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The Best Kept Secret in Supply Chain Consulting · Taking The Supply Chain Pulse

• 0:04
  Speaker 1: Hello and welcome to Taking the Supply Chain Pulse.
• 0:06
  Speaker 1: I'm Megan with St Onge Company, and today I have the honor of introducing a man who knows more about supply chains than most of us know about our own family trees the chairperson and executive vice president of St Onge Company, brian Jensen.
• 0:19
  Speaker 1: And now here's our host, the incomparable Fred.
• 0:22
  Speaker 2: Krantz, today I'm going to step out of my comfort zone, which is healthcare, and I'm going to be talking with Brian Jensen, the chairperson and chief and executive VP of the St Onge Company.
• 0:34
  Speaker 2: Brian's background is not in healthcare.
• 0:38
  Speaker 2: I think he started out in retail.
• 0:40
  Speaker 2: But, brian, we're happy to have you here.
• 0:44
  Speaker 3: Happy to be here.
• 0:45
  Speaker 3: Thanks so much for having me, Fred.
• 0:47
  Speaker 2: Why don't you, since you are so sparse with the words on your LinkedIn page, I couldn't find out where you went to school, what you've done in life much prior to getting to St Ange?
• 0:58
  Speaker 2: Why don't you tell us a little bit about yourself, your background and how you started your career and ended up in consulting?
• 1:06
  Speaker 2: Sure, sure.
• 1:08
  Speaker 3: My career path was much like most people's career paths.
• 1:11
  Speaker 3: It's kind of what happened while you were making other plans.
• 1:14
  Speaker 3: So I graduated high school, was going to be a chemical engineer, went to Stevens Institute for a year of chemical engineering where you were subject to seven engineering classes a semester and one humanities class a very well-rounded education.
• 1:32
  Speaker 3: By the end of the second semester, there I was done.
• 1:36
  Speaker 3: I was going to, you know, hammer a bullet into my head manually if I continued with that program.
• 1:43
  Speaker 3: When I told my family my father in particular I was changing my major to English, there was not a lot of excitement in the house.
• 1:50
  Speaker 3: So I went out and actually ended up with three different English degrees one at the associate's level, one at the bachelor's level and one at the master's level and also sat for all my PhD credits and did everything but my dissertation at NYU.
• 2:05
  Speaker 3: My concentrations were, ironically, phd in medieval literature, middle American literature.
• 2:11
  Speaker 3: For my master's degree wrote my thesis on Edgar Allan Poe's satires.
• 2:14
  Speaker 3: So you can see how they all connect directly to what I'm doing today.
• 2:17
  Speaker 3: It's an obvious logical chain.
• 2:21
  Speaker 2: Let me interrupt you on that.
• 2:22
  Speaker 2: See, I honestly I have gotten.
• 2:25
  Speaker 2: I don't know if Tom Redding has ever repeated my remark to him, but I made a remark to him one time because I'm a history major, so I have a liberal arts degree and I had six years of Latin and all kinds of classical education.
• 2:42
  Speaker 2: I said you know, you engineers, you're linear thinkers.
• 2:48
  Speaker 2: Two always follows one, three always follows two, and he goes no, no, we're playing chess, we're not checkers.
• 2:56
  Speaker 2: I said you could be playing Star Trek chess and two would always follow one and three would always follow two, and I honestly am impressed that you have a liberal arts background, because I think it.
• 3:07
  Speaker 2: I think it means that your view of the world is more expansive, perhaps, than if you had just been limited in that technical, that technical education.
• 3:18
  Speaker 2: What do you think?
• 3:19
  Speaker 3: Well, yes, and that's actually partially what frustrated me when I was taking engineering courses.
• 3:24
  Speaker 3: It was very, you know, step one, step two, step three, step four, step five or if then, statement tree, so you could go from here to there, always logically, you know, but to say, well, you're not playing checkers because you've got an engineering degree.
• 3:39
  Speaker 3: There are great quote chess players who have engineering degrees, technical degrees.
• 3:43
  Speaker 3: There are great quote chess players who have engineering degrees, technical degrees.
• 3:45
  Speaker 3: But I wouldn't say that Shakespeare was playing checkers with the constructs of his plays or his sonnets, To give an example.
• 3:53
  Speaker 3: Everyone knows.
• 3:53
  Speaker 3: I tend to think that neither one is superior but perfectly complementary, Because between merging the two approaches to anything, any problem solving or any client service approach, I think you get a better answer.
• 4:07
  Speaker 3: I think you get a more complete, multifaceted and well-rounded answer for that customer, for that client or to that problem.
• 4:16
  Speaker 2: What do I know?
• 4:16
  Speaker 3: I'm just an English major.
• 4:18
  Speaker 2: That's okay, you know.
• 4:18
  Speaker 2: Honestly, I think this sort of gives me some insight about something that I know.
• 4:25
  Speaker 2: You read the article I wrote about Cleveland, about Baptist Health of South Florida and its comparison to St Onge, and the commonality, I believe, of both places is the human side of business being equally as important as the technical side and the focus on the employees being as important as the focus on the customers and the outcome.
• 4:54
  Speaker 3: That's absolutely right and it's not that our staff doesn't have that perspective.
• 4:58
  Speaker 3: But everybody's got a job to do and you don't always focus 100% on that particular job.
• 5:03
  Speaker 3: Nobody's that one-dimensional.
• 5:05
  Speaker 3: But you have to focus the majority of your time and your emotional energy and your mental energy and your intellectual energy on that job, that task, that problem, that approach and my senior partners to focus on the staff themselves, because we don't have to worry about the technical execution of the project work.
• 5:28
  Speaker 3: We've got guys and girls who do a phenomenal job with that and that's one of the reasons that I think St Ange differentiates itself from a lot of other organizations that do very similar things and, quite frankly, one of the reasons I've been here almost 30 years out of a 41 year career, yeah, and that, frankly, one of the reasons I've been here almost 30 years out of a 41 year career.
• 5:46
  Speaker 2: Yeah, and that's that's another thing that we'll touch on.
• 5:48
  Speaker 2: Is that whole continuity thing.
• 5:50
  Speaker 2: That is that's important.
• 5:51
  Speaker 2: But so you graduated with a degree in English.
• 5:54
  Speaker 2: With degrees in English, how the hell did you get into consulting what?
• 5:59
  Speaker 2: What drew you?
• 6:00
  Speaker 3: there.
• 6:00
  Speaker 3: Well, it happened at the same time, as I like to say, life is what happens while you're making other plans.
• 6:05
  Speaker 3: Because my family was so thrilled with my choice of English major and I believe I only maintained housing because I put up the possibility that after my bachelor's degree in English I might go to law school, so that assuaged some fears that I'd be a bum or maybe a beatnik playing the bongos from my father's perspective.
• 6:24
  Speaker 3: I got a job at Toys R Us.
• 6:27
  Speaker 3: My first job at Toys R Us was a figure clerk, freight order, which is a job no one does today because computers started doing that two decades ago.
• 6:37
  Speaker 3: But I was looking up tariffs and reading freight bills and filing overcharge claims for misrated freight bills on behalf of the company, then moved into traffic and transportation management and routing product from our suppliers to our DCs.
• 6:50
  Speaker 3: Then they let me loose in the DCs as a small project manager for increasing effectiveness and efficiencies in the DCs.
• 6:58
  Speaker 3: So kind of did industrial engineering work based off of a little engineering education at the beginning of my academic career and experiential education by being in the DC with a major at the time Fortune 25 retailer somewhere in that neighborhood, certainly one of the bigger ones on the planet.
• 7:16
  Speaker 3: And by halfway through my career there, while I was a ripe old twenty six, twenty seven, I became director of distribution automation and was one of the folks responsible for automating the Toys R Us distribution network, taking them from very manual operations to, at the time, highly automated, which meant conveyors and sorters and pick modules and things like that.
• 7:37
  Speaker 3: Robots weren't anything in anyone's vision at the time in the DC, and the development and implementation of an actual warehouse management system Our first one was written in-house because there wasn't one to get off the shelf.
• 7:54
  Speaker 2: That's how old I am.
• 7:55
  Speaker 3: That's how I cut my teeth and vocationally became the facility design engineer that I ultimately was when I joined St Onge in 1998.
• 8:02
  Speaker 2: So what drew you to St Onge?
• 8:08
  Speaker 3: when I joined St Onge in 1998.
• 8:09
  Speaker 3: So what drew you to St Onge?
• 8:10
  Speaker 3: Well, toys R Us had plateaued I won't get into the details of the compensation model there being heavily stock option leveraged.
• 8:13
  Speaker 3: And when the stock flattened out and no longer split, the last option with value was exercised and most of the senior management, executive management, left.
• 8:22
  Speaker 3: They went on to Greener Pastures and that was a level above me, that was the vice president level and above, and most of the folks that were recruited in were either not great retail resources or they weren't experienced in the kind of retail model that allowed Toys R Us to grow.
• 8:40
  Speaker 3: You know Toys R Us was not known as a luxury brand, toys R Us was discount brand.
• 8:44
  Speaker 3: It was where Toys R Us was a discount brand.
• 8:46
  Speaker 3: It was where you could go and get a decent price on just about any toy known to humankind.
• 8:49
  Speaker 3: You didn't necessarily want to go to Toys R Us at Christmas, but you had to sometimes.
• 8:54
  Speaker 3: The end result was still a growing, flourishing business and it did get more and more challenging after that management change and that happened in 95.
• 9:05
  Speaker 3: The last stock option split was in 90.
• 9:07
  Speaker 3: So there was a five-year grandfathering and investing period.
• 9:10
  Speaker 3: So when the last one that had any value on it was exercised in 95,.
• 9:14
  Speaker 3: That's when the exodus started.
• 9:16
  Speaker 3: I started looking around in 96.
• 9:18
  Speaker 3: And by 98, I had found St Onge Company, interviewed with Paul Ivanko, the then managing partner at St Onge, and as he went through the approach.
• 9:25
  Speaker 3: St Onge Company interviewed with Paul Ivanko, the then managing partner at St Onge, and he went through the approach St Onge took to solving client problems, the objective approach where anything was on the table and the right answer was what was at hand, not necessarily a supplier, partner of any sort.
• 9:36
  Speaker 3: That attracted me tremendously.
• 9:38
  Speaker 3: I met with Paul on a Thursday, came down over the weekend with my wife I was living in North Jersey near where the Toys R Us corporate headquarters was in northern New Jersey in Paramus Toured the area with my wife to make sure she wouldn't beat me with a stick when I moved her here.
• 9:55
  Speaker 3: She either was perfectly comfortable moving here or was perfectly comfortable pretending she was perfectly comfortable moving here, and the rest is, as they say, history.
• 10:07
  Speaker 3: I'd accepted the job that monday and that was in april of 1998.
• 10:13
  Speaker 3: My first day at st ange company was the day after memorial day of 1998 wow.
• 10:18
  Speaker 2: So what kind of projects did you start?
• 10:20
  Speaker 2: Did you start out working?
• 10:22
  Speaker 3: The very first product I did was well outside of my domain.
• 10:25
  Speaker 3: It was how can the great indoors, the luxury Sears home improvement store, how can they run their back room more like a distribution center?
• 10:35
  Speaker 3: So gee, this foreign retail phenomenon was my very first project and we executed that, created a mini warehouse for them, complete with a locator system that in 1998, locator systems in the back rooms of stores weren't very common and help them through that process of organizing that back room, then moved on.
• 11:02
  Speaker 3: My next biggest project was another one well outside of my domain and that was a couple of distribution center designs for Shopko stores.
• 11:05
  Speaker 3: So almost back doing what I was doing at Toys R Us designing an automated distribution center to increase volume and support growth in a retail brick and mortar environment.
• 11:12
  Speaker 3: You have to remember, you know dot com was the redheaded stepchild at the time.
• 11:17
  Speaker 3: As a matter of fact, we were a year or two away from the dot com bubble in 2000, 2001, when everyone became disillusioned from a financial perspective and you know the stock market suffered and actually the whole economy suffered to a great degree.
• 11:30
  Speaker 3: So all of the retail projects were still heavily focused on store servicing and not direct to consumer shipping or anything of that sort.
• 11:39
  Speaker 2: So you've named three places that you work for that are no longer in business Toys R Us, shopko and Sears.
• 11:47
  Speaker 2: Is that because they failed to be able to adapt?
• 11:53
  Speaker 2: I had heard something one time about, you know, sears was more interested in being a financing company than being a retailer, and that made sense because they had a lot of credit plans out there.
• 12:07
  Speaker 2: But was retail not willing to or not capable of adapting fast enough, or did the technology and the new ways of doing things just sort of surpass them?
• 12:19
  Speaker 3: Well, the three companies that you mentioned and I have much better vision to Toys R Us for my tenure there and my connection with people who were there at the bitter end than I do with Sears and Shopko, but I know them both.
• 12:31
  Speaker 3: I think both Sears and Shopko, to one degree or another, fail to embrace the changing channel we mentioned, direct-to-consumer.
• 12:38
  Speaker 3: The channel shift from brick and mortar to direct-to-consumer, brick and mortar to direct to consumer.
• 12:48
  Speaker 3: Ironically, Sears was known for its catalog shipping capability, which was as close to direct to consumer as you really had.
• 12:51
  Speaker 3: The order was received differently.
• 12:53
  Speaker 3: But I mean, everybody talks about how Bopas is this new?
• 12:56
  Speaker 3: You know, buy online, pick up in store.
• 12:58
  Speaker 3: Sears was doing Bopas with the catalog.
• 13:00
  Speaker 3: When I was seven years old I can still remember my mom dragging me to the Sears store to pick up her catalog order at the back of the store, near where the shipping docks were, because that's where they had their pickup counter.
• 13:11
  Speaker 3: So they had the infrastructure to a better degree than many retailers and yet they didn't embrace it.
• 13:19
  Speaker 3: In fact, they closed their last catalog store in the late 90s early aughts, about the time dot-com was starting to take off.
• 13:25
  Speaker 3: Similarly, look at how Walmart embraced direct-to-consumer versus how Shopko did it and many of the listeners may not be familiar with Shopko.
• 13:33
  Speaker 3: It had a heavy Midwest presence, not much on the East Coast and some in the packed Northwest but not much on the Southern West Coast.
• 13:40
  Speaker 3: But Shopko was essentially a discount mass merchant retailer akin in many ways to walmart, um, kind of in a niche I would put them between walmart and target in terms of look and feel to the stores um, yeah, I was, I lived in, uh, I lived in iowa for a long time, in dubuque and and, uh, I, I like shopko, I really did.
• 14:02
  Speaker 2: It was a, a great place.
• 14:04
  Speaker 3: It had a great store vibe for a mass merchant retailer.
• 14:07
  Speaker 3: You know, very friendly service.
• 14:09
  Speaker 3: You know they had a pretty good mantra for that as well.
• 14:12
  Speaker 3: But I think both of both Sears and Shopko mis-aimed.
• 14:17
  Speaker 3: They didn't aim correctly when they were looking at Channel Shift and there are other financing issues with them.
• 14:22
  Speaker 3: You know Toys R Us was a whole other phenomenon.
• 14:25
  Speaker 3: Private equity came in and took the company private, if you folks remember, in large part because people who were heavily leveraged in stock ownership at Toys R Us and the stock wasn't growing and the business wasn't growing.
• 14:34
  Speaker 3: There's only so many children you have only so many toys you can sell, unless you really diverge into a new product line.
• 14:40
  Speaker 3: If they wanted a big cash out, that was the way to do it and private equity was comfortable coming in and buying it because many of Toys R Us' stores were owned by the company.
• 14:49
  Speaker 3: They weren't leased properties, so there was a huge real estate base that allowed for a fiscal safety valve.
• 14:57
  Speaker 3: Worst comes to worst, I can sell the store locations because many of them were bought in downtown areas in the 70s, late 70s, early 80s and those areas had grown around them and the property value with it.
• 15:08
  Speaker 3: So you have some pretty attractive financial models for a private equity firm to spend a lot of money, and if it didn't work, well, they'd still be protected.
• 15:19
  Speaker 3: And it didn't work, but private equity still made their money.
• 15:22
  Speaker 2: Interesting.
• 15:23
  Speaker 2: So when you came to St Onge in 98, had been around for 15 years, it was not nascent, but it was sort of maybe a preteen or a teenager.
• 15:37
  Speaker 2: How has it grown in looks and capabilities and in prestige in the greater community from the time you arrived to today?
• 15:48
  Speaker 3: Sure, Let me talk about the prestige it had first and come back to that in the end.
• 15:53
  Speaker 3: Let me talk about the prestige it had first and come back to that in the end, because at the time I had, I knew the St Ange name because I had consultant interviews.
• 16:00
  Speaker 3: For, hey, we can design your facility towards the rest and we use a couple of consultants for the first design.
• 16:04
  Speaker 3: That failed miserably.
• 16:05
  Speaker 3: I personally loathed consultants.
• 16:07
  Speaker 3: I thought they gave you the minimal value for the maximum dollar.
• 16:11
  Speaker 3: My experience, however, was with a lot of the larger business consulting firms trying to do supply chain, which meant they brought in a lot of logistics MBAs who had graduated, you know, in in June and you're hiring them in September, so the ink's not even dry on their diplomas yet, and they tended to be learning a lot more about your business than they were providing value on it.
• 16:32
  Speaker 3: The St Ange name I knew of it wasn't familiar with it.
• 16:37
  Speaker 3: What I came to understand shortly after I joined St Ange was one of the best kept secrets in the industry.
• 16:42
  Speaker 3: Those who knew it valued the partnership with the St Ange consulting firm, but very few knew it and that's what I mean by it was one of the best kept secrets.
• 16:52
  Speaker 3: Hold that thought.
• 16:54
  Speaker 3: We'll come back to it at the very end, because you asked me a couple of three different discrete questions about, say, an entrepreneur.
• 17:00
  Speaker 3: When I joined the services were focused on facility design, manufacturing facilities, distribution center facilities.
• 17:06
  Speaker 3: 1994 was the start of our network analysis practice, so we had one or two folks who were running the old sales model by Insight to help folks optimally locate new distribution centers within their supply chains.
• 17:18
  Speaker 3: And essentially that was it Facility design and a very, very not even it was past embryonic, it was a newborn network analysis or logistics practice purely focused on where your facility should be, how big it should be and what its mission should be.
• 17:44
  Speaker 3: Not really supply chain, no SNOP, no inventory planning and management, none of that.
• 17:46
  Speaker 3: Well, most of our distribution center design work was focused on wholesalers and in support of manufacturers.
• 17:51
  Speaker 3: One of the reasons I was hired is hey, this guy can spell retail, so there you go.
• 17:56
  Speaker 3: So that's why a lot of my first projects were all focused on retailers.
• 17:59
  Speaker 3: And it is a different animal, you know, pharmaceutical distributors have a different margin, they have a different price point, they have a different tolerance for investment than retailers.
• 18:07
  Speaker 3: You know, retailers didn't even know what their capex was going to be for next year until after Christmas.
• 18:13
  Speaker 3: So long range planning was kind of an oxymoron at a retailer.
• 18:18
  Speaker 3: You didn't know.
• 18:23
  Speaker 3: You had the budget for what you needed to get done next year until the end of the year and you had to get it done before September, october of that year, because Christmas season was coming and you better be able to support those sales and those logistics needs.
• 18:31
  Speaker 3: So that was the St Andrews Service Organs, those sales and those logistics needs.
• 18:35
  Speaker 3: So that was the St Andrews Service Org.
• 18:36
  Speaker 3: Then in 2000, we started using a tool by at the time a company called Tools Group, which at the time it was called DPM or something like that.
• 18:42
  Speaker 3: They eventually changed the name to Stock Optimizer 99+ and that was for inventory planning and management and inventory optimization.
• 18:49
  Speaker 3: So we added that arrow to the supply chain quiver.
• 18:52
  Speaker 3: I also brought a 3PL procurement practice with me because I was doing that at Toys R Us every year as we ran out of space in DCs.
• 19:00
  Speaker 3: We were growing insanely fast.
• 19:01
  Speaker 3: So we had 3PL procurement just for distribution centers, not for transportation, just DC third-party logistics requirements.
• 19:09
  Speaker 3: We could help our clients find the right partner, negotiate the contracts and select the winning bidder for their 3PL business.
• 19:17
  Speaker 3: So now we're starting to create this broadening of our service offerings, all ironically, starting from the most finite footprint you could have inside a building Went from inside a building to where those other buildings should be, to how we should fill those buildings, to how we should have those buildings serviced by other suppliers, to how we should have those buildings serviced by other suppliers.
• 19:35
  Speaker 3: Two in the last 10 years we've added SNOP, siop and inventory planning and management practices.
• 19:40
  Speaker 3: We've gone from having one or two folks do that to now we have a half a dozen people working on projects for clients in that vein.
• 19:47
  Speaker 3: And we're talking to clients at different levels.
• 19:50
  Speaker 3: Now, where you were doing the facility design, you were talking to maybe a vice president of distribution.
• 19:57
  Speaker 3: You certainly weren't talking to a chief supply chain officer in 1998, because that title really didn't exist.
• 20:02
  Speaker 3: Even the industry wasn't ready for some of the growth that we've encountered.
• 20:06
  Speaker 3: Or maybe we encountered the growth or weren't able to realize the growth because the industry changed.
• 20:12
  Speaker 3: I'll take it either way.
• 20:13
  Speaker 3: The growth is the growth and I'm happy that we're able to have that.
• 20:17
  Speaker 3: So now we've started to broaden our offerings to include the entire supply chain, up to and including landed cost modeling, from the cost of procurement based on location, to transportation, to movement within your transportation network, to your different sales outlets, whether they be wholesale, whether they be direct-to-consumer, whether they be wholesale, whether they be direct to consumer, whether they be retail brick and mortar locations, and making decisions within that supply chain to reduce your cost and increase your margin.
• 20:46
  Speaker 3: So, from how do I best pick this product out of this little finite location in my DC to how do I get this product from Shenzhen, china, to Dubuque, iowa, and all the options in between.
• 20:58
  Speaker 3: And that's the best way I can describe the blossoming of St Andrew's service offerings.
• 21:04
  Speaker 3: And you'll notice, fred, I left out an entire service offering which is between 25 and 30 percent of our entire company and very near and dear to your heart, heart, and that's what we've deemed the health care practice yeah, that's interesting where we service health care providers with many of the same disciplines that we do non-health care providers, or within distribution, manufacturing and supply chain, and some services that we don't offer anywhere else because they're unique to health care providers.
• 21:33
  Speaker 3: You know, I don't need to do patient flow anywhere else because I don't have patients anywhere else in my business.
• 21:38
  Speaker 2: No, but you really move.
• 21:39
  Speaker 2: You know patient flow is often queuing theory and the whole idea of moving a product through an operation.
• 21:46
  Speaker 2: I mean from a global level.
• 21:48
  Speaker 2: But a couple of things you said.
• 21:50
  Speaker 2: Number one you said you'd never liked consultants because they charge too much.
• 21:55
  Speaker 2: When I was at Accenture, our philosophy was if you ain't charging too much, it's not worth it.
• 22:01
  Speaker 2: Okay, absolutely.
• 22:05
  Speaker 2: And the second thing you said which I point out to people on a regular basis was supply chain, the term supply chain.
• 22:12
  Speaker 2: I've been in health care since 1965, and I never heard supply chain applied to health care until probably 2005 or so it started to sneak in a little bit.
• 22:22
  Speaker 2: We throw titles onto things before we have the operation to support the reason for the title, if you know what I mean.
• 22:32
  Speaker 2: Absolutely.
• 22:33
  Speaker 2: And I was interested to hear you say that.
• 22:35
  Speaker 2: So what sets St Ange apart?
• 22:39
  Speaker 2: What makes St Ange different than than the competitors out there?
• 22:44
  Speaker 3: And in large part to me.
• 22:45
  Speaker 3: It's remember my full statement they charge too much and offer too little value.
• 22:52
  Speaker 3: The goal is to offer that value.
• 22:55
  Speaker 3: What's my value?
• 22:58
  Speaker 3: First Because and I've reminded some of my engineers when I first started doing project management at St Onge Company guys, girls, this company is paying you $150 an hour at the time to help them be better.
• 23:15
  Speaker 3: $150 an hour.
• 23:19
  Speaker 3: Treat them like you're getting $150 an hour from them, because that's a handsome fee.
• 23:27
  Speaker 3: Provide handsome value.
• 23:29
  Speaker 3: Never forget that it's not just the salary you're getting, it's not just your paycheck at the end of the week that you're individually compensating.
• 23:38
  Speaker 3: Our company is getting a tremendous amount of premium and they're paying for our skills.
• 23:44
  Speaker 3: They're paying for our talents.
• 23:45
  Speaker 3: They're paying because they don't have that skill set on board and they don't want to hire it permanently because they maybe don't need it permanently.
• 23:51
  Speaker 3: Maybe they need it just on a project basis.
• 23:54
  Speaker 3: Or they're hiring us because they need the bandwidth with that highly valued skill set.
• 23:59
  Speaker 3: They've got some folks who can do what we do.
• 24:05
  Speaker 3: Let's not be arrogant.
• 24:05
  Speaker 3: We're not the only ones who can do what we do, so we have to differentiate ourselves by other means.
• 24:08
  Speaker 3: There are other people who are just as smart as us, just as experienced as us, but are they as devoted to the client as us?
• 24:15
  Speaker 3: Just as experienced as us, but are they as devoted to the client?
• 24:17
  Speaker 3: Are they as comfortable saying you know what?
• 24:18
  Speaker 3: I messed that up.
• 24:19
  Speaker 3: So the next time I have to do this for you, I mean I have to redo it for next week.
• 24:22
  Speaker 3: I'm not going to charge that to the client.
• 24:24
  Speaker 3: It's my fault.
• 24:25
  Speaker 3: I did that, I made the mistake.
• 24:27
  Speaker 3: The client shouldn't be subject to paying for my mistake and I've already reaped value from that because hopefully I learned something from that mistake so I won't make it again next time.
• 24:34
  Speaker 3: That kind of approach.
• 24:36
  Speaker 3: It's not bill at all costs, it's bill what you're giving value for and leave the client overwhelmed.
• 24:44
  Speaker 3: Deliver plus one.
• 24:47
  Speaker 3: You can pick all the cliched terms you want, but they're cliched for a reason.
• 24:52
  Speaker 3: They have a value and they work when they're embraced and applied appropriately.
• 24:57
  Speaker 3: So that's one of the things that differentiates St.
• 25:02
  Speaker 3: Another thing that differentiated us when I joined, but I think differentiates it even more now because of scarcity, is our objectivity.
• 25:09
  Speaker 3: A lot of those other folks who are as smart as us and as experienced as us are working with an integrator model.
• 25:16
  Speaker 3: They'll do designs inside of the four walls, but they want to sell hardware too.
• 25:20
  Speaker 3: They want to sell you the nuts and bolts on the back end.
• 25:23
  Speaker 3: Or they want to sell you the WMS system or the transportation management system too, because they make more money there and there's nothing wrong with that model.
• 25:31
  Speaker 3: But it necessarily narrows your objectivity.
• 25:35
  Speaker 3: It limits the field of view you have to bring to the client.
• 25:39
  Speaker 3: Our biggest value is we should be able to look at all the possibilities for a client and help them identify the best one from a fiscal reliability, longevity, flexibility, safety, accuracy, whatever value points are higher on the client scale because of the nature of their business.
• 25:56
  Speaker 3: We can look to the option, be it fully manual, to lights out, automation and everything in between, with equal aplomb, 100% objective, because we have no axe to grind on what the solution is.
• 26:09
  Speaker 3: And then the same thing provides us objectivity when we're looking for 3PL partners, when we're developing supply chain options.
• 26:16
  Speaker 3: We're not a steamship line helping you with the supply chain, because I don't know that air freight is going to be big on the list of things to do for a critical product that might be light, that might be low, cube, that might be cost effectively moved by air for the inventory savings to avoid a six week journey across the ocean.
• 26:31
  Speaker 3: But wouldn't you want every option on the table for any supply chain solution, and that's one of the advantages we bring.
• 26:39
  Speaker 3: So there's the expertise level, the experiential level.
• 26:43
  Speaker 3: If you look at the experiential level or the tenure of our staff, it's above average, and it's not just tenure.
• 26:50
  Speaker 3: In industry we're pretty good at retaining folks.
• 26:53
  Speaker 3: There were years, there were years where, you know, on average, we hit around a 10% turn rate per year.
• 26:59
  Speaker 3: There were years where it was three to 5%, which for a consulting firm, is phenomenal.
• 27:04
  Speaker 3: You know, consulting firms, especially the bigger they get, they tend to be a turn them and burn them, or, you know, grind them.
• 27:09
  Speaker 3: You know the most value out of them you can, and then they just burn out where they get enough experience and they go into industry and they jump out of the consulting area.
• 27:17
  Speaker 3: We, we want to be the place you retire from when you take a job here.
• 27:21
  Speaker 3: Well, I hope to you and me both.
• 27:29
  Speaker 2: You know, I was talking with Albert Nakansa recently and I asked him how many times do you go to a project and encounter what I call jeopardy purchasing, where the people that hired you have already selected the solution they want.
• 27:43
  Speaker 2: And you get there and you find out very quickly, after you've gathered the data and started to do the analysis, that what they want is not what they need.
• 27:52
  Speaker 2: And then what do you do?
• 27:53
  Speaker 2: Do you tell them and Albert is one of our fine young folks in health care, he's a great project manager and he says you know, we have the conversations with them, we try to lead them toward the right solution, because we have nothing in the game except to help them make the right decision.
• 28:12
  Speaker 2: So you know, almost we're sort of getting close to the end of our time.
• 28:18
  Speaker 2: But I had a couple things as an observation.
• 28:21
  Speaker 2: I was talking with Regine Vian from Ochsner recently too, and I made a comment to her that most of us that were supply chain leaders in healthcare didn't know anything about supply chain.
• 28:34
  Speaker 2: Once again, history, major, right, History major.
• 28:37
  Speaker 2: Can make the Hall of Fame.
• 28:38
  Speaker 2: It can't be that difficult, right?
• 28:40
  Speaker 2: But my experience is that healthcare supply chain management is 80% politics and 20% operational expertise.
• 28:52
  Speaker 2: What is that like on the other side of the coin in retail and industry?
• 28:58
  Speaker 3: It varies by industry.
• 29:00
  Speaker 3: You know, retail has a little bit more of a politics or soft skill requirement to have impact, and that's what I.
• 29:07
  Speaker 3: When you say politics, that's what I look at.
• 29:09
  Speaker 3: They're not just managing by dollars and cents and this must be the right answer which drives engineers crazy, as we talked about earlier, because it's not just a step one, step two, step three process.
• 29:20
  Speaker 3: But when you get into companies that rely on supply chain to make their living because we work for retailers, we work for wholesalers, we work for shipping companies, we've done projects for UPS and FedEx Well, they're all about how do I get this product from point A to point B in the most cost-effective way possible, inclusive of damage reduction and accuracy and speed and all those things.
• 29:43
  Speaker 3: So it varies dramatically and I think the more the money is made from the physical movement of the product, the less politics you have.
• 29:54
  Speaker 3: It's not a perfect proportion and ironically, with direct-to-consumer and in retail in particular, the focus on supply chain has become much more specific and it's gotten more weight in the decision-making process than when it was all brick and mortar, because then I want to go to the store and have an experience and my stores are being redone.
• 30:15
  Speaker 3: So my shopping experience is better and there are some people, I suppose, where the experience weighs overall.
• 30:22
  Speaker 3: Macy's and Nordstrom's, you know, have success for a reason, but Walmart and Dollar Tree and Dollar General have success for a very different reason.
• 30:30
  Speaker 3: Now you do have an experience when you go to their stores.
• 30:32
  Speaker 3: It's not the same as going to Nordstrom, but you might experience walking out of the store with more money in your wallet than you went in with, or more money than you have if you left a Nordstrom store with similar purchases.
• 30:44
  Speaker 3: So it's about everybody's value.
• 30:46
  Speaker 3: There's not one customer and there's not one complexion of a supply chain and I think the more that that retail or that business relies on the physical supply chain, I think the less politics there are in the decisions about the supply chain.
• 31:01
  Speaker 3: Let me be very particular about what I'm talking about.
• 31:03
  Speaker 3: Running the business, deciding what to sell, that's a whole different domain.
• 31:06
  Speaker 3: That's beyond my pay grade.
• 31:07
  Speaker 3: If I could do that I'd probably be retired already, and that's where the difference is made.
• 31:14
  Speaker 3: But you made a.
• 31:15
  Speaker 3: You talked about Albert's comments.
• 31:19
  Speaker 3: You know where the client already has a decision made back.
• 31:22
  Speaker 3: I think it was for St Onge's 25th or 30th 30th anniversary.
• 31:25
  Speaker 3: I think it was.
• 31:26
  Speaker 3: Penn Live did a very brief phone interview with me for an article to cover our 30th anniversary salutation in their publication and they said what's the hardest part of your job?
• 31:37
  Speaker 3: I said the hardest part of my job is actually the best part of my job at the time.
• 31:40
  Speaker 3: It's telling a client when they might be making a mistake If that preselection sometimes the preselection is exactly the right answer.
• 31:48
  Speaker 3: You know I mean mean my career success is a testimony to the fact that even a broken clock is right twice a day.
• 31:54
  Speaker 3: So as long as you know when to point to yourself that those are the two times in 24 hours, you got it right.
• 31:59
  Speaker 3: Same thing happens with client pre-selection or client predeterminations or notions of what the best answer is.
• 32:07
  Speaker 3: I often tell my clients I'm not here to ask you to look at your watch and then charge you to tell you what time it is.
• 32:12
  Speaker 3: I'm here to help you understand what your best solutions are, what your options are, and to guide you to an educated decision.
• 32:20
  Speaker 3: And if you're making a decision that has pitfalls, it's my job to point them out, even if they don't want to hear it, because it's always easy to tell somebody what they want to hear.
• 32:29
  Speaker 3: It is difficult to tell somebody what they need to hear sometimes, and that's, I think, one of the bigger value propositions of St Ange.
• 32:37
  Speaker 3: And the last biggest value proposition of St Ange is it's our people.
• 32:41
  Speaker 3: It's everyone who works the Alberts who work for our clients, it's you who communicates to our client base and who communicates about what we do through channels like this, and the reason that's so important is that is our product, more specifically, what's between their ears and what's in their hearts.
• 33:00
  Speaker 3: For our clients, that's the St Orange product and that's one of the reasons why I'm very grateful that we have that engineering staff who can do all the technical stuff, do the things to provide deliverables to our clients, so that myself to do these things.
• 33:13
  Speaker 3: But we can do a lot more than the average business we think does for their personnel, for their people, for their, their best asset in our case it's a one-to-one.
• 33:39
  Speaker 3: We don't have a bright, shiny thing, we don't have inventory.
• 33:44
  Speaker 2: We have our people and that's what we offer our clients and to me that's what c9 shouts is you know the excellence of its people but also as someone working here.
• 33:57
  Speaker 2: I mean, I told somebody the other day I said, who else would hire a 79-year-old guy and think that he brought any value to the place and treat him the way I've been treated by St Onge?
• 34:10
  Speaker 2: I can't, honestly, I can't think of too many, but, but that's the way everybody is treated here and and and I, I, I look at the young folks and I'm in awe of what they know and how they get into what they do, and my only, my only regret for them is that many of them only got one data point of of experience so far and they don't know that the rest of the world ain't like st onge and that's you know, that's a telling insight.
• 34:37
  Speaker 3: I I say, you know, we've got, we've got what I call grown-up st onge babies, and they've only been here and there's nothing wrong with that.
• 34:44
  Speaker 3: But I value what we have here so much more because I was someplace else before that.
• 34:49
  Speaker 3: Yep, you know, you have a point of comparison.
• 34:53
  Speaker 3: You go wow, and in some of the decisions I make it's or just I don't want to do what I, what I was subject to there.
• 34:59
  Speaker 3: Yep, I know Right what I saw as the wrong there.
• 35:02
  Speaker 3: I want to improve what was good there and could be made better.
• 35:09
  Speaker 3: And while we're not perfect, I think we've come much further down that path than many other industries, than many other companies in any industry.
• 35:16
  Speaker 2: Yeah, I can attest to that, and Brian thanks so much for being on the podcast.
• 35:21
  Speaker 2: It's been great talking to you.
• 35:22
  Speaker 2: I know we rehearsed this conversation in great detail.
• 35:28
  Speaker 3: Yeah, we'll get an English major and an English major together, and you said, we're coming up on time.
• 35:32
  Speaker 3: I'm like gee, I thought we were only half done so now we're good.
• 35:36
  Speaker 2: We're good.
• 35:37
  Speaker 2: I really appreciate it.
• 35:38
  Speaker 2: Thanks so much.
• 35:39
  Speaker 2: It's it was.
• 35:40
  Speaker 2: I think this may be the first time we've ever had a conversation, so this is this has really been enlightening to me, and I appreciate your taking time out of your day to talk with us.
• 35:51
  Speaker 3: Anytime, Fred, anytime.
• 35:52
  Speaker 3: Thank you for inviting me in.
• 35:56
  Speaker 1: As always, thanks for tuning in and don't forget to subscribe and connect with us online, where you can find all of our episodes.
• 36:02
  Speaker 1: If you have a topic you'd like to discuss or would like to be a guest on the show, you can reach out to Fred directly at F C R A N S at S T O N G?
• 36:12
  Speaker 1: Ecom.
• 36:13
  Speaker 1: See you next time.