Is the Chief Supply Chain Officer now A Chief Crisis Manager

The last two years have been incredibly challenging for anyone in supply chain.  It started with a supply disruption out of China in late 2019 / early 2020.  We then went into a demand crisis in April / May of 2020 and then for many industries it very quickly turned right back to a supply crisis.  Both with inventories being low and then the entire country trying to restock at the same time which led to too much demand and not enough capacity to move global products.  Even US based products were effected because whether made in the US or not, many of the components come over seas. 

One hidden part of the capacity issues was the fact that passenger planes stopped flying.  In the "belly" of passenger planes flies a lot of cargo and when those planes stopped flying, cargo which normally went by air had to find another way to travel.  This added to the supply chain issues.  

Much of this has been covered and many articles written so I will not rehash them here.  However, what have we learned?  What will we do differently?  The first thing I think about is crisis management.  It turns out, if you are going to be a great supply chain leader,  you need to be a crisis manager.  That has somewhat always been the case but in the last two years it has gone "mainstream".  So, what does it take to be a good crisis manager.  Here are my 4 learnings from the last few years:

1. Honesty - Be Honest and Straightforward in Communication:  This is akin to the idea that you will never solve a problem or deal with a problem unless and until you face up to it and admit it.  In your company you need to honest with your executives, your associates, sales and even, yes, your customers.  
   
   When these supply issues hit hard two companies stood out: Peloton and Ikea.  Both companies went public early on, described what the problem was, what they were doing about it and what people could expect.  "Bad news does not get better with age" applies here.  
   
   This also applies to associates.  Make sure you are honest and straightforward with them as well. 
   
   
2. Be Calm and Do Not Panic:  Panic is a flight response to an issue that is somewhat embedded in our DNA.  However, we as humans can control our responses to anything.  This is the time when you have to lead with calmness and strength.  Stay focused on the mission(s) at hand.  Focus on solving problems. 
   
   
3. Be Decisive:  You will not have all the facts by the time you need to make a decision.  You need to get as much data as possible but when the time comes you are going to have to "make a call".  And this is where the job can get lonely - YOU need to make that call.  As Matt Damon says in Ford v. Ferrari, "You cannot win a race by committee".  You then need to have all your antenna up to read new and conflicting information, synthesize it quickly and adjust if necessary.  Procrastination is not a decision.  
   
   
4. Provide a Vision of the Future:  Most people understand when a crisis hits and they understand the work is going to get difficult and they are OK with working incredibly hard if they see what the end vision looks like.  For example, out of this pandemic and supply chain crisis we will have actions in place to get us through even more difficult times should they come up in the future.  The company is going to do great when the consumer hits the great reopening period.  Those are two examples of hope and vision.  

Finally, as Toyota taught us a long time ago, use a crisis as a major learning event.  A lot of "rocks" were uncovered during this period in business, in government and, in some cases, in personal lives.  Don't cover those rocks with water again - use this as a learning period and fix them.  

To learn this, and for some entertainment, I offer you the lessons of Carroll Shelby in Ford V. Ferrari about lessons learned and how to go forward.  Notice how Carroll Shelby applies all of these - Especially at the end when he gives Henry Ford II a vision of the future when "the only thing that didn't break were the brakes":

Extreme Ownership in Supply Chain Management

I think it is well known that the supply chain area becomes somewhat of a hub for the corporation.  Just about every activity either flows into or flows out of the supply chain area.  Great ideas turn into products through the supply chain; Great sales of products cause great products to flow out of the supply chain and into the customer's hands.  Through the S&OP (Sales and operations planning) process, just about all planning activities move through the supply chain. 

This is why Extreme Ownership is so critical for the supply chain manager.  There is a saying in the safety world:  "You see it, you own it" and that is true for the supply chain manager.  You see the issue, you own the issue and since you are going to see just about all the issues you have to take ownership to get those issues solved.  Product defects?  You will see it in inflated returns - You see it, you own it!  Inventory problems (Too little, not enough) the distribution center manager will see that in his/her distribution center - You see it, you own it!

These ideas are built from a fantastic book called: "Extreme Ownership: How US Navy Seals LEAD and WIN by Jocko Willink and Leif Babin.  This book is written for all leaders but especially for the supply chain leader.  We see it all and therefore we have to own it.

While there are many types of leaders I think one large macro category could be that there are two types:  Victim and Owner.  The victim is the one who lists off all the things that have happened to him or her and therefore that is whey they cannot get their job done.  If only forecasts were better!!  If only we made products which cubed better... If only.... .Well, you get the picture.  This person sits back and plays the "if only" game as a complainer, not a participant.

The Owner (in the way of Extreme Ownership) sees the issues and regardless of origin takes ownership.  Rather than play the "if only" game as a spectator the Extreme Owner takes action to solve the issue(s).  If only forecasts were better! - Action: I am going to meet with the head of planning to discuss how I can give an early warning indicator to things which are not selling (Planning is in supply chain but the early warning indicator may come from outside the planning department).  If only products cubed better! - Action: I am going to participate further upstream in product development to educate others on the costs of not cubing properly and how we may be able to meet all the customer needs and ensure a cost efficient way to cube transportation conveyances (Design for Logistics).

My advice here is to take ownership and move out of of your "sphere of influence" and into your "sphere of concern" (Covey).  Take action, own the issue and work with your other partners across the company to bring to a resolution. 

After reading this book and contemplating for over 1 year (Read it last year), I really have concluded this separates out the great from the good.  The great take extreme ownership, the others observe and say "If only...".

Leadership Still Counts in Supply Chain

There is a lot of talk (even on this blog) about the cool and "sexy" technology being deployed in Supply Chain today. Things like block chain, robots, drones and apps to do just about everything are all the rage. However, it is my thesis that until and unless you get a full "lights out' warehouse, load control center, and planning department, leadership capability will still be the single competency you cannot do without.

You do not need block chain to run your supply chain (at least today).  However, try to run a 1m square foot warehouse or a sophisticated load control center without great leaders.  It cannot be done.  What do I mean when I say a great leader? It is simple and the good news is you don't need to be General Patton.  You do need to:

1. Treat everyone with dignity and respect... always. 
2. Help people look to leaders to solve problems not just point them out.
3. Lead from the front and on the floor. You cannot be a great leader sitting in an office. In fact, ditch the office as it is too tempting to hide out there.
4. Be visible always. If you have 3 shifts then you have to work third shift as much as you work first. If you can't or are unwilling to do that then you cannot lead a 3 shift operation. That simple.
5. Communicate, communicate, communicate...  every day that goes by where you are not communicating, a gap is being created, a void appears and the associates fill the void with rumor and innuendo.

You have to have a true passion for the subject of leadership and study it like you would any other subject. Through some trial and error you can figure out what works. Finally, write down your personal leadership playbook. Keep it with you.

So,  as much as I love technology,  my travels,  observations and work tell me great leaders can get great results in almost any environment. Go out and lead!!!  You will be surprised at what great things can happen!

The Schools of Experience - Developing Yourself and Selecting Talent

During holidays I really like to spend time with a good book and this Thanksgiving was no different.  I am reading (and re-reading) Clayton Christensen's book:  How Will You Measure Your Life?  This book is a fantastic read and it uses models of operation to help guide you in both your personal and professional life.  I may call on this in future postings but today I want to discuss his chapter on selecting talent called: The Schools of Experience.

In this chapter, Professor Christensen discusses how one should look at their careers and subsequently how someone should look at hiring talent.  The old model of climbing a ladder is no longer useful in a "flat" world (using Thomas Friedman's analogy and applying to corporate America).  Most organizations are extremely flat - especially relative to years ago - and this means it is a collection of experiences which will both drive your career and should drive your selection of talent.   He has many examples but let me provide two from my own career:

Transition from the Military:

The military was a fantastic place to both give back to the Country and also to accumulate many experiences:  Leadership, operating in stressful environments, fast decision making, and I could go on.  Truly, I cannot imagine any civilian business giving better experiences at those situations than the military.

However, the military does not provide a lot of financial experience, profit and loss experience or business competition experience (There is, after all, only one Pentagon!).  So, when the opportunity presented itself, I moved into the business world.  In that world I have experienced all the items I mention above.  Was it a "promotion"?  If measured by wages, true cost of living, or titles it could have actually  been considered a demotion.  If measured by gathering huge experiences which I could not get in the military, it was a huge promotion!

Transition from "Big Company" to Entrepreneurial Company:

The skills required to work in a big company with large well established processes are completely different than those required in the small and entrepreneurial world.  So, using the theory of "experiences" I decided I wanted that small experience even though I was in a well established executive position at a great company.

Using supply chain metrics, was it a promotion?  I went from managing 14M square feet of warehouse space to 6M square feet.  I went from $300M+ of transportation spend to $80M.  To the stereotypical person, this could be seen as a "lesser role".  Trust me, it was not!

I quickly learned the skills used in a large company are close to useless in a small, everyone does the work, entrepreneurial and "scrappy" company.  The experiences I gained at this smaller company could never have been attained in the larger, well established company.  And, if I were to just do what I did in the large company in the entrepreneurial company, I would have failed.   I had to adapt, learn, gather new experiences and apply them to the unique issues.

What does this mean for talent acquisition:

Even today with the sophisticated human resources (HR) departments I still find people rely on the "ladder" model versus the "experiences" model. For example, if you were hiring for a start up company would it matter that someone become a SVP in a multi-billion dollar company?  That person has incredible experience (and has been successful) in delegation, building staff, using sophisticated ERP such as SAP etc.

What this person lacks is start up skills.  Can they do a lot of the work themselves?  How will they perform without "staff"?  Etc.  The "ladder" model shows that this person is a great pick but the "experiences" model shows the person to be lacking in a number of major areas.

Conclusion:

We can use the "experiences" model to guide both our careers (choose experiences over perceived promotions) and we can use it in talent selection.  It tells a different story when this is applied versus the "ladder" model.  My advice for those starting their careers is to work to get many different experiences and work to stitch together a set of skills, acquired by experiences, that will serve in you in a multitude of settings. This will ultimately serve you better than "climbing the ladder". 

Marc Althen at Penske Logistics - Leading by Example and Empowerment

A great article about a great leader titled "Leading by Example and Empowerment".  Congratulations to Marc Althen.. .well deserved

Leadership in Logistics is As Important as The Technical

I have always believed leadership in the logistics field is as important, and maybe more important, as the technical aspects of the job.  As a logistics and supply chain executive you will be responsible for leading many people and, in fact, what you do will be far more about leadership than about your technical expertise.  The people you lead will have the technical expertise and the question is can you get them to do what needs to be done and have them use their ingenuity and innovation to go beyond anything you may have thought imaginable.  Some of this was discussed in detail in Adrian Gonzales' article:  Putting Leadership Development Back on Your Calendar.. and Your Budget!  He makes a lot of great points showing how important this is to the logistics and supply chain professional.

There are also many great development programs where you can "sharpen your saw" (Stephen Covey) such as the Executive Masters for International Logistics and Supply Chain Strategy (EMIL-SCS) at Georgia Tech.  This will help you gain technical expertise and help you gain leadership expertise.

Having said all of this, I love to listen to Clay Christensen of Harvard University speak.  He is brilliant in business (The Innovator's Dilemma), he is a moral and good man and he is a great leader.  His new book How Will You Measure Your Life is a "Must Read".  Listen to Professor Christensen speak on leadership, a moral compass and a direction to take in life.  As yourself what makes the "measure of a man"?  How will you judge your life? Will it be by money or by status or will it be by the good you do and what you leave to the rest of the world upon your passing?  I ask you, especially if you are starting out, to think deeply about this topic and question. This is the core question to answer.

When answering, don't forget the great words of John Bogle, Founder of Vanguard Group: "Not everything that can be counted counts and not everything that counts can be counted".

What Makes Tomorrow's Leaders

I am reading a lot about this subject and I suppose the driving force is I now have a son in college.  I wonder what he will want to do ultimately with his life.  As I read I see some common threads in tomorrow's leaders no matter what discipline they are in (so, these apply to supply chain people).

First, learn languages!  This is an absolute must and one which is tough for Americans to get their arms around.  If you cannot speak at least one other language other than English you are essentially toast.  Two or three are even better.  The best people I see in business today are very comfortable moving between languages.

Second, be prepared, willing and excited about moving globally.  I met a person the other day who had run an operation in Russia, is now in China, travels frequently to the US and is a German national.  OK, you may not be able to do all that but understand that is who you are competing with.  Unfortunately, most people elsewhere in the world are far more comfortable doing this than Americans are.

Third, be a leader.  It just does not matter what you do (unless you are going to be a highly skilled technocrat / individual contributor your entire life. No matter what you do in life, you will need to be a leader.

Fourth, never stop learning!  When I interview people I ask what book they most recently read and you would be amazed how many really cannot remember one or if they did read it, it is clear they just skimmed it.  Reading things such as the Harvard Business Review, The Economist, The NY Times and The Wall Street Journal are a must.  Put down the remote, turn off the T.V. and read!

These are just a few of my thoughts on this topic.  There are a lot more I know.  I wanted to get these out fast.

Use of Lean Techniques in The D.C.

A great article over at Logisticsview Points concerning use of lean tools in the distribution center.  The article is written by Carl Fowler of Menlo Logistics.

I will not repeat it as you need to go there and read the entire piece.  I will say I agree 100% and it makes the simple yet effective case for everyone to implement lean in the D.C.

The "Softer Side"...

Fitting on my first day back my thoughts went to leadership and the "softer side" of logistics.  An article written in December from Kate Vitasek talked about this issue directly.  As logistics leaders we are very good at measuring the performance of our networks but how are we at measuring the performance of our people in terms of leadership and engagement?  Do we believe these are important qualities?

What I am finding is the "technical" side of logistics and overall supply chain can be trained or, in most cases, the young and very good talent are coming to companies with the technical skills needed.  What the universities cannot train is the leadership aspect.  The more responsibility you have means you generally are going to spend more time on motivating, engaging and setting up people for success rather than on the technical details.  So, how does young talent get that type of experience so they are ready when they reach the higher levels?

You must find the opportunities and they are out there.  Even if they are leading a small team, get them into that leadership position early and often.  Further, if you are lucky enough to have large groups (i.e., shifts in a distribution center) make sure they get to lead those groups.  Reinforce the importance of doing this early and often in their career.  I know most college graduates do not aspire to lead the night shift but they have to have that experience early in their career.  

Also, ensure leadership is a fundamental skill one must acquire to get to higher levels.  Leadership can be "practiced", learned and improved upon.  Just like any other skill however, you must do it over and over again to get better at it.  Make sure your younger folks are given these opportunities. 

John Bogle, founder of Vanguard Mutual funds says, "not all things that count can be counted and not all things that can be counted, count".  Leadership is one of those things which cannot be counted very easily but probably "counts" more than anything in logistics.