People are the key differentiator in successful supply chains, says Avnet's Gerry Fay. That's why his company works so hard to develop its logistics leaders.
Logistics leaders are critical to supply chain success, which is why Gerry Fay, the chief global logistics and operations officer for the giant electronics distributor Avnet Inc., wants to make sure his company wins the "war for talent."
By that he means the search for people who not only have the right skills but also are strategic, long-term thinkers with an understanding of how logistics fits into a global supply chain. Those characteristics are important to Avnet Logistics, whose operation spans the globe and ships 7.3 million orders per year on behalf of the 700 suppliers that make up the company's client base. But Fay's ultimate challenge is to serve an even larger constituency: more than 100,000 end customers in 80 countries.
Fay is responsible for global warehousing, semiconductor programming, computer and integration center services and operations, global trade compliance, and risk mitigation. He joined Avnet in 2005 as its senior vice president of global strategic accounts for Avnet United and created the Avnet Velocity global supply chain practice at Avnet Electronics Marketing. In that role, he led the expansion of a key accounts program designed to provide global support services to Avnet's top customer base.
He met recently with Supply Chain Quarterly Group Editorial Director Mitch Mac Donald to discuss his career, Avnet's logistics operations, and his company's strategy for developing logistics talent.
Name: Gerry Fay Title: Chief Global Logistics and Operations Officer Organization: Avnet Inc. Education: University of Redlands (California), Bachelor of Science in Finance and Master of Business Administration Business Experience: President, Americas, Memec LLC; chief operating officer, ATLAS Services, a division of VEBA Electronics CSCMP Member: Since 2008
What are your key responsibilities?
To think about the supply chain and the way we plan, source, make, and deliver. That naturally and ultimately includes everything related to making deliveries, integration of our cable and connector assembly facilities, our programming facilities, and then all of our warehousing facilities on a global basis. I oversee our corporate operational excellence program and a group called Avnet Velocity, through which we sell supply chain services to our supplier customer base.
What are some of the biggest changes in logistics you've seen during your career?
The two biggest changes have been changing customer expectations and what I call a "war for talent." Regarding the first, changing customer expectations, it used to be that if you got an order and you told the customer they'd get it in a week, they would be OK with that. Now, they expect things to happen overnight. ... With that, the challenge for us in logistics is, how do we get that profitable proximity? How do we get close enough to satisfy the customer while still being able to have a logistics infrastructure that is supportable and cost-effective?
As to the war for talent, we are now expecting our logistics leaders to be a lot more strategic and to have a broader set of experiences. We want them to be knowledgeable, for instance, in how you set up logistics operations in emerging markets. We want them to know how you deal with different cultures, different laws, and different export and import rules.
Can you point to anything that has remained constant over the years?
The main thing that hasn't changed is that people are the key differentiator. Just about any company can go buy the latest conveyance, the latest WMS (warehouse management system), or the latest AS/RS (automated storage and retrieval system) and integrate it. The differentiator is how well your people are integrated into your operations.
We are very focused on employee engagement at Avnet because we believe if our employees are fairly paid, continue to be educated, are focused on doing their job, and have the tools to do that, that will translate to delighted customers, which means we will get more business, which means we can hire more logistics people. We see a nice, healthy, symbiotic relationship between employee engagement and customer engagement. For me, the biggest challenges I've had in my career in fixing logistics operations usually came down to management and employee engagement.
You used a term I haven't heard before: "war for talent." How does a company like Avnet approach that?
The fundamental thing we do is succession planning. Through many levels down through the organization, we have identified who are our major succession candidates, who are our key players, and who are folks who need development. Then, we create development plans. Our ultimate goal is to grow people up [through] the organization.
As folks move up the ladder, are they primarily coming out of logistics and supply chain management, or are they coming from other areas of the company?
It is a little bit of both. For the most part, they work their way through the logistics organization over time. One benefit we've had at Avnet is that because we have acquired so many companies, we generally get a look at the best talent that exists in the industry. One of the things that we say at Avnet when we do an acquisition is "Best people, best practice," and we really believe in that.
When we acquire a company, we look at the talent they have and determine if the talent is as good as or better than the talent we already have, and as much as possible, we will bring in those folks that we think can add to our talent base. I don't think most companies involved in an acquisition spend as much time evaluating the talent from businesses they acquire because a lot of times, it's all about synergies. When we do an acquisition, we are looking at both the Avnet folks and the acquired company's folks to really pick best of breed.
What's the next big challenge for managers striving for logistics excellence?
As operations expand around the world, driving efficiency, effectiveness, and standardization becomes a bit of a challenge. A lot of companies have not designed their logistics networks to support future growth.
The next big thing, I think, is logistics leaders looking out in three- to five-year chunks about what emerging markets their companies are getting into and starting to plan what their logistics infrastructure will need to look like. It used to be, "Hey, we are going to open up here, find us a warehouse and use a 3PL (third-party logistics provider)," but there wasn't a lot of thought of connecting those because business generally was fairly local. Now that it is global, a lot of times the customer will be in the United States this week, and then move its manufacturing to Asia and expect you to move the supply chain. You've got to have a logistics infrastructure to support that.
What advice would you offer to someone considering a career in logistics and supply chain management?
I would tell them that before they focus on logistics as an area of study to try to get a summer job at a warehouse and learn what logistics is about from the inside out. Try to help build relationships with management there to understand that.
Once you do that, my personal opinion is that even if you are focused on logistics, move on to a focus on supply chain because you will have a little bit broader background. I think that helps anyone understand how that all fits together and the role logistics plays in the supply chain.
Supply Chain Xchange Executive Editor Susan Lacefield moderates a panel discussion with Supply Chain Xchange's Outstanding Women in Supply Chain Award Winners (from left to right) Annette Danek-Akey, Sherry Harriman, Leslie O'Regan, and Ammie McAsey.
Supply Chain Xchange recognized four women who have made significant contributions to the supply chain management profession today with its second annual Outstanding Women in Supply Chain Award. The award winners include Annette Danek-Akey, Chief Supply Chain Officer at Barnes & Noble; Sherry Harriman, Senior Vice President of Logistics and Supply Chain for Academy Sports + Outdoors; Leslie O’Regan, Director of Product Management for DC Systems & 3PLs at American Eagle Outfitters; and Ammie McAsey, Senior Vice President of Customer Distribution Experience for McKesson’s U.S. Pharmaceutical division.
Throughout their careers, these four supply chain executive have demonstrated strategic thinking, innovative problem solving, and effective leadership as well as a commitment to giving back to the profession.
The awards were presented at the Council of Supply Chain Management Professionals (CSCMP) annual EDGE Conference in Nashville, Tenn. In addition to the awards presentation, the leaders discussed their leadership philosophies and career path during a panel discussion at the EDGE conference.
The surge of “nearshoring” supply chains from China to Mexico offers obvious benefits in cost, geography, and shipping time, as long as U.S. companies are realistic about smoothing out the challenges of the burgeoning trend, according to a panel today at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
Those challenges span a list including: developing infrastructure, weak security, manual processes, and shifting regulations, speakers said in a session titled “Nearshoring: Transforming Surface Transportation in the U.S.”
For example, a recent Mexican government rail expansion added lines to tourist destinations in Cancun instead of freight capacity in the Southwest, said panelist Edward Habe, Vice President of Mexico Sales, for Averitt. Truckload cargo inspections may rely on a single person looking at paper filings on the border, instead of a 24/7 online system, said Bob McCloskey, Director for Logistics and Distribution at Clarios, LLC. And business partners inside Mexico often have undisclosed tier-two, tier-three, and tier-four relationships that are difficult to track from the U.S., said Beth Kussatz, Manager of Northern American Network Design & Implementation, Deere & Co.
Still, dedicated companies can work with Mexican authorities, regulators, and providers to overcome those bottlenecks with clever solutions, the panelists agreed. “Don’t be afraid,” Habe said. “It just makes sense in today’s world, the local regionalization of manufacturing. It’s in our interest that this works.”
A quick reaction in the first 24 hours is critical for keeping your business running after a cyberattack, according to Estes Express Lines, the less than truckload (LTL) carrier whose computer systems were struck by hackers in October, 2023.
Immediately after discovering the breach, the company cut off their internet, called in a third-party information technology (IT) support team, and then used their only remaining tools—employees’ personal email and phone contacts—to start reaching out to their shipper clients. The message on Day One: even though the company was reduced to running the business with paper and pencil instead of computers, they were still picking up loads on time with trucks.
“Customers never want to hear bad news, but they really don’t want to hear bad news from someone other than you,” the company’s president and COO, Webb Estes, said in a session today at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
After five or six painful days, Estes transitioned from paper back to computers. But they continued sending clients daily video updates from their president, and putting their chief information officer on conference calls to answer specific questions.
Although lawyers had advised them not to be so open, the strategy worked. It took 19 days to get all computer systems running again, but at the end of the first month they had returned to 85% of their original client list, and now have 99% back, Estes said in the session called “Hackers are Always Probing: Cybersecurity Recovery and Prevention Lessons Learned.”
As the final hours tick away before a potential longshoreman’s strike begins at midnight on the U.S. East and Gulf coasts, experts say the ripples of that move could roll across the entire U.S. supply chains for weeks.
While some of the nation’s largest retailers were able to pull their imports forward in recent weeks to soften the blow, “the average supply chain is ill-prepared for this,” Tom Nightingale, the former CEO of AFS Logistics, said in a panel discussion today at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
Despite that grim prognosis, a strike seems virtually unavoidable, CSCMP President & CEO Mark Baxa said from the stage. At latest report, the White House had declined to force the feuding parties back into arbitration through its executive power, and a voluntary last-minute session had failed to unite the International Longshoremen’s Association (ILA)’s 45,000 union members with the United States Maritime Alliance that manages the 36 ports covered under their expiring contract.
The ultimate impact of a resulting strike will depend largely on how long it lasts, the panelists said. With a massive flow of 140,000 twenty foot equivalent units (TEUs) of shipping containers moving through the two coasts each week, each day of a strike will require 7 to 10 days of recovery for most types of goods, Nightingale said.
Shippers are desperately seeking coping mechanisms, but at this point the damage will add up fast, whether a strike lasts for an optimistic “option A” of just 48 to 72 hours, a pessimistic “Option B” of 7 to 10 days, or even longer, agreed Jon Monroe, president of Jon Monroe Consulting.
The first full day of CSCMP’s EDGE 2024 conference ended with the telling of a great American story.
Author and entrepreneur Fawn Weaver explained how she stumbled across the little-known story of Nathan Green and, in deciding to tell that story, launched the fastest-growing and most award-winning whiskey brand of the past five years—and how she also became the first African American woman to lead a major spirits company.
Weaver is CEO of Uncle Nearest Premium Whiskey, a company she founded in 2016 and that is part of her larger private investment business, Grant Sidney, Inc. Weaver told the story of "Nearest" Green—as Nathan Green was known in his hometown of Lynchburg, Tenn.—to Agile Business Media & Events Chairman Mitch MacDonald, in a keynote interview Monday afternoon.
As it turns out, Green—who was born into slavery and freed after the Civil War—was the first master distiller for the Jack Daniel’s Whiskey brand. His story was well-known among the local descendants of both Daniel and Green, but a mystery in the larger world of bourbon and a missing piece of American history and culture. Through extensive research and interviews with descendants of the Daniel and Green families, Weaver discovered what she describes as a positive American story.
“I believed it was a story of love, honor, and respect,” she told MacDonald during the interview. “I believed it was a great American story.”
Weaver told the story in her best-selling book, Love & Whiskey: The Remarkable True Story of Jack Daniel, His Master Distiller Nearest Green, and the Improbable Rise of Uncle Nearest, and has channeled it into an even larger story with the founding of the brand. Today, Uncle Nearest Premium Whiskey is made at a 323-acre distillery in Shelbyville, Tenn.—the first distillery in U.S. history to commemorate an African American and the only major distillery in the world owned and operated by a Black person.
Weaver and MacDonald's wide-ranging discussion covered the barriers Weaver encountered in bringing the brand to life, her vision for where it’s headed, and her take on the supply chain—which she said she views as both a necessary cost of doing business and an opportunity.
“[It’s] an opportunity if you can move quickly,” she said, emphasizing a recent project to fast-track a new Uncle Nearest product in which collaborating with the company’s supply chain partners was vital.
Uncle Nearest Premium Whiskey has earned more than 600 awards, including “World’s Best” by Whisky Magazine two years in a row, the “Double Gold” by San Francisco World Spirits Competition, and Wine Enthusiast’s “Spirit Brand of the Year.”
CSCMP’s EDGE 2024 runs through Wednesday, October 2, at the Gaylord Opryland Hotel & Convention Center in Nashville.