Our 2009 Rainmakers navigated through tough times with hard work, innovation, and determination, and still never stopped giving back.
Our Rainmakers of the past six years had the economic winds at their collective backs. Not so our 2009 honorees. The year's 14 Rainmakers faced economic conditions that few had seen before. Yet they never stopped innovating, persevering, and maintaining a positive outlook. These qualities never go out of style, but they shine especially bright when the world around us appears darkest.
Even as they deal with the difficult world of today, our 2009 Rainmakers remain mindful of tomorrow. All have legacies. All understand that the industry will be shaped not so much by them as by the young people who follow in their footsteps. Some have applied their talents toward the greater good, like Jock Menzies, who migrated from managing a successful family business to running a humanitarian aid organization that uses the power of the supply chain to help those in desperate need. Each Rainmaker has his or her own unique story to tell. But they share one common bond: They've made a lasting contribution to the profession.
As in the past, DC VELOCITY selected the 2009 Rainmakers in concert with members of the magazine's Editorial Advisory Board from candidates nominated by readers and Rainmakers from previous years. This year's selections represent many different facets of the profession: academics, practitioners, consultants, and vendors. But as the profiles on the following pages show, their differences are eclipsed byWhatever the talents they bring to the table, they're united by one goal: to advance the practice of supply chain management.
D. Scott Davis
D. Scott Davis is the 10th chairman and CEO in UPS's 102-year history, and the first to depart from the traditional path to the top. All of his predecessors had spent their entire careers with UPS before ascending to the chairmanship. Not so Davis. Prior to joining UPS, he served as the chief financial officer and later, chief executive officer for an Oregon technology company called II Morrow, which UPS acquired in 1986.
From 1991 to 1998, Davis held positions of increasing responsibility at UPS, serving as treasury manager, financial reports and plans manager, and accounting manager. In late 1998, he moved to Overseas Partners Ltd., a Bermuda-based reinsurance company, where he served as CEO before returning to UPS in 2000. He joined the UPS Management Committee in 2001, when he was named CFO. Davis assumed the top posts in January 2008 and has been responsible for leading UPS during one of the most difficult periods in the company's history.
Q: UPS is an operations-driven enterprise and its culture is to promote from within. Yet you are considered more of a finance guy and, unlike other CEOs, you are not a lifer. What was the most challenging aspect in adapting to the company's cultures and traditions?
A: Some people here call me the "new guy" after 22 years. After fulfilling my contract with II Morrow and helping with the transition, I was asked to stay on at UPS. But my inclination, up to that point, had been to follow a more entrepreneurial path, and I had really intended to stay on that track—perhaps go find another startup and help build another small company. I had never really considered joining a large corporation like UPS.
But I saw something in this company that was unique—people who lived up to their promises, a willingness to take risks and to change when change was required, managers who led by example and who took personal ownership in the company's success. And I saw a company with a horizon that really had no limits, that was developing service innovations driven by new technologies, expanding its portfolio of solutions, and staring at untapped global growth opportunities. I wanted to be a part of it.
It wasn't really hard to adapt to that kind of culture and opportunity. I just had to make sure that my efforts and contributions spoke for themselves, because it is a very demanding culture.
Q: This year marks the 10th anniversary of UPS's becoming a public company. Judging by the stock price, it has been a volatile ride. Does the company have any regrets about going public, and what have been the most enduring lessons learned from the transition from a private to a publicly held entity?
A: We are absolutely convinced that going public was the right thing to do. The primary reason at the time was the need to make acquisitions to expand our global footprint. We needed a publicly traded equity to ensure we had the financial capability to execute on that strategy.
But more than that, I believe that being public has made UPS more aggressive, quicker to make tough decisions, leaner, and more competitive. We have an incredible array of capabilities, the fastest-growing international business in the industry, a successful and profitable supply chain business—I do not believe we would have been the same company had we stayed private.
The enduring lesson is whether you are a public or private company, don't lose sight of the long term. We know our shareholders expect us to perform well every quarter, but we also make decisions with the long-term interests of the company in mind.
Q: The last four UPS chairmen and CEOs have put their own stamp of legacy on the company. For John Rogers, it was international growth. For Oz Nelson, it was the building of the IT platform. For Jim Kelly, it was the 1999 IPO that took the company public. For Mike Eskew, it was expanding into areas beyond package delivery to make the company a true full-service transport and logistics provider. What do you see as your imprimatur?
A: That is so foreign to the way we think around here, it is hard for me to talk about a legacy. I can tell you where UPS is headed. We need to be recognized as a solutions company, not merely a transportation company or logistics company that provides a menu of services. UPS will be successful to the extent that our customers view UPS as a provider of solutions that help them succeed.
Q: UPS has long been considered a proxy for the domestic economy because the company alone moves the equivalent of 6 percent of U.S. GDP. Do you see any light at the end of the tunnel, and when do you suppose we will see a turn?
A: UPS is a good concurrent indicator of the economy, not really a leading indicator. But I will share my personal opinion. At the end of 2008, the optimists were calling for an upturn by mid-year and the pessimists were saying end of year. Now the "end of year" people are the optimists, and they're probably right.
Ed Krupka joined Burris Logistics over 30 years ago as a computer programmer. Today, he is CIO and president of information technology for the company, managing a 40- member IT staff. Headquartered in Milford, Del., Burris Logistics specializes in temperature- controlled food warehousing and distribution, and is both a wholesale distributor and a third-party logistics service provider. It operates refrigerated warehouses all along the East Coast.
Q: You've been with Burris Logistics for over three decades. I imagine a lot has changed in IT during that time. Other than the obvious advances in technology, can you share what is different now from when you started at Burris?
A: I think the biggest change is that you no longer focus on only one area at a time. It used to be that IT changes were made just in one area, but now changes have several layers. Today, what you do affects everything else. It is an all-encompassing connection.
Q: During your time at Burris, you've worked on a number of initiatives. What has been the most satisfying and rewarding to you?
A: We developed our own software in house. We started building the platform in the early '90s, and Version 4 was introduced in 2003. That was the most satisfying project, as we had so many pent-up demands for our business that we had to address.
We run two distinct businesses within our organization. We are a wholesale distributor, and we also act as a 3PL service provider. I'm not aware of many companies that operate both of those businesses under the same roof. So the software must support both. It basically consists of our own ERP [enterprise resource planning system] and WMS [warehouse management system], and it ties into our voice systems and provides customers with visibility into our operations. We have also integrated with many of our customers' SAP systems. We continue to enhance and embellish the system as we develop additional interfaces.
Q: What have you been working on lately?
A: We have recently implemented engineered labor standards. Our voice system has been the enabler for that, as it provides real-time communication. We capture data on the performance of our team members and then analyze the information. This provides a real-time performance assessment that we can then compare against the engineered labor standards.
Q: How has the economy affected your business?
A: We, of course, do food distribution. We have been blessed that our business has not taken a huge hit. We still ship both lobster tails and pizzas, but probably more pizzas now.
Q: What advice would you give to a college graduate seeking an IT job in logistics?
A: There are few candidates who will have the luxury of going into a technical job with only technical skills. They will need to know how that technical job fits into the overall operation. Most will need to supplement what they have learned with internships and business courses. They may also have to spend a year working to gain operational experience, such as working in a warehouse. If they are just a technician, they may find that their job will be offshored. It is all about building solutions and not just being a good technician.
Craig Adkins is vice president of services and operations at Zappos.com, an online retailer of shoes and clothing that continues to grow despite the current recession. The company ships as many as 70,000 units a day during peak periods. Adkins is responsible for fulfillment operations, customer service operations, information technology, and computer network systems administration. His background includes 10 years in direct-to-consumer online retail, including the past three years at Zappos.com. He also spent three years in tier-one automotive manufacturing, following a 20-year Navy career. He characterizes himself as a technologist who specializes in operations management.
Q: How did you get into operations and fulfillment after your military career?
A: One of the things I did in the military was electronics. When I retired, I started working in an electronics manufacturing facility in the automotive industry. After about three years, I became plant manager. Then I was recruited by Amazon, which was looking for people with process experience. I went there in 1999 and stayed until 2005, when I transitioned to Zappos.com.
Why has Zappos.com been so successful?
A: We had a great opportunity. We were penetrating a market that didn't exist.
Q: The company has continued to grow despite the current economy. To what do you attribute that success?
A: We attribute it to customer care. Most customers are pretty fanatical because we give them good service. Our call center is beyond world class. Sometimes customers call in and chat for 45 minutes. We have no call resolution times, and we don't up-sell. There are no standard operating procedures. The only way to get in trouble is if you don't treat the customer well. We'll even help a customer shop at another Web site. Doing all those things is what fostered growth. Today, 75 percent of our sales are from repeat customers. In retail, that's invaluable.
Sometimes when I'm interviewed, I'm asked why we haven't grown faster. The answer is that we could have, but we wanted controlled growth. We did not want the customer experience to suffer.
Q: You see yourself as a technologist. What role has technology played in your success?
A: It has been absolutely beneficial. It has brought the cost of fulfillment way down. Our cost per order is half what it was as a percentage of revenue. It is essential to be operationally efficient. On the fulfillment side, the automation we've done has allowed us to fulfill orders quickly, and that's helped amplify the customer experience. If we have a customer's order by midnight, we can have it on the doorstep the next morning.
Q: Zappos has an unusual way of introducing executives to the business. Tell us about that.
A: Everything in the company is aligned. Every executive who joins the company spends the first month in the call center. That gave me a perspective on the customer I would not be able to get otherwise. It was a bit intimidating, but a fantastic experience. I was almost dreading doing it. I had 30 years of experience and was scared to death of talking to the customer. But after a couple of calls, I couldn't wait for the phone to ring.
Q: What do you see as key drivers of the direct-to-consumer business in the future?
A: As technology continues to improve, people will become more confident about placing orders online. That creates greater opportunity. There are still people who don't trust it, but in many ways, it is safer than traditional exchanges.
Then there's the convenience factor. I don't know anyone who has more time. Another thing often overlooked is that the selection online is far greater than in a physical store. A national chain, if it wanted to order something on the fringes—say, a pair of shoes in size 14EEE—it would need 200 pairs. We need one. That's a huge advantage.'
Q: What sorts of innovation are you looking for from providers of technologies that aid your business?
A: We're looking for enhancements to efficiency—ways of doing more with less. That is always going to be important. We never want to sacrifice speed or accuracy. We want those to go up. We want to ensure things are done in a quality fashion.
When Brian Hancock joined Whirlpool Corp. as vice president of supply chain, North America in May 2005, he had no idea of the challenge that awaited him. But it wasn't long before he found out. Within two months of his arrival, he was put in charge of integrating the supply chains of Whirlpool and a company it was about to acquire, Maytag.
Hancock came to Whirlpool from Schneider Logistics Inc., where he served most recently as vice president and general manager. Earlier in his career, Hancock worked for Tredegar Molded Products and Honeywell Corp.
Hancock holds a bachelor's degree in accounting from Brigham Young University and an M.B.A. from Virginia Commonwealth University. He holds a CPA certification and is fluent in Portuguese.
Q: What was your first thought when you were told that Whirlpool was buying Maytag and you would be responsible for integrating the two supply chains?
A: I joined Whirlpool on May 1, 2005. I was pulled into my boss's office 40 days later and told, "We have a summer project for you." So, my first thought was, "I am not going to sleep for three years." And that was about right. But it has been a great opportunity to learn and grow.
Q: One of the big challenges you faced was integrating the two inventories. What did you learn through that process?
A: The big lesson I learned is that if you simplify, you will find cost reductions. That applies not only to inventory but also to order management, manufacturing, transportation management, and product strategies. If you take the complex environment and simplify it, the money will come right after. Simplify, simplify, simplify.
Q: Green has been a big initiative of Whirlpool. Could you explain why that is important to you and your company?
A: Whirlpool has been involved in saving water and energy since the 1970s. It is part of our culture. It fits into my own thoughts as well. As we redesigned the Whirlpool supply chain, we saw opportunities to implement green building and transportation strategies. Personally, I have four daughters. I have the opportunity to show them how what I do now in my job can have effects that last for years. It is something that they will also face in the future. So this was a good thing for my family to go through, too.
Q: The economy has affected the supply chains of every company, and I'm sure that Whirlpool is no exception. What have you done to prepare Whirlpool to weather the economic downturn?
A: Actually, the appliance industry has been in a recessionary time for 13 to 14 quarters, so we've been in it longer than most companies. Our business is closely tied to the housing market. As people move, they buy new appliances. As housing turnover slowed, it had a big impact on our business. So, we had a two-year head start to prepare for what we're facing today. If I had to actually address the situation now, we might not have the money and resources to do it.
Q: If you could take away one lesson from the Whirlpool-Maytag integration, what would it be?
A: I think the one lesson I took away personally was that you have to have a great team around you and a good strategy. Make sure you know where you're going before you head down the road. Whether you are trying to gain operational excellence, become lean, or whatever, make sure you have a good strategy so you can make the tactical decisions needed as you go along. Otherwise, it will cost you. So, make sure you have a really good plan and a great team to execute it. I also recommend chocolate peanut-butter ice cream to help you get through some of the hard days.
Today, Gordon Holder is a vice president at Booz Allen Hamilton Inc., involved in defense logistics initiatives for clients like the Office of Secretary of Defense/Joint Staff, Regional Combatant Commands, Defense Logistics Agency, U.S. Transportation Command, Joint Forces Command, and the military services.
Prior to his career in the private sector, Holder served more than 36 years in the U.S. Navy, retiring as a vice admiral in 2004. He commanded the Military Sealift Command and rose to become the director of logistics, joint staff, Pentagon. What makes Holder special are his contributions to the profession. The 2002/2003 recipient of the National Defense Transportation Association DOD Distinguished Service Award, Holder also received the 2005 National Defense Industrial Association Logistician Emeritus Award.
Holder is a member of the board of directors of the Surface Navy Association of Greater Washington. He is also the vice president of the National Capital Council, U.S. Navy League; chair of the National Defense Industrial Association Logistics Division; and vice chair of the National Defense Transportation Association.
Q: We live in a time of continuing conflict around the world. How do you see military logistics evolving?
A: First, there is a significant need for further development of the joint [across all uniformed services] logistics area and accordingly, joint logisticians. The goal is to enable logisticians to work more efficiently as a team supporting the fighting forces around the world without regard to service origin. The U.S. joint logistician will be a leader in allied and coalition efforts as the world becomes increasingly a global set of relationships.
Second, organizations such as the Defense Logistics Agency and the U.S. Transportation Command are leading the way to ensure that the acquisition, distribution, and return of supplies for the operating forces are managed in a [more] coherent, efficient manner. This effort must continue, and with the help of leaders from all the services [and commercial carriers], the Department of Defense and our nation will reap the rewards.
Q: The Department of Defense spends more money on sustaining weapons systems in the field than it does on designing and procuring them. This challenge is being exacerbated by the continuing demands in Iraq and Afghanistan. Can we afford to maintain the equipment we field?
A: There are significant efforts being undertaken today to align the acquisition and sustainment worlds that design, develop, and deploy the weapons systems our fighting forces need. It's really not a question of whether we can afford to maintain the equipment that we field; rather, it's a question of aligning the acquisition and sustainment sectors across the department to ensure that we create the systems with the total life-cycle point of view.
Q: We continue to be a maritime nation. With the current dialogue in Washington around infrastructure investment, do you think our ports need to be a more prominent part of that discussion?
A: The United States is and will always be a maritime nation. We are dependent on our sea lanes for transportation of commerce, and one of the U.S. Navy's most important roles is to ensure that those sea lanes remain open and free. The current piracy concerns in the Gulf of Aden show how rapidly nations will respond to keep the sea lanes open. Our commerce cannot be held hostage by a group of renegades. Equally important is the need to ensure that our ports are considered part of those very important sea lanes of commerce. It does little good to have ships moving commerce rapidly between ports if port congestion and labor slowdowns prevent the cargoes from efficiently reaching the consumer.
Since 1994, Ann Drake has led one of the more successful third-party logistics operations in the nation, DSC Logistics. But her influence extends far beyond the bounds of her company. She is vice chair of the Business Advisory Council for Northwestern University's Transportation Center, serves on the board of governors for the Metropolitan Planning Council, and took part in the 2007 Brookings Institution's panel, "The Summit for American Prosperity: Washington and Metropolitan Areas Working Together," among other recent activities.
Drake organized a panel on "The Significance of Your Supply Chain" for the annual conference of the Committee of 200, an organization of women executives. She has participated for two years in the Women Business Leaders Summit, which facilitates links between business communities in the United States and the Middle East.
Her career in logistics began when she joined the board of what was then called Dry Storage Corporation, a familyrun firm, after earning her M.B.A. at the Kellogg School of Management at Northwestern University.
Q: Why the involvement in so many infrastructure initiatives?
A: We are used to using the infrastructure, but when asked to think about how it was working, I became interested in learning and doing more. So I've been slowly increasing my involvement over the last five or six years. It has been a real awakening for me about how government works or does not work. I really got excited several years ago when I was asked to be part of a Rockefeller Foundation think tank on American competitiveness through 2050. We studied several areas, including what kind of infrastructure we would need for goods and people. It's a goal in my life to think about the future and then back into the present and decide what to do.
I've been involved for the last two years with the Brookings Institution on the "metropolitan nation." We are a nation of metropolitan areas today. That's where the growth is. That's where the intellectual capital is. We're rethinking infrastructure funding and planning, where state boundaries don't have much to do with anything. Brookings has produced a great paper on transportation policy. It's a whole new view of America and how we fit into the global marketplace—how we will live, work, get goods around, and make sure we're green. The list is pretty daunting. Those of us who ship goods realize there has to be a flexible system and we have to put a lot of money into it.
Q: You have also been active in encouraging women to look at the supply chain for careers.
A: I encourage young women to study and major in it. I think the supply chain is the business of the 21st century— that's how important I think it is. Supply chain executives are running companies. There's a lot of opportunity for women.
It is true that advancement for women has been very slow. But given the importance of collaboration, leadership, and vision—all things that women are pretty good at—I think supply chain management is a great place for women, and I'm encouraged to see more and more women involved.
Q: Why do you see supply chains as so important?
A: There are plenty of opportunities to improve supply chains. Manufacturing we've got well honed. But the supply chain is in many ways in its infancy. There are so many ways to improve supply chain responsiveness, so much opportunity to do it better and become integrated with everything a company does. It is global in scope. It is as important as it gets. It is all about change and change management, upgrading people and processes, and collaboration.
Q: With the changes you're describing, how will the role of companies like yours evolve?
A: More and more, what we provide is knowledge management as well as services. More of our work is at customers' headquarters, planning for long-term challenges and how to meet them. The managing of partnerships, putting together value chains—we'll be doing more of that.
Q: So what is the skill set needed for people entering the business?
A: We are always looking for sharp, creative people who are interested in change and doing things differently. You need a background in the disciplines, but you also have to be open-minded, change-oriented, and able to see the big picture. You need to think in new directions.
Finding those people is hard—people who are highly intelligent, flexible in their thinking, and innovative. It is a full-time job for my company.
Susumu Kitadai, president of Sony Supply Chain Solutions Americas, is not your typical logistics executive. For most of his 27 years with the electronics giant, he has held sales and marketing positions. His experience in Asian, European, and North American markets, together with his deep understanding of the customer's point of view, has helped him bring a customerfocused perspective to Sony's supply chain organization.
Kitadai graduated from the University of Pennsylvania's Wharton School of Business with an M.B.A. in 1994. He earned his bachelor's degree, specializing in international law, from International Christian University in Tokyo in 1982.
Q: What is the mission of Sony Supply Chain Solutions Americas?
A: Our territory spans the United States, Canada, and all of Latin America. We are part of a global Sony Supply Chain Solutions network that is responsible for manufacturing support—logistics for raw materials, regional and domestic distribution for finished goods, and distribution of repair parts globally. We are also responsible for fulfillment for Sony Style, our direct-to-consumer retail Web site.
Q: What are some of the logistics and supply chain challenges Sony faces in the Americas?
A: Due to various economic and product factors, there are cyclical trends concerning what is an optimal configuration for a distribution network. We are now reviewing what is optimal for us in North and South America, taking into consideration Sony's total global business model. Brazil is our highest-priority market in Latin America. Under Brazilian regulations, most consumer electronic products we sell there must be manufactured there. We have a manufacturing plant in Manaus. Supporting that operation and making sure we get product from the middle of the Amazon to markets like São Paulo is challenging. There is limited infrastructure. Most of the time, we have to ship by boat to the coast, and then go by truck or all water. It's daunting, and that situation also is undergoing an optimization review.
Q: What are some of the changes you have brought to Sony's logistics operations, and what results have they achieved?
A: We strive to deliver the most competitive supply chain solutions to all Sony groups in the Americas. We started benchmarking and gauging performance levels and implementing key performance indicators (KPIs) for each of our functional areas.
We also made sure we had the most objective criteria and management tools in place. ISO 9000 certification is an effective quality tool, and ISO 14000 is very meaningful, not just because it's about being green but also from a cost-saving perspective. We also became ISO 28000 certified, so we have an internal mechanism in place to assure that we keep up with the highest standards of C-TPAT [the U.S. Customs-Trade Partnership Against Terrorism]. This is important not just for its original purpose but also because we sometimes are manufacturing and distributing in highrisk areas where theft or piracy is likely.
Q: How has your background in strategic planning and marketing helped you lead the supply chain organization?
A: Interestingly, when I joined the company 27 years ago, everyone assigned to international sales and marketing had to go through a one-year logistics orientation and training. I never imagined it would help me so much 25 years later. I've been assigned to Germany, Singapore, and Hong Kong and have been in charge of marketing and sales in each region. I was president of the Hong Kong sales company, so I have an understanding of clients' requirements as well as the importance of on-time delivery to ensure the highest in-stock rate and of shortening overall lead time to bring down costs. These are very fundamental performance indicators, and I was the one demanding it on the other side. I know that excelling in these areas does make a difference in terms of enhancing total brand perception by end users at the stores.
John T. (Jock) Menzies III
John T. (Jock) Menzies III has served as chairman of the Baltimore-based Terminal Corp. since 1984, when he and his brother Scott purchased the now 116- year-old logistics company from their father and uncle. During his tenure, Terminal has grown tenfold, with current annual sales of over $30 million and almost 2 million square feet of warehouse space in and around the Baltimore/Washington area.
These days, Menzies is becoming better known for his second hat. He is chairman of the American Logistics Aid Network (ALAN), which was formed after Hurricane Katrina in 2005 to help channel resources from members of various professional organizations to approved agencies providing relief during a time of crisis.
Q: You spent virtually your entire career in the corporate world. How did you get interested in the nonprofit sector, and especially this type of work?
A: I chaired the Central Maryland Chapter of the Red Cross when Hurricane Isabel came through Maryland in 2005. The Red Cross operations center was located in our building's vacant office space. Each day, I was asked to help with supply chain-related resources. The items included dry and freezer warehouse space, dry van and reefer trailers, lift trucks, dock plates, warehouse staff, etc. I then contacted some of the supply chain associations to help play a role in humanitarian relief.
After Katrina, everyone was interested in improving disaster response. I spent a week on the Gulf Coast reviewing distribution operations. Herb Johnson, a former supply chain executive with CVS and past CSCMP chair, spent three weeks on the Gulf Coast in what he called a "Quonset hut with 300 of my new best friends." Herb and I gave a report on the potential for our industry at the CSCMP conference about 45 days after Katrina.
Q: ALAN and its members have said they do not intend to replace any existing contracts or relationships the relief groups have in place. Yet these relief groups are known to be somewhat bureaucratic and protective of their relationships and their donor lists. Is there a problem balancing the two?
A: The agencies supporting disaster relief, known as VOADs (Voluntary Organizations Active in Disaster), provide the framework and foot soldiers for relief. They also represent established bureaucracies. These groups sometimes compete, and they are very protective of their sponsor relationships. But they collaborate on major events, and when a crisis hits, they come together in a practiced choreography. Much of their success is built on trusted relationships both within and between these organizations.
All VOADs have established relationships that help address relief needs. However, a disaster always reveals unmet needs. ALAN seeks to open a window on those needs and a network capable of addressing them. ALAN is neutral in that it seeks only to offer individuals and institutions the opportunity to see what is needed, and [the participants] then choose if it is something they might wish to do.
Q: While ALAN has responded to a certain level of need, it has not been tested in a large-scale disaster like Katrina or the 2004 Asian tsunami. Do you think ALAN is ready to respond to such a massive catastrophe?
A: No. And that answer applies to ALAN and any group or institution. Preparedness and response is a pyramid. The first level of responsibility is individual so far as meeting one's own needs for the likely 72 hours it will take for effective mass relief to begin. After that, there are institutional responsibilities—corporate, local government, state government, and VOAD responsibilities taken on by charter or mission. In the United States, FEMA and other federal government agencies step in only if they are requested or if state resources are overwhelmed.
Even with a broad and functioning network there will be gaps. [The consulting firm] Booz & Co. describes a "mega-community" with entities coming together across sectors and organizations to address mutual needs. ALAN is a gateway for VOAD needs that can align with a group having the potential to help address those needs. The portal technology is scalable, so in that area we are "ready." But it must be supported by a human network that examines and thoughtfully considers posted needs. That effort continues. However, a foundation of 13 associations with the opportunity to touch perhaps 10,000 businesses and 50,000 people is a great place to start.
Q: What are the challenges supply chain managers face in gearing up when disaster strikes? What are the areas the industry needs to work on in order to be better prepared?
A: Visibility of needs and of the resources available to the distressed area is a huge issue. We have sat at the table with government agencies and some of the large corporations that have engaged in prior relief efforts. The call always comes out to "show us what you are sending in so we send what you are not." We need to eliminate or minimize organizational silos, and build communications standards to enable a shared system.
A: Many companies would like to get involved in humanitarian efforts but are unsure how to go about it. What advice would you give them?
A: The Chinese proverb "dig a well before you are thirsty" applies. It is extremely difficult for an individual or organization to get involved in the relief effort when it is in process. VOADs are largely unable to assimilate new volunteers as their resources are stretched in meeting the obligations they take on. They would consider it a risk to their "brand" to send out the newly acquired individual.
Ideally, a business will engage with the voluntary disaster relief organizations that are active in its area. The Web site www.emergencymanagement.org/states allows visitors to click through to state emergency management offices that offer resources and connections to disaster support opportunities. The site www.ready.gov offers a good deal of useful information.
In 2006, senior executives at Intel Corp. realized there was a problem with Intel's career ladders. Although supply chain expertise was becoming increasingly critical to the company's success, the semiconductor maker lacked a formal career path for these professionals. If it hoped to recruit and retain the type of high-powered supply chain talent it wanted, Intel would need to remedy that. So it turned to 21-year veteran James R. Kellso to head up development of a program.
Kellso and his team created two new designations: supply chain master and senior supply chain master. Employees can earn these designations by demonstrating depth of knowledge in their area of expertise, internal influence within the company, external influence in the industry at large, and abilities as a role model/mentor. Currently, there are more than 20 supply chain masters at Intel. But Kellso is the only senior supply chain master.
Once the Intel program was in place, Kellso began looking at ways to expand the concept to the entire supply chain profession. As part of that effort, he chaired an initiative to create a designation program similar to Intel's through the Council of Supply Chain Management Professionals (CSCMP). And he hasn't stopped there. Kellso has been a tireless advocate for creating these types of professional designations, promoting the idea at conferences, at educational events, and in trade journals.
Q: Could you describe briefly the new career path that you helped establish at Intel?
A: The supply chain master is a step in a new career ladder that allows a person to progress from supply chain analyst to senior analyst to supply chain master to senior supply chain master. A person in the supply chain field can continue to develop his or her technical and business skills, and move upward without having to shift to a managerial job ladder.
Q: What types of projects do supply chain masters at Intel get to work on?
A: We have created a community of practice of supply chain masters. The community is often sought out as the first group to get involved in highly strategic projects. We recently completed the development of a concept for a totally new supply chain for Intel's Atom processors and sought out and utilized a great number of our supply chain masters on that study.
Q: Why did you feel it was important to establish such a career path?
A: We have a technical job ladder that leads upward to principal engineer and Intel Fellow. However, we have a great number of employees who are not engineers or whose skills do not fit into the technical job ladder. In the past, despite their passion for supply chain management, the only way in which these people could be promoted was to shift to a management job ladder. The creation of the supply chain master recognition and job ladder provides an avenue for our people to grow and expand their skills in the area in which they want to work and we need them to excel in.
Q: Where can companies go for information on how to set up a similar program?
A: The Council of Supply Chain Management Professionals has adopted a professional recognition program similar to Intel's. All of the materials necessary to establish a program for one's own company can be found on the CSCMP Web site.
Q: How did you yourself become involved in supply chain management? What continues to excite you about the field?
A: A I spent 14 years as an industrial engineering consultant [before joining Intel]. During that time, I learned how to optimize and automate the internal operations of manufacturing facilities. It was a natural progression to take those skills and apply them to the operations that connect those manufacturing operations: the total supply chain. I continue to be excited about this field—the problems are significant and difficult to solve, and the impact to the corporation is huge. It can be the difference between success and failure for a company.
Q: If you could give one piece of advice to a young person considering a career in supply chain management, what would it be?
A: Find your passion and operate there. I have a daughter who dances [a lot]. When I asked her one day if she was dancing too much, she looked at me as if I had grown a third eye and said: "But Dad, I'm only who I really am when I'm dancing." That made me ponder what it is I do that makes me feel that way. Each of us needs to find that thing which creates passion in our lives, makes us feel like who we really are, and do that. First, find your passion, and then find job opportunities that allow you to operate in that passion.
Douglas M. Lambert
Professor Douglas M. Lambert has earned a reputation as both a supply chain educator and an author. He is currently the Raymond E. Mason Chair in Trans - portation and Logistics and director of the Global Supply Chain Forum in The Ohio State University's Fisher College of Business. He's also served as a faculty member for more than 500 executive development programs offered in locations around the world.
Besides teaching, he has written books on supply chain management. He edited the text Supply Chain Management: Processes, Partnerships, Performance, now in its third edition, and wrote The Development of an Inventory Costing Methodology, The Distribution Channels Decision, and The Product Abandonment Decision. He is co-author of Management in Marketing Channels, Fundamentals of Logistics Management, and Strategic Logistics Management. In 1986, Dr. Lambert received the CSCMP (CLM) Distinguished Service Award for his contributions to the logistics management field.
Q: How did you end up in academia?
A: A professor whom I admired asked me to work with him writing cases for a year. That led to an M.B.A. and a two-year teaching appointment at the Ivey School in Ontario, Canada, followed by a Ph.D. at Ohio State University. I am fortunate to have picked a career that has been extraordinarily enjoyable and rewarding.
Q: Describe your current research focus.
A: At Fisher College of Business, we have a holistic view of supply chain management. In our view, the supply chain is a network of companies, and a network of companies cannot be managed with fewer functions than one company. We believe that supply chain management involves the implementation of eight crossfunctional, cross-firm business processes and that every business function needs to be represented on these cross-functional teams. We have been working on this supply chain management framework since the Global Supply Chain Forum was founded in 1992, and I continue to work with Forum companies on implementation of the framework.
Q: What's your greatest personal accomplishment to date in the field of supply chain and logistics?
A: It's been establishing the Global Supply Chain Forum. It has resulted in the development, over 16 years of research, of a cross-functional, cross-firm framework for managing relationships with key customers and suppliers in the supply chain. In 2008, we published the third edition of Supply Chain Management: Processes, Partnerships, Performance, which is based on this research. The book is used for undergraduate and masters courses at Ohio State University and at other universities around the world, as well as week-long executive development programs offered in North and South America, Europe, Asia, and Australasia.
Q: How can colleges and universities foster a closer relationship with supply chain practitioners?
A: Collaborate on research that solves business problems. It leads to the development of materials for degree programs and executive programs, and it provides value to industry.
Q: What courses are essential for an individual going into the supply chain profession today?
A: They should take courses on basic business functions such as accounting, finance, marketing, operations, purchasing, human resources, and logistics as well as integrative course work in supply chain management.
Q: What advice would you offer a young person considering a career in logistics or supply chain?
A: I always tell students to find a job they will enjoy. If you have fun on the job, you will put forth the effort. If you apply yourself, the rest is taken care of. If you have fun, success will follow.
Q: If you could return to school as a student for a day, what's the one course you would take?
A: Spanish. Unfortunately, in all my trips to Latin America, I haven't learned it, so probably a one-day course wouldn't be enough to improve my skills.
Angel L. Mendez
Angel L. Mendez, senior vice president of customer value chain management at Cisco Systems Inc., was instrumental in setting up his company's risk management program to handle disruptions. In particular, he helped develop the company's "Resiliency Index," which measures the ability to bounce back quickly from a supply chain disruption.
Mendez joined Cisco in 2005 after working for such companies as General Electric, Allied Signal, Citigroup, and Gateway. He currently leads a global organization that provides customers with a total quality experience spanning collaborative planning, product design, manufacturing, product quality, order management, delivery, and customer service.
Q: How did you end up in the supply chain profession?
A: I studied electrical engineering in college and was contemplating a design engineering career. Then, my last summer in college, I was lucky enough to get an internship at a Medtronic pacemaker factory outside of San Juan, Puerto Rico. That's when I realized I didn't want to be in a lab. I wanted to be making stuff. After college, I was recruited into GE's manufacturing management program, and I spent my first working years running manufacturing facilities, operations, and logistics in a variety of places.
Q: What's your greatest personal accomplishment to date in the supply chain field?
A: I'd say it's the transition we've driven at Cisco, which has gone from an organization focused on manufacturing excellence to one focused on excellence in managing an extended supply chain to one that's translating the many different kinds of innovation coming from Cisco into value. Supply chain at Cisco is no longer seen as a cost center but as a key innovation driver, contributing to Cisco's top-line growth.
Q: Can you describe Cisco's Resiliency Index and why it was developed?
A: Our Resiliency Index is a measure of our ability to recover the revenue produced by a product after the supply chain is interrupted by an event. It measures how quickly we're able to restore the flow of that product to its pre-event status. We use the metric of time to recover, or TTR.
We had to invent the index because we weren't able to find any pre-existing standards or metrics that met our needs. The business driver was to have a sense of priority for our risk management program. Not all products are created equal, and not all products have the same time to recovery.
The index is applied at the business unit level, helping us understand the degree of resiliency for the business unit's specific products and the corresponding supply chains. A number of factors are considered, including the time needed for manufacturing, testing, and component sourcing to recover after a disruption, and whether we have only one or multiple sources for any components.
With the Resiliency Index, we're able to measure the current state of resiliency—and address early any areas needing improvement. It also gives us an easy and intuitive way to report supply chain resiliency to our top management, as well as a framework for assigning priorities and making investment decisions.
Q: What's the biggest challenge that supply chain professionals face today?
A: Dealing with the disruptive effects of the economy on a worldwide basis. No one is immune. The downturn will have lasting effects on many industries. In response to the economic challenges, we're doing more than ever to design out rigidity from our supply chain: eliminating nodes, trying to get fewer touches, and finding second sources for suppliers. Cisco has invested in having a strong supply chain risk radar and mitigation system, so we have better visibility into where we're headed. We're also working more closely than ever with customers and suppliers to spot trends early so we can optimize how we react.
Alex Miller is the William B. Stokely Chair of Management and associate dean for executive education at the University of Tennessee, Knoxville. He oversees all executive education courses, including five executive M.B.A. programs, the fulltime M.B.A. program, and over 30 nondegree and custom courses, as well as a research budget of approximately $14 million. Miller is also the author of more than 30 journal articles and the leading textbook Strategic Management.
But what makes Miller a Rainmaker is his legacy of creation, the institutions and initiatives that seem to sprout up around him. According to U.S. News and World Report, the University of Tennessee's program ranks as one of the top 10 programs in supply chain and logistics, and Miller is a major part of that. He was also instrumental in the creation of four successful executive M.B.A. programs at the University of Tennessee, including UT's Aerospace Executive M.B.A. program, the only program of its kind in the United States. Miller also played a significant role in developing UT's National Defense Business Institute, the first university-based institute focused on helping the Department of Defense with its acquisition challenges from an integrated life-cycle perspective.
Miller is at the nexus of a number of productive teaching and research partnerships with the U.S. Air Force, the Defense Acquisition University, and several internationally recognized non-U.S. business schools. Could there be a new international supply chain M.B.A. program coming? Stay tuned.
Q: What challenges do you see facing the next generation of supply chain leaders?
A: Of the long list of challenges, I see two that are gamechangers. The first is the proliferation and globalization of supply chains in the face of national and international security concerns. The push toward globalization is the unstoppable force that is colliding with the immovable object of nations' demand for security. If we don't solve this dilemma, we all lose.
The second is the shift in organizations' outsourcing strategies from being focused on effort-based contracting to performancebased contracting. Smarter ways to outsource materials and services offer tremendous opportunities for step-function improvement in supply chain performance.
Q: The 21st century is a different world from what we knew even a decade ago. What challenges do you see facing academic institutions, and how must they evolve to stay relevant?
A: Academic institutions are just like rivals in any competitive market. To remain relevant, we must improve on the dimensions that matter most to customers.
The challenges I see are twofold: what we deliver and how we deliver it. Content must continue to evolve. The content we deliver must reflect the realities of a changing economy, globalization, and advancing technologies. How we deliver the content is equally important. New delivery processes must take advantage of emerging technologies (social networking, podcasts, blogs, and so on) and make learning more convenient and efficient for students.
Q: In addition to your academic endeavors, you are a big part of the family business, the Lick Skillet Cattle Co., and were voted Outstanding Cattleman of the Year by the Tennessee Cattlemen's Association. In your "spare time," you are an ultra-endurance bicyclist, pilot, and sailor. Any advice for the rest of us?
A: What works best for me is a one-two punch. First, invest heavily in building a great team. Second, leverage that team by never doing what you can delegate.
Greg Johnson has spent nearly all his career in the distribution side of the automotive aftermarket business. He started in 1982 as a part-timer doing picking and packing in a distribution center for what was then Mid-State Automotive Distributors. After college, he took a position as retail systems manager for the company, working his way up to director of information systems in 1997.
He joined O'Reilly Automotive as WMS systems manager when that company acquired Mid-State in 2001, but after six months, he moved back into operations at the request of the company's CEO. Today, he is senior vice president of distribution operations, overseeing the fast-growing company's distribution network. The company operates more than 3,300 retail stores and also serves thousands of auto maintenance and repair shops. It currently has 19 distribution centers, with more in the works.
Johnson has spent much of the past year integrating the distribution operations of CSK Auto, a large automotive aftermarket retailer acquired in mid-2008, into O'Reilly's network.
Q: How has your background in information systems served you in running distribution operations?
A: It has been a great benefit. I have a good knowledge of systems and networking, and I'm able to stay abreast of the evolution of both technology and supply chain best practices. One example of how we have integrated technology with operational best practices would be through voice-directed picking. At Mid-State, we used RF [radio frequency- directed] picking, and at O'Reilly, we started down the road of developing and creating specs for that. However, I put the brakes on that project because by that time, voice had matured enough to be considered a viable alternative. We spent several months researching voice, running pilots, and conducting head-to-head vendor evaluations before selecting the Vocollect system. It's one of the several ways my technology background has helped.
Q: O'Reilly has grown quickly, most recently with the CSK acquisition. Tell us about the integration process.
A: Last year, we planned 220 new store locations but cut that back to 150 after the acquisition. Previous acquisitions have had distribution models similar to ours. CSK deployed more of a retail model, distributing on a weekly basis. What we have had to do is institute our distribution model, which is a daily service model. We started work early last year to figure out where we needed distribution centers, what our transportation requirements would be, and what kind of total budget we'd need.
Q: How is the O'Reilly business model different from a pure retail operation?
A: We operate under a dual market strategy, which means that we service both retail (do-it-yourself) and wholesale (do-it-for-me) customers. We compete with the aftermarket retailers and have attractive storefronts. That's about 50 percent of our business. We offer daily replenishment to our stores. Customers can order a part by 5:30 and we will have it to our stores the following morning.
We also cater to the professional installers, and they have very high demands. If they have a car up on the rack and need a part, they want to be confident we'll get them the part the next morning. We see growth in the CSK market by getting buy-in from the professional installer base. To do that, we have to implement the service model in advance. That's what we're working on.
Q: You have a technology background: What role does technology play in the success of your distribution organization?
A: Technology projects have contributed in different ways. We are a very committee-driven company. We don't want to make process or system changes without buyin from the people who know the functions best, the people who do the job every day. To ensure that we are identifying true best practices and implementing necessary systems changes to support them, we have established five task forces to focus on key functional business areas. These task forces consist of representatives from both the corporate office and our distribution centers. We are constantly evaluating how we can better utilize technology to improve our operations.
Q: Beyond CSK, what strategic supply chain initiatives do you have in store?
A: We formed a supply chain committee three years ago to make sure we are addressing significant opportunities. Within distribution operations, we have several projects that we plan to roll out over the next 24 months. These projects will enable us to continue to improve service to our customers while reducing costs throughout our supply chain.
Shekar Natarajan exemplifies the new generation of supply chain managers. The director of supply chain at Pepsi Bottling Co. is young, technically savvy, and eager to use technology and analysis to improve supply chain performance. Natarajan has racked up a considerable list of accomplishments and recognitions in just a few years. Rather than take the credit, he cites the guidance of mentors as being instrumental in his success.
Q: How did you become involved in logistics and supply chain management?
A: I received my bachelor's degree in mechanical engineering in India in 2001. I came to the United States and received my master's in industrial engineering from Georgia Tech.
Having done research in micro electromechanics, I had not planned to pursue a supply chain career. Harvey Donaldson, the executive director of Georgia Tech's professional program, invited me to attend supply chain professional courses, where I met some of the best thinkers in the field: Lee Hales (my mentor), Ed Frazelle, Dick Ward (a great influence), John Hill, Don Ratliff, and others. Lee helped me to tie together my education and professional learning to match the supply chain industry's requirements. He and I still joke that he converted me from an electronics geek to a supply chain professional.
Q: What are your responsibilities at The Pepsi Bottling Group?
A:I am the director of supply chain. My primary responsibilities include infrastructure strategy and planning, which comprises distribution network planning, optimization, and automation; capacity planning; facility planning; simulation; and storage mode selection and design. It also includes inventory management and systems, and supply chain execution systems. I am helping to coordinate an initiative that crosses all of these responsibilities. It's a transformational project that is focused on ROIC (return on invested capital), increasing storage utilization, and effective work management.
Q: What do you like best about your work?
A: I'm fortunate to be working for PBG. The top leadership's energy, passion, and commitment are evident in every action they take, and that cascades from top to bottom. Our worldwide vice president of supply chain is a visionary who constantly challenges our thinking and the way we operate, and encourages "out of the box" thinking. My boss, the vice president of logistics and transportation, is a superb thinker and a great leader. I am also blessed to work with a team of A+ players with a great blend of intellect, industry experience, history at Pepsi, and diversity.
Q: You've collaborated with the consulting firm Richard Muther & Associates on a book and now are working on another with Muther. What are the books about?
A: I worked with Lee Hales on Simplified Systematic Network Planning. Lee has great knowledge of how to apply the formulation of a process to a subject area. I am also working with Mr. Muther on Planning by Design. The book is based on his experience, which spans over 2,000 projects. The thinking is revolutionary. It focuses on a predesigned, orderly way of thinking about a project in any subject area. It defines a repeatable methodology for speeding up project planning. With a "planning by design" working model, the planner has a comprehensive planning structure that can be expressed in the terms and techniques of the specific project at hand. Just as you don't go from strategy to action planning without defining tactics, you cannot jump from a general framework to a specific project without building a working model bridging the two.
Q: Do you have any advice for other young supply chain professionals?
A: To be successful in supply chain management, as in any other profession, you need three "Es": education, experience, and exposure. Education provides the basic qualifications for entry (but it should never stop). Experience is the number of mistakes you have made and how you have learned from them. Exposure is the ability to put yourself in the right place, at the right time, with the right people.
Continually focus on where you stand today and where you want to go, and build a plan to work through the gaps. Assimilate all you can about a subject area and organize that knowledge into its hard (tangible), soft (process), and sensitive (personnel) characteristics. It is always easy to come up with a tangible solution that is very expensive, but sometimes you need to step back and look at a problem in terms of its process and personnel characteristics in order to derive the most cost-effective solution.
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