2. LANGLEY, BC
SUMNER, WA
AIRDRIE, AB
TRACY, CA
MIRA LOMA, CA
TOLLESON, AZ
SALT LAKE CITY, UT
MORRIS, IL
BUREN, MI
VAN
BRAMPTON, ON
ST. BRUNO, QB
MONROE
TOWNSHIP, NJ
FREDERICK, MD
ATLANTA, GA
DALLAS, TX
LAREDO, TX
WEST
PALM BEACH, FL
TEPEJI
Costco depots
and the regions they serve:
AUGUST 2016 3
This map was updated June 2016. The Pyeongtaek,
South Korea depot will open late summer 2016.
SWIRE
TAOYUAN
CRICK
PYEONGTAEK
INCHEON
MIKI
ICHIKAWA
South
Korea
Taiwan
Japan
United
Kingdom
Australia
Our depot system is based on a simple concept: deliver
merchandise to our warehouses at the lowest possible cost.
The system was first developed in 1988. At the time, Costco was
operating 31 warehouses, and our suppliers were shipping goods
directly to the buildings. Locations were receiving an average of 60
deliveries per day, and company leaders were looking to expand
our number of warehouses.
The logistics were becoming increasingly difficult. With the birth
of the depot operation, the prices on our merchandise were
reduced by 5 percent, an impressive number when we factor in
Costco’s already low margins. Then in 1993, the depot and traffic
teams tackled refrigeration. Refrigerated goods had been distributed through third-party operators, but Costco developed the “wet side” of our depots,
in which refrigerated and frozen items could be cross-docked. Through the years, our depot and traffic employees have risen to the challenge of
innovating new methods to keep costs down and to improve the system’s speed and accuracy.
TO WAREHOUSE #1106
TO WAREHOUSE #391
TO WAREHOUSE #341
RECEIVING
SHIPPING
Worldwide Depot System
Mexico
3. Freight
Expectations
Beyond the ultraefficient operations of Costco’s distribution system,
our depots and their staffs provide a unique perspective on our business.
While warehouse employees focus on member service and driving sales,
their depot counterparts strive to support those efforts with an ample,
organized and safely handled supply of merchandise. The integration of
these two largely independent operations is paying dividends in Costco’s
Midwest Region.
A familiar staple in Costco Today is the openings section, in which we
feature facts and photos of new Costco buildings. Not long ago, the
Van Buren, Michigan depot appeared in that section. Along with telling
us about the building’s square footage and number of employees, GM
Dave Hunnewell gave a shout-out to Detroit-area warehouse managers
for providing such well-trained, positive transfer employees and for
creating a close-knit community.
We visited Dave and the GMs from local warehouses to learn more about
the connection between the depot and warehouses, and how they are all
a part of the Costco family.
Van Buren Depot
Just a few miles west of Detroit lies the Van Buren depot. The facility opened on December 14, 2015, with 227,660 square feet of dry and 118,800 square
feet of wet space. Costco Today met up with Todd Shields, AGM, and Dave for an inside look at the building and its enthusiastic employees.
What was it like to open a depot
in the middle of December?
Dave: It was a crazy time of the
year to open. It was two weeks
before Christmas and we had
a new staff, which made it that
much more interesting. Of our
185 employees, half of them were
transfers. Additional employees
from across the U.S. came to
help us get up and running. Their
contributions gave us the time to
work safely and accurately, and to
build a team spirit that embodies
the Costco culture.
Why did we build a depot
near Detroit?
Dave: When Todd and I were
running the Morris, Illinois
depot, we were stretched beyond
capacity. We knew Costco would
have to invest in expansion, so the
question was whether to expand
Morris or build a new facility. I
started talking with Tom Walker,
retired EVP of construction and
distribution, and John Thelan,
SVP of depots, about a new depot
in the Detroit area, and they liked
the idea.
How do you build team spirit?
Dave: We hold weekly meetings in
which everyone in the depot comes
together for a brief update. Todd
and I strive to be transparent. We
want everyone to feel involved
and in the know. That’s what builds
a team.
What are the benefits of the
new depot?
Todd: We collaborated with the
architects to create a design that
would address some of the issues
we knew other depots were having.
One thing that sets Van Buren
apart is our office configuration.
Other depots have two offices –
one on the wet side and another
on the dry – but here we have one
office. This helps keep our team
unified and makes communication
a breeze. We also have a
conference room, more bathrooms,
nicer amenities for employees and
better insulation for our dynamic
Midwest weather.
What value does the conference
room bring?
Todd: The conference room has a
couple of advantages. First, it saves
the company money, since we don’t
have to rent out rooms at hotels or
convention centers to hold large
meetings or conduct training.
Second, nearby warehouses,
suppliers, and home and regional
office employees can use the
facility. It builds exposure to the
depot and breaks down the silos
that can arise when employees
are unaware of other parts of the
business. When employees come
here for a meeting, we give them
a tour afterward. It helps solve the
riddle of what the depot does.
4 COSTCO WHOLESALE TODAY
4. Haggerty
GM: Colleen Stankiewicz
Commerce Township
GM: Narquita Steanhouse
How does your staff use the depot?
Narquita: We use the conference room
for our Leadership Development 101
classes. It makes so much sense for our
next generation of leaders to be exposed
to facilities other than the warehouse. It
provides a more holistic view of Costco.
You have great morale at your
warehouse. How did you achieve that?
Narquita: I want Costco to feel like an
extension of my staff’s family. I tell new
hires that we all want to enjoy our time
together, and that means everyone pitches
in. John Gaherty, SVP, was the catalyst
behind that way of thinking. He taught me
that the team bond is the top priority and
our mission is not just the success of our
building, but also the success of Costco as
a whole.
Since the depot is only a few miles from
your location, how has its proximity
affected your warehouse?
Colleen: We have one of the smallest
buildings in the company so, as you can
imagine, our dock is tight. The depot team
does an amazing job of working with
our merchants to help us be successful
throughout the day. If we sell out of a
hot item, we can call the depot to see if
it’s possible to get a truck delivered that
same day. Conversely, when our dock is
overloaded, we can ask to have our trucks
delayed. The teamwork between our
merchants and the depot is great for morale
and ultimately helps our members have the
best possible shopping experience.
How do the local warehouses work
together?
Colleen: This year, we had a number
of managers needing leave – many for
maternity. Because of our camaraderie
with the surrounding buildings, what could
have been a hectic situation was mitigated
by people-sharing. We were able to share
managers and arrange for coverage. We try
to help each other whenever possible.
What effect has the depot’s proximity had on
employees?
Kyle and Niki: Because employees have more
exposure to the depot now, they’ve learned what it
is, which gives them a better understanding of how
Costco works. Our merch crews are more efficient.
Because they know when things will arrive, they
can plan accordingly.
How would you describe the local warehouse
culture?
Gentry: The first thing that pops into my mind is
the constant positive attitude. People here are
always smiling. When you walk into a building,
you feel at ease because the positive vibes
permeate the atmosphere. Management supports
the attitude of encouragement; from training to
transferring, there is trust instead of fear.
Pittsfield Township
Admin Manager: Gentry Valley
Membership Manager: Niki Payne*
Receiving Manager: Kyle Spencer
*Now at Louisville, Kentucky
AUGUST 2016 5
5. The Huntingwood, Australia depot was severely damaged by a hail storm
on April 25, 2015. Thankfully, no one was injured because the depot was
closed for Anzac Day, a public holiday in Australia. The damage to the leased
facility was too extensive to repair, so the merchandise was salvaged and
the facility was demolished.
“The loss of the facility caused us some hardship,” says Country Manager
Patrick Noone. “It was the only available distribution center in the greater
Sydney area that included a dry goods warehouse along with cooler facilities
on the same site. This has forced us to segment our operations in alternative
facilities until we can build our own distribution center.” Costco Australia is
currently operating out of rented facilities – a dry building in Wetherill Park
and a cold storage facility in Prestons, both western suburbs of Sydney.
“I cannot speak enough of the teamwork involved during the first critical
weeks after the hail storm,” continues Patrick. “All employees from the
Australia Home Office, depots and warehouses worked together to ensure
the continued supply of merchandise. Due to our fantastic teamwork,
we stayed in stock, and many of our members were unaware that our
distribution depot was destroyed overnight.”
Prior to the Huntingwood collapse, Costco Australia was considering plans
for a new depot. At this stage, the plan is to build a new facility in western
Sydney in the next couple of years. Patrick says, “The new depot will not
only reunite our distribution system in a single, efficient location, but also it
will accommodate our expansion plans for years to come.”
Story and photos by: Robin Alex – ralex@costco.com and Miranda Cosand – mcosand@costco.com
Why is communication between the depots
and warehouses so important?
John: The depot mantra is, ‘When a warehouse
calls, drop everything.’ We are here to serve
the warehouses. Our GMs have many years of
experience, so they all know the culture. We
make sure that our warehouses’ and buyers’
needs are taken care of. Everything has to work
like clockwork. Our depot GMs attend all regional
warehouse GM meetings, so they’re aware of
what’s happening in the area and can help out.
Australia’s Depot Update
The temporary dry facility
6 COSTCO WHOLESALE TODAY
Freight Expectations
Middlebelt
GM: Harley Trader
What changes have you experienced since
Van Buren opened?
Harley: When the depot opened, we had about
20 transfers, and some of them were long-
term employees. This opened us up for a lot of
changes. Losing that amount of experienced
staff is a bit frightening, but it also gives rise to
many opportunities. Employees were able to
apply for new positions, cross-train and earn
promotions, which were great for morale.
How has the new depot affected your
day-to-day operations?
Harley: We have a recycling program for bottles
and cardboard in Michigan. Before the depot
was built, we had to keep bins on our dock until
they were full, and then we could send them
out. Now the depot handles the recyclables,
so we’re able to send out our bins daily, where
they are combined with those of the other
warehouses. This frees up a lot of space on
our dock and speaks to mutually beneficial
relationships.
U.S. Home Office
SVP of Depots: John Thelan
Photo credit: France Freeman
6. Need a map?
Michiganders always have one on hand.
Ask any local where they’re from and they’ll
point it out to you. Tonya Martin, forklift
driver at Pittsfield Township, shows us
she’s from the Ann Arbor area.
The “Grown in Michigan” tagline is a big deal up here. Locals like to support their own,
and they have great reasons to be choosy. According to Costco employees, the
Wonder of Winter, or WOW, berries grown by Mastronardi Produce are simply too
sweet to miss. Grown in greenhouses and harvested during the cold months of the
year, these berries are packed with flavor and sell out nearly as fast as merchants
can put them out on the floor.
Pick up a baguette from
the bakery and head to the
beach with these choice
condiments. A lunch with
Great Lakes Raw Michigan
Honey, Crofter’s Berry
Harvest Premium Fruit
Spread, McClure’s Pickles
and That Pickle Guy Classic
Olive Muffalata spread will
leave you satiated. Don’t
forget the sunscreen!
The summer sun rises early at the 42nd parallel. Brew
a big cup of joe with Biggby Best Coffee or Crazy Fresh
Coffee, both local favorites.
Headed to a party? Made in Michigan beer and wine
are always crowd-pleasers. Chill out with a cold one
from Griffin Claw or Short’s Brewing Company, or sip
on a delicious chardonnay from Leelanau
Cellars, all proudly sporting their Great
Lakes State status.
After picking up
these delectable
treats from the
warehouse,
be sure to fuel
yourself with
a Kirkland
Signature™
quarter-pound
bratwurst and
soda combo from
the food court
before driving
away in your
Motor City sedan.
The
and
Wo
sw
y
m Leelanau
eir Great
Motor City sedan.
AUGUST 2016 7
House
Welcome
to the
BigCross the Mighty Mac, pluck a Petoskey stone out of Lake Michigan and prepare to Go Blue! If you’re reading this
article in Michigan, you’re no more than 85 miles from four of the five Great Lakes. If you’re not in the Great Lakes
State, have a seat and take a Michigander at these fun regional products sold at the warehouse.
7. April, 2016
Volume #94
To our management teams,
In March, two notable events happened in the financial lives of Costco employees.
First, in the new Employee Agreement, Costco published new wage scales for hourly employees. As everyone
knows, top-of-scale increases have been regular annual occurrences, and the next three years are not
exceptions. Costco employees at the top of the scale received a 60-cents-per-hour raise in March 2016, and
will receive them again in March 2017 and March 2018. The company also significantly increased starting
wages for new employees to $13 (service assistant) and $13.50 (service clerk) per hour. Current employees
below these levels had their scales bumped up to the new rates. And of course, for those employees who are
neither at the top nor the bottom, Costco’s wage scales already provide for regular increases (approximately
twice per year for full-time employees) to the hourly rates.
Second, Costco completed its discretionary company contribution into employees’ 401(k) accounts. The
amount of the contribution – more than $284 million – went into about 111,000 active accounts for employees
in the U.S. and Puerto Rico.
Every manager knows that expenses associated with our employees – particularly wages and benefits –
constitute very sizeable line items on the P&Ls of our locations and home and regional offices. While some
companies consider their employee-related expenses nothing but costs to be minimized wherever possible, we
consider them investments in our people. This investment, of course, is a key part of our business model: Hire
good people, compensate them well, provide them with training and opportunities, and good things will happen
in the business. Simple.
Along with Costco’s commitment to providing the best-in-class wages and benefits, it’s important to note that,
in return, it’s fair and necessary for the company to have high expectations of employees – that they will work
productively and efficiently, provide great member service, and continue to justify the company’s investment
in them. The consistent message is that we’re all in this together, and we all have a role in contributing to
Costco’s continuing success.
Take care,
Pat Callans
8. Did you read the February/
March issue of Costco Today?
This year’s global edition
was all about leadership.
Designed to appeal to people
at all levels of the company, this
magazine is a great resource
for you to reference with your
employees. Keep copies on
hand to give to employees
seeking promotion, denied a
posting or interested in learning
more about the company.
The magazine can be a great
talking point. If you are having
trouble communicating with
a co-worker, browse through
the articles to get some
pointers, and then give the
other employee a copy. This
could be a great way to start a
conversation and work toward a
resolution. Key topics include:
• Conflict Resolution
• Knowing Your Numbers
• How to Handle Pressure
• Merchandising
• Teaching
• Communication
Each magazine has a
center article, “10 Ways to
Increase Your Chances of
Becoming a Supervisor,” that
can be removed and hung
up as a poster. Encourage
your motivated employees
to read the magazine and
ask you questions.
Need more copies? Email
costcotoday@costco.com.
GG
EEEE
dddd iiii tttttt iiii oooo nnnn
todayFEBRUARY/MARCH 2016 US EDITION
Benefit Enrollment Website
On Monday, May 2, 2016, the benefits department
will unveil its new and improved benefit enrollment
website. The site will offer exciting new features,
such as an enrollment countdown clock, alerts
for additional action employees need to take
and the ability to upload documents directly to
their record. To accomplish this, the current site
will be down for approximately two weeks.
The current enrollment website will be unavailable
from Sunday, April 17 through Sunday,
May 1. Here’s what you need to know:
• Employees will be able to make changes
during the blackout by calling the enrollment
center at 800-541-6205, Monday – Friday
8 a.m. – 5 p.m. Eastern time.
• No updates will be made with our benefit
partners (Aetna, HMSA, TripleS, EnvisionRX,
MESVision) during this two-week period.
• Employees who make changes that increase
or decrease payroll contributions will see back
charges or refunds on the May 13 paycheck.
Watch for more specific details as we
get closer to the blackout period.
• What does leadership presence mean to you? Do you
think it’s important to teach employees how to have
leadership presence?
• What’s the biggest difference between managing and
leading? What actions do you take to lead your team?
• Which senior manager quality to you think has the most
impact on employees seeking promotion? How can you
translate that to make it more accessible to your staff?
• Do you agree with the mantra, “If you want something
done right, you have to do it yourself”?
• Which of the Ten Ways to Increase Your Chances of
Becoming a Supervisor resonate with you most?
• How did you learn your numbers? From your
experience, what advice could you give to make that
process easier?
• What aspects of merchandising are most vital to
understanding how Costco operates?
• Talk about a time miscommunication hurt your
department. What lesson could you share from that
experience?
• Do you use TAP with your supervisors or managers?
What are your most helpful conflict resolution
strategies?
Let ’s Talk About It
Discussion Points From Learn to Lead
9. The College Student Retention
Program runs smoothly at
Angela’s location. As the GM, she
encourages employees to speak
with her about participation and,
due to those interactions, each
employee communicates with
management as needed, provides
a school schedule, and returns
for summer and winter breaks.
Immediately after passing his
probationary period, Ivan requested to
be part of the CSRP. Initially, Angela
was unsure whether to approve Ivan’s
request. She knew Ivan’s performance
was below average, but she didn’t
think his manager or supervisor
had documented his performance
concerns well enough to consider him
not in good standing. Angela approves
Ivan’s request and meets with him to
outline his obligations regarding the
CSRP. She reminds him that, before
he leaves for school, he needs to
provide a copy of his school schedule.
Ivan does not
provide a copy
of his school
schedule
before
leaving. The
warehouse
management
tries to contact
him several times at the phone
number he provided, but Ivan doesn’t
return any of the messages. It’s been
two months since Ivan left for school,
and Angela is looking to terminate his
employment based on noncompliance.
By not providing a copy of his
school schedule or communicating
with the warehouse staff, Ivan’s
continued participation in the CSRP
is in jeopardy. The recommendation
is to send warning letters to Ivan’s
last known address – one copy via
UPS Express and one copy via U.S.
What happens if ...
Postal Service. Use or refer to the
Noncompliance Warning Letter found
on the intranet: HR/Risk Mgt/OCM >
Human Resources > CSRP. Ivan’s
continued participation in the CSRP
is at the discretion of Angela. Should
Ivan fail to respond, his employment
may be terminated, after receiving
any necessary approvals, by mailing
separation paperwork along with the
Noncompliance Termination Letter.
A similar letter process is available
to employees who fail to return to
work during their summer and winter
breaks. If you have any questions
about the CSRP, contact the personnel
department at 800-284-4882.
Rehiring or Retaining Seasonal Employees
As a reminder, all positions need to be entered in CIMS,
including seasonal rehires and retentions. The posting
must accurately reflect the position and the full- or part-time
status the employee is hired into. For example, if a
part-time front end assistant is entered into CIMS, but
business needs dictate that the employee work in the food
court, a new CIMS posting needs to be entered for
part-time food service assistant. To help ensure all job
postings are entered correctly before new hires and rehires
are processed, implement a workflow plan. Discuss this
plan with management to ensure everyone is aware
of the details.
The integrated leave department runs reports to check the
accuracy of CIMS postings. If your posting is incorrect or
needs editing, contact the integrated leave department at
800-284-4882 for assistance.
Costco U Signon Credentials Update
On February 22, Costco U switched to using My Costco
Account signon credentials. Employees will no longer be
able to access Costco U with their employee number and
birthdate. My Costco Account is the same username and
password used for LAN IDs.
Our goal is to continually streamline the signon process
– simplifying the procedure for employees and increasing
security. Employees who have not signed up for My
Costco Account or don’t remember their password
should visit mycostcoaccount.costco.com. Links to the
site are available on the Costco U homepage and the
Costco.com employee site.
What would you do?
10. April
Hazardous Chemicals: Call 3E at
800-451-8346 for emergencies
only after accessing option STOP
regarding hazardous chemicals.
Spring Hiring: Work with regional
operators to ensure employees who
have been laid off in surrounding
locations are offered a position before
hiring outside applicants.
Re-enrolling for Benefits:
Employees who have regained
their benefits as a result of the last
measurement period, which ended
February 28, will be enrolled in
default coverage on April 1. Access
the Enrollment website or call the
Enrollment Center at 800-541-6205 by
April 30 to make changes.
Inside Costco Today: Environmental
compliance; Costco Employee
Agreement; graduating employees
can submit their information to:
costcotoday.polldaddy.com/s/grads-us.
May
Job Opportunity Binder: External
candidates: Retain only the
interview form and keep indefinitely.
Internal candidates: Retain all
documentation and keep indefinitely.
Springtime Reminder: Remove
gas and gas/oil mixtures from
equipment before delivering to RTV.
Policy available at: Environmental
Services / Hazmat (blue bar) >
SOP’s > Special Handling >
Items Containing Gasoline.
Inside Costco Today: Quality
assurance; Tell Us What You Think
employee survey; Ameriprise.
June
Hurricane Season: Review the
hurricane emergency procedures/
evacuation plan: Green Cross >
Safety Binders > Emergency
Procedures. If a hurricane develops,
additional information can be
found at Green Cross > Disaster
Information > Current Natural
Catastrophes > Hurricane.
Inside Costco Today: Toward the
end of June, look for our Graduates
issue, in which we celebrate
employees earning bachelor’s,
master’s or doctorate degrees.
Planning for the Next 90 DaysHorizons
Safety
Simon
Says!Forklift and EPJ Operator
Recertifications Due in 2016
The policy requiring forklift and EPJ
operators to be recertified every
three years went into effect in 2010;
thus, all forklift and EPJ operators
are scheduled to be recertified in
2016. Be sure trainers take time to
carefully review the communications
regarding changes to the manual.
Forklift & EPJ Program
Certified Forklift Trainers
The safety department recommends
each location have four or five
current certified forklift trainers. If
you have a trainer candidate, or one
whose certification has gone beyond
three years, they should attend one
of Bottom Line Training Services
courses. To find a course, see the
New Forklift Trainer Schedule. If you
have a soon-to-expire or recently
expired trainer, they can take
the Costco U course to recertify.
Courses in your area may come
only once a year. Plan accordingly
for new openings, transfers and
getting the number of trainers to
comply with OSHA’s requirement.
Forklift & EPJ Program > New
Forklift Trainer Schedule
Display Safety
The number of incidents reported
on the sales floor of furniture not
properly secured and falling on
members indicates the need to
place stronger emphasis on display
safety. Test displays before you
walk away to ensure merchandise
and pallets are stable and secure.
Safety Toolbox > Stockers >
Furniture / Exercise Poster
Globally Harmonized System
New changes to OSHA’s Hazard
Communication Standard are
bringing the U.S. into alignment with
the Globally Harmonized System
of Classification and Labeling of
Chemicals, further improving safety
and health protections for U.S.
workers. June 1, 2016, is the date
by which employers must complete
updates to their hazard communication
programs, train employees on new
hazards and update workplace labels
on all containers with chemicals.
Costco’s Hazard Communication
training has been updated to align
with GHS. Updates can be found
in the Period 8 Fiscal Year Safety
Training. Fiscal Year Safety
Training > Period 8 HazCom
Heat Stress
Summertime temperatures can spell
trouble for employees who spend the
majority of their time outside (e.g., cart
handlers or gas station attendants)
or work in areas with elevated
temperatures (e.g., deli or bakery).
Review the heat-related Temperature
Extremes safety training with all
employees. Reminder: In California,
employees working outdoors must
receive the training prior to working in
that environment. Fiscal Year Safety
Training > Period 9 Temp Extremes
