Some measure success by salaries and titles. Others use a different yardstick altogether. Take the 10 professionals selected as our 2012 Rainmakers, for example. When asked about their proudest professional accomplishments, three spoke of the rewards of nurturing talent within their organizations and the satisfaction of watching their protégées go on to achieve greater glory. Another cited the opportunity to participate in the resurgence of the freight rail industry. Yet another pointed to his company's role in introducing a breakthrough cost-saving practice that is now sweeping Europe.
So who are these Rainmakers and how were they chosen? As in the past, DC VELOCITY selected the 2012 Rainmakers in concert with members of the magazine's Editorial Advisory Board from candidates nominated by readers, board members, and previous Rainmakers. This year's selections represent different facets of the profession—from practitioners to an advocate for local freight interests. But as the profiles on the following pages show, they're united by a common goal of advancing the logistics and supply chain management profession.
In June 2009, Tony Davis joined Academy Sports + Outdoors, where he serves as senior vice president of distribution and logistics. In that role, he oversees the retailer's distribution centers, domestic and international logistics, and customs compliance as well as the chain's relatively young e-commerce fulfillment operations. The company operates DCs in Texas and Georgia to stock its 140-plus retail stores.
Davis's experience includes stints as vice president of logistics for Circuit City and vice president of transportation for Dollar General. He also spent 14 years in various logistics roles for Service Merchandise.
Davis is a graduate of the University of Tennessee, Knoxville, where he majored in logistics. He has been active in the Retail Industry Leaders Association, where he has served as vice chairman of its Logistics Conference steering committee. He is also a member of the Advisory Council of Executive Shippers for the Port of Houston Authority.
Q: You recently oversaw the launch of Academy Sports + Outdoors' first e-commerce fulfillment operation. What did it take to accomplish that, and how does it fit in with your traditional store-centered distribution activities?
A: The launch of academy.com as an e-commerce shopping destination required a significant effort on the part of many Academy team members. We took 100,000 square feet out of an existing distribution facility and dedicated that space to e-commerce fulfillment. We also had to integrate multiple systems to run that entire division. Most important was developing a team of professionals that could help us build, launch, and then run that business.
Q: How has that initiative gone?
A: We just launched in June of last year. We're very pleased. We are learning something every day about that side of the business and how we can use that vehicle to sell product, educate customers, and also entice them to come into our stores.
Q: You've spent your entire career in logistics. What drew you to the field?
A: I stumbled into logistics as a student at the University of Tennessee in Knoxville. I became interested in a co-op job where you could work for a quarter and go to school for a quarter. I learned that a business degree in logistics opened up more job opportunities than most business majors. So I became a logistics major. Little did I know that Tennessee had one of the most recognized logistics programs in the United States. I was just very fortunate that I chose that path.
Q: Tell me a little bit about developing talent in your organization.
A: At Academy Sports + Outdoors, we have a great blend of people—some with a long tenure and deep experience at our company and who understand our culture, and some who come from other backgrounds and have different experiences in supply chain. Those complement each other quite nicely. I'm a big believer in remembering where you came from but having an eye toward the future. Academy does a nice job of walking both sides of that line.
Q: What do you consider the greatest challenge you've faced in your career? Of what accomplishment are you most proud?
A: I've been really fortunate to lead logistics teams for several major retailers. On more than one occasion, I've led groups through some very difficult and challenging business environments. A major challenge is really keeping people's eyes on the horizon, keeping people optimistic about tomorrow and focused on things they can control and influence and not be pulled backward by forces they can't control.
As far as accomplishments are concerned, that's pretty easy. For me, it's really about people and seeing successes that people around me have had in their careers. I'm thrilled that I can say that numerous past team members of mine are now logistics executives in different industries. That's by far the most rewarding part of my job.
At BNSF Railway, before there was W.B., there was J.L. John Lanigan joined BNSF in January 2003 as executive vice president and chief marketing officer after the company he ran, Logistics.com, was sold to Manhattan Associates. Since joining BNSF, Lanigan has been its nonoperational glue, heading the rail's sales, marketing, customer service, economic development, and business unit activities.
His tenure there has been memorable. In 2006, Berkshire Hathaway Inc., the conglomerate controlled by billionaire Warren E. Buffett, began accumulating shares of BNSF stock. Three years later, Buffett went all-in, buying the 78 percent of BNSF he didn't own for $26 billion, taking it private in the biggest deal in Berkshire's history and one of the most significant transactions of the past 10 years.
Q: How has your job changed as a result of the Berkshire acquisition? And has the company's attitude and strategy been affected by the acquisition and privatization?
A: My duties and responsibilities have not changed at all. In fact, I have more time to spend with customers since I no longer meet with Wall Street analysts. Very little has changed with how we run the company since the Berkshire acquisition. We remain highly focused on safety and service. And we still take a very disciplined approach to capital expenditures.
Q: You said at a recent conference that it will take BNSF until 2013 to return to pre-recession peak traffic levels, and that this marks the longest recessionary period for the railroad to fully recover. How much of that is due to the weakness in coal demand, or are there larger factors at work here?
A: We will likely not return to peak volumes in any of our four major business groups in 2013. It has simply been a very prolonged and slow recovery for the entire U.S. economy.
Q: What do you consider to be the greatest obstacles businesses face to supply chain optimization?
A: Synchronizing data between all the players in the supply chain remains challenging. In a growing global economy, the use of multiple transportation modes has become the norm. When you think about how many touch points there can be on a single shipment, one miscue can result in an unsatisfied customer.
This year, BNSF will participate in millions of shipments that include an origin manufacturer, ground transport to an origin port, an ocean transit, a truck dray from the destination port to our rail yard, the rail transit, and finally the truck dray to the receiving customer. There are many opportunities for error. The logistics industry and our customers still have much room for improvement in the timeliness and accuracy of information. This risk can cause cargo owners to reduce the number of participants in their shipments, even if it means reducing efficiency and increasing their costs.
Q: What do you consider to be your greatest personal/professional accomplishment to date?
A: The opportunity to participate in the resurgence of the freight rail industry over the past decade. We are moving a lot of freight today that customers would not have considered putting on rail a few years ago. To be part of an industry that was once seen as "old economy" but is now widely considered to be at the forefront of logistics efficiency, infrastructure development, and environmental stewardship has been very exciting.
Q: What advice would you give young people who may be interested in entering the profession?
A: This is a great time for young people to join an industry with a historic past and a very bright future. The freight rail industry is poised to play an increasingly important role in the supply chain. Our infrastructure, environmental advantages, outstanding service, and innovative solutions are providing real value to our customers. In a growing industry, there will be significant opportunities for personal and professional growth for our young leaders in the years to come.
Since 2006, John Lund has served as senior vice president of supply chain management for Disney's Parks and Resorts, an $11 billion-plus worldwide business that spans three continents and includes vacation destinations. He joined the company in 1992 as transportation development manager for Euro Disney in France. In the years since, he has been instrumental in a number of initiatives such as Euro Disney's first online service and optimizing the performance of the company's global supply chain.
A native of Philadelphia, Lund holds a doctorate in policy analysis from the RAND Graduate School, a master's degree in international affairs from Columbia University, and a bachelor's in international relations and economics from Saint Joseph's University in Philadelphia.
Q: At Disney, you've been involved in optimizing the performance of its supply chains worldwide. What was the biggest challenge in getting that initiative started?
A: The challenge was never about starting the initiatives. The teams at Disney strive to improve continuously. The real challenge is getting started as effectively as possible, understanding each location well enough to develop and adapt solutions appropriate to its unique challenges. For each of our resort locations around the world, we must find the right balance of local versus global approaches, learning what is necessarily unique to each location while protecting the essence of the Disney brand.
Q: What is your greatest accomplishment in the profession to date and why?
A: I am most proud of the strong team we have been able to assemble and the recognition our team members have received. Several of our leaders sit on the boards of various supply chain organizations, and one serves on a U.S. government customs advisory council. In the last five years, we have been named twice in the Gartner Top 25 Supply Chain rankings, and two other times received honorable mentions. Our accomplishments are a team effort, which is why such recognition of the team means so much to me.
Q: In general, what's the biggest challenge facing supply chain professionals today?
A: Attracting, developing, and retaining the best talent possible. Clearly, the field has much great talent. However, our expectations are rising. Supply chains are increasingly global and complex, and ever more essential to the success of the overall business. We need supply chain professionals who are not only experts in their specialty, but who know how to think like a general manager and how to be effective in a global environment. These demands place greater emphasis than ever before on the ability to communicate compellingly and influence change in an organization, and at all levels of an organization, from the boardroom to the warehouse floor.
Q: What advice would you give to a young person considering a career in logistics or supply chain management?
A: The best professional advice I ever got was from my boss at RAND as I was leaving to go work at Disney. He said: "As you are doing your job, aim to solve the problems of your boss's boss." In other words, don't simply do the tasks at hand but strive to understand how your role fits into the greater objectives of your group or company. If you can do your job in a way that clearly and creatively contributes to the overall mission of the company, you will be more effective, gain the attention of senior leadership, and make your boss look good.
For a young supply chain professional, that means thinking like a general manager. If you were the boss of your company, what would you be concerned about? Enhancing your company's brand and the reputation. Growing your business profitably. Using your company's assets wisely. Attracting and retaining great talent. As a young professional, seek out professional opportunities that will allow you to develop your abilities in these areas.
A degree in chemical engineering may not be the usual path to a career in supply chain and logistics management. But that was the route taken by Joyce Maruniak. After finishing school, she went to work for the chemical giant E.I. DuPont de Nemours and after a time migrated into supply chain management.
Today, she is vice president of supply chain development for Advance Auto Parts Inc., where she is overseeing the design and implementation of a new network strategy for the automotive aftermarket retailer. She brings to that task more than two decades of experience in supply chain operations and quality management, including direct line management, strategy development, global project leadership, and consulting for major corporations.
Before joining Advance Auto Parts, Maruniak held senior logistics executive posts with The Sharper Image, Best Buy, and Sola International. She also spent some time as a senior partner for Paul F. Politte Consulting LLC.
Q: You recently oversaw development of a new supply chain network strategy for Advance Auto Parts. What led the company to overhaul its network and what was involved?
A: Over the last few years, Advance has gone through a change in strategy and focus. We've become more focused on the commercial customer, which required looking at a different level of service and availability in order to be responsive to those customers. Additionally, we were tight on capacity and needed to make investments in distribution capacity. These were the key drivers behind the new network strategy.
The strategy development included an evaluation of what type of service we wanted to provide, what we wanted the infrastructure to look like, what the facilities should do, and what they should look like internally. We redesigned operations within the facilities and also went through optimization and simulation modeling, looking at various business scenarios.
We're in the first phase of implementation, opening a new DC in Remington, Ind., that will be our first location with a new WMS.
Q: What are the project's goals?
A: We are looking for an improvement in operational costs as well as responsiveness to the stores, enabling increased product availability. We're expecting a significant improvement in service levels and shipping accuracy, as well as in our overall cost structure as a percentage of sales.
Q: You have a degree in chemical engineering. What brought you to logistics and supply chain management?
A: I started my career at DuPont and spent quite a while there. Luckily, they took the approach of hiring engineers and cHemiäts and letting them do almost anything. They gave people the opportunity to move around in different roles in the company and to develop in areas you might not have considered. I moved into supply chain there and found that's what I was really interested in.
Q: What specifically attracted you to it?
A: To me, it's a very interesting and much more analytical field than people might think. I love a challenge, and there are always opportunities for problem-solving or to do things better. It is not as routine as people might expect.
Some of the most effective supply chain managers do not come up through the ranks, but rather, arrive via a more roundabout path. Such was the case with Deb Parmé, who leads the Amway supply chain team in North America. Parmé joined Amway in 1990 as an internal auditor in the company's accounting department. Her skills in project management and operations soon led her to a variety of other roles in the company, including director of global special events and director of the Access Business Group finance team, supporting all supply chain financial activities.
Three years ago, she was asked to become Amway's director of global transportation. This evolved into her taking on responsibility for all of the company's North American supply chain, which includes transportation and the oversight of six distribution centers, two of which opened within the past year. Parmé is also responsible for developing a long-range plan for global business process optimization and the supporting technology roadmap.
Q: You didn't come to supply chain management by the traditional route, as your background is in finance. What led you to make that career switch?
A: I came in with an accounting background, starting with internal auditing, but I soon realized that I enjoyed operations. And I think that my knack or particular skill set was always being able to drive change and to drive efficiencies. I think they liked what they saw in my track record of managing change and asked me if I'd be interested in being the director of global transportation. A tremendous amount of money is spent in our international shipping operations and transportation to our affiliates, and I think they were looking for someone who could understand the financial and contractual pieces, but was also savvy enough to say, "How can we redesign how we are shipping internationally and domestically to drive down our spend?"
Q: What advice would you give to somebody coming to supply chain management from a different area of business?
A: Supply chain is extremely fast-paced and ever-changing. Many people don't see the value of supply chain management until something goes wrong. And so, I think you need to find ways to continuously add value in an area of an organization that is not always seen as a value-adding activity. You can do that in many ways. For me, it's about focusing on the end-customer experience.
Q: What's the biggest supply chain challenge you've faced at Amway?
A: I would say it would be developing and implementing two distribution centers within basically 12 to 18 months from concept to go-live. It was a pretty huge undertaking for us, given that it was everything from identifying the site to identifying the material handling equipment provider and putting in all the systems, which were new to the company and moved us away from our previous legacy systems.
Q: You've stressed the importance of collaboration and team building at Amway. Can you talk about the importance of relying on your team?
A: Because of my background, I'm very open to identifying and looking at talent and giving people opportunities that may be outside of their education, background, and previous-history boundaries. It's really about empowering them and letting them lead, but being there to coach them and teaching them to collaborate to get further, faster. We've worked really hard with the new team to break down a lot of boundaries by being able to put transportation and distribution together. So when issues arise, we're all at the table, they are all teammates, and they know they have to collaborate to figure out how to get it done.
Q: In the time you've worked in this area, what's the most important thing you've learned?
A: One of the big things that I've picked up from some of my up-line leadership over the years—and something that really struck home during this major go-live—was that you've got to have people, process, and execution. You get the right people to the table with the right capabilities and attitudes. And then process is important. Try to be realistic without being too comfortable when you're setting timelines, goals, and deadlines for projects.
Over the course of his logistics career, Jeff Reagan has gained the kind of broad experience few can match. He has worked at companies ranging from Wal-Mart Stores Inc. and Kmart to The Facility Group, a consulting and engineering concern, in a wide variety of positions. His duties have included overall direction of large-scale projects in areas such as operations, industrial engineering, network planning, facilities, quality assurance, and environmental safety and health. Common to all these roles has been a keen focus on continuous improvement of supply chain operations.
Reagan joined his current employer, MSC Industrial Supply, seven years ago as director of industrial engineering. Since that time, he has progressed up the ladder to his current position as vice president of supply chain engineering for the company, which distributes MRO (maintenance, repair, and operations) supplies to approximately 350,000 industrial customers throughout the United States.
Q: What do you consider to be your greatest professional accomplishment to date?
A: Building and leading the team that embarked on our CFC (customer fulfillment center) optimization strategy at MSC. This strategy was the largest investment in the company's history and transformed the way we service the customer. Through that set of implementations, MSC created a paradigm shift within our existing operations that has translated to tremendous bottom-line savings for the company and improved our customer service.
Q: What do you consider to be the greatest obstacles businesses face to supply chain optimization?
A: The greatest obstacle I see is the ever-increasing drive for value-added services by customers, specifically to service level. At MSC, customer service is our focal point and a competitive advantage. All customers demand the perfect order. As we strive toward that goal and continue to improve our supply chain model, that in turn raises the minimum expectation from our customers. This is a never-ending process that becomes more challenging with every improvement we implement.
Q: How important is the role of customer service in logistics?
A: In my opinion, customer service is priority number one in any supply chain. Customers evaluate you on your ability to deliver and meet their needs, which are always evolving and growing in complexity. Whether you're serving the end user or another business, your company's ability to meet customers' delivery expectations is critical. At the end of the day, if you don't meet or exceed your customers' service expectations, you're going to lose them to the competition.
Q: How important is the role of existing and emerging technologies in logistics?
A: Technology—both existing and emerging—is imperative in logistics and is an enabler to quality, visibility, speed, and execution. The path of continuous improvement requires that your logistics network be plugged into the marketplace and that you recognize opportunities as they emerge. Also, your leadership team must understand and be willing to invest in the right technology and take the appropriate level of risk to continue to drive successful change in the supply chain. Otherwise, the competition is going to leave you behind.
When Rachel Schaler joined Starbucks in 2007, the coffee company was coming off a period of rapid growth, during which it focused primarily on establishing its brand and opening new stores. As a result of that expansion, the supply chain was in need of an upgrade. Schaler's task was to help re-engineer the company's distribution network, with specific responsibility for Starbucks' last-mile distribution and customer service.
As Starbucks' vice president for store delivery and customer service, Schaler manages third-party service providers as well as the operation of a Starbucks Consolidated Distribution Center. All together, the team she leads executes more than 45,000 deliveries weekly. Her team is also responsible for customer service and order management for more than 10,000 stores in the United States, including licensed locations.
Schaler began her career not in supply chain management but in areas such as strategy consulting, merchandising, and account management. Former employers include McKinsey & Co., where she worked as a business analyst, and Amazon, where she launched the Apparel Store and led marketing, merchandising, and account management. She also worked for Point B Solutions Group, where Starbucks was one of her clients. Schaler holds a B.A. degree from the University of Virginia and an M.B.A. from the Harvard Business School.
Q: You started off as a business analyst and in marketing. Why the move to supply chain management?
A: My interest in the supply chain actually started in business school, where I was fascinated by the operations classes and understanding the flow of goods—looking at where constraints challenge the overall supply chain and then how to turn it around and optimize it. My first experience with supply chain management was at Amazon, working on a project that exposed me to understanding how supply chain fits into the overall business experience and the importance of viewing it through the lens of the end customer.
Q: Can you describe the responsibilities of your team at Starbucks?
A: I am responsible for the last mile of distribution in the United States, which includes a network of 35 locations throughout the country, and I also partner with our global last-mile delivery network. We work with third parties for 34 of the 35 U.S. facilities, and I have responsibility for those relationships. Our last-mile distribution centers are tri-temp centers. We run a dedicated network of dual- and tri-temp trucks out of these facilities to make deliveries every night. We directly manage the 35th warehouse in Atlanta, where we ship and process a variety of different products to support our stores every day.
Q: During Starbucks' expansion phase, the focus was on opening new stores, and distribution sometimes got left behind. But since you came on board, the supply chain has returned to center stage. What role have you and your team played in that re-engineering?
A: Starbucks definitely had a period where our focus was on opening the next new store. Although our supply chain has always been there to enable that growth, that rapid expansion led to a very diverse supplier base and distribution network.
I joined just before Starbucks began its transformation agenda. To support the transformation in terms of last-mile deliveries, we focused on strengthening metrics and controls by measuring our daily on-time, in-full, and assembly accuracy. We also built a team that engages with our providers' daily operations to understand service challenges and develop continuous improvement plans. The team's focus on daily operations has made a significant difference in our supply chain stability and performance.
Q: What's the biggest obstacle you've had to overcome during your time at Starbucks?
A: Our customers expect the highest-quality products and customer service in the business. Developing a last-mile distribution network in partnership with providers who share our philosophy and passion for innovation will always be an evolving journey. Along the way, we have had times where a provider change was required, and such a change always involves challenges. As we've navigated transitions with changing providers, we have historically had little to no service impact. Overall, we have an excellent track record for consistently delivering high-quality products on time so that they will be fresh for our customers. I feel privileged to lead such a talented and passionate team.
Three years ago, Page Siplon decided to roll the dice. Siplon, who is executive director of the Georgia Center of Innovation for Logistics, bet his group could successfully launch a state-led, industry-driven annual logistics summit on a large scale, something no state had done before.
In 2010, the first full-day Georgia Logistics Summit attracted 800 attendees. In 2011, it welcomed 1,100. This past February, it hosted 1,600 attendees from 28 states and seven countries. The summit's scorching popularity was such that it blew out its previous venues and this year was moved to the Georgia World Congress Center, the enormous downtown Atlanta facility that hosts some of the biggest conferences and trade shows in the nation.
The summit is just one component of Georgia's broader economic development strategy, in which Siplon's center plays a prime role. Siplon's actual day job is to help logistics-enabled companies overcome the challenges and capitalize on the opportunities related to the movement of freight. Siplon tirelessly advocates for Georgia's freight-related trade, transportation, and logistics interests, and does whatever is needed to advance the state's role in U.S. and global commerce.
Q: So how did this thing catch fire so fast?
A: The summit is a truly unique event bringing together the entire logistics ecosystem. The networking opportunity this unique mix creates is a key reason people come to the summit, and we try to design everything around this networking opportunity.
Second, we try really hard to listen and more importantly, to incorporate what the industry wants to see included in "their summit." This input shapes everything ... the price, format, speakers, and even where and when we host it.
Finally, the summit is really a capstone event for what we, as a center, do all year long. This industry involvement has built a network of high-profile public and private partners we work with almost every day. This powerful and collective industry voice helps us spread the word about the event to a broader audience than we ever could alone.
Q: How is it that you've been able to do something no other state has either tried to do or accomplished successfully?
A: Other states have held conferences. Many even have a focus on transportation, so doing that is nothing new. We think the summit has worked because it really is the "industry's event," and we've positioned it that way. This focus has created an event that has proved to have real value to their businesses and is worth the investment of their time away from the office. The companies are the ones with the jobs and cargo. Their success is our success.
Q: Describe your center's broader mission and advocacy role, and do you find yourself in competition with other states?
A: We are an industry-focused component of the Georgia Department of Economic Development and are the leading resource for fueling logistics competitiveness for companies in our state. We work with two categories of businesses: those that already have a presence in Georgia and those that might be interested.
There are some similarities, but each company's needs are quite different, which makes the job interesting and fun. I get to see every day just how dynamic and far-reaching the logistics industry truly is. Our role is to provide focused expertise, specific industry data, connections to state resources, and an extensive cross-sector industry network. If it involves freight or logistics, the center is there to help businesses connect, compete, and grow.
Q: The summit is really in its second inning. If you can look three to five years out, where do you see it going, and do you see it having an expanded role in shaping the state's future?
A: The summit will certainly continue to grow, and with that growth, it will play a role in the economic development of Georgia.
It's hard to look out five years and guess what it will look like. Our goal is to host 2,000 for the 2013 Summit, and we will continue to listen to the industry to make sure we are delivering what they need. The fact that in 2012 we welcomed attendees from 28 states and seven nations is a great indication of things to come.
Gerry P. Smith joined computer maker Lenovo Group in August 2006 as senior vice president, global supply chain. Since Lenovo had acquired IBM's PC Division a year earlier, Smith was heavily involved in consolidating the two supply chains. Under his leadership, the supply chain has increased customer satisfaction and improved serviceability results, while simultaneously reducing end-to-end and materials costs.
Smith is currently responsible for end-to-end supply chain management, encompassing order management, supply/demand planning, procurement, manufacturing, and logistics. Before joining Lenovo, he was vice president and general manager of the display line of business for Dell Inc. In that role, he was responsible for all development, procurement, and operations worldwide.
Q: At Lenovo, you've been instrumental in developing a more agile and effective supply chain for your company. What was the biggest hurdle to accomplishing that?
A: When I joined Lenovo five years ago, we needed to simplify and integrate the global supply chain. It was shortly after Lenovo's acquisition of IBM's PC Division, so we actually had two separate supply chains from two different companies.
Over the past several years, we've integrated and transformed our global supply chain to simplify processes and maintain a tight focus on four key performance indicators: cost, delivery, quality, and cash. We standardized everything by establishing consistent roles and responsibilities, instituting consistent processes, recording those processes, and making them highly efficient. And we put the right talent around the appropriate pieces. We are now highly competitive against all four metrics, having made significant improvements in each of them since 2006.
Finally, we've upgraded our talent levels across the entire global supply chain organization, bringing in leaders with the skills and knowledge necessary to build a world-class operation.
Q: At Lenovo, you've managed to increase customer satisfaction while at the same time reducing end-to-end and material costs. Can you briefly explain how you were able to accomplish this?
A: Our structure has been a key factor in this success. First, we are one of the only supply chain organizations with total ownership of the end-to-end process, from order to collection. This enables us to adapt and continuously improve faster than more fragmented organizations can.
In addition, we've organized our global supply chain into customer-facing teams aligned with our sales organizations. These teams are responsible for making the end-to-end supply chain work for the customer.
Our structure also includes global functional teams in procurement, manufacturing, and logistics. These teams ensure that we develop the technical expertise and talent necessary to be a world-class supply chain and continuously improve our processes in these critical operational areas.
Q: What's your greatest professional accomplishment to date and why?
A: The professional accomplishment that I'm most proud of is the tremendous progress we've made in transforming Lenovo's global supply chain. We've made our supply chain a competitive strength for Lenovo. It has been very rewarding building and leading our talented world-class team and helping Lenovo outperform its major competitors for over two years running. Our supply chain is a key reason we rose from number four to two in the global PC industry last year.
Q: In general, what's the biggest challenge facing supply chain professionals today?
A: The biggest challenge we face is recruiting and developing world-class talent. The global economy is very competitive across every industry, and operational excellence can be an important source of sustainable competitive advantage if you have a strong team that can drive innovation and continuous improvement. This demands the best talent.
At Lenovo, we've invested heavily in supply chain talent development over the past several years. We've implemented several organizationwide learning programs for high-potential talent and those positions demanding specific technical skills such as commodity management. We've also expanded general learning programs for the entire team.
While at Kimberly-Clark in 2001, Peter Surtees helped pioneer the concept of collaborative supply chains in Europe. Under this model, two or more companies share warehousing space and transportation capacity to serve mutual customers. The practice reduces costs for manufacturers and provides more frequent replenishment for retailers.
Surtees joined Kimberly-Clark (KC) in 1994, following 15 years working in the third-party logistics services (3PL) industry. During the past 18 years, he has been employed in a number of key positions within KC's supply chain organization, leading up to his current role as European supply chain director-consumer products. He is currently responsible for KC's physical logistics operations, sales and operations planning, and customer service organizations in Western and Central Eastern Europe, as well as several business streams within the supply chain organization.
Q: At Kimberly-Clark, you pioneered collaborative supply chains in Europe. What was the biggest challenge in getting that initiative started?
A: To put my answer into context, Kimberly-Clark Europe's (KCE) first collaborative venture was with Unilever in Holland in 2001. I am not aware of any pre-2001 consumer product collaborative supply chain initiatives, so I like to think that KCE and Unilever were the trailblazers for what is becoming the norm in Europe.
Bearing in mind the leading-edge nature of the proposal, the biggest challenge was the internal sales pitch. We wanted to sign a long-term contract to build a distribution center with another consumer product company and a third-party distribution company to reduce inventories, cycle times, and costs while improving on-shelf availability. Not necessarily the most intuitive sales pitch I have had to make. However, KC encourages and rewards innovation, and it wasn't long before we gained the approval to proceed. The rest is history—the collaborative partnership is still in place and continues to deliver benefits.
Q: Why should other supply chain and logistics managers consider the shared supply chain approach?
A: Consumer product supply chains are focused on cycle time, reducing inventory, and aligning demand with electronic POS [point of sale] data to optimize on-shelf availability. Availability is the ultimate KPI [key performance indicator]. However, reducing the customer replenishment cycle time means smaller, more frequent orders for most European consumer product companies. With European diesel prices at more than $10 per gallon, smaller orders are not always affordable.
So, how do you retain the cost benefit of full truckload deliveries while reducing your cycle time? You find like-minded companies who share a similar customer base, build a collaborative logistics operation that consolidates and coordinates multiple customer orders into full trucks, and sell it as a win-win to your retail customers. They hold less inventory, and we have competitive distribution costs. And we both benefit through the improvement in on-shelf availability. It's not for all, however. Even so, it is rapidly gaining traction in Europe.
Q: How did you end up in the supply chain profession?
A: I have to be honest and say it was by accident. I was a poor student looking for his first break and met a courier company who wanted to give him a salary and a company car. It was love at first sight, and I am still in supply chain 30 years later. If I had the opportunity to go back in time, would I change that decision? No way. It's taken a long time, but the world has finally realized that a successful supply chain delivers competitive advantage and profit. The future of the profession looks secure.
Q: What's your greatest professional accomplishment to date and why?
A: It has to be our role in developing and implementing the first truly collaborative consumer goods distribution center in Europe or perhaps the world, and to see how the innovation has slowly gained traction. To take a breakthrough idea from concept to execution and then see it adopted by the broader supply chain community is a very rewarding experience.
Q: In general, what's the biggest challenge facing supply chain professionals today?
The endless drive to reduce working capital, improve on-shelf availability, and reduce delivered costs despite a global economic crisis and input cost inflation. But that is what makes the job so exciting.