During his quarter-century career at Nabisco Inc., Joe Andraski led a team that has become almost legendary for its logistics innovations. Among other things, the group earned accolades for its pioneering use of information technology as well as its efficient consumer response (ECR) program, which Andraski himself developed for the company. While at Nabisco, Andraski also spearheaded the creation of a collaborative planning, forecasting, and replenishment (CPFR) program, an online system that allows retailers and their suppliers to share forecasts and sales data to obtain an up-to-date picture of actual product demand.
His days at Nabisco are behind him now, but not his commitment to leading-edge practices. Today, Andraski serves as president and CEO of the Voluntary Interindustry Commerce Solutions Association (VICS), an organization of retailers, suppliers, information systems solution providers, and others that are working together to develop processes and technologies that improve supply chain efficiency. And he remains a champion of CPFR. Just recently he created and launched the VICS CPFR Certification Program.
Andraski also serves as one of the supply chain profession's ambassadors to academia, having spent nine years as an adjunct professor at Pennsylvania State University's Smeal College of Business. In addition, he has been an active member of several industry and professional associations, including the Grocery Manufacturers Association, having served as the chair of the group's logistics committee and as a member of its efficient consumer response operating committee.
His contributions to the profession have been recognized by Penn State University, Michigan State University, Syracuse University, and his alma mater, the University of Scranton (Pa.). He has also received the prestigious VICS Roger Milliken Career Achievement Award and the Distinguished Service Award from the Council of Supply Chain Management Professionals.
He met recently with DC VELOCITY Group Editorial Director Mitch Mac Donald to discuss his career in logistics, the biggest barriers to supply chain collaboration, and Nabisco's secret for turning out top-flight logistics professionals.
Q: How did you start out in the logistics field?
A: With a large firm called Standard Brands. But shortly after I started there, Standard Brands got together with Nabisco. That was in the early '80s. I was initially on a team responsible for the warehouse delivery side of Nabisco's business.
Q: I'm always amazed at the number of top-flight logistics executives who came out of Nabisco in the '80s and '90s. It was almost like a training ground for the profession at large.
A: We are proud of the organization that we put together there because we are consistently referenced, even today, as developers of an organization and a process that was considered to be one of the top logistics operations in the industry.
Q: How did you attract so much talent?
A: We took the position that we were going to align ourselves with the academic community, and by doing so, we participated in internship programs. For the longest time, almost all of our new hires came out of the universities. They typically spent two-year internships with us and then often decided that, because they understood the company and they understood the technology, this was where they'd like to start their careers. So we built our organization around these young people. And once they joined us, we kept them fresh by giving them new assignments and challenges. Every two years, we were moving people from one area of responsibility to another. So at the end of a 10- year stint, they had quite a bit of experience in logistics management, supervision, and technology.
Q: It sounds as though technology was a big part of your operation even back then.
A: We felt very, very strongly that much of our success had to do with the development and use of emerging technology. Years ago, before anyone ever thought of IT in management, we had key people on our team who were, in fact, developing that management technology.We were fortunate. We had some very talented people. It provided us with a significant amount of information that allowed us to do more, so that we were able to report to management statistics around sales per employee, cases moved—basically, all of the key metrics broken down into various categories.
Fully exploiting the available technology also allowed us to eliminate a lot of the issues around customer service because we could be very specific in terms of what our service criteria were and how we measured our performance. We aligned our operation with the customers' expectations.We didn't get into a dispute with customers about whether our service was "X," as we thought it was, or "Y," as they were telling us it was.When we talked about an on-time delivery, for example, it was exactly what the customer expected, what it had specified on its purchase order. Anything other than that was considered a failure. Product substitution was considered a failure because we didn't get the customer exactly what it ordered. When you align yourself with your customer in that fashion, it gets rid of the noise, and once you get rid of the noise, it gives your sales organization an opportunity to get the job done without having to deal with the distractions.
Q: So the various groups were required to measure their performance in terms of satisfying the customer rather than against the more traditional internal performance metrics?
A: That's right. We talked about it back then, and I still talk about it today. And that approach has even wider applications. Whatever your responsibility in the operations, you have got to look at everybody in your organization internally and externally; you've got to treat them as a customer, which means that you respond to their requests, you understand their side of the opportunity or problem. You look at challenges from your standpoint as well as the standpoint of service providers, whether they are carriers, 3PLs, or distribution centers. All of this is critically important in terms of alignment so that people understand that it is the total process that you're looking at, not just a siloed approach.
Of course, a big part of that was getting involved in what we now call "collaboration." Collaboration to us back then really meant completely understanding your customers' requirements through 3PLs. We were proud that the 3PLs we used—the carriers and warehouses—liked doing business with us because it wasn't just about dollars and cents; it was about ensuring that they enjoyed working with us and found our business profitable. That way, we could be certain that they would, in fact, take care of our customers in ways that made our customers happy.
Q: You did that at a time when many companies were wary of sharing information with service providers about their goals and their customers' requirements. All that was supposed to be some kind of closely held secret, right?
A: Absolutely true. In large part, that attitude still persists today. We're working hard at VICS to continue to break down some of those barriers industry by industry, and we're starting to see some progress in that regard. On the other side of it, while there are companies that are willing to share, say, point-of-sale information, many of the companies as well as the suppliers out there haven't prepared themselves from the standpoint of being able to do something with that information and turn it into actionable supply chain data.
Q: So does the quest now turn from getting everyone to share information to finding a way to filter the flood of data?
A: Yes, exactly. That's the next step in the process. We certainly do see a lot of that so-called information overload. That's part of a natural process, though. That's why there is still so much work to be done. We still continue along the path of collaboration, with CPFR (collaborative planning, forecasting, and replenishment) being one of the initiatives. At VICS, we have established a formal CPFR certification program. We continue to publish information about the value of collaboration and how to do it effectively. We have recently, for instance, come out with a publication that helps car companies implement collaboration.
We are also seeing a significant amount of interest in collaboration on the part of the Asian business community. I just got back from Tokyo, where I spoke at a conference on collaboration. We are deeply involved in global logistics management and creating a global logistics model that identifies all of the transactions from the time an order is entered until such time as the order is received here in the United States.
Q: What do you see as the biggest barriers to increased supply chain collaboration?
A: Well, for one thing, many companies—including some very large ones—are still using paper bills of lading. When you hand bill or paper bill in a distribution center to a carrier, the carrier has to take that paper bill of lading back to its terminal and somebody has to key in that information so that they can assign a purchase order number. That's where the trouble lies. When you consider the costs the carriers incur by keying that information in, the prevalence of keystroke or data entry errors, with results like products' going to the wrong location and so forth, it really does add up to a major problem that doesn't have to exist. We can still do electronic bills of lading and still have a paper document if the buyer, seller, or carrier needs that document, but moving the information electronically is what it's all about. What everyone wants is speed to market and visibility. Any step along the way that includes a fax, a phone call, or an e-mail, though, detracts from your ability to have visibility at every point along the supply chain.
Q: What would have to happen for you to decide the collaboration battle had been won?
A: I don't know if we will ever have the information that I could point to and declare victory. What we can say today is that there are numerous companies that we know of that have, in fact, implemented a collaboration program of sorts. I would say that CPFR is one way to go about it, but it is not the only way. There are also companies that have been successful in implementing company-specific programs. There are multiple paths to success.
Q: If you could share one piece of advice with a young person starting out on a logistics career, what would it be?
A: Choose the company you go to work for carefully. I would certainly look for an industry leader. Universities are great sources of information in that regard; they know who the industry leaders are in terms of technology, business processes, and practices. I would certainly depend on my school and my professors to point me in the right direction.
If I were in school today, I would certainly be looking at internship programs. I would like to go out and work for two, maybe three companies during the course of my education even if it meant taking five years instead of four to earn my degree. That's a great help in finding out about these companies: Do they have training programs, state-of-the-art technology, and the attitude that says "you are important to me"? Do they understand that marketing has to relate to the supply chain as well as to manufacturing? Do they really have performance metrics that flow across the entire company or are they still in silos? Then when I graduated I would have a pretty good idea of the company that I wanted to work for. That's a great help in deciding what path you want to take.
Q: Any closing thoughts?
A: It's really important for each of us to be students. Regardless of where we are in our careers, what we've accomplished, or where we are within our organizations, we should always be looking out for ways to keep on learning.