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DG&A's Transportation Consulting Blog
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As baby boomer logistics leaders move into retirement, their successors are tasked with directing the company’s distribution operations. Informed business leaders realize that we are in a period of profound changes. Companies such as Amazon and Uber are disrupting current business models. Technology and automation are altering manufacturing processes. Ecommerce and omni-channel distribution are upsetting existing retail processes. As my colleagues and I meet with shippers, we find many companies are exploring their options. Should they try to manage these changes in house or should they enlist the support of outside resources?

In-House or Outsource?

It is important to understand that business leaders do not face a binary choice. The field of Logistics is more complex than it has ever been. Senior logistics professionals must possess a variety of business skills and possess a depth of knowledge in a range of areas such as supply chain design and management, warehouse and inventory control, customer service, transportation and information management. These leaders must then be able to adapt and apply their skills and knowledge to specific companies in the manufacturing, distribution and retail sectors, including bricks and mortar and eCommerce organizations. This leads to a fundamental question for every organization. Does the company have a set of leaders who possess this range of skills and knowledge?

While it is unlikely that one senior executive will possess all of these attributes, the broader question is does the company possess these skills across its logistics management team. If not, what skills and knowledge does it need to import from external sources? This article outlines how to create a leadership plan (http://www.supplychainquarterly.com/news/20170428-how-to-plan-for-future-supply-chain-leadership/?utm_medium=email&utm_campaign=Executive%20Insight%20 ).

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A Lesson from the Comey Firing

Posted by on in Crisis Management

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The firing of FBI director James Comey by president Trump is the biggest story of the week. Most of the focus has been on the constantly changing rationale for the termination. The television networks have been filling the airwaves with a variety of reasons for the firing. The various spokespeople including the president, VP, and assistant communications director have stumbled badly in telling a coherent, consistent and honest story.

Director Comey has been accused of being a “showboat” and “grandstander,” that “the FBI was in turmoil,” and that he was not doing a good job. Of course, one of the major issues behind this firing was clearly that Mr. Comey was leading the investigation into the possible collusion between the Trump campaign and Russia.

The director was in the third year of a ten-year term. According to the acting FBI director, in his testimony to Congress on Thursday, Mr. McCabe stated that director Comey had been highly respected throughout the agency.

There is no question that director Comey was a controversial figure. The Hillary Clinton e-mail server situation was a huge problem to the Democrats in 2016, possibly shifting the election at the last minute in favor of Mr. Trump. Then Comey mentioned in a public briefing to Congress earlier this year that he was investigating the links between the Trump team and Russia. In other words, he was investigating his new boss. This is not a winning strategy for job security unless the incoming administration has nothing to hide.

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Over the past few years, I have noticed a disturbing trend as I meet with both our shipper and carrier associates. They have changed their leadership team again. The VP of Transportation or Logistics (in manufacturing and retail organizations) or the President or other senior officer (in transportation organizations) has now been replaced multiple times. In fact, in some companies, they change executives like some people do spring cleaning in their homes. “It is out with old and in with the new.”

What is interesting for me is that in some cases, as an outside consultant, I have had the opportunity to work directly with the business leader and the company. I have been able to observe their performance and that of their superiors and subordinates. I have the following observations to share with you.

In some situations, the terminated business leader was doomed to fail. The expectations for the individual may not have been realistic. He or she may not have received the full support of the business owner or senior executive or the collaboration between them wasn't there. The departed person was charged with implementing the failed or poorly conceived vision of the business leader. The terminated executive “took the fall” for the unsuccessful business plan or weak leadership of his or her boss.

In other cases, the individual did not perform at the required level. He or she may have not had the required skills, did not fit with the company culture and/or did not work well with his or her peers. In some cases, there was an overreliance on specific subordinates who were not performing their jobs at an acceptable level. This overreliance and/or a poor hiring process cost the individual his or her job.

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Will Donald Trump be a Successful President?

Posted by on in Economy

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It is still too early to make an assessment if Donald Trump will succeed or fail as leader of the free world. In the months leading up to the election, and in the short time that he has been in office, a clear profile of Donald Trump’s leadership skills and style is emerging. How he employs these leadership traits will determine his legacy. These are my observations to date on his demonstrated leadership characteristics that may serve as a predictor of his performance.

Strengths

Vision

In the months leading up to the election, Donald Trump and his close colleagues saw something that others did not fully see and appreciate. They saw millions of Americans who were left behind, who lost their jobs to automation and/or foreign countries and who were experiencing stagnant wages. They captured this vision into a clear (but questionable) vision of America.

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Yesterday I had the distinct privilege of watching President Obama bestow the Presidential Medal of Freedom, with distinction, the highest U.S. civil honour, on Vice President Joe Biden. President Obama referred to him as “the finest Vice-President we have ever seen.” Coming a day after President-elect Donald Trump’s bizarre news conference, it was an extraordinary ceremony. It highlighted some key elements that are part of any successful business or personal relationship.

Eight and a half years ago, President Obama asked the then Senator Biden to become his Vice President. It should not be forgotten that Joe Biden ran against him to become the democratic nominee of his party. In selecting Biden, President Obama undoubtedly was looking for someone with extensive government experience but also someone with extensive life experience. Yesterday’s remarkable tribute said a lot of about their relationship and about the components of a truly successful relationship. Here are few take-aways from the speeches of the two men.

Shared Values Created a Strong Bond

The two men came from modest beginnings. The president was raised by his mother and her parents. His father played a minimal role in his life. He initially worked as a community organizer on the south side of Chicago. President Obama is a devoted husband and father.

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It is still the morning after the night before. Thus, it is somewhat early to draw any conclusions about how Donald Trump and The Republican Party achieved such a major victory in the US elections this week. Having said that, there were some powerful business lessons that emerged from this election process. Here are some that immediately come to mind.

Understand the Needs of your Customers

Everyone is acknowledging today that Donald Trump heard the voices of white working class Americans and other disaffected groups better than anyone in the Democratic Party. He heard their concerns about the challenges of lost jobs, technological change, stagnation in wages and other troubling issues. Moreover, he channeled this dissatisfaction and anger into an unprecedented, historic victory.

Key Takeaway: Business leaders must take the time to tune in to their customers, to peel away the layers of the onion to hear their true concerns and then to meet their needs. It was clear from this bitter election campaign that the Democrats, the party of the working class, were not in tune with many Teamsters, working class people and other groups that have aligned with them for so long.

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These are tough times. In a recent issue (February 22, 2016) of the Journal of Commerce, the headline was “Is the US in a Freight Recession?” If a freight recession is defined as two or more consecutive quarters of year/year declines in freight volumes, parts of the US and Canadian transportation economy are certainly there. While we aren’t back into the Great Recession of 2007-2008, there has been a pronounced slowdown in business activity. Trucking industry executives confide that business volumes have tapered off.

This is when leaders are put to the test. Here are some thoughts on how to lead an organization through tough times.

1. Be Visible and Communicative

Don’t hide in your office all day in closed door meetings.  This is sure to unnerve your employees. Be visible and try to maintain a “business as usual” demeanor. Employees pick up on every change in behavior by its leadership team.

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Some companies have strong leaders with good strategies and good systems. Unfortunately, they don’t put the pieces together and therefore deliver less than stellar freight management results. In other words, the execution isn’t there.  Projects are identified but they don’t produce the desired results.

Some companies seem to adopt a “flavour” or “mission” of the month approach. They hire a consultant to adopt lean manufacturing, lean logistics or balanced scorecards. The tools to make these systems work are never put into place properly and before you know it, they criticize the consultant, move on to the next consultant and don’t accomplish much of value.

While these companies may be able to generate pretty reports, the programs were ill conceived in the first place. They don’t produce results. This can lead to the “blame game.”

Achieving operational excellence is not about sexy slogans and programs. It is about teamwork, communication and commitment. There has to be an identification of the root causes of the problems. There has to be a commitment from the leadership to fix the problems. The company leaders must stay the course to fix the problems. They cannot assume that since a program has been put in place, the results will come automatically.

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It takes leadership and management skill to become a Best in Class shipper. One question many companies face is where should Transportation fit within the company’s organization structure? Clearly one size does not fit all since manufacturers may have freight budgets ranging from a few hundred thousand dollars to tens of millions of dollars. The Transportation leader in a small enterprise doesn’t need the skill set of an individual who manages a multi-modal, multi-division, multi-million dollar freight budget.

This is not to say that a manufacturer with a small freight spend can be managed by an individual with limited or no freight transportation expertise. In smaller enterprises, we often observe an individual in a small office in the warehouse who has been there for many years, reporting to the controller or operations manager. These people often have a rudimentary understanding of freight and have been doing things the same way for many years.

Even small manufacturers and distributors should ask the question, do their transportation managers have the data (blog 1 in this series, knowledge (blog 2 in this series) and management skill to lead this function effectively. In addition do they have the processes and technology in place to be effective? Supply chain management is rapidly changing. If your freight leaders are lacking in many of the areas outlined in these blogs, it is important for their supervisors to ensure that they are receiving the necessary training. Their lack of expertise may be costing the firm large sums of money (in missed cost saving opportunities). For companies where Transportation is not a core competence, consideration should be given to outsourcing these functions to a logistics services provider that is better equipped to manage transportation.

In larger firms, there are other issues to address. Does the leader of Transportation function have input to the strategies of the business; does the company have a well-conceived supply chain strategy and does this individual have a seat at the decision-making table? Is supply chain management one of the core functions of the company or is Transportation viewed as an end-of-the line execution process? In other words, does the company consider alternate supply chains, alternate modes and transit times, consolidating and deconsolidating freight, where financially attractive and beneficial to its customers? Alternatively, is the transportation department expected to expedite the orders made by Sales or find a way to move partial or full truckload shipments that come off the production line after the truckers have left the building? These are telltale signals that Transportation is not properly valued in the company.

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