Daniel G. Jacobs

Friday, 29 October 2004 05:22

Bedtime story

Jim Nation started working in a Miami department store in high school, and in one sense, he never left. The Florida Atlantic University education major moved from the warehouse to the boardroom without ever finding the inside of a classroom as a teacher.

Nation is president and CEO of Spring Air, the fourth largest bedding manufacturer in the world. And somewhere in Florida, a generation of students is deprived of his teaching talents. But as consolation, they may be sleeping well on one of his company's bedding products.

For nearly 80 years, the company founded by Francis Karr has been on the cutting edge of innovation -- not only with its products, but also with its operations.

"I get a lot of attention for doing the unusual or different," Nation says.

He's continuing a long history of innovations -- from Karr's free-end offset coil design, which adjusts to each sleeper's weight and today remains the most copied design in the bedding industry, to Nation's latest design, which incorporates latex foam used in the seats of Rolls Royce automobiles as the primary cushioning and quilting material.

"(Innovation) comes from a blend of two things," Nation says. "Things that we develop here on a national basis from our corporate staff and then, since we're a very entrepreneurial organization, we have a lot of creativity in the field. Sometimes it's top down, sometimes it's bottom up. Ideas are welcome from anywhere."

Nation's next big idea -- an experiment importing mattresses from the Far East -- has its roots in a trip he made to China earlier this year.

Currently, the Spring Air brand focuses on the high end of the market. Imports, Nation says, provide the company with a quick entry into less expensive market segments. But it is still too early to judge the venture's success.

"It comes down to price," he says. "We're exploring whether or not it's a viable strategy. I went over to China, my first trip, and was very impressed. The level of sophistication was much higher than what I had anticipated. They make a lot of products in a lot of categories that come into the U.S.

"The overwhelming reason is they can make a very high quality product and ship it into the U.S. cheaper than we can make it here. That's the bottom line."

 

Tale of a tinkerer

There are still a number of kinks to be worked out in Nation's plan.

It takes six weeks to fill an order from China, three of which are shipping time. With mattresses manufactured in the United States, filling an order takes just one week.

And then there is the issue of whether the supply is predictable or sustainable. But whether it is this venture or another, Nation anticipates that the importation of mattresses from Asia is an area that will continue to expand.

"The automotive industry was bringing in cars from Asia," says Nation. "Did it become important? Let's get a little closer to home -- the furniture industry. Probably 40 (percent) or 50 percent of it has moved to Asia, so that is important. If you can ship a sofa across the ocean and distribute it, and it ends up at a lower retail price for the consumer than what it would be if it were made in the U.S., can you do the same with a mattress?"

Setting up the import process was a challenge.

"We have a couple of suppliers who have relationships and factories over there," Nation says. "They were able to help us, but it is not easy. It's not like you call up your travel agency and book a trip. It requires more documentation than that, more permission than that. It's not hard, just time-consuming."

No matter how the experiment works out, Nation says Spring Air is not considering outsourcing its manufacturing work to China or shuttering its U.S. facilities.

"We're not entertaining that we're going to close our factories," he says. "We're not doing away with workers. What we will do if this works -- and I don't know that it's going to work -- but maybe in our assortment we make part of it and we import part of it. Maybe we import and distribute the very low end, where frankly we don't do a very good job anyway. If I did that, I'm not taking any business away from my factories; I'm going to take it away from other people's factories."

And Nation knows a thing or two about other people's factories. His rise to the top includes a stop at one of his much larger competitors, Sealy. He worked under Ron Trzcinski, president and founder of The Original Mattress Factory, who is famous for tearing apart competitors' mattresses to show customers the insides. Nation says Trzcinski doesn't do that with Spring Air products.

"If you go into his stores, you'll see he tears apart Sealy and Simmons," he says. "He never tears apart Spring Air because I'm a better match for him."

All of this tinkering has paid off. While Nation does not disclose financial information, Spring Air did nearly $475 million in business in 2001, according to figures from Hoover's Online (the latest year for which figures were available). And being privately held makes Nation's job just a little easier than it would be if he were running a publicly held firm.

"We don't have the same requirements a public company has," Nation says. "It has to be easier to run a privately held company than it does a publicly held company. We have shareholders, but I'm not open to the financial community. Each of the licensees is a shareholder. Currently in the U.S. we have 13 shareholders."

While Nation is beholden to those shareholders, he must also please another constituency -- the consumer. That means delivering a quality product at a quality price, and for Nation, the innovation is in effectively managing his supply chain.

Shopping for a mattress is different than shopping for, say, a car. Nation explains it this way: "All of a sudden (consumers) reach a point where they decide it's time to get a new mattress, and they're only in the market for a very short period of time. Probably 85 percent of them buy and 15 percent will postpone.

"Lifestyle changes affect the purchase of mattresses, and those lifestyle changes are things like number of married people, new family household creations, someone coming out of college who is going to have his first job. Divorces create mattress sales. Of course, the housing industry has been very good for a number of years, so that helps."

That can make it difficult to plan for the amount of material to order. Too much inventory can leave the company with obsolete and wasted products; too little translates into disgruntled customers and lost sales.

"Most of our materials are delivered to us on a just-in-time basis," he says. "Probably half of our business is on a quick-trip turnaround, meaning just a few days. And we produce to order, so we don't have a big backlog.

"If you go into a JCPenney store and buy a mattress, they do not have that mattress in stock. They'll place the order for us; we'll get it that night. Typically, we'll make that mattress the next day. It's available to you on the second or third or fourth day, depending on where you live."

That kind of operation requires a tight grip on the company's supply chain. A single disruption in the flow of materials can wreak havoc with the process, which produces about 3 million mattresses every year.

Spring Air nearly had one such disruption when one of its licensees, Spring Air Partners North America, filed for bankruptcy. Nation was able to get other facilities to ramp up production until the stumbling licensee got back on its feet.

And the supply chain has become more complex because Spring Air distributes bedding internationally. The company has plants in the United States, Canada, Mexico, Ireland, Australia, the Middle East and Argentina.

"We do a very nice job in Mexico," Nation says. "Actually in Mexico, Spring Air is the No. 1 brand. We do okay in Canada, but really our best success story is Mexico."

 

A well-rested competitor

Nation isn't just focused on innovating his supply chain with new techniques. He's also keeping an eye on a couple of upstarts in the bedding specialty market -- Select Comfort, which boasts a sleep number and a cushion of air, and Tempur-Pedic, which offers a memory foam that conforms to the shape of the sleeper.

Nation dismisses Select Comfort as a direct marketing company with an "upholstered air mattress."

"They actually struggled for many, many years," he says. "And then, without changing the product -- just changing their marketing to having a dial that had a number on it, so that each person got to select their own number -- the marketing of that has helped them tremendously."

Tempur-Pedic, on the other hand, has a bit more credibility in Nation's eyes.

"They may only be 4 (percent) or 5 percent of the units," he says, "but they are a sizable percentage of the beds sold above $1,500. At the high end of the market, they are having an impact. We do have a lot of products that are in the same category as theirs."

But that's where the similarities end, he says. The companies' selling approaches are drastically different. Tempur-Pedic is primarily a direct marketer that has recently begun to sell through retailers. Spring Air does not own any stores, selling through department and bedding specialty stores.

That's one thing that has helped Spring Air continue to grow during difficult economic times.

"The economy has been down, the industry has been down the last few years, but we've had double-digit increases every year," Nation says. "We are selling more and more retailers each year. And the acceptance of our product has become very high. What we're finding is people prefer our product over others. Our product and our distribution have helped us immensely, and we didn't have a downturn in our business.

"If I take the industry last year, all of the growth came from four manufacturers -- Spring Air, Select Comfort, Tempur-Pedic and Simmons," Nation says. "If you add the growth that those four companies had, that is equal to the growth of the entire industry."

And with that kind of innovative success, it's no wonder that Nation sleeps very, very well at night.

HOW TO REACH: Spring Air, 847-439-4399 or www.springair.com

Friday, 29 October 2004 05:10

The Brooks file

Born: Feb. 6, 1937, Conway, S.C.

Education: Bachelor of science degree, Clemson University

First Job: Working in a dairy, Gastonia, N.C.

Career moves: Worked in dairy sales, food equipment sales; called to serve in the U.S. Army during the Berlin Crisis; Germantown Manufacturing Co. (a food formula company); started his own company, formed Eastern Foods, which became Naturally Fresh Foods, in Atlanta in 1967; became a part of Hooters in 1984

Resides: Myrtle Beach (commutes once a week)

What is the greatest business lesson you've learned?
Never underestimate the power of the consumer. Don't ever tell a customer what he wants. Provide what he asks for at a price at which you can make a profit. If you tell him what he wants, at any price, you're going to tick him off.

What is the greatest business challenge you've ever faced, and how did you overcome it?
I've had a couple of them. One of them was a union and one was a bank. Don't let them get to you. Run your ship, which sometimes is tough.

Banks are cold; they have no personality, just a function. They can only do what the law says they can do, regardless of how well-meaning you are. Unless the numbers show exactly what they're supposed to show, they don't value people. At some point you have to say, 'OK, you want to run it. Can you do a better job than I'm doing?'

The banks are the first one to run and stick their heads in the sand when things look a little bad. They never lost a dollar, and we're good friends now. We didn't burn any bridges; we just rode out the storm.

Whom do you admire most in business and why?
I never thought much about that; I really don't know. There are certainly a lot of people to be respected. I guess I respect CEOs today, all of them, because they get no praise. CEOs are expected to pat everybody on the back and say, 'Great job.'

Nobody comes around to the boss and says, 'You're doing a good job.' It's awful lonely out there. It's tough to be a CEO or even a director today. So, my hat's off to most of them.

Friday, 20 August 2004 09:30

Fine-tuning the Midas touch

Alan Feldman, president and CEO of Midas Inc., may not share the ability of his company's fabled literary counterpart, King Midas, to turn whatever he touches to gold. But much of what Feldman has touched in his 18-month tenure at the automotive aftermarket giant has had a golden effect on the company's bottom line.

Feldman joined the franchiser -- an enterprise in financial crisis -- in January 2003. Midas was over-leveraged. It owed money on a loan that was set to expire. And sales and profits had been in a steady decline for two straight years.

As a result, Midas' stock price had been battered and the company's 2,000 franchisee owners were not only unhappy, they didn't trust its corporate leadership team.

"Part of it was the challenge I was looking for," says Feldman, who had tackled franchisee-related issues for McDonald's as president and COO of McDonald's Americas. "I had a good sense of some of it before I walked in the door the first day, but not all of it. It became clear as I got deeper into the circumstances of the business."

The circumstances, however, did not dampen Feldman's optimism.

"I've never had a day when I had second thoughts," he says. "I think the brand, the franchisees and the opportunity were always there. They needed to be dug out a little harder than I may have originally anticipated, but they've all begun to bear fruit."

Feldman's approach to turning around Midas included looking past its troubles and staring directly at the organization's key assets.

"The reason I came to Midas is because of the quality of the brand, the quality of the franchisees and what I thought was a great opportunity to make a difference for both of those elements," he says. "I couldn't be more proud about how the franchisees have embraced me and what we're doing."

Righting the ship required quick action, and Feldman immediately enlisted the help of the untrusting franchisees.

"We have not made a major decision that (affects) Midas without involving the IMDA -- International Midas Dealers Association," Feldman says proudly. "They are an integral part of our management process today."

Feldman's stints at McDonald's -- where he also served as president of McDonald's USA -- and PepsiCo -- where he held operations and financial positions at Frito-Lay and Pizza Hut -- provided a strong background in the franchise business that has served him well at Midas.

"It stretches any executive's leadership qualities and qualifications in ways that are different than if you're running a company-owned organization," he says. "You very much have to have a servant-leadership attitude and recognize the franchisees are, in many ways, the channel of distribution that your company has.

"So whether it's a restaurant company or an automotive service company, when you're dealing with franchisees, that's how you go to market. That's your channel of distribution, and you have to nurture that channel. And you lead from a standpoint of commitment, influence and direction rather than any type of command-and-control attitude."

It was this vision that won over the franchisees and convinced them to buy into Feldman's vision of rebranding Midas.

"We certainly brought strength back to the Midas brand over the last 15 months by refocusing our marketing efforts on our core business," he says. "And that's our brake business, which has been really the focus of our advertising. Finally, we brought back a great old campaign, 'Trust the Midas touch,' which re-enforces the brand and sets us apart in the minds of our customers as it relates to trust."

Focusing on the core business meant divesting operations that didn't fit the new look. In 2003, Feldman completed a major restructuring initiative that included outsourcing distribution of Midas brand and other automotive parts to AutoZone in the United States and Uni-Select Inc. in Canada. The company closed 11 of its 12 regional distribution centers and all 77 Parts Warehouse Inc., the quick-delivery parts distribution locations the company launched in 2000.

Feldman reduced the number of company-operated shops from 111 to 73 and reduced employment at Midas' headquarters and in the field from 1,900 to 900.

"You have to go back a number of years to truly understand the scope of the changes in the business environment, how Midas had responded to those changes and some of the effects those changes had on the company," Feldman says. "To make a long story short, the distribution business, the wholesale parts business that traditionally had been very profitable for Midas, had become very unprofitable and caused the company to become significantly overleveraged.

"Our financial position had gotten fairly week. We needed to unburden ourselves from the losses and the debt that the distribution business had put on the company."

Similarly, closing some company-owned stores was an effort to focus the company on its core strengths.

"Reducing the number of company-operated shops really was a strategic decision to focus our efforts in four core markets," Feldman says. "We had stores scattered around the U.S., which made it very difficult for us to manage those effectively. So we sharpened our focus in Florida, in Colorado, here in Illinois and the Connecticut area, so we could get better leverage and control."

The reduction in staff was a function of the other changes. But, Feldman stresses, it wasn't simply a move to save money.

"Many of those people were affiliated with our distribution/logistics/merchandising group that was outsourced to AutoZone," he says. "But at the same time we were doing that, we were staffing up in other areas, which is reflective of our focus on the retail side. We've added staff in marketing, we've added staff in training, we've added staff in franchise support, to better reflect the direction we're moving the company."

And Feldman has moved Midas quite a distance in a very short period of time.

"In the first 100 days I was here, we created our mission to become our customers' most trusted professional and first choice, and we defined what success between now and the end of the decade would be," he says. "We built a plan around that. We have teams of franchisees, company people and suppliers working to deliver against that plan, and we're committed to it. We hold ourselves accountable."

The mission Feldman and his team created includes a plan called Vision 4-3-2-1. Each of the numbers represents a specific goal. The "4" stands for a 40 percent increase in same-store sales. The "3" targets the organization's three core service areas -- brakes, exhaust and maintenance. The "2" represents the goal of doubling dealer profits. And "1" is for executing in a "1-Midas-way," which means one brand and one team delivering a consistent experience in all the company's locations, Feldman says.

Once Feldman convinced those in the Midas family, the investment community followed. Since January 2003, Midas' stock price has risen from less than $7 per share to the $17 range in August.

"Wall Street clearly sees the direction that we're trying to move Midas," Feldman says. "The value of the rising stock is a reflection of what we're doing to strengthen the brand and create a business that is focused on providing a solid return to our shareholders, strengthening our balance sheet, reducing our debt load, increasing our cash flow, reducing our capital requirements -- all serve to provide an investment vehicle for Wall Street, which is very attractive.

"We started with a clear vision of what had to be done. Part of that vision allowed our banks to refinance us. We refinanced the company twice based on the strength of our plan and the results we have delivered. That gives us tremendous credibility and financial security. We've made tremendous progress on improving our balance sheet and our debt management capabilities. We've restored sales and profit growth by focusing on our core business -- brakes -- and have now posted four quarters in a row of positive comparable sales. I see no reason why the trend is not going to continue.

And, Feldman says, he's rebuilt the trust of franchisees, who ultimately are the company's economic success drivers.

"We've embraced the franchisees in everything we do, and they know that," he says. "They are our constant partners in how we make decisions. We don't always agree, but we've learned to respect and trust each other in terms of how we have to move this business forward. And we have an attitude of win-win, meaning whatever we do has to benefit both of us."

While the company may rededicate itself to its core service offerings to reach the "4" and "2" of the Vision plan, the company, Feldman realized, needs to offer more than just brakes, exhaust and maintenance.

"We're the market leader in brakes and exhaust, and we want every one of those jobs in North America that we can get," he says. "But we're also launching into new categories. We've just completed announcing our relationship with Bridgestone/Firestone. We can become a viable supplier to our customers out there."

Midas is also getting into the maintenance business and the commercial fleet business.

"Those three categories, overall, represent, in today's dollars, over $50 billion in sales that will take place in 2004," Feldman says. "And we have just a very small piece of those businesses. So, we're strengthening our businesses and our businesses are growing, the brake business in particular, which is a $6 billion category and growing. We're the market leader. And we're moving into other categories where we know we can be successful."

Midas has leapt into the fleet management business, where it can service the thousands of companies that own hundreds or even thousands of vehicles. According to Feldman, this is a $6 billion category with serious growth potential for Midas.

"We're just beginning testing on some proprietary data collection, credit cost management tools that we'll be bringing to the marketplace the end of this year and early next, which we think will offer fleet administrators a terrific way to have increased visibility and cost management, and should give us a great advantage in selling in the marketplace," Feldman says. "We don't want to be a 'me, too' and say we're Midas and we can do this. We want to provide the fleet managers some added benefits. I'm very excited about this initiative, and so are our dealers."

All of which has Feldman looking ahead with the same unbridled optimism he came to his job with.

"We've told Wall Street that we'll return to profitability this year as a result of all the changes," he says. "And I'm a big believer in promises made and promises kept. I believe, in the not too distant future, you'll see the results of these efforts. But in a very tangible way, we've already seen the results of the focus on the retail side of our business as we've reversed what was more than a two-year decline in same-store sales.

"For the last four quarters, we've reported positive increases in comparable sales. That makes our franchisees and our shareholders very happy." HOW TO REACH: Midas Inc., (630) 438-3000 or www.midas.com

Sunday, 08 August 2004 07:14

Supplying solutions

It was a sterling reputation that drew Peter Sinisgalli from his high-ranking role at third-party logistics provider Newroads to accept an offer to assume a top leadership position at Manhattan Associates. OK, so maybe being the largest player in a fragmented $8 billion, high-growth market with an enormous upside had a little something to do with it as well.

Sinisgalli, former president and COO of CheckFree, took similar positions at Manhattan Associates in March. At the same time, the company announced Sinisgalli would also take over the CEO role when Richard Haddrill became vice chairman of the board on July 1.

“I spent the year before joining Manhattan Associates in the logistics business at a third-party logistics provider that dealt directly with Manhattan Associates and was impressed with the company and the industry from that perspective,” he says. “Prior to that, I spent six plus years as president of CheckFree and had heard, just through living in Atlanta, a lot of very positive things about Manhattan Associates.”

Those positive things include being named to Supply & Demand Chain Executive's Top 100 list of key performers in the supply chain industry, among other accolades.

Manhattan Associates provides supply chain execution solutions. SCE solutions employ a variety of modules that make up an integrated system. Among the many modules are trading partner management, transportation management systems and warehouse management systems. The goal, according to the company’s Web site, is to “streamline business in ways that increase fill rates, improve the bottom line and decrease overall logistics costs.”

While the concept of moving materials from sourcing to the end consumer more efficiently and more cheaply is as old as business itself, the science and industry that is now called supply chain is a relatively recent invention.

“Fourteen (years) sounds like a young babe, but not in this industry, Sinisgalli says. “That’s as experienced as they get.”

The recognition and the company’s reputation “primarily (because of) our industry reputation for customer satisfaction and innovative solutions,” Sinisgalli says. “We’ve been doing this for 14 years, which makes us one of the most experienced players in the space. Our ability to continuously improve our applications with richer functionality as well as better performance, scalability and lower total cost of ownership help to drive what we believe to be very high, industry-wide customer satisfaction.”

With more than 900 customers representing more than 1,600 facilities around the world, Manhattan Associates’ clients are involved in a variety of industries that include consumer goods, food, government, high tech/electronics, industrial/wholesale, life sciences, retail and third party logistics.

“We’re a formidable company in Atlanta,” Sinisgalli says. “We have about 600 people here and another 500 people spread around the globe. We will grow above the market pace.”

Smart Business spoke with Sinisgalli to learn about the state of the supply chain industry and how he plans to make sure that Manhattan Associates continues to increase its market share on the world stage.

How did your past roles help prepare you for this position?

I was fortunate enough, through previous experiences, to have similar situations. I spent about 14 years with Dun & Bradstreet, the last couple at D&B Software. The CheckFree situation was great fun. We grew rapidly during that six-year period in an attractive market. I think that growth through organic initiatives as well as acquisitions, that experience hopefully will be very helpful to Manhattan as we have a similar type opportunity in front of us. I think my last year as a CEO of a third-party logistics company gives me some valuable domain experience in Manhattan’s industry.

What opportunities are there for Manhattan Associates in the supply chain space?

The supply chain services and applications market is generally described as an $8 billion market, today. The component in which we compete, supply chain execution, is about half of that or about $4 billion. Our revenue last year was about $200 million. We’re effectively the largest player in the space, (holding) about an 8 percent market share. The market is estimated to grow about 10 to 12 percent a year for the next five years. So being the largest player in a relatively high-growth market, but a market that is still fairly fractured with the largest player being only 8 percent, gives us great optimism that through very good execution, focus and deployment of strategies that we can be a very substantial software and services company over the next five years.

What drives companies to improve their supply chain operations?

There’s a lot of pressure on companies from things like globalization, international – as well as domestic – regulation, the need to become more efficient to gain greater visibility into the supply chain, to drive faster turnover of inventory, to order more accurately to meet customer demand. All these marketplace issues, we believe, makes our solution substantially more attractive. So I’m quite excited for the opportunity for Manhattan. The good news for everyone in our space is whether they get it or not, they’re being forced to get it, primarily because of the effect of globalization. Sourcing around the globe, distribution around the globe, the need for visibility into the supply chain, is a fact that everyone in this space is going to have to wrestle with. Certainly, the big local players understand it and most of the regional players understand it as well. I don’t think there’s a whole lot of education that needs to take place here. It’s merely a matter of aligning resources and executing.

How do the demands that companies like Wal-Mart put on their vendors shape the market?

Obviously what Wal-Mart is trying to do is make its supply chain more efficient, lower its costs and get its suppliers to participate in that improved efficiency. And certainly having that mandate from a company as powerful as Wal-Mart helps move the entire industry forward. The department of defense is similarly requiring its contract suppliers to also begin tagging (with RFID – radio frequency identification) in 2005. Clearly Wal-Mart makes a major footprint in the landscape and we’re thrilled that they continue to move forward.

How has the economy affected the sale of supply chain solutions?

We have said, as recently as last fall, that we were starting to see some pickup in velocity in the market space that the sales cycle, although still longer than what it had been in the late ‘90s, was beginning to shrink, that buyers were getting more comfortable signing contracts, and our hope was that the market would continue to build momentum. We found that to be true in Q4 of ’03 and Q1 of 04. We do believe that the market is gaining momentum, and our industry will benefit from that.

Does Manhattan Associates have a presence outside the U.S.?

We have 19 offices around the globe in 10 different countries. A little over 20 percent of our revenue today is from outside North America. Actually, we expect that in the next three to five years, a third of our revenue will come from international sources. We are definitely in those spaces, particularly Europe and Asia, where we see very strong future demand for our solutions.

What are the hottest areas of supply chain right now?

Generally speaking, transportation, trading partner management, distributed order management are growing faster than warehouse management primarily because warehouse management as an application suite has been around longer and is a little further penetrated in the market space. Transportation and trading partner management are less penetrated, so those are expected to grow more quickly as a specific product set over the next five years.

What we’re seeing, and we’re quite excited about it, is the demand from clients to have an integrated suite across all the supply chain solutions. For everything from sourcing product to consumption of that product by the end consumer, the marketplace is looking for vendors who can supply them with the complete solution – from source to consumption. We call that our integrated logistics suite, integrated logistics solutions, and that takes all of our product sets and allows them to communicate with one another across the supply chain to improve on the solution set for our clients.

Are clients interested in whole solutions or are they searching for point solutions?

What clients have found appealing about our solution is that it’s modular, meaning you can implement just WMS, just TMS, just trading partner, just distributed order management, just RFID for that matter. Yet they know that if they wish to expand upon those implementations, we have a suite of solutions that can better meet your needs. Folks still wish to implement for the most part modularly, one application suite at a time. But, with the confidence that in the future they’ll be able to lean on one primary service supplier to provide a complete supply chain execution solution. Chief technology officers and chief information officers are all being pressured to drive down the total cost of ownership of technology.

What benefits can companies reap from improving their supply chains.

Primarily driving improved return on their investments in information technology – not just improvements in ROI in IT, but improvements across their entire business. We believe we provide the best solution from a technology perspective and that solution will allow companies to optimize their supply chains and get greater visibility into their supply chains rapid inventory turns, more accurate ordering of project, faster delivery of that product through the supply chain, greater opportunity for returns to be processed properly – everything from source to consumption, allowing companies to operate their supply chains more efficiently with greater visibility.

What does the future hold for Manhattan Associates?

One of the great things about moving into this job is there is a very strong company in place with very strong management and a good strategy. My challenge, and the rest of the management team’s challenge, is to continue to execute more effectively than any of our competitors and to continue to build out our strategy to play in a larger footprint within supply chain. Much of that will come through organic growth expanding through research and development, investment in our product development for organic growth, and we also believe given our strong market position and our strong Wall Street assessment of us that we have more than adequate ability to acquire complementary companies as well to help drive our growth and success. So through a combination of R&D and acquisitions, we believe we’ll play a much larger role in supply chain solutions over the next five to 10 years.

How to reach: Manhattan Associates, (770) 955-7070 or www.manh.com.

Friday, 16 July 2004 09:18

The Wilhelm File

Born: 1954, Chicago

Education: Graduate school in city and regional planning, undergraduate degree in geography and environmental studies, Northeastern Illinois University

First job: Stock boy in the men's underwear department at Sears & Roebuck on Lawrence Avenue in Chicago (sophomore in high school during the summer)

Jobs: City of Chicago's department of planning and development (while attending graduate school) -- "I was responsible for improving some of Chicago's commercial business strips."

Chicago Department of Aviation -- "My last job at the department of aviation was the assistant commissioner responsible for operations of O'Hare, Midway and Meigs Field in Chicago. I hired Standard Parking when I was working at O'Hare to help address some of the parking problems with the O'Hare garage. I met Myron Warshauer (owner of Standard Parking) and his group then, and when we finished the job we set out to do at O'Hare, I went to work for Myron."

Vice president for operations at Standard Parking; senior vice president of operations executive vice president for operations in 1998 (following merger); in 2000, named president; in 2001, named CEO and a director

Boards: Past chairman of the Des Plaines Planning Commission; Athletic Fundraising committee of St. Viater High School; member, Executives' Club in Chicago; member, Urban Land Institute; member, National Parking Association

Resides: Mount Prospect

What is the greatest business lesson you've learned? I've learned the most important skill I've developed is team-building. In my mind, the key to our company's success, and any personal success that Myron (Warshauer) and I might have had developing the business, has been by the team that we put together. I know it's a clich answer, but it works for me.

I've found that surrounding myself with people with really diverse backgrounds who don't all agree on every issue serves the company and myself very, very well. And over the years, whether it was when I was working at O'Hare on the airports or trying to build and turn around Standard Parking, that any success that we had was by virtue of putting a solid team together.

I've been very fortunate to have selected the right people to work with me.

What is the biggest challenge you've faced, and how did you overcome it? How do you take the passion that you have for delivering our product - in terms of insisting on excellence to separate us from the competition -- and originally applying that passion to 40 locations here in Chicago to, ultimately, 1,960 locations in 200 cities across the country? That certainly has been the most difficult challenge that we've faced as a team -- how do you get 300 senior managers and a team of 20 vice presidents and senior vice presidents passionate about delivering the product.

The key to our instituting that culture and that passion here in the United States and up in Canada has been a constant education system about what metrics we look at, a constant focus on Standard University and a delivery of excellence, and a constant stream of communication that emanates from my office in terms of our newsletter and communiqus that talk about the insistence on the product.

That, by far, has been the most challenging issue for us in growing the company the way we have.

Whom do you admire most in business and why? The person I admire most, even from a business sense, is my dad. My dad did not have the benefit of a high school education. He went to work on the back of a milk truck when he was a freshman in high school. He took that foundation and became a mid-level manager with one of the country's largest grain companies, and he did that by virtue of his work ethic.

At the time that he was working on the milk truck, to having three jobs when he first married my mom, he taught my brothers and me that the most important thing was working hard and being respectful of those people around you. The most important issue -- team-building -- came from my dad.

And whether it was lessons that he taught me in Little League -- in being there in terms of coaching and being around and teaching me the importance of being on a team and playing in team sports, and then, ultimately, how you treat people as you rise in business and enjoy successes and suffer through failures with a team -- all stems from my dad.

Some of those lessons he taught me as he tried to build a professional career without a lot of background. To this day, I'm thankful for those lessons that he taught me.

Friday, 16 July 2004 09:05

Clear skies

It was one of those days when dark, menacing clouds reached toward the troposphere, portending the pending storm. Debora Wilson lifted the garage door of her Atlanta home and watched the ominous skies as the rain began to fall.

"It began to rain, and it began to rain very hard, and there was huge lightning, an electrical storm. I just stood there and watched it. It was awesome," says Wilson.

For anybody else, it might have been disappointing -- a storm that cancelled a family picnic or perhaps a company softball game. But for Wilson, the storm was business.

A former Bell Atlantic executive, she assumed the reins at The Weather Channel as its president June 7 after serving as COO of The Weather Channel Networks and The Weather Channel Interactive, which operates one of the world's most popular Web sites, weather.com. As such, Wilson is very clear on the importance weather, and therefore The Weather Channel, has on, well, everyone.

"You know what's so cool about what we do," she says, "is that, unlike any other information category -- unlike sports, unlike business information, unlike even news -- weather information is relevant to everybody. There is nobody on the planet that it is not relevant to. In many cases, it's relevant to you and important in the decisions you're making, not only every day, but probably multiple times a day for some outdoor activity."

With that in mind, Wilson, who was responsible for launching weather.com as that division's president and CEO, has spent the last decade helping to build the nascent cable network into a weather conglomerate. Since her arrival, the changes have been numerous.

"One is very obvious, and that is the breadth of the products that we offer to consumers," Wilson says. "I came to The Weather Channel 10 years ago when The Weather Channel had half the history it (currently) has under its belt. We were predominantly a cable network; that is how we started life."

And while the business was strong at the time, today, with nearly 800 employees, it retains only the barest resemblance to that fledgling television company.

"We have probably a dozen different growth-oriented businesses under the umbrella of the Weather Channel brand," Wilson says. "The breadth of the products we have and the different ways that we touch the consumer every day is an important shift. Backing that up and supporting it is the degree of technical sophistication that we have."

But technology is nothing new to The Weather Channel, which launched May 2, 1982, and which now reaches more than 87 million households or 95 percent of all cable homes in the nation. Says Wilson, "We've always been a technology-based company. As a cable network, we had a great deal of automation in our broadcast center. So we've always been wide on technology. And in order to be able to distribute our network -- we're the only national cable network that also distributes local information within its national feed -- it's imperative."

Adopting technology

The weather affects every person who ventures outside of their home, a fact that is not lost on Wilson or her staff.

"You watch The Weather Channel and you hear what is happening across the U.S., and you also get your local content," she says. "At the same time, your friends (in other cities) get their local content, mom and dad, brothers and sisters, aunts and uncles, whoever, get their unique local content."

To accomplish that, The Weather Channel had to invent a new technology to, as Wilson puts it, "distribute the data that was necessary to power each individual local forecast."

The company did just that in the 1980s, long before the personal computer had become pervasive. So when the growth of the PC market was followed by the explosion of the Internet, The Weather Channel was ready. And weather on the Internet became an instant success.

"As we broaden the number of products we offer and the degree of sophistication that we've grown into, we've definitely increased the level of technical sophistication that we have," Wilson says. "When I came to The Weather Channel, that's what my job was. I was very specifically hired to do that, so I was glad to be able to do one or two of them."

But even Wilson couldn't have expected the level of success that The Weather Channel's Web site has achieved or the impact it would have on the company as a whole. Each month, the site reaches an average of 20 million users, and last year, the interactive division's revenue grew by 65 percent over the previous year.

"It's shaped and crafted what we provide today," she says. "Somehow, it all magically works. Because here we are, and weather.com is one of the 15 most used Internet sites in the world every month."

The site's impact was immediate.

"The minute we began to put The Weather Channel content on the Internet, the most amazing thing started to happen," Wilson says. "Consumers started to talk back to us. It was awesome.

"I tell this story about our first online presence; (it) was actually through CompuServe. It just feels like so long ago. (At the time) AOL, CompuServe, Prodigy had all these chat and discussion rooms. That's how they really began to flourish. It provided, for the first time, electronic communication.

"So, we put weather content online through CompuServe and literally within minutes, we got hundreds, and then thousands, and then millions, of e-mails."

Wilson recognized the opportunity as soon as she saw it, and knew the company had to capitalize on it.

"It was awesome," Wilson says again. "We printed them out (the e-mails) and we taped them up on a conference room wall. We invited all The Weather Channel employees to come and look at them. Most of them started out saying, 'Thank you, thank you, thank you, to The Weather Channel for giving us you through the PC,' 'We love you,' 'This is awesome.'"

Managing growth

As much of a boon as the Internet was to The Weather Channel, the Internet boom -- the crazy period where it seemed just adding ".com" to a business plan made someone an instant millionaire, created enormous challenges for the organization's leadership.

"Personally, it made it hard to separate the real from the unreal because it wasn't like it lasted a day; it lasted several years. And all the evidence seemed to point in a different direction than every bit of foundational learning that you had would suggest," Wilson says. "The Weather Channel and also our parent company, Landmark Communications, struggled as every media company did during that period of time, to separate the real from the unreal.

"Collectively, they did a terrific job of thinking about it for the long haul, responding however to the real challenges that we had in our organization as we sought to build a valuable weather.com to attract and retain the people that we needed to have here," she says. "I think we had a really good balance despite how, in hindsight, how strange it all was."

Wilson was able to help make the right decisions to lead the company through the confusing times, in part, because of her strong background.

"I had the really good fortune of, through Bell Atlantic, of doing two things -- one is to always manage, from the very first day," Wilson says. "I was 21 years old when I came, and I had a team of people who reported to me. From the very first day, and forever thereon, I had teams of people that I was responsible for. So I was a manager. In my very early days, I learned to feel comfortable with and actually embrace and love working with people and managing groups.

"In hindsight, as I look back and work with and mentor other managers and leaders, it's very unusual for someone to have had that experience that early in their career," she says. "And it makes a big difference in their capabilities and their degree of comfort later on."

But there was something else, Wilson says.

"The other piece of it was that I've had some of the ugliest jobs early in my career," she says. "They were very operational. I ran customer service organizations. I ran an installation dispatch center that was responsible for shepherding thousands of work orders every day and making sure that our telephone customers got hooked up and their problems got taken care of. I managed the executive support and financial management of an entire division, which for them is like 10,000 people."

All of which provided a valuable operational foundation that Wilson taps into today.

"When you get out of school, you don't realize how important your foundational experiences are in business," she says. "So now that I run The Weather Channel, no matter what the function is -- whether it is marketing or production or graphic design or facilities management or financial management or legal -- I feel comfortable. Even though I don't have a degree of expertise in each one of them, I feel comfortable with them and allow myself to enjoy the day-to-day hum of what makes a company work." How to reach: The Weather Channel, www.weather.com

Wednesday, 30 June 2004 05:28

The Davis file

Born: 1947, Atlanta

 

First job: Bottling wine in an Atlanta plant during the summer

 

Career moves: Headed National Distributing Co.'s wholesale operation in Sarasota, Fla. Led the Georgia branches in Albany, Augusta, Macon, Savannah, Brunswick; director of sales at NDC, then president; added title co-CEO, and, after partner passed away, CEO

 

Boards: Acuity; University of Georgia Foundation Trustees; Board of Federation of Greater Atlanta; Georgia International Law Enforcement Exchange Program; Davis Academy (a reformed Jewish Day school; started school named after his parents)

 

What is the greatest business lesson you have learned?

 

Patience -- which is not one of my virtues. Learn how to be patient and try not to shoot from the hip. Instead of making a quick decision, sleep on it overnight, particularly if it's something that you've really got some emotions about.

That's probably one of the best lessons I've learned. Sometimes you do something like that and you regret it. You didn't give yourself a chance to think through it. Sometimes problems come up -- this is really an interesting thing -- and if you let it go for awhile, they disappear; it's self-correcting.

 

What has been your biggest business challenge and how did you overcome it?

 

I guess creating my own niche in the business with having a father that was so dominant and really a major force in our industry. That was a real challenge to prove that I deserved my place here. (His father ran the business for 45 years).

He was pretty dominant and domineering. People loved him; he was a salesman's salesman. He was one of these guys that was his way or the highway. We certainly had our differences over the time we were in business together. I don't think it was atypical of what goes on in a lot of businesses, where kids are coming into a business where there is a strong-willed entrepreneur that's built a business up. That was a challenge.

I just kept my head down and kept plugging away. I just tried to do things the way I thought were right, what I believed in.

 

Whom do you admire most in business and why?

 

I'd have to say Warren Buffett. I (like) his down-home, homey approach; he's honest. I think he believes in the power of people. He's just a brilliant guy. He's got this self-deprecating way about him. He makes sense.

Tuesday, 25 May 2004 10:55

The Noonan file

Born: 1961

 

Education: Mechanical engineering, Georgia Tech; business degree, Harvard University

 

First job: Maintaining clay tennis courts and assisting tennis professional at a local country club

 

Career moves: Senior management positions, Dun and Bradstreet Software, including vice president, worldwide marketing. Before that, specialized in advanced, automated control systems for computer-integrated manufacturing. Founded two technology companies in Boston, Actuation Electronics and Leapfrog Technologies

 

Boards: Appointed by President Bush in 2002 to serve on the National Infrastructure Advisory Council; chair, NIAC Evaluation and Enhancement of Information Sharing and Analysis Working Group; trustee, Woodruff Arts Center; director on the boards of the Metro Atlanta Chamber of Commerce, Georgia Tech Advisory Board, Carter Center Board of Counselors, Young Presidents Organization, White House Critical Infrastructure Task Force. Serves on the boards of Manhattan Associates and NuBridges and Knowledgestorm, privately held technology companies

 

Residence: Atlanta

 

What is the greatest business lesson you've learned?

 

Some of the most important lessons that I have learned involve personal sacrifice, commitment and discipline as the foundation for success. Trusting my instincts is also something I have learned ... whenever I have not, I have usually regretted the consequences.

I have also learned competitive businesses draw competitive people, and it is essential to maintain an unwavering spirit, a will to win and a will to excel. Along with character and integrity, these are the things that endure, and these are the qualities that are so much more important than any of the events that occasion them.

Taking risks, being bold and getting out on the edge of the limb is critical if you are going to lead the pack.

 

What is the greatest business challenge you've faced?

 

It is the same challenge that I face every day, and I believe that it is something that you control, but you never really overcome. That challenge is the daily trial of balancing the needs of a growing publicly traded global company in an ever-changing competitive business environment with the essential responsibility of being a worthy father to my children, a devoted husband to my wife and a contributing member of my community.

 

Whom do you admire most in business and why?

 

Winston Churchill. He changed the course of history. He was tough-minded, smart and a tenacious believer in the value of persistence. A role model for all leaders faced with seemingly insurmountable obstacles.

Vince Lombardi. He believed in the triumph of the human spirit and uniquely embraced the need for discipline, commitment, mental toughness and sacrifice as the formula for success. He focused on teamwork and understood that if you treat people with respect and treat them like winners, they will perform as winners. I have kept his speech, "What it takes to be No. 1," with me since the first time I read it in grade school, and I still consult it today.

My parents. They have always been a strong beacon in my life. They established the ground rules early in my life, taught me right from wrong, instilled in me the need to be able to rely upon my own judgment and encouraged me to reach for the stars.

Tuesday, 25 May 2004 07:45

Safety Net

Someone with less faith would have called it quits long before.

It was a nearly impossible task to find customers. Venture capitalists turned a deaf ear. And for two years, Thomas Noonan, president and CEO of Internet Security Systems, struggled to keep his fledgling enterprise alive.

"1996 was an important year, both in the industry and in our history, because by the end of 1995, we were completely broke," says Noonan. "I was financing the company on 37 Visa cards with cash advances. Our technology was not necessarily doing what we wanted it to do. We weren't generating the customer activity.

"In fact, we had generated a whopping $250,000 in revenue in the year 1995."

But then something happened that would change the course of ISS and the future of Internet security.

"I would say the turning point for us was a one-two, left-right combination punch," Noonan says. "The first was that we were able to convince Motorola, up in Schaumberg, Ill., at their headquarters, that this was critically important to their security. They were doing a number of government contracts and continue to do so today.

"Upon receiving that order, the venture capital community completely changed their stripes. Unfortunately, it wasn't the Atlanta venture capital community. We had to go to Boston and California, where they were a little more attuned to this. We were able to raise $3.5 million 45 days later. That was a big shift for us."

The win with Motorola in 1996 was the beginning of ISS' rise to become a leader in Internet security.

"The most important change that it brought was revenues of close to $5.5 million and the addition of 41 new employees and about 220 customers," Noonan says. "We've been growing ever since. We've never had years where we haven't grown."

With hard work, perseverance and a dogged determination to succeed, Noonan has created one of the premier Internet security companies in the world. Despite the challenges, or perhaps because of them, he has learned that he can't wait for problems to occur. He must check them before they appear.

Noonan, with fellow Georgia Tech alumnus Christopher Klaus, founded Internet Security Systems in 1994, at a time when few outside the university or scientific communities were even familiar with the term "Internet," and the Internet security field had few players. Today, that arena is filled with names like IBM, Cisco and Symantec.

"We've grown from $250,000 to $250 million in nine years," he says. "(We) serve about 12,000 business customers and have offices in 32 countries. That's a lot of growth."

Those 12,000 customers are located in about 80 countries. But, Noonan says, getting to this point wasn't easy.

 

Getting into the game

"When we went to raise venture capital, all the early venture capitalists told us they wanted to invest in businesses that can serve businesses, not businesses that could serve research labs in universities," Noonan says. "We said, 'No, this is much bigger.' They said, 'No businesses are using the Internet today and no consumers are using the Internet.

"Why would you want to secure it? Why would they want to spend money on securing something they don't even use?'

For two years, Noonan and Klaus struggled to convince the uninitiated.

"It was a valid question," he says. "You had to have vision and belief. This concept of skating toward the puck, knowing where the puck would be, we thought the puck would be right here, meaning a pervasive broadly utilized enabling technology for both businesses and consumers."

The hard work paid off. In 1999, Noonan was recognized by Ernst & Young LLP as an Entrepreneur Of The Year. But like any good leader, he understands that it takes more than the leader's vision to accomplish a company's goals.

"It was an exciting accolade," he says, "But it's much more a tribute to the team of employees that put this company on the map. I was their face man and their leader, and was very proud to be so back then and continue to be so today. But to do something like this, to take an idea and then go out and build a market-leading company in a technology environment that is extremely competitive against companies like Cisco and IBM, really requires an unbelievably committed team of people that will follow you into battle anywhere.

"And our employees have done that with me. I owe them much more than a debt of gratitude."

Noonan also believes he owes something to his country. Recently, President George W. Bush appointed him to serve on the National Infrastructure Advisory Council, a committee designed to advise the president on issues surrounding the security of information systems that support the nation's critical infrastructure as part of homeland defense.

"Eighty-five percent of the Internet is controlled and operated by the private sector," Noonan says. "President Bush and the team in Washington recognized early on that it had to be a public/private partnership and he needed to reach to very visible leaders in the industry to help bridge that public/private partnership of protecting our infrastructure."

Noonan says the council has made unbelievable progress in 18 months.

"One side of me said, this government is going to move like a glacier, be fraught with bureaucracy and frustration, and my experience has been extremely positive here," he says. "I'm serving with John Chambers, who is chairman of Cisco, and Craig Barrett, who is chairman of Intel, and a handful of key industry leaders. We are making some progress, and we feel good about it.

"This country has defined the term 'critical infrastructure' to mean the financial-communication-transportation-energy-emergency services components of our digital infrastructure and our physical infrastructure as the critical infrastructure," he says. "The ability to assess that infrastructure to determine how vulnerable it is to attack, the ability for that piece of the infrastructure to have the proper controls in place to repel attacks should they be targeted and, lastly, for the ability for that piece of the infrastructure to recover, i.e. in a business continuity perspective, should it come under a catastrophic attack. Those three very manifest objectives have been driven through the national strategy to secure cyberspace, and NIAC is all about making sure we can achieve those objectives anytime, anywhere."

 

Game plan

Give Noonan credit; he has always skated not to where the puck was, but to where it was headed.

"When we founded the company, we established founding principles, three of them focused on what we believed the Internet would become," he says. "One of those founding principles -- the Internet would be the pervasive for all voice and all commerce between businesses and consumers or the pervasive enabling technology. At the time it was at zero percent. That was one big bet."

Noonan's early vision may have allowed him to stay in the game, but it is the hackers who continually up the ante for ISS.

"It is what make this business, quite frankly, at the end of the day, the most exciting business on the face of the Earth, because we are in a never-ending, round-the-clock battle with the bad guys," Noonan says. "It is through technological innovation, coupled with very smart people, that we are staying one step ahead of the bad guy for our customers. We call this ability the pre-emptive protection, and it's truly driven by technological innovation that we did not even imagine 10 years ago. We could imagine the objective, but not how to do it."

He says the security model in 1994 was a reactive model.

"Basically, you had to get infected by the virus first. The virus would be sent to a lab of smart people," he says. "They would reverse engineer the virus and then send you an inoculation -- that's an antivirus update. They're doing that today when your antivirus system is updated."

Then the Internet happened.

"All of a sudden, now, the Internet became the vehicle for transport, not the floppy disk," Noonan says. "Whereas it might take five years for a virus on a floppy disk to get on enough computers and enough floppy disks to infect the whole world, the slammer virus -- one of the recent worms that was on the Internet -- infected the entire Internet in four hours. There is no possible way that the researchers can get the virus, reverse engineer it, build the inoculation and then send it out to all their customers (quickly).

"If you happen to be at a dinner meeting for three hours, you're done."

 

Looking to the end game

Noonan is happy with how he's been able to grow ISS, but things aren't getting any easier.

"The next 10 years will bring equally as much, if not more, change as we have seen in the first 10 years," Noonan says. "Specifically, wireless devices will proliferate beyond our wildest imagination; therefore, the Internet will be with us everywhere. New threats and new methods will manifest themselves, which, quite frankly challenge us in ways we've never even imagined. At the same time, with no ways of dealing with these threats, we will innovate to establish ways of dealing with these threats."

That doesn't mean that Internet security is 100 percent effective.

"Unfortunately, I do believe we will suffer large-scale outages from these attacks each year," he says. "Yet, I believe this infrastructure is resilient enough to recover. The biggest concern I have is the concept of a coordinated attack against the infrastructure, whereby a chemical or a biological or a nuclear threat is coupled with a large-scale outage of ability to communicate, so that the first-responder system would be disabled as well, creating pretty significant chaos.

"I do believe the chance of all of that happening concurrently is low, not because of capability or not because of intent, but I believe our defenses are already to a point where we have the capability to minimize -- not eliminate -- the impact of that." How to reach: Internet Security Systems, (888) 901-7477 or www.iss.net

Tuesday, 25 May 2004 06:47

The business of hunger

For six years, Robert H. Forney was president and CEO of the Chicago Stock Exchange.

He still carries those titles, but in a different capacity. Forney now leads America's Second Harvest, the nation's largest charitable domestic hunger relief organization.

When he took over leadership at the Chicago Stock Exchange, Forney also began volunteering at the Greater Chicago Food Depository, packing food. He eventually became a board member.

"I used it as an opportunity to build the right kind of spirit at the exchange with my management team, with our members," Forney says. "I became increasingly aware of not only poverty in Chicago's urban areas, but also the opportunities to do some serious things to alleviate some of the pain.

"When I left the exchange after six years, I thought about retiring, and before I could really spend a whole lot of time on that line of thought, my wife decided that she was too young to have me around the house," he says. "Along came the opportunity to be CEO of America's Second Harvest. I have to say it was really everything I was looking for. I wanted to do something that had some social value.

"My dream wish was to be involved in something that had the look and feel of a very large, complicated business."

America's Second Harvest is a national network of more than 200 regional food banks and food rescue organizations that provide more than 2 billion pounds of food and grocery products to 50,000 local charitable agencies. These agencies operate more than 94,000 food programs, including food pantries, soup kitchens, women's shelters, Kids Cafes, Community Kitchens and other organizations that provide emergency food assistance to more than 23 million hungry Americans each year.

Smart Business spoke with Forney about how leading the stock exchange and leading the food program are not really all that different.

 

Are there any similarities between the Chicago Stock Exchange and America's Second Harvest?

 

I found that I really like working in a membership environment. I also think I have some skills in management approaches that are particularly well-suited for that environment. I don't think everybody is. When this opportunity came along here, I was able to transfer a whole lot of things that I developed over that six-year period into practice here.

They both have earned Baldridge Awards for best managed and most productive -- in our case, the use of diesel fuel; in their case (the exchange), computers. We use computers here, too, but the biggest element of expense we have here is transportation.

If we just equated the amount of money that, collectively, our network spends on transportation, we'd rank somewhere in the top 50 logistics organizations in the country. If we just counted the number of meals that Kids Cafes (provide) every day, we'd rank in the top 15 restaurant chains in America.

 

What role do you play as CEO of America's Second Harvest?

 

I am actually the advocate, the voice, for 35 million hungry Americans. Because of our size, because we're in every community, hopefully, we're the most effective voice. They need to be heard, and that's part of my job.

The other part is to run a very large business. I've got to be able to find food. It doesn't all come in the form of off-the-shelf boxes of frozen or canned or bottled or jarred bags of finished product. We have to figure out how to get fish off the decks of commercial fishing ships and then get it processed into various kinds of products -- we'll turn salmon that would otherwise be thrown away into salmon that can be utilized by kids in Brooklyn to fight obesity and bad diets.

 

How large is the hunger problem in this country?

 

We talk about the 13 million children and how many meals you want to give them a day. Three sound OK? That's 39 million meals a day. Start making that pasta, don't forget the salad, the drinks and the veggies that go along with it. It is a staggering amount of food.

When people think about 2 billion pounds, it's very, very difficult to get your hands around that. I describe it sometimes as a convoy of semis going down the road in military form. That convoy is between 8,000 and 9,000 miles long, and always on the move. We're dealing with 8 million to 9 million pounds on average, per day.

 

What are the challenges of getting food to hungry Americans?

 

There are more apples left on trees in the state of Washington than would be needed to put an apple in front of every kid in America, every hungry child -- the 13 million of them that are out there -- certainly once a week, year round. We have to create ways of getting those apples off those trees.

There will always be places and times where there will be a deficit (of food) and places and times where there will be a surplus. Being responsible for the entire country, our job is to find that stuff wherever it is, and then, in a balanced, fair, equitable and consistent way, get that food to as close to that source as we can to people who need it.

It's not easy to do just what I said. Unless you can create some pretty ingenious ways, fish from the deck of hundreds of fishing boats, it will not get to kids in Brooklyn. That's an expensive, complicated difficult process.

 

But you've found a way?

 

Kraft was interested in helping with that. They helped provide some capital investments that will make fish processing facilities a little more productive. As a byproduct of that, that fish processing facility will get from us X million pounds of fish, which they will then process for us at no charge. We'll figure out how to get the freezer storage capacity that we need, hopefully at no charge.

Then, eventually, we have to figure out how to get a truck from Seattle to Brooklyn. That is a very strong suit of our organization. We have a fleet of almost 800 trucks. On top of that, we rely a lot on the good folks in the trucking industry, individual truck drivers, retired truck drivers, people that have an empty load coming back, that will move things for us all over the country.

 

What are your goals for the rest of the decade?

 

I've got a commitment to the board (focusing on) three deliverables by 2010. One of them is to reduce the at-risk hunger population in America by half by 2010.

Another of my deliverables is to find 900 million additional pounds of food (a year) -- roughly 3 billion (total). The third one is to create a movement, to inspire the nation to not only help us do this, but to work with the grass-roots, faith-based components, as well the government at all levels - city, county, state, and the most important, federal.

Along the way, I've got to dramatically improve our productivity. We've got to get (productivity) 35 to 50 percent better. We've got to come close to moving twice as much food for the same dollar. There are opportunities for us to do this. How to reach: America's Second Harvest, (312) 263-2303 or www.secondharvest.org