I interviewed Jim Bisaha who discussed Innovation in the 3PL World.
Can you provide a brief background of yourself?
Yes, Dustin. My name is, like Dustin said, Jim Bisaha. I have spent over 34 years in the transportation and logistics industry. The first 10 years of my career, I was with Roadway Express, a LTL carrier. I handled all vehicles systems there and that was 12,000 tractors, 48,000 trailers. As I said earlier, I was responsible for all of the vehicles and the accounting systems that were there. Then I got lured away within the Roadway family to work on a startup endeavor which was called Roadway Logistics System, which was one of the first 3P, third party logistic providers in the industry. That was at the end of 1991, early 1992. I was there for four years. We did a lot of innovative projects there, which I will touch on later in the conversation.
And then in 1996, I got lured to come to Atlanta, Georgia to work for a $24 billion company that was alarge logistics business,and that was UPS. And I was at UPS Logistics which became UPS Supply Chain Solutions for 15 years as a division manager, at the director level. So we have a wide variety of roles there, was there when we did the 23 acquisitions of different companies, so I have experience in that.Also, was responsible for the last four years when I was there, was running the healthcare IT organization and worked closely with the business throughout my whole career.
And for the last five years I've been doing consulting, helping customers out in the transportation, logistics, and supply chain. I have worked with a variety of different customers helping them streamline their supply chains and really helping them, bringing them some ideas to help them improve their businesses.
Do you think that there is innovation in the 3PL world?
I think that there was innovation at one time, Dustin. I look back at some of the things that I have a seen in my career and things that were done, and since probably 2008, 2009, I don't see the same level of innovation that is out there that was previously done. Let me touch on this. I think that there is some of the things that I've seen in the past when I was at Roadway Logistics, one of the things that we did is we worked with John Deere and we came up with an innovative solution for returnable containers or plastic totes. We came up with a method to track those totes because there were some new green laws in effect.
I look at some of the things at UPS that we did where we did some work with the automotive companies. We did a Chrysler referrals parts piece of business where we worked with Chrysler and we were able to route spare inventory from the dealer network, put them into a facility where they were cross-docked and then shipped back out to the dealers. Some of the other things were some of the GM warranty parts where we put up a facility with GM to be able to track failure rates. We hired some engineers. Another thing that we did was we had [inaudible 00:04:29] that was a track and trace for the finished vehicle, kind of like a UPS tracking system for finished good cars. So that was a collaboration with Ford.
Some of the other things was the whole return and repair effort with some of the major computer manufacturers where you collaborate, set up the return center, actually do the repair.
It may be out there, Dustin, but I'm just not seeing it today where there is the inspiration between the customer and the 3PL. I think that what we do see is everybody -- and there are studies out there that will back this up -- it's about reducing costs and controlling costs. The days where companies will allow people on site and pay you to come up with ideas and help them to understand their business, to be able to reduce costs in the long run, I don't see that happening. I think that there has been a definite turn since 2009, since the last recession, that it is now all-hands-on-deck to be able to reduce costs. And that is not only from a customer's perspective. They're under the gun because they have cut logistics. They have cut the transportation departments. Where they used to have a team of people,it's now one or two guys or gals that are running the whole thing, and they're running [inaudible 00:06:09] on the thing.
The same thing with logistics companies. Logistics companies no longer have the luxury of meeting with customers, putting people on site for projects to develop the business. It's all about results now. And I think that's sad. But I think it's a state of where history is. And it's also a state of business as it exists across the spectrum.
How would you define innovation the way that you think it should be in the supply chain, in the 3PL world?
I think it is understanding your customer's business. It is working with your customer, being able to come up with solution to help them reduce cost and provide better information to them. And I can cite some examples.
What we did when I was at UPS with the GM warranty parts, we actually developed a system, put up a facility where parts would come in, they would be inventories, they would be tracked, UPS would pick up the parts, if it was bigger, then they would use an LTL carrier. They'd come into a facility. The engineers that UPS hired would work with some of the General Motors engineers and the supplies as well to really break down those parts and see why they were failing. I mean, that was a whole win-win for everybody because it allowed GM to be able to work with buyers better. It allowed a revenue stream for UPS. It cut through the bureaucracy.
Do you have any final recommendations on how 3PLs can start to innovate again?
I think it's taking a step back. This is interesting in that, throughout my career, if you do a good job for your customer, business begets business. Organic growth is the way to go. So you earn your stripes every day you provide ideas, you understanding points of the customer's business, and additional revenue opportunities will come, and that will bring innovation back, because the customer will see that you add value.
Over my career, I've been in organizations from a pure new business perspective. We never were able to make the revenue plan, but we were always able to smash the revenue plan by getting add-on business because our customers loved us. And that was in both companies that I was at. I guess, to say is you need to do a good job. You need to prove for yourself, and at the same time, you can't pinch so many pennies that you have to make an investment in your customer as well. But they also, at the same time, have to make an investment in your 3PL as well. So it's got to be a partnership and a win-win for everybody.
And thanks for sharing today, Jim.
About Jim Bisaha
President - Logistics Trends Inc