“There’s no preventing it, there’s only learning to navigate it.” When things go awry, are you prepared to take action? How do your organization's choices impact your partners, your business, and your customers? Michelle Weaver, Senior Vice President of Global Order Management, talks about navigating through immense challenges by switching focus from controlling the situation, to influencing your options to create powerful, effective outcomes.
Chris Parker (Host):
Hello, everyone, and welcome to The Expeditors Podcast, where you can hear about front of mind topics in the logistics and freight forwarding industry through the lens of a global logistics provider. I'm your host, Chris Parker, and today we're going to be talking about valuable damage control. We all know there's more than one way to get a job done, and it's no different when it comes to protecting the flow of goods and materials whenever a disruption hits.
Chris Parker:
So all parties, whether it's the shipper, forwarder, or the customer, have their own approach to mitigate disruptions. But what's the most productive? Today, I've got Senior Vice President of Order Management at Expeditors, Michelle Weaver, to talk about it. Michelle, how are you doing today?
Michelle Weaver:
I'm very well. Thank you, Chris. How are you?
Chris Parker:
Well, my wife actually got me a telescope for Christmas, so now I can observe social distancing on a planetary scale. And let me just tell you, Venus is kind of pushing it.
Michelle Weaver:
I was hoping maybe you could use that telescope to monitor the port of LA so we can see how quickly we can get the next ship in to be worked. A little crowded over there right now.
Chris Parker:
I'll just point it over in that direction for sure. I'll let you know. I want to get to know you a little bit more, and for the audience who may not know you, what's your background, how'd you get into your position? And then also what's order management?
Michelle Weaver:
My background is I've worked at this company for almost 28 years. It'll be 28 years in April.
Chris Parker:
Congratulations.
Michelle Weaver:
Thank you very much. And I started at one of our local offices, our Seattle office, and I started filing original documents in our ocean import and what it was called at the time, our inland, which is now transcon department. So then I just kind of worked my way through operations and then moved to corporate, and here I am. My background is mostly ocean and order management. Those are the two products that I have worked in over the last almost three decades. Oh, Jesus. I can't believe those words just came out of my mouth.
Chris Parker:
Hey, no, but you've really stuck with it. That's impressive. Order management, what is that, and how does that relate to today's topic?
Michelle Weaver:
Order management, I think, relates beautifully to today's topic because I'm not entirely sure how a company could have a truly robust and resilient supply chain without a very powerful order management program of some kind, whether you're running your own or you're having a company like Expeditors run it for you. I think an order management program is absolutely essential to having a resilient supply chain. Order management, as we define at Expeditors, it's a product where we offer a lot of origin consolidation services.
Michelle Weaver:
We're managing suppliers, making sure they're shipping your POs, your products on time, in the right quantities. We're helping build physical consolidation, ocean containers, or air shipments, or transcon shipments truck. We're helping you manage any exceptions to those orders, approve them, not approve them, et cetera, and giving the customer visibility to that process the whole way through. It's a pretty robust and powerful service. And like I said, I think it's one that's critical to a resilient supply chain.
Chris Parker:
Yeah, it sounds like it's all about really understanding and having visibility to the nitty-gritty details of shipments and everything's in order.
Michelle Weaver:
Yeah. It's about having visibility and control over your product that is moving, not the ocean container or the air freight shipment. It is, "Where are my 100 widgets? Where are the door handles that I've ordered for this particular vehicle that we're assembling? Or where are the servers that we need to have built and installed in this project on the other side of the world? Where are the sweatshirts that need to be on the stores for back to school?"
Chris Parker:
Well, let's jump into our topic then. Aside from what we've seen in 2020, what other examples of disruptions are out there that people may not be aware has affected them from a trade perspective?
Michelle Weaver:
Well, we always call it our disruption of the year because there is a major one every single year, whether it be a labor slowdown or a labor strike with ports or carriers, whether it be a natural disaster, a tsunami or an earthquake or a hurricane, or whether it be a financial situation, or one of the steamship lines or air carriers is going bankrupt. And when that happens, capacity is immediately removed from the market. Available capacity for people to ship cargo on is immediately moved from the market.
Michelle Weaver:
There's always something. Every year there's something. 2020 happened to be a global pandemic. We haven't seen a disruption. I think that's an underuse or an overuse of the word disruption.
Chris Parker:
And unprecedented disruption.
Michelle Weaver:
The pandemic was a little larger than a disruption, but it certainly obviously impacted the supply chains for everyone. I think it was 2016 when Hanjin ship line went bankrupt. They were one of the biggest steamship lines in the world. They were a formidable organization, and it was quite sad when they went bankrupt. And not only the fact that they went bankrupt, but the timing of their bankruptcy.
Michelle Weaver:
It was the last day of August, which is right in the middle of peak season when importers, specifically in the US, are importing cargo in time for the holiday season so people can do all their Christmas shopping. So you do the Christmas and the holiday goods coming in late summer, early fall, so they have time to clear customs and get distributed and be out in the store shelves and ready to go.
Michelle Weaver:
That would have been a year that people might've noticed that they didn't have everything that they wanted to people to buy on the shelves because when Hanjin went bankrupt, all of their ships were immediately arrested, meaning they were taken out of rotation. That capacity was immediately withdrawn from the marketplace, and all the goods that were already on those ships were now tied up.
Michelle Weaver:
A lot of those Christmas and holiday goods were in containers on those vessels that then could not be offloaded and distributed to the end destination because they were tied up in bankruptcy proceedings. That's one way you'd feel it.
Chris Parker:
A sad Christmas.
Michelle Weaver:
It really is a sad Christmas or a sad Hanukkah.
Chris Parker:
What have organizations been able to learn from these major disruptions from the past? As we're going on and evolving our business and growing and such, how have organizations learn from these?
Michelle Weaver:
There's no preventing it. There's only learning to navigate it. So some of the ways that we see, the more successful customers really, have the ability to navigate those disruptions is they have to have really full mastery over the way that their organization opens orders, manages those orders. And I'm using the word order, but it could be a PO, a sales order, a shipping order. There's lots of different terminology form, but that's what I mean by when I'm talking about orders.
Michelle Weaver:
When you open a PO against a supplier, or you open a sales order because a customer has opened a PO against you, and you're the exporter, and you need to now produce that product and export it to them. And there are some real key hallmarks I think of organizations that do that well. And the first is, of course, like I said, to have mastery over your order process. And what I mean by that is have as much data on those orders as you can possibly get, have volumes, meaning shipment volumes, so you've got your quantity of widgets that your customer has bought from you or that you were buying from that vendor.
Michelle Weaver:
But you also need to know how big are those widgets? How much space do they take up? How much do they weigh? How are you going to ship them? Are you going to ship them in an ocean container? If so, how many containers are you going to need, or how much of a container are you going to need to ship that order, to ship those widgets? Is it going to go air freight or ocean freight or a truck? What are the dates? What is your requested ship date? What are requested delivery dates? What are requested ex-factory dates?
Michelle Weaver:
Manage those dates and have mastery over those dates, meaning we'll see companies that open orders, and they'll ask their vendors, "Please ship this. Your latest ship date is July 1st." But really, they never hold the vendor accountable to that date, and they just let it slip and slide. It could ship early. It could ship late. Whatever.
Chris Parker:
People down the line may not be able to prepare for an early shipment or later shipment.
Michelle Weaver:
That's exactly right.
Chris Parker:
Those organizations still need to run on their own timelines as well.
Michelle Weaver:
That's exactly right. So you really need mastery over that process. Is every vendor going to ship every order on time every single time? Of course not. There are always going to be exceptions, but you need to have a methodology and a process for managing those. And then keep them as accurate as you possibly can. Keep them up to date. And really, the way that I see organizations or companies be able to be successful in doing that is by working across teams or across silos within their own organization. The logistics team can't do that all by themselves.
Michelle Weaver:
They've got to work with their sourcing or their planning or their buying teams. Finance needs to be involved. Compliance needs to be involved. Logistics needs to be involved. Those silos are different segments of your company. However you slice and dice them or split them up or align them or what have you, those are really the functions within your organizations that need to work as a solid aligned unit when you are running a resilient supply chain. The purchasing team has a relationship with the vendors when you're talking about importers, right?
Michelle Weaver:
And the vendor might need extra time or they might need to make some sort of change. Maybe you need to accommodate that, but you need to be working in lockstep with your logistics team, your compliance team, and your finance team to make sure that all happens. And then that information needs to be shared with whoever is managing your order management program for you so they can make those accommodations successfully.
Michelle Weaver:
For example, if you've just changed a PO that you need, it's going to be 10 containers worth of product, and you've just agreed with the supplier to let it slip a month, you need to be telling your ocean carriers.
Chris Parker:
Hey, by the way.
Michelle Weaver:
Hey, I don't need those 10 this month. I need them next month.
Chris Parker:
Yeah. You used the word mastery, and that sounds... It sounds like a harder goal to achieve. Is it that hard to have mastery over your supply chain or the alignment of your organization?
Michelle Weaver:
I think every company is different, obviously.
Chris Parker:
Sure, of course.
Michelle Weaver:
Every customer we work with is different, and they all operate different ways within their own different company cultures. I don't think having mastery over your order program is terribly complicated. I think it takes a lot of discipline, a lot of resolve, a lot of negotiating. If you think about the different entities within a customer's organization, the buying and sourcing and planning teams have very specific mission, as do the logistics teams, as do the finance teams, as do the compliance teams.
Michelle Weaver:
And sometimes those missions can be in conflict with each other, right? So getting them all aligned. And if they're all making decisions or taking actions independently of each other, that's when a customer will really, I think, struggle when they're trying to navigate. And then you throw in some crazy market disruption that nobody has any control over, and you're like, "What do you mean it's going to take three weeks before the ship can actually birth in LA to unload? My product is sitting there.
Michelle Weaver:
What do you mean they're going to slide by the port of LA and just go onto Oakland? You need to have a program that's agile enough to navigate around those things and say, "Great. We're going to start redirecting product away from LA, and we're going to go through Houston instead, or go through Oakland or Seattle." And to be able to do that quickly and resolutely, I think, takes absolute lockstep internal alignment within a customer's organization.
Chris Parker:
Sure. When an organization finds itself in that damage control mode or even trying to enter a period of getting ahead of potential disruptions. I mean, they all need to act very swiftly. Especially when it's happening right at that moment, they need to act swiftly. What tangles can happen to slow down success or to really put organizations in a really tricky, problematic situation?
Michelle Weaver:
So let's assume that customer has fairly good mastery over their order program and processes internally. They also need to make sure they're working with the right partner, whether that partner is, partners, I should say, an order management type partner, as well as the right carriers. Those partners need to have the right technology systems. They need to have absolutely the right global coverage and global network. They need to have the right people. Because if you move too fast and you're not with the right partners, there are risks.
Michelle Weaver:
Probably not the most exciting risk, but certainly one of the most dangerous would be the compliance risk. Are you working with partners that have a very extremely high level of compliance, a very robust compliance program that are going to keep you safe, that are going to help support your company's compliance program?
Chris Parker:
I can imagine trying to take shortcuts and stuff to make things happen or to provide results; not adhering to or having strong compliance can really put you in a very difficult situation.
Michelle Weaver:
Yeah. Compliance and chaos are not good partners. They're just not good partners. So when you have chaos, you need to make sure that your compliance program is extremely robust and that you are working with the right partners to ensure that you always maintain the highest level of compliance at all times because chaos likes to work against that a little bit. But that's where things can get tangled. Are your lines of communication set up properly? Do you have your business continuity planning in place? Is it documented?
Michelle Weaver:
Does everybody know exactly who they need to speak with or communicate with, how they need to communicate with them, by when, what's expected of everyone? Have you actually tested all of those connections and tested those backup plans? So if I think back to the big cyber attack that happened, I think it was in 2017, a couple of the big players in the market, and suddenly the whole market had to redirect their freight away from those suppliers while they tried to get their systems back up and running. So that's part of the planning.
Michelle Weaver:
You want to make sure that if you need to plug in backup carriers or switch providers or redirect flows to different ports or different origins or what have you, that you have tested all those connections, and they're live, and they work.
Chris Parker:
So it sounds like taking control of the situation may not always be the most productive. How can they influence their outcomes in a more constructive way, more productive way? How can they be less reactive?
Michelle Weaver:
I think when these disruptions happen... To be fair, 2020, that disruption, if you will, the pandemic, it was global. It was happening everywhere at the same time. The normal disruptions that we see really only impact maybe a particular geography or a particular subset of a geography, right? Or a carrier. It's a slice of the industry as opposed to the entire thing.
Michelle Weaver:
I think when one of those type of disruptions react, the very human, the very natural, the very first reaction is, on behalf of everybody's part, customers, providers like Expeditors, carriers, whatever is, "I need better visibility to exactly what's going on at the ground level in real-time. Tell me exactly what's happening." That level of visibility, that feeling, people are looking for a feeling of control and a feeling of understanding. Like, "I see what's going on. I understand what's going on, and now I can control what's going on."
Chris Parker:
Sure.
Michelle Weaver:
And unfortunately, it doesn't always work that way. If I think back to like what's going on right now with just ocean freight being at max capacity, every ship is full, there's 34 vessels at anchor in LA right now waiting to birth, air freight capacity, planes are full, but the capacity levels is still low because people aren't traveling. Customers are asking for real-time step-by-step visibility to everything that's happening at origin in terms of trying to make bookings with carriers.
Michelle Weaver:
And the customer needs to be able to work with their carrier partners to ensure that they're getting the space that they contracted to get so that they deserve what they're owed. But the other part of that is the origins are fighting so hard for space for everyone right now that to stop and provide that level of detail that some are asking for is difficult at best and usually impossible to provide. It's really this is gray area where it's a matter of influence versus control.
Michelle Weaver:
At the end of the day, the carriers are the ones who control who they give the space to and if and when they load the cargo.
Chris Parker:
Right. Right.
Michelle Weaver:
Right? The customer can influence, the customer can't control it. Expeditors can influence it, but we can't control it. It's really the carrier that makes that choice. I think the important thing to keep in mind during these times of great disruption is more visibility. Visibility is absolutely paramount, but let's keep in mind what's really happening and what steps we can take to help it, as opposed to make it even harder.
Michelle Weaver:
I think one of the key hallmarks of a very resilient supply chain is having enough time built in to be able to react early in the process to give yourself choices. And I'm not necessarily suggesting you extend your lead times. That's not what I'm saying. I'm saying with that mastery of your order program and having those disciplines and that data available to you; you've got this organized well-oiled machine of a program, you see a disruption coming, so rather than... Let's say you're forecasting out.
Michelle Weaver:
Your capacity needs to your carriers six to eight weeks in advance. You see the storm coming. Instead of everybody running around the week of booking with their hair on fire trying to find space, you can see it come in six weeks out and go, "Okay, we need to make some different decisions. Let's start six weeks out." You're starting to figure out how to reallocate your cargo, whether it's to different carriers, to different ports; however it is that you need to reallocate, and you're doing that in a very thoughtful, calm, organized manner with your partners.
Michelle Weaver:
You're talking to your carriers. You're talking to your order management provider. You're talking to your suppliers at origin. You're talking to your DCs or your warehouses, and you're making a plan because you have the time to react and to consider those plans and put them in action before, like I said, everyone is turning around with their hair on fire at the time of booking, and no one can find space.
Chris Parker:
Yeah, it's not a good look.
Michelle Weaver:
Absolutely. It's not a good look, and it's not a fun for anyone involved. It really is a key hallmark of a resilient supply chain. And I think those organizations that have that mastery over their program and are disciplined in that way have great success because they give themselves that extra time to react earlier.
Chris Parker:
As customers are seeking that visibility that you were talking about, they're going to be looking for software, and there's a lot of solutions out there. We offer our own. Expeditors does. Does that help make an organization more self-sufficient when they have a software solution that can then provide them that visibility? Are they better off without interaction with other organizations for service?
Michelle Weaver:
Software absolutely is paramount to the success of any process. It's really going to facilitate the process of visibility, of management, of control, quite honestly, in a lot of cases. And you have to have the right technology to support your program, but technology or software in and of itself isn't the only answer. It can't operate solo. You have to have the service that goes with it, that managed service.
Michelle Weaver:
Software can tell you where your freight's sitting, but it can't necessarily get your shipper a late gate, or help you navigate what's going on at the terminal, or with equipment, or find a backup carrier. It's the combination of the people that service the account and the technology they're using that's going to give you the most powerful solution. Technology software by itself, it's just software. Software with the right service behind it is incredibly powerful.
Chris Parker:
Because it's information paired with action at that point, right? You can have all the information that you want, but if you can't do anything with it and you can't make any moves based off of it, then you just have numbers at that point.
Michelle Weaver:
Right.
Chris Parker:
Thinking about smaller companies then who may not have as much visibility or any data to give themselves visibility, how can they go about building a successful program for themselves?
Michelle Weaver:
I think for those smaller companies or organizations that are just getting started with importing or exporting, they might be really big companies, and they just have never moved into the international arena before. It's important to find the right partner that you can grow with, that can scale with you and meet your needs. I think you've got to find one that can jump continents with you, that can be in all the right places, that has a big global footprint.
Michelle Weaver:
As you source different places and sail different places, you need one with robust compliance infrastructure to keep your company safe and make sure that you are following all the applicable laws or supporting you and following all the applicable laws and regulations that you may know nothing about, especially as you move into new origins or destinations. And you need to find one that has the right technology and incredible customer service to support you as you grow and help you really meet your needs.
Michelle Weaver:
I think it's important to find a partner that can scale with your growth at the pace and the size that you are planning for.
Chris Parker:
Sure, sure. In contrast to that, then for those who may not... And this can speak to the past too, but if an organization hasn't found itself in as much hot water or having as many issues and they're feeling pretty confident with how they're operating, how else can they improve? Where else could they look to within themselves to improve?
Michelle Weaver:
I think it's really important to plan for that growth. What's your three-year plan? What's your five-year plan? What's your 10-year plan. Where do you want to see your program grow? And share those plans with your providers, right? I mean, I know from my perspective, if we know what our customer what they want to be doing and where they want to be in five years, we're a lot more valuable to them, and we're able to provide them with a lot more support in getting there because we know where it is that they want to go and what they're trying to achieve.
Michelle Weaver:
So I would say don't be shy in sharing those plans within the bounds of confidentiality, of course.
Chris Parker:
Sure.
Michelle Weaver:
Don't be shy about sharing those plans with your partners because that's how you're going to get there; that's how you're going to be able to get there faster.
Chris Parker:
Got you. Thank you so much for your time. If folks want to get in touch with you or reach out to you, where can they find you?
Michelle Weaver:
They can find me at michelle.weaver@expeditors.com.
Chris Parker:
Perfect. I'll have that information in the show notes. Michelle, thank you so much for talking about this. This is fascinating stuff. Really appreciate your time.
Michelle Weaver:
Yeah. Thank you.
Chris Parker:
Thanks for listening to today's episode. If you've got questions or want to learn more about today's topic, check out the show notes for more information. And before you go, make sure you're subscribed on whatever podcast app you're using so you won't miss the next episode. To learn more about Expeditors, you can find us on LinkedIn, Facebook, Instagram, and Twitter, or simply visit us at expeditors.com. Take care and I'll see you next time.