Drew Wilkerson, CEO, RXO

Drew Wilkerson graduated from college with no specific job in mind. But he knew how he hoped to spend his career. “I wanted to work with people and have the ability to create solutions and build strong relationships,” he says.

At the suggestion of a friend who worked there, Wilkerson visited third-party logistics company C.H. Robinson. “I spent a day with the teams, and I was hooked,” he says.

From a series of positions at Robinson, Wilkerson moved on to XPO Logistics, eventually rising to the role of president, North American transportation. In 2022, XPO spun off its technology-enabled brokerage business to form RXO, based in Charlotte, North Carolina. It chose Wilkerson to lead the new company.

We talked with Wilkerson about his rise to the CEO’s office and his current focus at RXO.

IL: Since the formation of RXO, what have been your top initiatives?

We want to take market share. To do that, we have to focus on giving customers great service from Point A to Point B , with good communication throughout the life cycle of an order. We have to create solutions for them, using our technology and data to run their transportation networks more efficiently. There has to be innovation.

And we need to have really good relationships with our customers. Our top customers have been with us for 16 years on average. They don’t just come back and renew the business we’ve done with them the previous years. In most cases, they reward us with more freight, because of the service and solution innovations we’ve brought them.

IL: What’s an unusual challenge you took on for a customer?

In 2021, the ports—especially on the West Coast—were so backed up, they sometimes had more than 100 ships waiting to get in. Obviously, that delayed our customers’ inbound shipments. So as soon as their product hit the port, we sent drayage trucks to pick up the freight and take it to our facility, where we transloaded it.

From there, we gave our customers options, based on what worked best for their networks—LTL shipments, truckload, intermodal. Were they looking to get products to consumers as fast as possible? Were they looking for the best price? By providing options, we helped our customers keep their supply chains moving during one of the toughest times I’ve seen in my career.

IL: What new and interesting projects are you working on?

We were early adopters of technology in transportation. Today, one important set of questions for us is how do we integrate our technology with everyone it touches? How do we give our customers a more efficient experience? How do we make our technology easy for the carriers we partner with, so they can negotiate prices, book loads, and manage their entire businesses from their phones?

We also want our technology to help our employees accomplish more every day. On a rolling 12-month basis, our employee productivity—the number of loads per head per day—is up by 18% year over year. That’s largely because our technology has reduced the number of keystrokes and clicks employees have to make, so they can focus on building relationships with customers and providing solutions.

IL: Which emerging technologies have exciting implications for RXO and its customers?

We’ve been using artificial intelligence and machine learning for a decade. It helps us move faster from a pricing perspective, and it has allowed us to attain some of the strongest margins in the industry with regard to how we procure transportation. For the future, generative AI offers opportunity for back-office functions and even for customer-facing activities.

IL: How would you describe your leadership style?

I’m very transparent and open. You do not need an appointment or scheduled meeting to stop into my office to talk about yourself, your career, or ways to improve the company.

I’m also customer-focused. I spend a lot of time with our customers and care about them deeply. My job is to make them look good within their organizations.

Finally, as a leader, I focus on surrounding myself with and retaining talented individuals. Many people on our leadership team had already been with us for 10 years or longer before the spinoff.

IL: How do you give criticism or correction when that’s required?

If you have good relationships with people, the best approach is to be direct. When people know that you’re invested in their future and the critique comes out of a good place, they’re generally receptive. Often, I talk about the “why” behind the criticism, what the impact can be for them if they consider doing something in a different way.

IL: What’s the hardest aspect of your job?

For a leader, the most difficult thing is making sure you choose the right people to surround yourself with. Coming into the spinoff of RXO, the most challenging part of my job was filling some positions with people who did not come over from XPO. Fortunately, the people we chose fit in well and have made us a better organization.

IL: Among today’s active leaders, whose brain would you like to pick?

I’d love to talk to Elon Musk, who is innovative and not scared to take on big challenges. I’d pick his brain on how he builds organizations and where he thinks technology can disrupt, or allow business to grow at a faster rate in the future.

IL: Outside of work, how do you like to spend your time?

I love spending time with my family. My wife and I grew up in the same small town in South Carolina and have been together since I was 16. We have two beautiful girls, ages 14 and 11. If I can spend time with them watching South Carolina football, basketball, or baseball, that’s even better.

From Imperfection Comes Strength

Early in Drew Wilkerson’s tenure at C.H. Robinson, a customer turned up with a complaint. “We had created some service issues,” Wilkerson says. Such difficulties may damage the partnership between a shipper and a 3PL. But that’s not what happened.

“One of my mentors at the time used those challenges as an opportunity to create a stronger relationship with the customer,” Wilkerson says. “He didn’t back away from the tough problem. He leaned into it.”

The customer was so impressed by how the service provider worked to arrive at a solution, the shipper ended up giving C.H. Robinson more business. “And there was more trust in the relationship,” he says.

That incident delivered an important lesson: “When things don’t go perfectly, that’s an opportunity to improve the business and create stronger relationships.”

THE CUSTOMER

On is an athletic footwear, apparel, and accessories company headquartered in Zurich, Switzerland. Founded in 2010, the high-performance sportswear brand has fast become a global entity with 52 branded stores and 10,000 dealers in more than 60 countries. Its workforce includes more than 2,800 individuals.

THE PROVIDER

Verity, headquartered in Zurich, Switzerland with offices in Chapel Hill, North Carolina, is a developer of autonomous indoor drone systems. Founded in 2014, this pioneering AI and robotics company currently delivers AI-powered mobile intelligence in 13 countries and counts 160 employees within its ranks.

The company is on a fast course. In a bid to optimize inventory management and ultimately enhance supply chain efficiency and precision, On recently joined forces with Verity, an AI and robotics company, to deploy fully autonomous drones in its warehouses.

On’s phenomenal growth shows no signs of slowing down. In 2023, the company recorded revenue of 1.8 billion Swiss Francs ($2 billion), a 55% increase that significantly exceeded expectations set at the beginning of the year. As sales racked up, On researched methods to improve supply chain execution and meet demand.

“We needed a solution for automatic inventory tracking that could help us boost productivity, minimize stock accuracy issues, and prevent loss of goods,” explains Erinda Lala, an On senior warehouse technologies specialist.

On was also looking for a solution that was easy and quick to implement, with low installation costs and flexibility to accommodate its ongoing growth. Open to embracing every technological advancement, On soon forged a partnership with Verity, an AI and robotics company.

Since On and Verity are both headquartered in Zurich, Switzerland, and their offices lie in close proximity to one another, it was natural for the two companies to become acquainted. Verity’s reputation and expertise in AI and robotics impressed the sportswear brand.

INITIAL TAKEOFF

In February 2024, the two companies embarked on a project whereby fleets of Verity’s fully autonomous drones were deployed in an On warehouse to enable full operational visibility through smart, real-time inventory tracking.

“We opted to kick off the project by implementing a pilot solution in one of our largest U.S. warehouses,” says Lala. Globally, On has warehouses in 12 countries as diverse as Japan, China, Australia, Belgium, the UK, Brazil, and Canada. It has two facilities in the United States.

“This initial phase will allow us to assess the effectiveness of the solution before gradually expanding to our other locations,” Lala adds.

A STEALTH APPROACH

For its part, Verity is on a mission to transform warehouse operations and optimize inventory management. The 10-year-old company came out of stealth mode at a TED conference in February 2016 and did a live demonstration of its ability to fly drones autonomously indoors. The presentation culminated with a swarm of drones flying over the audience.

Less than six months later, Verity did a proof of concept (POC) with a large U.S. retailer, demonstrating the use of drones to deliver automated inventory tracking.

“What we learned from doing the POC, was that there was a real demand for this capability, and our technology stack, while still best in class, was not mature enough for large scale deployment,” says Raffaello D’Andrea, co-founder and CEO of Verity.

Verity went back to the drawing board and, over the next three years, created a second-generation system that is the basis for what now is used inside 80-plus warehouses operated by companies in 13 countries including the United States, Canada, Germany, and South Africa.

“Building on our track record of successful projects in Europe, we completed our first deployment in the United States with Maersk in late 2021,” says D’Andrea.

Basically, the Verity drones used in warehouses navigate to the locations they are scheduled to scan, collecting accurate inventory data in three dimensions by scanning barcodes at any height using onboard, high-resolution cameras.

When an electric-powered drone’s battery runs low, it autonomously lands and recharges while other drones fly off to continue the mission. It isn’t necessary for a dedicated human operator to be on-site and entire operation cycles can occur at night or on weekends with no need for overhead lighting.

The drones take photos of SKUs to identify inventory errors, such as missing or misplaced stock items. Once the data is collected, the system compares the findings with data stored in the warehouse management system (WMS) and then distills that information into critical insights delivered directly to users via a dashboard.

The results are cloud-based and shareable, and strengthen a company’s data accuracy to improve decision making quality and speed.

PIONEERING INNOVATION

Sportswear brand On leverages technology to support company growth by improving product availability at its physical and online stores, and maximizing order fulfillment by boosting on-time and accurate delivery.

On’s success is rooted in innovation. The brand’s own CloudTec technology propelled initial sales of its running shoes—and its subsequent growth—so it’s no surprise On would be open to deploying fleets of autonomous drones in its warehouses. The company’s primary goal is to establish precise inventory management without having to rely on manual processes.

“The accuracy of our stock levels serves as the foundation for maintaining product availability and facilitating sales across various channels, including direct-to-consumer, business-to-business, and our own retail stores,” explains Lala.

By enabling full operational visibility through smart, real-time inventory tracking, Verity’s autonomous drones are minimizing stockouts, misplacements, and shrinkage across On’s supply chain. The drones scan On products daily, ensuring full availability of stock for both retail and ecommerce customer fulfillment.

“Our system allows On to not only spot errors before they impact operations downstream, but to also determine root causes so they can be addressed,” says D’Andrea, who notes that manually tracking inventory is frequently a detested, error-prone, and even dangerous task due to the heights involved.

“Our solution also addresses the labor-shortage issues that many supply chain companies are witnessing,” he adds.

Harnessing innovation for the benefit of customer experience appeals to On because it reflects the company’s own pioneering spirit and history. The sportswear brand is keen to get behind new, more sustainable supply chain solutions that reduce CO2 emissions linked to warehousing.

Verity clients net a reduction of 1,000 tons of CO2 emissions per warehouse each year, on average.

“By leveraging innovative technological solutions, we aim to improve our operations’ efficiency further, become a more sustainable brand, and take customer satisfaction to new heights,” says Caspar Coppetti, co-founder and executive co-chairman of On.

DRONE ON

“It’s hard to name an industry that wouldn’t benefit from mobile intelligence,” says D’Andrea. Singling out factors that affect the business category, he points to the velocity of the goods, their value, the tightness and quality of the labor market, and the impact of errors in operations.

Verity counts retailers, third-party logistics providers, and manufacturers among its clients. The company is already deploying its autonomous drones to scan everything from pet food to groceries, shoes to household goods, electronics to machine parts.

Enhancing real-time inventory tracking across customer touchpoints—whether physical stores or online—minimizes stockouts, misplacements, and shrinkage. Drone technology boosts successful order fulfillment for companies by improving on-time and accurate deliveries.

Verity clients are seeing their operational issue rates drop from 5-12% to less than 1%, significantly increasing their warehouses’ labor efficiency.

But it’s only the beginning. Many of Verity’s clients are pulling the company into new verticals, including security and inspection.

It makes sense. To stabilize altitude, drones utilize air pressure sensors, which allow the hover capabilities needed for videography or photography. The sensors are small, lightweight, and low power, culminating in the perfect payload for a mobile platform that can move anywhere in space, on demand.

“Our cloud-based solution is also agnostic as to how the data it ingests is generated, so we can easily incorporate other data streams into our system, including those from fixed sources, or even mobile phones,” D’Andrea adds.

LOOKING AHEAD

Six months into its collaboration with Verity, On is currently assessing the performance of the pilot project in its U.S. warehouse to identify future opportunities.

“We found a partner who can support our warehouse in its core activities without adding manual work, and help streamline the process,” notes Lala. “We hope we’re getting closer to our goal of a zero-error warehouse.”

Casebook Study: Prone to Drones Challenge

On, a Swiss high-performance sportswear brand, sought to optimize its inventory management and enhance supply chain efficiency and precision to support its burgeoning growth.

Solution

On partnered with Verity, a Swiss AI and robotics company, on a project to deploy fleets of fully autonomous drones in one of On’s U.S. warehouses beginning in February 2024.

Results

Early results indicate the collaboration is already improving ON’s key performance indicators.

Next Steps

The plan is to gradually deploy Verity drones in On’s additional 11 warehouse locations around the world.

Greg Skrovan is the director of global reverse logistics for Intel Corporation.

RESPONSIBILITIES: Leads the global organization responsible for warranty and reverse logistics strategy, service delivery, customer service and fraud mitigation for all Intel products, as well as more than $1 billion in returns. Oversees management of more than 15 3PL return depots and repair centers.

EXPERIENCE: Global program director, circular economy, supply chain innovation and business development; group manager, capital equipment planning and supply line management group; manager, global transportation and logistics procurement; manager, European logistics; regional transportation manager; all with Intel.

EDUCATION: Georgia Institute of Technology, M.S., international supply chain management; Michigan State University, B.A., supply chain management

I should have ‘supply chain nerd’ in my LinkedIn job title. Even as a freshman in college, I knew I wanted to study supply chain. I’ve been blessed to be in supply chain roles since I graduated.

My interest in the circularity aspect of supply chains kicked in about seven years ago when I became involved in the reverse logistics function. You can’t have a circular economy without reverse logistics.

Typically the biggest struggle in gaining continued investment in sustainability initiatives, especially in the supply chain, is showing a return on investment. The thing that excites me most about our mission is that we play a critical role supporting our customers’ needs while also driving cost savings and doing something positive for the environment through our asset recovery capabilities. We try to find a way to either resell or repurpose any material that comes back to us, so we’re getting its highest value. Or, we try to recycle, with little to no waste.

Our goal is to recover and resell or recycle 99% of products that come back. Today, we’re able to reuse or resell roughly 60% of materials that come back. We want to find higher value uses for the 40% we can’t currently reuse or resell.

Circularity provides an opportunity to do what’s good for the company and for the environment.

Years ago, I worked in Amsterdam with a team of employees to transform our European distribution model. It was a great opportunity to be immersed in another culture and country. The biggest challenge was understanding local labor laws and the unwritten rules around working with employees in the Dutch culture, versus managing them in the United States.

Building our European team meant working a lot and failing a lot. But we were able to leave knowing we had a strong operation and strong local leaders in place. The operation continues to thrive.

Today, my team includes people from seven countries. Recognizing the differences in cultures and perspectives and the different ways people work and are motivated and contribute, while also staying within the strong Intel culture, is incredible. One great thing about Intel is we have a strong company culture, but we also have an inclusive culture and we take advantage of differences in perspectives and experiences.

As supply chain professionals, I believe we have a responsibility, which doesn’t exist in all functions, to make decisions that benefit our companies and are also good for the planet. This profession has the opportunity to excel in that sweet spot between doing what’s good for the company and what’s good for the environment.

Greg Skrovan Answers the Big Questions

1. If you could speed the development of a supply chain-disrupting technology, what technology would you choose?

Artificial intelligence and machine learning. We’re currently leveraging this in our receiving process, where we take advantage of the data and watch trends and opportunities. I’m excited about using it in our day-to-day work to make faster and better decisions.

2. Do you have any words to live by?

A colleague once said he knew he wouldn’t always be the smartest person in the room, but he could be the most prepared and work the hardest. It’s about focusing on what you can control and influence. Do that and good things are going to happen. Worst case, you’ll sleep well, knowing you did everything you could.

3. If you could throw a dinner party and invite anyone from throughout history, who’d make the guest list?

I would bring back several family members who have passed. I would bring Jesus; that would be an opportunity you couldn’t pass up. And the chance to be able to listen to Martin Luther King would be incredible.

So, a mix of thought leaders, inspirational people, my family, and some storytellers to make the dinner enjoyable.

THE COMPANY

Kenvue Inc. is an American consumer health company. Formerly the Consumer Healthcare division of Johnson & Johnson, Kenvue is the proprietor of well-known brands such as Aveeno, Band-Aid, Benadryl, Combantrin, Zyrtec, Johnson’s, Listerine, Mylanta, Neutrogena, Trosyd, Tylenol, and Visine.

This required benchmarking, among other measures, its service levels, technology, and the ways in which its logistics processes could impact how Kenvue was going to market.

The good news? The company didn’t need to completely overhaul its operations. “But we did have to ask ourselves, ‘If we want to be best in class, what needed to change?’” says Rodney Leonard, vice president, U.S. deliver operations. The consensus that emerged identified leveraging data and partnering more strategically with retail customers as the approach that would provide the most substantial opportunities. “That’s what we are focusing on,” Leonard says.

In doing so, Kenvue has reduced unloading times, overages, damages, and shortages, while boosting on-time shipment arrivals at its customers’ warehouses.

Across the globe, Kenvue’s 2023 sales hit $15.4 billion, with 10 brands bringing in sales of $400 million or more. About half of net sales were generated outside North America. Each day, more than 100 trucks leave Kenvue’s four distribution centers strategically located across the United States; the company also has one in Canada. Then, the trucks head to customer distribution centers.

Digital First

To ensure an efficient operation, Kenvue has leaned into technology, becoming a digital-first company. This has meant shifting from a more transactional approach to focusing on data analysis. The company also uses technology to boost service to its retail customers and to help drive the decision-making process.

Kenvue centered on the on-time, in-full (OTIF) metric, knowing that optimizing this would maximize its revenue, as well as customer revenues.

One example is using technology to improve the order-to-cash process. When a customer places an order, Kenvue has to ensure it has the right inventory in the right distribution center and can efficiently move it to the customers’ distribution centers.

For example, an order from a Chicago location would probably be filled through the distribution center located in the Midwest.

Another step has been using technology to automate and receive orders more efficiently. Previously, Kenvue might receive a customer order, and manually hold it for an employee to review, checking that it contained the right price and quantity.

Also, purchase orders could come from different buyers within the same company. Placing multiple purchase orders, typically for smaller quantities, in different areas within a truck often led to inefficiencies in receiving and increased claims for overages, shortages, and damages.

Now, Kenvue has automated the intake and collation of these orders using EDI software and other Bot technology to optimize the customer logistics analytic review. (Bot technology refers to automated software applications that perform repetitive tasks over a network. It follows specific instructions to imitate human behavior but is faster and more accurate.)

Improved Picking, Packing, Shipping

When working with five orders with the same SKU, for instance, Kenvue can combine them, putting the orders together because they’re going to the same region. This enables employees to pick the items logically.

“We were able to use technology to help organize the orders and create a much smoother customer receiving experience,” Leonard says.

Before this change, a customer might receive multiple different Tylenol bottles on different pallets throughout the truck. As a result, it took them longer to find, count, and properly receive the products.

In a pilot with the new system, two of Kenvue’s largest customers saw up to a 40% reduction in unloading costs, as well as an improvement in reported errors.

By creating a cleaner, more organized order, the picking, packing, and shipping processes are also more efficient. These changes reduced Kenvue’s loading time by about 20%.

The new system has also cut overages, shortages and damages (OS&D) about in half. Previously, customers might think they hadn’t received some of the products they’d ordered. By more effectively organizing each load so the same SKU codes are together on the truck, Kenvue’s customers accelerate unloading time and can better assess the goods they’ve received.

The enhanced Pick Logic system was built in collaboration with Kenvue’s third-party logistics partner, who runs warehouse operations. The 3PL changed its picking sequence, or the logic within its system, from a “most efficient path” to an “end-to-end customer experience path” to streamline the customers’ receiving operation.

Timely Information Sharing Is the Key

For these tools to work effectively, Kenvue and its customers need to share information. With a timely exchange of information, Kenvue can understand its customers’ inventory levels and where they want to receive products, among other information. “It all starts with that data,” Leonard notes.

For instance, Kenvue might alert its customers to data on products that are running low. Then, the company can make more tailored suggestions regarding inventory replenishment.

In the past, if a customer indicated it wanted, say, 50 cases of a product, Kenvue typically would just ship the cases. Now, it can let the retailer know that it could actually use 60 cases at its store in Southern California, which had a spike in sales over the past week.

“We’re able to help retail customers prevent out-of-stocks on the shelf by having access to that data,” Leonard says.

The Perfect Store

Kenvue’s Perfect Store solution taps into AI to help retail customers drive better store execution. Analyzing and sharing a store’s daily sales data can identify irregularities and prevent out of stocks.

While moving products to a customer’s distribution center in the right quantity and time frame is a critical starting point, the products also need to get onto the store shelves.

Many retailers are also focused on acing store execution, Leonard says. The goal is to avoid inadvertently having products in the distribution center or back room, while the shelves are empty.

To help address this, Kenvue is initiating what it calls “The Perfect Store.” The goal is to help customers ensure on-shelf availability.

Store shelves are the customer’s space, and not Kenvue’s. But partnering can help both. For example, Kenvue recently launched Perfect Store pilots with several customers, using AI to help them drive better store execution. As Kenvue receives the store’s daily sales data, it can analyze the information to identify any irregularities at the store level.

Say a location that normally sells 10 items daily hasn’t sold any in three days. AI can alert the retailer, who can check whether the product is actually on the shelf.

“With AI, we can be targeted in looking at point-of-sale trends,” Leonard says. “We’re seeing some great results to drive the consumer experience.

“This is the next frontier,” he adds. “We’re driving all the way to the customer’s shelf.”

Kenvue continues to add customers to the program. “Every customer we have approached expresses high interest in the program,” Leonard says.

Leveraging AI and Partnerships

The AI tool can help in adjusting not only for historical trends, but also can consider factors such as weather patterns or social media and events.

So, if a summer music festival will be taking place in one city, the system can incorporate that data into its analysis. It might recommend boosting the inventory of sunscreen in the area. “We’re able to be much more forward-looking and predictive,” Leonard says.

While Kenvue and its retailer would typically sign a non-disclosure agreement, so the retailer can be confident the data will be used appropriately, sharing information also requires a trusted partnership. Kenvue has worked diligently to foster such partnerships.

The labor shortage has also helped accelerate this practice. In the current environment, many stores may have one or two employees in a store, and they’re trying to manage hundreds of products, Leonard notes. AI can help them.

Kenvue is testing this in different regions, highlighting best practices, while adjusting to each region. A bodega in Asia will require a different approach than a big-box store in North America.

“There’s a certain level of freedom that we have to use, but the concept and the spirit of using technology to drive consumer experiences is consistent,” Leonard says.

Since becoming an independent company, Kenvue has not only streamlined transactions, but it has also established a new culture and way of interacting with customers.

“It has been a whirlwind, but it has been exciting,” Leonard says.

Casebook Study: A View Into Kenvue

Challenges

After spinning off from Johnson & Johnson, Kenvue needed to establish a successful and effective supply chain as an independent company that’s also the world’s largest pure-play consumer health company by revenue.

Solutions

Leveraging data and artificial intelligence, while also partnering more strategically with its retail customers to drive efficiency.

Results

Reducing unloading times, overages, damages, and shortages, while boosting on-time arrivals at customers’ warehouses.

Next Steps

Continuing to test and implement The Perfect Store approach with customers around the world.

THE CUSTOMER

American Standard is a North American manufacturer of plumbing fixtures headquartered in Piscataway, New Jersey. The brand has been a mainstay in the building industry for the past 150 years.

THE PROVIDER

Hercules Forwarding is an asset-based less-than-truckload (LTL) motor carrier and customs brokerage with Canadian headquarters in New Westminster, British Columbia and U.S. headquarters in Vernon, California. It specializes in U.S.-Canada shipments with a specific focus on transloading solutions.

American Standard produces most of these units in one of four manufacturing plants it operates in Mexico and then ships them to distribution centers in the United States and Canada.

For a long time, the company relied solely on large and direct carriers to ship its product from Mexico. However, constant rate increases were affecting the bottom line.

“In 2005, we decided to go down to Laredo, Texas and see what other options we could find,” recalls Gary Harlow, a leader at Amstan Logistics, the logistics arm of American Standard, Inc.

Transloading is the Solution

That’s when American Standard connected with Vocar Transportation (acquired by Hercules in 2010) and landed on a transloading solution. “We began bringing our freight up to the border with Mexican carriers and then transloading the shipments at Hercules and putting them on U.S. trailers,” Harlow explains.

A practice that wasn’t as prevalent in 2005 as it is today, transloading is the transfer of goods from one mode of transportation to another enroute to its ultimate destination. “A lot of companies transload now,” Harlow notes.

Prior to engaging Hercules, American Standard interviewed several potential candidates. “We actually used two companies for a while—Hercules being one of them—but the other company didn’t do as good a job so we settled on using Hercules only,” Harlow says.

Almost 20 years later, the partnership endures. It has grown to the point that American Standard currently transloads more than half of its cross-border shipments. Transloading not only reduces shipping times but also cuts down on damage claims.

“We set up the operation exactly how American Standard needed it set up,” says John Volpe, who as president of Vocar Transportation oversees Hercules’ Texas operation. “We were flexible and catered to their specific needs.”

It All Starts with Cross-Docking

Theirs is a relationship grounded in distribution. It starts with cross-docking operations at the border in Laredo, Texas. Cross-docking entails unloading goods from vehicles making incoming shipments at a logistics facility and transferring them to vehicles handling outgoing shipments. The point is to incur little or no storage time in between.

“Cost was our major issue,” says Harlow. “If you don’t have options, you’re stuck with whatever capacity and/or pricing you get from the larger carriers. You don’t have a lot of control.”

Door-to-door (D2D) shipping isn’t the only recourse. When American Standard relies on U.S. trailers to ship its product out of Mexico, the order of operations proceeds like this:

1. U.S. trailers are loaded in Mexico.

2. Shipments are transported to the border and are cleared by a customs broker engaged by American Standard.

3. Shipments are dropped in a U.S. carrier’s yard to be delivered within the carrier’s capacity.

Depending on the time of year and capacity constraints, this means a shipment can sit in a designated U.S. carrier’s yard for far longer than American Standard often prefers. And the carriers in question are typically larger and thus more expensive. “Working with Hercules gives us much more flexibility,” says Harlow.

Expanding the Options

Hercules’ cross-docking operations give American Standard more options in regard to choosing carriers to transport shipments from Laredo to its distribution centers (DCs). Hercules typically handles 20 to 25 American Standard truckload trailers daily.

“We load a Mexican carrier’s trailer at our plants,” Harlow explains. “It travels to the border where our customs broker clears the load. Then the trailer gets dropped at Hercules’ facility on the U.S. side.”

American Standard then works with Hercules to transload shipments onto U.S. carriers. Theirs has been an efficient and long-running partnership. “Transloading has meant better pricing and better service,” says Harlow.

The relationship isn’t static either. It has evolved to include Hercules participating in American Standard’s LTL needs on the shipping lanes Hercules can service. “We’re not a nationwide carrier so we can only service them in certain lanes,” Volpe notes.

The relative fragility of American Standard’s product line influences shipping decisions as well. The company manufactures bathroom fixtures in its Mexican plants—mainly toilets and sinks. These items are primarily made of porcelain and require careful packaging. Despite the packaging, minimal handling does much to minimize damage claims.

“Damage doesn’t occur on the initial shipping side of things,” says Harlow. “The LTL side can be a different story.”

American Standard uses all kinds of LTL carriers including large providers such as SAIA and Estes that use various terminals where breakbulk handling occurs. If a shipment is going to incur damage, breakbulk terminals where packages are unloaded and reloaded is the more likely spot.

“We try to minimize the handling of freight by eliminating breakbulks,” says Volpe. “When we ship to the Pacific Northwest (Oregon, Washington) from Texas, the freight travels without being touched. A lot of our competitors have to go through two or three different terminals to get freight to that destination.”

EVOLVING AND ADAPTING

To minimize shipping damage to its main product line—toilets and sinks—American Standard eliminates breakbulk handling so freight travels without being touched.

When Hercules first began cross-docking American Standard’s freight at the border, everything arriving from Mexico was palletized. Then American Standard discovered a cheaper and more efficient way to ship its product: slip sheets.

Made of plastic, heavy laminated kraft paperboard, or corrugated fiberboard, slip sheets are pallet-sized but thinner. “We had to retool our operation to handle freight on slip sheets,” says Volpe. “It required additional equipment and hardware on our forklifts plus training of our dock personnel.”

Volpe likens picking up freight sitting on a slip sheet to picking up a pancake on a skillet with a spatula. “There’s definitely a learning curve but slip sheets offer savings,” he says.

Volume Savings

One could easily assume less weight on a trailer might be one of the savings but in American Standard’s case, Harlow points to volume savings. Given the insulating packing materials required, a toilet box is pretty big. “The slip sheets allow us to put more product into trailers because we no longer have the height of the pallets subtracting space,” he says.

American Standard appreciates Hercules’ willingness to adapt. Another example centers around availability.

“As shippers, we often have to adjust to a carrier or vendor’s hours or situation and our company happens to work through a lot of holidays,” Harlow says. “Hercules will ask what we need and be there just for us. They’re cognizant of our needs and that flexibility continues to sustain our relationship.”

HANDS-ON “HANDS-OFF” SERVICE

Because Hercules is a smaller, regional LTL carrier, it offers a more personalized experience. Harlow appreciates being able to talk with Volpe directly should problems arise. The sales reps that service national carriers sometimes can be harder to pin down.

“Hercules is customer-service driven,” Harlow says. “I can call and get them on the phone. I can’t do that with all of our carriers or reps.”

Harlow also points to the absence of breakbulk terminals. “If your shipments go through fewer terminals and encounter less handling, the result is decreased or zero damage,” he says. “Larger national carriers often touch your freight three times.”

Moving forward, Hercules hopes to expand its coverage map footprint. “We hope American Standard keeps giving us opportunities to grow,” says Volpe.

That seems likely to occur. “Hercules feels more like an extension of my team than a vendor,” Harlow says. “We have a very strong relationship.”

Casebook Study: Plumbing the Depths

Challenge

Plumbing fixture giant American Standard sought options to move fragile products efficiently and effectively from their Mexican manufacturing plants to distribution centers in Texas, Ohio, California, Canada and other locations.

Solution

American Standard partnered with Hercules Forwarding, an asset based less-than-truckload (LTL) carrier focused on providing transloading solutions. Hercules performs cross-docking operations in Laredo, Texas and, as a regional carrier, fulfills LTL shipments in certain lanes.

Results

American Standard went from 100% engagement in direct cross-border or door-to-door (D2D) shipping to 48% direct and 52% transloading. By incorporating transloading, the company reduced shipping times, achieved considerable cost savings and minimized damage claims.

Next Steps

The two companies plan to continue their long-running partnership. Hercules hopes to expand its coverage map footprint and provide American Standard with more breakbulk-free shipping routes.

The Customer

Belcorp is a Latin American direct-sales beauty corporation, guided by its purpose: “We promote beauty to achieve personal fulfillment.” The 50-year-old company offers more than 2,000 SKUs across three commercial brands: L’BEL, ésika, and Cyzone. Belcorp provides an entrepreneurial opportunity to its more than 900,000 beauty consultants across Latin America and the Caribbean.

The Provider

ToolsGroup offers probabilistic demand and supply planning solutions used by retailers, distributors, and manufacturers to enhance supply chain resiliency and efficiency. The company harnesses AI and real-time data from various sectors of the enterprise to help companies facilitate agile and effective decision-making.

“Complex” might even be an understatement for Belcorp, which operates three brands:

• L’BEL targets women aged 30 and older and employs advanced skincare technology.
• ésika caters to women between 25 and 45 years old; this brand aims to inspire confidence and unlock the potential of Latin American women.
• Cyzone targets members of Generation Z and focuses on affordable cosmetic products, while considering current digital market trends.

Belcorp’s network of beauty consultants offers the company’s products directly to potential customers.

Like many cosmetics companies, Belcorp leverages market trends to introduce new products every few weeks. While these evolving product lines are key to sales, they also require an agile and sophisticated supply chain planning and optimization approach, given the brevity of product lifecycles.

Additionally, Belcorp’s direct-selling business model operates with 18 commercial cycles, or marketing campaigns, per year. This creates higher volatility in customer demand and a need for greater flexibility and agility in the supply chain.

What’s more, it’s typically difficult to shift any unused materials or packaging from one brand to another, given their different focuses. “If you don’t plan well, you can end up with a lot of unused inventory,” Rodríguez notes.

A Supply Chain in Need of a Glow-Up

Belcorp works with about 200 suppliers located around the world. For most of the materials it sources, the company manages the logistics processes from the point of supply through to its plants, working with best-in-class fourth-party logistics (4PL) providers, says Nicolas Frasquet, corporate procurement executive director.

Belcorp produces its cosmetic products in four countries: Mexico, Peru, Ecuador, and Colombia, which is its most important manufacturing site. Belcorp also operates 12 distribution centers in Latin America and one in the United States.

While its primary markets are Colombia, Mexico, and Peru, Belcorp offers its products in 12 Latin American countries and in the United States.

All cosmetic products are approved under the Leaping Bunny Program by Cruelty Free International, which ensures that the company is committed to help end animal testing around the world. Along with cosmetics, Belcorp offers fashion accessories.

Beautifying Service, Inventory, and Distribution

“While a goal of Belcorp’s inventory management efforts is efficiency, the process starts by defining our service-level strategy, and then working toward it,” Frasquet says, noting that maintaining strong service levels is critical. Unlike traditional retail, there are no inventory buffers for a direct-selling model. If consumers order a product and don’t receive it on time, they have no immediate access to an alternative.

This can become frustrating for both consumers and the consultant, who loses the sale and profit. Moreover, if a consultant decides to stop working with Belcorp, the company essentially loses the capability to sell into that market.

“It’s best to secure the sales force and secure the consumer,” Frasquet says.

Because most of Belcorp’s products contain materials sourced from across the globe, and given the dynamic nature of the market, Belcorp runs and evaluates distribution scenarios every day. The goal is to adopt an inventory planning automation concept—that is, achieving the highest service with the lowest optimal cost and workload. This requires leveraging the right data, model, process, and culture, and ensuring the right inventory is in the right place with the right quantity.

“If we try to manage inventory and distribution with spreadsheets, we are dead,” Rodríguez says. Instead, Belcorp needs an inventory planning and optimization solution that enables the company to work toward an agile supply chain.

Belcorp management identified a handful of providers of inventory planning and optimization solutions. As they studied each one’s different capabilities, it became clear ToolsGroup’s approach best fit the company’s needs.

Its offerings are “more scientific, more data-based, and more driven by advanced mathematical models that can help inform decisions to guide inventory policies,” Rodríguez says.

Highlighting the Right Solution

With more than 2,000 SKUs and a constantly changing product mix, Belcorp needed best-in-class demand planning. By using ToolsGroup’s SO99+, the company optimized its inventory strategies.

Service Optimizer 99 (SO99+), ToolsGroup’s supply chain planning solution, which has been developed and refined over 30 years, leverages advanced probabilistic and optimization algorithms to optimize inventory levels, while factoring in a company’s desired service level at the lowest cost.

Achieving optimal inventory levels also requires mapping constraints, such as the amount of inventory the company can obtain from each supplier and at what time, as well as defining the amount of each product needed at each point in the supply chain, Rodríguez explains.

To achieve this, Belcorp began leveraging an advanced and automated multi-echelon inventory optimization (MEIO) model within SO99+. Among other functions, the MEIO model automatically calculates the optimal stock values at each node within a supply chain. This enables multi-level supply networks to meet their service-level goals, yet with a minimal inventory investment, says Angela Iorio, director, customer advocacy, partners and social, with ToolsGroup.

For example, MEIO software can recommend appropriate inventory levels for materials, components, subassemblies, and finished goods at any point in the supply chain.

The model, along with an advanced replenishment solution, also helps companies determine the ideal replenishment frequency for each product at each location. So, the solution could determine that one distribution center needs deliveries of red lipstick every two weeks, while another needs deliveries every three weeks.

Belcorp has consistently maintained a fill rate exceeding 95%. With the implementation of the ToolsGroup solution, management’s goal is to sustain or slightly improve this performance while simultaneously reducing total inventory value by 10 to 15%.

The ToolsGroup solution also empowers centralized demand planning, gathering overall requirements and dynamically assigning distribution priorities to each level, ensuring fair allocation logic to minimize stockouts at peripheral locations. This helps reduce costs across the supply chain and streamline operations.

Planners gain a centralized view of the company’s supplies across the network, with insights into inventory levels, service levels, and supplier performance. They can see both overall demand and the specific products most in demand.

With this insight, they can determine the optimal level of safety stock needed to achieve the planned service level for each product at a given location.

Getting Pretty in Phases

Belcorp’s supply chain leadership is handling its implementation of SO99+ in phases, which began in mid-2023 with a subset of products. This enables management to continually monitor performance and check that they’re not adversely impacting other supply chain KPIs.

Balancing inventory levels across Belcorp’s network likely will be completed in six to eight months, Rodríguez predicts. One reason is the phased approach Belcorp is taking with implementation and adoption. Lead times also come into play. For instance, the lead times for some materials, such as the glass containers for fragrances, can extend between five to seven months.

Information Offers a Better Look

Before implementing ToolsGroup’s automated MEIO model, it often took Belcorp six to eight weeks to optimize its inventory levels. The dynamic market and Belcorp’s need to continually introduce new products limited the usefulness of the information generated.

With the ToolsGroup solution, Belcorp can run sales and operations planning scenarios as often as necessary, and with a more sophisticated, data-driven approach. They can, for instance, make minor adjustments to the supply plan as needed and monitor the short-term evolution of demand and supply. They are able to plan ahead, avoid putting out fires, and work by exceptions.

“We now have more powerful insights to make data-driven decisions regarding the trade-off between service levels and inventory investments,” Rodríguez notes.

Before implementing SO99+, Belcorp had cut its airfreight costs approximately in half by implementing a push inventory strategy at select strategic distribution centers. However, this boosted inventory levels at the DCs.

“With SO99+, our goal is to optimize and reduce this inventory while maintaining air freight’s efficient performance,” Rodríguez explains.

Managing complex inventory requirements takes agility, advanced algorithms, visibility, and automated processes that enable companies to respond efficiently to market changes. For Belcorp, information about supply and demand variability is a must.

The less time Belcorp spends preparing information, the more it can dedicate to deciding how to take action. “The efficiency of our sales and operations planning process provides a competitive edge,” Frasquet says.

Through its partnership with ToolsGroup, Belcorp can automatically meet service levels, optimize inventory, automate processes, manage exceptions, and work smarter. Along with its goal of reducing inventory levels by 10 to 15%, it aims to improve service levels, decrease air freight use, and adopt inventory planning automation.

As it continues to define its supply chain digital roadmap, Belcorp plans to implement ToolsGroup’s lot size optimization module with price break constraints.

Case Study: A Demand Planning Makeover

The Challenge

Belcorp needed a more effective way to optimize inventory and service levels within its complex supply chain, where the universe of products changes every few weeks.

The Solution

The company partnered with demand and supply planning solutions provider ToolsGroup and implemented its Service Optimizer 99 (SO99+) solution. Belcorp also began using an advanced and automated multi-echelon inventory optimization (MEIO) model within SO99+.

The Results

Among other benefits, Belcorp gained the ability to automatically meet service levels, optimize inventory, automate processes, manage exceptions, and handle demand planning more efficiently.

Next Steps

Belcorp plans to implement ToolsGroup’s lot size optimization module with price break constraints.

John Moseley, Chief Commercial Officer, Port Houston

As a high school student, John Moseley started to dream of a career with global scope. “My dad was in the foreign service, and I went to the American School in Islamabad, Pakistan,” says Moseley, chief commercial officer at Port Houston.

His best friend came from Nigeria, and Moseley also hung out with friends from Pakistan, the Czech Republic, Hungary, and South Korea. “I knew I wanted a career that took me to faraway places and international cultures,” he says.

Moseley first imagined himself as chief marketing officer at a big, international firm. But life had other plans, nudging him into the world of ocean transportation. He has worked for cargo owners and shipping lines, provided third-party transportation services, and held several roles in trade development at Port Houston before he assumed his current role in 2018.

We talked with Moseley about how his career took shape and what keeps him busy and enthusiastic these days.

IL: How did you find your way into ocean transportation?

I studied international business administration at California State University, Los Angeles. In my junior year, I took a paid internship at a customs brokerage. Eventually, that turned into a full time job. While handling Japanese imports, I was invited to attend the grand opening of Mitsui O.S.K. Lines’ new terminal in Los Angeles. I met some people there who impressed me, and they offered me a position. I started working for ocean carriers in 1988, and I haven’t looked back.

IL: When you joined Port Houston in 2010, what was it like to make the transition from port user to owner?

Working for a port kept me close to the international side of the business, and to the water and ships. Helping the port grow and creating value has been a great way to cap my career.

Port Houston was especially appealing to me because, unlike the typical port authority, we’re not just a landlord; we’re a terminal operating port. Working directly with beneficial cargo owners, ocean carriers, and freight forwarders has kept me in the game.

IL: What’s an important lesson you learned early on that has helped to shape you as a leader?

As an intern, and then as a person in the lower ranks, I learned how important other people were to my career.

It was always people who made me feel good or bad, who provided opportunities and mentored me. You can’t be successful without other people.

That has been a valuable lesson, and I’ve always tried to give back. Helping younger folks—providing guidance, mentoring, and suggestions—has been a tremendous source of pleasure throughout my life.

IL: Since you became CCO at Port Houston, what have been your most important initiatives?

Moving us up to become the number 5 container port in the country was huge. Working on communications and messaging for stakeholders was new to me and very important, as was creating communications for finance packages to support the expansion of the Houston Ship Channel. The foreign trade zone is another big one.

And then there are the economic development initiatives. The real estate piece of my responsibility has been a lot of fun; it is one of the cornerstones of my role during the past five years.

IL: Which of your current responsibilities do you find most exciting?

Developing our intermodal product is a big, fun project. I also enjoy leveraging our real estate to prepare for the kind of capacity we’ll need in the future.

IL: Which aspect of your job is the most fun?

It’s the interaction with people. I like to be outside, engaging with people, doing new things. I’m all about putting people together to find successful outcomes. I’d say relationship management is my super power.

IL: If we followed you around at work during a typical week, what would we see you doing?

You’d see me on my phone and going in and out of meetings. I constantly communicate with people through all sorts of channels.

I like to get a quick answer and keep things moving, and I treat other people the same way. Sometimes I need a little help being that responsive, but fortunately I have a team that helps me manage things.

IL: How would you describe your leadership style?

It’s servant leadership, inclusive, and opportunity-driven. I don’t claim to be the smartest guy in the room. I rely on all the smart, hard-working people around me, and my role is to make sure they have the resources they need.

I also consider myself a champion for diversity in the workplace. Diversity of perspectives, of opinions, comes from having people with diverse backgrounds and life experiences. I come from a diverse background myself. I think that sort of variety creates strength in an organization.

IL: What qualities do you look for in people who report to you?

Work ethic, honesty, and integrity are at the top of the list. We can always learn new skills, but some qualities are innate to a person. I also value the ability to communicate with others.

IL: What advice would you give to your 18-year-old self?

Don’t be afraid to dream big. Anything’s possible. I never shied away from anything back then, but maybe I’d tell myself to focus more on school work.

IL: Outside of work, how do you like to spend your time?

Mostly I like to spend time with my family, doing whatever they’re doing. That could mean going on a trip, or just watching a movie together. I’m a people person, and I love to be with friends and family all the time.

Be Prepared

Attacks on shipping in the Red Sea, drought in the Panama Canal, a pandemic—there’s no shortage of emergencies that can disrupt a port’s operations. “It’s important to always be ready to mitigate the risk of these bumps we experience,” John Moseley says.

Case in point: the pandemic. “Port Houston was the first U.S. port to report someone sick with COVID-19,” Moseley says. “Having to respond to that while keeping our business moving, doing our part to feed, clothe, and supply the regional population, was huge.”

Port Houston’s operations affect 20% of Texas’s gross domestic product, so keeping cargo moving in and out, and keeping factories supplied with materials they needed, was crucial. “We had to get creative, rolling up our sleeves and working some late nights when necessary, putting in protocols to keep our people safe and working,” Moseley says.

It’s also crucial to prepare in advance, financially and operationally, for any number of potential disruptions, Moseley says. Luckily, Houston has had lots of experience to draw upon.

“We’re used to disasters here, such as hurricanes,” he says. “We don’t spook easily in Texas.”

EXPERIENCE: Director, network supply chain and indirect procurement; director, business strategy; senior manager, reverse logistics; manager, reverse logistics; manager, supply chain effectiveness; senior business analyst; all with UScellular. Managing consultant, Revere Group; senior consultant, BearingPoint Consulting; systems engineer, Intergraph.

EDUCATION: Loyola University, Chicago, MBA, Operations Management and International Business; Miami University, BS, Applied Science, Engineering Management.

When I earned my undergraduate degree in engineering management I knew that I didn’t want to work in the automotive industry, even though many of my classmates did. Instead, I went to work drawing production lines. I traveled to many manufacturing plants and caught the travel bug.

My next job was a consulting role with KPMG. Even though I didn’t check all the boxes on the job description, I interviewed for the job and landed it.

Women tend to not apply for jobs unless we check every box. Don’t sell yourself short! If you are interested in a role and don’t check all the boxes, you still need to apply and network to get that interview.

At KPMG, I spent about four and a half years implementing SAP for the U.S. Army and creating new business processes for the Army’s supply chain. That’s how I got into the supply chain field. I love being able to solve problems and figure out how to improve processes.

At UScellular, one of my biggest successes was making reverse logistics a profit center, while making sure no products ended up in landfills.

My team and I knew phones and accessories would come back in different conditions—from items that are new in the box to a drone that’s in 500 pieces. We needed to figure out what path each product would take.

A first step was a cosmetic inspection of returned products. That alone yielded $1 million in savings, providing a return on investment in six months. Over time, we became smarter regarding what was coming back and through what channel to push each product.

We weren’t equipped to be resellers, so we partnered with vendors in revenue-sharing arrangements. We learned what each was good at, and how to move products through them.

While the reverse logistics function and product mix has changed over the years, the focus on making sure nothing ends up in landfills continues.

For the past 18 months, my team has been working on an organizational transformation. Before I took this role, UScellular didn’t have logistics, inventory, or forecasting and planning teams for Network Supply Chain. This has been a unique opportunity to build out the teams and supply chain processes to support the network.

It has been a journey for the people on my team and those we serve in network engineering. One big move was right-sizing our warehouse footprint. We had 12 about one year ago, and today we have six. It’s more efficient and saves us about $1 million annually in storage fees.

Our next big project is addressing ‘milk run deliveries’ from our warehouses to our cell sites. These deliveries consume a lot of gas and aren’t good for the environment. To change this, we’re shifting to full truckload deliveries of equipment to cell sites that are near each other, versus doing individual deliveries.

Being open and honest in communication helps bring everyone along. I’m open to knowing that we’ll make mistakes, but we will learn and get better.

Supply chain is about processes and identifying ways to mitigate the risks you encounter. I love being able to use my strategic thinking and problem-solving skills to drive transformation across a supply chain.

Amy Augustine Answers the Big Questions

1. Do you have any heroes?

My father is one of my heroes. I learned leadership skills from the way he led and interacted with others. I also admire Mother Teresa, as someone who gave her life for others and did good in the world.

2. Do you possess any hidden talents?

I know many Kung Fu moves.

3. If you could witness one event what would it be?

I would like to have witnessed the drafting and signing of the Declaration of Independence. I have a copy of it hanging in my home office. It is still relevant today.

4. What would you tell your 18-year-old self?

Take more risks, especially early in your career.

Matt Rendall, CEO, OTTO Motors

When he wasn’t cramming for exams or working on multiple engineering assignments at the University of Waterloo, Ontario, Matt Rendall spent his time in the robotics lab. “Building early prototype autonomous mobile robots (AMRs) quickly became a passion,” Rendall says.

Years later, that passion engendered a startup, as Rendall and three university colleagues formed Clearpath Robotics to create robotics platforms for research and development. In 2015, Clearpath formed a new business division, OTTO Motors, which develops AMRs for material handling. Rockwell Automation acquired Clearpath Robotics and OTTO Motors in 2023.

Rendall heads Clearpath and OTTO as CEO. He recently gave us a look at OTTO’s evolution, discussed the impact of the Rockwell acquisition, and discussed how he leads his teams.

IL: What is OTTO Motors’ origin story?

As Clearpath became a market leader, around 2013 we got our first R&D contracts for AMRs in material handling applications. We recognized this quickly emerging opportunity as the first big end use application for AMRs. So we decided to take our amazing technology and deploy it vertically into that category.

IL: Is there a lesson you learned early in your career that has helped to shape you as a leader?

We started our company with just $200. We didn’t have money to develop prototypes; we didn’t even have enough experience to know what prototypes to develop. So we concentrated on product and customer development. We said, “Let’s find customers who have a problem that’s so painful, they’re prepared to buy an idea on paper.”

From day one, it has been part of our DNA to ask customers probing questions, get to the root of their challenges, find the patterns, and turn that information into opportunities. To this day, our leadership position comes from our relentless focus on listening to the customer.

IL: What does it mean to OTTO Motors and the industry you serve that you are now part of Rockwell Automation?

Rockwell has brought the AMR industry credibility that it never had before. We did great work in the past, but we were a mid-sized company trying to serve the world’s largest manufacturers. That difference in scale created all kinds of speed bumps. Now, as part of Rockwell, we can accelerate delivery of our AMR technology on the global stage, for the world’s biggest companies, at the pace they need. AMRs are now entering prime time.

The acquisition also means OTTO can grow faster, and we can integrate into a portfolio of automation and digital transformation capabilities that unlock new value propositions for our customers. We’ve always used application programming interfaces (APIs) to integrate our robotic fleets with manufacturing execution systems. Now, we can integrate with Rockwell’s systems completely and seamlessly.

IL: Which emerging technology will soon make a big impact on your products and customers?

I’m excited about the evolution of computer vision in AMRs. As robots move materials around facilities, they’ll also be able to observe important secondary or tertiary things that we can turn into actionable data.

To give a simple example, say a customer needs to keep an active inventory of fire extinguishers. With its photographic memory and real-time map of its environment, a robot could produce a daily audit of fire extinguishers and send an alert the moment one went missing.

IL: What’s at the top of your agenda these days?

Our most important goal is, with Rockwell’s support, to grow the company even faster than we were previously. We’ve had success with our core customer base in North America. Now we need to pour gas on it and create value for more customers in farther reaches of the world.

IL: Which traits make you an effective leader?

I try to show up with humility. I also try to create an environment where people know it’s okay to make mistakes in a calculated manner, and then learn from those mistakes.

IL: How do you give criticism when that’s required?

When we experience a challenge, it’s likely to be technical in nature. I try to dig into the root issues, so we can have a conversation from a place of understanding. When you do that, and you approach things with curiosity and humility, you can have a constructive conversation about what went wrong, what we’re doing about it, and how to make sure it doesn’t happen again.

If the problem is too technical, or outside my domain of expertise, I defer to my team. If I can’t get comfortable with their answer about why something didn’t happen as planned, I ask if they’re happy with the way things turned out. And I ask, “If you were in my shoes, what would you do, and what do you recommend?”

IL: What’s the hardest aspect of your job?

We essentially created a market, and the hardest aspect is dealing with the uncertainty of venturing into a new category. I try to face it with humor, and—as an engineer—by anchoring my decisions in data. Also, as I’ve gained experience, I’ve learned to trust my gut more.

IL: Is there something you believed strongly at the start of your career that you’ve since changed your mind about?

Early on, I felt that I was on a journey to a destination. Now, I realize that the destination is always on the horizon, and the journey is the important thing. I need to make sure that I’m enjoying the journey. Sometimes I need to stop and reflect on all the great things that are happening among all the difficult times, hard work, stress, sleepless nights, and ups and downs. I want to create a workplace that everyone enjoys.

IL: Outside of work, how do you like to spend your time?

I prioritize being a father to my two boys, ages five and two-and-a-half. I spend weekends driving them from activity to birthday party to activity. It’s a rewarding contrast to the workplace. No matter how big the challenges you face at work, they’re not that meaningful in the grand scheme of things compared with the kids. n

An Entrepreneur Worth Watching

In 2023, Ernst & Young (EY) Canada named Matt Rendall one of the Ontario Finalists for its Young Entrepreneur of the Year award. This program bases its choices on multiple factors, including the nominees’ entrepreneurial spirit, their companies’ financial growth, the growth of their teams, and their impact on customers, employees, and the world.

For Rendall, one striking aspect of this honor involves the industry that OTTO Motors serves. “That Ernst & Young could scan the entire province of Ontario and, from all the amazing entrepreneurs in the region, select a supply chain company is pretty cool,” he says. “As much as a recognition of myself, I view this award as a recognition of our company and our products.”

THE CUSTOMER

Riviana Foods is a leading rice company and marketer of wild rice. The company is a wholly owned subsidiary of Ebro Foods, which operates in the rice sector across the globe through an extensive network of subsidiaries and brands in more than 80 countries spanning Europe, North America, Asia, and Africa.

THE PROVIDER

Franklin, Tennessee-based ProvisionAi offers sophisticated suites of optimization tools for load building and transportation load leveling that reduce total supply chain costs.

Like many companies over the past few years, Riviana has faced challenges when looking for trucking capacity, especially when demand spikes. One way companies can address this, even when capacity tightens, is to ensure all truckloads are optimized to their maximum legal capacity when they leave a facility.

To help its supply chain organization meet this goal, Riviana turned to Auto02 (Automatic Order Optimization), a load-building solution from ProvisionAi.

Selling a Broad Profile

As a large rice processor—its plant in Memphis, Tennessee moves more than 10,500 shipments annually—Riviana sells a wide range of products to retailers, industrial companies, and food service organizations, among other clients.

Shipments can vary from small, lightweight rice cups to 20-pound bags of rice geared to food service operations. “It’s a broad profile,” says Jennifer Phillips, Riviana’s director of transportation. Shipments generally travel by box car, intermodal, and truckload.

Riviana Foods is a wholly owned subsidiary of Ebro Foods, a global leader in the rice vertical. Ebro Foods’ network of subsidiaries and brands spans more than 80 countries across Europe, North America, Asia, and Africa.

The range of products and weights Riviana ships can present challenges when trying to load a truck so all the space within the trailer is fully utilized. Riviana had been using a load planning solution, but even so, trucks would often ‘weigh out’ before they ‘cubed out’, says Zachary Dale, Riviana’s supply chain continuous improvement manager.

Optimizing Truckloads

In the United States, most truckload shipments travel on 53-foot trailers that provide a bit more than 4,000 square feet of capacity, says Tom Moore, founder and CEO of ProvisionAi.

Most trucks traveling on highways can haul between 45,000 and 50,000 pounds. Because many of Riviana’s products—like sacks of rice—are heavy, shipments often meet the weight capacity of the truck before they’ve actually filled the space available.

The breadth of products Riviana offers and the range of pallet weights can also make it challenging to train new employees to properly load trucks.

“More efficient loading and better truck utilization could cut both the number of trucks on the road, as well as transportation costs,” Phillips says.

Generally, when shipping a variety of product sizes and weights, combining products of varying weights on a truck, rather than filling it with a single product, more efficiently uses the legal weight and space available. Even when dealing with slight differences in weight, there are opportunities to take advantage of that difference in the load design.

A Good Fit

When shipping a range of product sizes and weights, like Riviana does, combining products of varying weights on a truck, rather than filling it with a single product, more efficiently uses the legal weight and space available.

To help optimize truck capacity, Riviana began working with ProvisionAi. As Dale had been researching sustainability, a key initiative at Riviana, he came across information on the AutoO2 solution from ProvisionAi. “It sounded like a good fit and referenced a lot of the issues we were having,” he adds.

Auto02 load building software uses machine learning to optimize shipments, while it also considers more than 300 parameters, including product and customer-specific loading rules, among others.

For instance, a shipper may require that all shipments of a specific product family be placed in the tail of the truck, or that all pallets be shipped on the narrow dimension. The software can accommodate this. It has been deployed by companies around the globe and across verticals.

Along with enabling companies to fit more products on fewer trucks, the Auto02 solution manages the placement of pallets so that lighter weight products are placed on top of heavier ones—“eggs on top of bricks,” as Moore says.

In addition, pallets are placed so that they’re supported when, for instance, a truck must turn sharply. This helps eliminate much of the damage that can occur during transit and from material handling.

AutoO2 bolts on to companies’ enterprise resource planning and warehouse management systems, so it can create and guide large orders through execution. It also creates diagrams workers can follow to guide them as they load shipments onto the trucks. This helps ensure that what is planned actually is loaded, and that the resulting shipments comply with relevant regulations and are protected against most damage.

ROI In Weeks

In some cases, the solution has cut deployment freight expenditure by more than 10%. Many shippers see a return on their investment within a few weeks of going live, the company says.

As Riviana worked to implement the Auto 02 solution, Dale and his team sought input from multiple departments across the organization, including the warehouse, information technology, packaging, and transportation planning teams. This helped ensure all gained a solid understanding of the solution, its potential impact, and how it could help them load more efficiently.

“This helped with the success of the implementation,” Dale says. “Everyone was on the same page and understood the goals.”

Step-By-Step Implementation

The implementation process ran about four months, Dale says. Steps included cleaning the data, and some development in SAP. Among other actions, the teams needed to develop a way to electronically send information, such as the item master with the dimensional and weight data for each product.

In addition, the solution needed to transmit the requirements that the supply planning systems needed to ensure enough inventory would be on hand in customer-facing distribution centers.

For instance, a requirement might say that Location A needs 200 cases of wild rice. Most of the development used standard SAP functionality, Moore says.

Through the connection with Riviana’s supply planning system, Auto02 knows which items are headed to which distribution center. Based on this information, Auto02 can develop truckloads that are both legal and optimized.

When Auto02 went live in late 2022, most operators quickly learned how to use the load diagrams, Dale says. The Auto02 solution reduced the learning curve for new loaders by about 80%, Phillips adds.

Almost as soon as operators can read load patterns, they’re ready to begin loading; they don’t need to first become experts in the products themselves, as well as which are stackable and which aren’t.

Riviana’s supervisors can run the programs to create loads when operators come in each day. If the inventory of loads starts running low during their shift, the supervisors can generate additional plans.

Since implementing Auto02, Riviana has seen about a 3.5% increase in weight per truck. Because freight costs fluctuate, it’s difficult to attribute changes in overall freight expense to the software. However, the increase in weight per truck, “adds up in terms of cost savings,” Dale says.

Suggestions for Improvement

The ProvisionAi team has been flexible and open to suggestions that can improve the solution, Phillips says.

For instance, ProvisionAi helped Riviana streamline the process of importing Excel files for times when demand might veer from what was expected. This could occur when a special promotion is planned that will drive demand in specific locations, and the Riviana operations planning team needs to manually tell the system where to ship products.

Now, the system will still produce a loading diagram, even though the load has been created manually. “They’re helpful in coming up with solutions for any issues or for improving the system,” Dale says.

The ProvisionAi team also has offered suggestions to help Riviana continue to leverage the solution. For instance, the team suggested weighing trucks to understand “weight per load goals.” Because the total legal weight that can be driven on U.S. highways is 80,000 pounds, if a truck weighs 35,000 pounds, as many have, the payload can be 45,000 pounds.

Weighing the Options

Over the past several years, trucks have tended to become lighter, as manufacturers try to increase mileage and allow for higher payloads. However, a loader who is used to working with the heavier trucks of the past might assume a truck weighs more than it actually does.

“By taking the time to weigh each truck, rather than relying on memory, loaders might learn that some are 32,000 pounds,” Moore says. “This means they can increase payload targets to 48,000 pounds.”

Riviana currently has plans to implement Auto02 at its plant in Freeport, Texas, which is the company’s second-largest plant.

Case Study: Taking Up Space

Challenges:

Riviana needed to optimize truckloads to use as much trailer space as possible, cutting costs and number of trucks on the road.

Solution:

Implement Auto02 load optimization software from ProvisionAi.

Results:

An average increase in weight per truck of 3.5% and an 80% reduction in the training time many new loaders require.

Next Steps:

Implement Auto02 in Riviana’s Freeport, Texas plant.