Voice of Supply Chain – May 2023
Featuring: John Hantzis
Welcome to our Voice of Supply Chain show, brought to you by ISM New Jersey and SourceDay. The purpose of our show is to tell stories of people in the supply chain doing extraordinary things. I am your host, Sarah Scudder. I oversee marketing for SourceDay, our supply chain software that prevents late supplier deliveries for manufacturers, preventing production line shutdowns. If you want more intel on what’s happening in the supply chain manufacturing world, you can connect with me on LinkedIn and follow my hashtags #ManufacturingMaven and #WomeninERP. Today, our guest is John. I have known him for a few months. He is part of a meetup group that I host and run twice a month and has been a wealth of knowledge in the logistics, freight, and transportation space. I thought he would be a really good guest as he’s been doing some really cool things in that space, and we haven’t had someone focused on logistics and getting parts and materials from point A to B before. So, John, as our typical show format, we’re going to walk through and tell your personal story and journey throughout your life and career. I’d like to start from the very beginning, going back to your childhood days. Can you share a favorite childhood memory with us?
Thank you for having me. One of my favorite memories growing up in New England was going to Hampton Beach once school was out. It was a staple in that area, and as soon as school was done, we would head to the beach, usually around Fourth of July. Schools up there didn’t get out till late June because of snow days. So, knowing that beach time was coming up and looking forward to it was one of my favorite childhood memories.
We have people joining us from all over the globe, so drop us a note in the comments and let us know where you’re joining us from. It’s lunchtime for most people, so tell us what you’re having for lunch today as well. We see someone joining us from SAP, welcome Kathy! She’s out and about today. Don’t be shy about putting a note in the comments as we talk about John’s journey. Beaches and Fourth of July, love that! What in your childhood would you say shaped you to be the person you are today?
I think most of it would be the family bonds. We had cousins all over the place, but one thing that always stood out was the bonds within the family. Everyone was willing to jump in and help each other out when needed. I’ve transferred that into my positions today, where I’m always happy to jump in and help somebody out. I help mutual connections with logistics or job interview questions, for example. Having that belief that the strength of a leader is the strength of their team and fostering a bond with the people you work with every day has shaped who I am and what I’m doing today.
So, John, we have folks from Orlando, Florida. We’ve got Tom Grossman joining us from Vegas, and Rodrigo, who followed instructions almost to a T, is joining us from Miami and is having a turkey wrap. Rodrigo, I am a vegetarian, so I’d say good on the wrap, minus the turkey whistle. A lot of Florida people on here. I’m over in the Tampa Clearwater area. So, we’ve got Andrew joining us from New Jersey. Your Tri-East Coast tribe is joining us today. John, who is the most influential person in your childhood and why?
That would be my grandmother on my dad’s side. You know, she ruled with an iron fist and was the matriarch of the family. My grandfather was a career Marine, serving in World War II, Vietnam, and Korea. So she was raising all the kids, living on military bases. But you were always fed and taken care of. However, everyone was afraid of her at the same time that they loved her. And I think that’s kind of the one thing I always saw: she would always help you out, but she was very strict in what she expected of you. There was no deviation from that. Okay, Grandma knows best. I can say the same for my mimers. She will tell you like it is, no matter who you are. And I hear about the beer time. You know, we have to slide some things around for meemer’s beer. So we gotta have happy hour at four o’clock instead of five, per her new bedtime. There you go. So, John, you have a family. What is one childhood tradition that you’ve continued with your family today, that you learned or acquired from childhood?
I think most of the traditions were about being true to your word. If you say you’re going to do something, you need to do it. I saw that from a young age with family, all the way up to my kids now. Like, if you’re gonna do something, do it. Say you’re going to do it and follow through. Don’t say you’re gonna do it and not be able to do it, because you need to be relied on. That translates into my career today. If I go and tell my boss that I’m gonna handle it, she doesn’t have to worry because every time she’s asked me to do something before, it’s been done. And I’ll provide feedback. Yes, hey, we’re circling back to this. This is completed. This is where everything stands. So there’s never that question of dependability and reliability. I think that needs to hold true a lot more today than in the past, but it’s one of the biggest things I can say, you know, to my kids.
What did you think you wanted to do after high school? High school is funny because originally, I didn’t want to be an engineer—I wanted to be an architect. So my original plan was to pursue architecture. It was one of those things I always loved—math and science. I participated in the robotics competition, which was called U.S. FIRST at the time but is now called FIRST. It fueled my passion for engineering and design. I wanted to create something that would stand the test of time, something that people would appreciate even after I was gone. Plus, in high school and college, I was just happy to find a job that paid decent money. I mean, living off ramen noodles and cafeteria food in college made me desire better things once in a while. One of the biggest motivations was making a change, making a difference that would help others.
What was the most important thing you learned in college? I would say it was showing up. In college, just like when I was at UMass Lowell over 20 years ago, and probably still today, you would fail if you didn’t attend your classes. You couldn’t just show up whenever you wanted; there was a limit of three absences, and exceeding that meant automatic failure. But by showing up consistently, it made a difference. Some things don’t come naturally to everyone, but by showing up every single day and putting in the effort, you can overcome challenges. I had a professor who emphasized the importance of showing up and giving it your all every day, especially as a freshman in engineering. If you didn’t understand something, we could circle back to it later. By showing up, it allowed me to better understand the subjects, engage with others, and make progress. It’s a mindset that still applies today—sometimes you won’t grasp everything immediately when starting a new position, but by consistently showing up and learning day by day, you gain a better understanding down the road.
So we’ve got several more folks joining us. We’ve got Wanda from Arizona. Oh, it’s probably super toasty in Arizona. I’m in Cali this weekend, and it’s pretty warm here. Eric is somebody that I met at the ISM conference when I lobby crashed last week. So hello Eric, looking tan as ever. And our dear friend Rachel, repping Northeast from New York. She had coffee and a protein bar for lunch, breakfast of champions. That’s exactly right.
So John, what did you think you were going to do after college? You were majoring in engineering. What were your plans after graduation? I mean, originally, you kind of have these scared-straight stories from people you work with during internships. So you weren’t sure if you would be stuck in a corner all the time doing work or out in the field. As an engineer, I had a good mix at the company I was with. I did desk work, but also got to apply it in the field, visiting job sites and such. I had an impression of what I wanted it to be, but sometimes engineers realize they don’t want to do it every day. It’s not a bad thing, but it’s when you’re actually doing it day in and day out that you start to question if it’s what you really wanted. It allows you to make career pivots. I find your background interesting too. You majored in engineering and followed the traditional path, starting as an engineer after college. But then you quickly pivoted to become a warehouse manager. Engineer to warehouse manager isn’t a common transition. Why the change?
It was actually a pivot to work with my father. He was involved in running a non-profit that sent educational textbooks to third-world countries. He had expertise in construction and demolition, and I had the opportunity to work with him and take on the entire warehouse operation. It was my introduction to international shipping, especially to war-torn parts of the world like Sierra Leone and Nigeria. It was a chance to work with my father, which not many people get. It was important to me, and it also aligned with my interest in logistics. Making a difference in the world was also a driving factor. I still receive cards from people who were in grade school at the time but have now graduated from colleges in the US after learning in other parts of Africa. They express their gratitude for the part I played in their education. It’s heartwarming to know that I made a difference.
So, you worked for your dad, then you dabbled in a few different things: real estate, logistics, and supply chain. And then you started your own logistics company. Tell me about that. Well, I think, you know, part of the change obviously, the multiple jobs was at that time when I had kids. So, you know, underestimating the cost of children, it was kind of doing multiple things at one time to provide. But, you know, the logistics business came as a need when I was in the biotech pharmaceutical, seeing that a lot of companies, you know, manufacturing companies work three shifts, but trucking deliveries stopped at four o’clock. You know, so all of a sudden, if somebody needed something for that second or third shift, it was going to come into the next day, so production was getting pushed. So I kind of started this niche area of if you’re open, I’m open, you know, in helping transport stuff because that would, you know, if they were open, it didn’t matter, you know, you were able to move these things 24/7, and a lot of companies really appreciated that. They could send you something at 10-11 o’clock in the afternoon and say, ‘Hey, this is going to be ready at two or three. Can you pick it up and have it here by seven o’clock, by the second or third shift starting?’ Yeah, no problem. And being able to fill that niche area, that I wasn’t competing against the big players in the mix, I was able to operate in those little niche areas. And then it was even delivering medical supplies to nursing homes. So one of the biggest parts was basically from Maine to Virginia, was delivering the medicines that all the nursing homes give to the residents. So if a resident comes back and they went to the hospital, the doctor changes their meds, all the meds that they have on that cart for that person are now no longer good. So now they needed a new set of meds, and a lot of times they needed it in two to three hours or less. And it was okay, go pick up at the big pharma, commercial-grade pharmacy and deliver to the nursing homes 24/7. Because at the same time, the way I always looked at it was, it’s somebody’s relative, it’s somebody’s family member. Like, you need to look at that delivery, that even though you may not want to get up out of bed at one o’clock in the morning when they’re calling you saying you’ve got to take a two-hour drive to the cape, but it makes a difference in someone’s livelihood day-to-day.
It was, you know, something that I was really proud of doing. You know, the biggest headache that comes from it is you’re a one-man operation. You know, there is no backup. You don’t have days off. You don’t get to take a vacation. You can’t give it a call service. It was all funneling through to my phone 24/7. So, you were a solo entrepreneur then? Yes, and then I was basically having all the independent contractors work for me that were doing the deliveries as well. So, how long did you survive with that schedule? Two, three years, you know. And it was, that’s when you’re driving 70, 80,000 miles on a car, you know, two, three states in one day was not uncommon. You know, Maine, New Hampshire, Massachusetts, Connecticut, Rhode Island. It was, you know, you had to run the gamut, but at the same time, you’re really making a difference. So, it was stressful, but I was happy to alleviate that after a while. There’s only so much you can do with that. And hopefully, you are charging a premium if you’re providing that kind of service. It was actually a flat rate, which made it much easier for the companies to do so. They knew exactly what their costs were when they were if they were going to make a request. It wasn’t, ‘Can you send me a quote?’ It was, ‘Here’s your multiplier, here’s what it is, here’s the service charge, flat rate.’ So, they knew. And a lot of the big commercial pharmaceutical companies loved that because it was a fixed cost. Every 60 or 90 days, you might revamp it, but it was a fixed cost. So, they knew if this nursing home was x amount of miles from the facility and it was this time of day, here’s the charge. So, they could easily factor that in without having, and it wasn’t an unknown when you did the billing, you know. Because when you’re dealing with independent contractors, you are paying every week. So, you couldn’t have that, ‘Oh, I’m going to pay you every two weeks, 30 days.’ It was, you were paying everybody weekly. And so, that invoice really needed to match. I just imagine a picture of you driving a U-Haul truck around here. Oh, it was. It was between the personal vehicle, cargo van, box trucks, you know, a lot of times you were renting those last minute because you were in. Some of the times you were picking up from, like, a big Cardinal Health facility and delivering to the commercial pharmacy. So, nothing’s more nerve-wracking than you got about two, three million dollars worth of pharmaceutical pills in the back bed of a truck and you’re driving down the highway.
So, what did you do next? You had your own company. You got probably no sleep for two to three years driving. You know, that’s what I transitioned to. The company, SMS, was that they did a lot of IT work. They were doing stuff just outside of the warranty. So, if you bought a new computer, you get a one- to two-year warranty. They were selling maintenance contracts that allowed them. But it was a problem that I liked to solve because in addition to that, you know, domestic, it was also an international piece. So, if a company in Spain had their hard drive go down, we had four hours or less to get them operational 24/7. So, it was really cool to be able to design or strategize where inventory needed to be based on usage, based on the products they had. So, I was really able to jump in and kind of, you know, go run with it. And it was a steep learning curve, made a lot of mistakes along the way. But, you know, it’s, you’re not making a difference if you’re not willing to take a risk, you know, in there. But dealing with, you know, countries where I was dealing with India, Spain, even in some Australia, sometimes is very difficult, you know, doing stuff in that nature because just because of the distance that they are away from certain things. But strategically locating where inventory needed to be in order to make that SLA, to help with the sales guys. And then a lot of domestic shipping, taking stuff out, what we call ‘White Glove,’ which was, you know, you have to go in and send a team of people to take out these computer systems. You had to put plywood down on the floor to not pop tiles, kind of a thing or ruin a carpet. It was a lot of, you know, interesting requests. And the good thing is a lot of these people that I work with, and I’m still very friendly with now, I’ve actually done jobs with them that even though they’re at other companies, they’ve actually done some work for me currently in Data Center relocations and so forth.
So, it’s been a great thing knowing that you have those friends and those connections that have come along the way with you, even though you may be at respectively different companies now. But having worked together and know how each other operate, it’s, you know, it’s always a great thing to either make that request or get a request saying, ‘Hey, can you help me?’ So, at SMS, your job was what, to oversee transportation and logistics? Yes, okay. From there, you went to Amazon. That’s kind of a big move, a big company, very controversial. I know. I think what, you know, a big part of what drove me there, and it’s something we see in our respective industries that a lot of companies don’t do, was unrelenting pursuit of customer satisfaction. You know, everything, one thing that anyone can, you know, good, bad, or whoever someone says about Amazon, one thing that’s always held true is their ability to do customer satisfaction, trying to make, you know, you look at years ago, you might have three-day shipping, and it went to two-day, to one-day, same-day. Everything they’ve done is re-engineered to go to that customer satisfaction, and that was one of the big reasons I went there. Now, I stepped out of my comfort zone, I became an operations manager there, and that really wasn’t, I don’t want to say it was still logistics, but not really logistics, and that’s kind of where, you know, it was. As an operations manager, you were running the entire facility. So, you would show up and you say, ‘Okay, we have to do 400,000 packages that day.’ You were creating the game plan of what each shift needed to do, where you needed the people, where, you know, and then you had some area managers that reported to you, but you would run them in two different shifts. You know, Amazon, we had some crazy hours. I used to work what was called back half, which was Wednesday to Saturday, you know, seven to seven. So, it was, it was very interesting. It was an incredible learning experience, you know, and it’s interesting to see something to go from a company that, at the time, was small compared to Amazon, and then going to this behemoth when you’re, like, you’re looking at almost a million square feet, you know, two different forms of delivery, 14, 1500 people, and the building at an average shift, and you have to be that quarterback to keep everything moving.
So, what did you do? What did you do at Amazon? What was your role there?
I was an operations manager. So, at any given time, you have an OP, you know, you have your GM or your site lead, and then the operations manager on shift was actually running the operation. You were running the day-to-day. So, when you, if you everyone coming in, you were saying, ‘Okay, you know, day shift needs to do x amount of packages. I got 400 people, I need 100 here, 50 here, 20 here.’ You were creating that game plan in order to get to that number, and then you were relying on your area managers to help push that through. And then operations managers, we work with each other to say, ‘Okay, I’m running day shift, you’re going to have night and overnight shift. I need to make sure I don’t leave you too much,’ you know, because if I failed in my shift, it made more work for the guy, you know, whoever was coming after me in the shift. And you were trying to have that constant communication to stay on target, because one little headache, you know, for instance, in New England, you get a blizzard, well then a truck can’t show up. A truck not showing up or lightning storms, the yard shut down. Anything within a certain miles of the facility is shut down. Wind over 20 miles an hour, shut down. So, the minute you missed a number, it was affecting the people that came after you. So, it was always trying to be vigilant of that. And I think that’s kind of why a lot of people lose sight of that. It gets very difficult and also where some people make the news, if you will, when doing unsafe things because they weren’t thinking about it correctly, but they were just doing what they thought was the correct move, but it made people work and, you know, potentially in unsafe conditions.
The surprising part of working at Amazon, I think, it’s just the sheer pace and volume. Like, when as a manager, if you were walking and you were looking up at the floor and you’re looking down at everyone working, just seeing how many moving parts have to happen in order to get that package out the door. Like, from the time it comes in the door, you know, many times if a truck was showing in and it was delivering a package into the facility, I would say within five hours it was leaving the—it would be getting ready to leave the facility. So, you were bringing it in, filtering it out, it would go by certain zip codes or whether it was a postal service or the next final mile delivery that you were going out to the vans. You would be able to see just the enormity of that and dealing with that day-to-day, but also just the volume. I mean, some of these centers, a million packages a day is not uncommon. So, when you just think about the sheer volume of what you have to ship day-to-day in your current job to one facility that has to handle a million packages a day or, you know, and failure is not an option. And I think that’s one of the challenges that I loved about it and loved working with the people that I had there. And that even so, I had a former intern of mine that actually went to join Amazon after I did, and now he’s doing very well up in Seattle as a project manager. What was the most important leadership lesson you learned working at Amazon? I would say it’s the accountability. You know, one of the things, one of the principles there is being right, and a lot of times in that respective position, you need to be right. So, the call that you make, if you made a wrong call, a lot of people were going to be affected. If you chose a number wrong, you ran the wrong number of people on a certain line, you missed your numbers, now everyone, the shifts coming behind us, had to do more work because we couldn’t fit the—you know, do what we needed to do. So, the accountability, but also that Amazon let you have that accountability. It wasn’t like you were being micromanaged. It was, ‘Hey, you got a job to do, do it. Yes, communicate it if it’s a problem, but other than that, just go get it done.’ And they relied on you to do that. And I think that’s where, you know, a lot of the challenges come from, and I think that a lot of people either thrive on it or burn out from it.
So, you were at Amazon. I want to say over three years, yeah. Right, I mean, that’s a long time for people that I know that work at Amazon. Three years is on the upper end, I would say. And now, you run logistics for a company called AAMP, yes. So, why did you decide to leave Amazon and tell me what you’re doing now in your current role? Yeah, in my current role, now I’m the director of logistics for AMP Global. A lot of what we do is your vehicle telematics. You know, we actually outfit most of the Amazon Vehicles. So, the cameras, the telematics that they use are ours. Also, we have different brands. So, anyone that’s a Jeep enthusiast knows the Stinger off-road brand. You know, those are the cameras that you have for the top, the pitch and roll of the vehicle, seeing outside the vehicle. Lights, radio, some of the radios we have, and the large touch screens that you see in the vehicles today are ones that we do. And I actually came here because someone that I worked with at Philips Lighting, which is now Signify, was a VP here. And, you know, basically, I had run into him, and he’s like, ‘Why are you in Florida?’ And at the time, I was like, ‘Hey, I’m helping launch centers for, you know, doing these for Amazon.’ He’s like, ‘Well, we do work for Amazon.’ And he’s like, ‘I need to talk to you.’ And Signify, one of the specialties I did was operational efficiency. So, it was reducing ocean lead time from vendors in the Asia regions, China, Hong Kong into the facilities in California, and also cost, you know, cost efficiency, contract negotiations from either the freight and vendor Ocean Air Freight all the way to, like, your UPS, FedEx, DHL. And that’s when he was like, ‘I need you. I need you to come work for me again and do what you did.’ He’s like, ‘We’re way up here.’ Like, I think when I joined, they were at, like, 70-75-day transit time and probably 19-20,000 a container. You know, I averaged all of Q4 and now into Q1 averaging 31-day transit from China to delivery to our facility in California. And then obviously, ocean rates have come down, but I’m probably fifteen-sixteen hundred dollars a container. And then obviously, you have your transport cost, but, like, all in, maybe two-three grand, which is a far difference from where they were. And I think that’s kind of where I specialize in, is those areas that not that anyone was doing something wrong, but because as they grew and had growing pains, they didn’t have the bandwidth to focus on these areas. And I think that’s where most companies don’t see a true logistics person. And I think it wasn’t until like a post-COVID scenario that real logistics supply chain people were able to come in and make a difference. Because most of the time, we weren’t having that seat at the table as far as creating efficiency. And then, because of COVID, it was those kind of stresses that come about in creating that efficiency. And I think that’s part of what I love to do, is that it’s always like a puzzle. You know, there’s always something different. There’s never the same thing twice. And it’s just, you know, at the end of the day, I try to make tomorrow better than today.
And that’s kind of what I’ve always told the, you know, the executive team here. My job is to be a bullpen, my job is to provide them with as many options as I can, and then they tell me which way they want to go, and I’ll make it happen. But my job is to provide as many options to allow the profitability of the company. So, I feel like people in your role often kind of get overlooked, and that you just make things happen, and we’re just used to getting things when we need them and not really aware of all that goes into getting something produced, getting it packaged, getting it transported, getting it through customs, and just all the different components. So, I feel like unless there’s a disaster, it’s kind of hard for people in your role to be understood and appreciated sometimes. The easiest way I sum it up is no one really knows what we do until we don’t do it, because there are so many moving parts. It’s not until something falls or something’s missed does someone even realize that, ‘Oh, this wasn’t done.’ You know, at any given time, I have probably dozens up to hundreds of shipments in transit. I have to monitor every single one of them. You know, did they clear customs or what milestone are they going to make the deadline that we have? Are we going to make the deadline for our customers? And all those rolling things come into play that no one really sees in a day-to-day. It’s only when something falls apart do they see that there’s an impact. And I think that’s where, now currently kind of in a post-COVID, many companies have realized, ‘Hey, these can be integral in creating cost savings within the supply chain.’ You know, many times, yeah, I jokingly heard it said that, ‘Innovation in supply chain is not squeezing your vendor for three or four percent.’ You know, it’s being able to work in a relationship with those vendors, knowing that you’re putting constraints on them as well. You know, in a post-COVID, they may not be able to get their raw materials as quickly as you want as a demand. So, you’re trying to work with them, and, you know, if you’re carrying inventory that you’re supplying for them all the way up to, you know, trying to offset anything for them by pre-buying a certain amount to have in the house so they can build in a faster timeline. We see that right now because we do a lot with the microchips because of the radio. So, you know, the lead times, you see some of these things can be 50 all the way up to 90 weeks on certain chips, you know.
So, your quarterly allocations are huge to the bottom line, and being able to get things efficiently where they need to be is paramount at this time. So, what does the day in the life of a director of logistics even look like? How would you explain to some of our listeners who maybe haven’t served in a role like you before, and maybe it’s something that someone’s interested in going into? I think one of the biggest things is being comfortable being uncomfortable because everything is never going to be perfect. Like I always say, logistics supply chain to me is organized chaos. There’s always going to be bumps, there’s always going to be hurdles. And if you look at it like a roller coaster ride, for us enthusiasts, I’m not trying to make this thrill ride that’s flipping you upside down. I want that kitty ride. I want the knowing there’s going to be highs and lows, but I’m going to try to minimize them. Yes, they’re going to happen, but we can rebound very quickly when that happens. And I think that, and it happens more frequently, like right now we have a shipment that all of a sudden, hey, this is on hold or this isn’t going to happen or this is coming in early. And being able to make all those pivots where you need to be and keep things going forward is crucial. But also, having somebody that knows how to do this is second. Like someone cannot just jump into this because then it’s just absolutely crazy. When I try to outline what I do every single day and what has to be done every day just to be able to get these products from A to Z, most people would not even understand the complexities that come with that. And I think, but it’s something that, as someone that likes to be a problem solver, I think that’s why a lot of people in engineering truly do well because you have that analytical mindset. You know, you have this ability to say, okay, there’s got to be some kind of methodology that I can put into play to minimize this. And for me, I’m a statistical super freak. Anyone that knows me knows that. And not to say like everyone jokes about Excel sheets and supply chain. I do have Excel sheets, but most of mine are data-driven. So, I’m going into our ERP system and I’m clicking refresh data.
I’m not creating this thing every single time I need to do it. I’m downloading a report and just hitting refresh data. There’s my dashboard. So, I am relying on Excel, but it’s driven by data from our NetSuite system, you know, that we use to provide those answers for me. But I can upload it and instantly get that update and measure. Where’s my report card? Am I doing okay? How are the shipments looking? Are there, you know, I have mine that actually color code, so for shipment milestones, whether it’s air or ocean, there’s, you know, multiple milestones. When it’s like getting to the port, port to port, customs, and then final delivery, I measure every one of those milestones, and they’re color coded on my sheet. So, if it’s not plus or minus one day, it turns a different color, and that’s where my focus needs to be. Everything that’s green, there’s no problem. Yellows and reds, we have a problem. And I think being proactive to those situations allows me to fix them before they become a problem, either for my company or customer facing. You know, that if I’m monitoring these things ahead of time, I’m fixing them before they become a problem for anyone. I don’t have to have a salesperson call their customer and say, ‘Hey, this isn’t going to be in time, we can’t make it,’ or, ‘Hey, these are stuck in customs, I’m sorry you’re going to miss your deadline.’ To me, failure is not an option, and the importance of that is now more than ever, especially in the situations that exist today. Speaking of fixing things before they become a problem, what would you say is the biggest challenge that you’ve experienced in 2023? I know you and I have chatted about this several times before, but I think it’s relevant to share with our audience today. I think most of it, a big part, is diversification within the company. So, for us, you know, we, as a lot of us have production in Chinese, you know, China plants and manufacturing, your HTS codes are up there, your tariffs are up there. So, a lot of it is having the ability to work with your team and build out, you know, can this be built in Hong Kong, Vietnam, Thailand, reducing that dependency in that area. And what it affects and what I always tell people to be mindful of is your total landed cost, which is the total cost to get that product from A to Z. And most people, and I think in bigger companies, lose sight of this because you may have a procurement team that’s in California, but your Ops teams are in New York City, and they don’t necessarily talk. So, their little picture says everything’s fine, and then they realize this thing costs an astronomical amount to get in the door because, yeah, we bought that widget at this price, but the shipping, the transit, the tariffs costs now made that product, you know, you have to raise your prices. And but being cognizant of that and working with your procurement team, your Ops, and even your sales is, you know, having that ability to pivot in there and say, ‘We can provide these options.’ But also, you know, what a lot of times is the transit times. You know, many times you have 30 or 60-day terms with the vendor, and at the tide of COVID, when you were seeing 70-plus days, you were paying for stuff that you couldn’t even sell, you know.
So, the speed to market is something that, you know, needs to really be looked at, and as you look at evaluating your supply chain. So, I’m thinking of crazy-looking charts and graphs, the bald head. How do you manage stress? Strange, but I actually love it. To me, when you love what you do so much, to me, although there is stress, I love what I do every day, and I think that’s what the big difference is. I love coming in, and I kind of joke, only say it’s like a Chicken Little movie. The sky is going to be falling to somebody, whether it’s a sales, whether it’s accounting, whether it’s procurement, someone’s gonna have a problem, and the sky is going to fall, and you need to fix it. And I think just coming in, knowing that those problems exist, and knowing that you can help that person out and make their day a little bit easier, you know, that stress to me, I kind of enjoy my day-to-day stuff. So, I understand, I have a better understanding of what’s involved. So, it’s, you have these momentary stresses, something stuck in customs, and customs is coming back saying, ‘Hey, this isn’t an FDA hold,’ and you’re gonna jump through hoops because this thing needs to be in a customer’s doors in four days. You know, those are stressful moments. You know, I deal with a lot of that now with stuff going into, say, Mexico, but it’s not uncommon. And it’s just a matter of who do I know, how many connections do I have in that industry that can help me fix that problem. And I think that’s one of the biggest things, is always learning and always having those connections. Because, and that’s why I love jumping on calls, is that you’re always learning something new. You’re always learning, you know, because things change. You know, I know a lot about, you know, a little about a lot of things, if you will. And so, one of the biggest things is always trying to learn something different. Like, I try to learn not only just procurement, but now, besides procurement, I’m trying to look at, okay, as a company that’s owned by a private equity, how do they do their financing? How do I reverse engineer agreements I make with freight vendors that are advantageous to the company, based on knowing how they want to do the payment structure? And I think having that better understanding of what happens before and after your desk is a very important part. Because I don’t want to do something that makes it easy for me but makes it very difficult for the next person. And to me, that’s not fair, and I don’t think that’s doing a proper job. So, you know, one of the biggest things I say is, you know, did I make everyone’s position easier by doing what I do? Did they have less stress on the vendor? Did the warehouse have less stress in dealing with that shipment? You know, one of the things we have with ocean shipments is we, there, it’s called floor loaded. They, you know, they pack and stuff these things to the gills. Well, when you’re dealing with the container coming in Southern California, it’s very hot in that container. It takes a while to unload it. So, one of the biggest things I did was started to have some of our shipments palletized before they got in the container. Now, one person in 20 minutes can unload that container versus two or three people for four hours in a very hot container. No, sometimes it’s inevitable you have certain things you have to do that. But in many cases, depending on how much volume I was shipping, I could have 20 piles put in that container that now one person in 15 minutes for the forklift can unload versus having to spend four people in a hot container. You know, and but I was thinking of that all the way at the origin point, not waiting for someone to say, ‘Hey, it’s kind of unfair for the guys in the warehouse.’ I’ve been there, I know what that’s like. So, I’m trying to do everything I can do to make their jobs easier, because the faster that’s in the building, the quicker it is for them to receive, and it’s the faster for them to turn around and outbound sales. That’s now triggering revenue for the company. I’m not doing them any good if I’m just stuffing this stuff in a container, making them deal with it, and then you risk boxes being damaged because, you know, you’re talking container heights. You may step on a box to get another box. You know, and those are the very things that you try to reduce, and having that understanding to making everything better for everyone in the organization.
Seems a little bit challenging, is how you track your cost savings because my guess is you are adding tremendous value to the bottom line by doing all of these things behind the scenes. But how do you actually prove and show the impact that you’re having on revenue? Oh, these are my spreadsheets, you know. My boss laughs at me because she knows I literally update my sheets weekly. So, if someone says, ‘Hey, you know what impact did you have on the organization?’ It’s like, ‘Okay, have a seat,’ you know, because I keep graphs on these things. And what I say is, you know, a lot of times if you look at say, ocean shipping right now, the container pricing dropped for everyone. So, a lot of times I say, listen, it’s, I came in at twenty thousand, we’re at three thousand. It’s not I saved you 17,000. It’s what I show is what was the cost savings between what we paid and what’s the spot market rate. And that delta between the two is what I say is the actual cost savings, because it’s being fair. If you went on a spot market right now, what would the price you pay door to door for a 40-foot container? And if that price is X and I’m paying Y, that delta is what I say is the cost savings, and I track that by every single container. One of the biggest things I did was I compared Q1 2022 to Q1 2023, and it was funny when they look at the numbers, it was drastic. You know, in the first quarter of 2022, they did 181 shipments and spent about a million dollars. In Q1 2023, we did three shipments less, it was 179 shipments, I believe, and I only spent 350,000. So, you know, the amount of shipping volume didn’t change, but my ability to be able to help connect those dots for them and say we can ocean this, you can air this, or we can do a mix, let’s air two pallets of that shipment to get no back orders in the system, keep the customer happy, and then do that mix. And then also, you know, your HTS classifications, you know, China’s stuff that you’re paying 25 percent on, reclassifying those. So, some of the stuff I successfully got from 25 to 12 or seven and a half. And if you’re talking about a particular product line that you may buy 10 million dollars worth in that year, paying 25 as a tariff versus 12 is a significant cost savings. And I’m able to track those, the dates of when certain stuff changes, also exclusions as this stuff has changed with the 301 within those things. So, all those things are you’re able to show, even on your domestic shipping, you know, your UPS parcel contracts, what you were spending before, what you’re spending now, and where you were able to save. Rating a lot of times people, if they looked at their UPS contract, like 60 pages of mind-numbing numbers and percentages. And for someone like me, I go through and highlight them.
I’ll highlight, go through there, and be like, ‘This, no, no, no, no, here, send this back to them, fix that.’ Same thing with the freight carriers. They’ll send something, they know I’m very, very detailed. Where, ‘Hey, I want this cost this is or no, but in exchange for that, they’re getting more business than they normally got.’ You know, so I’m able to work with these vendors to say, ‘Hey, there needs to be a value out on both sides.’ And, you know, we sort of had a conversation about this yesterday, that I’m providing more business for them, but at the same time, I’m understanding what they’re up against. But now they’re able to say, ‘Okay, we meet him here, we’re now going to get 10 or 15 percent more shipments from the organization based on that.’ So their actual net revenue gain from me as a customer grew, even though they may be doing a little bit less on that margin per shipment. And, but also, only the understanding that they don’t have to wait for a commercial invoice, they don’t have to wait for paperwork. It is in the day that that shipment is picked up, no questions asked. So I’m making a lot of what they would have as a time sapper from a customer go away, so that it balances out with that. But also, just in talks with them, you know, as a value add, they may come to me and say, ‘Hey, John, we’re trying to get into this customer.’ They won’t say the name, but to say, ‘They’re having a tough time getting past that gatekeeper because we think their problem is X, but they’re turning this down.’ And a lot of times I’m able to help them say, ‘Okay, you’re not going about this correctly. You’re trying to do that. Oh, we’re going to find that pain point.
Well, they have pain every single day, you know. It’s not a question of, ‘Are you going to solve their pain point?’ No, it’s going to be, ‘What do you explain how you’re different from the normalcy that they’re doing now, and what is that cost savings going to be like being going with the status quo, going with that, this is the way it’s always been done?’ That’s costing them X right now. Your problem comes in over here. You need to explain that difference, what the cost is to not make this change, what the cost is to not adapt this technology, and what it would mean to them in years 1, 3, and 5. And I think that’s kind of one of the big things that I’ve helped with the vendors that I work with. And that’s why, you know, I have them jump on calls, ‘Hey, can you jump? No, no problem.’ You know, because having an understanding now when I ask them to do something, it’s not as a crazy event ask as the customer that treats them transactional. You’re just a number. It’s ‘What have you done for me today? Here’s your number, here’s your money, go.’ You know, ‘I’m only going to call you again when I need something.’ And not having that and not treating things like that, it has allowed me to get much better relationships with these carriers to the point that, you know, I’m able to help them out. In many cases, what about an innovation or some new advancement that stands out that you think is going to have a big impact in your space? I think, you know, we talked about before with AI, I think AI is going to have a very good contributing factor because I think you can use AI to help take away what, what I would consider be a time sapper of my day, what’s menial tasks that take up time that I might be able to push off. ‘Hey, AI, generate me a bill of laden from here to here.’ That kind of generative AI down the road saves you time to be able to focus on other things. But also, having not the fear, but I don’t think it’s going to completely, you know, AI is based on data. And, you know, as we know with the mutual friend, if the data is dirty, it’s no good. And that AI is now no longer useful. But if you have the correct data set in what you’re doing, it can really make an improvement as a value add to an organization. And I think that’s what a lot of people really need to start looking at, is what is the value add versus the value detracting that.
You think you’re going to lose jobs? No, I don’t think so. I think, yes, it will replace some people, but that’s going to be a decision a company makes. But I think there’s a lot of value add to a company in doing that, but understanding it’s derived on data sets. So if there’s not a ton of data in that spot, that spot, you know, there’s not much you can really do. And I think that’s why it’s affected other areas like customer service or sales first, because there’s far more data. When you look at logistics, you have to understand this thing to it with a fine-tooth comb. And if it doesn’t quite understand those dots, it will literally tell you, ‘I don’t understand this. Can you give me more?’ You know, so it’s kind of like I have friends that will jokingly say they’re trying to stump the AI, you know, and ask it a question about logistics or supply chain that it can’t figure out. And it’s based on those data sets. I think AI is something that definitely is coming and definitely in its infancy stage. But if done correctly, I think it could be a tremendous resource for a company and for individuals. You know, if you’re able to not have to spend an hour or two a day doing something and you’re able to focus on other things, learn a new task that helps you become more valuable to your organization, you know, that’s where I think a lot of this could come into play. So we’re going to move into what I call our Spitfire round, where I’m gonna, I’m gonna say something and you’re gonna respond with the first word or phrase that comes to mind, okay? Accomplishment you are most proud of. I would say helping, helping someone. That was recent. I did a post on it. It was a career impact that someone that didn’t report to me, and I got a thank you card from that person. And I think that is something that is the most proudest for me, is that I’m able to impact a younger person’s career advancement to the point that they took the time to give me a thank you card. And that I have, you know, make that impact. Quality you admire most in yourself: problem solving. What’s your dream? Tired of Disney. Biggest pet peeve: focus and direction. What are you binging? My daughter has me re-watching Originals, Vampire Diaries, you know, some of those ones. So, it’s on those moments I’ll watch those with my daughter. Bucket list item you are going to accomplish this year: I actually just accomplished it by getting my Disney annual pass holder. It was a dream, you know, to be able to do. When I was younger, I wasn’t able to go to Disney. The first time I went to Disney was my junior year in high school for a robotics competition, and I hadn’t gone again until after having kids. So, it was a dream to be able to have that pass holder card, get that little magnet, and, you know, I pulled that trigger a couple of months ago. So, you know, that was a bucket list accomplishment for me. Well, John, thank you for being with us today. For our listeners, we will be back as always next month.