As associate director of distribution in corporate transportation, I am involved in all aspects of transportation for the corporation, including inbound, between the facilities, and outbound to our customers. Transportation has ramifications on production planning, purchasing, manufacturing, marketing, and financial and inventory carrying costs, and it involves legal and financial issues because of contractual agreements.
My basic report card does not just reflect cost savings, but it has to be balanced between cost savings and service. I can be a hero today and negotiate very low rates, but if I can't move the product when the customer wants it, I'm the goat!
I am responsible for planning the transportation cost and service requirements of the company. Also, I am responsible for building the budgets (the financial part), as well as for compliance with transportation and customs regulations. In total, I am responsible for the planning and control of $15 million worth of expenses. In addition to supporting the rest of the organization, I get involved with pricing, strategic planning with regard to network analysis, and those kinds of things. I look at my job as having five major functions: planning, controlling current costs, reducing future costs, service, and continuing to build functional capability.
I'm responsible for the transportation budget for the whole corporation. Every marketing function is then assigned a portion of that budget. We monitor the performance in those functional areas. They're held to their individual budgets, and I'm held to the aggregate budget, so I'm influenced by everything that takes place with regard to inventory, shortages, or alternate shipping. Whatever a division does affects the bottom line. I'm held accountable for that bottom line and for determining why we were either favorable or unfavorable and what can be done to correct it. I don't want to be unfavorable, and at the same time it's no good if I'm too favorable. So I'm continually looking for opportunities to leverage our freight expenditures as a percentage of net sales.
We do things that have impact on a day-to-day basis. We run an extensive private truck fleet, so we're continually looking for ways to improve their performance. At the same time, we want to maintain the customer service levels based on our programs and the type of customers we're servicing. We are heavily involved with contract rates with carriers. My office is where we review and develop the contracts, so we spend a lot of time with the legal department to get the best contract for the corporation.
We go in and determine the specific needs of the customer as far as transportation is concerned, and then we work up a plan to meet those needs, either by developing specific rates the customer can afford or by developing specific services the customer needs to maintain his or her business.
One of my roles is to expand our visibility by opening terminals in qualified market areas, staffing those terminals, and guiding the terminal manager to generate revenue to pay the employees, the overhead, and a reasonable profit. I'm a profit-oriented person, always have been. My immediate role is to make money for the company.
Question - How do you spend an average day?
Answer - I spend a lot of time in meetings on different programs in different areas in the company. I'm constantly evaluating what the various functions need and how they can set priorities for what needs to be done immediately. In looking for new opportunities to leverage our expenses, I frequently meet with people from private corporations and with various carriers. When I'm involved in a major contract negotiation, I meet with executives from several companies all the way down to basic salespeople. I spend 25 percent or more of my time traveling, which consists of going to our office facilities, our warehouse facilities, and our plants; meeting with carriers going out to negotiations or leasing companies; attending conferences and seminars; and meeting with our major customers.
I can give you an idea of what I have right now on my "things-to-do" list: (1). Contact various carriers to negotiate LTL (less-than-truck-load loading commodity rates for a particular plant. (2) Handle an XYZ airfreight claim. It seems we're having a problem on a claim. You see, on this one I'll be dealing with marketing and with XYZ airfreight. (3) Do a plant distribution survey. We are surveying our plants to see if we could possibly do more with piggyback operations. (4) Train local personnel on custom papers. (5) Write a letter to one of our larger customers detailing a changeover from truck to rail. These are my actual duties.
This morning I'll also be working on my production schedule. There have been some major rate increases, and I want to take a look at them as far as negotiations are concerned. I'm going to a luncheon today for the ABC Trucking Association. This afternoon I'll be working on fiscal budget responsibility, and probably, if I have time, I'll be working on analyzing the quarterly inventory turn.
