Deep [Supply Chain] Thoughts

One of my favorite Saturday Night Live skits was “Deep Thoughts by Jack Handey,” where Jack would share a brief thought-provoking question or observation on something strange, mundane, or just plain ridiculous. For example, watch this clip for Jack’s deep thoughts on time travel etiquette.

A couple of supply chain deep thoughts popped into my head this morning as I caught up on industry news.

First: If you’re going to launch a disruptive supply chain technology company, make sure you have at least one person on your team who actually understands supply chain management and has worked in the field, don’t just hire a bunch of high-priced Silicon Valley software developers who might be good at creating cool-looking apps and interfaces, but have no clue how supply chain processes actually work in the real world.

This thought was triggered by the news that Cargomatic, a so-called “Uber for Trucking” startup that has raised more than $10 million in funding, has laid off half of its staff. As reported by Lara O’Reilly in Business Insider:

[Cargomatic] “blindsided” staff by laying off half of its workforce — around 50 to 60 employees — over the past couple of months, according to people familiar with the matter.

CEO Jonathan Kessler said in an emailed statement: “The Cargomatic marketplace continues to expand and has enjoyed year-over-year growth since our founding in 2013. Key to growing a successful company is knowing where to staff appropriately at different growth phases. Sometimes that means making difficult decisions, and to that end, we recently reduced the size of our marketplace operations and inside sales teams.”

In Cargomatic’s case, “where to staff appropriately” is hiring executives with deep industry experience and expertise. Last month, the company announced the hiring of two logistics industry veterans to key leadership roles: Chuck Oeleis as Executive Vice President of Sales, responsible for building and managing all of Cargomatic’s sales efforts, and Meaghan Diem as Vice President of Enterprise Sales, assigned to focus on growing Cargomatic’s large-volume client base. According to the press release:

Oeleis has more than two decades of experience in the logistics world, including 18 years in various global executive positions with UPS. Most recently, he was a Vice President for Carlile Transportation and later for CEVA Logistics, tasked with business growth and developing supply chain partnerships.

Diem has more than twenty years of supply chain leadership experience across multiple industries, with a particular focus on building customer-specific logistics solutions. She served as Director of Business Development for XPO (previously Menlo Worldwide) and most recently was Vice President of the less-than-truckload business unit of Coyote Logistics.

It seems like Cargomatic followed through on what a laid-off employee posted on more than a week before the new hires announcement: “The CEO doesn’t know anything about freight. Is fixated on running a ‘tech’ company, but at the end of the day you’re moving freight through a platform. Lack of knowledge directed sales people in the wrong direction selling deals for losses. Be more involved and hire people that know what they are doing [emphasis mine]”

Second deep thought: Will the rapid growth of e-commerce further crumble our nation’s transportation infrastructure, or will our nation’s crumbling transportation infrastructure leave e-commerce stuck in traffic — or at least dampen the ability for retailers and logistics service providers to meet consumer expectations for faster, more time-definite deliveries?

This thought was sparked by a recent Harvard Business Review post by Edward Humes titled, “Why the Future of E-Commerce Depends on Better Roads.” As Hume writes:

For all their convenience to consumers, the rise of e-commerce and the allure of same- and next-day delivery have hit the goods movement industry like a tidal wave, UPS more than most, multiplying the number of trips each day by several orders of magnitude. Big Brown’s original lucrative model has shifted from truckloads of business-to-business delivery to those same truckloads dropping off a parcel at a time at a hundred different home addresses. Traffic is the enemy in this new reality, and it’s getting worse, not better, over time.

Just a couple of thoughts — maybe not so deep, but perhaps important enough for you to think about as we begin a new week.

Have some deep supply chain thoughts of your own? Post a comment and share them!