Whole Foods’ New Inventory System Giving Employees ‘Nightmares,’ Leads To Job Losses

The new inventory-management system installed by Whole Foods, which intends to cut down on food wastage and keep track of sales and storage in an efficient manner, is giving employees nightmares.

After doing away with their de-centralized inventory-management system, Whole Foods installed a new system called order-to-shelf (OTS) in 2016. The latest system is built on an extensive set of rules that has to be followed by the stores to keep a flawless record of purchasing, displaying, and storing products on store shelves and in back rooms.

OTS, which was also installed by Target, requires employees to mention the precise number of products needed for replenishment when they place an order through to the distribution center. The distribution center takes into account the layout of the store before packing the specific number of items before dispatching the order.

According to a number of both former and current employees who talked to Business Insider on the condition of anonymity, the new inventory system has become the reason for people working across all ranks of the company to either resign or get fired.

"The OTS program is leading to sackings up and down the chain in our region," an employee of a Georgia Whole Foods said. "We've lost team leaders, store team leaders, executive coordinators and even a regional vice president. Many of them have left because they consider OTS to be absurd. As an example, store team leaders are required to complete a 108-point checklist for OTS."

It is not enough for the system to be installed in Whole Foods stores around United States, but the company has also arranged for strict compliance protocols, which includes scorecards and quizzes.

Tests are conducted bi-weekly that includes instructed managers of stores to take “walks” with selected employees through store aisles and storage rooms with an 80-page scorecard, grading stores on how well the inventory has been maintained.

If even the manager spots any of the items out of its desired place or an excess amount of stock than recommended, the scorecard reflects accordingly. If the score on any particular “walk” falls below 89.9 percent – which is the passing grade – the company officials reserve the rights to start firing employees from the store.

"Every item in our department has a designated spot that is labeled or marked,” a Colorado Whole Foods store employee said. "If that item is even an inch outside of its designated spot ... we receive negative marks."

The managers also pick random employees on a daily basis to answer questions about company goals, top-selling items, previous week's sales, and other information.

Because of the OTS program, Whole Food’ employees work in constant fear of losing their jobs.

“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 store said. “The stress has created such a tense working environment. Seeing someone cry at work is becoming normal.”

However, investors of the company disagree with their employees’ point of view on OTS. According to them, the new inventory system has cut costs, reduced shrink, prevented wastage of storage, and allowed employees to spend more time engaging with customers.

Amazon bought out Whole Foods for $13.7 billion last year. Since the takeover, Barclays analysts have been visiting various stores of the famous grocery chain only to find many of the shelves empty or operating at less than its optimum capacity, as a result of which sales were suffering, Business Insider reported.

Employees have attributed the poor management of store shelves to the complicated OTS system. Jim Holbrook, CEO of private label and retail consultancy Daymon Worldwide – which works with Whole Foods – said he hopes to see improvement when it comes to employees’ understanding and managing the OTS system, after the new owners take control.

"Amazon is very good at managing logistics behind the scenes," Holbrook said. "Whole Foods will be a better shopping experience as a result."