The supply chain has been heavily disrupted during the last few years, leading many businesses and supply chain professionals to rethink supply and logistics strategies and processes. In this podcast, Dr. Marie Gould Harper talks to APU’s supply chain department chair, Dr. Larry D. Parker, Jr., about what industry changes can be expected and the costs associated with it. Learn how transportation companies will likely start using smaller cargo ships and smaller ports, changes to distribution centers, and new appreciate for key labor positions like warehouse employees and truck drivers. Also learn about the rise of automation, artificial intelligence, and robotics among other exciting opportunities in the supply chain management field.
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Dr. Marie Gould Harper: Welcome to our podcast today. I’m your host Marie Gould Harper. Today, we are going to talk about the crisis in supply chain management. Our guest today is Dr. Larry Parker. Dr. Larry Parker serves as the Department Chair of Supply Contracting and Acquisitions within the Dr. Wallace Boston School of Business at American Public University, which offers over 200 online courses and certificate programs.
In this position, Dr. Parker leads a phenomenal team of faculty and delivery of world-class instruction of logistics and supply chain management. An experienced educator, Dr. Parker has served as a business doctoral chair, an adjunct educator facilitating courses for universities around the world. Prior to his dedication to academia, Dr. Parker spent 24 years as a Marine Corps officer and recently retired as Lieutenant Colonel. He is also the CEO of P42 Consulting, LLC, which offers consultation, training and motivational speaking services.
[Hear more from Dr. Parker, the host of The Veteran Edge]
Dr. Parker has a long history of passion and interest about local communities and is a proud member of Kappa Alpha Psi Fraternity Incorporated, The Association of Supply Chain Management, and National Naval Officers Association. Dr. Parker, welcome to our podcast and thank you for joining me.
Dr. Larry D. Parker, Jr.: Marie, hey, it’s great to be here. Thank you. I appreciate it.
Dr. Marie Gould Harper: Well, Dr. Parker, Larry, we are going to have fun because we have such a hot topic that I’m sure both of us are going to have opinions on. And normally I am used to talking to you about diversity, equity and inclusion and other topics that are going on in the world.
Well, now we have something near and dear to your heart. And I was sharing with someone today that I actually saw something on the news about this topic last night and the Secretary of Labor was on the news also, talking about the update of how the supply chain situation is affecting the labor market.
So I want to start by asking you to, first of all, provide us a layman’s term or a layman’s explanation of what is going on when people refer to a crisis in supply chain management.
Dr. Larry D. Parker, Jr.: Absolutely. It is a crisis now because what’s happening, you sometimes have a roller coaster in supply and demand. We learn in grade school about that cyclical relationship that, as things are desired, there’ll be produced and then the logistics of getting it to individuals will be determined by just how much or how determined they want it.
Well, as we know over the years, there was a big push for just-in-time and trying to reduce costs. And the old warehouses that we used to know of where there were just mounds of things that if you went to any store, there were a good number of those items on shelves in the back. You could go in and ask for a particular shoe and there would be tons of those in the back. Or you asked for a particular vehicle and they had several in the back, but as a way of reducing cost, becoming more competitive over time, those storage fees were the first target to be reduced.
And so, really what we have now, we’re dealing with the repercussions of reducing our stocks to a just-in-time level and we’ve had a disruption with this pandemic. With the pandemic and with some of the… I will say the pandemic first, and then we can talk about labor and things of that nature, because really those things are only relevant now because we want things faster and so that’s the only reason those things are coming up. The supply chain is doing exactly what it’s supposed to, but because we had a disruption in some of the ports, now that’s what’s going on. So this was to be expected by us going down to that just-in-time type mentality.
Dr. Marie Gould Harper: Now that’s interesting, you and I talk a lot about beyond the veil and especially about leaders being prepared to think about the future when they may not necessarily have all the pieces of the puzzle. You have mentioned disruption because of the pandemic, people wanting things faster and other situations that would require your particular industry to safeguard the process.
Based on what we know today, what would you do if you were the one responsible for making sure that the world supply chain management system ran more effectively based on what’s going on in our society today?
Dr. Larry D. Parker, Jr.: Well right now, what I would do is, again, turn to my profession and let us go ahead and lead in some of these areas. And what I mean by that is, in a number of cases, there are a lot of costs constraints, a lot of issues along those lines that limit the access to ports. There may be some tariffs and some other decisions in the type of vehicles being utilized because of the ports that can be utilized. And I would take off all the gloves, if you will. For example, right now those ships that are sitting outside the Port of Los Angeles and some of those here on the East Coast as well, those are deep-water type vessels.
They need deep ports and the reason that you see those ships piled so high because it’s so efficient and cost effective. Well, we need to go ahead and take cost off the table right now to take that big lump out of the supply chain and to be able to smooth it out, it’s going to cost a little bit.
And so you’re going to have to utilize maybe smaller vessels, utilize other ports, and incentivize some of those individuals that are the frontline logisticians, if you will, the truck drivers, to go ahead and move those items out of the places that they’re currently sitting. So, in a nutshell, and I know I said a lot right there, basically remove all the barriers that we have on our logistics arms right now.
Dr. Marie Gould Harper: Well, I led with that question because that puts you on the throne. I put you in a strategic position and I want you to stay there for the rest of my questions okay?
Dr. Larry D. Parker, Jr.: Okay.
Dr. Marie Gould Harper: You were referring to the ships outside of the port, and I was talking about how the Secretary of Labor, that’s the first point he led off with when he came on the news last night, he pointed to those particular ships.
What was interesting to me is, as he spoke about what was occurring and providing people with an update, he also, what word do I want to use? He also couched the conversation so that he could also talk about what was going on was affecting the labor market and how that was affecting the stock market. What are your thoughts on that? And do you think that’s fair to put all of those responsibilities on the back of the supply chain management process?
Dr. Larry D. Parker, Jr.: No, it’s not fair. It’s really, anyone who’s been in the profession for a while, we’ve accepted a certain amount of risk. When I said we moved away from the just-in-time concept, and for those that familiar with it, it’s just, really it’s the concept that supplies—something that you’re utilizing in your industry—whether it be the finished product or a part or some supply is delivered just as you need it. So, as I refer to having warehouses of things, we moved away from it because there were costs. Costs for the building, costs for people to manage it, and security, all those other type things.
But to respond to something like this, you can’t put that on the backs of saying, “Well, hey, labor’s just not there.” Or, “The individuals aren’t responding within the profession.” There’s always been people there and there’s always been people who are willing to do the job, but just like anything in an entrepreneurial world, in a capitalist situation, you’re trying to reduce costs.
And until it’s needed, you’re the one that’s the easiest to reduce until something like this happens. So now we’re just dealing with what is to be expected at a time like this. Now you need me. Now you need someone who drives that forklift.
And it’s an interesting thing because these are often very complex and very detailed jobs to work some of those forklifts and to work some of those material-handling equipment. And then they’re unionized in a number of cases. So it’s not just picking someone straight off the street. So if you’re not building up for this, you’re going to get caught like we got caught, not having people.
Dr. Marie Gould Harper: Well, that makes sense especially from a labor perspective, and you brought up a point that reminded me of something that I wanted to share. One of the things that I have noticed in the state that I am from is that Amazon basically came in and purchased all of the automobile plants and transformed them into distribution centers. And that has been a process for the last couple of years.
But what I’m also noticing in the state, as well as the next state over, is that Amazon and other distribution centers that have relocated to this state are now also building businesses for trucking right next to it. So it looks like a whole factory town on one side of the particular city that’s devoted to this whole distribution and supply chain process. Do you think this is the industry that is the up-and-coming industry, especially in the United States and blue collared workers?
Dr. Larry D. Parker, Jr.: Yes, it is. And you know, it’s interesting. You may not recall it, we did talk about this. I think last year, when coined a phrase of the “New Normal.” And I remember mentioning that individuals that have noticed these Amazon buildings going up, these distribution centers going up. Because individuals will not want to be less competitive in being able to compete against Amazon, they’re going to start popping up their own distribution centers. And so we’re going to see more and more of those type of facilities littered across the United States.
So we can expect that these small pods that you see, now you need the trucking industry to support it and then you’re going to need maintenance to support that, you’re going to need all those things that are now a part of the industry, yeah they’re going to pop up around the United States.
Dr. Marie Gould Harper: And I find that so interesting because as you laid out the foundation of what could be, you brought up another point, that was a part of a conversation that I had with one of my family members. And it was because of all these businesses going up to support the supply chain management and the type of jobs that are involved, what we are also noticing now—and you can tell me if you think it’s the second phase, or where does this fall in the process—we’re seeing a number of hotels being built.
And the reason the hotels are being built by the distribution centers is for the truckers that they will need some places to stay. And so there have been a number of hotel chains that are starting to build a site near these distribution centers so that the truckers that have to come through will have a place to stay regardless of when the products need to be pushed out. Is that common or is that just the new part to the process?
Dr. Larry D. Parker, Jr.: Actually, that is an evolving piece to this. With my experience in the industry and having truckers, they are the integral piece to this. Products won’t move without that driver that’s going to take it that last tactical mile that we like to refer to it. Because the ships will bring things in, the air will bring things in, the rail will bring things in, but to get it to your local store, it’s going to take that driver.
Just like we’ve noticed with remote work and some of these things in the [Great] Resignation, basically the worker now taking a look at their lifestyle and demanding a better level of influence on their working conditions. We’re noticing that with the trucker, the trucker used to sleep on the side of the road. A lot of those have double cabs and you will see that there’s got beds in them and things of that nature.
But now that you have a little bit more influence, you may not want to sleep in the back of the truck all the time. You may not want to warm up your meal in the microwave there, and you want to be able to get a shower in your own room instead of in a truck stop.
And so these are now like the demands that someone who worked in an office might have in their various work conditions, this is something that is growing within the industry. And the driver is just making it known that, “Hey, if you can’t provide this level of comfort and I’m working this many hours, I can likely find it somewhere else.” And that’s why it is very competitive as well, to get drivers to not only join you, but stay.
Dr. Marie Gould Harper: And you know, I like how you phrased it that way, because you pretty much confirmed what I was thinking. It’s almost as if they have recognized how important this particular job is to the process. So they want to make it comfortable and offer those employees things that would make their life more efficient as well as comfortable. What other things do you think we can do to improve this process? What do you foresee?
Dr. Larry D. Parker, Jr.: Well, I see us really reevaluating the ports and the ships. Some of those ships that were taken out of commission likely by some industries, because it was just cheaper to operate these huge ships. And if you think about like the one ship that got jammed or launched in the canal last year, and that had a major disruption, operating these large ships, yes, it’s cost effective when it works. When everything works, it’s cost effective and you can save money.
But as we can see, I will share this was, and I’ll tell you, it doesn’t just happen here, it happens in even in the military, and it’s just funny as I look back at it, there was a similar situation where if you try to move a lot of product and something happens, which in this case it did, you wind up stopping the whole process.
So really to focus on your answer, I can see using smaller vessels, using additional ports. Cities that had not been in this major play, will now find themselves being called upon because smaller vessels will now start to travel to those cities.
So I can tell you across the country, if you have a port that can take a vessel and you are familiar with handling some kind of containers, you’re likely to be in more business. If I was a business person and trying to locate somewhere new and I was in the logistics industry, I would just take a look at a map and see where there’s ports, not just deep water, but all ports that can handle some kind of container, it’s going to be booming business.
Dr. Marie Gould Harper: And as you were talking, I saw our Amazon Prime driver drive up and I get excited because they seem excited about their job now. And that leads to a point about the programs that you oversee at American Public University.
I believe that this is a field that’s going to become very popular because people are starting to understand what it entails and how it affects so many areas within our society. That it’s just not one level. I personally have seen how it has affected groceries, the production of cars, what’s in stores, what’s available.
What would you say to someone who does not have a background in any of the areas that we have discussed thus far and they wanted to make that transition? What words of wisdom would you give to them besides giving you a call?
Dr. Larry D. Parker, Jr.: Well, in addition to giving me a call, I would say, another topic that you and I have discussed is automation. I can tell you now, if you want to be ahead of it, now I mentioned there’s certain things, until we get to the point where there’s teleportation of things, products are going to have to still be moved. And so that’s where the ports come in.
But I will say, the robotics that have already been introduced in some of these major ports and some of the cranes that individuals see when you go to some of the major ones in Chesapeake area, and some of the other places, there are already some level of automation there.
And I talked about the last tactical mile from delivering pizzas to even out on the battlefield, we’re already testing some of this automation to major trucks that are driven by AI, that’s already being tested.
So for an individual that would want to be on the cutting edge of industry, I would say, start studying the implementation of artificial intelligence and robotics throughout all the levels of the industry down to working in the stores to warehouse, to actually transportation. That’s the main thing that I would tell someone. You would be doing yourself well to be able to speak the language and have certifications in those areas.
Dr. Marie Gould Harper: Great. And in terms of the programs that you oversee, are there any particular ones—I want to word this correctly—not that they would come out of sequence in taking the courses, but courses that they should really focus in on when they’re about to take them in your program.
Dr. Larry D. Parker, Jr.: Okay. Well I like to approach it like this, and so this is, looking at it from a department standpoint, Supply Chain. If you are in a level that you are a decisionmaker at a higher planning level, any of my programs, whether it be my Master’s degree or my Bachelor’s within Supply Chain, that’s what I would like you to see if you’re in management. If you are someone that’s at a level, and when I say management, I would say senior management.
But if you are at a level that you are an influencer, if you will, you are a frontline individual, a manager that directly affects the trucking, the rail or the warehousing, or even the reverse logistics, that’s where reverse logistics programs and the transportation and logistics programs come in.
We have a number of specializations that depending on how detailed we want to get into a particular area that we can look at, where you can take transportation and you can pick up a reverse logistics, or you can do reverse logistics, and you can pick up a piece of the other.
But I would like individuals just to look at it in that umbrella, that supply chain is overarching, transportation is more forward focusing, going out the door in those that are closer to moving the product.
And reverse logistics is a very important thing. If you’ve ever sent something back, because we’re doing a lot of ordering now these days, that’s that whole industry, that’s a whole focus. That’s a, some would argue, just as important, if not more important to customer satisfaction, because we do order so much online. And now, again, not trying to pay for warehousing or anything else like that, how do we get it back into the supply chain? So that’s what I would want individuals to know if they’re thinking about coming into the industry and getting an education.
Dr. Marie Gould Harper: You did something that I was going to ask you. I know I struggled with it, when your program was developed, the Supply Chain Management, I was struggling with, how were they all related? Like supply chain management, transportation and logistics, and reverse logistics. Was there a certain order or how you have mapped out, there are certain subdisciplines, I’ll call it that, a person should focus on based on where they see themselves and what they’re currently working on.
So thank you for sharing that because, in addition, to allowing people to hear everything that you have to say today, it’s nice to know, but where do I fall in, in the process? And some people are afraid to ask those type of questions. So we have you on record, as providing that outline.
We’ve talked about how your areas affect different parts of society, whether it’s directly with the economy, whether it’s another industry, but something I don’t want to say near and dear to my heart, but to see the process in play during this holiday season. For example, Black Friday came in September, and I think it’s a result of supply chain management. And I’m going to lead it into you to discuss from a marketing perspective, was that a good promotional opportunity for the retail industry? And that was the theme of, if you don’t get it early, it won’t be there in time.
Dr. Larry D. Parker, Jr.: Well, I will tell you, actually, it’s one of those things, like when you’re in a big meeting and you have an opportunity to speak up from the logistics point of view, it sounds like someone was listening and marketing took advantage of it. And that organization did not want to be caught flat footed. They wanted to be on record saying, we told you so.
We saw this coming for a while. We didn’t see anything getting better as much as we would’ve liked all the efforts. And that was actually a great play because you mentioned the new normal before. I believe for at least the next year, we’re going to have to expect that if you were doing shopping in November to ensure that you’re going to have things arrive on time, that Black Friday movement is right, is accurate. That is spot on, because it’s going to be some time before we get this lump, that’s not whatever you want to refer to it as, out of the supply chain and things smooth out.
Dr. Marie Gould Harper: Well, that’s interesting. And I like how you tied it into when we talk about the new normal and leading forward, because I do think someone just jumped on that whole concept. We have gone from having a major promotional day on sales, to having almost a quarter on a promotional for sales. That’s at least how I’m looking at it. I know it’s the holiday season, but let’s call it what it is, it’s the sales season.
And when I see different people and it may be because of the pandemic, it’s just something to be happy about, the positivity of the process. And as a result, people are continuing to do it because it’s something that makes them happy.
Dr. Larry D. Parker, Jr.: Yes. You know, obviously no social scientists here, but it, it requires you to get into the seasonal spirit a little bit longer, because if you look at it, society has moved with technology to things to be easier and faster, easier, and faster. Every time a new invention or a new iteration of something comes out, things are supposed to be easier and faster. And so now what this is just requiring on a larger scale is telling everyone to slow down. It’s not going to be easier and faster this year and just to manage your expectations.
And with that adjustment, we may have that positive result that you’re talking about. Where you’re going to think about gifts a little bit sooner, and it won’t be that next day or the prime if you will type response that you can order at the last minute. And that just tells me, because I was actually one of those guys that you catch me out there on Christmas Eve buying gifts. And so I know that’s not going to happen and I’m going to have to lean into it a little bit better this year.
Dr. Marie Gould Harper: And I’m glad you mentioned that. I will be honest. I mean, this is my favorite season to just watch the dynamics. But I’ve actually seen more men out shopping where I expected them to be more close to the end of the season regardless of what was going on.
So I think we’re having a lot of changed behaviors as a result of what is going on in your particular field. And when you mention easier and faster, I’m going to end with this, but there is a commercial it’s for TJ Maxx, Marshalls and HomeGoods and what I like about it, I had to watch it a couple times to figure out what was really going on.
You have a diverse group of individuals shopping in these stores. And as they look at the counter for a gift that catches their eyes, as soon as they pick it up, all of a sudden, other gifts that they had been thinking about purchasing pop up. So they can stand in that one spot and just pick up the gifts as they pop up. I thought that was a nice concept from a mental perspective for that particular brands, because it’s saying you can get everything here and it’s always available. Do you see more industries going to that? And how does that affect your industry with the marketing group putting out that promise?
Dr. Larry D. Parker, Jr.: It’s like, I love seeing this, and I’m a big Sci-fi fan and as I now think about it, at this point in my life, I’m recognizing all those things I saw as innovation is now requiring my industry to step up and provide that. So the only way that’s going to happen is, we’re going to have to be able to have those products staged strategically. You’re going to actually have operational centers that are going to evaluate on that data that’s being collected in order to make sure that we have it as close as possible to you. So once those things come in, we can create that unique basket if you will, or that unique experience when you go to shop.
So I can see it, it’s not too farfetched. And actually it’s here faster than many would expect. We could probably do something like that right now on a larger scale. Just look forward to it. Look forward to the opportunity. I think right now we just have this thing right in front of us. But I think on the other side of it will be more of what you just described.
Dr. Marie Gould Harper: And for me, that’s a great feeling. It just seems so exciting. And what I wanted to say was, first of all, before I forget, I want to thank you so much for joining me today. This has been very informative and I think not just for me, but for our audience. And for sharing your expertise, but also for hyping something that I think is hot right now.
And that’s what we want to do in our programs, is to have a pulse on what’s very positive, innovative, and trending. And it seems like all of your areas fall into that category. And it’s exciting and amazing to see how they’re interconnecting and people within the communities are starting to grab hold.
And it looks like something that I don’t want to call it a trend, because trends fade out. But it seems like we have found something that a lot of people can relate to from a business perspective, as well as a personal perspective and a community perspective. With that, do you have any closing remarks about how you see everything overall and what you predict to be the next steps with leading forward in this area?
Dr. Larry D. Parker, Jr.: Yes. For the person that just is already a part of the industry, I will say continue to lean forward, continue to educate yourself, because that’s going to be, as I said, artificial intelligence, robotics, those things are going to be where we’re going as an industry.
For the business owners, I have said this for the last couple of years that we have outsourced as far as we can outsource. You have probably looked at products, supplies or at least the materials and reduced cost as much as you can. The logistics and supply chain industry is where it’s at.
If you want to improve your profit margin, if you want to take a look at increasing business, logistics is where it’s at right now. Because to get things to your customers smoother, faster, more efficient, I believe that’s where the bottom line will be affected.
And then just for everyone, in general, that is just watching, like I said, this is going to be a lot of great innovation not long. What you’re going to see because of these things that are going on now, a lot of innovation that’s going to affect other things, whether it be medicine to just your local restaurant, a lot of innovation that’s happening here today is going to come out of the logistics industry. So look forward to it and keep your eye out.
Dr. Marie Gould Harper: Thank you Dr. Parker. One word that I want to leave with you. We started off with the title of crisis in supply chain management. I would like change that at this time. Dr. Parker has educated us and I think we can say it’s not a crisis, it’s an opportunity. We have been speaking with Dr. Larry Parker. This is Marie Gould Harper, thanking you for listening to our podcast today.