DC Velocity - July 2016

38 DC VELOCITY JULY 2016 www.dcvelocity.com t h ou g ht l e a de rs

Q Which accomplishment in your career are you most proud of?
AWorking with the Council of Supply Chain Management Professionals (CSCMP) and now
with APICS over the years, I have done four major
research projects looking at best practices, including the
books World Class Logistics: The Challenge of Managing
Continuous Change and 21st Century Logistics: Making
Supply Chain Integration a Reality. We were able to
work with industry to understand the practices being
used, and then we put together frameworks and guide-
lines to help firms improve their operations in a way
that reflects sound academic research. This work has
influenced a lot of students and businesspeople.

Mike Fernstrom’s experience in retail distribution stretches from the realm of hand tools to dog food. Now, you can throw omnichannel retailing into the mix as well. Fernstrom has been with Petco Animal Supplies for the past nine years. During his time at Petco, he has managed both distribution and logistics operations, giving him a unique perspective for his new role as vice president, supply chain e-commerce, systems, and engineering.

Fernstrom is also credited with being the inventor of the “picking sled,” which is a horizontal picking cart that Petco uses within its fulfillment modules to cluster pick for up to six stores at a time. Two material handling firms now market the technology commercially.

Prior to joining Petco, Fernstrom spent 10 years at Anderson Consulting, specializing in retail distribution and government systems implementations. He also worked at Sears and Orchard Supply Hardware, which was then a Sears subsidiary, where he served in logistics and distribution roles.

Fernstrom is very involved in mentoring young professionals and is active in the Warehousing Education and Research Council (WERC). He is also an avid road cyclist.

Q You have a great deal of experience managing retail supply chains. What would you say are the biggest challenges that retail distributors face?

A There are many challenges, but there are two in particular that I believe are pretty common.

First, organizations are always striving to reduce costs.
Distribution and transportation operations provide
critical services but represent a significant cost to
the organization. As leaders, we need to relentlessly
identify and pursue productivity improvements and
cost take-out opportunities that deliver year-over-year
savings driving down the costs for logistics services.
Second, the rise of e-commerce both in terms of over-
all volume and customer expectations is an enormous
challenge. Furthermore, omnichannel
initiatives—ship-to-store, ship-from-
store, same-day delivery, etc.—require
significant investment and make execu-
tion more complex.

Q Besides supervising distribution, you also have experience in transportation, e-commerce, and systems engineering. How important is it for supply chain managers today to have experience in those other disciplines and how has that helped you in your own career?

A It is critically important to have a broad range of experience in different functions. So much of what we do today requires collaboration across multiple supply chain functions in order to drive out cost and/ or improve service. For example, making changes to inventory buying practices will affect inventory costs, inbound shipping modes/cost, and DC efficiency and storage utilization. Experience across multiple functions and understanding the systems that support these functions helps you understand the relationships and gives you the skills to work with others to determine the optimal mix to arrive at the cost/service targets.

Q You have overseen the construction of several distribution operations. Which project stands out to you and why?

A I have been fortunate to work on three large-scale DC projects. The first two established DC operations within an existing building. The latest project was a greenfield, build-to-suit project. I would say the greenfield project stands out for me. There is a lot of satisfaction gained from seeing a dirt field being transformed into a working DC that services both retail and e-commerce customers and employs over 170 people. Personally, I learned about real estate and construction, which were areas new to me. I also enjoyed seeing a number of project workstream leaders really enjoy their roles and appreciate their contributions to the overall project.