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Not her father's company Featured

9:27am EDT August 20, 2004
If he hadn't been there through the transformation, Jim McIlrath might not recognize the warehousing company he founded in 1960. Not only has the name changed -- from Dry Storage Co. to DSC Logistics -- so has the company's focus.

Ann Drake, McIlrath's daughter and DSC CEO, says the days of the warehousing industry depicted in old Marlon Brando movies are long gone. Warehousing has gone high tech, and DSC has transformed itself into a logistics and supply chain service company.

"We're no longer about product that sits and is stored," says Drake. "We're about product that is planned for, executed, information flow. We're really about product movement."

Helping companies manage their product is just of DSC Logistics' tasks.

"Everybody would love to get rid of (inventory), but until we have some futuristic spaceship thing going on, we're going to have to have inventory," Drake says. "You just can't meet the demand of the customer on site for every product he wants, when he wants it."

In 1994, to better streamline operations, Drake took the 22 separately operating companies that comprised Dry Storage Co. and combined them into one -- DSC Logistics.

"It relates to the whole idea of one-to-one marketing and really developing a relationship with your customer, then developing future services around that relationship and around their request," she says. "It's mass customizing your services rather than thinking of it as, everybody in this quadrant is somebody who ought to like what we offer.

"It's no longer about offers and close customer relationships, with the customer being the driver of what you do together. You're constantly giving them information that helps them make decisions about their business.."

Smart Business spoke with Drake about how she transformed the enterprise from a storage company into a supply chain and logistics leader.

 

How important was the move from dry storage to supply chain service provider to the success of the company?

 

(It was) very important to the growth of the company. You need to stay ahead of where the marketplace is going. We've had to go through many transformations, because the kind of employee that you needed, the kind of activities you engaged in as a storage company, are very different from what we do today as a logistics and supply chain company.

We had to develop a corporate infrastructure in information technology, in process management, in training and development, in customer relationship management, in engineering and all the operations functions. Getting and developing those people who can work together to solve customer problems is really much more what the business is about today -- and helping the customers to make more sense of, from a service point of view and a cost point of view, of their inventory. Helping them to smooth out the bumps and make it faster, more flexible and more responsive is what the business is about today.

 

Was the transformation quick?

 

It was a slow, sometimes painful transformation, with many iterations. When I look back on it, I think about the fact that we had to start managing by customer across geographies, which was something people didn't do in the early '90s.

I think it has been a spiral of transformations. I was very lucky because I was a student of Total Quality Management in the early '90s, read everything, went to seminars and got introduced to the whole process concept of an organization being horizontal rather than vertical. ... We've been continually working on, how do we work with customers to help them improve this great area where there is still lots of room for improvement?

 

What was the impetus for the change?

 

I was on the board for about four or five years. I wrote a reorganization plan for the company and sent it my father and the board and said, 'This is what I think needs to happen if this company is going to survive into the 21st century.'

My father, always being very critical, I expected him to be very critical of the plan, so I was a little scared sending it to him. I suggested that I become executive vice president for strategy and culture. He called me up and told me to go do it. I came to the company, implemented that plan, and we've been having interesting and challenging times ever since.

We're both very stubborn and bullheaded, so it's probably a good thing that he was starting to have other interests outside the company at about the time I came. Over the first few years I was here, he was pretty much withdrawing. We never really worked side-by-side ... although he has always been a coach his whole life.

 

How did you consolidate the 22 independent operations under the Dry Storage Corp. umbrella into one organization?

 

It was a very complex challenge. I started by getting the business cards of everyone in our company, and I put them all on a couple of big poster boards. There were different logos, different color schemes, sometimes more than one for an operation. We even had different jackets and that kind of thing.

We really were a loosely organized entrepreneurial organization. So we came up with the concept of Founder's Day, in honor of my father, the founder, because he was part of the perpetuation of all this. We needed to make the transition from the old ways to the new century -- and between my father and myself -- clear to people. And we needed to get this to become one great company. So we developed this Founder's Day celebration.

We went around the country, Jim and myself, and visited all of our operations and talked to everybody about where we were headed as a company and our vision of one company. And we changed our name from Dry Storage Corp. to DSC Logistics, with a new logo and a new corporate identity.

 

How have customers responded?

 

People didn't have any idea what I did when I came here. (Supply chain and logistics have) now moved from the back office to the boardroom floor. Logistics and supply chain are at the forefront with most enlightened businesses.

People thought of it as a cost that somebody did something about, but they never thought of it as a key strategy and a key component to how goods are put in the marketplace and how the whole service equation after the product is made and dialogue that goes on with customers and how that all occurs.

... We're able to talk and work with customers on how to improve their supply chain. I've even seen some companies where there is talk that, in the future, it's the supply chain people who are going to be really running manufacturing companies. ... It's no longer just about cost; it is also about revenue.

How do we do a better job so customers will want to buy more through our supply chain activities -- not just about the cost of those activities. HOW TO REACH: DSC Logistics, (847) 390-6800 or www.dsclogistics.com