KANE’s new Chief Operating Officer is Patrick Coughlin, a 30+ year logistics industry veteran with a strong history of driving performance excellence in corporate logistics and 3PL environments. We recently sat down with Patrick to discuss the trends and opportunities he’s seeing in the market.
Q: What are the biggest changes you’ve seen in logistics lately relative to your 30+ years in the industry?
A: Speed is the biggest change. With what Amazon is doing in the market today, there’s a push to drive order-to-delivery cycle times lower and lower. That has implications across the supply chain. Another is innovation. Electric vehicles, autonomous vehicles, robotics, artificial intelligence… These are now or near-horizon capabilities that will drive massive changes. Companies that aren’t changing in step will be run over.
Q: What’s the biggest challenge you see?
A: I’d say it’s the talent shortage in our industry. With unemployment so low, competition is fierce for the best people. You need great operators and a strong bench to succeed and grow in this business. Talent recruitment and development have never been more important. It’s what takes up a good portion of my time. Talent in the supply chain industry will become a competitive advantage for those who make it a priority.
Q: Is it talent across all levels?
A: Yes, from senior managers to drivers – it’s across the board. But I would single out the middle management level – distribution center managers and their operations leads. Having talented people in these roles is vital. They are the organization’s daily face to the customer. They are the ones supervising the quality of the work. When company growth creates a need for experienced operators to take on larger roles, these facility-level managers provide a critical pipeline to fill those positions.
Q: Manufacturers and retailers are competing more and more based on their supply chains rather than product and price. Are 3PLs well-positioned to provide the competitive edge in logistics that these companies need?
A: Yes, and the best evidence of that is the 3PL industry’s continued growth. 3PL customers are seeing the value. That said, the bar has never been higher as far as expectations. Customers want cost and service improvements out of the gate, and then they expect continuous improvement year over year across all performance measures. You’ve got to prove yourself every day in this industry.
Q: What’s the opportunity for a company like KANE?
A: KANE brings a level of customer-centricity that you don’t always see in 3PL relationships. It’s one of the reasons I came here. We bring value on the strategic side, with know-how to help our customers meet their business objectives; but we are also hard-wired to sweat the details of day-to-day tactical execution – inventory accuracy, pick accuracy, on-time delivery, safety performance. This idea of sweating the details is baked into the culture here, and is hard to replicate. Ultimately, it’s the glue that sustains long-term relationships.
Q: You said that it’s hard to replicate. What do you mean?
A: Well, I think you can duplicate a service but not necessarily what’s in the hearts and minds of the people who do the work – the culture. You see that with some of the biggest 3PLs in the market. With size comes competing priorities and attention can be deflected away from operational KPIs and managing customer relationships.
Q: So, do you think it’s possible for a 3PL to be too big?
A: Let’s be clear. Growth is good. It enables companies to invest and to create stronger businesses that bring more value. But it’s important to manage that growth so that the customer remains the central focus of the organization. If you’re a 3PL with 1,200 “strategic” customers, it’s just not possible to give equal attention to all of them. So, you lose some of the customer-centricity I talked about. And customers do notice.
Q: Let’s shift the focus to omni-channel distribution. Are shippers successfully adapting their fulfillment operations to effectively support new sales channels?
A: It’s a mixed bag. There are a whole new set of challenges and companies are evolving at different paces. New requirements might include an expanded warehouse network to meet rapid Ecommerce delivery requirements, a greater ability to flex to meet huge volume surges around the holidays, a technology platform that can manage inventory across all sales channels, including fulfillment of consumer orders from store locations. But this added fulfillment complexity presents another great opportunity for 3PLs like KANE that have a national fulfillment network. Rather than build it themselves, manufacturers and retailers can tap into an existing 3PL infrastructure to ramp up faster.
Q: Do you have an operating philosophy?
A: Great question. Operating philosophy is another one of those reasons I came here: alignment of my personal philosophy and KANE’s. There are several priorities that drive our operational agenda. They include:
- Safety. Running safe operations is foundational to what we do. But safety also extends out to the consumer. KANE runs many food distribution operations, so compliance with FDA and other regulations is paramount.
- Growth. It can’t happen if you don’t have the next-generation of leaders to step up and take charge when needed.
- Innovation. If you don’t innovate, you die, plain and simple.
- Improvement. As a 3PL, if we’re not getting better continuously, we’re not earning our keep. Improvement could involve big picture type projects like a network optimization study or just a simple change to our slotting strategy to decrease travel time.
- People. If the people who do the work are not engaged and committed, nothing else works. So it’s important to bring in the right people with the right attitude, and then give them the training and support that they need. I’ve always liked this quote from football coach Marvin Lewis, “They don’t care that you know, until they know that you care.” I think that translates nicely into the logistics environment.
Q: Talk to me a little more about that quote.
A: It speaks to the relationship between leaders and front-line workers, like warehouse associates, drivers, and customer service reps. As a leader, your passion and commitment needs to be real, and it needs to be out there for all to see. If you don’t care, why should they?
Q: Any closing thoughts?
A: Many things factor into running a great operation – hiring, training, technology, safety, process discipline, innovation, continuous improvement… But In the end, it’s the job of operations to create happy customers by being excellent at day-to-day execution – the logistics equivalent of blocking and tackling, to continue the football metaphor.