Q: The "rise of automation" seems to be everywhere you look. How big of a role do you think automation will actually play within distribution within the next 5 years?
A: Distributors in the e-commerce space are the most likely to invest in automation. More and more sales are moving from retail stores to e-fulfillment. This business tends to be more intensive with SKU count and discretionary picking. We have seen a movement to ASRS (automated storage retrieval systems), GTP (goods to person) systems, AGVs (automated guided vehicles) for such operations, and I believe that is likely to continue.
Q: Labor is the #1 cost for any distribution center, but it's the people that create the results. How do you create an engaged and positive culture without hurting the bottom line? How do you cut costs without cutting jobs?
A: The key to creating this engaged and positive culture is to involve people in the process of running your business. This is a very simple concept that many companies do not do well, but it is critical to make your people feel important… because they are important! If your associates understand, from you the leader, that you NEED them, they will more eagerly participate in change and cost-cutting initiatives for your company.
Cutting costs without cutting jobs – this may not be the answer people are seeking, but many times you have to cut jobs in order to cut costs. Some of our clients are seeking ways to build a more productive workforce so they can improve their bottom line. Some of our clients have capacity issues, and they need the foundation of a productive workforce so they can grow their business without unnecessarily growing their labor costs. At LogistiPoint, our role is to help our customers to be profitable and to be in a position of growth.
Q: You've been in the industry for a long time and have seen businesses make great decisions, but you've also seen them make mistakes. What's one of the biggest mistakes you can make to your supply chain?
A: For me, it all comes down to the people. You have to build a culture where people are excited to come to work every day. I believe that most people want to do a good job. It is the role of leaders to maximize the contribution of our associates. This requires a group of leaders who have no ego and understand that they exist (at this company) to make the company successful by getting everyone to swim in the same direction.
I realize there are complications in business – declining industries, growth challenges, financial challenges, IT struggles, difficult labor markets. I also believe if you are a company leader of 1,000 people, it is your job to extract as much brain power, muscle, and effort of all 1,001 people that work there. If you are successful in doing the latter, the complications in business will be fixed by the people. People are smart. People want to do a good job.
Q: You are a retail executive with oversight of a 10 building, 8,000 person supply chain serving all parts of the US. You also have a blank check. Where do you invest the money:
If your company is looking to grow market share?
A: A thorough analysis needs to be completed to identify the current strengths and weaknesses of the existing supply chain. Additionally, analysis is needed to identify where the target market is that we are chasing. It might mean that we need to consider an updated network strategy to handle the geography and the service level required, or it could be an overhaul to existing facilities, systems, and staff to increase capacity levels.
If your company is looking to reduce operating costs?
A: In an operation with these types of headcount numbers, I think investing in the workforce is the key. At LogistiPoint, we install Performance Management programs that have the accountability of engineered labor standards and the reward of handsome incentives for the associates. We design these programs to be a financial win-win for the company and its associates. When these programs are coupled with my culture sentiment above, they can be enormously successful. I have served on the operations side of these programs and they work. Now, I’m on the consulting side because I believe in them, and again, they work!
Q: What makes an executive successful when driving change?
A: You have to understand the process of change. People are going to resist, and you cannot change that. What you can change is you. How are you communicating? How are you involving others? Are you meeting people in their place of pain? The successful executive is simultaneously driving results while looking around and making sure people are keeping up… and if people are not, the executive is taking the time required to educate people on why the change is important. You will not have 100% success with getting people on board, but after some number of key people are on board, you’ll soon find yourself over the tipping point.
Q: Enough business... spring is right around the corner--and therefore, spring break! What's your favorite vacation spot for spring break?
A: My favorite spot is always on one of the beautiful lakes in Tennessee! However, because I have less than 20% of the voting power in my household of five, we’ll be spending this spring break on the beaches of Seaside, FL. I’m not complaining – they have some beautiful water too!
Glenn Hanley has over 20 years of experience in the supply chain industry, focusing on distribution operation management. Glenn joined LogistiPoint in 2015 as Senior Manager, where he improved the performance of supply chain workforce and leadership teams for several large retail companies, including Cabela’s and Dollar Tree. Glenn’s visionary skills and analytical thinking earned him the title of Principal at LogistiPoint in 2017, where he specializes in performance improvement, network and facility strategy, and design and technology services. His creative solutions achieve significant results in logistics and distribution operations for his clients.