Some measure success by salaries and titles. Others use a different yardstick altogether. Take the 12 professionals selected as our 2008 Rainmakers, for example. When asked about their proudest professional accomplishments, one spoke of his work spreading the gospel of Lean. Another mentioned the satisfaction of providing logistics support to the brave men and women in uniform. Yet another cited his involvement in his company's groundbreaking program to hire people with disabilities to work in its DCs.
As in the past, DC VELOCITY worked with members of the magazine's Editorial Advisory Board to select the Rainmakers. The selections were made from a list of candidates nominated by board members and Rainmakers from past years. This year's honorees come from all parts of the profession, from the military to vendors to practitioners. But whatever their role, they have this in common: they've all made a lasting contribution to the profession.
Earl Boyanton is the assistant deputy undersecretary of defense for transportation policy in the U.S. Department of Defense. He is the DOD's senior official focused on transportation within the headquarters staff of the secretary of defense, with a portfolio spanning all DOD passenger and cargo transportation, including household goods, customs clearance, and mail. Essentially, he has oversight responsibility for the biggest transportation organization in the world.
Though Boyanton may be best known in military circles for his leadership in providing logistics support during the largest and longest-running military deployment since Vietnam, his achievements at the DOD actually go well beyond that. He has also proved to be a master collaborator, moving quietly through the corridors of power and working with all the right people in a quest to fundamentally transform the DOD's supply chain.
Take the 2007 award of the Defense Transportation Coordination Initiative (DTCI) contract, for example. DTCI is a multibillion dollar contract that incorporates 3PL support into DOD's "proprietary" distribution process. The U.S. Transportation Command (USTRANSCOM) did the work,made the award, and will manage DTCI, but somebody provided the catalyst. Look closely at DTCI's origins, and you're likely to detect Boyanton's presence behind the scenes.
He has also been relentless in instilling best practices across the vast DOD logistics enterprise, driving cultural reform, eliminating vertical silos, and—in collaboration with USTRANSCOM and other national partners— advancing a consistent agenda for transformation to meet the security requirements of the 21st century.
Q: What do you consider to be your greatest professional accomplishment in the logistics field?
A: I am proud of my success at the strategic, enterprise level in the Office of the Secretary of Defense, helping provide the very best in supply chain support to our warfighters. Others deserve the credit for moving forward with operational and tactical matters, but we strive at the corporate level to develop improvements and eliminate obstacles so the combat logisticians in the fight see only positive results. Our goal is to set the environment so that the performance of distribution chains supporting soldiers, Marines, airmen, sailors, and Coast Guardsmen could be as reliable as turning on the tap water at home—they're there when needed, in the right amount, at affordable cost, with minimal effort and thought to make it happen.
Q: What do you consider to be the greatest obstacles, moving forward, to greater supply chain optimization in the logistics field?
A: The U.S. Department of Defense is a huge organization assembled from many disparate component parts. Each has its own role and mission and as such, defines its measures of success around those roles and missions. Disaggregate the DOD component organizations into their subordinate parts with their respective roles and missions, and you can see how difficult it is to define enterprise-wide logistics metrics for DOD. In the U.S. military, we don't really have "a" supply chain. Rather, we have myriad discrete supply chains for many purposes—for moving commodities like fuel, ammunition, and food; and for moving specific weapon systems like helicopters and ships and their subcomponents like power plant and navigation systems. However, in collaboration with the logistics leaders within the DOD components, we are making headway in setting up integrated and inter-related metrics around order fulfillment, time-definite delivery, and other measures that our commercial corporate counterparts have used for a long time. Continuous process improvement techniques—Lean and Six Sigma— are taking root and producing results, as is the strategy of performance based logistics, where it fits, in support of equipment availability.
Q: What was the best job you ever had?
A: The one I have now. I've said that about every job I've held in the 45 years I've been working in transportation, distribution, and DOD crisis action response, and it was never more true than it is today. One of my earliest mentors, my high school football coach, told me, "You just block your man—the scoreboard will take care of itself." That's an oversimplification of life, but I try to have a targeted focus every day. I'm in awe of our extraordinary men and women in uniform and the civil servants and contractors who support them, and I'm honored to serve with them all.
Editor's note: Pentagon lawyers have asked us to say, "The opinions expressed here are those of Earl Boyanton and do not necessarily represent the views of the Department of Defense." Our own sense of fair play requires us to report that we gave various Pentagon offices the opportunity to review this piece prior to publication, and all approved it for release without any changes.
Robert Arndt has been in the automotive business for over 30 years and is currently the director of global lean warehouse operations for General Motors. He has also worked for Toyota and Volkswagen of America. Most of Arndt's career has been devoted to the implementation of lean warehousing concepts, which he became familiar with during his tenure at Toyota.
In his current role, Arndt is responsible for developing a lean-thinking organization that brings lean processes to GM's entire $14.4 billion service- parts business. Arndt says there's a bit of a fast-food industry aspect to what he does: "We have operations all over the world, and my responsibility is to share best practices globally," he says. "It is sort of a McDonald's approach to warehousing. A new idea does not help just one facility; it helps 90."
Q: How have your customers' needs changed during the past five years in terms of your day-to-day operations?
A: Our customers [automobile dealers] are under more pressure to achieve profits at the back end of the store. The margins are so slim on selling new vehicles, so service and parts operations have to make more profit. From the supply chain standpoint, that requires us to make sure we have good availability and timely replenishments of their parts and other products.
Q: What do you consider to be your greatest professional accomplishment to date?
A: That would be taking the lean concepts I learned while working at Toyota and applying them at GM. It was an opportunity to take a big corporate giant and move it to lean opportunities.
Q: What are the biggest obstacles, moving forward, to greater supply chain optimization in the logistics field?
A: I think it's dealing with multiple cultures around the globe. It means realizing that the way to get something implemented in one place does not work everywhere. There is a need to develop relationships with others and learn how comfortable they are with change. To get buy-in, you have to learn how to deal with diversities, cultures, and the things that cause resistance.
Q: What is your top priority for supply chain management this year?
A: Our top priority is our work in emerging markets, which would be China,Russia, and also India. All are fast-growth opportunities—not just 5 to 10 percent volume growth each year, but 5 to 10 percent volume growth each month. That is pretty exciting.We want to get there early. And when someone buys a car,we want to make sure that person has a good service experience so that he or she will come back to GM again.
Q: What advice would you offer a young professional considering a career in logistics?
A: With the United States being a high-cost producer and with so much manufacturing outsourced overseas, logistics will continue to be strong. I would recommend getting a degree from a reputable school, then choosing the right employer for the first job—one that will provide lots of hands-on experience. Service industries are a good place to be to develop opportunities. Also, it used to be that the big would eat the small; now it is the fast that eat the slow. Focus on a company that has good change management and is able to react quickly to market conditions.
Chris Hickey did not set out to become an expert in supply chain technology. Rather, he majored in computer sciences in college and began his career in enterprise software. But on-the-job experiences quickly opened his eyes to the importance of the supply chain in the global economy. After stints at EXE and i2, Hickey is now senior vice president of sales at RedPrairie and a committed member of the supply chain community. "The supply chain plays a very crucial role in most of what happens in the world today," says Hickey. "I like the challenge of that and the ability to affect that in my own small way."
During his 14 years in the profession, Hickey has gained a reputation as a relationship builder, noted for patiently educating clients, partners, and other industry players about the importance of technology and the supply chain in the future of any business. "In my opinion, Chris has set the standard for developing relationships and partnerships in the supply chain industry," says John Sidell, principal and co-founder of ESYNC, a supply chain consultancy that is also one of RedPrairie's business partners. "This industry-wide contribution is significant—because of Chris, our industry has a roadmap for how to build synergistic relationships in an increasingly complex landscape of partners, technologies, and channels. Chris is someone who makes things happen and understands how critical relationship building is in the supply chain industry."
In recent years, Hickey has made it his mission to promote formal education in supply chain and logistics. Among other endeavors, he is a driving force behind his company's scholarship program at the University of Wisconsin—Milwaukee.
Q: What role does technology play in supply chain management today?
A: Obviously, I am a bit biased, but I believe that technology plays a huge role in the supply chain. The growth in the movement of product around the world has placed constant pressure on supply chain professionals to drive down the cost of fulfillment. Technology—regardless of what supply chain or industry you are in—is an enabler of driving down costs and driving up efficiencies.
It's crucial for supply chain professionals to remain current with technology. I know sometimes for practitioners that can be a little overwhelming. But they need to know the fundamentals and they need to stay in tune with what's going on. Technology is not going to go away.
Q: RedPrairie has focused a lot on managing the supply chain from end to end. Why do you feel that is important? What does that mean for the typical logistics professional?
A: The handoff between supply chain partners is very important. Historically, the distribution center has been primarily concerned with fulfilling orders and trailers' leaving on time. But if you are delivering to a store and they cannot receive the goods efficiently or get them out onto the shelf in a timely fashion, it doesn't matter how quickly the order moved through the distribution channel. Logistics professionals need to be open-minded and look at the entire supply chain. In the retail environment, they need to be aware of how they are sending product out to the store. They need to prepare it so that it can be efficiently moved into a selling position. Our view of end to end takes into account the distribution process as well as the point of final consumption, addressing both physical movement of product and management of labor across this entire network.
Q: If you could give one piece of advice to a person considering a career in logistics, what would it be?
A: Out of gate, you have got to come to terms with whether you are, or enjoy being, a problem solver. Not only if you are selling into the logistics field but also as a practitioner, a lot of what you do is solve problems that come your way with very little warning. Obviously, you need to have a solid grasp of the fundamentals in logistics— whether that's through on-the-job training or taking electives or prerequisites in an academic setting. You need to know how the physical movement of product happens around the globe. But you also need some understanding of business. For example, what does it mean to drive the cost of sales down? In the supply chain, you are always looking to contain costs, so you need to have a solid understanding of business and economic fundamentals.
Randy Lewis is senior vice president of distribution and logistics for Walgreen Co., headquartered in Deerfield, Ill. In that role, he oversees the flow of merchandise from suppliers to the stores and the operation of 12 distribution centers, the newest of which opened in Anderson, S.C., last June.
The Anderson DC opened amidst a flurry of media attention, largely because of the facility's unique program to employ people with physical or cognitive disabilities. Today, 40 percent of the workers in the DC have a disability of some sort. The drive to hire the handicapped was spearheaded by Lewis, who knows the plight that handicapped people face when it comes to finding employment—his own son is autistic. Walgreens plans to follow the same hiring strategy at a DC in Hartford, Conn., that will open this fall.
Lewis joined Walgreens in 1992 as divisional vice president of logistics and planning. He was formerly a partner with Ernst & Young, where he had served as a consultant to the Walgreens SIMS (Strategic Inventory Management System) project since 1987.
Lewis received his M.B.A. from the University of Texas in 1975 and served in the Peace Corps in Peru. He has been chairman of the Distribution/Logistics Committee for the National Association of Chain Drug Stores and currently is on the board of directors of Wendy's International Inc.
Q: Tell us about your plans to hire more workers with disabilities.
A: We plan to expand our program to a DC we're opening near Hartford (Connecticut) this fall. We are working with our agency partners to help find and screen prospective team members with disabilities. At Anderson, about 40 percent have a disability and we hope for similar success in Hartford. When the management teams from our other DCs came to Anderson and saw for themselves, they set a target of hiring 1,000 people with disabilities by 2010. Certainly, it is a clear and elevating goal for us. We know we are on a journey.
Q: What has it meant to you personally to be involved in such a program?
A: It has been a privilege to be part of this and an overwhelming one, too. It has turned out better than I ever imagined—not just in the opportunities it has offered to people who might not have had an opportunity before, but in how it has changed the way people with disabilities interact with others, by offering them a community and a voice. More importantly, it has changed the "typically-abled" as well. Quite frankly, it has transformed the workplace. Knowing I am part of this has been the most rewarding and meaningful time of my career.
Q: What advice do you have to offer companies that might want to head down a similar path?
A: Get a good partner to help you. And whatever number of people with disabilities you are targeting to hire, you are aiming too low. Whatever level of disabilities you are looking to hire, you are being too restrictive. It doesn't require investments in new technology—it only requires the will to say yes without knowing all the answers. This is not easy, but it will be the best thing you ever do. We hope others will be moved to act.
Q: There's been a lot of talk about a labor shortage in the years to come. Could this provide a partial solution to that problem?
Certainly the disabled is an untapped pool that has a lot to offer. We've found that people with disabilities are as diverse as the typically-abled in terms of abilities, needs, and attitudes. But our experience has shown that an integrated workforce is not just as good; it is better. It has brought out the best in all of us.
Art Litman hopes never to retire completely—not because he wants to make more money, but because he truly loves the business of international trade. That's good news for anyone who's involved in importing, because it means he'll continue to represent their interests before U.S.Customs authorities.
Litman retired as vice president of regulatory affairs and compliance for FedEx Trade Networks in February 2008 and now has his own business, Customs Advice. He is uniquely qualified to offer advice on that subject. Not only is Litman a past president of the National Customs Brokers and Forwarders Association of America (NCBFAA), the International Federation of Customs Brokers Associations, and the Foreign Trade Association of Southern California, but he has also served on the board of the American Association of Exporters and Importers for 17 years.
His expertise is recognized both here and abroad. Litman is a member of U.S. Customs and Border Protection's Trade Support Network. He represented FedEx on the World Customs Organization's Private Sector Consultative Group in Brussels, Belgium, working on the WCO's SAFE Framework of security standards. He is a recipient of the Stanley T. Olafson Bronze Plaque Award, the first NCBFAA Centurion Award, the AAEI Trade Warrior Award, CBP's ACE Award, and the Commissioner of Customs Award of Recognition, and he is the Coalition of New England Companies for Trade (CONECT) 2008 Person of the Year.
Q: How did you become a licensed customs broker?
A: In college, I was a physics and math major. I was a typical '60s kid: I dropped out in my fourth year, grew a beard, and became a carpenter. I was tired of studying and just wanted to work. I had all kinds of jobs ... then a friend who was working in the [customs brokerage] business said his company had a messenger job in downtown LA. It was paying more than the men's store where I was working at the time, so I interviewed, and they hired me.
The company [Castelazo & Associates, later acquired by Tower Group and then by FedEx] had been started in 1947 by two brothers, Juan and Francisco Castelazo. The brothers left the company about the time I came. One of their beliefs was that the people who ran the company should own it, so they sold their shares to some of the people who worked for them.
I moved into the office after a month or two, and after about six years opened an office at the airport that was very successful. I got my customs broker's license, and when I was only 27 years old, they offered me an equal share of the ownership. After I became an owner, I realized that I needed to finish my education, so I went back to school and finished my degree. Then I went to law school at night and passed the bar. That gave me a lot of the analytical tools needed to run a business.
Q: What are the most significant changes you've seen in your profession over the years?
A: I'm old enough to remember the transition to containers. I used to go over to the docks to see goods unloaded in old cargo nets, and I can still remember the smell of some of those old warehouses!
The technological changes have been huge. I've worked in this business from the time when there was no automation in customs to the second generation of automation. Automation took the emphasis away from scribnering— preparing documents—and put the focus on professionalism, something I thought was very healthy for the profession.
From the clients' standpoint, the biggest change came from the Customs Modernization Act of 1993, which took the responsibility for classification and preparing entries from the broker and gave it to the importer. That changed the whole dynamic of importing in the United States.
The latest and perhaps the biggest change resulted from the ramifications of 9/11. All of a sudden, a customs service that was primarily focused on revenue collection with some drug interdiction had a new number one priority: security. What in the old days was the whole customs service is now a fairly small organization, the Office of International Trade. Before security became so important, we were working toward minimal invasiveness and account-based processing. Very compliant companies had self-assessment and were looking at almost no inspections of their shipments, but 9/11 certainly delayed that. I think we probably have another 10 years of sorting this all out before we can get back to that point.
Q: Over the years, you've been a member of several groups that advise customs authorities on trade and regulatory matters. What were some of your accomplishments?
A: Very early on, I was one of the leaders in developing ABI (Automated Broker Interface). I felt it was very important, and I had a lot of influence when the initial wave of automation came along. I am also very proud that I had the opportunity to run COAC (Commercial Operations Advisory Committee) for two six-year terms. I was there from the very first meeting and aggressively worked on getting Customs to move from daily to monthly duty payments.
I was fortunate to be on COAC during 9/11. It was an exciting time because there was so much change as we watched Customs move from Treasury to the Department of Homeland Security.
Now I am really enjoying working on the second iteration of customs automation. I'm also co-chair of the Trade Support Network Entry Committee and am an ACE (Automated Commercial Environment) Trade Ambassador, so I have full security clearance. That means I'm able to get involved in ways that only a few of us can.
Q: What are your plans now that you are retired?
A: I hope not to retire fully. I love this business; it's given me an amazing and exciting life. I've never regretted becoming a customs broker. I like the entire trade community— steamship lines, importers, customs brokers, and everyone else—and I've received so many nice things by being a part of that community.
One thing I'd like to do is put an oral history together, to pass on the institutional memory of the customs brokerage industry. The NCBFAA has agreed to help me with it. Sometime next year, we hope to have everyone in the brokerage community go out and interview key players. We'll put it online, and maybe it will encourage people in other industries to do something similar.
D.G. Macpherson joined Grainger in February 2008 and is responsible for supply chain operations, including the performance of Grainger's distribution centers as well as its product offerings and availability.
Macpherson came to Grainger from the Boston Consulting Group, where he had been partner and managing director since 2002.While at BCG, he was a strategic consultant to Grainger, helping shape and execute many supply chain initiatives that proved foundational to the distributor's growth. Today, W.W. Grainger Inc. is the leading broad line supplier of facilities maintenance products serving Canada, China, Mexico, and the United States. The distributor, which reported sales of $6.4 billion in 2007, serves its customers through a highly integrated network that includes more than 600 branches and 18 distribution centers.
Early in his career, Macpherson was an operations manager for Rain Bird Sprinkler Manufacturing Co. and a test engineer with the U.S. Air Force. He holds a bachelor's degree from Stanford University and an M.B.A. from Northwestern's Kellogg Graduate School of Management.
Q: Please describe your role at Grainger.
A: I have the privilege of leading a great team dedicated to designing the customer offer from a product line, DC network, and pricing perspective. In addition, my groups are responsible for executing against the offer, ensuring strong product availability and delivery performance so that when a business has an unplanned product need, we are poised and ready to address that need.
Q: I know your company has doubled the size of its catalog in the last two or three years. How has that affected your supply chain and distribution operations?
A: You are correct. In 2005, we had 82,000 products in our catalog. This year's catalog had more than183,000 items— everything you can think of to keep a facility up and running, including power transmission, fleet maintenance, material handling, safety, plumbing, electrical, and cleaning supplies.
That expansion was one of the reasons for our multiyear network redesign initiative. In 2000, Grainger began reconfiguring its logistics network in an effort to increase capacity and improve product availability, as well as boost productivity and enhance service to customers. Grainger's supply chain is the backbone of our operation; in order to effectively execute on growth initiatives such as product line expansion and market expansion and handle a large-scale SAP implementation, it was first vital to get our infrastructure in place.
Today, our U.S. network includes nine large automated DCs—five new and four redesigned facilities. All of those DCs ship goods directly to customers as well as replenish the branch facilities. We also fill customer orders through the branch sites.
The redesign enabled the company to remove a step from the distribution system. In the past, we had several regional DCs along with two national DCs and the branch facilities. Currently, orders come in over the phone or via the company Web site, www.grainger.com, and they are processed to ensure our customers have the products they need to maintain their facilities, when and where they are needed.
Q: What was the most challenging aspect of the program's rollout?
A: One challenge was helping suppliers adopt a new way of doing business with Grainger. Other challenges included adjusting to new cycle time requirements and adjusting to new procedures after we removed a layer from the supply chain. We are committed to helping our customers be more efficient in maintaining their facilities, and our suppliers play a vital role in making this happen.
Q: How have things improved in the time the program has been up and running?
A: Product availability has improved, and inventory turns have remained constant even though we've more than doubled the size of the catalog over the past three years. Cycle times are also improving.
In addition, we can now replenish inventory for our more than 400 U.S. branches the next day. We've also improved our ability to make daily deliveries, in some cases, multiple times per day.
Q: As companies go overseas, I know many industrial distributors follow them. How is Grainger handling that?
A: Well, certainly we have many customers that are international customers, and one way we serve them is through our export business. We also have several international businesses, including operations in China and Central America.
Q: What is the biggest supply chain challenge that Grainger now faces?
A: I think the biggest challenge will be making sure we continue to offer exceptional customer service as we aggressively expand our product line. The value proposition that Grainger provides in the marketplace is that customers can turn to us for any facility maintenance product needs that may arise, thereby cutting down on the time and money it costs to track down whatever they require to meet these unplanned needs. The objective is to always have a product solution available when there is a need.
Q: Are there any plans for tweaking things in the future? A new DC to handle growth, for example?
A: We are constantly evaluating our network and our ability to improve our reach to customers—that is an ongoing activity of my strong team. We believe that our network is correct for now, but as our product line continues to grow and we continue to be successful as a business, we may make adjustments to ensure Grainger delivers against its service promise.
Mick Mountz learned the hard way just how important fulfillment costs can be. Earlier in his career, he worked for the online grocer Webvan, one of the best-known players of the dot-com era. Though a hit with consumers, Webvan struggled with the distribution end of the business. With an inventory of thousands of SKUs and relatively small orders, fulfillment became an expensive proposition, and the company wound up losing money with nearly every transaction. In 2001, Webvan closed its doors.
Mountz says that experience proved to be the genesis of Kiva Systems, the Massachusetts company he founded in January 2003. Kiva markets a new technology it developed that uses robots to essentially bring racks of stock items to picking stations.
Prior to joining Webvan, Mountz spent three years in product marketing at Apple Computer. He began his career at Motorola, where he spent seven years working as both a mechanical and a manufacturing engineer.
Mountz holds five U.S. technology patents. He earned a Bachelor of Science degree in mechanical engineering from the Massachusetts Institute of Technology and an M.B.A. from the Harvard Business School.
Q: You were in the middle of the Internet bubble. Tell us a bit about the experience at Webvan and what you took away from that.
A: I was there about a year, charged with the next-generation DC design to solve the order fulfillment [problem] of split case pick, pack, and ship. It is difficult when you have 50,000 SKUs and you are trying to draw 30 items per order. Most approaches cause you to use quite a bit of labor and complex automation. We wrestled with that for better than a year. I felt there had to be a better way.
I was thinking about the extreme conditions under which you might build a warehouse. What if I were building in China? If I was building where the land is free, I could build a million square feet. If the labor was free, I could hire 10,000 workers. You could call out, "Hey, bring me that case of Pepsi." I said, hey, what if the products could walk and come when you needed them? About a year after I left Webvan, the notion came to me of robotics with high-performance computing. You could design a product for moving products around.
Q: So when you launched Kiva, what was your vision?
A: I thought hard about the problem and reached the conclusion that the current suite of material handling and picking solutions did not lend themselves well to this problem. I said, "Let's design a warehouse from the back door in, trying to get these 30 items on the truck. Take it from the perspective of the customers: How do you make material handling serve the operations folks? In fact, let's develop an entire solution end to end, so that the customer can get back to his day job, filling orders." We decided we would need bots, navigation software, and storage devices. In our original vision it would be easy to use, fun to use, and friendly, and if it solved the fundamental picking challenge, it would be valuable to customers. We set out to develop a machine with three times the picks per hour of other solutions.
Some of the side effects have been dramatic, some of them unexpected. Since you are using one simple process, you don't have to segment products like fast and slow movers. You can increase productivity and be more flexible.
Q: You've spent a lot of time with well-known technology leaders. How do you foresee the role of technology in addressing some of the issues in logistics and supply chain management?
A: We will find more and more innovative ways to solve logistics and supply chain problems. You can see a lot already in the planning stages. You can see it in DCs in RFID. You can see that kind of thing working into the DC through pallets and cases. We will get to the "each" level.
Other technologies are getting better and cheaper—voice and lights, for example. They are getting faster and with higher quality, and they are more robust. Flexibility is a key to the way we thought about the problem. Flexibility means if you want to pick, scan, and pack, you can give multiple scan options. The other flexibility we provide is that this is a set of automatons that work with a broad set of SKUs.
Procter & Gamble's acquisition of Boston-based Gillette in October 2005 created the world's largest consumer goods company. And shortly after the deal was completed, work to integrate the two companies' supply chains got under way. It fell to Daniel Myers, who was P&G's vice president of product supply for global operations at the time, to set up and run the project team that knit together the two global supply chains.
The supply chain integration project proved to be a largescale initiative that took almost two years to complete. Among other challenges, P&G had to absorb an additional 100,000 customers worldwide as well as 50,000 new stockkeeping units. But the effort paid off in the end. Combining the supply chains has saved P&G an estimated $1 billion and produced another $750 million in incremental sales.
Myers, who has worked in every P&G business unit at one time or another during his 28-year career with the company, holds a degree in chemical engineering from the University of Tennessee. Out of college he worked for Eastman Kodak's chemicals division before joining P&G in 1978.
Q: Describe your current role in your organization?
A: For the last three and a half years, I have had responsibility for the company's finished-product supply chain, including customer service and logistics.My responsibilities included logistics, order to cash, and customization budgets, which were $6 billion, and finished-product inventory of $4.5 billion. Employment was 4,300 people managing the finishedproduct supply chain and over 500 distribution centers. I also led the supply chain integration for the Gillette acquisition. This was the largest consumer products acquisition in the history of our industry and five times larger than any project P&G had ever managed.
I have recently moved into a role managing the supply chain for our Global Hair Care business. This is a business of $11 billion in sales and a strategic growth area for the company. I have responsibility for manufacturing, purchasing, engineering, quality, customer service, and logistics. The business includes both our retail business and our professional salon business through Wella.
Q: Based on your experience guiding P&G's supply chain merger with Gillette, what advice would you offer other professionals faced with the task of combining two supply chains?
A: There were several key elements that were essential to our success. First, you must staff for excellence in the leadership roles. We had leaders from each company jointly responsible as a team to deliver the different elements of the supply chain integration.
Second, we developed an inspiring vision of creating the best consumer products company in the world and were focused on 1 + 1 = 3. The sum of the two companies would be much greater than either of them were separately. We identified best practices from each company that we wanted to broadly reapply across the combined organization. You need to deliberately communicate doing this and role model it.
Third, we focused on staffing the best team at all levels. This meant truly picking the best candidates for all roles. Maintaining the true knowledge and skills of the Gillette organization was critical to future success.We had dedicated teams to attract and retain the Gillette people.We had 95 percent retention at the end of two years, which is unheard of in most acquisitions.
Fourth, we had very clear hard-number goals with broad-scale ownership in the goals, which were very stretching.We delivered over $600 million in supply chain savings over two years. We used outside consultants to develop the first draft of savings but then had the combined organization confirm the goals, which we adjusted based on the feedback.
Fifth, you must have excellent program management structure and leadership with clear decision-making to the top of the company. You want to drive decisions quickly to move fast.
Finally, you must set challenging growth goals.We committed to $750 million in incremental sales from combining the two companies. You need to identify the key building blocks.
Q: What's the biggest challenge that supply chain professionals face today?
A: The biggest challenge is designing the supply chain to support the ever-changing business models to win in a global environment. This calls for the ability to truly understand the business model required to win and the capability needed in the supply chain to create a competitive advantage to support the unique and ever-changing business model. In P&G with over $80 billion in revenue, we have 22 different business units and over 300 brands sold in 180 countries around the world. As supply chain professionals, we really run three supply chains—information flow back from our consumers and customers, product supply to consumers, and then cash flow back. Operating these three supply chains in a synchronized way with lower cost and cash in the total system is the key to creating competitive advantage. We must do this while constantly managing fast-paced innovation required to win in the marketplace for each of these businesses. We must be providers of supply chain solutions to win in each business and in every geographic region in which we compete.
This is a huge and fun challenge requiring constant learning and the ability to manage differentiation, scale, and agility.
Q: If you could go back to school for a day, what course would you take and why?
A: I would take a course on the history, geography, and culture of China. China is one of our fastest-growing markets. I have spent a large amount of my time over the last five years there.
China is going to continue to have a huge influence on our world, and it represents a huge growth opportunity for businesses and leaders who understand how to win in China.
Q: What advice would you offer a young person considering a career in logistics?
A: You must first approach your career and role as a total business leader. This means understanding the business model and what is required to win from a total business perspective.
Second, you must develop your skills to be an end-to-end supply chain leader, starting externally with your customers. Lastly, you must deliver your current role and responsibilities with excellence. The key to future success is approaching every role and every day in this order. You should constantly learn how to be a great coach and inspirational leader. People will never remember your results, but they will remember the positive impact you had on their lives and development.
Joan M. Padduck
As the longtime president and now chairman of the Coalition of New England Companies for Trade (CONECT), Joan M. Padduck gets heard in Washington.
CONECT's mission is to inform policy makers about how trade legislation and regulations will affect their businesses. Together with CONECT's staff, volunteer board of directors, and Washington counsel, Padduck has helped give New England's international trade community a voice in Congress. The grass-roots advocacy group also offers educational seminars and organizes an annual conference.
Under her leadership, the Southborough, Mass.-based organization has grown to include members in every aspect of international trade: from large shippers such as L.L.Bean, Hasbro, and CVS to customs brokers, carriers, third-party logistics service providers (3PLs), law firms, banks, and others, large and small.
Padduck—known to all as "Joni"—understands firsthand how trade policy affects business: During her 30- year career, she has held import operations and management positions at companies like Reebok, Staples, and APL Logistics. She later was a partner in a small consulting firm that specializes in customs matters.While she still does some consulting, she now devotes most of her time to CONECT. It's a very demanding schedule, but Padduck doesn't seem to mind. "When you can do something you love, it's not like work," she says.
Q: How did CONECT get its start?
A: While I was working for Reebok, Congress was debating footwear quotas. The company's trade counsel, Peter Friedmann [now CONECT's Washington counsel], advised senior management to talk to Congress. They appointed me, and with Peter as my mentor, I went to Washington to talk with the Massachusetts delegation. They didn't understand that footwear companies were becoming importers and that for them, importing was a good thing. They told us they only heard from labor unions, not from companies that were in favor of trade.
We realized that we needed to have a voice for manufacturers like Reebok, Morse Shoe, and Converse that were also importers. CONECT was launched in 1991 with about 14 members, and by 1999 we were able to hire [Executive Director] Carol [Turner]. That's when things really took off—she promoted the group and personally called on companies that would benefit from joining. Now we have about 700 individual and corporate members.
Q: What do you see as CONECT's main focus?
A: Our core mission is advocacy work. For instance, this will be the 17th year we'll bring a group of members to Washington for what we call our Washington Briefing. We'll meet with congressional delegates and members of the Senate Finance Committee, the House Ways and Means Committee, CBP (Customs and Border Protection), and so on to learn about and discuss topical issues like free trade agreements.
It's important for Congress to hear from constituents at the grass-roots level.We're not asking for completely open trade. The message we're bringing is that companies want free and fair trade.
Q: Has CONECT been successful in getting its message across in Washington?
A: We do get phone calls from congressional representatives asking for feedback. Congressman (John Joseph "Joe") Moakley was the first. He was very much pro-union, but he also recognized the importance of trade to his district, and he wanted a balanced view.
Now, we regularly get calls from [lawmakers]. They know what we represent, and they want to hear what we have to say. We had a fair amount of influence on establishing permanent normal trade relations with China and Vietnam.
Q: How has the organization changed over the years?
A: A larger percentage of our members are coming from other states, and we're seeing more interest in exports. So we're branching out geographically and are collaborating with groups that can help small and medium-sized enterprises.We've had some very successful co-sponsored events in Connecticut and Vermont and are working on arranging a breakfast with Sen. [Olympia] Snowe in Maine.
Our annual conference has expanded to include economic and supply chain trends, such as where manufacturing and sourcing is going, and more sessions about exporting along with the usual import and customs-related topics.
We've also added new seminars over the course of the years to reflect members' interests. And even though CONECT is mostly about education and advocacy, we recognize that providing networking opportunities where members can meet and share ideas with each other is important, too.
Ken Ruehrdanz has been a key player in the logistics field for more than two decades. Currently Dematic's industry manager for warehousing and distribution, he has been involved in the development of automated system solutions for production, warehousing, and distribution operations for the last 25 years.
Beyond that, Ruehrdanz has given generously of his time to work toward the advancement of the profession. Over the years, he has become a fixture at several high-level logistics industry associations and is a frequent presenter at the annual conferences organized by groups like the Warehousing Education and Research Council (WERC), the Council of Supply Chain Management Professionals (CSCMP), the International Warehouse Logistics Association (IWLA), and the Material Handling Industry of America (MHIA).
A graduate of the University of Illinois at Champaign- Urbana, he is the author of scores of white papers and other works of thought leadership. He also serves as chairman for MHIA's Conveyor Systems Product Section and is vice chair of the Supply Chain Execution Software Product Section.
Q: What value and importance do you place on being involved in associations like MHIA, WERC, and CSCMP?
A: When your airplane flies through the jet stream and hits some rough air, who do you call? You call air traffic control to help find a new altitude at which to fly. In the supply chain business, we are also looking for smooth optimized flow. Professional associations like WERC, CSCMP, and MHIA are centers of expertise that can help us find smooth air. I see significant value in these organizations.When I first started participating in the various supply chain associations, I was skeptical.However, it has been my experience that if you put effort into supporting the professional supply chain associations, you will be amazed at how much value comes back in return.
Q: What is the greatest challenge to increased operational efficiency and customer service excellence facing today's logistics professional?
A: Managers of warehouses and distribution centers must focus on continued optimization of all the process functions in the operation. That means optimizing how humans work. Therefore, it is all about the impact of labor. Many operations are struggling with how to deal with government regulations, bio-mechanical injuries, worker conditions, worker skills, turnover, attendance issues, and theft rings, just to name a few. Logistics professionals should be continuously re-thinking the human element in each step of the process flow, from receiving to shipping, so that it works faster and more efficiently, and provides improved customer service. Of course, don't forget to keep reducing operating costs while you're at it.
Q: If you could give one piece of advice to a young person considering a career in logistics, what would it be?
A: A great career in logistics awaits you, come join us.We need the best people to enter this field. Here is a profession that has been elevated from backroom clunky stuff to being strategic, visionary, and vital. The work is challenging and gratifying; it is a blend of strategic planning, engineering, and business management. The demand for people trained in logistics will continue to grow. If the other option is to become an attorney, the choice is easy, join us in logistics.
Loren Troyer has worked at John Deere for over 30 years in a variety of supply chain management roles. He is currently director of order fulfillment for the Commercial and Consumer Equipment (C&CE) Division, which sells commercial mowing equipment, utility vehicles, and riding lawn mowers. Among his other responsibilities, he oversees forecasting, sales and operations planning, production, order management, distribution, and inventory management activities for the division worldwide.
When the C&CE division embarked on an inventoryreduction initiative in the fall of 2001, it was Troyer who led the program. The program's goal was to find ways to cut finished-goods inventory to dealers while still keeping enough stock on hand to fill customer orders during the peak spring and summer sales season. The division accomplished that by using special optimization software to restructure its supply chain and slash inventory. Six years after the program got under way, the division has been able to cut the amount of inventory in its pipeline by half.
Troyer, who is based in the division's headquarters in Cary, N.C., graduated with highest distinction from the University of Iowa with a B.A. in mathematics. He also received his M.B.A. from the University of Iowa.
Q: Describe your current role in your organization.
A: My current position is director of order fulfillment for the Commercial and Consumer Equipment Division of Deere & Co. For our division, I am responsible for both the design of the order fulfillment process—i.e., ongoing improvements to the design of the process—and the effective execution of the process, primarily product availability and inventory turns.
Q: What did you learn about controlling inventory from your project?
A: One of the lessons learned is that if you want to operate effectively at lower inventory levels, you need more refined processes and more refined tools. If you're flying a plane at 30,000 feet, that's a whole lot different from trying to fly at 100 feet. If you're going to fly close to the ground, you have to have a good set of processes and capabilities. As we reduced our inventory, we found we had to tighten up our operations and improve our ability to react because we had less inventory to buffer the variability of demand.
Q: What's the biggest challenge facing your supply chain group today?
A: Since we sell primarily impulse purchase products, our biggest challenge is to provide high levels of product availability while still maintaining minimal inventory. To meet these twin challenges, our forecast must be reasonably accurate, and we must have the capability to quickly adjust production to meet changes in market demand if our forecast misses the mark. The biggest constraint to that type of operational flexibility is long suppler lead times caused in part by growing global sourcing.
Q: If you could go back to college for a day, what course would you take?
A: Since we already have very active strategies to work with suppliers to reduce lead times, I would focus on either statistics or modeling classes to help analyze variability of demand and how much we need to flex our production in order to cover the variability of demand.
Q: What advice would you offer a young person considering a career in logistics?
A: I believe that a young person needs to have a wellrounded background in production scheduling, supply management, logistics, information technology, and process improvement. To improve the effectiveness of execution, processes must be improved. It will be much easier to work across these different functions if you already have experience in these areas.
Roger W. Woody
Roger W. Woody, who takes the reins as chair of the Council of Supply Chain Management Professionals (CSCMP) this fall, didn't start out in logistics and supply chain management. Before joining Hallmark Cards more than 20 years ago, he was a probation and parole officer for seven years for the state of Missouri.
After a brief stint in distribution, he spent several years in human resource management before he turned permanently to logistics. Since then, he has developed a broad résumé, working in logistics and supply chain management positions for Hallmark, Yellow/Roadway Corp., Delfour, and Sprint. Today, he is general manager for transportation and logistics for EMBARQ Logistics, a company that provides thirdparty logistics services to the telecommunications industry.
Like many of the other Rainmakers on these pages, Woody believes in giving back to the profession as a teacher and active participant in industry organizations. He serves on advisory councils for the Kansas State University School of Management and Business and for Kansas University.He has taught supply chain management classes and is a frequent speaker at colleges and universities.
Woody has long taken an active role with CSCMP as well; he was the first president of the Kansas City Heartland Roundtable, served as a roundtable adviser for several years, and served as Roundtable Chair on the council's Board of Directors before assuming the position of board vice-chair last year.
Q: What brought you into the field of logistics in the first place?
A: Life is full of opportunities. I started [at Hallmark] on the second shift of a distribution operation. I worked with a group in which many of the people were experiencing their first real job. In a way, the experience was similar to working in probation and parole. As a probation/parole officer, I had worked with people who made poor choices and failed to take responsibility for their behavior. In the same way, people in their first job don't always appreciate what they have, often don't take responsibility for their actions, and often just don't understand their responsibilities.
When I was first hired into the logistics field, my manager suggested I get involved in CLM [CLM, or the Council of Logistics Management, was the forerunner to CSCMP]. I went to a couple of conferences and eventually helped start the roundtable in Kansas City. When I look at all those things, what has excited me most in the logistics and supply chain world is that it all has to do with relationships— with connecting with others. It is what drives this whole field—how you work with people day in and day out, domestically or across the world.
Q: How is working for a company like EMBARQ different from working as a logistics executive for a company like Hallmark or a company like Yellow/Roadway?
A: EMBARQ Logistics is part of EMBARQ, which was formed from a phone company that started more than 100 years ago. In fact, we were part of Sprint until May 2006. As part of EMBARQ, EMBARQ Logistics is a distribution company for telecom products. We know the products very well. We are the supply chain arm for our phone company. We also do distribution services and fill a third-party role for other strategic customers. Often, these companies lack expertise in sourcing, procurement, and inventory management, or seek to outsource these activities to a company that has knowledge and experience in the telecom space. That is our expertise. That's what attracted me to this—being engaged with a company that is growing and developing its supply chain functions, and understanding the big role we play for our customers. It is a lot of fun and always very interesting.
Q: You have a leadership role in CSCMP. What is your vision for the future of the organization?
A: I'm thrilled, humbled, and honored to become chair next year. In some respects, I'm kind of an anomaly. When I look at past chairs, they've either owned a business or been high-level executives. I'm just kind of a basic transportation and logistics guy.
CSCMP is also a very exciting organization to be part of, especially since we changed our name and embraced the broader supply chain as our focus. The process of understanding the broader supply chain came with a formal establishment of a definition of "supply chain" and getting our arms around what it is in the goods and services we offer to our members. That process has been an exciting challenge.
There have been two really critical pieces of our strategic plan. One was the decision to change the name, but the more recent and perhaps bigger challenge, has been understanding that the most significant influence on the profession and on the council is the global influence. We've found many challenges as we've engaged cultures like India and China and tried to understand how we best fit into those cultures. In countries like Greece and Finland, we've established agreements with them for them to learn from our expertise, and for us to learn from their supply chain professionals. Every day, there's a new opportunity. We have learned so much by opening our arms and taking in influences from around the world.
Q: Tell me about your experience teaching about these issues.
A: I've taught classes in warehousing, logistics, and supply chain management. I've guest lectured on what's going on in the field. The great part in teaching or guest lecturing is engaging students and feeling their energy and excitement about the profession. One of the key aspects of being successful in business today is understanding how to network and connect with others well. So, I advise students on how to get connected and to network in addition to becoming a well-educated, productive worker.
One of the more recent activities I've been engaged in here in Kansas City is developing an education network that will train entry-level employees for warehouse and distribution positions—but extending that educational opportunity through the local community colleges and even through undergrad and advanced degree programs. We're excited to have a great partnership between the city and educational institutions to train workers. When you think about the warehouse worker today, you have to understand technology and how it impacts business.
Teaching has helped me grow and develop professionally. The students have the same fascination I had with the complexities and challenges of the profession. I like what I find in each of their faces when they finally get it: This is how stuff ends up in my home or on my shelf. It is just really exciting. It's just an extension of the great opportunities I've had to learn and grow in this great profession.
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