Some measure success by titles, salaries, or richly appointed offices. Others use a very different type of yardstick. Consider the eight professionals selected as our 2007 Rainmakers, for example. Asked about their proudest professional accomplishments to date, not a one responded with a lengthy recital of awards or career triumphs. They talked instead about the satisfaction they've gained from working with students, helping develop breakthrough software, or working to promote collaboration among supply chain partners. For them, success means nothing less than making a lasting contribution to the profession.
As in the past, DC VELOCITY selected the 2007 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 by their similarities. Whatever the talents they bring to the table, they're united by a common goal: to advance the practice of supply chain management.
Larry Lapide
Larry Lapide, Ph.D., is the director of demand management research programs at the Massachusetts Institute of Technology's Center for Transportation and Logistics (CTL), where he helped launch the university's Supply Chain 2020 Project. He has experience as a consultant, a high-tech manager, and a software market analyst. He has worked at AMR Research, Accenture, and Data General and holds a Ph.D. in organizational research from the University of Pennsylvania's Wharton School of Business.
Q: Describe your current role in your organization.
A: I conduct and analyze business research on demand management, strategy alignment, and supply chain management.
Q: What are some of the biggest changes you've seen in the typical logistics professional's job over the past five years?
A: Many supply chain and logistics professionals have had to travel overseas more often in support of the increasing use of outsourced manufacturing and offshore sourcing. In addition, higher oil prices have forced them to focus on energy efficiency, especially with regard to holding down their transportation costs.
Q: What do you consider to be your greatest professional accomplishment in the logistics field to date?
A: Being an integral part in the evolution of supply chain technology from around late 1997 to 2004. During my tenure as a supply chain analyst at AMR Research, there were a lot of startups, and the software application market grew to hundreds of software providers. I advised these providers, their user-customers, their consulting partners, and their investors, helping to shape the solutions and their use in enabling supply chain process innovation.
Q: What do you consider to be the biggest obstacle, moving forward, to greater supply chain optimization?
A: The greatest obstacle to optimization is the increasing complexity and uncertainty being faced by supply chain professionals. This is being driven by mergers and acquisitions, the globalization of supply, global marketing, worldwide competition, shortening product life cycles, and SKU proliferation. It is difficult to optimize very complex supply chains with increased uncertainty. However, this is a two-edged sword, since this also represents an opportunity for competitive advantage. Those companies that can optimize their complex and uncertain supply chains will be the big winners in the market.
Q: Do you expect to see more supply chain and logistics professionals promoted to major executive posts like CEO? If so, why?
A: I think more so than in the past, given that many companies now recognize that supply chain management (SCM) is more than just backroom operations, and that it can be leveraged for competitive advantage. However, probably no more than supply chain's fair share among managers from other functional disciplines such as sales, marketing, R&D, legal, and finance.
Q: Do you believe RFID technology will have a significant impact on supply chain operations? If so, how and why?
A: Yes in the long run, because there are a lot of potential opportunities for its use. Supply chain visibility will be the main driver of the significant impact as managers will always want to know where their goods and assets are, and how their supply chains are performing. The biggest issue right now is figuring out what they are going to do with all the information gathered by the technology and determining where there is a good cost-benefit story in leveraging it. The growth in the use of RFID will take place over decades, not years. As in the early days of the bar code, we don't yet know all the possible uses.
Q: How do you personally define the term "supply chain management" as it relates to logistics operations?
A: Supply chain management involves the coordination and management of goods as they move from raw material suppliers to manufacturers and distributors until they get to the end user. I basically adhere to the Council of Supply Chain Management Professionals' definition. SCM is cross-functional in nature, while logistics is viewed as more functionally oriented, largely dealing with transportation, warehousing, and inventory management.
Q: What, if any, changes are you and your colleagues making to your curriculum to reflect new supply chain and logistics best practices?
A: Since SCM involves coordination among functional areas, we've added courses on management, leadership, and presentation skills. Students need to go out in the world and sell their innovative ideas, as well as succeed in getting various functional managers to align and integrate their operations toward the betterment of the company.
Q: Are you seeing more "talent" come into college majoring in the logistics and supply chain areas? If so, do you think this trend will continue and why?
A: Yes, because it is not backroom operations, as was the view in the past.Hence, there is more potential for career growth both within SCM as well as throughout a company.
Russell Meller
Russell D. Meller, Ph.D., is the Hefley Professor of Logistics and Entrepreneurship in the Industrial Engineering Department at the University of Arkansas. His teaching and research expertise are in logistics at the internal or facility level, focusing on the activities that take place "within the four walls" of a company's distribution centers or warehouses.
Q: Describe your current role in your organization.
A: I teach and perform research in facility logistics, which is defined as logistics at the facility level. I also serve as director of the Center for Engineering Logistics and Distribution (CELDi). As an industry-university cooperative research center, CELDi is co-sponsored by over 30 member organizations. The National Science Foundation also provides a base level of overhead support. My other main role is as the deputy director for the Center on Innovation in Healthcare Logistics, a research center recently created by Wal-Mart Stores and BlueCross/BlueShield to transfer best practices from the consumer products supply chain to the health-care supply chain.
Q: How has your day-to-day job changed in the past five years?
A: Personally, I have transitioned to significant leadership roles in research centers. This has impacted me since I now spend less time in the classroom and less time actually doing the research. Instead, I now lead recruiting and retention efforts for the research centers that I am involved with. I enjoy the variety of activities that I am engaged in.
Q: What do you consider to be your greatest professional accomplishment in the logistics field to date?
A: Although I am excited about my research, especially my latest work on new, innovative aisle designs for warehouses, my greatest satisfaction has come from working with students. And I'm very proud of the fact that, for four years in a row, I have mentored the winning team in the national material handling system design competition sponsored by the College-Industry Council on Material Handling Education,which is part of the Material Handling Industry of America.
Q: What do you consider to be the biggest obstacles,moving forward, to greater supply chain optimization?
A: There are three obstacles that concern me. The first is the continued lack of worldwide standards that would make supply chain hardware components truly "plug-andplay." Second is the lack of an integrated representation and model of supply chains that would allow us to truly optimize a supply chain with integrated components. Third is the lack of research support for faculty working in facility logistics. The latter has a direct effect on the future supply of students and faculty to support supply chain optimization.
Q: Do you expect to see more supply chain and logistics professionals promoted to major executive posts like CEO? If so, why?
A: This is certainly possible due to the increased attention given to these divisions of corporations. I also see the creation of more companies that are founded on the basis of supply chain and logistics if the trend to outsource these activities continues. These companies will likely be led by supply chain and logistics professionals, at least initially. But, in some sense, I hope that our community is successful in raising the overall quality of these operations to the point that supply chain excellence is no longer much of a differentiating factor since all companies will do it so well.
Q: Do you believe RFID technology will have a significant impact on supply chain operations? If so, how and why?
A: With increased information comes increased opportunity. And since RFID technology has already shown its capability in providing data that can lead to valuable information for supply chain operations, then yes, I do believe the impact will be significant. But that doesn't mean that we should think of RFID as the end-all application. It is but one step along the journey toward a future of pervasive computing.
Q: What, if any, changes are you making to your college curriculum to reflect new supply chain and logistics best practices?
A: Academics are constantly evaluating curricula with respect to changes in best practices, and logistics is no exception. The obvious changes are related to the emergence of RFID as an enabling technology in the consumer products supply chain. I cannot imagine a logistics course that doesn't spend some amount of time on what RFID is and how it can be justified in logistics operations. But I also see changes to curricula related to other emerging topics, like sustainability. Our students are very aware of the changes in global supply chains and trends to improve them. It is also important to note that traditional material handling courses are being phased out in most industrial engineering programs. I hope that some of this material is ultimately incorporated into logistics courses since, as we know, material handling system design is the backbone of logistics operations at the facility level.
Q: Are you seeing more "talent" come into college majoring in the logistics and supply chain areas? If so, will this trend continue and why?
A: For my field, this is a complicated question. The best way to answer that, I think, is in terms of how these topics are viewed by students, faculty, and administrators in engineering colleges. By most measures, logistics continues to be viewed as an increasingly important topic, with expanded course offerings and a realization that the distribution of goods to domestic customers is one of the few sectors of our economy that cannot be outsourced overseas. And in general, many students are more interested in the service economy as opposed to the traditional manufacturing- based economy. So, yes, students, faculty, and administrators view logistics and supply chain more favorably now than they did 10 years ago. I am confident this trend will continue as logistics is recognized as a very important component of an industrial engineer's education.
Jack Kuchta
Jack Kuchta is executive vice president of Gross & Associates, a Woodbridge, N.J.-based consultancy specializing in material handling logistics. He has over 20 years of logistics and supply chain consulting experience. Prior to joining Gross, he held financial and production planning management positions with construction and pharmaceutical companies. Kuchta has an undergraduate degree from Brown University and a master's degree in computer science from Fairleigh Dickinson University.
Q: Describe your current role in your organization.
A: I manage projects that cover a wide range of logistics concerns, from site selection to facility design and implementation. I have recently been asked to do forensic cost estimation for a client's third-party logistics service provider (3PL) as well as develop disaster planning programs. Of course, there is the ever-present need to find new projects and clients.
Q: How have things changed in the past five years in terms of your clients' day-to-day operations?
A: The two biggest changes are the increased sophistication of logistics professionals and their willingness to explore more complex solutions, and the shortening timeframes from concept to completion of operational changes.
Q: What do you consider to be your greatest professional accomplishment in the logistics field to date?
A: I hope that those whom I have worked with would agree that it is the degree to which I have been able to educate logistics professionals to continually re-examine the physical components and the processes that they use in light of an ever-changing market. A successful logistics organization must continually adapt practices and change methods to stay ahead of the competition.
Q: What do you consider to be the biggest obstacles,moving forward, to greater supply chain optimization?
A: Some organizations still look at logistics operations as a "cost center," rather than as a part of the organization that is the ongoing representation of the company. It is, after all, the output of the picker and packer that is the first thing that the customer sees.
Q: Do you expect to see more supply chain and logistics professionals promoted to major executive posts like CEO?
A: Unfortunately, it may take a major change in the temporal perspective of companies before logistics becomes a significant source for CEOs. Logisticians tend to take a long-term view, planning years in advance. As long as the corporate focus is on the next quarter's results, these planners will be bypassed.
Q: Do you believe RFID technology will have a significant impact on supply chain operations? If so, how?
A: Just as bar codes had a significant impact, so too will RFID. But it will take time before we fully understand the differences between what is possible and what is useful in applying the technology. The impacts will be industry-specific, with retail seeing the most impact, especially in the speed and accuracy of collecting transaction-level data. And just as there are some industries that have yet to adopt bar codes, RFID will never touch some aspects of the supply chain.
Q: How do you personally define the term "supply chain management" as it relates to logistics operations?
A: Supply chain management is the process of real-time matching of the acquisition and delivery of product with an unknown demand.
Q: What advice would you offer to a young person who is considering a career in logistics?
A: If you want to become rich fast, become a stock broker. But if you want to have a successful logistics career, never stop questioning everything that your organization does. Always ask yourself, "Is the way that I do things today relevant to the business today and tomorrow or was it something that I needed to do yesterday?"
Kevin Smith
Kevin Smith is senior vice president of supply chain and logistics for CVS Pharmacy, which generated over $430 billion in revenue in 2006. Smith, a graduate of the University of Massachusetts with a degree in English, describes himself as a "recovering supplier," having spent 27 years in food manufacturing and distribution with Kraft Foods and H.J.Heinz before joining CVS in 2000. He serves on the boards of the University of Rhode Island's Transportation Center, Agentrics, and the American Red Cross of Rhode Island and as industry co-chair and education chairman for the Distribution Business Management Association.
Q: Describe your current role in your organization.
A: I am primarily responsible for setting the strategic direction for our supply chain and logistics activities. I view my role as that of facilitator for the extremely talented supply chain professionals at CVS. With 15 distribution centers and 6,200 stores in 43 states, we have an abundance of great ideas constantly under consideration. Some can be adopted easily, while some may require months or years of preparation if they are to be incorporated into our repertoire. It is fascinating and exciting to be exposed to so many new ideas and to be able to help determine which ones will enhance our business processes.
Q: How have things changed for your company in the past five years in terms of day-to-day operations?
A: Our business has more than doubled over the past five years, and we now have DCs and stores from coast to coast. CVS has grown both organically and through aggressive acquisitions. This afforded us the opportunity to bring thousands of new associates, and importantly, their ideas and expertise into our business. Each new acquisition has brought with it countless examples of process improvements. Fortunately, we have been able to capitalize on many of them while bringing the new facilities into the CVS fold.
Of course, when you think about changes in our business over the past five years, costs—especially fuel and energy costs—spring to mind. It is process improvements and innovative ideas that have allowed us to mitigate those cost increases and actually improve our cost to service stores over the past five years.
Q: What do you consider to be your greatest profession al accomplishment in the logistics field to date?
A: Without a doubt, the seamless manner in which we have expanded our business from fewer than 3,000 stores to over 6,200 stores and from nine distribution centers to 15 without ever missing a beat. This includes the design and flawless startup of two of the most automated picking facilities in our industry (in Ennis, Texas, and Vero Beach, Fla.) as well as the acquisition and incorporation of four additional, and very large, DCs to complement our southern and western expansions. The greatest startups and conversions are the ones that go unnoticed by the stores. At CVS, we have nearly perfected the art of the transparent change-over.
Q: What do you consider to be the biggest obstacles, moving forward, to greater supply chain optimization?
A: Beyond the constant pressures to reduce or mitigate costs, the two greatest obstacles that I see are a lack of openness to innovation and a failure to maintain a robust talent pool. I am happy to report that this is not the case at CVS. Still, many large, successful companies tend to be risk averse. After all, why monkey with success? It is logical to try and replicate successes by simply doing what worked in the past. But the reality is that innovation and continuous improvement are the weapons we use to offset increased costs and competitive activity. Companies that stop innovating begin a slow, yet definite, decline in operational effectiveness. At the same time, the talent pool begins to dry up because less-innovative companies cannot attract and retain the most forward-thinking people. Over time, this causes companies to become stale and less competitive. Therefore, it is imperative that we encourage innovation and creative thinking so that we can attract, train, and retain the very best people.
Q: Do you expect to see more supply chain and logistics professionals promoted to major executive posts like CEO? If so, why?
A: Supply chain and logistics has certainly taken on an air of respectability over the past decade. The realization that supply chain and logistics can provide real bottom-line value to the corporation is an idea that has now been accepted at most companies. After all, every dollar saved, or dollar not spent, in the procurement, distribution, and transportation of goods is a dollar that goes directly to the bottom line. This can then be translated into profit or consumer value. We may see more top executive spots being filled by supply chain "graduates" in the future; however, it may be because legitimizing supply chain's role in the business allows more people to consider supply chain management as a meaningful step in their career development.
Q: Do you believe RFID technology will have a significant impact on supply chain operations?
A: A At its simplest level, the ability to either actively or passively identify products in the supply chain by reading RFID signals will greatly enhance our ability to move product from the supplier into an inventory position of "beneficial use." From a retail perspective, supplier consolidations over the past few years have created a number of mega-suppliers that sometimes ship thousands of items on a single truck. The process of sorting, segregating, and positioning those items in the inventory stream has become increasingly labor-intensive and complex. RFID is a likely technology candidate to streamline some of that complexity. Additionally, RFID could be utilized to manage, maintain, and find inventory for fulfillment in DCs.
There are, of course, grander plans for RFID that include on-shelf replenishment or track-and-trace capability. However, there are still myriad issues to address regarding these applications, especially around the full adoption of standards and the immense cost of equipment and electronic storage space for the incredible amount of data that will be collected.
Q: What's your number one logistics operational improvement goal for 2007?
A: We have begun the process of consolidating and standardizing systems and data across our distribution network. The diversity of systems developed through the process of successful acquisitions has allowed us to examine and experiment with a number of great processes. We are now in a position to assemble a standardized WMS [warehouse management system] that will propel us into the next decade of growth.
Q: How do you personally define the term "supply chain management" as it relates to logistics operations?
A: Supply chain management is the collaborative interweaving of processes from suppliers all the way through to the end user in an effort to effect both the most efficient flow of goods and the most attractive aggregation of value for the consumer. It is the combination of efficiency and value that defines a successful supply chain. Supply chain management aimed only at "the lowest cost" will eventually send consumers scrambling for alternatives.
Q: What advice would you offer to a young person who is considering a career in logistics?
A: If possible, learn from the ground up. There is no better way to build an appreciation for supply chain than to personally experience basic operational activities like picking product, hefting cases, or loading a truck. That does not mean that the academic pursuit of supply chain knowledge is unimportant. Simply understand that a balance of theory and real experience is always the best teacher.
Additionally, understand and accept that supply chain and logistics is a service-oriented profession. While supply chain activities are not necessarily the most visible or "sexy" part of the business, no company can be ultimately successful or competitive without good supply chain and logistics processes. Enjoy what you do and be proud of what you do, or go do something else!
Jeff Mitchell
Jeff Mitchell is Manhattan Associates' executive vice president, Americas. Before joining Manhattan Associates in 1997, he held sales and account management positions with the Summit Group (CIBER Enterprise Solutions) and ADP. He holds bachelor of science degrees in marketing and management from the University of Indianapolis.
Q: Describe your current role in your organization.
A: As Manhattan Associates' executive vice president, Americas, I oversee sales, services, and account management activities for the Americas. This year, I'll celebrate my 10th anniversary with Manhattan Associates. In my 10 years with the company, I've served in a variety of leadership positions in the sales, customer relationships, and services organization.
Q: How have things changed in the past five years in terms of a typical customer's logistics and supply chain operations?
A: Supply chain management used to be seen as a tactical part of business operations. As senior executives began to realize the competitive advantage that an efficient supply chain could deliver to the company, that changed. Today, the supply chain has become strategic, even mission critical, to the business.
Q: What do you consider to be your greatest professional accomplishment in the logistics field to date?
A: My personal belief is that being focused on customer needs and investing in people defines a company. Leadership depends on being able to do both. I've been able to do both. Business is about winning, thriving, and growing. When customers win, associates and the business win by default.
Q: What do you consider to be the biggest obstacle, moving forward, to greater supply chain optimization?
A: I believe the greatest obstacle will be the departmental silos that populate the enterprise and inhibit collaboration. Ongoing and effective change management is needed to dissolve these artificial boundaries and mindsets. When this radical change happens, supply chain management will be seen as a centralized asset to the global enterprise.
Q: Do you expect to see more supply chain and logistics professionals promoted to major executive posts like CEO? If so, why?
A: As more companies realize the value of the supply chain, I predict that the discipline will rise in stature and clout. I'd like to see the across-the-board creation of a chief logistics officer position, with that person reporting to the CEO and having a seat at the table when mission-critical decisions are made.
Q: Do you believe RFID technology will have a signifiA cant impact on supply chain operations? If so, do you see it happening anytime soon?
A: From where I sit, RFID adoption will continue to be slow. It will take a while longer for RFID's real-time information to make a difference at the decision-making level. I see RFID as an enabling technology, and I expect its adoption to keep pace with the rather slow adoption seen with other enablers.
Q: What's your number one logistics operational improvement goal for 2007?
A: Cross-application integration and holistic supply chain optimization are my two overriding goals for this year. When supply chain executives finally gain total visibility into their operations, they'll be able to make much needed cross-enterprise collaboration happen. Cross-enterprise collaboration and global visibility are key to solving complex supply chain challenges.
Q: How do you personally define the term "supply chain management" as it relates to logistics operations?
A: Supply chain management is such a critical operation that a single definition is needed. To me, the term means integrating your business processes and tapping into enabling technologies to be able to continually optimize and re-optimize your extended enterprise. Supply chain optimization needs to happen at each phase of the supply chain—from demand to consumption.
Q: What advice would you offer to a young person who is considering a career in logistics?
A: Join a leading company, roll up your sleeves, and get in the game. Intelligence comes from combining strategy with practical experience, and success hinges on execution. All the intelligence in the world won't help you if you can't execute.
Chuck Taylor
Chuck Taylor is a self-described "hands-on supply chain leader." He has led turnarounds, strategic restructurings, Lean/Six Sigma implementations, and performance breakthroughs from the shop floor to the boardroom. He has held senior positions at Nabisco Brands, Ryder System, Burlington Northern Santa Fe, Tri Valley Growers, American National Can, ServiceCraft Logistics, and Awake!
Q: Describe your current role in your organization.
A: I am now an interim/turnaround executive, consultant, speaker, and executive coach. My new venture Awake! is dedicated to leading positive organizational and personal transformations and preparing companies and individuals to thrive in an uncertain future.
Q: How have things changed in the past five years in terms of a typical company's day-to-day logistics operations?
A: I have been out of day-to-day operations for a couple of years, but my impression in working with companies and individuals is that resources of all types— people, equipment, capital, energy—are more expensive and harder to find. I also sense more uncertainty.
Q: What do you consider to be your greatest professional accomplishment in the logistics field to date?
A: That is a tough question. I have enjoyed many varied companies, industries, and situations. However, my last assignment as CEO for a struggling third-party logistics company required every leadership, industry, financial, organizational, and operational skill I had to successfully turn around and sell the company.
Q: What do you consider to be the biggest obstacles, moving forward, to greater supply chain optimization?
A: Lack of leadership and competing agendas at every level—company, industry, national and local government, and individual. Conditions will eventually force consideration of the common good to override these, but the quality of leadership will determine the pain involved in the transition.
Q: Do you expect to see more supply chain and logistics professionals promoted to major executive posts like CEO? If so, why?
A: I think more so than in the past, given that many companies now recognize that supply chain management (SCM) is more than just backroom operations, and that it can be leveraged for competitive advantage. However, probably no more than supply chain's fair share among managers from other functional disciplines such as sales, marketing, R&D, legal, and finance.
Q: Do you believe RFID technology will have a significant impact on supply chain operations? If so, how and why?
A: Yes in the long run, because there are a lot of potential opportunities for its use. Supply chain visibility will be the main driver of the significant impact as managers will always want to know where their goods and assets are, and how their supply chains are performing. The biggest issue right now is figuring out what they are going to do with all the information gathered by the technology and determining where there is a good cost-benefit story in leveraging it. The growth in the use of RFID will take place over decades, not years. As in the early days of the bar code, we don't yet know all the possible uses.
Q: How do you personally define the term "supply chain management" as it relates to logistics operations?
A: Supply chain management involves the coordination and management of goods as they move from raw material suppliers to manufacturers and distributors until they get to the end user. I basically adhere to the Council of Supply Chain Management Professionals' definition. SCM is cross-functional in nature, while logistics is viewed as more functionally oriented, largely dealing with transportation, warehousing, and inventory management.
Q: What, if any, changes are you and your colleagues making to your curriculum to reflect new supply chain and logistics best practices?
A: Since SCM involves coordination among functional areas, we've added courses on management, leadership, and presentation skills. Students need to go out in the world and sell their innovative ideas, as well as succeed in getting various functional managers to align and integrate their operations toward the betterment of the company.
Q: Are you seeing more "talent" come into college majoring in the logistics and supply chain areas? If so, do you think this trend will continue and why?
A: Yes, because it is not backroom operations, as was the view in the past.Hence, there is more potential for career growth both within SCM as well as throughout a company.
Russell Meller
Russell D. Meller, Ph.D., is the Hefley Professor of Logistics and Entrepreneurship in the Industrial Engineering Department at the University of Arkansas. His teaching and research expertise are in logistics at the internal or facility level, focusing on the activities that take place "within the four walls" of a company's distribution centers or warehouses.
Q: Describe your current role in your organization.
A: I teach and perform research in facility logistics, which is defined as logistics at the facility level. I also serve as director of the Center for Engineering Logistics and Distribution (CELDi). As an industry-university cooperative research center, CELDi is co-sponsored by over 30 member organizations. The National Science Foundation also provides a base level of overhead support. My other main role is as the deputy director for the Center on Innovation in Healthcare Logistics, a research center recently created by Wal-Mart Stores and BlueCross/BlueShield to transfer best practices from the consumer products supply chain to the health-care supply chain.
Q: How has your day-to-day job changed in the past five years?
A: Personally, I have transitioned to significant leadership roles in research centers. This has impacted me since I now spend less time in the classroom and less time actually doing the research. Instead, I now lead recruiting and retention efforts for the research centers that I am involved with. I enjoy the variety of activities that I am engaged in.
Q: What do you consider to be your greatest professional accomplishment in the logistics field to date?
A: Although I am excited about my research, especially my latest work on new, innovative aisle designs for warehouses, my greatest satisfaction has come from working with students. And I'm very proud of the fact that, for four years in a row, I have mentored the winning team in the national material handling system design competition sponsored by the College-Industry Council on Material Handling Education,which is part of the Material Handling Industry of America.
Q: What do you consider to be the biggest obstacles,moving forward, to greater supply chain optimization?
A: There are three obstacles that concern me. The first is the continued lack of worldwide standards that would make supply chain hardware components truly "plug-andplay." Second is the lack of an integrated representation and model of supply chains that would allow us to truly optimize a supply chain with integrated components. Third is the lack of research support for faculty working in facility logistics. The latter has a direct effect on the future supply of students and faculty to support supply chain optimization.
Q: Do you expect to see more supply chain and logistics professionals promoted to major executive posts like CEO? If so, why?
A: This is certainly possible due to the increased attention given to these divisions of corporations. I also see the creation of more companies that are founded on the basis of supply chain and logistics if the trend to outsource these activities continues. These companies will likely be led by supply chain and logistics professionals, at least initially. But, in some sense, I hope that our community is successful in raising the overall quality of these operations to the point that supply chain excellence is no longer much of a differentiating factor since all companies will do it so well.
Q: Do you believe RFID technology will have a significant impact on supply chain operations? If so, how and why?
A: With increased information comes increased opportunity. And since RFID technology has already shown its capability in providing data that can lead to valuable information for supply chain operations, then yes, I do believe the impact will be significant. But that doesn't mean that we should think of RFID as the end-all application. It is but one step along the journey toward a future of pervasive computing.
Q: What, if any, changes are you making to your college curriculum to reflect new supply chain and logistics best practices?
A: Academics are constantly evaluating curricula with respect to changes in best practices, and logistics is no exception. The obvious changes are related to the emergence of RFID as an enabling technology in the consumer products supply chain. I cannot imagine a logistics course that doesn't spend some amount of time on what RFID is and how it can be justified in logistics operations. But I also see changes to curricula related to other emerging topics, like sustainability. Our students are very aware of the changes in global supply chains and trends to improve them. It is also important to note that traditional material handling courses are being phased out in most industrial engineering programs. I hope that some of this material is ultimately incorporated into logistics courses since, as we know, material handling system design is the backbone of logistics operations at the facility level.
Q: Are you seeing more "talent" come into college majoring in the logistics and supply chain areas? If so, will this trend continue and why?
A: For my field, this is a complicated question. The best way to answer that, I think, is in terms of how these topics are viewed by students, faculty, and administrators in engineering colleges. By most measures, logistics continues to be viewed as an increasingly important topic, with expanded course offerings and a realization that the distribution of goods to domestic customers is one of the few sectors of our economy that cannot be outsourced overseas. And in general, many students are more interested in the service economy as opposed to the traditional manufacturing- based economy. So, yes, students, faculty, and administrators view logistics and supply chain more favorably now than they did 10 years ago. I am confident this trend will continue as logistics is recognized as a very important component of an industrial engineer's education.
Jack Kuchta
Jack Kuchta is executive vice president of Gross & Associates, a Woodbridge, N.J.-based consultancy specializing in material handling logistics. He has over 20 years of logistics and supply chain consulting experience. Prior to joining Gross, he held financial and production planning management positions with construction and pharmaceutical companies. Kuchta has an undergraduate degree from Brown University and a master's degree in computer science from Fairleigh Dickinson University.
Q: Describe your current role in your organization.
A: I manage projects that cover a wide range of logistics concerns, from site selection to facility design and implementation. I have recently been asked to do forensic cost estimation for a client's third-party logistics service provider (3PL) as well as develop disaster planning programs. Of course, there is the ever-present need to find new projects and clients.
Q: How have things changed in the past five years in terms of your clients' day-to-day operations?
A: The two biggest changes are the increased sophistication of logistics professionals and their willingness to explore more complex solutions, and the shortening timeframes from concept to completion of operational changes.
Q: What do you consider to be your greatest professional accomplishment in the logistics field to date?
A: I hope that those whom I have worked with would agree that it is the degree to which I have been able to educate logistics professionals to continually re-examine the physical components and the processes that they use in light of an ever-changing market. A successful logistics organization must continually adapt practices and change methods to stay ahead of the competition.
Q: What do you consider to be the biggest obstacles,moving forward, to greater supply chain optimization?
A: Some organizations still look at logistics operations as a "cost center," rather than as a part of the organization that is the ongoing representation of the company. It is, after all, the output of the picker and packer that is the first thing that the customer sees.
Q: Do you expect to see more supply chain and logistics professionals promoted to major executive posts like CEO?
A: Unfortunately, it may take a major change in the temporal perspective of companies before logistics becomes a significant source for CEOs. Logisticians tend to take a long-term view, planning years in advance. As long as the corporate focus is on the next quarter's results, these planners will be bypassed.
Q: Do you believe RFID technology will have a significant impact on supply chain operations? If so, how?
A: Just as bar codes had a significant impact, so too will RFID. But it will take time before we fully understand the differences between what is possible and what is useful in applying the technology. The impacts will be industry-specific, with retail seeing the most impact, especially in the speed and accuracy of collecting transaction-level data. And just as there are some industries that have yet to adopt bar codes, RFID will never touch some aspects of the supply chain.
Q: How do you personally define the term "supply chain management" as it relates to logistics operations?
A: Supply chain management is the process of real-time matching of the acquisition and delivery of product with an unknown demand.
Q: What advice would you offer to a young person who is considering a career in logistics?
A: If you want to become rich fast, become a stock broker. But if you want to have a successful logistics career, never stop questioning everything that your organization does. Always ask yourself, "Is the way that I do things today relevant to the business today and tomorrow or was it something that I needed to do yesterday?"
Kevin Smith
Kevin Smith is senior vice president of supply chain and logistics for CVS Pharmacy, which generated over $430 billion in revenue in 2006. Smith, a graduate of the University of Massachusetts with a degree in English, describes himself as a "recovering supplier," having spent 27 years in food manufacturing and distribution with Kraft Foods and H.J.Heinz before joining CVS in 2000. He serves on the boards of the University of Rhode Island's Transportation Center, Agentrics, and the American Red Cross of Rhode Island and as industry co-chair and education chairman for the Distribution Business Management Association.
Q: Describe your current role in your organization.
A: I am primarily responsible for setting the strategic direction for our supply chain and logistics activities. I view my role as that of facilitator for the extremely talented supply chain professionals at CVS. With 15 distribution centers and 6,200 stores in 43 states, we have an abundance of great ideas constantly under consideration. Some can be adopted easily, while some may require months or years of preparation if they are to be incorporated into our repertoire. It is fascinating and exciting to be exposed to so many new ideas and to be able to help determine which ones will enhance our business processes.
Q: How have things changed for your company in the past five years in terms of day-to-day operations?
A: Our business has more than doubled over the past five years, and we now have DCs and stores from coast to coast. CVS has grown both organically and through aggressive acquisitions. This afforded us the opportunity to bring thousands of new associates, and importantly, their ideas and expertise into our business. Each new acquisition has brought with it countless examples of process improvements. Fortunately, we have been able to capitalize on many of them while bringing the new facilities into the CVS fold.
Of course, when you think about changes in our business over the past five years, costs—especially fuel and energy costs—spring to mind. It is process improvements and innovative ideas that have allowed us to mitigate those cost increases and actually improve our cost to service stores over the past five years.
Q: What do you consider to be your greatest profession al accomplishment in the logistics field to date?
A: Without a doubt, the seamless manner in which we have expanded our business from fewer than 3,000 stores to over 6,200 stores and from nine distribution centers to 15 without ever missing a beat. This includes the design and flawless startup of two of the most automated picking facilities in our industry (in Ennis, Texas, and Vero Beach, Fla.) as well as the acquisition and incorporation of four additional, and very large, DCs to complement our southern and western expansions. The greatest startups and conversions are the ones that go unnoticed by the stores. At CVS, we have nearly perfected the art of the transparent change-over.
Q: What do you consider to be the biggest obstacles, moving forward, to greater supply chain optimization?
A: Beyond the constant pressures to reduce or mitigate costs, the two greatest obstacles that I see are a lack of openness to innovation and a failure to maintain a robust talent pool. I am happy to report that this is not the case at CVS. Still, many large, successful companies tend to be risk averse. After all, why monkey with success? It is logical to try and replicate successes by simply doing what worked in the past. But the reality is that innovation and continuous improvement are the weapons we use to offset increased costs and competitive activity. Companies that stop innovating begin a slow, yet definite, decline in operational effectiveness. At the same time, the talent pool begins to dry up because less-innovative companies cannot attract and retain the most forward-thinking people. Over time, this causes companies to become stale and less competitive. Therefore, it is imperative that we encourage innovation and creative thinking so that we can attract, train, and retain the very best people.
Q: Do you expect to see more supply chain and logistics professionals promoted to major executive posts like CEO? If so, why?
A: Supply chain and logistics has certainly taken on an air of respectability over the past decade. The realization that supply chain and logistics can provide real bottom-line value to the corporation is an idea that has now been accepted at most companies. After all, every dollar saved, or dollar not spent, in the procurement, distribution, and transportation of goods is a dollar that goes directly to the bottom line. This can then be translated into profit or consumer value. We may see more top executive spots being filled by supply chain "graduates" in the future; however, it may be because legitimizing supply chain's role in the business allows more people to consider supply chain management as a meaningful step in their career development.
Q: Do you believe RFID technology will have a significant impact on supply chain operations?
A: A At its simplest level, the ability to either actively or passively identify products in the supply chain by reading RFID signals will greatly enhance our ability to move product from the supplier into an inventory position of "beneficial use." From a retail perspective, supplier consolidations over the past few years have created a number of mega-suppliers that sometimes ship thousands of items on a single truck. The process of sorting, segregating, and positioning those items in the inventory stream has become increasingly labor-intensive and complex. RFID is a likely technology candidate to streamline some of that complexity. Additionally, RFID could be utilized to manage, maintain, and find inventory for fulfillment in DCs.
There are, of course, grander plans for RFID that include on-shelf replenishment or track-and-trace capability. However, there are still myriad issues to address regarding these applications, especially around the full adoption of standards and the immense cost of equipment and electronic storage space for the incredible amount of data that will be collected.
Q: What's your number one logistics operational improvement goal for 2007?
A: We have begun the process of consolidating and standardizing systems and data across our distribution network. The diversity of systems developed through the process of successful acquisitions has allowed us to examine and experiment with a number of great processes. We are now in a position to assemble a standardized WMS [warehouse management system] that will propel us into the next decade of growth.
Q: How do you personally define the term "supply chain management" as it relates to logistics operations?
A: Supply chain management is the collaborative interweaving of processes from suppliers all the way through to the end user in an effort to effect both the most efficient flow of goods and the most attractive aggregation of value for the consumer. It is the combination of efficiency and value that defines a successful supply chain. Supply chain management aimed only at "the lowest cost" will eventually send consumers scrambling for alternatives.
Q: What advice would you offer to a young person who is considering a career in logistics?
A: If possible, learn from the ground up. There is no better way to build an appreciation for supply chain than to personally experience basic operational activities like picking product, hefting cases, or loading a truck. That does not mean that the academic pursuit of supply chain knowledge is unimportant. Simply understand that a balance of theory and real experience is always the best teacher.
Additionally, understand and accept that supply chain and logistics is a service-oriented profession. While supply chain activities are not necessarily the most visible or "sexy" part of the business, no company can be ultimately successful or competitive without good supply chain and logistics processes. Enjoy what you do and be proud of what you do, or go do something else!
Jeff Mitchell
Jeff Mitchell is Manhattan Associates' executive vice president, Americas. Before joining Manhattan Associates in 1997, he held sales and account management positions with the Summit Group (CIBER Enterprise Solutions) and ADP. He holds bachelor of science degrees in marketing and management from the University of Indianapolis.
Q: Describe your current role in your organization.
A: As Manhattan Associates' executive vice president, Americas, I oversee sales, services, and account management activities for the Americas. This year, I'll celebrate my 10th anniversary with Manhattan Associates. In my 10 years with the company, I've served in a variety of leadership positions in the sales, customer relationships, and services organization.
Q: How have things changed in the past five years in terms of a typical customer's logistics and supply chain operations?
A: Supply chain management used to be seen as a tactical part of business operations. As senior executives began to realize the competitive advantage that an efficient supply chain could deliver to the company, that changed. Today, the supply chain has become strategic, even mission critical, to the business.
Q: What do you consider to be your greatest professional accomplishment in the logistics field to date?
A: My personal belief is that being focused on customer needs and investing in people defines a company. Leadership depends on being able to do both. I've been able to do both. Business is about winning, thriving, and growing. When customers win, associates and the business win by default.
Q: What do you consider to be the biggest obstacle, moving forward, to greater supply chain optimization?
A: I believe the greatest obstacle will be the departmental silos that populate the enterprise and inhibit collaboration. Ongoing and effective change management is needed to dissolve these artificial boundaries and mindsets. When this radical change happens, supply chain management will be seen as a centralized asset to the global enterprise.
Q: Do you expect to see more supply chain and logistics professionals promoted to major executive posts like CEO? If so, why?
A: As more companies realize the value of the supply chain, I predict that the discipline will rise in stature and clout. I'd like to see the across-the-board creation of a chief logistics officer position, with that person reporting to the CEO and having a seat at the table when mission-critical decisions are made.
Q: Do you believe RFID technology will have a signifiA cant impact on supply chain operations? If so, do you see it happening anytime soon?
A: From where I sit, RFID adoption will continue to be slow. It will take a while longer for RFID's real-time information to make a difference at the decision-making level. I see RFID as an enabling technology, and I expect its adoption to keep pace with the rather slow adoption seen with other enablers.
Q: What's your number one logistics operational improvement goal for 2007?
A: Cross-application integration and holistic supply chain optimization are my two overriding goals for this year. When supply chain executives finally gain total visibility into their operations, they'll be able to make much needed cross-enterprise collaboration happen. Cross-enterprise collaboration and global visibility are key to solving complex supply chain challenges.
Q: How do you personally define the term "supply chain management" as it relates to logistics operations?
A: Supply chain management is such a critical operation that a single definition is needed. To me, the term means integrating your business processes and tapping into enabling technologies to be able to continually optimize and re-optimize your extended enterprise. Supply chain optimization needs to happen at each phase of the supply chain—from demand to consumption.
Q: What advice would you offer to a young person who is considering a career in logistics?
A: Join a leading company, roll up your sleeves, and get in the game. Intelligence comes from combining strategy with practical experience, and success hinges on execution. All the intelligence in the world won't help you if you can't execute.
Chuck Taylor
Chuck Taylor is a self-described "hands-on supply chain leader." He has led turnarounds, strategic restructurings, Lean/Six Sigma implementations, and performance breakthroughs from the shop floor to the boardroom. He has held senior positions at Nabisco Brands, Ryder System, Burlington Northern Santa Fe, Tri Valley Growers, American National Can, ServiceCraft Logistics, and Awake!
Q: Describe your current role in your organization.
A: I am now an interim/turnaround executive, consultant, speaker, and executive coach. My new venture Awake! is dedicated to leading positive organizational and personal transformations and preparing companies and individuals to thrive in an uncertain future.
Q: How have things changed in the past five years in terms of a typical company's day-to-day logistics operations?
A: I have been out of day-to-day operations for a couple of years, but my impression in working with companies and individuals is that resources of all types— people, equipment, capital, energy—are more expensive and harder to find. I also sense more uncertainty.
Q: What do you consider to be your greatest professional accomplishment in the logistics field to date?
A: That is a tough question. I have enjoyed many varied companies, industries, and situations. However, my last assignment as CEO for a struggling third-party logistics company required every leadership, industry, financial, organizational, and operational skill I had to successfully turn around and sell the company.
Q: What do you consider to be the biggest obstacles, moving forward, to greater supply chain optimization?
A: Lack of leadership and competing agendas at every level—company, industry, national and local government, and individual. Conditions will eventually force consideration of the common good to override these, but the quality of leadership will determine the pain involved in the transition.
Q: Do you expect to see more supply chain and logistics professionals promoted to major executive posts like CEO? If so, why?
A: It is possible. Supply chain prepares one to look both inside and outside the company and to orchestrate diverse teams to do all the things needed to satisfy customers at reasonable costs. Good supply chain people know "win/win." These will be important skills as the world faces constrained resources.
Q: Do you believe RFID technology will have a significant impact on supply chain operations?
A: I come from the "lean" school, where Kanban cards, continuous improvement, strict operating discipline, and simplicity work. Those seem to work OK for Toyota. RFID might have some uses in very high-valued situations, but I have never seen the use or justification for most products.
Q: What should a company's number one logistics operational improvement goal be for 2007?
A: The economy will enter a period of stagflation or worse in 2007. Supply chains must reduce costs, and it won't be easy. It means a fresh look at everything— sales/pricing policies, service levels, order quantities, inventory strategies, transportation strategies, networks, plant/DC operations, packaging, sourcing strategies, etc.
Q: How do you personally define the term "supply chain management" as it relates to logistics operations?
A: My last two "supply chain" jobs embodied what I consider to be supply chain management. They included sourcing, manufacturing, production planning, transportation, inventory management (raw materials, parts, finished goods), network design, DC operations, customer service, and sales, operations, and logistics planning. This structure optimizes trade-offs and eliminates silos.
Q: What advice would you offer to a young person who is considering a career in logistics?
A: A career is a do-it-yourself proposition. Take advantage of every learning opportunity, especially those that develop self-management skills. Take risks! If you are not satisfied, look for something different. There are so many opportunities in the supply chain world to do great things. Love it or do something else.
Christian Verstraete
Christian Verstraete is worldwide senior director for Hewlett-Packard's Manufacturing and Distribution Industries Worldwide Solutions Division and has been a member of HP's manufacturing team for more than 26 years.Verstraete is responsible for identifying and developing HP's differentiated portfolio of horizontal and vertical solutions for the manufacturing industries. His group is tasked with creating field-ready solutions that meet the specific needs of customers, geographies, and HP's Technology Solutions Group (TSG) business units. Prior to this role, he served in a variety of positions within the company, working with customers and HP entities in the areas of factory automation, computer-integrated manufacturing, software development, and supply chain management. Verstraete holds a mechanical engineering degree from the Université Catholique de Louvain in Belgium and a degree in industrial management from Katholieke Universiteit Leuven, also in Belgium. He is based in Brussels, Belgium.
Q: Describe your current role in your organization.
A: I have global responsibility for the development of solutions for the manufacturing and distribution industries. It is my role to work closely with our internal entities and with customers to spot areas where, by integrating existing hardware, software, and services, and by filling the white spaces, we can address specific pain points in the supply chain and logistics area.
Q: How have things changed in the past five years in terms of your company's day-to-day logistics operations?
A: In my mind, there are two main things that have happened. First, we've realized the need to respond much faster to triggers and events. This requires greater agility within the company and across the supply chain. And we need to do this at a lower cost. Second, we have moved from too little information to information overload. We need processes and tools to identify what is relevant, so that we can take appropriate action. The need for decision-support tools has drastically increased as we can no longer rely on our good judgment. Too many things are happening too fast. While this has happened, competition has increased drastically due to globalization, resulting in the need for much higher service levels.
Q: What do you consider to be your greatest professional accomplishment in the logistics field to date?
A: First, I have had the opportunity to work with a local university and a couple friends in studying the role collaborative sourcing plays in maintaining sustainable competitive advantage. We have discovered the importance of treating different suppliers and partners differently, and of moving away from the traditional, rather confrontational approach to a much more collaborative approach with key partners. Second, with my team, we are currently working on a supply chain visibility solution allowing companies to better understand how their supply chain is operating both in "real time" for event management as well as over time for improvement. One of the first pilots we ran was for a consumer packaged goods company to manage its distribution during a new product introduction. We have included RFID in this approach as we feel RFID is not a solution as such, but a technology allowing companies to better track and understand their supply chain.
Q: What do you consider to be the biggest obstacles, moving forward, to greater supply chain optimization?
A: There are a number of elements at play here. First, the transportation industry is still fairly scattered. There are thousands of players, and understanding what happens (which is the first step for optimization) is difficult as information is lost at the boundaries between the companies. We are starting to see global players appearing, but most of them are in the middle of mergers and acquisitions, and have not reached the integrated approach we may want. Second, too often, companies are not looking at their supply chains from an end-to-end approach, and as such, are sub-optimizing the various functional parts. The production people optimize production, the logistics guys optimize logistics, and so forth. Instead, they should be looking at the complete problem and asking themselves, "How do I get a particular product to a customer at the lowest cost, including manufacturing, distribution, logistics, and returns?"
Q: Do you expect to see more supply chain and logistics professionals promoted to major executive posts like CEO? If so, why?
A: I would hope so, as the supply chain is becoming a critical competitive advantage. But first, there needs to be a realization from top management that the supply chain and logistics people are not those guys who cause trouble— late deliveries, imperfect orders, and so forth. That will require educating the sales teams about how they can use the supply chain to their advantage. It is only when the sales and supply chain people are working hand in hand that one can truly improve company profitability and start realizing the value the supply chain brings to the party.
Q: Do you believe RFID technology will have a significant impact on supply chain operations? If so, how and why?
A: As soon as the technology settles, RFID will start playing a bigger role in the supply chain. It will increase visibility in the supply chain drastically through the automatic identification of the contents of pallets at different stages in the supply chain. By forging more cooperative working relationships with suppliers and partners, and by automating their data-gathering processes, companies will be able to view what truly happens in their supply chain so they can identify bottlenecks, waste, and opportunities for improvement. HP is using RFID in the printer supply chain as a result of the Wal-Mart mandate, and this has allowed us to reduce our inventory levels by more than 20 percent, which is critical when you're dealing with fast-moving goods and products with short life cycles.
Q: What's your number one logistics operational improvement goal for 2007?
A: Our number one objective is to align cost structures and leverage HP's price and spend while addressing the specific needs of different businesses.
Q: How do you personally define the term "supply chain management" as it relates to logistics operations?
A: Supply chain management is the end-to-end management of the supply chain, from both a supply and a demand side. How can the company move products through its supply chain in the most cost-effective, reliable, and timely way? That's what supply chain is all about from a logistics point of view.
Q: What advice would you offer to a young person who is considering a career in logistics?
A: Be curious and creative. In other words, give rein to your natural curiosity and then make a point of asking why things are done the way they are done, and use your creativity to come up with alternative ways to do things when the answers you get aren't very convincing. These two elements are, in my mind, the most important for people who want to improve their supply chains and logistics operations. I would add to that the importance of allowing people to fail—that's the only way you will really get innovative ideas. If people can experiment without being thrown out of the company as soon as something goes wrong, ideas will flourish.
Lloyd Wallsten
Lloyd Wallsten is vice president of distribution for Converse. A graduate of the College of Alameda in Alameda, Calif., he is currently responsible for providing direction, motivation, and support to his logistics management team. This includes developing long-term plans and objectives for facility, material handling, transportation, and labor capacities based on future projections. Over the course of 32 years in the logistics field, he has been involved in moving companies like Converse and The North Face to their next level of success as well as in two "dot-com" startups, Pets.com and Wine.com. He is a member of the Warehousing Education and Research Council, the Council of Supply Chain Management Professionals, and the Waterfront Coalition, a port advocacy group.
Q: How have things changed in the past five years in terms of your day-to-day operations?
A: I am seeing a change in how retailers want their orders handled. Many companies are using several methods of getting product to their stores. In the past, companies such as Footlocker, Champs Sports, and Sears would have all of their orders go to their central warehouse. Today, they will do a portion of their business direct to stores in addition to bulk orders. As a result, we're doing a great deal of less-than-case picking, which has increased our operating costs.
Q: What do you consider to be your greatest professional accomplishment in the logistics field to date?
A: Six years ago, Converse's supply chain was totally outdated in responding to the needs of the just-in-time retailers. Within 18 months of coming on board, I was able to cut six days out of our order turn process by moving a distribution center from North Carolina to California. Also, I set up a state-of-the-art pick-to-belt DC operation that could turn orders around within 24 hours of receipt. This saved three days, bringing the total reduction to nine days.
Q: What do you consider to be the biggest obstacles, moving forward, to greater supply chain optimization?
A: The greatest obstacles moving forward are infrastructure challenges such as port throughput and highway and rail capacities.
Q: Do you expect to see more supply chain and logistics professionals promoted to major executive posts like CEO?
A: I think that will happen for supply chain professionals in isolated businesses that are truly focused on operational improvements and efficiencies. Still, in most companies, CEOs will continue to come from the sales side of the operation.
Q: Will RFID technology have a major impact on supply chain operations? I think the jury is still out on RFID. After the initial race to meet Wal-Mart's timeline, most companies have been waiting and watching to see how the technology is moving forward.
Q: What's your number one logistics operational improvement goal for 2007?
A: Our main improvement objective is to continue to find ways to keep inventory moving rather than sitting in storage in a DC.
Q: How do you personally define the term "supply chain management" as it relates to logistics operations?
A: The term "supply chain management" takes the logistics part of getting goods from manufacturer to retailer to customer and broadens it. It includes everyone who touches or affects the goods' movement.
Q: What advice would you offer to a young person entering logistics?
A: Being a subsidiary of Nike, the phrase "Just Do It" comes to mind. The field of logistics is growing worldwide. The U.S., like many countries, is looking outside its borders to manufacture more goods at the cheapest price. That brings logistical problems from timelines, to transportation, to quotas that need to be dealt with. Determining the optimum method of moving goods through supply chains is a daunting challenge, and it is drawing many new people to the field. It is a challenge that will only continue to grow.
the shippers' white knight
HALL OF FAME: William J. Augello
He could be cranky, self-righteous, hot-tempered, and stubborn. He often played the role of white knight, furiously battling motor carriers and their lawyers in defense of shippers' rights under the law.
Yet he could also be kind and friendly; was notorious for his love of jokes and pranks; had a knack for getting friends and strangers alike to sing around a piano; and respected his opponents enough that he would sometimes invite them out for a drink.
That's why, when William J. Augello passed away in November 2006 at the age of 80, both shippers and carriers mourned the loss of a unique individual who had an undeniable impact on the transportation industry.
Brooklyn-born Augello began his career as a young lawyer, working on freight claims for his father and uncle in their transportation consulting business. Neither the law nor transportation was his original career choice; in fact, his ambition was to be a classical pianist. But practicality took precedence over passion, and Augello spent some 52 years devoting his consid- erable energy and intellect to representing shippers' interests.
Among the most important accomplishments of Augello's long career was co-founding and running the Shippers National Freight Claim Council (now the Transportation Logistics Council, or TLC). He served as the organization's executive director and general counsel from its inception in 1974 until his retirement. The council's mission was—and still is—to advocate exclusively for shippers in regard to freight claims, liability, and insurance. The group also publishes reference books on those subjects, sends out a newsletter with updates on court cases affecting transportation and logistics, and conducts educational seminars nationwide. (More information about TLC can be found at www.transportlaw.com.)
But Augello will probably be remembered most for his pivotal role in resolving the "undercharge" crisis that cost shippers more than $25 billion, by one estimate.
Undercharges, also known as "balance-due bills," were invoices issued by trustees for bankrupt motor carriers long after a shipper had paid the original bill. Following trucking deregulation in 1980, motor carriers had eagerly exercised their newfound ability to negotiate rates. Many, though, failed to file those rates with the Interstate Commerce Commission as required by law at the time. When carriers went bankrupt—as they did in droves in the mid-1980s—their trustees claimed that the negotiated but unfiled rates were invalid, and they demanded that shippers pay the difference between the negotiated and tariff rates.
Augello believed that tactic was unjust and took up the cause. He formed joint defense groups for shippers, and he later represented the shipper before the U.S. Supreme Court in the undercharge case Riss v. K-mart. He lobbied long and hard for passage of the Negotiated Rates Act of 1993, which enabled shippers to use the "unreasonable practice" defense against bankrupt carriers. Augello gave his all to that effort: According to transportation lawyer Brené Primus, Augello once said he had personally called the offices of every U.S. sena- tor and representative.
His success in the undercharge fight may be what gets written into the history books, but shippers have other reasons to be grateful to Augello. Through seminars, speeches, and more than a dozen books, the indefatigable lawyer taught thousands of shippers what they need to know about transportation law. Freight Claims in Plain English, co-written with longtime law partner George Pezold, is considered to be an indispensable reference by many; his textbook Transportation, Logistics and the Law is on the desks of thousands of shippers.
In retirement, Augello remained true to form, devoting himself to his family and to teaching transportation law at the University of Arizona in Tucson, where a scholarship has been established in his name.
Editor's Note: For more about Augello's career and accomplishments, see "shipper champion Bill Augello dies" (DC VELOCITY, January 2007).
