What the Duck?! Episode 41 Transcript
RIDING THE WAVES: How to Deal with Global Freight Issues with Craig “Double-C” Campbell
Welcome to What the Duck?! A podcast with real experts talking about direct spend challenges and experiences. And now, here’s your host, SourceDay’s very own manufacturing Maven, Sarah Scudder. Thanks for joining me for What the Duck?! Another Supply Chain Podcast brought to you by SourceDay. I’m your host, Sarah Scudder, and this is the podcast for people working in the direct materials part of the supply chain.
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Today, I’m going to be joined by Craig Campbell. We’re going to call him Double C, and we’re going to discuss how to deal with global freight issues. If you work for a manufacturer dealing with hugely extended freight times and freight cost increases, then this episode is for you.
Craig started his career with a defense contractor in Scotland, gaining an engineering qualification, and then moved into purchasing. From there, he moved to an oil and gas materials supplier as a buyer and ultimately ended up as the head of supply chain. This resulted in his move from the UK to the US.
Welcome to the show, Craig. Thank you, Sarah. Thank you very much for having me on. Yeah, it’s a work-from-home type of day and a little bit of a tech issue day, but we made it work. We persevered. We’re still smiling, so here we are.
So, Craig, let’s go back in time and talk about the very, very early days of your career. Yeah, you actually started your career as a subcontract engineer. So, would you like to explain what this is and what you did in this role?
Okay, so yeah, you’re right when you say we’re going way back. I am struggling to remember it myself. It’s been that long. But basically, at the time, I worked for a huge defense contractor in the UK. They went through a massive transition for financial reasons, for contractual reasons. They had to outsource pretty much 75% of our manufacturing. So, in order to do that, they had to build a very strong, very resourceful supply chain purchasing department. And part of that was subcontract management.
I was a young engineer in the company at the time, and I was given the opportunity to move into this team. It basically involved contacting suppliers about both sourcing parts that were previously made in-house and also measuring suppliers, starting the road, I guess, towards supplier scorecards and supplier business reviews. So, a lot of supplier contact. And for me, at the time, it was brand new. For me, it was a fantastic introduction into dealing with external suppliers. So, that was pretty much it, background. And actually, I hadn’t heard that phrase “subcontract engineer” before.
Yeah, so you started in engineering. We’re gonna call that as kind of your starter launchpad of your career. Why the pivot from engineering to purchasing? Well, you know, a lot of times over my career, I’ve been asked, “How did you end up in purchasing?” And my usual answer is, “I’ve also done something really, really bad in a previous life.” But the actual fact is that, at that time, it was career advancement for me. It was an opportunity. It wasn’t that I had any real passion or desire for purchasing. It was just an opportunity for career advancement. And, you know, what else I joke about, you know, unfortunately ended up there. It’s cemented a fantastic career in an industry and in a part of this industry that I really truly love, and I have traveled all over the world doing it, and I’ve moved countries doing it. So, it was never a plan, but it’s funny how things work out.
Speaking of not planned, I’ve talked about this episode for the podcast because, but I actually used to do runway modeling and was planning to go into fashion, and I actually wanted to produce fashion shows. And now, here I am in direct materials procurement. Yeah, so I would have never ever thought I would ever wind up in a purchasing or procurement or supply chain capacity. So, you just never know what happens. I don’t think any of us ever planned or chose it. We just fell into it, which is one of the reasons why I like to start off our podcast kind of talking about the start and the background because almost nobody that’s come on the show has actually majored in college and supply chain and actively pursued a career. They’ve always just kind of randomly happened by chance, you know, fallen into the industry. Sure.
So, the other thing from your background, Craig, is that you really kind of have this focus on direct materials versus indirect. So, why the passion for the direct materials portion of our industry? It’s kinda similar to my previous answer in that it’s what I was involved in, it’s what I was put into. Now, after I started in that subcontract engineer position and moved on to a buyer position in the same company, I started being involved in the commercial and direct execution of supply, which was a kind of natural progression within that team. There was a very, very experienced buyer who’d dealt with all our indirect materials, and I have massive respect for anybody that deals with indirect materials because I saw day-to-day what that guy went through. He used to joke, you know, if the CEO doesn’t have toilet paper, then, you know, it’s just as bad as a line not having a casting, right?
But, but it’s just, I think the thought of being able to make sure the production continues, and also because I’ve got an engineering background and I’ve always been involved in the purchasing of engineering-type components, then I’m much more well-versed than talking to suppliers about these types of products. Yeah, I started on the indirect side and I’ve come full circle now on the direct side, and I love the direct side because it’s high visibility, high priority, and I feel like the executive team is more bought into the spend and the strategy. Versus some companies, indirect is kind of like a “well, nice to have” or “we’ll get to it later.” Yeah, some companies I’ve worked for, indirect spend doesn’t even go through the supply chain department. Yeah, I’ve seen that several times as well.
So, you were born and raised and started your career in the UK, and then you made your way over to the States. So, how did you end up in the U.S.? So, I went on from my first company to a supplier of steel products to the oil and gas completion equipment industry. It was a Scottish company, a young company at the time. I joined them when they were only 30 years old, and they were very successful. And they moved to open facilities in all the major oil and gas centers across the world. So, they had a place in Houston, a place in Singapore, Norway, Canada, Dubai. I was with them for a long period of time in Scotland, and the company was bought over by a Japanese steel company who were headquartered in Houston. And at that time, I was moving into a corporate supply chain role, and the new owners wanted to move our corporate headquarters from Glasgow to Houston. So, they actually built an extension to our Houston facility for our corporate headquarters. So, I was given the opportunity to make that move. I had a young family at the time. It was a massive decision, you know, but it turned out to be a good one. So, that’s how I ended up there. So, you and your family moved to Texas at the end of 2021 when I joined the SourceDay team, and you spent about 10 years in Texas. Yeah, so what did you do for those 10 years, and why did you decide to stay for so long?
Well, for the majority of those 10 years, I think maybe seven or eight of them, I was in that okay, the supply chain role. So, it was my job that kept me there initially. When I moved on to that, I moved on to another couple of supply chain roles in the area. But by that time, my kids had gone through high school and moved on to college. It turned out to be a really massive upheaval moving them from Scotland to the US, and we wanted to keep stability in their lives, you know, having already made that one major move. It was important to keep a stable situation for them.
But that’s one part of it. The other part of it is actually, I love Texas. I just do. I mean, the people of Texas and the state of Texas are very similar to the people of Scotland and the country of Scotland. So, you know, I mean, other than the weather and, you know, all the other things, but culturally, it was a great place to be, and I still love Texas. Obsessed with it here, and I think it’s the nicest people I’ve ever met anywhere I’ve been are in Texas. And my second observation is everyone here has a dog.
Yes, I might be the only petless person that I know. Oh, you have to have a dog? No dogs. I’m a neat freak. I don’t like hair. Okay, but I moved into corporate housing when I started, and I swear I had never seen so many people out and about with dogs. Yeah, we actually moved our dog from Scotland to Texas. Wow, that was the most expensive part of the move, meaning like a special, I guess, crate and transportation. Yeah, that would have been three business tickets’ worth in terms of cost. Wow, part of the family, absolutely.
So, as we’re talking about your career progression, it sounds like the next move is you worked for a nuclear valve manufacturer, right? So, tell me a little bit about this role and what did you learn that you’ve been able to take with you in future positions?
Okay, so that was when I left Texas and moved to North Carolina. By that time, both my kids were in college, and I was looking for new opportunities, and they didn’t necessarily have to be in the Houston area. An opportunity for a supply chain manager came up with this company, and it was a great opportunity, and I decided to make another move.
The issues with this company are very much a very much engineered-to-order facility, so no two valves are the same. They’re all very old design, and the nuclear industry has got, as you would imagine, incredibly stringent certification rules and a very narrow supply base because there are very few qualified suppliers to make the components.
And I know we’re going to move on to further in the podcast, but it was here when we were going through the core with issues, and we were experiencing the three issues. So, they had an MRP system, they had planning, but pretty much everything was done, as you used to say in Scotland, on the back of a cigarette packet, as opposed to using a system. It makes me cringe because I think of Post-it notes all over the wall, all over the computer. Exactly, it was very much like that.
So, the one thing I learned there is you have to be adaptable, right? Every single supply chain, purchasing, procurement, whatever you want to call it, problem is similar to one that you’ve experienced in the past, regardless of what the end-user is, regardless of what the industry is, regardless of what certification is. I find that you need to be able to have strong relationships with your vendors. You need to have stronger relationships with your internal customers: engineers, quality, manufacturing people. And so, yeah, I mean, like, I guess what I learned most from that job was just the adaptability requirements of a supply chain professional is one of the biggest assets you could possibly have, being very good at managing stress, very much so. Yes, absolutely.
So, you mentioned they had an MRP. Does this mean they did not have an ERP system in place?
And yes, yes, it does. I have interacted with more people than I can imagine that are on QuickBooks, yeah, or using Excel spreadsheets to run a multi-million dollar business. Well, yes, and I could talk about that, but we don’t have enough time on this podcast. Let me just say that one of my biggest skills is Excel. Ridiculously well-versed in Excel. You’re an Excel master, and not because I wanted to be, because I had to be.
So, you have pivoted in your career now, and you’re doing something a little bit different in that you are actually a contractor, yes. So, talk to me about what you’re doing now, and I would love to hear your thoughts on what it’s like being a contractor.
Sure, so I’m working as a contract buyer for a manufacturer of pharmaceutical equipment in Durham, North Carolina. It’s kind of, as far as a job goes, the actual job itself goes, it’s kind of going back to more tactical buying and certainly has a much more stable demand profile, a much better systems, easier to plan, all that kind of stuff. And as far as being a contractor is concerned, it’s new to me. I’ve never done it in my entire career. Every time I’ve worked for a company, I’ve been very invested in the company that I’ve worked for. I’ve always had a passion for the companies I’ve worked for. I think that’s important to be successful. So, it’s slightly different. Having said that, it doesn’t change my mindset in terms of wanting to be successful for the company I’m working for, even though I’m there as a contractor. It just adds a little bit of lack of stability into the mindset. However, I’m glad I’m doing it, and I’m very happy with the situation. It’s just because it’s new for me, I’m a little bit… I’m kind of learning as I go. But overall, I would say it doesn’t change a single thing about how they go about my day-to-day work. It doesn’t, you know? Yeah, I have a lot of friends who are contractors, and some have their own business, and I think the hardest part for them is the sales and marketing piece, which you don’t have to worry about because, absolutely, you don’t have your own business. So yeah, it makes that piece a little bit easier. Sure, yeah.
So, Craig, when we were prepping for the show, you had mentioned that the biggest problem by far that you encountered over the past couple of years has been global freight, yes. So, I want to dive into this. I think this is really relevant and important to a lot of our listeners who are working for small and mid-sized manufacturers who are still struggling with this. So, let’s start with why was this problem so unexpected? Why did it kind of come out of nowhere for you?
Okay, so I wouldn’t say that it was unexpected, the problem itself. What I would say is that the extent of the problem was unexpected, you know? Like when COVID initially hit, it wasn’t just freight, it was a problem that was there were worldwide supply chain problems, lots to do with staff not being able to get to work and creating shortages of materials. But with freight, it was a combination of staff problems at ports, lack of people that could run container ships, lack of global air freight because a lot of air freight is done on commercial flights and the number of commercial flights was a fraction of what it had been prior to that. So, the surprise wasn’t so much that it was a problem, it was how big a problem it became. So, for example, we saw our freight times or sea freight times from Asia and Europe move from what had always been typically four to six weeks to 16 to 18 weeks, which is impossible to react, which is unimaginable. If you were to tell me that five years ago, five years ago, I would say, “Absolutely never, no way.” Exactly. That’s just incredible. It was incredible. I mean, it was initially, you couldn’t react to it because you hadn’t planned for it. So, that was the biggest surprise for me, was the extent of the change in lead time.
Freight problems, owner, you already talked about the extended lead times, but there were a lot of other things that came up as well. Yeah, can I touched on it there? So, what did you try to do to react to the sea freight times? Well, obviously, as all supply chain professionals do, you need to fly it, and then you couldn’t do that either, and then it was cost. The cost was through the roof, you know? Like, even if you could secure freight, it was doubling and tripling, and these are items that are already on order for fixed-price manufacturing contracts. So, there’s not really an opportunity to recover these costs. It’s all coming off the bottom line. So, yeah, I mean, it was crazy. I would say, and hopefully your listeners will say the same thing, it’s improved drastically over the last year, maybe plus, certainly the last six months. I’m not seeing the same issues that we had back then, but being able to react to it was the biggest problem, finding it, you know, trying to understand what you could actually do about it. And as a direct material supply chain professional, I find that you take it personally when you can’t support the business, you know? And even when it’s an issue like that, it’s completely out of your control, you still feel personally responsible for it.
So, what did you do? Well, what we, the only thing we really could do, and again it came back to planning, if we know it’s going to take 16 weeks to ship something, you can add 16 weeks to the lead time of the part in your system. Data accuracy is huge. We had to make sure that our parts lead times are extended so that our MRP signals were hitting us earlier, and that was a little bit more of a kind of going forward issue rather than fixing the current problems, but we did that. You have to. You have to. We had to do that. We had to react. So, yeah, I mean just extending lead times on parts in our system so that we get our buy signals earlier. And the other thing was planning from a planning perspective, trying to plan for container loads, you know, trying to consolidate requirements from certain parts of the world to ensure that when we did have something to ship, we were taking up the most economical method of doing it given the increased costs. We would also add the other wrench in the planning mix was your data was no longer relevant. Absolutely. So, what you used to be looking at from your MRP or ERP and making strategic decisions, you almost couldn’t even go off historical data, and it was hard to predict the future because of COVID and the unknown buying behaviors. Yeah, and I mean, like, yeah, and it’s easy to see, just add 10 weeks lead time to a part to get a buy signal earlier. When you’re in the middle of it, if you get that buy signal three months ago, no, there’s not much you can do about that. But gradually over time, if you take the time to plan like that, you eventually can make some sort of inroads into the problem.
So, what advice for our listeners who are still struggling with global freight right now? You mentioned a positive, which is always awesome to hear when things improve. Things have gotten pretty well. I mean, nothing’s perfect, but significantly better, I would say, over the last few months. But what about people who still are having challenges? Any words of wisdom that you can share? Well, yeah, I touched on it in my previous answer. Definitely ensure that your planning lead times are currently and have knowledge, have a total understanding of what your current freight times are. Avoid the early like the plague if you can. Partner with good logistics companies. There’s nothing more important than that, and that’s something that we found very valuable when we were going through that, making sure we had good relationships with the companies that we deal with in the logistics side to make sure that we were getting the best opportunities, the best situation in a bad situation, if you like. So, partnerships with excellent logistics companies is invaluable when it comes to handling these sort of issues. But overall, certainly planning is a big part of it. And as you see, the positive is that it’s nowhere near like the situation it was a couple of years ago, but you know, we never know what’s around the corner. It could go back to that. So, just data is a big part of it, making sure that if you have a good partner, a good logistics partner, that they constantly keep you up to date. We used to get weekly updates on shipping times, container capacity, air freight capacity. Data, data, data. I mean, it’s boring, but it’s important.
So, what learnings do you want to share with our audience from your career? You’ve been in the industry a long time. I’ve worked at several global companies, a lot in manufacturing and in the direct material space.
Overall, when dealing with suppliers, I would see relationships as number one. Building relationships. Partnerships. When I first started in purchasing, there were some old school people that were banging the table types. They loved to get on the phone and just scream down the phone at suppliers. So, it doesn’t work anymore. It’s not… It doesn’t work like that. I’ve worked in situations where suppliers I’m dealing with, our business to them is like 0.01 percent of our total output. And then the flip side of that, I’ve worked with suppliers where our business today is like 80 percent of their entire output. Both of them are polar opposites in terms of supply dynamics, but both are equally important. And the only way to handle them is relationships. I do not like dealing with either, if I’m honest. And honestly, I prefer the former rather than the latter. I don’t think any vendor should be very, you know, dependent on one company’s business. And I used to tell these suppliers that, but if it’s good business, they’re going to want to keep it. But just relationships. I went through some very, very, very complex supply situations when I was working in oil and gas. In the oil and gas industry, OCTG is king. The steel mills of supply. Oil country tubular goods. Generate that stuff day in and day out. Miles of it. And we were buying a fraction of that from the same companies. If we didn’t have relationships with these companies, we wouldn’t have been able to get supply. So, relationships are key. I think suppliers are your most important stakeholder. And if they’re not, they should be. Absolutely 100 percent. I often say that it’s like, you know, you’ve got a plant manager in the facility, but your job is to be like a plant manager of 20 facilities. Yeah, that’s a good one. It’s a good example.
What about a success that you’d like to share from your career? And, oh, I think there’s been a lot. There have been a lot of successes. I think, yeah, I’ve had a lot of fantastic negotiations over the years for big contracts, made very significant savings, particularly when I was working in the oil and gas industry. Like the oil and gas industry, for any of your listeners that are involved and will know, this is very volatile. It’s a boom and bust. And when it’s booming, everything… You can’t get anything quick enough, and money isn’t an object. Get it here, get it here, get it here. And then when it goes to bust, it happens overnight. You have to stop everything just like that. And it’s like trying to turn an ocean liner on a dime. It’s just impossible.
So, I had a lot of success managing inventory levels to a certain area when we were going through the downturns. I think most of my successes in my career have been when the business has been on the downside, and again, that comes back to having relationships with the suppliers that will work with you. I’m very proud to say that despite all the down times I’ve seen, I’ve never ever actually had to cancel a purchase order. But I have never, ever in your entire career, have you had to cancel an order? Never? You might be the first person I’ve met that’s been able to say that. I’ve never canceled an order. I’ve had suppliers who work with me and held onto the inventory sometimes for over a year, but I’ve committed to if they do that for me, I will take the material eventually because I knew that we would eventually need it. I feel like this should be the highlight on your LinkedIn profile. Yeah, tell you what, you would stand out.
Well, thank you for discussing how to deal with global freight issues with me today, Craig. Where would you like to send people to find you? You can find me on LinkedIn, Craig Campbell. I’m also on Twitter, so you can search and find me on there. And my personal email is email@example.com.
If you missed anything, you can check out the show notes. You can find us by typing in “What the Duck?! Another Supply Chain Podcast” in Google. To have optimal search results, make sure to add “Another Supply Chain Podcast” in your search to ensure you don’t miss a single episode. Make sure to follow this podcast and subscribe to us on YouTube. I’m at Sarah Scudder on LinkedIn and @SScudder on Twitter. This brings us to the end of another episode of “What the Duck?! Another Supply Chain Podcast.” I’m your host, Sarah Scudder, and we’ll be back next week. Thank you.