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2015

I interviewed Tony Noe who discussed Product Versus Process Knowledge: How to Decide Who to Hire?

 

 

 

 

 

Can you first provide a brief background of yourself?

 

I’ve been in the procurement profession for just over 40 years. I started in Mill Supply, industrial supply company and have been in several Fortune 500 companies—Siemens, Emerson, Holley, Johnson Control’s automotive group—a number of companies that are very large operations. I’ve served as category manager, as director of procurement, manager of purchasing, a number of different titles, which are typically found within different companies, called the same exact position, different names. I’ve been the boss and I’ve been the follower.

 

Thanks. My first question is regarding finding sourcing professionals. What are the stumbling blocks that a hiring manager may face when looking for talent in sourcing?

 

One of the things that’s not unusual is to find people who are actually salespeople who want to switch the side of their desk and become a purchasing agent. Their knowledge is based on their knowledge from across the table of what it takes to do the purchasing job. They know they get a purchasing order; they know that the purchasing agent looks for the best price, but that’s about the extent of it. A lot of times they’re not acquainted with the process of developing specifications, developing the RFP, RFQ, whatever you use in particular, and the fact that your customer, if you will, if it’s a manufacturing firm, is that guy on the assembly line. It’s not the customer who will eventually get the assembly; it’s the person to whom you’re supplying goods to keep him working. A lot of times, that’s a critical factor to make sure that they’re aware of.

 

Making sure what the background is, also making sure, in the course of the conversation, what you’re looking for is a person who adapts well to change, because there are different requirements depending on what kind of buying you’re doing, or is this a person who really needs some focus time to be able to do a good job. In other words, they really can’t be interrupted constantly and do a really good job.

 

The first type, the guy who really adapts and takes change, just rolls off his back, doesn’t bother him at all, they make excellent MRO buyers—material, repair, and operations buyers—because in that environment, your requirement changes constantly, and people from the plants and maintenance department of the plant, sales expediters are constantly bombarding you, wanting their number one priority to become your number one priority.

 

On the other side of the coin, you have the raw material and manufacturing buyer who is looking at—typically in a larger company—he’s looking at some kind of ERP that’s telling him some period out on a forecast, what he needs to buy so he can work out the best deal for whatever it is he’s buying. He knows a quantity, he’s got a history, he knows, he can look at history and see he’s been buying this about every two months, this size quantity, so he has a pretty good feel for what the overall annual volume is. He can take all of that knowledge and put it together in a reasonable RFP or RFQ so that the supplier has an idea, a very good idea, not only of today’s requirements, but tomorrow and the next day and the next day after that.

 

It’s a different type of buying. Typically, an MRO buyer will be interrupted every 15 minutes, sometimes more frequently, sometimes out to a half hour between interruptions. A raw materials supplier frequently—if he’s doing his job right—they can go for two or three hours before somebody wants to interrupt them or there’s a salesman calling or something like that.

 

Plus, in raw-material buying, you have an opportunity to schedule sales calls, whereas an MRO, there’s always another salesman wanting to sell you drilling tools, cutting tools, grinding tools, janitorial supplies, paper for the copier; there’s always somebody selling something. They’re much narrower in their area of representation because there are more of them, whereas if you’re buying production material, there just aren’t that many people selling steel, there aren’t that many people selling copper, and until they know your volume, they may not want to call on you in the first place, so you have to go out and look. It’s very different. You have to identify personality type, and that’s part of the process too.

 

Would you say that process or product knowledge is more important when hiring sourcing professionals?

 

I think in the majority of cases, the process knowledge, the knowledge of how to do a reasonable buy; do a very logically developed RFQ and then an evaluation of that quotation, proposal; developing the specifications so that they’re clear but not restrictive.

 

Early in my career I had an opportunity. I was buying things for the state of Oklahoma and the IT department wanted some new mainframe computers because they were maxed out on what they had. In their specifications, they had in there that the panels on the outside of the computer needed to be blue. Well, I wasn’t a big IT person, but I knew enough to know there’s a reason IBM’s called Big Blue, and other mainframe manufacturers use other colors on their mainframe panels, the outside, dressy panels.

 

He was trying to restrict it to just IBM mainframes, so I challenged it to find out if there was a good reason. The only reason he had was that they matched what they already had. Not a question of maintenance, it would be cheaper if they had all the same manufacturer or something like that; it was strictly that they looked good sitting side by side.

 

That skill, that knowledge of the process, the knowledge to know what you can share with a salesman versus what you absolutely should never share with a salesman. The personality that you’re not going to be influenced by a salesman taking you to lunch or dinner. That your ethics are well-developed and understood. That whole realm of the process of being a professional purchasing agent, senior buyer, whatever title your company happens to have. That process, to me, has always been far more important because I find the learning curve of a product, be it corrugated boxes, plastic molding, raw materials in the steel and red metals range, ferrous and non-ferrous.

 

All of those you can learn. There are always, in a true manufacturing company, there are always experts in your engineering department who know the details and specifics of the raw materials, and they can advise you and guide you, whereas they can’t help you with the process; in fact, they may lead you down the wrong path. More valuable to me is knowledge of process than knowledge of product, with a few exceptions.

 

And how would a hiring professional evaluate whether someone has the process knowledge?

 

Generally, in a one-on-one interview either one the phone or face-to-face, asking some key questions such as situational type questions, where you would say, “Okay, you’ve got three current suppliers of left-handed widgets, and you’re trying to determine the best strategic sourcing plan for your company. How would you go about that?”

 

The answer they give you is going to tell you a great deal about their understanding of the process, if you will, of strategic sourcing. If their answer is, “Well, I’d ask them all the quote and see who had the best price,” they’re probably not ready for a really heavy workload in strategic sourcing because they’ve missed a lot of different factors, such as: Are these the best three suppliers of that type product? Are there other people out there who are better? What’s your history with the three that you’re dealing with today? Are they delivering on time? Have you had pricing problems? Do their prices go up constantly, and, really, all they give you is, “Well, that’s the way it is”?

 

If the rest of the story isn’t part of the answer, they’re probably not as process-savvy as what you may be looking for. If you’re looking for an entry-level, yeah, they certainly could help you out. But if you’re looking for somebody to take charge of a commodity category and handle it, you’re probably going to be looking to have to help them a lot, whereas if—and I’ve had this happen—you’re looking for somebody in a category, a commodity manager, and you ask them how to deal with it, and they start asking the specifics about what gauge metal, what the finish is like, etc.

 

If they start asking very specific questions about the commodity itself, then you know they've got the product knowledge, but you’re still trying to get them back to do the newer process too. I’ve known a few engineers who’ve gone to the purchasing area and done very well; not as many as I wish, because they would get hung up sometimes on the product specifics and sacrifice price, delivery, requirements, things like that to get exactly the right, perfect material. We frequently say in purchasing, “It’s getting the right material at the right price at the right time.”

 

One of the things we need to always keep in mind, the right material that is just right for the application, it’s not better material and it’s not worse material. It’s just right. You can get out there in the sourcing world and frequently find somebody who can make it to a tighter tolerance, to a higher finish, but do you need that? You’re paying for that; you’re paying for that extra expertise, that extra skill.

 

Some years ago, buying castings, just gray iron castings, there was a company out of Germany that I was dealing with that was capable of making gray iron castings with such a fine finish that they didn’t even need to be sand blasted to look like they’d been polished. In their casting operation, they could cast threads that you could actually screw onto. That was great but that was not what I needed; I just needed casting. It was casting nobody would ever see; the finish wasn’t critical. I didn’t have threaded requirements. Their pricing was typically quite a bit higher, so for the application I needed at that point in time, it just didn’t make sense. Some castings I didn’t buy from because they had that lower requirement. You have to understand the specifics of your requirement and meet that, not what you think is better. Sometimes an engineer can get hung up in that area, and that produces a higher cost for goods sold.

 

Thanks, Tony, for sharing today.

 

I appreciate your time too.

 

 

 

 

About Tony Noe


 

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Tony Noe


Strategic Sourcing/Procurement Professional and Leader

 

LinkedIn Profile

I interviewed Brett Parker who discussed Increasing Efficiency in Local Trucking through Technology.

 

 

 

 

 

 

It’s great to speak with you today, Brett, and I’m looking forward to hearing your views today on the topic of increasing efficiency in local trucking through technology. Before we start, can you provide a brief background of yourself?

 

Sure, yes, and thank you for having me. I come out the supply chain logistics industry. I grew up on the docks in a family business, loading and unloading trucks, working in the shops. I really have been involved in trucking and transportation my whole life.

 

That company is called The Triangle Group. They focused on consolidation in the local markets, picking up local shipments, consolidating them onto full truckloads going cross country for the retail community—the Levi Strausses, the Dillards, the Perry Ellises of the world—and also doing a lot of port work—picking up containers from the ports, unstuffing them, and doing a lot of value-added services for that retailer. I grew up in transportation, and that’s really been my background. That obviously has been an easy transition for me into Cargomatic.

 

Great. Can you talk about how you increase efficiency in local trucking?

 

It all starts with a problem. When we started this company, we really sat for a month, my partner and I, whiteboarding what the problems were that we were looking to solve. This business is $77 billion and growing. When you go and look at that business, the local trucking community, the guys with six trucks or less who are really our customers, our niche, are doing 85 percent of that business. These are first-generation, second-generation immigrants, entrepreneurs, hard works who are in the local marketplace, making all of this commerce happen, and there’s no technology layer; there’s been no focus on the local supply chain. All of this is happening very, very inefficiently, really old-school.

 

A typical scenario is with the Rolodex. A guy has a Rolodex of a couple of truckers, they call them, and after that it’s a big, black hole. If that trucker is 100 or 50 miles away at the time they need to book a shipment, well, that shipment will just have to wait.

 

What we’ve done is taken all of this capacity, we’ve given them our app, and now everybody has visibility and transparency into where the capacity is. These truckers now can market themselves, market their capacity, and now actually market their access capacity. If they’re driving by a warehouse and that warehouse has a shipment of three to four pallets, and that truck that’s going right by, going that way to the destination, has room to take that shipment.

 

Now you can make that shipment happen because of the technology layer that we put in. That’s a really efficient way to operate: taking advantage of excess space on trucks.

 

Can you talk about who’s involved with this process?

 

Sure. There are multiple stakeholders. We have a double-sided marketplace, if you will. On the one hand we have the shipper. Who are those shippers? They’re the freight forwarders, they’re manufacturers, distributors, and they’re the carriers themselves. Those are the shippers taking advantage of the capacity that’s in the network.

 

On the other side of the fence are the carriers, and those are the guys we’re giving excess revenue to, we’re giving technology to, we’re collapsing their admin expense by just paying them out automatically. You have the shippers on the one hand, the carriers on the other hand, and then you obviously have Cargomatic in the middle as the technology layer.

 

Can you talk about the obstacles you face?

 

As you know, in start-ups there are many, but I would say one obstacle we’ve been focusing on recently is quality, giving that consistent product to the shipper every time. For us, that’s making sure the driver has his app on, he’s going through the workflow, uploading proof of delivery, getting a signature from the consignee, the place they’re delivering the shipment to.

 

When a carrier doesn’t do that, we have an immediate feedback loop from the shipper, so we go and counsel them. If they can’t deliver a high quality of service, we have to deauthorize them. I think that quality is paramount importance in keeping our product the best in class, so we really focus on that. That is a challenge.

 

Another challenge is finding capacity in all the right places all the time. One day we’ll have more shipments, the next day we have to add more carriers; it’s really a nice growing process to find the right truck at the right time at the right price. We’ve been very successful to date. We’ve done tens of thousands of shipments with millions of pounds and continue to add both shippers and carriers to the network, kind of creating this network effect in the local marketplace.

 

There are certainly challenges every day that our operations teams are focused on fixing, but it’s really about picking up and delivering on time. Right now we’re at a 97.25 booked-to-completion ratio, which means a shipment comes in, and there’s a 97 percent chance that we’re going to make that shipment happen for our shipper and that’s important. We want people to believe in the marketplace and come back and use this service.

 

My last question is: Do you have any final recommendations?

 

I think that the supply chain is really looked at as a mature industry, so it’s really important to try things. Try things a new way, push your organization forward, push efficiency to the next level. A good example of that is the work we’re doing at the ports.

 

For example, in Los Angeles port they’ve been dealing with a labor issue and the ships got backed up and you have ships still sitting out in port, waiting to be offloaded. They came to us, kind of looking outside the box, and said, “We hear what you’re doing with technology in the local market. Can you apply this to help us be more efficient at the port?”

 

It’s been exciting to see that we’ve been able to move containers out the port 100 percent quicker than the old way. We have what’s called a free-flow program. Basically, a container comes in and we pull it off the top and give it to the trucker and they can go to their destination versus having to find an individual container.

 

It’s thinking outside the box, my recommendation, really trying new things, and push the envelope to be best in class.

 

Thank you, Brett, for sharing today.

 

My pleasure. Thanks for having me.

 

 

 

 



About Brett Parker

 

"Cargomatic: Increasing Efficiency in Local Trucking through Technology"

Here are some links to recent Cargomatic press stories

http://techcrunch.com/2015/01/29/cargomatic/

http://pando.com/2015/03/06/cargomatic-plays-the-role-of-hero-swooping-in-to-help-unclog-the-uss-largest-ports/

http://www.wsj.com/video/expediting-cargo-shipments-with-an-app/25CEF722-2A56-4C73-8516-6F52C1312FD9.html


 

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Brett Parker


COO at Cargomatic, Inc.

 

LinkedIn Profile

I interviewed Nick Blawat who discussed Leadership Development at the Intersection of Mindfulness and Speech Act Theory.

 

 

 

 

 

 

It’s great to speak with you today, Nick. Today we have an interesting topic. I’m looking forward to hearing your views and experience on leadership development, and it’s at the intersection of mindfulness and speech-act theory. Before we start, can you provide a brief background of yourself?

 

Sure. I’m an operations executive. I’ve been in different roles for most of my professional career in business. First as a consultant with the Boston Consulting Group and then in two different supply chain and operations leadership roles at Feeding America and a relatively new company named Corbion that recently had its name changed and is in the bioingredients business. Prior to that, I had a five-year stint as a U.S. Naval officer in the Submarine Force. I’ve spent a lot of my career really focused on operations roles and leadership roles and people-development roles, which is part of the reason why I wanted to talk to you today about this topic.

 

This sounds interesting. Can you first explain what mindfulness is?

 

Mindfulness is an old practice but an evolving term. I think it means a lot of different things to a lot of different people. For me, it’s really kind of a state of being balanced, balanced from a mind-body standpoint and centered, and really being very self-aware and focused on what you’re doing, who you’re with, and the task at hand. I think it has a lot of its origins in what I would call Eastern practices, meditation, et cetera, but I think it extends well beyond those historical stereotypes into the realm of, really, modern science and neuroscience. There’s a lot of very provocative research in this area for anybody who’s interested. Obviously, I can’t go in depth in this venue.

 

What about speech-act theory? What is that?

 

Speech-act theory is a decades-old theory that was developed by two philosophers (Austin and Searle) and several other innovators in the world of communications and communication theory. It essentially has to do with defining the types of moves that individuals make linguistically, carrying out their lives.

 

A framework or example of it would be what’s called the core-commitment cycle, where one essentially makes a request of someone else. That person has to assess your request and determine whether or not they can both accept it and commit to fulfilling on it, at which point they’ve made a promise. To close out the cycle within speech-act theory, you have to complete the request and then, from the requestor, confirm whether or not the conditions of satisfaction have been met. As I describe some of the leadership-development work that I did, you’ll see evidence of that core-commitment cycle being practiced and the effects that it creates with regard to trust-building. This is a critical enabler for effectiveness for any individual in any professional domain, quite frankly, and it has huge implications for the personal domain, as well, and how people get along and how relationships develop.

 

How did you combine both of these concepts—the mindfulness and speech-act theory—to develop leaders? Can you talk about some of the practices you use?

 

That’s a good question, Dustin. To provide some context for your readers and listeners, we actually developed a program at my former employer where we had roughly 25 customer service representatives who had perhaps the most difficult job in that business. They were essentially at the center of all of the heat between external customers, the sales force, and all of the internal functions that had to engage to resolve any sort of customer service issue. As a result, they were in extraordinarily stressful jobs. Quite frankly, many of them weren’t equipped to remain centered in that highly, highly volatile environment.

 

As I was thinking about how we would equip this group to handle some of the increasing challenges we were experiencing in our business (customers continuing to expect higher and higher service levels and quicker turnarounds on everything, all the typical things you would expect with a continuous improvement in an industry, and a lot of internal changes we were experiencing), it occurred to me that for these folks to really be successful, ultimately, they had to be empowered to decline requests in a positive, dignified way, and craft promises with customers of all sorts that they would be able to successfully keep in order to build trust. The status quo was that they were forced to consistently make promises that would require heroism to fulfill, and that was not a sustainable model.

 

As I started thinking about what we needed to do with this group to develop them as leaders and what would make that sustainable, I engaged with an executive coach who was an expert in mindfulness and speech-act theory and a host of other important leadership-development frameworks. Essentially, she and I worked together with my customer service manager to create a program that consisted of five parts.

 

We started by defining the outcomes for the program, which were really oriented around creating a sustainable customer service model for the business that would inspire customer loyalty, which would ultimately lead to business success. From there, we defined key leading indicators of those outcomes, because, quite frankly, those outcomes can really only be measured on a pretty long timeline, so we were looking for something shorter-term and more directly related to our work. The key leading indicators were an important component of the framework.

 

Then, there were four different areas that we built, all of which fall into this realm of mindfulness and speech-act theory. The first was creating an engaged and centered mind and body for these staff members. We developed practices that would help them do that. We created a new lexicon using a different set of words to describe actions than one would normally use. It really created a different way for these people to interact, and it allowed us to formalize and monitor the degree to which behaviors were changing in the group.

 

We also employed some of the concepts from an HBR article and framework called “Promise-Based Management,” which was really the philosophy for the whole program. If you build trust in an organization among stakeholders by making good promises and keeping them, then everything all of your people need to do becomes easier, more efficient, and quicker. Pretty fundamental philosophical belief we had to have in place to drive the success of the program.

 

And the last piece was that core-commitment cycle I mentioned. Those things in and of themselves are not practices; they were the overall framework and structure for the program, which we ran for more than a year in order to make it sustainable. The practices, though, were far more interesting. As part of this program, we had a monthly workshop with our coaches, and part of that workshop involved training our minds and bodies to actually decline requests with dignity, which is something most human beings have a very, very hard time doing. To practice that, we actually had, it was kind of scenario-based, where an individual would walk toward another individual, holding in their hand a request—you could do it with just your hand or a piece of paper—and then the other individual would essentially center themselves, take a deep breath, and become mindful of where they are and what they’re doing and then slowly step aside, put their hand on the individual’s back and walk them to the other side of the room. We literally practiced embodying physically a decline of a request.

 

I give that particular example because declines are so difficult for anyone in business or in a customer service function to offer to a customer, because you never want to have to do that, but, inevitably, you must. Conditioning these customer service reps to be able to say no with dignity to a demanding customer (or salesperson) when they make an unfair request was a really powerful practice that enabled these folks to really, what I would say, mature professionally as leaders.

 

It was also a very powerful practice for the leadership—myself, my customer service manager, and everybody in that chain of command—to demonstrate on a regular basis as well, supporting those individuals when on the job (after training) they actually made those leadership moves to decline requests. This was really, really powerful culture- and behavior-changing stuff.

 

How can these practices and concepts you’ve been working with be developed further and improved to help more companies and people?

 

It’s interesting. When I embarked on this journey with the support of this coach, I had spent two or three years engaging slowly in the practices of mindfulness and having a centered mind-body when engaging with others and dealing with challenging situations at work and at home. I had seen a lot of the benefits that offered me as a leader. I was kind of sold on the concept from the get-go. I faced a lot of resistance from folks who simply weren’t as familiar with these somewhat New Age, if you will, practices.

 

I think any organization or team can benefit from work like this. I certainly can’t, in this venue, go into enough depth to really make the case for it. But one thing I’ll do is make some information available in the not-too-distant future as a case study so others can read the details. To specifically answer your question, Dustin, I think a critical prerequisite is to have a leader who understands and is willing to innovate in the realm of leadership development and make a relatively small investment from a cash standpoint in their staff.

 

At the end of the day, for a year of training, the way we structured it cost us maybe $2000 to $3000 per person to do this. When I compare the costs to the benefits of this work in terms of the enhanced productivity, the reduced turnover, the improvements on customer satisfaction, KPIs, and, ultimately, the outcomes those things are going to drive in terms of loyalty and revenue growth, the ROI on this work is extraordinarily high. Mainly, you need an engaged leader, and commitment to consistent training over time. We did it for a year, and we could’ve easily justified another year of this type of training and work with our teams.

 

A bit of a burning platform also helps. Like any successful transformation program, there needs to be a good reason to really double down and invest in leadership development for a significant portion of an organization or a large team.

 

I look forward to hearing how things develop. You’re welcome to participate and share with our supply chain community how things are going in the future.

 

It’s one of those things that is easy to push off when other priorities come up because of the nature of a well-written case study. I will definitely forward you that content and a link to it once I get it published on LinkedIn.

 

Great and thank you for sharing.

 

My pleasure.

 

 

 

 

 

About Nick Blawat


 

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Nick Blawat


Transitioning Business Leader and Operations Executive

 

LinkedIn Profile

I interviewed Rob Carpenter who discussed The Challenge With Recruiting Drivers in Intermodal Cartage Business.

 

 

 

 

 

 

It’s great to speak with you today, Rob. I’m looking forward to hearing your views on the topic of the challenge with recruiting drivers in the Intermodal Cartage business. Can you start by providing a brief background of yourself?

 

Sure, Dustin; thanks for the opportunity. I started in the business in 1987 with a small company in Nashville, Tennessee. We had a location in Nashville, Tennessee, and Memphis, Tennessee and concentrated on the on the I40 corridor into middle Tennessee. Today there are between 3,000 to 4,000 loads a week that are moved in this lane. We probably had close to 100 trucks where I worked and we operated all owner-operators.

 

The company didn’t manage their monies the way they probably should’ve been, and they were on the verge of bankruptcy. In 1993 Intermodal Cartage, a guy by the name of Mark George came in and bought them out. That’s when the change began.

 

Mark was very aggressive and goal oriented and had a vision to grow the company which he has done in a very impressive manor to the point that today we operate over 1,500 trucks out of 20 locations in the southeast and Ohio valley.

 

I started in sales with Mark, and about a year into it, a position came open in operations. We were in a very big expansion mode and I took over our Nashville, Tennessee; Charleston, South Carolina; and Savannah, Georgia, offices. We also added Atlanta, GA and Birmingham, AL during that time. I stayed in that position until 2000. We grew it to between 300 and 400 trucks, sales grew every year, and we continued to buy company trucks because, at the time there was starting to be trouble with recruiting the owner-operators; not near as bad as today, but it was just getting harder and harder to recruit them. A reason being for that is the people we do business with, a lot of them steamship lines would depress the rates, and they would just go with the cheapest rate. It would not allow us to pay the drivers what they deserve.

 

We are a lot different than many of our competitors. I’m operated facilities that are a 100 acres, they’re paved, they’re lighted, they have cameras for security, we offer all the EDI there is, along with 60% of our fleet being company trucks so we have a lot of expenses out there that these smaller agency-type operations don’t have. They pay their drivers a little bit differently than we do. We pay a fair wage, and we’re probably in the top one-third of all companies that I consider legitimate competitors but we don’t have a lot to offer other than you will be home every night because I cant sell them on the financial benefits to work here. There are not as many what I call true competitors, like Intermodal Cartage in the market as there are these agency operations that run 20 to 25 trucks. They are here today and gone tomorrow.

 

As we’ve gone through the years—I guess when I first started—the average age of our owner-operators was probably 35 to 40 years old. After 25 to 30 years in the business, I look at it now; the average age of the drivers is 50 to 60 years old, and I see it every day. There is no young blood coming into the industry and the smarter companies are starting to realize this.

 

I get very involved in the recruiting of trucks, and I always ask three different questions. I ask them how much their truck payment is. If they tell me its $1700 a month, they don’t need to work for me; they can’t make that kind of money just because the rates are so depressed. Secondly, what do they do for medical insurance? That’s important. Thirdly, I want to know the age of their truck because the older a truck gets, the more maintenance there is on a truck, and it costs anywhere from $3000 to $5000 from the beginning of the hiring process until you get the guy on the road. We take that pretty seriously, and I don’t want to make a mistake on the front side and have the guy quit after working for three or four weeks. That’s very important to us. We implemented a lease to own program that has worked out well for us and because of our financial stability we can afford to do this where a lot of our competitors cant.

 

I’ve always been the type as I moved from operations into sales, to understand what a good deal was and what a bad deal was. After 17 years I was afforded an opportunity to move to the sales side, and with operational experience I had, I could sell business that was not only good for the company but good for the drivers as well. I would always start out by telling any potential customer that I’m probably not going to be the cheapest on the block, but because I operate so many company trucks and have a lot of overheads to deal with plus being the container yard for so many of the major steamship lines, I have a lot of advantages that my competitors can’t offer. That allows me to get better rates a lot of times.

 

What I’m seeing out there, Dustin is Fortune 500 companies are now coming to companies like mine, and before they negotiate their door rates with the steamship lines, which typically happens in April and May—they come to me anywhere from December to March—and they get my trucking rate. I show them the advantages of doing business with me, what we can do; and they compare it to what my competitors to do, and a lot of times, they find, hands down, that people can’t compete with us on many sides of the business. There are fortune 500 companies that we have been doing business with for 5 to 10 years and because of our service a lot of times it’s just a formality to renew the contract. These companies know that truck capacity is becoming tight as the owner operator market shrinks and the realize that they need to align themselves with the Intermodal Cartages of the world that can financially afford to purchase company trucks and give them the capacity that they need.

 

Another important factor is that my customers know that they can reach me at night and the weekends. Trucks operate 24/7 and I have to be available if there are problems that I can help with. Tenure in our upper management is another advantage that we have to offer. There is not too much that we haven’t seen or dealt with out there. Mark George started our company in 1983 and grew it from 3 trucks to over 1,500 trucks today and we are one of the top 5 intermodal carriers in the country.

 

What we see is that rates are finally starting to come up a little bit. I was talking to the president, Joel Henry, whom I report to, and over the past five years, we’ve seen our gross profits rise by a percent, percent and a half every year. What we have to do is if we want to attract the kind of drivers that we need, then we have to start sharing some of that money with those guys, and we have to bring their paychecks up. It’s critical, if I can get them over that first 90-day hump and meet with them weekly, make sure their paycheck’s right, make sure they feel like they’re being fairly treated and dispatched fairly, then I’ve got a driver long-term. I’ve got guys who’ve worked for me for 15 to 20 years. Even though I’ve moved in to the sales side, I still have contact with these drivers pretty much on a daily basis—sometimes on a weekly basis, depending on my travel—and that’s probably one of the things that I like the most about the business. I try to not only get to kbnow them but their families as well.

 

The drivers, they’re so misunderstood. It’s like, I’m riding down the road with my dad, and he says, “Oh, here comes one of those big trucks.” I’m like, “Wait a minute, Dad. If we didn’t have one of these big trucks, our country would probably come to a stop pretty quickly.” That perception of the driver has to change. I feel pretty passionately about that, and I think Intermodal Cartage does as well.

 

Mark George, who’s the chairman of Intermodal Cartage, he’s one of the best about taking a five-year plan and sticking to it because a lot of companies will take a five-year plan, and after six months, that five-year plan’s changed three times. He’s very good at looking into the future, and seeing how he thinks the industry’s going to evolve. We’re doing the right thing, but it takes money to do the right thing. That’s why I go back to saying I’m never going to be the cheapest rate out there, but I’m going to give you the best service and every tool that you need for your supply chain to be successful in what you do.

 

Thank you. Do you have a final summary or recommendations on how to deal with the challenges of recruiting drivers?

 

I think what we have to do—and I’ve always been a strong advocate of this. Working with blue-collar employees, to be honest, we have to help them financially. I think it would be a smart move that we had some kind of financial planner that worked with these guys. We have the least-to-own program, and it basically does a budget for them. We’ve had great success with this. We accrue money for their tags, which cost $1300 a year. We know that maintenance on their tractor is going to cost them six cents a mile a year. We accrue monies for that. We basically set a budget up for these guys, and at the end of three years, they own the truck, and hopefully, they’ve learned how we’ve done things, hopefully  how to be successful and make the kind of money they want to make. We have seen their net monies, their bring-home monies; we’ve seen it increase every year over the past 15 years I’m going to say. Now we’re starting to see it level out and even grow more in a lot of cases. I think that’s very critical. It’s real important to me.

 

I don’t hire a guy who’s had five jobs in the past three years, because he’s always looking for the grass that’s greener on the other side. I want somebody who’s been with a company for three, five, six years but is just looking for a change, looking to be at home a little bit more because he has children growing up. That’s what I think is very, very important for us and for a lot of people out there.

 

As far as the companies that are asset-based, just like we are, they’re offering a 401(k) plan, they’re offering medical-dental-eye insurance, and that’s important. It has to be a good plan; it has to be as good of a plan as the office employees have. We’ve been able to accomplish that.

 

Our turnover ratio last year was 49 percent, well below the national standard, and we’re looking forward to even improving on that this year. It’s critical because if we don’t have the drivers, then I don’t know what they need Rob in sales for. That’s what I’m very passionate about. “They put the paycheck in our pockets” is what I’ve always told my people. Some of them haven’t agreed with me and we’ve had to part ways, but once they did, once they understood, then you can grow the operation the way you want it to grow.

 

Thanks, Rob, for sharing today.

 

I appreciate you calling.

 

 

 

 

About Rob Carpenter

 


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Rob Carpenter

 

Vice President of Operations at Intermodal Cartage Company, Inc.

 

LinkedIn Profile

I interviewed Ashok Muttin who discussed How the Healthcare Supply Chain Lags Other Industries and How It Can Be Improved?

 

 

 

 

 

 

It’s great to speak with you again, Ashok. This is the second interview we’re doing today. The second topic is how the health care supply chain lags other industries and how it can be improved. My first question is: How does the health care supply chain differ from other industries?

 

Dustin, it’s good to speak to you again, and thanks for the opportunity. If you really look at supply chain in the health care area and if you look at the supply chain in other areas; let’s just take Apple as an example. Everyone agrees that Steve Jobs was a visionary and he brought us all those products that revolutionized the way we listen to music, communicate, so on and so forth. Obviously, Jony Ive’s design capabilities for Apple products. If you really look at it, it’s Tim Cook who was the COO and the head of supply chain at that point in time who really made sure that the products that were designed by Jony Ive got manufactured to the highest standards that Apple was expecting, they reached the shelves in time, and they reached the hands of the consumers at a price point that they could afford or they aspired to buy. If you didn’t look at the amount of importance that’s given to the supply chain in other industries, health care has lagged tremendously behind in terms of the people, the process, or the technology.

 

Obviously, there is a difference between a supply chain in a manufacturing organization as a supply chain in the health care in the sense that in health care, there is a human element involved, so one has to be very careful about the decision that one makes; it’s not just replacing one nuts and bolts with other nuts and bolts. Having said that, health care has continuously underinvested in all of the three departments: the people the process, and the technology. As a result of which, they have left a tremendous opportunity on the table. Considering that 30 or 40 percent of the hospitals’ spend is in the materials, there is a great opportunity for health care to invest and take the right approach so that hospitals are being profitable, and, by being profitable, they can serve a larger portion of the people, and, hopefully, the savings that they generate can actually be passed down to the recipient so it can become a win-win situation.

 

What are the challenges and what can they do better?

 

The health care industry is facing a tremendous amount of challenges, as you can see, there are a lot of structural changes that are happening, new rules and regulations that are coming in, Obama Care act, pay-for-performance. All of these things have created a huge challenge for health care. My personal opinion is that we’re going to see more changes happening in the health care area in the next 5 years compared to the past 20 years. What they could do is look at it not as a challenge or stumbling block, but look at it as an opportunity to range any of their processes and look at how the supply chain is being managed, use some of the best practices from other industries, and be able to deliver the required cost savings, as well as enhance the patient experience.

 

Why do you think they’re in the mess they’re in now?

 

Well, a variety of reasons. To be honest, * (4:48—unclear) supply chain has not been the co-competency in the health care area. The majority, as it should rightly be, that all the emphasis has been on the hiring the best physicians, hiring the best doctors, getting the best equipment in place so that we in the United States provide the best patient outcome to those who need it. As a result of which, somehow, the supply chain has taken a backseat. Also, there has been a lot of consolidation in the past couple years. When a merger or requisition activity happens, you end up with a lot of different processes, you end up with a lot of different technology, and so on and so forth. That obviously adds up to the care.

 

There are a couple of things I personally feel that supply chain could have done better. They should have been in the driver’s seat instead of being in the passenger’s seat. They could have taken control of the supply chain and managed it with the best resources, bring about the intelligence within behavior and use that intelligence to be able to actually guide how one goes about generating the cost savings in supply chain. That’s an area that I personally feel could have been done better. The last one is, somehow, the closed-mindedness of the supply chain committee themselves to a lot of newer technologies that are there, be that SAS, be that intelligence. If they were to invest in some of these things, I feel the returns could be phenomenal.

 

Can you talk about the future? What is the way forward for the health care supply chain?

 

I would think the future for health care is bright, and like a lot of people who think only that the gloomy days are ahead of us, there are obviously certain challenges that we need to keep in mind. Here in the United States, there are more and more Baby Boomers who are being added to the system, as a result of which, we will see our costs are going to continue to rise. What do you do to overcome some of this and be the supply chain of the future? One is that we should be able to embrace your technologies, your ways of thinking even though some of the things might sound different. The second thing I think is the GPO model has run its course. They have to look beyond that; they have to look beyond the GPOs and becoming self-sustaining and be able to run their own destiny. Definitely, I think some strategic investments in technology—be that big data analysis technologies that are way beyond what they have today, and if they were to invest in some of these things, they are basically creating an equal system, an equal system of supply chain which mirrors more of some of the leading examples that you have: Wal-Mart, Apple, we have General Electric, you have Procter & Gamble. These are all the companies that have created that reason, and I think by supply chain, by risking and taking already-concrete course, can become as cutting-edge or as forward-leading as some of those companies that I mentioned to you.

 

Thanks, Ashok, for sharing again this great topic.

 

Thanks alot, Dustin. Thanks for having me. It’s a pleasure.

 

 

 

 

About Ashok Muttin


 

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Ashok Muttin


Purpose Driven Entrepreneur Reinventing Healthcare Supply Chain

 

LinkedIn Profile


I interviewed Tim Donovan who discussed Four Things A Leader Must Do.

 

 

 

 

 

 

It’s great to speak with you again, Tim. Today I’m looking forward to hearing your views on the four things a leader must do. My first question is: Why is leadership so important today? What is the current situation?

 

I think it’s more important than ever because we have less leaders and less people with leadership experience, so, therefore, it’s really important that they understand it, as well as most people think if they have an M.B.A., they’re a leader if they’re a manager and that’s not true.

 

What is leadership?

 

Leadership, as I learned a long time ago, is the art of influencing people in such a manner as to accomplish a mission. There’s a lot more involved to it than just being a manager because you need to really understand what makes people tick and how to get them to do the things you’d like them to do in such a manner that you can get the mission done.

 

Can you talk about what it means to be a leader and what the four keys are?

 

Being a leader and the four keys to that are: knowing your people—and we’ll talk about each one of these in a minute—make timely decisions, communicate the strategic intent, and keep your focus on the mission. These four basic keys will allow you to be very successful as a leader if you can follow them, and they’re not necessarily easy to follow.

 

What do you mean by “know your own men”?

 

I should say “people” more than “men.” What that means is that you know the capabilities of what your people can do for you; therefore, you can match them up to the job. If you’ve got a guy who’s a crack whiz at PowerPoint and he’s not a very good writer of a document, then you probably don’t want to put him on a Word document; you could probably use him to do some PowerPoint stuff. That’s what I mean by “know your people.” Know what they can do, what their skills are, and especially know what their aspirations are. You can try to mirror those and then you’ll have a happier employee, and they’ll be more willing to follow your lead.

 

What do you mean by “making timely decisions”? Don’t most leaders do this?

 

Making timely decisions—a lot of people will say most leaders do it; the reality is, they don’t. I know a lot of people who will wait it out, hoping it goes away, and you really can’t do that. You need to make a decision when it needs to be made, and you need to make it right away whether it’s popular or unpopular. That’s one of the things I’ve noticed in Corporate America: a lot of people don’t want to make those timely decisions; therefore, they’ll stall on it and wait and see if it goes away.

 

Can you talk about communicating strategic intent?

 

In the communicate strategic intent key, it means that everybody in your group should understand what you’re trying to accomplish. Why are we doing what we’re doing? A lot of times people will say, “Do it because I said so. I’m the leader.” In a lot of cases, that’s not good enough for people, especially in today’s world. People want to have some say in what they actually accomplish; therefore, without understanding the strategic intent of it, they tend to drag their feet or maybe not even do what you’d like them to do.

 

My last question is: Why do you have to keep your focus on the mission?

 

Because I think that’s where we fall short a lot of times, especially in Corporate America. People will do a lot of these things, but they forget the reason they’re there for. It’s like the old pogo thing; sometimes you forget your job is to drain the swamp, not to do some of the other things. You need to keep your mind and your people focused on what it is you want to accomplish. If they understand that, they’re going to do a better job of getting out there and getting the job done. That’s why we say keep your eye on the prize or focus your strategic intent on the mission, just to understand what it is that we want to have happen, and make sure that people don’t forget that. If your job is just to, as they say, to drain the swamp or put up a building, why are we putting up a Taj Mahal?

 

Thanks, Tim, for sharing today the four things a leader must do.

 

No problem. In summary, keep in mind that you need to know your people, know their strengths and weakness, and be genuinely concerned about each person. People will sense if you’re not really interested in them, and that happens in Corporate America a lot of times. People go out there—especially CEOs—and they want to be successful for the company because they make the money, but they forget it’s the people who get them there.

 

The second point is: Make timely decisions. You want to make sure that you make the decisions that you need to make when you need to make them. Don’t put them off. A lot of times—especially the unpopular ones—people wait and hope it goes away.

 

And communicate strategic intent is just what it says. What are we trying to really accomplish? What is the end game? And the last one is: Keep your eye on the mission. What do we want to have happen if we’re successful? Those are the four keys.

 

Thank you, Tim, for sharing.

 

No problem.

 

 

 

 

 

 

About Tim Donovan


 

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Tim Donovan


CEO & Leadership Guru at First-Rate Leadership, International, Inc.

 

LinkedIn Profile

I interviewed Mark Tuchmann who discussed Effect of Independent Contractors Versus Employees in the Supply Chain.

 

 

 

 

 

 

It’s great to speak with you, Mark. I’m looking forward to discussing with you the topic of the effect of independent contractors versus employees in the supply chain. Can you start by providing a brief background of yourself?

 

Sure. I’m 48 years old and primarily have spent my whole career in the transportation space, specifically the last mile part of the business, where most of the day-to-day type expedited moves throughout the U.S. and international. I formerly own a company that’s called BeavEx, which I sold in private equity about three years ago. Currently, I consult with companies that have issues around the transportation space or so in their business. Our practice is to make them more profitable and more effective in delivering their product.

 

Today I suggested that we talk about the independent contractor versus employee status. That is probably one of the more accepted models in the transportation space in the U.S. You see it ranging from tractor trailers all the way down to small delivery vehicles, where an asset light model is the most effective way in the supply chain to deliver the product.

 

Can you explain a little bit about the problem?

 

Sure. This isn’t a new problem. I guess the best way to put it is: There’s a lack of this clarity by the government in states, more particularly in the way they view who is an independent contractor versus who should be an employee. That status has primarily two different tests that people use. The IRS uses a 20-item test to determine if you’re a contractor or another employee. The states, some of them use that same 20-item test, and some of the other states use what they call the ABC test.

 

There’s no uniform manner to determine the status of a contractor or of an employee; it’s very vague and it’s not clear for companies that want to use one or the other, which would be viewed depending on what that regulatory body would be coming to audit your operation and who is workman’s comp division to collect workman’s comp insurance. They might do it one way, where unemployment would be viewing it another way. You have class-action lawyers who like to do it a totally opposite way.

 

There’s really no clarity and what ends up happening is that it leads to mis-classification—some intentional, some not. Ultimately, you have companies out there that think they’re operating legally, and next thing you know, they have an audit and it’s determined that they’ve been operating illegally and are fined penalties and potential lawsuits and the like, which not only costs money but is also a big distraction in their businesses.

 

Do you have any recommendations on how this problem can be solved?

 

I mentioned you that primarily in my career, I’ve been in the transportation space and probably most of that 27 years, we’ve been trying to figure that out. Like I said, there’s a very little lack of guidance or clarity. It’s almost intentional, where they really don’t want to be clear and distinct because for example—the state of Massachusetts, there’s a law in place where the use of independent contractors is illegal, but if you looked at state vendors and contractors, they’re usually independent contractors who provide services such as snow plows and things like that that would actually bring commerce to a halt if they ever enforced the law to the effect that they should.

 

That lack of clarity is something that we’ve been trying with lobby efforts and lawsuits and things like that manner. In Massachusetts, our association sued the State of Massachusetts that the law was unconstitutional and it prohibited interstate commerce, and we actually got a favorable appeal of the law. Now it’s got to go to the Supreme Court to get signed.

 

Do you have any final comments regarding the effect of independent contractors versus employees?

 

Ultimately, if you look at the supply chain, you’re probably asking yourself why it’s so bad. The bottom line is the asset-light independent model should provide efficiencies and flexibility so that the cost to that shipper or person is lower. Part of the supply chain is transportation obviously/ If that cost in an efficient, asset light model, and then the state and federal government have their way and the cost would increase the state’s dollars, well then, the ultimate consumer now who’s buying that product is now paying a higher price for the mere reason that they’re prohibiting the use of an independent contractor, which is the better model. Really, in the event of that non clarity or the way that it is today will ultimately increase prices to consumers. If you look at our economy and the dollars driven through the transportation space, that can be a staggering hit to our economy.

 

Thanks, Mark, for sharing today.

 

Great.

 

 

 

About Mark Tuchmann


 

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Mark Tuchmann


Strategic Advisor, Board Member at CXT Software

 

LinkedIn Profile

I interviewed Fred Schenkelberg who discussed Component Failure and the Five Useless Responses from Suppliers and What to do About it.

 

 

 

 

 

 

It’s great to speak with you today, freed. I’m looking forward today to discussing the topic of component failure and define useless responses from suppliers, as well as what to do about it. Before we start, can you provide a brief background of yourself?

 

Sure, and thanks for the invite, Dustin, I appreciate it. I’m a reliability-engineering and management consultant. I’ve been on my own, working in this field for about ten years. I’ve worked with all kinds of different companies. Matter of fact, last year I taught a course in the Shanghai University of Science and Technology on reliability-engineering management, which was a lot of fun. Prior to that, I was at Hewlett-Packard. I used this line earlier today: I grew up as a manufacturing engineer, where I first started in the industry, so, therefore, it’s always the designer’s fault. It’s kind of shaded my approach to a lot of things I work on.

 

So, focus on reliability and engineering as a design aspect. Selecting components is a part of that, but then how do you assemble that into a system that meets your business and your customers’ needs? That’s kind of the space I work in.

 

Can you talk more about what component failure is and what these useless responses from suppliers are?

 

I thought I got your attention when I mentioned these responses. It’s a good question: What is a component failure? We’ve come a long way since Henry Ford and his assembly line. He was pulling iron ore out of the ground and processing it into metal and then forming it into the parts he needed for his vehicle. He controlled his entire supply chain, whereas today we don’t. When I was at Hewlett-Packard, whether it was a desktop computer or printer or whatever device, we relied on a pretty extensive supply chain to provide components, everything from capacitors to the molded parts on the outside.

 

When a part fails, when a system fails and it has, whether it’s a ford label on the vehicle or an HP label on the box, the customer sees the failure, and they don’t really care whether it’s an AVX component or an intel chip that fails; they just know that it failed and they’ve got a loss of function. Many times we do some due diligence and failure analysis and say, “Okay, this component from this particular vendor seems to have caused the problem.” And that’s what I mean by component failures; we can identify the particular component that was either the instigator or sometimes the victim—or both—of something that went wrong. At that point, it’s oftentimes a discussion back with the vendor. That’s what I mean by a component failure.

 

In that process, we often make a phone call. We call our representative or technical contact or support folks at the supplier’s facility. A real story was—I don’t remember what the component was; it was probably a field-effect transistor or something like that that was having a combination of a very high-yield dropout; we had a lot of failures at assembly, and we were getting failed failures related to the same part.

 

One of the steps was bundle up a couple of components and send it back to the vendor. I FedEx’d it and expected it to be there the next day. I called them and said, “These parts are on the way, here’s what we know,” and the immediate response on the phone, before he got the parts was, “Oh, it was ESD. We had an electrostatic discharge; it happens all the time. It’s not our fault. Something went wrong and somebody damaged the part.”

 

How in the world can you know that from five hundred miles away and not having seen the parts yet? It was the second time I got an answer like that. I went and talked to my boss about it. He said, “Suppliers have five standard answers. They try one of these answers, and if you go away, their job is done, and they don’t have to deal with you anymore.” I’m like, “There’s got to be a better way.”

 

It’s ESD, which was hard to prove that it actually is ESD, especially for electronic components and CMOS technology-type stuff; it’s very hard to find that failure. It was a common scapegoat. If we can’t figure out exactly what caused it, it must be ESD. That’s one.

 

Another one is: “We’ve never seen this before. It’s unique. We’re surprised. We don’t know what to do.” Another one is: “You didn’t use the part right. You overstressed it in your design. You did something wrong.” It’s basically a veiled way of saying it’s your fault. Another is: “Oh, we know about that. No problems. We already implemented a fix. No trouble.” All’s they know is the symptom; they may not really be able to explain what the cause was.

 

One of my favorites was: “We didn’t think you’d notice. We changed our process a little bit, and it should have no change in form, fit, or function, so we didn’t need to notify you.” And I’m looking at my components that are failing left and right, going, “Well, it needed a fix. That’s why I called you.” Those are the five that I get, and I’m sure other people have additions to this list or different responses. Dustin, you work in this field. Have you seen or heard these kinds of responses?

 

Similar to those, yes. My next question is: What is a better response?

 

Well…it varies. I know in some organizations, they just don’t have the capability to answer the question. They really don’t have the facilities or capability to do the diagnostics, and their answer may be, “Let’s work together with an outside lab to figure out what really happened here. We’ll add our expertise to what we think has happened, and you add your information about the circumstances and the design.”

 

One of the best labs I worked with was a vendor, and right away they said, “Let’s preserve the evidence.” It was like a detective show or forensics exercise. They said, “Don’t take it off the board. We need to investigate if it’s a solder-drain problem, for example. Can you ship us the board and help us understand how to evaluate it? Let’s do the, I think it’s called the 8 Ds, eight disciplines of failure analysis or root-cause investigations.

 

The first step is to really preserve the evidence. It’s the equivalent of putting up the police tape around the crime scene. Asking the question if it’s just one part or affecting a batch level part or is it across batches, those kinds of things. What this particular group did was started asking those kinds of questions to get a sense of the magnitude or scope of the problem. They were very forthcoming with, “Here are the things we see that are related. Here’s an analysis of your design that pushes the margin this particular way. Together, we were able to replicate this; it was an intermittent problem. Within a week or two, we’re able to come to an agreed-upon root cause and fix.” Like most problems, it’s not just the vendor’s problem; it’s not just the designer’s problem; it was a mix or variation or combination of those two areas that you have to design it so that the product or component will work in that circumstance.

 

The response I appreciated the most was: “It’s in our best interest if your design works because you’ll buy more of our components, so let’s work together to get it right.” That was very much appreciated, but it’s exceedingly rare. That’s probably a better response, one I would look for from suppliers when I have an issue.

 

Do you have any final recommendations?

 

I think it comes down to two different recommendations. One is: Your suppliers, they’re good people, they want to do a good job, they want to provide good components. They don’t intentionally send you faulty parts—at least not the reputable dealers I work with most of the time—so treat them with respect. When you have a failure, it’s not automatically their fault. Their component may have been a victim of your bad design, created an overcurrent situation or some other phenomenon that caused their component to take the damage.

 

You’ve got to be open-minded. The recommendation is that you’ve got to work together to solve the problem. If you approach somebody as an adversary right from the start, they’re less likely to cooperate with you, just even on a subconscious level. That’s one recommendation: Work with your suppliers like they really are your partners in trying to solve this thing.

 

The second part starts long before you get a failure. As you vet your suppliers, as you go through the process of selecting your suppliers, investigate—and I’m not really clear exactly how to do this in all cases—but you’ve got to ask how they approach failure analysis. What’s the right way to bring them information that’s related to their components failing? Who should you call? What’s the response time? What kind of failure-analysis tools and techniques do they use? What’s the right way to contain or triage problems so you can clearly identify the contributing causes to failures? That’s kind of what I’m getting at.

 

That happens early on in a process, before you hit failure, so that you’re set up and already have a relationship to deal with failures when they occur. I think it starts very early in a program. It’s really those two things: treat your suppliers as partners, and understand what the process is and what their capabilities are. Don’t ask them to do things they’re not capable of doing I think is really the second piece of advice. Those are probably the two key parts.

 

Thank you, Fred, for sharing today.

 

I appreciate it. Thanks for the invite, Dustin, I appreciate it. I’m glad LinkedIn works and the keyword searching thing actually works.

 

 

 

 

About Fred Schenkelberg


 

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Fred Schenkelberg


Reliability Engineering & Management Consultant

 

LinkedIn Profile


Website

I interviewed Dr. Janice Presser who discussed Three Ways to Build and Maintain Strong Human Links in Your Supply Chain.

 

 

 

 

 

 

Your organization, The Gabriel Institute, offers a product that has been called the ‘technology of teaming’. Can you tell us about it, briefly?

 

It’s called Teamability® and it’s a completely new way to know how people will perform in teams – all kinds of teams, from startups and project teams, to functional areas of business, to entire companies.

 

Teamability was launched late in 2012. It is the product of 25 years of behavioral science research and tech development dating back to 1984 when my research colleague – Dr. Jack Gerber – and I began looking for a way to measure what is really going on between people when they work together in teams. We first tried all of the familiar types of tests – IQ, personality, aptitudes, and so on. None of them had been designed to directly measure team interaction, so we had to take a totally different approach to the problem. And – as you might imagine – measuring what’s happening between people is much more complex than measuring what’s going on inside one person, so we eventually had to create new technology to do the job.

 

The crucial differences are that, while Teamability identifies elements of ‘good teamwork’, which is healthy and productive person-to-person interaction, it also identifies a person’s awareness of, and relationship to, the team itself – as if the team were a living being. That’s where things get really interesting!

 

How is Teamability used?

 

In a simple online exercise, the participant responds to a series of teamwork scenarios.Simultaneously, the Teamability engine identifies and organizes specific behavioral elements that describe how that person will seek to contribute to team activity.

 

Aggregating the resultsprovides a whole new category of information and guidance for selecting, developing, managing, and motivating both individuals and teams. There are three kinds of reports: The Self-coaching Report provides constructive information and advice to individual participants.The Management Advisory Reports provide detailed support for strategic and tactical planning, and for effective team leadership. And Team Analysis Reports identify specific opportunities and action steps for improving team chemistry, resilience, and productivity.

 

Team Analysis can be configured for small or virtual teams, for team comparisons, or for an entire organization, which is where the value exists for supply chain optimization.

 

Even though supply chains are supported by massive mechanical and computer-supported infrastructures, anyone in the business will tell you that the human links are still, in many ways, the crucial links. So, what’s the first point you would like to make?

 

The first thing you look at is Role-fit. We use a capital r for Role when we’re talking about team members. Role is not a job title or a job description. It is the fundamental way in which a person seeks to make meaningful contributions to their team. You know, some of us are great at getting things started, while others are fabulous at making sure all the pieces got picked up and accounted for. When we’re doing work that aligns with that way in which we make meaningful contributions, we’re much happier, more engaged, more productive. And we’re more fun to work with!

 

In the supply chain, like anywhere else in business, if you want better results you need to ‘get the right people on the bus, and in the rights seats on the bus’. That saying became popular for a reason – but at the time there wasn’t a scientific, reliable way to do it. Teamability provides the missing link.

 

So there’s point #1. What else can you do?

 

A: The next step is Team-fit, which recognizes the differences in mission that exist between different teams. Following the ‘right seats’ analogy, you don’t just need the right people in the right seats. You also need them to be on the right bus.

 

Through Teamability, youcan look at the team as a whole -everyone involved in the entire supply chain process, or in different functional areas - and make sure that you have the right Roles on the team to help it meet its mission.

 

What happens when you don’t have Team-fit?

 

It depends on where the Team-fit isn’t happening. For instance, in supply chain, there may be very high walls between business units in a single organization. This is exactly where you need constant, high quality person-to-person communication. That’s pretty simple to fix with just one Role – what we call the Communicator Role – people who seek to contribute to the team by creating a sense of community and shared mission. That’s what the team needs to get past those high walls. The same thing is true for virtual teams – and I’d guess there are lots of those in the world of distribution.

 

What would be the 3rd way to strengthen the chain?

 

It would be by applying our Elements of Team Management in ways that raise people to a higher level of team contribution. There are several ways to do this, but the most powerful one is through effective communication of appreciation and respect.

 

During our decade of field-testing and validation, we noticed a number of things related to Role – one of which is the fact that expressions of respect are NOT GENERIC. People with a specific Role feel truly respected when the ‘delivery’ aligns with their way of making meaningful contributions. To make that alignment, you need to know their Role and how it meets the needs of the team. After that, it’s easy.

 

Can you give me an example of the business value Teamability has delivered?

 

In a series of three Team Analysis Pilots, a very large healthcare delivery organization determined that Teamability had significantly reduced workplace stress, including management apprehension in the areas of individual and team performance evaluation. Based on these multiple ‘proof-positives’, discussions are underway for much broader implementation of Teamability.

 

Another company, about $1B in size, was experiencing 30% turnover of new hires. From the day they added Teamability to their existing sourcing and hiring procedures, they had no new-hire turnover at all – Zero% – for 2 ½ years, while the company grew by 500-plus people.

 

That’s valuable! Anything else you’d like to add?

 

Well, just that we are based in Philadelphia, PA, and your listeners are welcome to reach us by phone or at our email address, which is:  clients@thegabrielinstitute.com!





About Dr. Janice Presser

 

Dr. Janice Presser, CEO, The Gabriel Institute - Teamability® - The Analytics of Team Chemistry

New video: https://www.constellationr.com/content/teamability-digital-transformation

One Penn Center, 1617 JFK Blvd, Suite 1040 Philadelphia, PA, 19103, USA +1.215.825.2500


 


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Dr. Janice Presser

 

CEO, The Gabriel Institute - Creator of Teamability®: The Analytics of Team Chemistry; Teamwork Expert

 

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I interviewed Steve Gruler who discussed Global Risk Management in Food Supply Chain.

 

 

 

 

 

 

It’s nice to speak with you today, Steve. Today I’m looking forward to sharing with our audience your topic of global risk management in the food supply chain. Before we start, can you provide a brief background of yourself?

 

I’d be more than happy to. I appreciate the opportunity talk with you today and share a passion I have around risk management and the things I’ve learned over 35 years’ experience in the consumer-products industry. I started out of school with my degree and graduate studies in chemistry. I went to work for Quaker Oats, where I held many different positions; the final position, was manager of quality assurance for their largest manufacturing facility in Cedar Rapids, Iowa. I learned a lot of basic stuff; it was a great company to work with and for.

 

From there, I went to Clorox, where I attained the position of global head of quality. It was the global experiences that lead me to the eye-opener that in spite of the worlds best systems, tools and techniques the industry was still experiencing devastating issues. So what wasnot working? This is when Irealized our industries current and common approach was grounded in an inspect and reject philosophy. It became obvious to me that this current approach was not effectively mitigatingthe ever increasing levels of risk we are experiencing.  It was also at this point where I developed the belief that we (our industry) needed to transition to a concept, of using proactive tools and techniques to predict and prevent issues from occurring. Clorox afforded methe opportunity to test and successfully confirm this hypothesis and approach.

 

I then went on to Gerber Products Company as the head of global quality. I was able to apply these same concepts and philosophies with them. I left in 2007, and started Global Quality Consulting (GQC). We (GQC) have workedwith approximately 250 to 300 different organizations, companies, manufacturers, and restaurants, from the small mom-and-pops, farming organizations to the world’s largest fast-food chains.

 

We’ve acquired a wide breadth of experience and results working with these outstanding companies. GQC is lead by myself with help from two other core guys. Bothof them having 35 to 40-plus years’ experience crisis management, risk mitigation, food safety and quality assurance globally. We haveextensiveexperience from the shop floor to the boardroom. We help companies identify, manage, and mitigate risk to their brand.

 

Can you go into a little bit of detail about what’s involved with global risk management in the food supply chain?

 

Global supply chain risks are growing rapidly by the minute while our ability to effective identify devastating risk is diminishing. Just the expansion of risk categories should be concerning to all. Most haven’t calculatedthe risk for such areas as, the comprehensive global supply chain, cultural risks, increased consumer demands, impact of social media, or our ability to acquire and make critical business decisions with enterprise wide intelligence.

 

Fundamentally, our food safety/ qualityfrom the farm to fork, is primarily based on what I call inspect-to-reject systems. Whether it is the private or public sectors inspection based approach has been widely accepted for many years. Allimported food products are subject to FDA inspection when offered for import at U.S. ports of entry. A vast majority of companies use industry-wide accepted practices of receiving ingredients based on a certificate of analysis and annual third party audits. I believe we as an industry have become complacent and comfortable using these approaches, which result in key risk decisions being made unknowingly with limited and incomplete data. This leads me to the most dangerous risk category. That being: We don’t know what we don’t know

 

We don’t have to look very hard to see headlines of top tier companies involved in devastating recalls and unrecoverable brand damage. Likewise by looking at government data, we see foodborne illnesses sicken one person in six — 48 million — in the U.S. each year. Of those, 128,000 require hospitalization and 3,000 die.Continuing with government data we can assess the effectiveness of an inspection based approach. For example, the U.S. Food and Drug Administration anticipated that 24 million agency-regulated products would enter the U.S. in 2011, but it expects to inspect only 1.59 percent of them.It is obvious a inspection-based approach is lacking? As an industry we know an inspect and reject approach isnot effective yet we seem reluctant to explore or develop a proactive, predictive and preventive approach.

 

As mentioned, many manufacturesus this same approach of inspection and rejections. Whether it is internal testing or limited data provided by suppliers, 3rd party inspections, certificates of analysis, companies managerisk with this data to ensure food safety and consistent quality. This approach is widely accepted and has been utilized globally for many years. Unfortunately, key decisions are based on very limited and at best non-representative data.

 

We have also witnessed a significant shift from internal failures as the source of issues to today issues driven by external failures. This transitionto external failures is partly due to the implementation of international standards, such as the Global Food Safety Initiative. These global improvements have helped eliminate and reduce the food-safety issues due to internal failures.

 

Today’s external risks haveincreased significantly. This expansion of risk is attributed to increased volumes, financial pressures, complexity of processes, and overwhelming demands by consumers, social media, and regulatory agencies.  The explosion of the global supply chain alone has significantly amplified brand risk.

 

I mentioned Social media. My goodness, everywhere you turn, somebody’s getting beat up on social media. As an industry, we’re a bit naïve; we don’t quite understand social media, how to utilize it, how to make it work for our individual brands, and how to use it as a great communication tool, which it is. It should be the primary communication tool for any company that gets into a crisis, a brand crisis, or a recall; that’s where they have to communicate to the public. It’s a marvelous tool to get your clear, concise, and consistent message. Quite frankly, those who are skilled at it and astute about it can get out in front of the issue and define and lead the messaging rather than following the message.  A qualified social media communications team must be integrated into a company’s crisis management plan.

 

I firmly believe themost threatening risk is the expanding global supply chain.  I think this is the greatest area or risk that we face as an industry. I would be willing to bet that 80-plus percent of companies are not equipped with comprehensive intelligence of their supply chain and unable to dive back though the supply chain to the source of their base ingredients. Many put significant trust in their suppliers.  Many are not capable to determine how far the chain goes back. What’s chain look like? What do their suppliers’ suppliers look like?  What’s their culture? What are their principles and ethics? What are their skill sets and what specific risks are they delivering to our brand? Is it coming from an area in the world where the food safety culture is different than what one sees and expects from a U.S. or European company?

 

Just look at some recent headlines from Asia.

 

• China FDA Officials Arrested On Bribery Charge

• This is the second major bribery scandal concerning the SFDA in recent years

• Melamine in Infant Formula.

• 2,000 people have been prosecuted for food safety-related crimes in the past three years

 

In Chinamelaminewas added to infant formula to increase protein-testingresults, which translates toa higher price.  It is very difficult for us to imagine how someone takes such steps.

 

If I put all that together, to me, I see companies are struggling to effectively manage their businesses with either a lack of intelligence from the surrounding supply chain and risk environments. Our current inspection based approach facilitates a compliance environment and inhibits companiesfrom looking at their products from a true risk standpoint; in other words, classifying them in risk categories, applying enterprise wide intelligence and performancemetrics where they can manage on a continuing basis, in order to predict and prevent issues from happening.

 

To me, I think these are the critical risk challenges that the food industry is facing. I’m concerned on the lack of recognition of these severe risks within our industry.Leaning on my years of experience working for the major companies makes it understandable. It’s difficult for some companiestake an outside inlook at their product and brand risk profile. Most businesses have a solid track record, do not have unlimited resourcesand typically are not skilled in holistic or comprehensive risk evaluation and risk-mitigation planning. They do have experience for other areas, such as health and safety, fire, tornadoes, things of that nature; they’re pretty good at that. I’m a firm believer that the sooner the industry recognizes the need for comprehensive brand risks planning and starts applying some practical business tools to look around the corner, see what might be coming their way, the better off they’re going to be.

 

Do you have a quick summary or recommendations regarding how to address these challenges, the complexity, supply chain, and tracking the global supply chain?

 

Simon, I do. I think there are three challenges we need to address.

 

1. Is the recognition by our industry for the need to transition our systems, tools and techniques to a predict and prevent philosophy.

2. Evaluation, expansion / development and implementation of pragmatic comprehensive risk based tools and techniques.

3. Industry leadership, acceptance, and implementation of the aforementioned transformation.

 

In fact I am currently reaching out to industry leaders to form a groupto address these challenges. I would welcome talking with anyone that concurs and would like to support our initiative.

 

With a bit more specifics on a good first step, companies will benefit by focusing on the global supply chain.One shouldwork tocollect more in-depth intelligence for each individual supplier.Define them by categories of risk, a classic risk diagram, where you’ve got high, medium, and low risks based on comprehensive data. You need to look at their culture, understand their skillsets, what their strengths and weaknesses are, the systems they have in place.

 

They need to confirm a supplier has the right tools and techniques and metrics that can day in and day out(not one shipment or the next shipment) that their processes and systems are capable of delivering to the level of food safety and quality the company requires for their product.This data should become a KPI, included and, managed via enterprise wide intelligence. Companies shouldadjust their almost overly reliance on certifications, individual food-safety audits and certificate analyses. Thesetend to give companies a false sense of security. I can name a dozen companies that have been fundamentally destroyed that had these world-class systems in place. They’re good systems; I’m not criticizing them at all. We need them, they play a very key role, but they’re only a part of a holisticsystem.

 

In closing I have seen first hand, this proactive approach transform two well-recognized organizations. I have seen thisapproach deliver outstanding business, financial, and significant risk mitigation results, I know it works.

 

Thanks, Steve, for sharing today.

 

 

 

 

 

About Steve Gruler

 


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Steve Gruler

 

International Speaker, Brand Risk Mitigation, Food Safety, Crisis Prevention and Management Consultant.

 

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