At Supply Chain Game Changer we believe in sharing experiences and expertise from people in every industry and from across the globe. As such we are introducing a new “Leadership in Action” Interview series at Supply Chain Game Changer.
To introduce our Interview series we are starting with Skip Boothby, a colleague and good friend for many years. Skip is a tremendous Leader and Executive with phenomenal experience in running businesses and operations through every stage of their evolution. Skip’s background and insights are valuable for all of us to learn from and share.
Today Skip has a consulting and board advisory practice specializing in multi-party supply chain orchestration and digital transformation. After a career as CEO, COO, President and Division Head of leading supply chain, manufacturing support, and after-market service organizations, he helps companies assess what they have, determine what they need, and decide what to do.
Recent projects include the digital transformation of a worldwide service and repair parts program; enabling an OEM’s end-to-end supply chain visibility of outsourced manufacturers, assemblers, distribution hubs and 3PL’s; and forming a B2B business development capability for a successful B2C eCommerce company.
He works from Boston and Palm Beach, and be reached at email@example.com.
Here is our interview with Skip Boothby:
Tell our readers a little about your background and experience?
Thanks Mike, for asking. I’d have to say I’ve been blessed with several gratifying career experiences. I’ve worked in different industries, different roles, public and private, large and small companies. This combination of experiences has been immensely invaluable.
My start in supply chain was a bit unknowing at the time. I was a young general manager in a publishing company with responsibility for educational kits. These classroom kits contained 100’s of components, mostly printed matter, but also contained components like chalkboards from Portugal, plush toys from China, etc.
Some parts were manufactured internally and most others were sourced around the world. The challenge then, as now, was to bring together the right items, in the right quantity at the right time and assemble into finished goods to meet a product launch date. MRP software wasn’t as well developed then as it is today, and the best we could do was find something that would let us create and manage multi-level indented bills-of-material and kitting work orders.
Trade customs were different then too. Vendors would only agree to deliver an ordered quantity within a broad over/under tolerance, often referred to as “commercial quantities” otherwise one would have to pay a premium to have a “no less than” or “no more than” quantity. Ordering and receiving exact counts was unheard of.
We had a big break into the world of high tech when IBM selected us as one of its two suppliers to replicate and package its personal computer software. Being a publisher and commercial printer we loved this, as you will recall software always included lots of user guides and manuals – a real boon to printing companies!
In order to be one of their vendors IBM wouldn’t accept the commercial terms of the times. They challenged us to be much better than we were. We learned we could meet their requirements, and not only for them, but for ourselves and our other customers. They raised the bar for our entire company and we were better for it.
So, I have a lot to thank IBM for that experience because it showed me not to be complacent with the status quo. I also learned that top-down management buy-in is a must for cultural change. We had to convince our CEO of what was needed to meet IBM’s expectations, otherwise it wouldn’t have happened. He supported us and our relationship with IBM lasted ten very profitable years.
Moving on, I joined a privately held printing company in Austin, Texas. The hardware and software markets were booming and we wanted a piece of it. IBM and Dell were the big dogs in town and we became suppliers to them both. But, what we experienced was the constant pressure on cost take-out to earn and keep our place in line.
The problem was the pressure to meet an arbitrary cost reduction target, especially when our contribution was infinitesimal in the total cost of the product. It was a killer for us to meet the cost reduction target which had little effect on their total bill-of-material. It became clear we needed to control a larger share of their product costs, whether we made it or not.
This drove our decision to enter into sourcing services, vendor management and supplier owned inventories. Whether we made it or bought it, if we controlled it, we could better manage the costs – while becoming all the more important to our customer. Our revenues went from $32 million to $105 million that year.
Since then, I’ve had the good fortune to experience various roles of increasing responsibility in sales, operations, general management and executive management. I’ve been a CEO, COO or President four times of businesses from $13 million to $1 billion. Today I’m a board advisor and management consultant.
What are some of your greatest achievements in the Supply Chain and in Business?
My proudest accomplishment was leading and growing a small sixty-million-dollar mailing and fulfillment subsidiary of a bigger public company into becoming a billion-dollar supply chain services company.
It was a lot of hard work and fun. We felt we were pushing the envelope then by offering forward supply chain services along with reverse logistics and after-market services under one umbrella. Our customers were the who’s who of high tech and very demanding. I knew if we could make them happy we would become world-class and we did.
I feel especially gratified that many of my then first line direct reports have gone on to very successful careers from this early experience.
Another accomplishment was in the past ten years getting some of the larger electronics contract manufacturers to realize their service organizations could be more than the “shipping department” and become profit centers.
If you’re making someone’s product for them, why not offer service and support for it too? At one multi-billion-dollar company, we generated 4% of company revenue but 8% of its EBIT.
How has the Supply Chain changed over the course of your career?
It’s become much more sophisticated. When I started, we operated under a “build-to-stock” methodology which created considerable excess and obsolete inventory exposure because forecasts couldn’t accurately predict demand. Then it became “build-to-plan, assemble and finish to order,” which was a step in the right direction. This “closer to the customer” philosophy is a big driver still today.
When I was building up our eventual billion-dollar supply chain services company, our business had grown in its second year to $175 million from $63 million and we were throwing off considerable free cash-flow, $22 million in fact. So, the board pretty much let me do what I wanted and I invested in an Oracle ERP system, a JD Edwards advanced planning system and a state-of-the-art WMS system from Manhattan Associates – bolting them all together.
It was 1999 and I spent $6 million on the project. What we learned was that investment in our core competency was more than the amount our customers typically invested in their comparable systems. We had a better IT capability than most of our customers! We also made the big decision to go single instance – do everything the same way wherever we operated.
This was a boon to our business as many of our customers were growing internationally and we followed them around the globe. Our IT systems and operating practices were the same in every site (save some localization) making it easy for our customers to do business with us. Over the next two years we grew from $175 million to $448 million.
We also were eager to adopt and offer new concepts, at least for us, to our customers, such as merge-in-transit, hourly line-side component deliveries to factory floors, and pay-on-consumption.
Today, it’s more complex. With focus on faster time-to-market, reducing the total cost of ownership, the circular economy, sku proliferation, multi-party outsourcing, omni-channel sales, and countless other factors – it requires more sophisticated systems to perform.
What are some of the lessons you learned in your career that you would like to share for others to learn from?
1. Your Customers will tell you what you need to do.
I’ve spent too much time on comprehensive strategic planning for my boards of directors, only to realize that if you deliver on your promises to your customers, they will reward you. They will tell you exactly what they need, where and when they need it.
If you can tap into that, then you will succeed and your business will grow. It’s easier to grow your business with an existing customer than to attract a new one. After all, existing customers will prefer to do business with someone they know and trust, and they want you to win along with them.
2. Don’t overthink things – take action early.
There’s an adage that goes something like “The race goes to the swiftest.” I’ve come to believe through experience that taking action is best even with incomplete information, especially if you have the right customer or supplier partner. Because you both will go through the same experience together, it’s better to get things done, even with mistakes, then to delay.
Conversely, if you keep taking the time to engineer out the risk, so too do you reduce the window of opportunity. So, take action, not every decision you make will be right, but most will be.
3. Communicate, communicate, communicate.
Everybody in the company needs to know the vision. Seems a bit clichéd, but when everyone is on the same page, amazing things happen.
4. Be absolutely clear on roles and responsibilities.
So many times, I’ve seen where people are unsure of their roles, where they fit and what’s expected of them. I’ve been in personnel reviews and career discussions where the individual just isn’t making it or contributing in the way they should, yet the company hadn’t been clear on what was expected from them.
Make it clear!
5. With new Customers, manage expectations from the start.
It’s easy to overlook or gloss over details, but take the time and effort to get “level set” so each party knows and understands the deal. There should be no questions about what is to happen, how, when, where and with whom.
Problems always come from mis-matched expectations.
6. Have the courage of your convictions.
Even if unpopular or going against the consensus, if you believe in something, pursue it. There’s always a way to get things done. And by that, I mean with integrity and ethically.
Never take “no” as the final answer.
What challenges facing the world are important to you?
If I can use a cliché, the world is becoming smaller. It’s also more demanding – which says to me “opportunity.” The role of supply change management and logistics is becoming more important to everyone.
The “Amazon effect”, social media interaction, globalization and continuously higher expectations influence our industry as never before.
I find it an exciting time for us and for those contemplating a career in supply change management.
What is the role of Supply Chain and Change Leadership in addressing these challenges?
There are some very interesting happenings affecting our industry where we can make a difference. A big one is the transformation from traditional supply chains to digital supply chains.
An essential element of this transformation is the adoption of blockchain. Blockchain defined, is a single version of the truth made possible by an indisputable, distributed and secure time-stamped ledger, copies of which are held by multiple parties.
Understanding how blockchain works, is used, and implemented will be a major opportunity for our industry.
What are you working on these days?
I’ve recently become a board advisor to an exciting software company that provides supply chain orchestration. They offer a cloud based software-as-a-service platform linking multiple parties through a control tower with broad visibility.
I also like it because it works with scattered and disparate systems, is affordable and can be brought up quickly, offering considerable value.
How can people contact you?
Please feel free to email me, Skip Boothby, at firstname.lastname@example.org
Please see our other blog posts at https://supplychaingamechanger.com.