Going to war and lovin' it: interview with Dave Bozeman
Dave Bozeman, vice president of Amazon Transportation Services, says he wakes up every day ready to "go to war for the customer." And he wouldn't have it any other way.
Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.
When Dave Bozeman, vice president of Amazon Transportation Services, goes to work each day, there's just one thing on his mind. It's not the competition. Nor is it the latest marketplace innovation. It's the Amazon.com customer. "Everything is about the customer, and anything outside of the customer doesn't matter," he says. "We wake up every day, and we go to war for the customer."
So far, his team appears to be winning both the battle and the war. In less than two decades, the online retail giant has turned the market on its ear, conditioning customers to expect free two-day deliveries, seven-day-a-week service, and in-home and in-car deliveries, to name just a few examples. But Bozeman has no illusions that his job is now done. "Once you've accomplished all that, are the expectations just going to stop?" he asks. "No. There are going to be even bigger expectations."
Bozeman sat down with Mitch Mac Donald, group editorial director of DC Velocity and CSCMP's Supply Chain Quarterly, for an interview in October, following his opening keynote at the Council of Supply Chain Management Professionals' (CSCMP) Edge 2018 conference. The following is an edited version of the conversation. See the full interview here.
Q: You work at a company that continues to enjoy historic growth year after year, with no end in sight. How do you make sure that your supply chain keeps up?
A: First, it is scale and innovation. You have to have scale and innovation in order to do what we do. But more foundational than that is leadership. Amazon is run off of 14 key leadership principles. I'm not going to talk about all of them here, but they all support what we see as our primary mission: staying focused squarely on the customer, or what I call our "customer obsession." We wake up every day, and we go to war for our customer.
When I tell you everything is about the customer and anything outside of the customer doesn't matter, that's how it is at Amazon, including the supply chain. The supply chain has evolved, it has scaled up, and it's all been for the customer.
As we plan for tomorrow, we keep our eye on three basic elements: quality, cost, and the delivery experience for the customer. "Quality, cost, and delivery" is the obsession we have. We build our supply chain around that obsession. Be it planes, trains, or automobiles, we're going to make sure we have quality and speed. And we're going to make sure we provide an exceptional delivery experience because I know our customers expect nothing less, and that's what we are here to do.
Q: Let's talk a little bit about the tactical side. What role have enabling technologies like automation played in the evolution of Amazon's supply chain?
A: They've been extremely important. Amazon's operations have obviously grown in scale since that day 23 years ago when Jeff [Bezos] put a few books in a box, sealed it up, and took it down to his local post office. We've made millions—even billions—of customers happy since that time, but in order to continue to do that today and tomorrow, things had to continue to evolve and change. At Amazon, we're never satisfied with the status quo. When it comes to serving the customer, there's "divine discontent" here, meaning we're never happy and we're always looking to provide a better experience.
That was the case in our fulfillment operations a few years back. We knew there had to be a better way to fill orders. That ultimately led to the acquisition of Kiva Systems [a robotics company Amazon bought in 2012 and later renamed Amazon Robotics]. We now use robots to bring goods to human order pickers, instead of sending workers out into the aisles in search of items. And what does that do? It only makes quality better. It improves accuracy and obviously boosts speed, and it's going to improve the delivery experience for our customers.
I should note here that the robots aren't replacing people. When they hear about the tens of thousands of robots we've introduced into Amazon's operations, people will say, "Wow, robots! Where are we going with this? What happens to the people element?" Well, during that same time, we have hired over 300,000 more Amazonians. They're just doing different work now. Using the robots allows our people to focus more on quality.
Q: It sounds like a key to Amazon's success is there's never ever going to be any resting on laurels. So what we did yesterday doesn't matter. Only today matters. Do you think that culture has helped to drive all of this?
A: Oh, that is our culture. If you go to work at Amazon, you'll be challenged to look at things in a whole new way. I mean, we have a bar—a performance bar that you have to clear when you're interviewing at Amazon. We have that bar when it comes to what we want to do in growing out and scaling projects, but ultimately we look at the customer. We say, "Hey, what is the next thing that we have to do?" Think about supply chain. Think about where things are going. People want things faster, but tomorrow, it will be something different.
People have choices now in the supply chain. What are some of those choices? Well, they can choose the day they want their product delivered. And along with choosing when they want it delivered, they can choose where: on this part of the porch or in this milk box or even inside their home or car.
And tomorrow, who knows? You can be somewhere, and we may just fly it to you in a drone. The point is, it's about innovating for the customer through your supply chain and not being apologetic for being divinely discontent.
Q: I'm going to get a little more into the weeds here and ask about Amazon's decision to enter the airfreight business. What made you decide to build your own air fleet? Private truck fleets are very common. Private air fleets not so much. Why go this route rather than simply using the standard commercial air carriers?
A: I love that you said operating an air fleet is not so common, because at Amazon, we love to hear that what we're doing isn't common or normal. But at the end of the day, you know what I am going to say: Everything we do is ultimately driven by the customer experience and our obsession with our customers. In the case of air, this is what we've had to do to ensure we have the capacity we need.
That said, we have a number of great partners that we've worked with from the beginning and continue to work with—partners like UPS, FedEx, and DHL. But we also know that we have to continue to supplement that capacity in order to make sure we can keep up with our projected growth and ultimately, satisfy our customers as we continue to grow. That's why in 2016, we launched Amazon Air and are continuing to expand the operation. In just two short years, the fleet has grown to 38 planes—767s-200s and -300s—that fly millions of packages around the U.S. every day.
Q: It's clear you have a passion for your work at Amazon, so it might be tough for you to give an unbiased answer to this question. But here goes: Is there another company out there that has achieved the scale that could justify a private air fleet?
A: Well, that is a good question. But at Amazon, we don't let ourselves be distracted by what others might be doing. We could spend a lot of time talking about competitors. We could spend a lot of time talking about other companies. Instead, we take all of that energy and talk about the customer.
What we want for our customers is speed, lower costs, and an exceptional delivery experience. Concentrating on that—and not on the competition—allows us to maintain a laser focus on what we have to do. That enables us to be clear on the decisions we have to make, be it building an air fleet or automating our operations or going into drones. Those are things that we do with our customer in mind, not the competition.
Q: Do you see anything on the horizon—for instance, the shortage of labor we hear so much about—that could disrupt your growth and momentum?
A: The macros of the world are the macros of the world, right? We will deal with those things as they come, and we'll solve them. Take the labor shortage you mentioned. Unemployment is obviously at a low right now and the labor market is tight, but we feel really good about the number of Amazonians that we have and the number of Amazonians that we bring on. Why? Because we feel we are a great company to work for.
The real challenge—the thing I personally look at—is the challenge of customer satisfaction. Customers are always going to have something they want and in some cases, they're going to be dissatisfied. But how and why? You have to think about it—that is the key. How do we identify and address the problem before the customer becomes dissatisfied? And along those same lines, how do we anticipate the customer's future needs? Those are the things we think about at Amazon each day.
Q: Do you have any final advice for our readers?
A: Stay close to the front lines—the people who are out there doing the work. We have over 550,000 Amazonians out there working for us, and I appreciate every one of them for the work they do every day. As a leader, you have to stay close to that because those people know how important our customers are.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.