Article written by Bob Trebilcock
The president of UPS Supply Chain Solutions discusses some of the strategies taking the 3PL into the future
I recently had a chance to talk supply chain management with Philippe Gilbert, the president of UPS Supply Chain Solutions (SCS). Gilbert joined UPS in January 2019, where he is responsible for Global Logistics and Distribution, Global Freight Forwarding, UPS Freight and the technology-driven truckload freight brokerage business at Coyote.
Prior to joining UPS, he served as the regional CEO of the Americas for DB Schenker Logistics in Miami, and from 2013 to 2015 was Schenker’s regional CEO for West Europe in Paris. He has also held leadership positions at GEODIS, Saga S.A., Circle International and Eagle Global Logistics. Gilbert spoke to us from his home in Houston.
SCMR: How is the business environment changing, and how is UPS working with customers to meet new or changing supply chain requirements?
Gilbert: COVID has led to unprecedented challenges for companies from small manufacturers to large international organizations like ours. We have always believed that the safety of employees, vendors and customers will be our top priority. That’s something we’re pushing across all of our sites. And, liquidity and cash management are becoming top priorities. We’re seeing initiatives like payment terms rationalization. It’s being reviewed all the way up to the C-suite.
In the supply chain, most organizations are conducting detailed risk management, prioritization and recovery plans. There’s a lot of talk about shifting from just-in-time to just-in-case logistics by holding more inventory. I think in the new normal, we’ll see more customers trying to have a little buffer stock. Pre-COVID, trade discussions led to conversations about near shoring or the localization of production, like moving production to Turkey to serve Western Europe or Mexico for the U.S.
SCMR. You mentioned risk management and recovery: Are companies rewriting their playbooks?
Gilbert: I believe so. COVID has pushed us to be more flexible and agile than ever before. And our customer base is asking us for digital tools, such as risk management platforms with predictive analytics, to understand where disruptions might come from. We’ll see more and more future requests.
SCMR. As a supply chain leader, is your strategy changing?
Gilbert: Our strategy in SCS is very much aligned to the four pillars of UPS’s long-term strategy. Those are aimed at capturing more of the growth in e-commerce; serving the needs of small and midsize business; focusing on high growth markets; and more specifically, focusing on health care as a vertical, which of course COVID has been pushing quite strongly.
In logistics, we are reviewing the way we move freight and looking at asset light models where possible. We invested in Ware2Go on the warehousing side, and we took an asset light approach with our partnership with Fast Radius, which is providing on-demand 3D printing services at our campuses. And, we’re looking at our 900 service parts locations as forward-stocking points for the just-in-case inventory I mentioned.
SCMR. What is your biggest challenge now and moving forward?
Gilbert: COVID forced companies to look at visibility at all the tiers of their supply chains. Some companies have access to data from implementing a visibility platform, but the true value comes from deriving actionable insights from the data and then taking corrective actions. To do that, we’re trying to leverage AI and Machine Learning. We are also trying to embed more predictive analytics and develop prescriptive models to alert us to global risks.
We are advising our customers to analyze their direct suppliers as part of their risk management, and to develop plans to shift sourcing or production to a different location in the event of inclement weather or road closures. By creating a flexible network, I believe our customers will be better armed and less dependent on a single vendor or geographical region.
SCMR. How important will automation be going forward for UPS?
Gilbert: In the past few years, we have invested in automating and improving connectivity in our smart network. Now, we are focused on deploying the right mix of automation, like robotics, to provide more options for our customers. In fact, the first time I visited one of our facilities in February 2019, I was quite happy to see a combination of robotics and humans. And, given the competition for talent, it’s more important than ever to maximize the labor in the facilities. We are also embedding Robotic Process Automation so that repetitive transactions can be done by RPA, rather than by a human. We want the robots to engage in repetitive work so humans can keep doing the more value-added work.
We are also thinking about lights out warehousing, so we can work 24/7. Our dedicated workforce will provide control and support, but the robots can work 24/7 when it’s not easy to have humans inside the facility.
SCMR. What keeps you up at night in your role as a supply chain leader?
Gilbert: The first question that comes to mind is: How can I make sure that all of our partners are safe and healthy when they interact with UPS? We have been focused on safety from the get-go, but since COVID, we have worked to make sure that safety is at the forefront of all our decisions. Beyond COVID, we are also looking at how to be safer with our trucks on the road.
The pandemic is presenting us with great challenges, but at the same time there are great opportunities. So, the other question I ask is: Am I missing something to do a better job for our customers and become stronger and more resilient? I’m confident that our culture and values help us to answer some of these questions. They have been at the forefront of UPS for many years.
Original Source: https://www.scmr.com/article/a_conversation_with_philippe_gilbert