DC Velocity - October 2010

I actually did that for quite a long time— 13 years’ active duty. That was a great background and training, certainly on the technology side, but more important, it taught me a lot about leadership.

After that, I applied for a fellowship at the Massachusetts Institute of Technology (MIT). It’s called the Leaders for Global Operations program. There were about 45 of us in the fellowship program. We earned dual degrees over two years. In my case, I got my M.B.A. from the Sloan School of Management as well as my master’s in civil engineering with a heavy emphasis on network optimization and design.

We hooked that solution up with an off-the-shelf Garmin receiver you can buy at Best Buy. Basically, we wrote a software program to integrate the Garmin receiver and a GPS receiver in the truck with the dynamic route optimization process. What we ended up with was a system that provides optimized delivery plans for drivers that was so simple to use that even a new driver who didn’t know the routes could follow it on the first day. He just followed the voice of the Garmin.

QTwo MIT graduate degrees in two years? Not bad. AYes. Two degrees, two years. I left here and went to Amazon.com, which had a pretty good gathering of ex-MIT-ers. They recruited some of us out of that program, so I kind of fell into the retail world by accident, if you will. I started in management operations in one of its DCs in Nevada. I then went on to corporate up in Seattle, where I worked my way up to director of operations. I was in charge of DC design and DC optimization.

QFrom there, you went over to the service provider side of logistics at DHL. What did you do there?

AI took a position in South Florida as vice president of engineering for DHL Express. That job was pretty much twofold. Primarily, I worked on improving the pickup and delivery on the “last mile” of the DHL network in the United States. At that time, we were loading and moving just under 20,000 trucks a day. One of the reasons they brought me in, I think, was to grow and improve the industrial engineering group there, which was kind of on the skids. I focused on bringing about Lean concepts and standardization to get their operations up to proper levels. It was about Leaning out the system.

The second part of the job was working with an outside software firm to develop a world-class solution using some proprietary technology to optimize the last mile of the network. The solution we came up with allowed us to re-opti-mize the route of any driver in real time throughout the delivery day.

QThat brings us to your current role at Office Depot. Could you tell us a little bit about your work there? AOffice Depot is about a $12 billion company, as measured by annual sales. We operate approximately 1,150 retail stores in the United States. We have 16 distribution centers in the United States as well as international centers in about 52 other countries, but obviously nothing close to the size of the operations in the United States.

We also have a very large direct-customer business. We call it the Business Services Division. That services customers like IBM and those kinds of folks with high purchasing volumes.

We are just now completing a DC consolidation program. We used to have two separate supply chains in the United States—we had a retail distribution network and we had the traditional DCs that fit the direct-customer business. In the last year and a half, we’ve gone from 33 buildings down to 16. We’ve put the inventory together, reduced our overhead with leases, and so on.

QHave you accomplished what you set out to do?

AActually, our service right now is probably approach- ing world-class levels. At this point, every store in the United States is receiving deliveries five days a week. Previously, it was two to three days per week. Obviously, the retail stores like that because they can put their labor on the floor selling as opposed to unloading a lot of pallets. Another nice thing is that we can now optimize our inventory in stores. We’re very close to achieving our goal of replenishing, on a daily basis, only what was consumed the day before at that store.