Costco Connection - July 2005

looks at it as an opportunity.” Closing up shop A perfectly balanced warehouse has no By noon at the front end, the crush is on. At 8: 30 p.m., the warehouse entrance holes, no empty spots in the steel. All mer-

Wave after wave of members in lines 15 peo- door rolls down. Aisle by aisle, four employ- chandise is uniform, neat and clean.
ple deep move through the register aisles. ees gently remind members that the ware- If everybody bought the exact same
Even here, a dance is being performed, as just house is closing and that they need to begin amount of merchandise each day, all you’d
about every order involves something extra. moving toward the front. have to do is remove the empty pallets and
At one register, a member’s card comes As each register closes, the all-clear is replace them with full ones for the next day.
up expired, which requires a renewal for the sounded. At 9, an employee bids the last But this never happens.
transaction to continue. At another, a member members of the day farewell and the exit door Managers must have a keen eye, an abil-
who runs a convenience store is separating a jangles down. ity to judge, assess and predict the day’s
massive flatbed order between items for Many of the warehouse lights are now needs. And they have to do it before the
home or for resale. Cashier’s assistants are turned off, as is the music. An eerie reversal doors open, while members are shopping,
constantly on the move, scurrying back and of what we experienced at 2 in the morning and they’re thinking about it even now, while
forth between stations to help box and load begins to take place. they’re preparing for tomorrow, which
items, or sprinting back onto the warehouse “Each shift passes the baton,” says begins in a few hours.
floortoverifyanitemnumber. Fausto Mendoza, one of the assistant man- “We’re so used to being busy, if it
Over at the membership counter, person- agers. “It never really stops.” seems slow, the employees think there’s
nel are moving in overdrive, handling returns, something wrong,” explains Humberto.
taking photos of new signups and renewing Another cycle begins Common sense would dictate that, to get
memberships. At 10 p.m., the freezer/cooler stockers the job done, you simply hire more people.

Throughout the day, managers are will arrive and work until 2 or 3 a.m. in the But with Costco’s razor-thin margins, that walking the warehouse floor, walkie-talkies chill of the frozen foods section. “We used to doesn’t work. in hand, directing employees to areas that do all the stocking from 2 a.m. to 10 a.m.,” “We have to anticipate everything,” says need replenishing or messes that need says Allen. “Withtheincreaseinsales, it was Fausto. There’s no room in their time-cleaning up, and handling myriad requests just too hectic.” crunched day for egos, territorial issues or from members. The challenge, especially at high-volume politics—the managers work by committee.

At 3 p.m., the evening receiving crew and warehouses such as the Culver City location, is “We always talk about everything.” night merchants arrive. They begin prepping to meet members’ demand for merchandise in In receiving, the last truck is out by 10. the receiving dock and surge area, arranging the expected Costco style. Procedures such as Forklift drivers spend the next two hours and tagging merchandise for the next day. receiving times and stocking hours must some- clearing the area, laying out the stacks of

“We have 439 employees,” explains times be morphed to dovetail with city ordi- pallets on the warehouse floor that the next Humberto. “Every employee has a specific job. nances, the needs of the members and of the morning’s shift will find at 2 a.m., when it The goal is to get everyone working together as warehouse. Moving to a 24-hour schedule is all begins again. a team. If anyone fails, the whole team suffers.” another example of the company’s flexibility. Day after day, after day, after day. C

9 p.m.
10 p.m.
11 p.m.
Closing time Go back, young man

“If you carry only 4,000 different items, it doesn’t During the course of shopping, items are rou-pay to be out of stock in any of them,” says tinely left in different areas by members who Costco President and CEO Jim Sinegal. As the have changed their minds about a purchase. last members leave the building, the crew within Dozens (hundreds during the holidays) of carts is already assessing the next day’s needs. of these “go-backs” are restocked at night.