I would come up with a system that actually informs workers of what their productivity targets are and allows them to monitor their progress with accurate data in real time.
I would also not have an automated process for termination, if for no other reason than attrition and retraining are more costly in the long run than underperformance by a fraction of a percent. Particularly given the variables that can affect performance which are out of the employee's control.
Now of course i'm sure most warehouse workers aren't like that but I can't even imagine what managing 125,000 low-skilled employees like that would be like, and i'm sure the turnover is absolutely massive as well.
It's all unicorns and rainbows and posturing until you're the guy who has to actually manage them.
I have to say, you stereotyping all warehouse workers as drug addicts and thieves is not a good look. It says more about you than them.
I'd love to see some of the negative commenters made staff manager of just one busy warehouse for a few months and made responsible for a 500 low skilled workers with no prior systems in place such as these and see what kind of solutions they can come up with on their own that are any better.