We pen this Supply Chain Matters posting on Sunday, December 22, on the very last weekend before the Christmas holiday. This is the absolute peak of the holiday buying surge, as online shoppers make their last minute purchases, assuming that delivery prior to Christmas is a given.
This is the weekend that all of us, supply chain or consumer alike, need to extend a huge shout-out to all the logistics, transportation and delivery professionals who have again performed in an extraordinary manner. Included in that recognition are the planning and inventory management teams that have scrambled to deploy inventory across various fulfillment channels.
This has been an especially challenging year. The period between the Thanksgiving holiday and Christmas, where the bulk of holiday buying occurs, was shortened by one full week from previous years. In the United States, severe winter storms impacted many parts of the country, causing transportation delays and perhaps motivating other shoppers to perform the remainder of their holiday shopping online. That has stressed and already highly stressed logistics infrastructure. Even as we pen this posting, an ice storm is moving along the northeast United States threatening to cause additional delays. The timing could not be worse.
The latest edition of Bloomberg Businessweek features a timely cover story, Can UPS Save Christmas? The article profiles Scott Abell, the director of Peak planning for UPS, who is known internally as “Mr. Peak.” Abell is responsible for insuring the all of UPS resources are adequately planned to handle any expected holiday rush. As the Bloomberg authors note: “Mr. Peak’s job, in effect, is to fulfill the Internet’s promise of instant gratification.”
That says it all.
Assisting Abel and his planning team is the UPS Contingency team headed by Steve Merchant. That team has to respond when all of the best laid plans are upset, or when weather or unplanned needs cause glitches. The contingency department has 18 planes positioned that can take off on 30 minutes’ notice to plug holes in delivery schedule commitments or accommodate last-minute requests from shippers.
Tomorrow, UPS could process and handle as much as 3.2 million packages, nearly twice that of any other period. The current bad weather is not going to help, nor will last-minute requests from retailers to ship goods overnight. This very weekend, and perhaps the next two days, the UPS Worldport will be working double shifts to accommodate our needs as consumers for instant gratification.
Beyond UPS are other professionals working at FedEx, the U.S. Postal Service and other logistics and transportation carriers, who often do not get the recognition they deserve. They all collectively work their butts off so that consumer’s young and all can celebrate with gifts, holiday cheer and special foods.
We at Supply Chain Matters extend a huge shout-out to all logistics and customer fulfillment professionals who consistently perform beyond all expectations, in cold weather, winter storms, and among crazy holiday drivers and traffic jams, to insure that the goods are delivered for the holidays. They are all clearly distinguished supply chain management professionals.
While you go about your business and enjoy the holiday events these next few days, if you encounter these professionals on the roads, sidewalks or business establishments, please acknowledge them with a hearty “thanks” and a huge “Thumbs-up”.
This year, they deserve it more than ever.
Bob Ferrari, Executive Editor
Earlier this month The Baltimore Sun published an article describing how Alan Wilson, the CEO of McCormick & Company not only personally responded to an email from a consumer, but offered to have his supply chain team search the company’s warehouse for supply of a previous discontinued seasoning product.
This article describes how the parents of a five-year-old Atlanta girl were disappointed to discover that their favorite spice was suddenly missing from grocery store shelves. Parents of small children can readily relate, since the five year old would not eat any fish at all without this seasoning. As a last resource, they sent a direct email to the CEO of McCormick which was answered the same day. It seems that the parent’s email resonated with Wilson who indicated that he had to re-locate his family many times in his career and knew all too well how kids get focused on specific routines.
Within a week, the discontinued spice was located in a warehouse and the entire available supply was shipped to these parents at no-cost providing them a lifetime supply of the product.
Supply Chain Matters has previously featured commentary regarding Alan Wilson. In a May 2011 commentary highlighting speakers of the Supply Chain World North America conference sponsored by the Supply Chain Council, we noted that Wilson’s career background is anchored in roles in supply chain management and was great to observe a CEO who could also clearly articulate the firm’s strategic business goals in terms of required impacts on the firm’s supply chain. Another important strength brought forward was McCormick’s strong emphasis and reinforcement of corporate culture being the fabric of the company, including its investment in people. During the darkest days of the past global recession, McCormick continued to invest in people and in benefit programs. That strategy continues to pay dividends in corporate culture.
Supply Chain Matters therefore extends our Thumbs-Up recognition for McCormick and its CEO Alan Wilson, for demonstrating true individual customer responsiveness.
In August of 2011, consumer product goods producer Kraft Foods made a surprising announcement that included significant global supply chain implications. The company announced that it would split into two independent public companies, one to be focused on a global snacks business with the other being the company’s core North American grocery business. The snacks business unit, which was subsequently named Mondelez International has responsibility for $32 billion in global revenues while Kraft Foods Group is responsible for more than half that amount, namely $18 billion in revenues. The former Kraft North American grocery business umbrellas 9 major brands including names such Kraft Cheese, Cracker Barrel, Philadelphia Cream Cheese, Maxwell House coffee, and Oscar Mayer hot dogs and meats. Supply Chain Matters posted a recent commentary regarding supply chain challenges at Mondelez, and in this posting, we reflect on Kraft Food Group.
In January of 2012, Supply Chain Matters posted a commentary concerning the implications of the corporate split on each company’s supply chain and supporting systems. An important indication of the critical contribution of supply chain management led to the decision to have leadership for both of the split integrated supply chain organizations to have direct reporting relationship to respective company CEO’s. At the time, the Chief Supply Chain Officer of the former singular Kraft was recruited to lead the integrated supply chain of Mondelez, and leadership for Kraft Food was initially classified as open.
As is often the case with large mergers or acquisitions, our commentary wondered aloud what the impact of having to split out shared business processes and systems would be for both companies. We also pointed to specific differences in business strategy and outcomes that each of the supply chain organizations had to overcome.
Last week, while attending the S&OP Innovation Summit held in Boston, we were able to peek into the new chapter for the Kraft Food integrated supply chain team and to state the least, we were tremendously impressed. Specifically, we witnessed Robert (Bob) Gorski, Executive Vice President of Integrated Supply Chain for Kraft Foods articulate the supply chain transformation that is underway. Gorski landed at Kraft in March of this year after initially retiring from a 32 year supply chain related career at Procter& Gamble. As Gorski describes, that retirement lasted a mere 3 weeks. He apparently wasted no time in concluding that in spite of internal beliefs, a holistic transformation was needed across the Kraft North America supply chain.
Processes needed to be simplified, streamlined and integrated. Gorski and his current leadership team have outlined a transformation which is termed “Symphony”, one sheet of music for all. The powerful analogy used was a marathon, not a sprint, in the ways work gets done and how businesses are run. Gorski leans heavily on Vice President, Process Transformation, Rajan Nagarajan who came to Kraft with a track record in driving process change.
The presentation described product demand and supply processes touched literally 60 different times with little effect on forecast accuracy. Supply chain wide metrics were at odds with individual plant and functional metrics, some in direct conflict. There was a lack of a fixed execution planning window with 60 percent of plan changes occurring in the execution window. Production lines, on average, were forced to shutdown every 4 minutes because of various maintenance or setup issues due to inconsistent process specifications. Gorski articulately described the new goal as moving from metrics in isolation to metrics as part of a performance culture.
After the former single company invested what was described as $700 million in a global SAP ERP rollout, much of the systems were customized or augmented globally. The corporate split has caused the awareness for the need for more streamlined SAP standardization. Plans are underway to integrate 25 major platforms to integrated demand and supply planning, order management, procurement, and manufacturing control.
This author has been involved in various aspects of supply chain management for over 30 years. Thus, I have witnessed many a supply chain or operations leader. After witnessing Bob Gorski articulate a supply chain transformation plan, there is no doubt in my mind that Kraft Foods and its associated supply chain team will be the beneficiaries. You can sense a leader in his or her’s presence, style and charisma.
Readers can expect to read of positive transformation and business outcomes emanating from the Kraft integrated supply chain team in the months to come. At the beginning of this year, Supply Chain Matters began a new series of calling out distinguished supply chain management professionals. We were impressed enough to now include Bob Gorski in this category.
Supply Chain Matters provides another edition of amplifying Distinguished Supply Chain Professionals who have garnered noteworthy and well deserved industry or professional recognition.
In December 2012, The Institute of Business Forecasting and Planning (IBF) presented a Lifetime Achievement in Business Forecasting & Planning award to Larry Lapide, Ph.D, Research Affiliate, MIT Center for Transportation & Logistics and Lecturer, University of Massachusetts Boston. Many of our readers probably know Larry from his career in both management consulting and the Industry Analyst world, as well as his appearances and talks at many industry conferences and management forums.
This author was especially pleased to hear of this award, since Larry was my very able mentor and first manager while we worked together in the original supply chain management research practice at AMR Research. I am proud to have Larry as a continued friend throughout the years.
This IBF recognition notes:
“Larry has provided valuable input in the development of IBF’s body of knowledge that drives our certification, research, and training programs. He has contributed over 60 articles to our Journal of Business Forecasting. He provides valuable insight and thoughts on improvement, enabling forecasting and planning professionals to succeed in this challenging environment.”
Anish Jain, Managing Director, IBF summed up Larry’s lifetime achievement as follows:
“Larry volunteered to speak at the first IBF best practices conference back in April 1996 and has been a contributor every year, sharing his experience, driving new thought and imparting knowledge. He volunteers to train and enrich budding Forecasting and Planning Professionals at IBF’s Tutorials, Workshops, and Academy every year since the 90’s.”
Those of you who know or have worked with Larry throughout the years are probably aware that he tends to always downplay these types of industry accolades. When I heard about the award, I insisted that we would amplify this prestigious award on this blog, since Larry truly deserves this recognition. He has made his mark in supply chain thought leadership and practical advice.
Supply Chain Matters provides a hearty Tip of the Hat and job well down to Larry Lapide, and we echo our thanks to the IBF for their choice in a lifetime recognition award. We also invite our readers to share their congratulations as well in the Comments section of this posting.
We also extend congratulations to Patrick Bower, Senior Director, Corporate Planning and Customer Service at Combe Inc., for also earning the IBF Excellence in Forecasting and Planning Achievement award.
Bob Ferrari, Fonder and Executive Editor
One area that Supply Chain Matters has been neglectful has been that of highlighting honors and citations for distinguished supply chain management professionals. In the coming weeks, our blog will highlight such awards on a periodic basis.
Thus, we would like to honor Don Ralph, Senior Vice-President of Supply Chain & Logistics at Staples Inc. for receiving the Salzberg Medallion, an honor extended by the Harry E. Salzberg Memorial at the Whitman School of Management, Syracuse University. The Salzberg Medallion has come to be recognized as one of the most prestigious awards in the field of transportation and supply chain management, in part because of the rigorous selection process. Don was honored for his outstanding contribution in supply chain management, including accomplishments in development of new industry-leading infrastructures, spearheading impeccable inventory management, perfect order execution and a highly efficient cost structure. Don has spent more than a decade driving the effort to build a fulfillment and delivery infrastructure that includes 79 fulfillment centers and 75 fleet delivery cross-docks in the U.S. and Canada. He has led the development of both the Staples delivery (B2B) and retail logistics networks and a superior supply chain management team.
Also honored in the category of transportation was Mike Haverty, Executive Chairmen of the Kansas City Southern Railway Company.
Full details of this award are in the press release issued by the Whitman School of Management.