The power's in the people: interview with Tracy Maylett
It's important to understand what really determines the long-term effectiveness of a supply chain, says consultant Tracy Maylett. And it's not the technology or the process.
Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.
When it comes to measuring distribution center performance, it's not enough to just focus on operational factors—like throughout and order accuracy. According to Tracy Maylett, CEO of consulting firm DecisionWise, you also need to measure the "soft side" of the business—how human beings interact with one another in the workplace. That's because skills like the ability to communicate effectively and build and maintain relationships have a measurable impact on both operational performance and customer satisfaction.
A specialist in leadership development through education, performance feedback, and coaching, Maylett has spent more than 20 years in the field and worked with clients in 30 countries. Prior to joining DecisionWise, an international consulting firm that focuses on boosting individual and organizational performance through feedback and measurement, he was the vice president of organization effectiveness at Modus Media International in Boston.
Maylett has also taught strategy in the Marriott School of Management at Brigham Young University. He has a doctorate in organizational change from Pepperdine University and is the author of numerous publications relating to feedback, human process systems, and leadership. His article "A hard look at the soft side of performance," co-written with Kate Vitasek, appeared in the Quarter 4/2011 edition of DC Velocity's sister publication, CSCMP's Supply Chain Quarterly.
Maylett recently spoke with DC Velocity Group Editorial Director Mitch Mac Donald about the importance of interpersonal skills in the workplace and how those skills can have as much effect on supply chain performance as the operational aspects of a business.
Q: How have companies traditionally gone about measuring the performance of their supply chain operations? A: Most of the emphasis has been on measuring the hard side. By "hard side," I mean very, very specific aspects of operational efficiency and performance—like ship rates, inventory turns, sales, and so forth. Over the past 15 years, most organizations have become pretty adept at measuring the hard side.
But in the last 10 years, I've come to realize that these organizations are missing a whole piece of the picture. What we are missing is how things happen. We tend to measure what we did, what we accomplished, and what has been done. What is not factored in is **ital{how} things are taken care of.
Q: Why is that important? A: By failing to focus on how things get done, companies could jeopardize or even destroy relationships. We may have met one of our metrics so things look fine on paper, but some larger issue may have been missed. We may have just decimated a vendor. We may have destroyed a customer relationship in the process. We need to be measuring not just what got done, but how it got done.
For instance, a lot of the steps toward greater efficiency have included the use of technology. In taking this approach, we may have designed humans out of the system. There's been a lot of designing humans out of this to make the supply chain relationship a purely technology relationship or a goods exchange relationship. It is almost an obsession to design humans out of the system, when in reality it is the human piece that holds the supply chain together.
Q: So how do we change that? You talk about the soft skills—or if you will, the human or interpersonal skills—in a supply chain. What are some of the skills that can have a measurable impact on the supply chain or an organization's supply chain effectiveness? A: The first one is communication, obviously. My co-author on the Supply Chain Quarterly article was Kate Vitasek, who a few years ago wrote an article on collaborative education. Collaborative education relies on a willingness to exchange information back and forth. So one of the soft skills is not just how we maximize the technology or the logistics pieces, but how we maximize our knowledge of each other and what works for us and what doesn't work for us. So that interpersonal communication piece is a key part of this.
Q: Are there other soft skills that should be taken into consideration? A: Yes. Building and maintaining relationships is a big piece of this. One of the things we see quite often in supply chain management is the focus on hitting a metric, and we might be blind to the fact that we may destroy relationships in the process. My firm focuses a lot on measuring what we call engagement, employee engagement. That is the idea that employees are bringing their hearts, their hands, and their minds to what they are doing. So the next piece is motivation. The motivation piece is how intrinsically motivated I am to work with this person or to work with this company.
The last part of that is satisfaction. What will that relationship bring to me? Is it working both in your favor and in my favor? We use answers to questions like that to measure what we think of as supply chain engagement.
Q: Can you point to any companies that have adopted this approach? A: Yes. There are several companies I work with that have done a couple of really effective things in this area. One of the things they've done is develop balanced scorecards that include not just hard metrics but also some soft metrics—metrics such as customer retention, employee retention, and employee engagement. The idea of employee surveys and employee engagement has really taken off over the last 10 years.
It's important to note that they're holding their managers accountable not just for hitting those hard metrics but those soft ones too.
Q: I expect this doesn't happen overnight—that it takes a bit of time and patience for this kind of thinking to become ingrained in the culture? A: Definitely. You have to remember that for the last 15 years, we have been intensely focused on designing the human factor out of the supply chain. So to put that back in the supply chain takes a cultural shift.
Q: What advice would you offer a company that's interested in exploring the "soft skills" approach? A: A good place to start might be with collaborative education. It's about teaching each other about our own companies. Bringing all the players in an entire supply chain together in a room. It's about helping everyone get a deeper understanding of how what they do in their piece of the supply chain impacts the entire group, both upstream and downstream.
It's important to understand what really impacts the long-term effectiveness of the supply chain and a hint here: It is not always just technology. It is not always just process. It is the people.
The number of container ships waiting outside U.S. East and Gulf Coast ports has swelled from just three vessels on Sunday to 54 on Thursday as a dockworker strike has swiftly halted bustling container traffic at some of the nation’s business facilities, according to analysis by Everstream Analytics.
As of Thursday morning, the two ports with the biggest traffic jams are Savannah (15 ships) and New York (14), followed by single-digit numbers at Mobile, Charleston, Houston, Philadelphia, Norfolk, Baltimore, and Miami, Everstream said.
The impact of that clogged flow of goods will depend on how long the strike lasts, analysts with Moody’s said. The firm’s Moody’s Analytics division estimates the strike will cause a daily hit to the U.S. economy of at least $500 million in the coming days. But that impact will jump to $2 billion per day if the strike persists for several weeks.
The immediate cost of the strike can be seen in rising surcharges and rerouting delays, which can be absorbed by most enterprise-scale companies but hit small and medium-sized businesses particularly hard, a report from Container xChange says.
“The timing of this strike is especially challenging as we are in our traditional peak season. While many pulled forward shipments earlier this year to mitigate risks, stockpiled inventories will only cushion businesses for so long. If the strike continues for an extended period, we could see significant strain on container availability and shipping schedules,” Christian Roeloffs, cofounder and CEO of Container xChange, said in a release.
“For small and medium-sized container traders, this could result in skyrocketing logistics costs and delays, making it harder to secure containers. The longer the disruption lasts, the more difficult it will be for these businesses to keep pace with market demands,” Roeloffs said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
As the hours tick down toward a “seemingly imminent” strike by East Coast and Gulf Coast dockworkers, experts are warning that the impacts of that move would mushroom well-beyond the actual strike locations, causing prevalent shipping delays, container ship congestion, port congestion on West coast ports, and stranded freight.
However, a strike now seems “nearly unavoidable,” as no bargaining sessions are scheduled prior to the September 30 contract expiration between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) in their negotiations over wages and automation, according to the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary.
The facilities affected would include some 45,000 port workers at 36 locations, including high-volume U.S. ports from Boston, New York / New Jersey, and Norfolk, to Savannah and Charleston, and down to New Orleans and Houston. With such widespread geography, a strike would likely lead to congestion from diverted traffic, as well as knock-on effects include the potential risk of increased freight rates and costly charges such as demurrage, detention, per diem, and dwell time fees on containers that may be slowed due to the congestion, according to an analysis by another transportation and logistics sector law firm, Benesch.
The weight of those combined blows means that many companies are already planning ways to minimize damage and recover quickly from the event. According to Scopelitis’ advice, mitigation measures could include: preparing for congestion on West coast ports, taking advantage of intermodal ground transportation where possible, looking for alternatives including air transport when necessary for urgent delivery, delaying shipping from East and Gulf coast ports until after the strike, and budgeting for increased freight and container fees.
Additional advice on softening the blow of a potential coastwide strike came from John Donigian, senior director of supply chain strategy at Moody’s. In a statement, he named six supply chain strategies for companies to consider: expedite certain shipments, reallocate existing inventory strategically, lock in alternative capacity with trucking and rail providers , communicate transparently with stakeholders to set realistic expectations for delivery timelines, shift sourcing to regional suppliers if possible, and utilize drop shipping to maintain sales.