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2013

I interviewed Amir Aziz who discussed Better Supplier Collaboration Improves Flexibility and Profitability of Your Enterprise.


 

 

1. Please provide a brief background of yourself

 

Hi Dustin, Thanks for giving me this opportunity to share my views and experiences on Supply Chain.

 

My Name is Amir Aziz and I have over 20 years of experience in Supply Chain with different multinationals in Oil & Gas and energy sectors.

 

I started my career in 1992 with Christensen (it was a division of Baker Hughes then), worked there for 3 years and joined Schlumberger in 1995 and worked with them until end of 1998.

                                      

In 1999 I joined Aggreko as Purchase and Inventory Manager. I was with them for over 12 years. I was with the company right from the start and set up the entire structure and management framework for the purchasing and stores functions.   The remit was very comprehensive and included the setting up of a warehouse from scratch, developing processes and policies for procurement and inventory control, KPI's, developing a supplier network across the globe and providing support to our specific region (Australia, South East Asia, Middle East, Africa, South America) which covered  over 100 sites.

 

I currently work with WASCO as Procurement and Supply Chain Manager since Feb 2012. In my current role I am managing end to end procurement, inventory, distribution and supply to the projects in the region and Jebel Ali.

 

I will talk about the topics below based on my experience

 

2. What is your experience with supply chains in general?

 

My experience in Supply Chain over the years has been very challenging and exciting, there is never a dull moment and every day brings a new challenge so you are continuously learning 

 

A lot of companies nowadays have realized the importance of supply chain and understand how supply chain can really improve efficiencies and enable companies to perform better.  An effective supply chain can increase profitability hence demand for efficient supply chain is the focus of many organizations.

 

There are many definitions of supply chain and every organization may see it differently. In simple words,  A Supply Chain is the stream of processes of moving goods from customer order through manufacturing, distribution, retailers to end user. Managing this chain of events is called supply chain management. Successful supply chain is integrating all the different links of the chain as quickly as possible without having an effect on quality and without increasing cost. In addition, key to the success of supply chain is the speed in which the activities can be completed.

 

Basically a supply chain includes manufacturer, supplier, warehousing, inventory, and transportation therefore it involves mainly building co-operative relationships across the supply chain so that the whole chain works together and adds value to the organization, hence it is very important to have an effective and integrated process.

 

There are many drivers and key factors of supply chain performance i.e.

  1. Location
  2. Production
  3. Inventory
  4. Transportation
  5. Information
  6. Sourcing
  7. Cost
  8. Planning

 

It is very important to align your supply chain strategy with your corporate and business unit strategy and to stakeholder’s needs and expectations.   This can be done by taking into consideration what is important for your organization e.g. Quality, Delivery time, Cost and Innovation to support and enable the achievement of targets.

 

A strategic supply chain will contribute in

  • Reducing waste (non- value adding) activity
  • Reduce cost and total cycle time
  • Improve response to customers (internal and external)
  • Improve quality and service
  • Provide better visibility and real situation
  • Better risk management
  • Develop strategic supplier

 

3. How do you bring in efficiencies in the process and operations?

 

There are quite a few things you can do to improve efficiencies in Supply Chain Management (it is worth bearing in mind that they may change from industry to industry)

 

In terms of process

  • You should  have a good software system
  • Provide empowerment to your people and make them accountable for their work
  • Cut down on over processing and non-value added steps in the process
  • You can simplify your process and use VSM (value steam mapping – Swim Lanes) to identify waste in process and eliminate it.
  • In procurement you can establish price agreements for your routine items (e.g. consumables, stationery, general items etc.); work on call off agreements or monthly or quarterly PO agreements. This will reduce your number of POs, receipts and invoices to process and will save time.
  • For items such as steel, copper and oil you can do agreements with supplier and tie up your pricing mechanism with indices available.
  • You can also look at your picking process and locate items in such a way that when your pick list is printed you minimize movement to save time and effort.  Lists can be reviewed and stored in sequence so that they are picked in order.

 

Operationally you can look at:

 

  • Implementing a Kan Ban system for workshop consumables
  • Identify your bottleneck and critical items and key suppliers. Work with your key suppliers to guarantee the delivery of parts by having them reserve and maintain stock for you or guarantee lead times. This requires time and effort to establish and may take months or a year but can be worth the investment.
  • Have consignment stock agreements in place with your supplier so you have parts available on your site all the time but you only pay for them when you use them
  • Have an MRP system for inventory management so you can balance your stock and hold optimum stock levels. This will help you define the safety stock, re order points and quantities for parts and will also help you establish realistic lead times from your suppliers
  • If you are in a multi-site operation then optimize inventory between the sites by setting up a hub and spoke system
  • If you have bills of material for service items you can work with suppliers to pre pack the kits as per your requirement.  The kits are delivered ready to use.
  • Also you can implement JIT (just in time) agreements with your supplier to reduce inventory

 

 

4. How can you work collaboratively with suppliers to drive improvement in quality and performance

 

It is very important for organizations to have strategic suppliers who work with them in partnership to improve performance, quality and cost. The critical element for collaboration is trust which develops over time as you start to work closely with your suppliers and depends on both sides being true and transparent if is to work.

 

There may be many commodities that can be bought from several suppliers for which this level of process is not required. Instead organizations need to focus on a few key suppliers and work in collaboration with them to secure supply for bottleneck and critical commodities and to protect relationships with suppliers who represent the majority of the organizations spend

 

Collaboration is not just exchanging emails or meeting once in a while: it needs quite a lot more than this. True collaboration involves sharing our vision and forecast with key suppliers, showing them the ‘big picture’ and involving them at the early stages of the process.  They play a key role in the decision making process collaboratively resolving any risks in supply chain. Our key suppliers are treated as part of our organization: this is the best approach to achieve the best results from today’s complex supply chains.

 

The need for regular communication and exchanges of information is very high in collaborative relationships covering topics such as changes in demand, supply, quality and cost. This determines the flexibility required of the supply chain and may add to the profitability of the company. By sharing more high-level information with our key suppliers and working with them more closely we can make quicker and better decisions to achieve more secure, long terms results.

 

To select or identify our key suppliers with whom we shall work in collaboration we need a clear picture of our supply structure i.e. Single Sourcing, Sole Sourcing, Multiple Sourcing and Delegated Sourcing.

Once we understand this then we can:

 

  • Identify critical commodities
  • Identify critical suppliers
  • Meet with suppliers top management team
  • Identify key projects i.e. what exactly the organization wish to achieve
  • Define requirement/details
  • Monitor status

 

Once we have identified the above we can also assess the supplier’s perception of us: whether they see us as Key / Core customer already or as an organization which could be developed into a key customer in the future. If we are a key customer we have a better chance of working with suppliers as a strategic partnership.  If our business is not important to the supplier and we are not seen as a key customer it can be difficult to gain their commitment to a long term partnership. It is very important that both supplier and customer are committed to work together for mutual benefit.

 

Better supplier collaboration will improve the flexibility of your supply chain and the profitability of your enterprise.

 

By working collaboratively with key suppliers we can:

 

  • Monitor and Improve supplier performance
  • Reduce costs and resolve quality issues
  • Improve business alignment between supplier and customer
  • Be more efficient  at procuring material
  • Assess supply forecasts and corresponding commitments
  • Recognize supply limitations and their influence on future supply needs and business performance
  • Make faster, more cost effective decision and develop new routes to supply
  • Can attain better long-term results.
  • Evaluate engineering changes and the effect to inventories and schedule commitments
  • Determine supply priorities and inventory buffer provisions
  • Assess supply shortage risks
  • Evaluate strategies and requirements for "large contracts"
  • Manage data reliability related issues

 

About Amir Aziz


 

a1.jpg

Amir Aziz

 

Procurement & Supply Chain

Manager at Wasco Engineering

International Limited

LinkedIn Profile

I interviewed Richard van de Vrie who discussed The Supply Chain of Optics.

 

 

1. Please provide a brief background of yourself.

 

Back in 1991, I was one of the founders and CEO of an innovative family-owned lighting company designing and manufacturing private label fixtures for several of the larger European OEMs. As an early manufacturer of LED lighting products, we learned that it was very difficult to make money in a fast changing environment. Before we could start manufacture of a new product, we had to make huge upfront investments in molds and buys large inventories of LED engines and optics. In most cases, the period of development, from idea to product launch took over a year. In particular, the optics were often the most time-consuming part of the product development process.

 

After all the work our team has done, it is fantastic to see so many people understand the possibilities and advantages of printing optics. In 2012 just before the Frankfurt Light & Building fair, we started talking about printed optics to the LED Lighting Industry.

 

Our goals are to help lighting, product and optics designers and engineers to develop new optics, optical and diffusing structures faster, cheaper and in more flexible ways. We aim to offer competitive advantages to industries reducing upfront investments in tooling and inventories. Also, we help companies reduce waste and capital intensive upfront investments by offering the possibility to order “On Demand” lower volumes of optical components (e.g. 1, 100, 500, 1000 or 10,000 pieces). Modifications in the optics they buy are as easily as changing a design in a CAD file.

 

With such a great team of employees, advisors and strategic investors and with help of our customers, suppliers and partners, I have full confidence that LUXeXceL will continue to lead the path of digitizing the optical future. You will hear more from us!

 

2.    What is unique about optics manufacturing and the optics supply chain?


In the conventional way to manufacture optics, you need expensive tools and time to make those. This makes it very necessary to manufacture volumes for commodity products and not interesting to offer customized solutions. Please find the picture below where Harvard Prof. Chris Anderson (2006) describes the The Long Tail: Why the Future of Business Is Selling Less of More. At this moment optical companies only can address the body and cannot offer real customized solutions. With LUXeXceL’s Printoptical Technology (Additive Manufacturing) this can be easily done


LUXeXceL invented the only digital manufacturing process for making optics and thus started the “digitization of optics manufacturing”. By going digital new applications, new software and new approaches are possible.


For example, here are some possibilites:

 

i.  Online libraries of optics (or intercompany online libraries)

ii.  As a parameter it will be able to key in the requested light distribution and the computer will calculate the optic design to achieve that requested light picture

iii. The computer will become able to generate many different variations (CAD files) for one single product

iv. LUXeXceL is making great progress with gaining precision and for LED lighting optics we are already close to te=he precision of high quality molds. It is expected that LUXeXceL’s technology will continue to improve and will get a precision beyond injection molding!

v.   Free form optics are rapidly made. Complexity is free!

 

3.    How does your company address the supply chain challenges?


It is possible to order 1, 100, 1000 or 10.000 pcs per order. There are no more obsolete optics, no huge upfront capital investments (tools/molds/inventory), no frequent write-offs and significant financial drags from high inventories. The CAD file can be modified rapidly if changes are required!

 

Both optics and textures can be combined in one print-job (this means less parts and less mounting |  e.g. print the whole front side of a traffic light in one part or print in one part the whole front side of a LED recess fixture in the color you like and the optic you need). To design your prototype, print it and literally within a minute you can upgrade the prototype to a manufacturing badge!

 

4.    Where do you see the future going in terms of the optics supply chain?

 

a.    We get a lot of collaboration of universities, material suppliers, software developers. For us it is clear that a digital way of manufacturing On Demand will offer so many design and supply chain advantages, new products and improvements that we may expect that this technology will become a major 21st Age Optics process. Recently we printed the proof-of-concept for the World’s 1st printed glasses (both frame + optics in one print job).http://www.luxexcel.com/products-home-/3d-printed-glasses/ This new Base Technology will change the game in the whole optical landscape!

 

 

About Richard van de Vrie


 

RichardVanDeVire.png

Richard van de Vrie


Founder & CEO

LUXeXceL Group BV

LinkedIn Profile


Richard van de Vrie is a lighting industry veteran with more than 25 years experience (through his roles as Chief Executive Officer of Lighting Partner BV and VP of two international stock market listed companies: Sylvania Lighting International and Lighting Science Group Corporation).

He has held various positions, including sales management, business development, brand positioning /marketing, building global platforms, launching new collections and global brands. Mr. Van de Vrie was co-founder of Eyeleds and was instrumental in extending this to an internationally recognized brand. Richard van de Vrie founded the LUXeXceL Group and holds the position of Chief Executive Officer.

To further learn about Mr. Van de Vrie's background and key reasons to found the LUXeXceL company, we can also recommend you reading "The LUXeXceL Story" on this website.

I interviewed Miguel Arredondo who discussed The Power of Lean-6Sigma and New Technologies to Achieve Healthy Operations in North America.

 

 

 

 

I was born in Monterrey Mexico, a manufacturing hub for the country and for Latin America, about two hours south of the Laredo Texas border. I spent most of my career in that area. Growing up, I was one of those kids that are constantly taking things apart to see how they’re put together. After graduating with an industrial design degree, I went to work at Mattel Toys for seven years, the last two at corporate in Los Angeles, in engineering and product management positions.

 

After that I went back to Monterey to take on managing different areas for U.S.-, Mexican-, Nordic-, and Asian-managed companies. Eventually, I got the best job in the world as a plant manager a few years ago. So, I have been working with Lean for about 20 years and Six Sigma for ten years or so.

 

During my whole career, I have been involved in numerous transfers to my plant and, quite painfully, from my plant. I lived through the whole channel phenomenon from the tentative approaches of the nineties and the mystery of the unknown times that are just ending to the long-overdue, reshoring, near-shoring or whatever -shoring that is beginning to correct those mistakes at last.

 

Yeah, I’ve listened to preachers; I’ve listened to fools. The whole thing hasn’t been pretty nor particularly smart, long-term for our region. Every process you can think of is subject to analysis and can be broken down into simple price, but it’s important to put it back together again. Leroy provides the tools to do just that. Then Six Sigma makes sure show that we’re consistently good at it, over and over and over again. You apply more reading tools, you move up the ladder, and the cycle repeats so it becomes a journey toward excellence.

 

These “rinse and repeat” process and technologies create a competitive edge over those immersed in a “how-low-can-you-go” game. It also creates a strong value proposal where you offer a better product, made in a better way, faster and at a reduced total cost so instead of competing in how much we can screw our customers, our employees, and the environment, we actually become positive agents of change or turn up a handsome profit that gets reinvested in the area.

 

On a more enlightened level, we may argue that technology also pulls the so-called “millennials” towards making stuff, not just apps, to manufacturing, reducing the importance of low-skill jobs that compete with burger-flipping or for the beautiful, as once CEO would say, some clothing stores and providing jobs paid according to skills of the mind, in a knowledge, economy. That improves life for everybody involved.

 

I know it’s a cliché to say that these tools can be applied everywhere and in your daily life but it’s true. Every activity implies a process, and every process can be analyzed and improved using technology to help. You start with yourself, then your supply chain, maybe a bit with your Customers. Suddenly, you’re using those tools to cut waste in your day-to-day life, improving it.

 

One of the first things you Learn in lean in general, and Value-Stream Mapping in particular, is that every activity that doesn’t result in something that your Customer pays for is non-value-added. That is, it has some kind of waste inside of it, and Lean is all about killing waste.

 

There’s a lot to say about branding and marketing advantages and fresh moving and eyeballs and traffic and, of course, design and they can all be critical to your plant’s success. But I believe strongly that to truly understand something, you must make it with your own hands. Steve Jobs used to say that design is not about how things look, but how they work. 3D modeling is one of the ways you can make things look a certain way and is a great tool but, in my experience, you cannot know and understand something unless you pull it apart and back together with your hands.

 

Let’s look at Apple for a second. Great innovation, superb design, legendary marketing, celebrity leadership. Now, the guys that used to make their stuff—their chips, their screens, their casings, their product itself—are becoming competitors and they’re kicking their butt, so they’re losing advantages. You’ve gotta wonder how much intimate stuff, how much of Apple’s mojo has Samsung taken from them and is now using against them in the marketplace.

 

On a macro level—I may be getting a little political—I think our governments really need to start working together more and coordinating better. A bright future for Canada, the U.S., and Mexico depends more on the three of us than anybody else. Our money will be better spent locally instead of Asia, Africa or whatever the next low-cost country is. After Recession, we’ve come to realize that being de-industrialized or postindustrial or the 100 percent service economy future, many of us were sold on, just doesn’t provide sufficient career parts for the poor and the entrepreneurial to grow into a middle-class, to achieve the American dream, so to say; to create paying customers for our own product.

 

In the so-called “service economy”, the steps to achieve that are just too few and far apart compared to an industrial or a manufacturing environment. So, who needs to do this most? Well, manufacturing people would find the world less than exciting, but that’s not the main deal. You can also note that there’s only so many assistant manager positions at your local fast-food joints, and they really don’t pay enough for you to buy high-tech gadgets, that would run the apps everybody else was supposed to be building.

 

The reality is also important for all of us as a society. Maybe we could a little bit more clear:

 

If you're selling a strong value proposition, if your business model depends on one of the following as advantages or core beliefs or whatever the business model is: that is speed or getting quickly to your market; be it new products or new iterations to retire; if you have strong intellectual property, if you belief in sustainability (for the environment or in fair trade), or maybe that your product should be made by people who can afford them, then you cannot afford to ignore this. It’s critical for you to apply these tools.

 

On the other hand, if your product has achieved commodity status and you buy it in bulk by the container load and you compete based just on raw price and playing “how low can you go” with suppliers, workers, customers, and environment, then you don’t really need them.

 

Thank you, Dustin, for the opportunity to share these views.

 

 

 

About Miguel Arredondo


 

miguel.jpg

Miguel Arredondo


Plant Manager at Leroy Somer

LinkedIn Profile

I interviewed Chris Powell who discussed Streamlining Supply Chains Using Big Data.

 

 


Well, it's good to speak with you, Chris. I look forward to hearing your views on streamlining supply chains using big data. Can you start by providing a brief background of yourself?

 

Sure. So, I'm actually a mechanical engineer turned technical salesperson, selling into the medical, electronic, and many other aerospace industries and what not. Now, I am a computer programmer and I do business development, helping small/medium-sized manufacturers as well as big companies like the Defense Department streamline their supply chains.  I actually started industrial interface about five years ago as a way to bridge the gap between engineers and suppliers. What I mean is, engineers speaking a different language than suppliers. I was out talking with one of my coworkers one day who was a project engineer, process engineer at Titleist Golf. His company used Avery Dennison as a tape manufacturer for the golf grip tapes that their company used to adhere the golf grips to the actual shafts.

 

When they're making a $500 driver, you expect the grip to stay on the golf club, and Avery Dennison changed a single chemical that led golf clubs to flying down the fairway. I have known this person for easily six, seven years. We'd worked together. I'd [toured] his plant. I talked to him about his problems, and he had spent six months researching, designing, testing adhesive tapes for this process. I looked at him like he was crazy when he told me this problem like, "Hey, you didn't know that my company sold manufacturers these custom adhesive tapes?" Within about a month, we had the best solution Titleist had ever had on its floor. We looked across the industry and this was happening everywhere. Engineers were describing their problems [as] suppliers described their products, their services, and their capabilities in a different way. So we created a company to bridge that gap and help stream supply chains by allowing engineers and buyers to better communicate with their suppliers.

 

That's interesting. Can you talk about, what is big data?

 

Yep. So, when we started the company we realized that there are a ton of suppliers out there who don't really know anything about their engineers and who the engineers, what their customers really do, and vice versa. A lot of engineers have a supplier that they think of specifically for one item. What big data is - according to Wikipedia, it's a collection of data sets so large and complex that it becomes difficult to process using on-hand database management tools or traditional data processing applications. These people, who are trying to understand their supply chains or their customers, cannot analyze data sets that are essentially big data. I think it's more of a buzz word, or data sets that are so big that no one can really grasp them using a normal data analysis method, such as Excel, ERP systems, or NAICS codes or things like that.

 

How can supply chains be streamlined with big data?

 

Well, I think that the way that supply chains can be streamlined with big data is by analyzing the big data and presenting it to the person in a way that solves their problem. What I mean by that is that data exists on what suppliers actually do. But organizing that data is much more difficult than traditional means of allow. That's what industrial interface does, is we organize that data and put it in a search engine. Using Symantec analysis, we do a lot of structuring of that data so that the engineers and suppliers can better find each other. So, an example of big data streamlining supply chains is our customer, the Department of Defense, Defense Logistics Agency, they buy everything for the Navy, the Coast Guard and what not.

 

Their data systems were so scattered and so antiquated that they weren't able to group parts for solicitations, or essentially buy what they were trying to buy because they didn't know how to relate the products to industry. They didn't know how to find people. By using big data analysis and restructuring of that data we were able to take a process that took two to three months and bring it down to one day. Actually less than five seconds, if you really want to be technical about it. I think that if companies had understanding of what capabilities could be done using big data analysis that they could solve a lot of their internal problems, streamline a lot of their functions. It's a matter of getting access to that big data about their supply chains.

 

Can you talk about who needs to streamline their supply chains with big data and some good results that you've seen?

 

I think everyone can be streamlined using data analysis and big data analysis. Whether they're a small company that's $250,000 up to a company like 3M who has a supply chain that is absolutely, incredibly large, or even a tier one manufacturer of Boeing or Boeing itself. An example of us using big data analysis for a large company is Lockhead Martin looking for a C5 Galaxy ramp and having a database of 80,000 manufacturers that they have in their supply chain. And not knowing which one of them actually has the capability to build this ramp because they have data that is historical-looking.

 

Their data looks back into what that company has provided them in the past as opposed to what that company is capable of providing them. By using big data analysis we were able to identify three companies that were in their supply chain that were capable of manufacturing this, as well as two that were outside of their supply chain that were capable and certified to the requirements that Lockhead needed. Then on a small business perspective, we've used big data analysis to take in their customer list and help them find new targets, new potential customers like their current customers that are in their same ZIP Code. But they have no visibility on them because there's no access to that data by looking on Google. You can't look for an ISO-9001 certified metal stamping company in the ZIP Code of Huntington Beach on Google and find exactly the companies that you're looking for. Whereas, we have the capabilities to do that and dive much deeper than that.

 

Thank you, Chris, for sharing your views on streamlining supply chains using big data.

 

Absolutely happy. I appreciate your time, Dustin.

 

Hey, thanks.



About Chris Powell


 

powell.jpg

Chris Powell


Founder

Industrial Interface

LinkedIn Profile

I interviewed Hernán David Pérez who discussed Supply Chain Roadmap.

 

 

 

I’m Hernán David Pérez. I’m a speaker and innovator in supply chain management and supply chain strategy, with more than twenty-two years’ experience in several sectors, like retail, consumer goods, B2B and automotive.

 

I developed "supply chain roadmap" which is a method for mapping, evaluating and redesigning of supply chain strategy.  Method is the result of answering a common question for supply chain professional…. What is the best supply chain strategy for my business?

 

ABOUT THE METHOD

 

Proper alignment of functional supply chain strategy with business strategy is essential to address the current challenging competitive environment, and a consequence of that, supply chain professionals are challenged by a big question ... What is the best supply chain strategy for my business?

 

But perhaps, after reading many articles, sharing experiences with other companies and maybe receiving support from external consultants, supply chain professionals bump in a common challenge ... It is very difficult to define the right criteria to select and deploy the most appropriate supply chain strategy for their own reality.

 

This is precisely the value proposition of "Supply Chain Roadmap", a method for understanding, mapping and redesign of supply chain strategy in a simple and easy way.

 

SUPPLY CHAIN ROADMAP APPROACH

 

There are different approaches about strategy, some of them focused on the power of external forces governing competition in an industry, as Porter’s approach, and others focused on competences and capabilities of the organization, as “Resources-based view” approach.

 

Supply Chain Roadmap is positioned in the middle of both approaches and defines an additional element as a result of the interaction among external forces an internal capabilities: the unique value proposal.

 

Supply Chain Roadmap defines "Supply Chain profile" as the vision of internal processes, "Business Framework" as the vision of the external forces that affect competition in the industry,  "unique value proposition" as the organization's competitive positioning and “Managerial Focus” as the approach of the magament for making decisions aligned to strategy.

 

6 GENERIC SUPPLY CHAINS

 

A comparative analysis of several authors, cases, and my own experience, allowed me to select the six generic models of supply chain: Efficient, continuous flow, fast, agile, custom configured and flexible. Then, each of these models was characterized according to the factors that comprise the four sides of the supply chain roadmap: profile, framework, managerial focus and unique value Proposal. The relationships among the different factors of "supply chain roadmap" for each generic model is the basis for comparative analysis from any supply chain.

 

In summary, the method was derived based on three pillars:

 

- The strategy of supply chain consists of four perspectives: the business environment, internal processes, managerial focus and the unique value proposition.

- Cross-analysis of several articles, real cases and practices to define the factors that characterize each of the perspectives.

- Characterisation of the 6 generic supply chains, which are a guide of the proper alignment of supply chain with business strategy.

 

APPLYING SUPPLY CHAIN ROADMAP

 

MAPPING

 

The first step is to map the supply chain factors in order to visualize on one page all the factors of supply chain under analysis.

This map allows us to understand in an easy and friendly way the supply chain to facilitate analysis of the strategy.

 

EVALUATION

 

The second step allows you to compare your supply chain with the six generic supply chains, which helps you find the gaps between current strategy and generic strategies,and is the basis for the discussions that allow to evaluate if these gaps are strategic advantage or disadvantage and thereby redesign the supply chain strategy of the company.

 

REDESIGN

 

The third step is to create the bridge plan in order to close the gaps.

 

“Supply Chain Roadmap” is a systematic and organized approach oriented to evaluate the coherence of supply chain strategy in an organization, in an easy and practical way, understandable for people in every level and every function of the company.

 

In a few words:

 

“Supply Chain Roadmap” pretends to change the way organizations build supply chain strategy

 

If you like to apply supply chain roadmap, please visit our website www.supplychainroadmap.com, where you find the web tool, which allows to apply in an easy way the method.  More details about theory behind the method are in the printed and internet edition of "Supply chain quarterly" 1st quarter of 2013 issue, in an article called "Supply Chain Strategies: which one hits the mark?".

 

 

 

About Hernán David Pérez


 

hernan.jpg

Hernán David Pérez

 

 

Supply Chain Manager at Sodimac.

Thought leader, innovator

and speaker in Supply Chain.

 

LinkedIn Profile

I interviewed Maryanne Steidinger who discussed Improving Operational Performance in a Plant from a Software Perspective.

 

 

 

 

Hello, my name is Maryanne Steidinger, I’m with Invensys, and I’m gonna be discussing today improving operational performance in a plant from a software perspective. My background is: I’ve been in industrial automation for over 25 years, and I’ve been working for Invensys for about five years.

 

My responsibilities are product marketing, and I’m responsible for the Avantis, SimSci, and Wonderware software brands. These products bring productivity to manufacturers, and that’s the segue in which I’m going to speak today. I’m going to talk about three products, and it’s really three types of software products: MES, or manufacturing executions systems; EMI, or enterprise manufacturing intelligence; and Workflow.

 

The first thing I’ll discuss is what are they. MES is a software product that basically provides tracking, tracing, and genealogy so, really, the as-built state from raw materials through finished goods for a manufacturer. It enforces workflow; it enforces different states of manufacturing; it enforces all of the data capture and quality and performance and operational information surrounding a work order that you're executing. An MES would be used in industries such as food and beverage, water, high-tech or industrial, pharmaceutical, chemical. Any of those industries that, again, start with raw materials and go through finished goods.

 

With MES, it will help you improve your yield, throughput, up time of equipment, quality of product. Normally, when you look at MES, it’s integrated into a plant’s other software systems. For example, you might have integration to an ERP, or enterprise resource planning system. the reason is is that the MES is actually executing the work order, but all of those sales orders are being built by ERP, which is really the business system, so HR, finance would have manufacturing and even some quality information in it.

 

An MES could tell you the consumption of the material, when that happened, who did it, which lines so that an ERP can go and order more materials or understand the quality or understand the status of the work order or the sales order to give the customer-delivery information.

 

Now, I’ll talk about EMI. EMI, enterprise manufacturing intelligence, is really a reporting product. It uses a dashboard, so if you're familiar with business intelligence, that also has a dashboard that’s fed from a company’s business and other operational systems. Well, EMI is similar in that in which it can take data from a plant or even business database. For example, from a plant historian or a plant MES system or even a plant ERP system.

 

What it does is it takes data and it puts it in relationship to one another—we call that putting it in context to one another—so that you can get reporting on issues or events that make sense to you. For example, energy use by plant, by product line; or energy use by plant, by production line; or energy use by plant, by shift. The idea is that you’re taking these discrete bits of data, you're putting them in context to one another, and then you're presenting it graphically on a dashboard so it becomes a very rich and intuitive and interactive way of presenting that plant data.

 

The reason that companies use EMI is because it gives them a better indication of events that are going on within the plant or within their enterprise. So, it allows you to compare things such as plant-to-plant productivity or even region-to-region productivity or shift-to-shift. It gives you kind of that big-data feel when it comes to an operating plant.

 

The interesting thing about EMIs, it doesn’t have to be used just for manufacturing. We sold EMI to, for example, water-and-waste-water plants or even government entities that may need to look at energy usage by sight. With EMI, companies are able to create this relationship, stay in them, so keep the data bits in relationship to one another, and then, in near real-time, update that data as the events occur. It always gives you the freshest and most recent view of those relationships, and that’s what EMI is.

 

The last thing I’ll talk about, kind of the third leg on the stool, so to speak, is Workflow. Workflow’s been around a long time. When you talk about Workflow, a lot of people equate it to BPM, or business process management. Essentially, what it is, it’s a business rules-enforced way of executing a procedure or a process.

 

With BPM or Workflow, you have players; in other words, people or entities that are involved in executing that process. For example, you could have a corrective-action procedure, and it could be triggered by an event. Once that event occurs, there are people and systems that are required to remediate that event. Perhaps you need to go and recheck the lot. Maybe you need to take a quality test. Maybe you need to bring that data to a board, who has to decide whether or not to pass that lot or to scrap it or to rework it. All of that can be enforced by Workflow.

 

The other important thing is that Workflow also becomes a system of record. Not only is that actual procedure enforced, but the outcome of that procedure is stored so that if you need it for compliance or regulatory issues, it’s there for you. Invensys has been using Workflow in conjunction with their manufacturing execution system and their enterprise manufacturing intelligence, and that’s why I call it the third leg of the stool, because the three of them are very complementary applications that really help, overall, to improve a plant’s operational performance.

 

Because not only can MES enforce a process and track all of the data as that raw materials or finished-goods transformation is occurring, but EMI can be reporting on it from a more macro perspective, and Workflow can help to enforce the different steps. So, if you need to take a quality test, MES will say, “Take that quality test,” but if you enforce it by Workflow, it will not only have the specific person, but the type of test and the forms that captured that signoff and also the integration to the other applications. It’s really a way in which to streamline and standardize and make your plants more compliant.

 

When you look at big data from manufacturing, manufacturing has a number of different databases that are within it. If you look at, for example, a human machine interface, it has a real-time database. You look at a data historian, that’s time- and event-stamped data that’s normally very, very high volume. That data historian can have one or two million what we would call tags or bits of data in it; so, very, very large real-time data. There may also be an MES that has its transactional data. There may also be ERP that has that business data.

 

All of those are kind of discrete databases sitting in their own environment. The idea behind big data is that you take all of those different data, and you can make some rational decisions on them. The big data is really there to help you be more responsive to events that occur; be more responsive to the types of policies and procedures that you need to enforce; it helps you with remediation should things go wrong; it’ll give you, basically, leading indicators. Rather than having to deal with the event once it occurs, such as a quality breach, and then have to go through an entire recall procedure, you can start to see events that occur, and you can put those baselines in place and those alarm and event levels in place so that you can be more predictive and more proactive in, for example, managing equipment up time or managing quality breaches or managing recall events or managing corrective-action events.

 

These three products—manufacturing execution, enterprise manufacturing intelligence, and Workflow—all can work in concert with one another or all can work separately from one another and help you to improve operational performance. Thank you.


 

About Maryanne Steidinger


 

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Maryanne Steidinger


 

Director Commercialization,

Operations and Information

Portfolio at Invensys

LinkedIn Profile

I interviewed Gustavo Nardone who discussed Lean in a Service Company, Some tips Based on a Real Case.

 

 

This philosophy was created in the manufacturing sector by Toyota in Japan. Based on indentifying and eliminating wastes to reduce costs through the value chain in different processes on any given company, Lean brings a powerful tool either for daily management or crossed functional manager.


No matter how big or how little could be the improvement; the important thing is working every single day for getting smoother and simplified processes. Definitely is a no hero job that should be having capillarity through the whole company; from bottom to top and vice versa. It is a way of doing things inside the company, it is a philosophy.


In general, when things go well, there is no sense of crisis (I mean that this sense of crisis should be part of the management with a sound leadership regardless the context and particular situation), management does not produce that kind of sense in people under this environment, therefore nobody in the company thinks of “lean process” (or any other TQM[Total Quality Management] thoughts). However, when economical crisis or bad profitability knocks the doors of the company, suddenly, cutting costs is mandatory, projects come to stand still and people mood is not the same. The atmosphere turns into uncertainty. Leadership is not the same. Decisions involve risk management more than usual. Summing up, things change suddenly and company surviving is on siege.


Therefore, in my opinion, the key point is, why should be stay tied to the context turmoil or wait for a crisis to change our way of working and leading. In my opinion, a way of doing things in the company should be done regardless the context and people. I am sure that Total Quality management over the processes and people brings the framework in order to manage or mitigate this type of situations.  


The first question arose at the top of my head was:  how to implement lean philosophy in Supply Chain area of the company with no trace of lean in its history?  How to tackle the apparent dichotomy between current company`s culture and lean philosophy in order to make lean sustainable in the long run? I found that there no were simple answers of these questions and many others. Nowadays, as matter of fact, I have not found the right answers yet, and I do not know if it is worth thinking about it over and over again.


Nevertheless, I did know the following:


a) It was going to be a hard working challenge, so I had to be available for this all the time and I had to be aware of having resilience to fail, and whatsoever keep going. First, I made Lean understandable for everyone of my team.

 

b) I made a simple breakdown in elements of every process under my responsibility in order to identify issues.

 

c) Set a plan for my area. Where to start and follow with Lean, in what processes, what elements with, and what problems must be solved. Who is going to deal with problems?

 

d)When do we start and what challenge should be worked out. Task schedules are important. Do not try to do everything at the same time. Be patience. Lean is a philosophy, is a process itself, so you cannot expect magic changes quickly. Little changes every day/week/month and sustainable in time is the key point.


e) Set the teams for every process taking into account that they will have to work one another. Not more than two or three people for every team.  I should go from bottom to top. I mean, starting with BackOffice people working on lean philosophy with daily management working out their daily problems through lean. Make it tangible for people.   Make sure that these teams can teach the methodology to other teams, in such a way they can make a network and everyone drives the learnings into the organization or the whole area at least.  


f) It had better produce quick wins from the simplest people’s issue. Do not start Lean with complex things or big projects. Do not make it unreal for people from start. You know... give people results and not reasons.


g) Make benchmark, if any, in order to know if the overcomes you are getting are aligned to the industry or not


h) Make short meetings to discuss weekly or daily results. Take countermeasures timely.


i) Get help with consulting agencies if there are many areas from your Direction


k) Eliminate processes’ waste – Reduce unnecessary tasks and delays. Make sound processes. Make it simple, and then ....make it simple again. Keep or improve velocity and efficiency in processes.  You remember, what in company services stay still is useless. There is no stock .Customers (internal or external) will judge your process at the zero moment of the true; that is a very narrow window of time.


Even though these milestones in mind, I think that, one of most important  thing that a manager have to  consider in implementing Lean successfully, underlies on the country culture, and in particular, the  culture organization. So, my advice is not to wait until problems, internal or external from the company, come up; just start implementing Lean as a way of doing things in daily management. Make it sustainable in the long run.


Thus, Lean, or any TQM tool, ought to be part of the culture company or area, may be this shall be the most difficult to get as manager. Therefore, be open minded in order to make certain adjusts between Lean philosophy and people culture you are working with.


Finally, stay close to your people as permanent support, coaching, feeling comfortable, as much as you can, with ambiguity, and then, leading with sense of crisis properly.


In my opinion, when you get this stage, it will mean that the Lean processing is flowing and you, and your team, will be ready for the next challenge waiting around the corner.   

 

About Gustavo Nardone


 

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Gustavo Nardone

 

 

Supply and Operation Manager

at Tarjeta Naranja S.A.

LinkedIn Profile


I interviewed Farhan Mirza who discussed Contract Negotiations from a Supply Chain Perspective.

 

 

 

Hello, everybody, this is Farhan Mirza. I’m working as a vice president and global head of global sourcing and supply chain management at Win Wind Limited, a wind turbine manufacturing company out of Helsinki, Finland, for the past three-plus years.

 

Prior to that I was the global director of supply development, value improvement, and warranty management at Clipper WindPower, out of Santa Barbara, California, for about three years there. And prior to that, ten years with General Motors, various roles within manufacturing, quality, and supply chain management. The most recent role before I left General Motors was global quality and purchasing manager for new vehicle launches.

 

Contract Management Overview

 

1. Definitions of contract negotiations and how they are put into supply chain management.

2. The objectives of a negotiation.

3. Best and worst cases of negotiations.

4. Negotiations tips.

5. Contract-drafting tips.

6. Strategies for planning contract negotiations.

7. Evaluations of negotiation output.

8. What can go wrong.

9. What determines a win-win outcome.

 

Definitions

 

Going into negotiations, the process of bargaining that precedes an agreement. Successful negotiation generally results in a contract between the parties. That’s the Barron’s Business Dictionary definition. There are a couple of quotes which I always remember. “When a man says he approves [of] something in principle, it means he hasn’t the slightest intention of [carrying] it [out] in practice.” That’s by Otto von Bismarck. And, “Grant graciously what you cannot refuse safely, and conciliate those you cannot conquer.” That’s by Charles Caleb Colton.

 

These are two things, quotes, which come usually to my mind in negotiations, and there are a couple of problems I would like to state here. “Buying is cheaper than asking.” It’s an old German proverb. And there’s a saying, the author’s unknown. It goes: “You must be fully prepared to lose a great deal in order to make a great deal,” which, in my mind, comes to more of a win-win. The goal is not to kill someone to gain something; it should be what someone else can gain across the table and what you can gain on your side of the table and make it a long-term relationship. As William Shakespeare has said, “We were not born to sue, but to command.”

 

Objectives

 

Moving into negotiation objectives. Number one is certainty. The aim of the contract negotiation is, firstly, to achieve certainty to record what is being supplied. When, in what quantities, and what standard? And what are the consequences of delay or failure to meet the agreed requirements?

 

The next thing would be, as an objective, the best deal. Seeking clarity does not conflict with the view that negotiation should be achieved the best deal. It merely points out that both parties to a negotiation have to understand what is it that they have agreed to. Again, that should be the best deal.

 

Third objective would be achievement of organizational goals and objectives on both sides. Fourth would be creation of a long-term relationship between the two parties which are coming to an agreement of signing the contract.

 

The broad attributes to precontract negotiations, our next topic or subheading: scope management, quality management, time management, cost management, risk management, and customer satisfaction. These are the six pillars which are required to be honed in for precontract negotiations.

 

Strategies for planning contract negotiations

 

Then we come into strategies for planning contract negotiations. Firstly, link your priorities along with alternatives. Second, know the difference between what you need and what you want. Third, know your bottom line so you know when to walk away. Fourth, define any time constraints and benchmarks. Assess potential liabilities and risks. Sixth, confidentiality, non-compete, dispute resolution, changes in requirements all have to be documented ahead of time and agreed on.

 

Negotiations and Contract-drafting tips

 

Seventh, do not use the same—you have to walk a mile in your vendors’ shoes or your customers’ shoes. Do the same for your vendor or customer what you are stating. Just don’t do lip service; you have to mean what you say what goes in a contract with the intention of going in a contract. That’s how risk versus the cost and impact has to be judged.

 

Nondisclosure agreement, I have to emphasize here, before launching any negotiations, document, or exchanging any data, you have to a nondisclosure agreement in place. This avoids all sorts of complications as you move forward.

 

Strategies for planning contract negotiations

 

Preparations for negotiations, our next subtopic. Select the short-listed suppliers for contract negotiation. You cannot go about trying to deal across the board with all suppliers at one goal or just trying to play the field and see what works out best. You have to have a good idea with whom you want to do a negotiation and what the time is worth, what the effort is worth, and whether that company, commodity, or customer-supplier is really capable of handling the negotiation and is worth the time and effort.

 

Secondly, establish cross-function negotiation teams for the negotiation. Just don’t go walk in or say casually you're walking in to someone’s facility. Invite someone over. Make sure you have the right team which is sitting with you and across the table to make the process go smoother and conserve time to the maximum possible and make it an effective process.

 

Third, actual contract negotiations. Each issue of negotiation should be resolved individually. Don’t clump things together. An answer issue should be noted and discussed in a follow-up discussion or after a break in the same discussion. Summaries should be made of resolved issues so you have a checklist of what’s resolved, what’s unresolved. And don’t give hope that a particular supplier or customer may be entering into a contract when you still have open issues on the table. Make sure you resolve things before you commit to the final goal.

 

Preparations for negotiations, one more aspect to remember would be determine if you will need legal counsel, and make sure you have them by your side and the other party also knows you're going to have some legal counsel because of the issues. Then it’s clear and you're not hesitating to involve legal at the last minute.

 

The next point within the preparation of negotiations is: Make sure you identify ahead of time is going to be on-site or is it going to be teleconferenced. I generally prefer face-to-face negotiations, on-site, looking at someone right across the table and then doing the discussions. The next point within the preparation for negotiations would be: Make sure that persons representing the vendors or the customer have the authority to negotiate on behalf of their organization.

 

Negotiation tips as the next topic. Always have clear objectives; it helps to make lists of goals before meeting the other party. Secondly, it is important to go to a negotiation having done your research. Know the relevant laws, facts, and figures. Third, consider what you really need to get from the other party, and also decide in what areas you're willing to compromise. Fourth, build trust with the other party. Trust will aid in complications.

 

Fifth, it is always better to have a first draft of the agreement written before meeting the other party. Sixth, try to keep the discussions ordered when meeting with the other party. Make the checklist of topics that you would like to cover, and then make sure that you check off that list as you progress. Listen to the other party and their concerns; don’t always be the only person doing the talking.

 

Things to consider: Do you know the other party? Have you done business with them? Secondly, consider doing a credit check if you haven’t dealt with the party before. Third, if the other party’s based abroad, make sure you take legal advice to ensure you have a properly protected local laws, your product, liabilities, it’s all covered if things go wrong. Fourth, are you happy to allow the other party to subcontract some or all of the work or pass on the benefits of the contract to others? If not, this must be made clear in the contract.

 

Fifth, is it a fixed-price contract? If not, then incorporate clear price variation formulae linked with published market indices for the key components or materials which go in the product. Are goods delivery cost included in the price or not? These are the six things you need to consider while framing the contract.

 

The main rule of contracting policies always, for the long-term contract, short-term contract, they’re all leading to a relationship. Agree in writing. The only proof of what has been agreed is the document signed by both parties.

 

Contract-drafting tips as the next subtopic. An effective contract should always be clear, specific, and focused. Secondly, sentences should be short to avoid unnecessary complexity and ambiguity. Third, have a look at some sample agreements prior to drafting your own. Fourth, make sure all party names are correct, and include the business titles if applicable.

 

Fifth, make a contract where it’s consistent with good grammar, word usage, and abbreviations. Sixth, outlining the contract can aid clarity and allow for quick reference to certain clauses. Seventh, define the important terms. Eight, anticipate litigation by including sections regarding venue and choice of floor.

 

Ninth, all parties should sign the contract, including the business titles where applicable. Number ten: pages should be numbered. Avoid appearance that pages could have been added after the agreement was signed. Eleventh, as with any business writing, proofread very carefully.

 

Legal views [are done] at an early stage so they can fully understand the commercial context and aims. Let your solicitor help with strategic planning. Let your solicitor provide guidance on any relevant rules and regulations at the negotiation stage. Remember that early involvement is much more effective than a last-minute review once negotiations are mostly complete, as this avoids having to change a pre-agreed position.

 

Evaluations of negotiation output

 

Post negotiation tips as our next topic. Kick off the meeting. Define roles and responsibilities and complication channels. Secondly, appoint a project-management team or an external company to monitor and manage the contract. Number three: periodic coordination meetings. Number four: periodic progress reports. Fifth, cost monitoring and financial management every quarter, every six months. Whatever has been agreed, you’ve got to follow. Sixth, quality inspection.

 

What can go wrong

 

Seventh, claims management. Whether that’s warranty or liabilities, they have to be reviewed and managed at least quarterly is my suggestion. And eight is contract closure. Evaluation of the negotiation’s output. In every purchasing or supply chain contract, you have to evaluate output. This is even so more important because the entire organization’s looking at this supply chain function to see how many contracts were negotiated, how many were closed, how many were open and what reasons they were open and what liabilities and risks are hanging out there for the organization.

 

That’s why evaluation of negotiation output as our next subtopic, I would give five pointers. One: What could go wrong with the deal, and what loss could you suffer as a result? Consider all possible consequences. If buying, try to ensure that the seller is responsible for all possible losses, including consequential losses, and that liability is not limited in any way.

 

If selling, try to limit liability to a fixed amount. Resist any responsibility to consequential losses, as they may be far greater than the contract amount and impossible to quantify. Fourth, a clear timetable is essential, especially if price is tied to delivery or performance date. Fifth, do you know or do you want to be able to end the contract or impose a violation penalty if work or goods are delivered late or not delivered for reasons beyond an act of God?

 

And what can go wrong is the next subtopic. Poor planning; failing to pay attention to your party in front of you. As humans, that cross-cultural negotiations just like local negotiations, this is a big no-no. There never are. Cross-cultural sensitivities and implications of how things can go wrong all have to be considered. Paying too much attention to anchors, caving in too quickly, and do not gloat.

 

And then one important thing would be all of this as a culmination, I say, has to be supplier appraisals. Why are supplier appraisals so important before going in to contract negotiations? It shows them problems can be identified and resolved quickly. The signal to an organization, whether taking a supplier for negotiation is really worth it is based on the supplier’s performance. Supplier appraisals help land suppliers with organizational goals. Good suppliers will be more willing to work with you. Poor-performing suppliers will be rooted out quickly when you do the evaluations or supplier assessment.

 

What determines a win-win outcome

 

Effective risk management. Cost savings, because supplier appraisals will tell you where the bang for the buck is. Effective relationship management, effective management of preferred supplier lists, and it promotes continuous improvement. And last but not the least, in my opinion, supplier assessments highlight possible weaknesses in the system.

 

Best- and worst-case scenarios is the next subtopic and which is the summary of my discussion here. Number one: The worse contract negotiation is to bleed every last cent out of the vendor for the lowest price. Secondly, remember you want to partner with your vendor so that both you and your vendor or your customer will meet your corporate goals and objectives by signing the contract. And lastly, a signed contract that benefits both parties will provide a firm foundation to build a long-lasting relationship with your supplier or your customer.

 

That brings us to the end of the suggestion. I hope all of you enjoyed it. Any questions, comments, feel open to ask in the blog or e-mail me. Thank you very much.

 

 

About Farhan Mirza


 

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Farhan Mirza

 

Vice President and Global Head of

Global Purchasing, Supply Chain

Management at Win Wind

LinkedIn Profile

I interviewed Jeffrey Crowley who discussed State of Supply Chain Executive Search.

 

 

 

Can you start by providing a brief background of yourself?

 

Sure, Dustin. I am president and owner of JMC Search. We’re a boutique, retained search firm in the Chicago area. You’re in Illinois. I’ve got a background in search in general. I’ve been in search for about eleven years now. I had my own firm for about five and a half. At the end of the day, I specialize specifically in the field of supply chain, the purchasing, moving, distribution of materials are really the area I focus in in my practice at the executive level, which tends to be the director and vice president level served.

 

Can you talk about what is the current state of executive search in the supply chain field?

 

It’s definitely an interesting time for us. Supply chain continues to be a focus of specifically manufacturing companies and finding good supply chain talent. They’ve done a good job as organizations of taking cost out of other parts of the business—finance, HR, those type things—so, the supply side is really, I think, the next evolution, and it’s been going on for a couple of years now. So, really looking for talent that can come in and essentially pay for themselves through cost savings and reductions of costs, whether it’s the buying of material and negotiations, whether it’s the more sophisticated warehousing of material in product, or, quite honestly, whether it’s the transportation and moving of material. Supply chain is very much a global product, and what’s interesting is, we had this scenario a number of years ago where everything had to go to the Far East. What I’m beginning to hear, and it’s just rumblings; I wouldn’t say it’s very big, but it’s definitely beginning to be talked about. Is that still the best place for us to be in terms of getting material, in terms of manufacturing products? Do we start bringing stuff back in to the U.S.? Do we get competitive again here? For my clients local in the U.S., do we go to India? That tends to be another big topic of conversation. I know a number of organizations moving in that direction. Supply chain, if you're not global in supply chain, you're gonna really struggle in finding that leadership role that is a candidate you might be looking for.

 

Can you talk about who is in demand?

 

I would say two levels. First of all, still looking for those vice president, C-level individuals that can really paint the picture for the right CEO and really show them how we can go about putting together a process and a program that’s going to lower our cost but not affect the end user, whether that is another component manufacturer, whether that is the actual even user that would buy a complete product. That’s the first person that’s still in demand today.

 

The second person is that lieutenant, that number two. In the field of search right now, whether it’s supply chain or other areas, one of the big issues is succession planning. Organizations are not only focused on making sure they have got the top level taken care of, they’re really focused, as well, on making sure they have got that second level—that director or assistant vice president, whatever title you wanna give it—level secure as well so that if and when that top individual moves on, there’s consistency in the organization. There’s not the big expense to, quite honestly, come out and find me to find that next VP or C-level supply chain leader. We just need to simply replace that director level again and make sure a succession plan is fulfilled. Those are the two real areas right now that are in demand.

 

How do you select the right executives?

 

How do I select the right executives? That is a loaded question, to be quite frank with you. Certainly, there’s the process of going about and looking in the marketplace. The first thing I do with clients is I basically interview them. Who are we looking for? Not only the technical skills we’re looking for, what are the soft skills? What is the personality of this person look like? What is gonna mesh well with the rest of the leadership team? Is it a driven person? Is it somebody who’s a little bit more laid back? Those type questions. To really put a complete profile together, not just a technical profile. That’s first and foremost and then you have got to go out and—if you're calling to retain search to find your next candidate, likelihood is, you want somebody with industry experience, discreet manufacturing or food processing or consumer products, whatever it might be. You want that person to have played in your sandbox before, so to speak. That means my job is to go out and dig through that sandbox and not only work my network and sites like LinkedIn.

 

But still, to this day—and this is a little old-school, I’ll be honest with you, Dustin—I believe in the power of the cold call. I believe in just simply taking a list of companies after I have done some of those other things and calling through and asking for the appropriate individual and just saying, “Hey, who do you know, or are you interested yourself?” And then it’s, of course, the interview process, the evaluation of what they have done, the checks and balances of what they have done. The referencing becomes so critical at the upper levels because you really gotta make sure not only do you like the person, but can they give you solid references that can really back up what they talked about that they have actually done. So, that’s where your network comes into play a lot. “Who do you know that might know this individual?” type thing. Not that you don’t do formal references, but backdoor references, in my humble opinion, are always better because, quite honestly, they’re usually more truthful with you.

 

 

About Jeffrey Crowley


 

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Jeffrey Crowley


 

President at JMC Search, LLC

Executive Search with Integrity

LinkedIn Profile


I interviewed Blake Shumate who discussed Management Insights from a Logistics Service Provider.

 

 

 

 

Background:

 

Hi Everyone, my name is Blake Shumate with American Global Logistics.  Let me start with a little background about myself.  I hold a degree in Business Communications from Old Dominion University and I have approximately 13 ½ years experience in the logistics industry.  My journey began on the importer side by managing the inbound containers from Asia to the US for Pulaski Furniture.  Really, this amounted to Coordinating and facilitating the schedules for all the DC locations.  I moved up to something ofa corporate process analyst as the Continuous Improvement manager. This entailed reviewing all manufacturing and the business processes to create more efficient workflow as well as produce cost savings for our organization. (for example one project dealt with lumber yield and I was able to produce rought $70k in monthly savings by simply changing the process flow in our cells). In ’03 I moved on to Global Link Logistics as the Regional Manager.  Here I accomplished such things as opening a Virginia office and growing to handle over 60% of the company business, I managed all off-site personal, and I created the “In-house” service program in Martinsville, Pulaski, Greensboro, Atlanta, and Chicago Area’s.  In 2007, I became a founding member of American Global Logistics.  Initially, as the Operations Manager, I opened AGL’s first office in Martinsville, VA and co-founded all internal operating processes for Asia and customer relations. I also assisted in starting our sister company American Global Brokerage Services as well as assisted in opening some ofother office locations.  Today, I oversee all internal and external system solutions and I have developed AGL’s proprietary operating system as well as the AGL Supply Chain Cloud service –including our mobile platforms.  Essentially, all things that are process and system related for our employees or customers I facilitate the creation/deployment thereof.For the most part, I do believe this summarizes me and as one might think, my core competency is in the realm of breaking down any process flow and then reconstructing it to a more user friendly environment that promotes efficiencies and great service.

 

I have been asked to give everyone some feedback on a couple questions, so let’s go ahead and get started…   First question:

 

How is your company focusing on customer service at a time when the industry is trying to become commoditized?

 

First off, I don’t think I it comes as a surprise to anyone in this industry, The NVO / Freight Forwarding market is rapidly becoming a commodity. In other words, many importers are actively searching for the lowest rate on any given lane in any given market regardless of service level the carrier is able to provide.  I think this steams from the importers belief that our industry is limited to the amount of carriers that can be used since there is a limited amount of ocean shipping lines. Ergo, NVO/Forwarders must all be alike. On the surface, this seems like a logical school of thought, but in my opinion this is nowhere close to the truth.  The reality is that shiplines and air cargo services are set up to keep their costs as low as possible so they can maximize profit. This essentially means that their manpower or staff/office locations are set up like an assembling line.  They accomplish this by disseminating each segment of the supply chain within various departments (i.e. routings, bookings, tracking, dispatching, brokerage, availability, equipment, intermodal, customer service, sales, etc… the list goes on and on).  Now, with respect to the carriers, this is 100% the best philosophy for their industry.  However, this plan for maximizing costs also also means that the staff for each station has a smaller knowledge base of the supply chain.   This limited base of knowledge ultimately means, lower salaries, easy replacement, high turnover, and higher probability for lower customer service.  Again, I just want to repeat, this is a great philosophy for their industry. However, understanding this is vitally important to an importer as this translatesto a lower level of customer service, slow response time, the inability to develop partnerships or strong relationships, the difficultly to learn more about the entire supply chain from one single source, and even the increase risk of finding a “9 to fiver”. (Now, just to be clear, this is what I call people who just show up for a paycheck and do not care about the integrity of their work or the information they are providing to the end customer).  This becomes more apparent to an importer when they have very important merchandise in transit.So in short, an importer needs to understand this perspective to see that the lack of services or attention will very quickly result in high and unplanned additional costs.

           

At American Global Logistics, we don’t see the NVO/Forwarding industry is a commodity but rather a solution to a problem.  Obviously, the problem we see is that importers need a partner that is a true end to end supply chain expert.  Someone who will work in their best interest and is devoted to improving the supply chain. The purpose of this partnership is to ensure that rates are at a market level, process improvements are recognized (internally and externally), important cargo is handle with high attention and care, and receive a top tier level of no-hassle reliable customer service from an experienced veteran.   We deliver this solution to our customers with the very best of the best in our industry.  AGL is an employee owned company.  What the point of that you might ask, well the point is that AGL translates into 1 phone call to any person in our company delivers the very best intentions and experience to our customers --- guaranteed.  Our owner, Chad Rosenberg, is well renowned in our industry for great service and setting trends (on multiple occasions he has sat in as an industry resource for many conferences and panels of experts). Working with Chad for as long as I have, I understand that the key to AGL’s success is the team that he has assembled.   Our team enables us to transcend from the “commodity” of low-rate forwarding services to a company that partners’ with its clientsas a long-term asset with the goal to improve the end-to-end global experience of importing/exporting for our customers.

 

Ok, so hopefully that all makes sense.  Now the next question I would like to address is:

 

What innovations in management and operations is your company applying?

 

Two words.  “Cloud Services”.  I believe in 50 or even a 100 years from now our age will be defined as the beginning of the “Cloud Era”.  Thanks to companies like Apple, Google, Dropboxetc… this phrase seems to be the title todaysera of business.  The concept of storing all of your vital information in a cloud so that multiple users from around the globe can access the same real-time information fits perfectly with our industry.  The majority of NVO’s / forwarders purchase or partner with outside technology companies to provide such services.  However, I believe that in the world of logistics there is no such thing as an “out of the box” or a “one system fits all” type platform. Therefore with input from multiple large importers we have created the AGL Supply Chain Cloud.  This is our proprietary online platform that allows our customers to work with their factories, middlemen, NVO, carriers, truckers, warehouses, and brokers all simultaneously.  We do have standard service offerings but our approach to these services is to first learn more about our customers workflow and how they run their supply chain. Once thoroughly examined our development team (which is comprised of a panel of experienced logistics personal) creates a unique proposal that fits each customer’s specific needs.  So although we did not invent the concept of cloud services we are redefining how cloud services are used within the supply chain for each of our customers.

 

And finally the last question I would like to review with you is:

 

Do you have any recommendations for logistics managers?

 

I believe the best advice I can give would be for any person at any level of leadership both in work and in life.  I personally believe that people are the best assets in any organization. Like any valued asset people should be invested in, polished, and groomed to be successful.  For our industry especially, this is one very important concept to realize simply because the logistics field is a service orientated business.  Behind every good service stands not one but a group great people.  All forms of logistics managers need to teach and push their people to be better than they are as well as inspire them to do the same in their co-workers.  Having this understanding at a leadership level, I believe produces tremendous results.

 

Now with that being said, I do have about 5 basic mantras and quotes that I do my best to manage by and instill in my co-workers.

 

    1. The first one is a quote from Jim Collins book “Good to Great”.  He said something to the effect that good is the enemy of great. People become complacent and happy with being good at something.  This ultimately stops people from reaching true greatness.(great book by the way).
    2. The next one is more of my opinion, and that is: a true leader never stands in the spotlight. A true leader is the person that standing in the dark holding the light on others.( of course by this definition we all have the ability to be great leaders – we all just need to realize this and make the right choices)
    3. Thirdly, I despise the old saying “I don’t live to work, I work to live”.  I personally believe that is a bad philosophy.  I always tell people “To me, life is work. If you want to be successful – you must work at it.  If you want to have a good family life – you must work at it. If you want your children to learn good morals and be upright citizens – you must work with them.  If you want your marriage to be successful – you must work at it.  If you want to play a game well – you must work at it. Put your best effort into everything you do and this will produce success in work and life.  None of this means there will not be failures but it all means you must be focused in all things.“
    4. Fourth, can be summed in one word, respect, but as a leader I believe this means that you must realized people don’t work for you, we all work together. Understanding this is important to your and your peoples success.
    5. My last mantra is a classic and is so true in any service orientated field and it is simply “The customer is always right”.

 

To me, these quotes and mantra’s are phenomenal and really help me to push people to see greatness and success in themselves.  After all, managing is not about what someone can force another to do – it is about teaching people the realization of what they are capable of.

 

Well, in closing, I would like to thank you Dustin for your time as well as say a very special thank you to Chad Rosenberg and the entire staff at American Global Logistics.  Individually we are all unique pixels but together we create an amazing picture of customer service.  So Thanks again to you all for your very meaningful contribution at AGL.

 

 

About Blake Shumate


 

 

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Blake Shumate


 

Operations Manager

American Global Logistics, LLC

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