When the Supply Chain Begins with the Customer

George: That gets back to our overriding philosophy that our supply chain begins with the customer. By design we have a very nimble supply chain, and we can change and adapt to customer requirements. In many cases, we can actually predict where customers will go with their supply chains, and we try to get there before they do. Consequently, we don't feel the cost pressures that many consumer product companies do.

iSource: What might be an example of that, where you've gone someplace in anticipation of a customer need?

George: The due diligence and the subsequent choice of our warehouse management system were based on a technical capability to cross-dock off of our manufacturing line into a truck. That was an overriding decision point for us on which system to choose, because we anticipate that our customers will continue to shorten their lead-times — if we can truly have the ability to turn an order around at the time of manufacture, we're already there.

iSource: Which WMS do you use?

George: We use Manhattan Associates.

iSource: Are you running an enterprise resource planning (ERP) system there?

George: Well, technically, we're really not fully ERP. We have a BPCS platform, and we have integrated our WMS system into that. We also have some other functional software that we use in other parts of the company that we've interfaced with BPCS.

iSource: What are the challenges or risks that you anticipate when you are implementing any type of new system or process in your supply chain, and how do you deal with those challenges?

George: There's a part of me that says I don't want to tell you, because we've had at least one competitor tackle some technology and have significant problems as a result, which we have benefited from. But that probably wouldn't be fair. [Laughs]

I think our approach is very straightforward. AIPC has the low-cost production platform, the low-cost model in our industry. We only employ just over 600 people. So, obviously, we have to depend on technology to drive our business. But our approach, and what makes us successful, is that we don't build a process around technology. We understand our processes so well that we identify the process improvement and the application, and then we go and find the technology — and we don't Alpha or Beta any technology. If the processes are well defined, we can lay the technology on top of them and not go through some of the pain. That's not to say that there isn't pain — any installation and integration of technology is going to come with some issues. But we have very stringent return on investment criteria for any technology purchase, and the savings have got to be real, and the savings have got to be incorporated into our financial statements.

iSource: Do you have a preference for going outside to buy technology or building your own?

George: We go outside.

iSource: How come?

George: We're in the pasta business. We don't want to be in the technology business. And we're very good users, but we don't want to employ an IT infrastructure. I came out of a background with some pretty aggressive technology initiatives, and I think that it has taken a while for some of those initiatives to take hold. But I also have seen, not just in my prior life but out in marketplace, how so many companies employ technology, but then they also have to employ an infrastructure to support it. And that doesn't make much sense to us. We take the approach that the technology shouldn't require a pit crew to keep it going.

iSource: Finally, you've worked at Colgate Palmolive's pet food subsidiary, Hill's Pet Nutrition. What did you bring with you from that environment to your new job at AIPC?

George: Colgate's a very, very fine company, and they employ a technology strategy — a technology platform — that's very strategic. They have wrestled with things that most companies don't. They had to integrate businesses all over the world. They employed SAP, and what has made them successful was a very strict discipline to implementing SAP, and I think that's invaluable. You decide what you want to do with it and you adhere to the standard until you get it operational. Only then do you begin to fine-tune. Colgate has proved that time and time again through their installations. And I think they are also very good at supply chain management overall, using a philosophy that is supported by technology, and that's been very helpful for me.