This summer, the Council of Supply Chain Management Professionals (CSCMP) announced that it had chosen Joel L. Sutherland to receive its 2009 Distinguished Service Award. The honor is given each year to an individual who has made significant contributions to the art and science of supply chain and logistics management. Sutherland is the 44th person to receive this award since it was first presented in 1965.
In a statement announcing Sutherland's selection, CSCMP President Rick Blasgen said, "Joel has dedicated his career to creating innovative techniques, processes, and solutions to improve supply chain efficiency and effectiveness. He is also an inspirational leader who believes in leadership by example and has greatly contributed to raising awareness of the supply chain management profession around the world."
Sutherland has worked for more than 30 years in the supply chain profession. He joined the pharmaceutical company Bergen Brunswig after graduation from college. Since then, he has worked for Denso (a Toyota Group company), International Paper, Frans Maas/Sealand Logistics, and the Formica Corp. In the late 1990s, he helped create the non-asset-based 3PL Transplace and later became president and COO of Air-Road Express. He is currently managing director at Lehigh University's Center for Value Chain Research in Bethlehem, Pa.
Sutherland, who has a B.S. degree from the University of Southern California and an M.B.A. from Pepperdine University, spoke recently with DC Velocity Editor at Large James Cooke about his career.
Q: How did you end up in the supply chain profession?
A: I was going to the University of Southern California, thinking I was going to be an engineer and I found a course that I liked more through the business school that was called "Marketing, Logistics and Transportation Management." So I entered that program in my sophomore year and ultimately got my undergraduate degree in business with a focus in marketing, logistics, and transportation management.
Q: In giving you the Distinguished Service Award, CSCMP noted that you were behind a number of innovations in the field. Can you describe one of those innovations and its impact?
A: I have a couple, but I will give you one in particular—collaborative transportation management. I was recruited by the president of J.B. Hunt Logistics to come in and help him craft a division for a new company that we eventually named "Transplace." This goes back to 1998-1999. We were doing something unique in terms of working with our clients and carrier partners as a third party. We got involved with collaborative transportation management and worked very closely with Wal-Mart and Procter & Gamble on that. Then, as we started servicing other customers like AutoZone and Office Depot, I started putting together this collaborative relationship.
I then got involved with VICS [the Voluntary Interindustry Commerce Solutions Association] because they wanted to know if there was a relationship between CPFR (collaborative planning, forecasting, and replenishment) and collaborative transportation management. I spent several years running a committee for VICS, where we defined what collaboration transportation management was.
I will skip forward to today. I am working through the center here at Lehigh with a confectionery company called Just Born. We are developing a collaborative supply chain with Just Born and other candy companies—we call it the "confection connection." As part of the program, we are going to co-load the shipments of these multiple candy companies that are going to the same locations—we're putting them on the same truck at the same time.
This all came about from collaboration transportation or collaborative supply chain. There are other forms of collaboration—collaborative warehousing, collaborative communications, and so forth—but transportation is where the biggest savings come from.
Q: Can you briefly define collaborative transportation?
A: Well, it is where multiple parties—shippers—work together to serve a common customer. So in the case of Just Born, the shippers are candy manufacturers and the common customers are retailers. The program allows the manufacturers to save on freight costs by consolidating loads going to the same location. In the confectionery industry, 75 to 90 percent of the shipments are LTL today. If you can combine shipments going to the same locations, you can change that to 90 percent truckload.
So the intent is a bulk conversion from LTL to truckload and not in the traditional pool distribution or cross-docking modes. Really, you are combining them under one warehouse, where you can then take a look at the purchase orders. The orders are coming from common customers—Walgreens or Sam's, for example. Then you can plan those loads so that you can fill the truck with goods from multiple shippers that are headed to the same location. The savings in transportation alone are somewhere around 20 to 25 percent.
Q: What other innovations were you involved in?
A: I wouldn't call it an innovation as much as an application. I spent a number of years working for a Toyota Group company called Denso, which is a $40 billion parts manufacturer. I was the highest-ranked American in that company. After 11 years there, I really mastered the Toyota production system—Lean. Since I left Denso, I have applied those lean processes beyond manufacturing or production operations to the supply chain. What I have done is focus on ways to identify and eliminate inefficiencies in the supply chain. I have applied those throughout my career in companies that I have gone to work for.
One was at International Paper. At International Paper, we were creating a new company called Xpedex and building it up through acquisitions. I was the chief supply chain officer at the corporate headquarters. My role was to integrate these companies, which we were acquiring at a rate of two or three a year. The question came up: How do you quickly integrate them and eliminate inefficiencies?
So I created a process based on the Toyota production system to identify inefficiencies and eliminate them in a way that became cultural. In other words, this was a process that the newly acquired companies had to implement, and there were metrics attached to it. They reported on a daily, weekly, monthly basis, but it was a way to drive kind of a cultural integration, applying the Toyota production system techniques in a wholesale distribution environment. We achieved dramatic improvements over a short period of time.
Q: Looking back on things, what is your greatest personal accomplishment in the field to date?
A: I could say my greatest personal accomplishment was at Denso. I went from basically a lower management level to the first vice president of operations, but it was really supply chain. I was the highest-ranked non-Japanese in Denso for North America.
I don't know if you're familiar with the Japanese training process, but they put you through every role within a company. That is how they test you, and that is how they reward you. During my 11 years at Denso, I went from distribution, running warehousing and transportation and inventory control, to manufacturing and production to procurement. Throughout this rotation, which was a competitive process, several people were being evaluated. By the end, I had won out.
I succeeded at becoming the first American vice president, but more important was the responsibility they gave to me afterward, which is what I consider to be true supply chain management. I had responsibility for all the procurement going back to my suppliers and even qualifying suppliers that they used. But I also was getting involved in returns and reverse logistics and in figuring out how to satisfy customer complaints involving the products that are ultimately installed into automobiles. I had total responsibility for that at a time when we didn't know the term "supply chain management."
As for a professional accomplishment, I would say it was turning around Formica. At Formica, I was brought in by an equity group as part of a turnaround team. It was a horrible union environment, where they had lost all trust in management. Also, they did everything they could to sabotage the efforts that management was making.
A company called Wilsonart comes along and says, how can we provide a better supply chain solution? They reduced the order to delivery cycle time dramatically. As a result, they took market share away from Formica within a very short period of time.
So the equity group brought me and several other folks in—a manufacturing guy, a finance guy, an HR guy. My role was to integrate the logistics activities within the company. I applied what I call the Toyota culture, developing trust with the unions, showing them that I understood their business and understood what their jobs were, and spent six months developing closer relationships with them.
In the meantime, I started pulling the various operations together, with an eye toward eliminating silos and making the company leaner. So I again applied those Toyota production system techniques to develop a program for measuring results and rewarding performance appropriately. Within two years, we were able to dramatically shorten our order to delivery cycle time. We had a culture that was much improved, and we were able to sell the company. Unfortunately, the new owners went into bankruptcy, but that's a different story.
Q: You are now at Lehigh University. How can industry and universities work together better to advance the supply chain profession?
A: There are only a few universities that really have a focus on outreach to industry. When you think of the supply chain programs out there, how many have brought in an industry person like me to provide a real outreach to industry? Too many centers have put academics with limited or no industry experience in charge of developing a supply chain program or working with industry. Many universities don't even have a research center that is "outreached" to industry.
So the first step is having a center like we have at Lehigh that is intended to work with industry to identify its needs and solve supply chain problems. I learned a long time ago that a university is just like a manufacturing company. If you manufacture something, you have to manufacture something for which there is demand in the marketplace, right?
A: Otherwise, you are not going to sell it. The same is true with universities that offer supply chain and logistics programs. If they're turning out students who don't have the knowledge and skills industry is seeking, those students are not going to be able to get a job. The one thing that universities have to do is have research centers like we have here. We really understand what industry needs. As an industry research center, we can go back and say, "These are the skill sets that we need to incorporate into our program so that it is aligned with the demand of industry." That could be regional demand or it could be global demand. You want to take a look at how students are going to get a job. You are manufacturing that talent.
Q: That leads into the next question. Are there any special courses a student considering a career in distribution should take right now?
A: I am a big fan of IE courses. If you are taking pure business classes in supply chain, you are missing a big part of where that demand is, what industry is really looking for.
Q: You mean industrial engineering?
A: Industrial engineering, with the focus in the supply chain area. Industrial engineering historically was focused on manufacturing, but that has changed. In the United States, there are more supply chain programs that are now applying IE techniques and skill sets.
Q: Looking back on it, what has been the biggest change you've seen in logistics and distribution?
A: I would say one would be technology. We used to have to build our own technology. We used to have to figure out for ourselves what the problem was and how we would solve it. Now, there is so much technology out there that you can just buy off the shelf—and you can customize it, you can implement it in a matter of weeks instead of years, and you can do it at a fraction of the cost. Because of that enabling technology, we have been able to move it into supply chain management vs. just managing within the single enterprise.
Q: If you were to do it all over again, would you still pick this profession?
A: Absolutely. I picked this back in the early '70s, and it has been tremendous for me for a number of reasons. One is that there is never a dull day in this field, and it is constantly evolving.
When I joined NCPDM [the National Council of Physical Distribution Management, the forerunner to CSCMP], we were talking basically inside the four walls. From transportation and some warehousing and some inventory management to logistics, we started integrating a lot of the activities into supply chain management. I think that Wall Street now recognizes the importance of effective supply chain management.