Podcast: Featuring Global Supply Chain Leader for Jones Lang LaSalle – Richard Thompson
Hosts: Mike Ogle and Rodney Apple
In This Episode:
Richard is an International Director and leader of the Global Supply Chain & Logistics Solutions consulting team for Jones Lang Lasalle. He has been a Partner in the global supply chain consulting practice at Ernst & Young, then was a Sr. VP at Schreiber Foods prior to joining JLL. Rich shares his supply chain journey, about how preparation meets luck, the importance of associations, the value of continuous learning and well-roundedness, and his advice to industry professionals and students entering the field.
Richard Thompson Bio:
Transcript:
Well, I will tell you that I think my supply chain journey started by accident. And by that, I mean that when I was coming out of college, which was in the early mid-eighties, this was at the time that supply chain really was first being coined. There’s always been the various supply chain functions, independent functions, transportation, distribution, inventory management, manufacturing, procurement, those have always existed for companies for many, many years, but the idea of supply chain management really came with the advent of the internet and the worldwide web.
And that’s about the same time that I was graduating from school. So, supply chain, as we know it today really wasn’t a major or anything that was offered back when I was graduating from college.
I started my career with a company called Airborne Express, an overnight package company competing with Federal Express and UPS. It was number three to those other two big players who you all know today, it was acquired by DHL eventually. That’s how I started my career in supply chain. I was able to learn a lot about transportation, specifically overnight distribution, but, also about third party logistics and air freight and international air freight. That was my entry into the world of supply chains.
I’ll try to walk you through that briefly. And it was less of a roadmap than it was a journey for me that took me in different directions, without a whole lot of planning around that. But let me walk you through that briefly.
So out of college, I took a job with airborne express and I was excited about the job because they flew their own airplanes. And it was all about planes, trains, and automobiles, and moving freight and working to influence big companies to utilize our services. I thought that was pretty exciting. And I was able to learn a lot about that particular industry. I started in sales and moved into kind of an operations management role. I was really never in one place for more than about 18 months. I was at airborne for eight years, but, as I mentioned, they moved me around and I was able to gain exposure and grow in my knowledge of the business over that eight years. But at that time, it was really transportation and logistics. As I began to learn more and grow, I always had a real interest in management consulting. I had this dream of being a strategic consultant with companies like McKinsey or Booz Allen or AT Kearney or some of the more strategic consulting firms that you may know of.
And a part of that dream for me was also going back to get my master’s degree, my MBA and I had been pursuing that for quite a while. While at airborne, I was able to get transferred back to Chicago, where I had started to head up our international freight group and I was able to apply and admitted to the University of Chicago graduate school of business. Which was quite exciting to me at the time, because they were number one in the world. I was able to take classes there at night. I was still working full time at airborne and going back to school for my MBA, which again was always something I’d wanted to do. And I thought would help propel me into management consulting. In fact, that’s exactly what happened. I started to attend round table luncheons with the University of Chicago being the host and started to research all the firms and I ended up sitting next to an Ernst and Young partner at one of the round table lunches who was talking with me about what I was doing at airborne and suggested that I would be a perfect fit for their transportation consulting division. I had always had an interest in doing something with a more strategic firm, I took an interview with E&Y and, I was hired and I was very excited to get into the consulting rank. I was at E&Y for a little over eight years and grew my way from coming in as a manager to senior manager to partner, within that eight-year period.
So that eight-year career at Ernst and Young, I grew my knowledge and experience across supply chain. I was able to get involved in projects, strategic sourcing projects, manufacturing projects, transportation management systems and warehouse management systems and other related supply chain project works. So, I was able to broaden my knowledge and experience across different aspects of the supply chain, which was very beneficial.
During a project with a big $5 billion global food company I was developing a relationship with the then COO. About a year and a half later, I received a call from that same individual. He had been named the CEO during that timeframe and he called and said, Hey, I would like to talk with you about coming on board with us to head up our supply chain organization, which at the time was in its infancy. So, this is a $5 billion company in the early 1990s that had no supply chain organization, which was true for a lot of companies at that time. So, I ended up leaving Ernst and Young where I absolutely had a wonderful time and a great career and met a lot of wonderful people, and moved to Green Bay, Wisconsin to head up the supply chain group for Schreiber foods, which as I mentioned, was a $5 billion food company, and served big companies like Walmart and McDonald’s and Sysco foods, and a lot of other companies that you would know of. In that role, I was responsible for heading up a supply chain organization that consisted of transportation and distribution and inventory management functions.
As I mentioned, we are one of Wal-Mart’s big customers. In fact, we are one of their top hundred suppliers. So, we were very active with leading edge supply chain companies as our customers at that time. I was at Schreiber foods for about four years, and learned a ton and got back into the practitioner side or the corporate side of supply chain.
Which I really valued, but ended up coming back into consulting with Jones Lang LaSalle, which, at the time that I joined, was with the Staubach company, which is Roger Staubach, the former quarterback of the Dallas Cowboys, who’s quite a hero of mine and I know of a lot of other people. He started a real estate career as he was leaving football, which was required at that time to put his kids through college. But I joined the Staubach company, which about a year later was acquired by Jones Lang LaSalle. Now known as J L L, and we are a company with revenues of about $18 billion and about 95,000 employees around the world.
For those of you that don’t know JLL, and I certainly did not. JLL is not only a big company, but we are one of two big global commercial real estate companies. So that was quite an interesting turn for me. Not because I’m doing anything different than I had been for my entire career, but I was doing it in a completely different industry segment.
I’m going on my 13th year at JLL. It’s been a great fun for me because I’m doing all the same things I’ve learned during my career in supply chain, helping our big corporate clients think about their supply chain networks. For those of you that are questioning how supply chain fits within a commercial real estate firm, I would explain it this way. When you think about commercial real estate there’s office, there’s retail and there’s industrial, those are the big asset classes. When it comes to industrial real estate, which has plants and warehouses and distribution centers, it’s my point of view that in order to be a trusted business advisor, to your corporate clients, you better understand supply chain management because when it comes to looking at the total operating cost of a distribution center, for example, the vast majority of that cost is in logistics, is in transportation, it’s in distribution, it’s in freight labor and inventory carrying costs. And so, if you don’t understand that 75% of the operating cost equation, you might be very good at finding a deal or identifying some available properties and understanding all the aspects of that, but that’s about 5% of the total operating cost, the lease expense or rent. So, it’s critically important to get that right. But you have to understand the other 75% of the equation. And so, what I’ve been doing, I think it lends itself perfectly to the work that we’re doing with our clients at a commercial real estate firm, and that’s been my role.
I help with the strategy and then we have other experts that can help with the whole platform of implementation services. And that could be real estate brokerage, it could be business and economic incentives, discussions, and negotiations. It could be labor analytics, trying to identify the right labor demographics within a particular site or market area, et cetera.
I’ve been doing the same thing I’ve always done, but with a different kind of set of goggles on a different perspective. It’s been quite successful for the firm as well as for our clients to have those capabilities integrated together.
I think that’s a really good question. And I would tell you that when I first got involved with some of the bigger supply chain industry organizations, these types of organizations have always been instrumental in helping their members stay current on trends and keep educated and help network. They weren’t as important when I was young, as I thought they would be, but that certainly proved out to be an important link I think for me later in my career. I’ve been associated, for example, with CSCMP for nearly 30 years and at some points in time, you’re more active than at others.
I think that is an excellent way of helping build your network of contacts within an industry that seem incredibly vast when you first start, but as you progress in your career, you understand how small a world it actually is. And so, I completely support finding the right organizations and it doesn’t have to be a big one, helping to make those connections and finding mentors and continuing to stay abreast of the trends and things that are happening in your industry.
You know, this pandemic has been really tough on everyone, for sure. But I think it’s also been in some ways, a blessing in disguise because you do have the opportunity to spend time on things that you might not otherwise have had a chance to spend time on.
Obviously, the big conferences and things like that have been canceled for all the right reasons. The most disappointing aspect of that is the networking piece because, I think most people would suggest going to a big conference is important to learn, but also to have that ability to connect.
I would suggest that one of the key skillsets that companies are looking for is not well-defined. It’s not about a particular topic or major if you will, but it really has to do with more well-roundedness. And I don’t know of any school that’s offering a major in well-roundedness, but a part of that earned over time too. If you think back about what I was saying in terms of my career, where I started in the transportation function. And then it expanded to distribution and then to strategic sourcing and other areas over time, you have a much broader knowledge set. The other aspect of it that I didn’t bring up was global and supply chain, as you know, is a global sport. There’s certainly a desire to have individuals working on your team that have either experienced working in other parts of the world, or have a passion for that, because that’s an understanding, I think that’s going to be critical in the future and is critical today.
One of the reasons I think that I was more successful than I could have been is the fact that I was able to articulate some of the issues to senior management in a way that others in my field could not do because supply chain by nature is a very analytical field and for good reasons has a lot of very intelligent people that are crunching numbers and doing analytics, but may not be as good of public speakers. Being able to take complex problems and articulating them to senior management in a way that they could understand, I think was a big benefit. And that’s what I mean by well-roundedness it’s having the ability to do the deep dive analytics, but also the ability to help articulate those to different people in the organization at all different levels.
Wow. Mike, that’s like first time I’ve ever heard that question. I find that question to be very challenging because I think the only thing that I could have wanted to know is what the future was going to hold. I mean, I had no idea what direction I was heading, to be honest, early in my career, I started out with a company that I thought was a great company, and I was learning a lot and it was fun for me. And I got moved around quite a bit. So, there was always a challenge there for me. I didn’t have this long-range view of exactly where I wanted to be other than I did want to get into management consulting and get a graduate degree to help me to do that. And those things I think were essential at least in my career. What I found exciting is the fact that supply chain, which wasn’t even coined as a term until 1982 by a Booz Allen consultant out of the UK. But now is on the lips of everybody that we know in the business world. And it wasn’t the case back in 1984 when I graduated from college. But today in the year 2020, you hear supply chain in the news almost on a daily basis. What is driving that, the first catalyst was the worldwide web and the advent of the internet and other technologies that allowed companies to look at the whole, as opposed to the individual pieces or functional silos.
But the second thing that’s happened, and this has happened relatively recently is the advent of e-commerce. And business to consumer, the Amazons of the world have had an enormous influence on supply chain management, as we know it today. And that has had an enormous influence on industrial real estate and distribution centers. And, how many and where should they be and why? That’s been a pleasant surprise, something I couldn’t have planned for, but certainly has been a huge influence in what I do. And what everybody does in the supply chain world.
Well, in my case, Mike, going to graduate school was an incredible pleasure for me. And I went to undergraduate at Miami University in Ohio, which I absolutely loved and enjoyed and speak very highly of. But for me, my undergraduate experience was made up more of number two pencils and filling in squares on a big test form and turning them in. It was less about the education and more about the social. My graduate school focus was all about learning and the educational piece.
And I found the University of Chicago to be one of the premier learning environments. I was in the front row. I was in the back row at Miami University with the spit ball guns. It was fun for me and a great learning experience. Plus, I was able to learn from individuals that had such vast experiences in business that it was just a pleasure.
Well, and in my specific industry, which is the commercial real estate industry, e-commerce has been a big boom to our business in many different ways. So, number one, is that when you think about the differences between business to business, or distribution centers, fulfilling retail stores and things like that, what I’d call more traditional supply chain or business to business, the whole advent of e-commerce and business to consumer changes that dramatically. And one of the things that changes is the amount of space that you need. So, when you think about a traditional, call it a half million square foot distribution center that’s moving pallets in and out. They might employ maybe 150 people that are driving forklifts around for the most part. But if you take the same footprint, 500,000 square foot distribution center, that’s utilized for business to consumer or e-commerce related pick and pack versus pallets it requires as many as three times as many people and up to 10 times as many people in seasonal peaks to fulfill those orders, which is a good thing for the industrial real estate world, because it requires more facilities, custom built with a lot more automation to make that happen.
What we’re seeing today is a need for more and more last mile type distribution. What I think is really exciting is the whole evolution of customer service requirements. When you look at supply chain management, you’re trying to optimize your cost, but you’re balancing that out with the customer service requirements that you’re trying to meet. So, in the old days, and I’ll say 15 years ago, if you ordered something, if I were to order a shirt, and they said I would get it within seven to 10 days, I was very, very happy with that and that met my expectation. And that was true just about anything at that time. But today the expectation is you’re going to get it within two days and get it for free and, oh, by the way, you might get it next day. What we’re finding is those expectations are continuing to get more demanding. And all the studies that I’ve seen and been involved in would suggest that the dominant customer service requirement going forward is going to be next day or even same day, or even within a couple of hours if you think about online grocery. And so as those things change the need to have more facilities closer to your customer become critically important. And in order for you to be more nimble and you’ll have faster throughput, and to be able to meet those demanding customer service expectations, it’s going to mean more closer. That puts a strong growth on our industrial real estate business and changes the whole dynamics of supply chains.
Well, I think the skill set is going to become even more demanding for supply chain practitioners, needing the kind of analytical minds to assess the information and data, which has become richer and richer over the years. I specifically am thinking about predictive analytics and artificial intelligence. This is still a very young part of the supply chain business and companies that get better at it are going to be super successful. Because as you guys know, supply chain is about getting the right products and the right place at the right time. And getting that done efficiently and effectively is what makes a good company into a great company and having data and knowledge to help forecast where that demand is going to come from is what’s going to separate the winners from the losers. And artificial intelligence is something that will get better and better, and predictive analytics. And it’s my view that those skill sets are going to be critical to the most successful companies.
I would echo attracting and retaining labor to fulfill customer orders at the distribution center level is probably one of the number one priorities right now for companies and supply chain. And I would tell you that back 10, 15 years ago, that was a important consideration, but it wasn’t a number one issue. You can always find a hundred people that would be willing to drive forklifts around at a lower wage. But today the demands on these individual warehousing folks are greater. You have to get it right. You gotta do it quick. It’s not always easy. It’s very strenuous at times. I absolutely agree with you that attracting and retaining labor, which can be a big leadership issue is one of the most critical issues in supply chain today.
Read and learn and stay involved in organizations that can help you to keep track of trends. What keeps your clients up at night and those kinds of things. So, there’s no one answer to that, but I think it’s a combination of things that we’ve talked about in some parts already. Going back to get a graduate degree or going back to a three-day seminar or executive level course, reading on a daily basis, keeping up with trends in your industry and future state type issues that will have an impact on your career. I don’t think there’s a silver bullet way of doing all of that, but it’s important to be able to continue to learn and grow in your career.
Well, my advice is to first find a company, especially as a young person coming into the field that will support your efforts to learn and grow. And that could be a different, a bunch of different paths to get you there. It could be a startup that allows you to do a lot of different things and learn a lot of things more quickly, or it could be a larger corporation that might put you in a particular functional area, but will help you to grow and provide training and other things that you might not get at a smaller company, but not to try to jump too fast. I think that’s the one thing that everybody wants and I wanted in my career, I wanted to be the strategic consultant at age 23.
And the fact of the matter is that that just doesn’t happen and for good reason, and you have to be able to build a track record and learn something that you can continue to grow and build upon. And so, I would say, take things more methodically, use what you can in your particular field or career or job at the time to allow you to build upon that and to continue to grow and not to try to jump too many rungs up the ladder too quickly. I think is critically important is to think about being well-rounded and not just be an expert necessarily in your area, but to be able to understand what’s going on in other areas of the company that have an impact. And I think that’s also critically important.
I hear that all the time. Two areas of the business work across the entire business, and that’s finance and supply chain. And so being able to connect those dots and understand how systemically a supply chain stretches from the front end with your supplier base and your partners, extending through the customers and be able to understand the whole big picture. I think that’s very important.
Yeah, supply chain is a very analytical field in many respects, but it’s also a people business and, supply chain is all about collaboration between companies and between functional areas and between people. And so ultimately, that’s a big part of the puzzle piece.
