For Kevin Smith, it all started with a job unloading freight cars at a General Mills warehouse in Massachusetts. That was the entry point for a distinguished 30-plus-year career in logistics and supply chain management that has included executive-level positions at some of the world's best-known companies. For instance, prior to his retirement in 2008, Smith served as senior vice president supply chain & logistics and corporate sustainability officer for CVS Caremark. Before that, he worked for H.J. Heinz, where he was vice president of logistics and customer support, and for Kraft Foods, where he was the director of network design and implementation. Today, he is president and CEO of his own firm, Sustainable Supply Chain Consulting, which he started after retiring.
In September, Smith began a one-year term as chairman of the Council of Supply Chain Management Professionals (CSCMP). In addition to his CSCMP post, he is a special adviser to World 50, a private community for senior-most executives from globally respected organizations, and its Supply Chain 50 subgroup. Smith also serves on the advisory board of the Massachusetts Institute of Technology's Center for Transportation & Logistics.
Smith spoke recently with Editorial Director Peter Bradley about his goals for CSCMP, the relevance of trade groups in the age of the Internet, and why the supply chain should get more respect.
Q: Congratulations on becoming the CSCMP chairman. My first question is what are your principal goals for the next year?
A: When I think about furthering the progress and development of what we do in supply chain management, I think there are three challenges: We have to provide foundational information for people to use in their own personal development. We need to build an appreciation of the importance of what we do as an industry. And we have to help supply chain managers develop the confidence to change, innovate, and involve—to make supply chains more effective, efficient, and important to their individual enterprises.
Q: How do you accomplish those goals?
A: Well, of course, you've got CSCMP as a network that can connect all kinds of people. Whether it's based on a particular business issue or it's mentoring or just networking within the industry, we have the wherewithal to do that because we have a lot of members who want to share either information or experiences.
We also have a lot of educational information, a lot of educational programs, a lot of pre-existing research that can be helpful to people trying to solve problems for their businesses. We've got all this content. The question is, how do you make it readily available to people in such a way that they recognize the importance or the value it brings to their enterprise? That is the tricky part.
Once they have that, it could help them develop confidence to take chances, introduce innovations, and actually try to look at the supply chain as something very positive for the enterprise.
I have seen this repeatedly, especially in 2008. In 2008, we hit the skids. Supply chains became very important to businesses. Why? Because the supply chain had the ability to influence both the top line through the way we dealt with customers and the bottom line in terms of saving money and decreasing costs within the enterprise. When that happened, it was almost like a switch went on, and CEOs and CFOs suddenly realized that supply chains could play an important role in making sure that the companies, in some cases, literally survived that first couple of years.
Now, as the environment improves, as the economy improves, I think there's a tendency to try to put supply chain operations and supply chain management back into the backroom and let the sexy marketing take over again. That has been the premier activity within the enterprise. I'm not sure that is wrong, but I think what is wrong is for companies or enterprises to totally disregard the importance of supply chain even in good times. The ability to control costs, to reduce costs for the enterprise, is very important. More important, though, is the ability of the supply chain to develop a relationship with the customers and clients, so that those customers and clients want to do more business with the enterprise. So to discount that and push it off to the side and focus your company on just marketing or just finance, I think you are losing something. We have a challenge within CSCMP to bring all that out into the open so CEOs and companies recognize the value of supply chain not just in cutting costs, but also in growing business.
Q: One of the challenges, not just for CSCMP but for every trade organization, is holding onto and building membership. Why do you think that is so, and what approach will CSCMP take to build membership?
A: When did membership in professional organizations start to wane? Some would say it was 9/11. A lot of people were afraid of traveling, and companies used it as an excuse to say, "Let's curtail travel." It actually started before that. The advent of the Internet and the "wiki" world that we live in, I think, has given people this false impression of where they can get knowledge and useful information.
I think it's a very small percentage of people that actually take that information and transform it into something that's really useful. I think as human beings, (it is) much more important to have interaction and to network with people, especially the people who have actually done what you're trying to do.
So, we've got what we call "the lifecycle" at CSCMP. We try to get people involved in CSCMP and supply chain from the time they are college students up to the time when they are senior fellows like me. So we categorize people as students, young professionals, mid-career, senior leaders, and senior fellows. You can participate in CSCMP whether you're 18 years old or 88. You just participate at a different level. What we're trying to do is develop an information network where people are able to participate no matter where they are in their career.
Q: You've been a supply chain professional for a long time, and now, in your current role, you see a lot of businesses. What do you see as the biggest challenges folks in our profession are facing?
A: As I said before, I think a lot of it is economically driven through the C-suite. The challenge for CSCMP and the challenge for enterprises over the next couple of years will be to try to capitalize on supply chains and leverage what the supply chains have to offer. In many businesses, the people who have the face-to-face interaction with companies, besides the individual salesperson, are the supply chain people. It is the supply chain that has to deliver in the end and look the customer in the eye and either say, "We've done what we promised to do" or "We failed in what we promised to do." So that relationship, I think, in many ways is as important as the sales-to-customer relationship—and in some cases, it is more important because the last and final impression that a customer gets is whether or not the product was delivered on time, complete, and free of damage. If the supply chain is doing all of those things, you're probably going to build a really good relationship with your clients. If it's not doing those things, then you're going to be in big trouble.
Q: Right, which goes back to the old silo argument we've been having for decades. If the merchants and sales and marketing people aren't talking to supply chain, you may have some issues.
A: Right, and, you know, I think a lot of companies have done a better job with that over the last few years, especially since 2008. Back in 2004 or so, 30 percent of companies had a position called supply chain or logistics that was either in the C-suite or reporting directly to the C-suite. By 2011, 80 percent of Fortune 500 companies had that position, supply chain or logistics reporting to or in the C-suite. There has been a recognition that supply chain management is important to the enterprise. The trick is keeping it top of mind because when things get good, when the economy is booming, when you can't help but sell things, enterprises lose track of the fact that the supply chain is important, and they only come back to that realization when things get tough.
Q: Wall Street pays attention to supply chain these days, too.
A: It does. But again, I think that has been more since 2008. I can recall being the first supply chain person at CVS to ask to present at an analysts' meeting in New York because of all the things we just talked about—the fact that we had a story to tell and it was not just about how we were cutting and controlling costs, but how we were adding to the value proposition on the top line.
We have certainly come a long way. The trick now is to make sure that we keep our value proposition front of mind so people understand that we're not just the backroom people who ship stuff and store stuff, but that we are also a part of the enterprise that helps add value to whatever product or service is being provided.