Reprinted from Armstrong & Associates, September 19, 2008

DSC Logistics: New Team — New Direction

Until the last year or so, DSC has primarily been a big box, pallet-in/pallet-out operation with underutilized IT and personnel strengths. Its revenues had not grown over the last several years and “C” level turnover has been frequent.

CEO, Ann Drake, had strong ideas about where the company should be going but struggled with chief operating officers who couldn’t get on the same page. In turn, those same COOs seemed unable to get real teamwork spread across the organization.

Within the last two years, a major change has occurred. The DSC execs I met with recently, act like a team. They work hard together, plan well together, seem to enjoy what they are doing, and like each others company. The key seems to come from Drake herself, who now operates day-to-day as the CEO. She is a strong person who is much closer to the operation than she used to be. Her second in command for operations is an affable, knowledgeable “coach” named Michael Weinstock. Weinstock came to the Des Plaines headquarters from DSC’s East Coast operations. The VPs reporting to him are all experienced, about 40 years old, and have Master’s degrees. There are eight key reports to Weinstock including six regional VPs, a VP of transportation and a VP in charge of measuring and improving operations (Supply Chain Excellence). Relationships are flexible within this group and cooperation is strong.

Staff VPs report directly to Drake. These include a bright, new CIO, Greg Goluska and the VP - Customer Care (Sales and Customer Services), Scott Morgan. Morgan, Goluska, Weinstock and the VP - Supply Chain Excellence, Ken Heller, are not only very good at their specializations but are major “think out of the box” contributors.

Supporting Morgan is a group of six major account owners. Not surprisingly, they are all Master degreed, 30-somethings who are aggressive and customer oriented. They carry the “partnership” building theme to traditional customers like Kimberly-Clark, Kellogg’s and Philip Morris as well as to a new style of customers Tree of Life, Yamaha and Cardinal Health.

The team members are tuned into looking for broader opportunities with new and existing customers. For example, DSC now looks regularly for dedicated store delivery and transportation network management opportunities. For Tree of Life, it runs cross-dock operations on each coast managing the North American transportation network in the process. For Yamaha, DSC manages supply chains for musical instruments and consumer electronics. DSC now operates one distribution center for Cardinal Healthcare on the West Coast. Cardinal has 51 others. Expansion prospects in this new vertical for DSC are large.

The IT core for DSC consists of i2, RedPrairie and a proprietary warehouse management system. There are 46 people in IT. In Heller’s continuous improvement program, there are 19 people of which seven are industrial engineers. DSC has more intellectual capital than companies which are much larger.

That intellectual capital is contributing heavily to DSC’s renewed growth. In addition, Drake’s team efforts involving more value-added services and transportation should steadily improve profitability. It looks to us like DSC, under Ann Drake’s leadership, will be a strong 3PL competitor going forward.

© Copyright Armstrong & Associates, Inc.. September 2008.All rights reserved.

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