Operations & Logistics: Experts at HARDI Focus Conference
While the lineup for the Operations & Logistics Focus Conference produced the same high-caliber presenters that one expects from a HARDI gathering, this one had several surprises.
Barry Brandman, president of Fair Lawn, N.J.-based Danbee Investigations, kept everyone drilled into their seat as they listened to a business presentation that had the trappings of a mystery and adventure thriller.
Brandman spoke about the need for security in distribution businesses and focused on the reasons for bringing in an undercover operator when the circumstances dictated aggressive action. At some point during the presentation, someone asked him, given his decades in the industry, if there was a way to spot what the “average” criminal might look like. “Look at the person to your right,” he said as many started to laugh. He drove home the point that there is no magic way to visually judge whether a person might be a potential thief.
He also said background checks don’t catch thieves. While a background check deters potential job candidates with criminal records, his experience says most employees who become thieves were honest when they started the job. Brandman says the usual pattern is for a small theft or criminal act to occur, and then it grows into a larger issue.
In his PowerPoint presentation, Brandman provided four reasons why an executive might consider an “undercover operative” entering the business:
• No explanation for inventory reports or cycle being off.
• Reception of a confidential tip concerning illegal activity or unethical behavior.
• Using “operational intelligence” that has an effect on profits, management quality and morale or security control effectiveness.
• Need to obtain evidence for a theft insurance reimbursement.
Brandman provided a variety of real case studies (withholding the client’s name) and a video that actually showed illegal activity.
Jon Melchi, HARDI’s vice president of government affairs and business development, provided his (as expected) insightful view of the major legislative issues that might affect distributors, and he also shared his view of a number of presidential candidates. For example, Melchi spoke about compliance and the 608 Refrigerant Recycling Rule, which:
• requires safe disposal for small appliances.
• updates recovering equipment standards.
• creates a standard for recovery of flammables.
Mark Richards, vice president, AWI Logistics, spoke about outsourcing, noting that a “monumental” shift in the industry was occurring as many businesses “are making the decision to either outsource a portion of their distribution needs or offer their distribution and fulfillment services to a wider group of industries.”
Bob Heaney, research director, principal analyst, wholesale, retail and eCommerce, discussed “trends and advances” in 2015 and beyond.
Heaney emphasized that there was an increase of evidence in convergence when examining multichannel flow. Two to three years ago, shipments to and through a distribution center were 75 to 80 percent with direct shipments to customers at 45 to 50 percent. “Now they are both equal at 61 percent, [which] fundamentally moves B2B from bulk to single shipments at execution,” according to Heaney.
Closing out the 2015 HARDI Operations and Logistics Focus Conference, Frank Hurtte guided attendees on a journey of discovery through understanding, segmenting and driving supplier behavior. Pulling data from HARDI Profit Reports back to 2008, market studies and HARDI’s new Supply Chain Scorecard, Hurtte, who combines 28 years of real world distribution experience and a decade of consulting, brought sense to a complex topic. Contrasting HARDI members’ situation against distributors in a wide range of similar lines of trade, Hurtte provided information on how to understand a distributor’s most valuable suppliers and ways to work with them to drive costs out of the supply chain.
The River Heights Consulting’s founder sent the group down the course for a productive, fact-based supplier meeting. All through what many called “the clean-up position” of the conference, Hurtte coined the phrase, “Specifics Rock, Generalities Rock” to describe the best way to build traction with suppliers. Further, he encouraged them to measure the impact of the effort, identifying repetitive small gains such as warehouse time, incoming freight measures and improvements in inventory utilization.
One memorable mention from Hurtte’s presentation was his recap of a conversation with a young friend who had a freshly minted MBA in Supply Chain Logistics. Based on the academia-centric views of her professor, she said, “Distributors can improve the supply chain by reducing the amount they charge for products flowing through their organizations. And, even though I know you aren’t going to like hearing this, many in our class question whether wholesale distributors should even be part of the equation.”
Hurtte, unsurprisingly, disagreed. Taking the conference attendees back to the point of their founding 40, 50 or more years ago, he asked how much has changed. “Make no mistake, our manufacturing partners couldn’t be as nimble or as innovative as their distributor partners,” said Hurtte. “We exist because we are the most efficient vehicle to market. And improving the flow of goods from supplier to distributor to customer is our next challenge.”