. There are fundamental paradigm shifts that have to take place, the most important one being that the prosperity of the organization and the prosperity of the team member are not separate things. They are one thing. They're inextricably linked. They are an ecosystem, they are interdependent, they are connected.

Robert Martichenko: 45:02

And I'll come up with some other ways of saying it. I'll use my chat, vpt, and get some more things. They're one thing. You don't have one without the other. The cause and effect is unclear. There's no way to figure it out. There's no PDCA. There's no root cause, there's no five why? Because it's one thing and it needs to be managed like one thing. So when you think about how you're bringing people in and you're thinking about what you're saying right out of the gate, what is it that you're telling people? Think about that, make observations inside your organizations. What are you really telling people with that policy, with that rule? At the end of the day.

Tom Goldsby: 45:50

Well, fantastic, great question. Thanks for that response and we've got another fat on the back you get a gold star, buddy Diane. This question is directed to you about. We talked about the multi-generational workforce and how the unique challenges, seemingly, that the new generations present, and this question's about those differences that you've encountered and tapping into intrinsic motivators and work engagement that are seemingly different Again, gen X. You know money drove us all right.

Ted Stank: 46:20

As a boomer, I could see like I don't want to tell you anything about what's going on in my lifetime. I just want to come to work. Leave me alone, right.

Diane Lowman: 46:27

Right. Thinking about the younger generations that are coming into the workforce, this particular platform is great for them because they love to be on computers. They love to be on their phones. Think about the times that you have tried to interact but there's no reaction. The first step is they're going to enter comments in the system. That supervisor manager will read them. That opens the door for us now to have dialogue.

Tom Goldsby: 47:00

You know, the tool, I guess, is easy enough for those of us that are not digital natives per se, but yet it's a medium that your younger workforce is quite comfortable, and then you're bringing maybe along the older workforce as well.

Diane Lowman: 47:15

It takes a little more. I'm a pencil and paper person. I hate computers, I hate phones, I hate the whole thing. But this particular platform appeals to me because it's asking me questions, I can give it feedback. It's not complicated, so I think it appeals to all generations.

Tom Goldsby: 47:34

Another audience question. And you know, as we sit here and listen and, by the way, sunland Logistics just a great, great company and probably over the course of this hour you've gotten a sense of their values as an organization, Truly a caring company. I've had the opportunity to spend some time in Greenville, client engagements and it's like a family environment, certainly within the company but also with your customers. I mean, it's just really tight. And this question comes from, maybe, a place where maybe those values aren't so firm or in place on balancing the needs of our people with the needs of the business. And maybe Arch you can speak to that a little bit about. You know, you said that you went through the effort to try to quantify the nature of this problem and say, hey, it's just good business to invest in our people, but for those folks maybe haven't done that calculus.

Arch Thomason: 48:29

Yeah, I think I've tried to keep things very simple and one of the things that, from my perspective, in order to be successful with any relationship or partner, it needs to be win-win. And that doesn't mean I win twice right, win-win. We both have to win, twice right, win-win. We both have to win. And so I think to Robert's point we both need to win to walk away and say it was a good effort, right? So look, we have to make a profit. That is not negotiable, right? We have bank covenants, we have shareholders and we really think this is. You can't just leave this out. We do not want to be low-cost provider or payer. That's just not our strategy. We want to provide the best team wins. We think Very simple the best team wins. And so how do we build out that team?

Arch Thomason: 49:17

And why did the New England Patriots win so many Super Bowls? They developed their people. They paid them less than other people too, but they built something that people wanted to go and stay. We're not going to pay less. We have to be competitive. The 3PL business is a tough business. Our margins are much less than the majority of shippers in this room. So we have competitive issues that we have to address and we have those conversations. Look, guys, we can't just go out and pay $5 more an hour. It's not sustainable for us. But how do we cut down that turnover, improve the P&L and then we reinvest in our organization. It's important for us, for our people and for our teams. Look, you've got to manage it. One doesn't work without the other. So we think they're holistic in nature.

Robert Martichenko: 50:03

That is a very, very profound question because at the heart of it is doing the right thing for people is not great for the business. Think about it. That's the heart of the question. How do you balance them? So that would suggest that one actually is one. A positive here is a negative there. But if you think that we need to balance it and that's another paradigm shift that just absolutely has to change you go into organizations and everyone has the sign that people are our greatest resource and all this stuff. And then you walk around and you go oh, it doesn't really look like they actually believe this. And Ted said to me the other day why aren't people walking the talk? And there's some very good reasons for it. Everybody says we got to do the best thing for people, but then our actions, our spouse theories and our theories in use have a big gap. Why? And there's a couple of reasons, and I could be here for hours, but there's two really, really big ones. The first is at a leadership level.

Robert Martichenko: 51:07

We still see employment as a transactional engagement. I pay you, you show up. Because I'm paying you, I get to have authority and control and tell you what I want you to do. You accept those terms because you want to be paid. And this is a deal. It's a business transaction. If you don't show up, I don't pay you, and I never worried about this not being the right way to do it, because if you don't show up, then I'm just going to get somebody else. It didn't matter that it was transactional. So then you go okay, well, you know, if we say it but we're not doing it, why not? And if your walk and talk have a gap, it's because it's not a requirement.

Robert Martichenko: 51:56

Go into any healthy business and there'll be things that they do, no matter what, non-negotiable. Why? Because it's a requirement. They have to do it. It's not a preference. A preference is we really like the idea, we'll do it if we have time, we'll do it if CEOs are passionate about it, but it's not actually a requirement. So when things get crazy and there's not enough hours in the day, the preferences go away, the requirements stay in place and we get those done.

Robert Martichenko: 52:30

Well, what's happening is this idea of people being the most important resource in the organization, generally speaking right now, is a preference. It's not a requirement. But here's the deal. Read this paper because it is actually a requirement now. Because the transactional CEO who says just grind it out, pay as little as you can pay, don't worry about the environment.

Robert Martichenko: 52:56

There's three, four years ago, notwithstanding the pandemic, they're still getting orders out the door because they can churn, because there's another person, there's another warm body to replace the one that left. But ah, now five jobs, four people. So if you, as a leadership team, if you still believe that this is a transaction and you don't have a responsibility to the person, then it's not going to be about still getting your orders out the door because you grinded it out. It's going to be there. Still getting your orders out the door because you grinded it out, it's going to be. There's nobody in your warehouse working because they're going to go someplace where they're being treated properly. So it will become a requirement, and as soon as something's a requirement, then it gets done, and so this move from preference to requirement is another shift that absolutely has to happen.

Ted Stank: 53:47

You know, robert, it strikes me as similar to the customer revolution, right? Every company, on their annual report to shareholders, says that customer is number one. Yet how many, increasingly, how many times do we call a customer service number? And you know, get on, how many of you love calling your cable TV provider, right, but customer is number one for them, right, compared to calling a company and you get somebody that picks up the phone, it's like, oh my God, and I think that's kind of where you're going, right, how do we make that intrinsic to who we are?

Tom Goldsby: 54:19

But thank you very much for accelerating that transition right, and it comes through careful study, right. I mean we've got to treat it like the problem that it is and we've got to put the resources and time into it. Hey, thank you so much for joining us today. Robert Diane Arch Fantastic.

Ted Stank: 54:36

A reminder also Robert mentioned it we're going to have breakout sessions this afternoon, that kind of drill down deeper into several of these topics. This will be one of the breakout sessions.

Tom Goldsby: 54:47

That's it. I feel like maybe, just maybe, we're transitioning to solution, which is really exciting for us. So, yeah, we've got the breakout session a little bit later and we probably ought to close out the podcast. Thank all our listeners out there.

Ted Stank: 54:57

Yeah, we probably also have to do that. Yeah, thanks everybody for listening to the Tennessee on Supply Chain Management podcast. For those of you here especially, we will always welcome questions or suggestions for speakers or topics. Send your thoughts and input to gsci at utkedu. That's it All, right, thanks for.

Tom Goldsby: 55:15

Rocky.

Ted Stank: 55:16

Tyler, thank you.

Introduction & Outro: 55:19

Thanks for tuning in to Tennessee on Supply Chain Management. If you enjoyed the episode, subscribe today on your favorite listening platform to get all of our episodes as soon as they drop, and don't forget to take a moment to leave us a rating. Have any questions, thoughts or feedback? We'd love to hear from our listeners. Email us at gsci at utkedu. Join us next time as we continue pulling back the curtain on the world of supply chain, educating and entertaining you along the way. Until then, listeners.