Reuben Slone is the senior vice president of supply chain for Walgreens. (Walgreens Boots Alliance, Inc. is a global corporation with over $100 billion in sales.) Reuben has been recognized as one of the top 10 thought leaders in the supply chain community. He has written two popular articles for the Harvard Business Review and co-authored the book The New Supply Chain Agenda. With decades of experience in the field, he shares his insights on some of supply chain’s top challenges and how to surmount them.
Q: What challenges in supply chain keep you up at night?
A: As in every business, we regularly face supply chain challenges, but two of them are on top of our minds.
1) Continuing to integrate supply chain into the core corporate strategy so that it is involved in almost every aspect of the business.
2) Finding supply chain talent, both entry level and experienced.
When you consider those two opportunities together, you can easily see the connection. We want the best and brightest involved in supply chain and those high performers need to know that they will be part of action with no limits to their career.
Q. So what do you do to manage and find your supply chain talent?
A: We constantly work closely with our recruiting team as we search for experienced talent. This is a major and ongoing priority of the highest order for us. Thankfully there’s a lot of experienced talent in the Chicago area but still far more demand than supply. So of course we need to look well beyond Chicago for top talent.
For entry level, we continue to cultivate relationships with top schools like the University of Tennessee, although we sometimes have trouble convincing students to relocate.
We have an internship program that targets schools in the proximity of our distribution centers. We want to have a great career path for talent in our DCs. We strive to give new hires valuable experience and allow them to move up the organization. We’re constantly working on career development for our people.
Q. Speaking of talent in DCs, isn’t Walgreens a leader in employing people with disabilities in distribution centers?
Actually, yes; more than 10 percent of our DC employees have voluntarily disclosed having a disability. For some of our DCs it’s more than 30 percent. For example, we employ a large number of people who are hearing impaired in our Waxahachie DC in Texas. Hiring people with disabilities makes us a better operator. It’s not an altruistic investment, it’s a smart one: the OSHA accident rate is lower and the employee engagement is higher in these DCs.
Q. What about omnichannel fulfillment? This seems to be something on everyone’s mind now.
A: A lot of people use omni as a synonym for e-commerce, and it’s not. For smart companies, everything that we do has to be customer-driven. You have to understand who your target customer is and what they want. This really isn’t anything new.
The very first Walgreens had a small front room, a very large backroom and a fleet of people on bicycles and carts. You could call in or drop off a list and Charles Walgreens would have your order waiting for you or delivered to your doorstep. He actually used to try to keep people on the phone until their order was delivered. So, Walgreens has been doing same day and omnichannel since 1901.
For us, omni means thinking of the customer first. For example, for the senior citizens’ community, we work with to fill prescription schedules automatically. For busy adults, we can fulfill that script wherever they are with just a few small details. It really is the evolution of putting the bricks together with the clicks, with an intense focus on our customer’s needs.
Q: You have an entire department devoted to network optimization. How do you approach it?
A: This is all part of the changing landscape of how to service the customer, and with that in mind we constantly re-evaluate our network. Obviously we use modelling tools and evaluate a wide array of scenarios. Our goal with this is the highest possible store in stock, while still having world-class working capital and cost productivity. The key is knowing that the work is never done. It’s dynamic, and we’re always evaluating it.
For our global operations, we created a global supply chain council to look across the world to determine the best locations for distribution and manufacturing. We share best practices and financials as well as the key measures to understand best practices. The good news is that the spirit of collaboration in supply chain is quite high, with a lot of collaboration between pharmacy and retail globally.
Q: Any final thoughts?
A: I continue to see the power of systems thinking in supply chain and the importance of synthesizing all of the components into the broader whole. The supply chain is interconnected across all of the functions in our company and also with our vast network of suppliers. The magic lies in how to optimize this huge network of stakeholders while focusing intently on our customers.