Automation in the Logistics Industry With David Smith

Updated: Oct 4


Mark Hiddleson

David Smith is an enterprising senior operations executive with decades of experience enhancing performance. He has identified improvement avenues and implemented roadmaps and strategies to scale growth in matrix environments. David’s background includes best practices in logistics, operations, warehousing, automation, and translating strategic intent into actionable plans to drive efficiencies, reduce costs, improve services, and enhance team development and culture.




Here’s a glimpse of what you’ll learn:

  • David Smith talks about his entry into the logistics industry

  • What are matrix environments?

  • The use of robotics and automation in the logistics industry

  • Mark Hiddleson and David discuss projects they have worked on together and David's work with Gap and Toys R Us

  • David’s projects, the challenges with third-party fulfillment, and the need for data access

  • David discusses his fleet refresh project with HME

  • David shares the tech tools and software he recommends

  • David’s mentors and how they influenced him

In this episode…


What strategies can you use to maximize your warehouse's capacity per square foot? How can you make your business more profitable and competitive?


Many companies have embraced technology and adopted the use of robotics in their businesses. The logistics industry has not lagged behind, and some companies use robots for their fulfillment needs. This helps them maximize their capacity and improve efficiency.


In this episode of The Tao of Pizza Podcast, Mark Hiddleson interviews David Smith, an enterprising senior operations executive, about automation in the logistics industry. They also share their experiences working together, discuss the importance of automation, and talk about the challenges with third-party fulfillment.


Resources mentioned in this episode:


Sponsor for this episode...

This episode is brought to you by Specialized Storage Solutions Inc.


Listen...

I have been in the logistics and storage industry for several decades. I know I don’t look that old, but it's true..


We provide industry-leading warehouse storage solutions nationwide.


So basically if you have a warehouse that needs Rack, Shelving, Carts, Conveyors or Mezzanines we help with....design engineering, installations, inspections, and repairs to help clients optimize their logistics operations.


Sometimes people don’t even realize that we can actually help with permit acquisition services.


We take a look holistic at your entire business supply chain ecosystem to develop the resources for continually improving your operation.


To learn more, visit specialracks.com or give us a call at (707) 732-3892. One of the best ways to learn more about our products and services is to follow us on instagram. And there’s a link on our website to do that.


I will even give you my personal email address for podcast listeners so email me at markhiddleson@aol.com if you’re ready to take your warehouse storage and retrieval systems to the next level.


Episode Transcript:


Intro 0:01

Welcome to The Tao of Pizza where we feature top logistics leaders, entrepreneurs, and supply chain innovators and share their inspiring stories with a holistic twist.

Mark Hiddleson 0:13

This is Mark Hiddleson here, host of The Tao of Pizza podcast where I talk to top industry innovators in the warehousing, logistics, and supply chain business with a holistic twist. And before I introduce our guests today, David Smith, this episode is brought to you by Specialized Storage Solutions. Listen, I've been in the logistics and storage industry for several decades, though I don't look that old, but it's true. We provide industry leading warehouse and storage solutions nationwide. So basically, you have a warehouse that needs rack shelving carts, conveyors, or mezzanines. We help with design, engineering, installations, inspections, and repairs to help clients optimize their logistics and operations. Hey, David, sometimes people don't even realize that we can actually help with permit acquisition services. We take a holistic look at your entire business supply chain ecosystem to develop the resources for continually improving your operation. To learn more, visit specialracks.com. Or give us a call at 707-732-3892. I'll even give you my personal email address for podcast listeners. So email me a markhiddleson@aol.com if you're ready to take your warehouse storage and retrieval systems to the next level.

And I also want to make sure I do this first I want to give a big shout out to Greg Owens. He hosted me a few weeks ago on the Watching Paint Dry podcast, which features today's top facility managers, property managers and property owners, where they talk about the challenges and opportunities of managing hundreds of thousands of square feet of real estate and how to beautify and improve their properties. Greg and I had a great conversation, and we'll have a link to that interview in the description. I'll tell you, I'm really excited to introduce David Smith. I mean, he's a enterprising senior operations executive with decades of experience handling and performances. He's identified improvement avenues implemented roadmaps and strategies to scale growth in matrix environments. David's a blackbelt Lean leader quit with Thought Leadership and best practices and logistics operations, translate strategic intent into actionable plans, drive efficiencies, reduce costs, improve services, and enhance team development and culture by instilling autonomy and pride and staff. Dave has negotiated and form independent decisions and solutions regarding warehousing, logistics, automation, and transportations. He's provided both leadership and vision to integrated logistics projects, utilizing a blend of technology and people to elevate overall operational performance. I just want to highlight a few of David's track records for deploying these type of projects. he spearheaded the startup of the West Coast fulfillment center to supply Toys R Us e commerce orders for the western region. He executed the transition from three facilities down to one in the Hebron Kentucky facility for a large apparel retailer 87 successfully decommission multiple distribution centers across the country. David, it's a pleasure to have you on The Tao of Pizza podcast.

David Smith 3:13

It's great to be here. And Mark. Good to see you again.

Mark Hiddleson 3:15

Yeah. And so I wanted to this is a great opportunity I've known you for for a few years now. You know, when I

David Smith 3:26

was 20 years, we did our first job together.

Mark Hiddleson 3:28

Yeah, so I'm thinking I must have been in kindergarten.

David Smith 3:33

In Salt Lake Jews in Salt Lake City, our first job?

Mark Hiddleson 3:36

Yeah, Salt Lake City. So I've definitely want to talk about that. It was a fun project the way we first met. But tell me kind of how I know you went to Kansas State. It's a great school. Tell me how you got into the logistics? How do you get into the logistics industry?

David Smith 3:52

You know, I started off at UPS really unloading trucks at DFW airport really, as a part time job and worked my way through school and, and just kind of stuck in the industry got in with a company called Mark Bower, which distributes food to McDonald's, and just worked my way up through the ranks. You know, it's just It's what I've always done.

Mark Hiddleson 4:11

Yeah, it's, and I have to ask you something, too. And I read your, your introduction, and I read it again, while I want you to explain to me what you mean by matrix environments. I think I think I know what that is. But that's

David Smith 4:27

for me, it to me, that's where you're keeping track of things. You know, you've got to put KPIs in place you've got to keep track of, of key indicators and key key points in your business. And you've got to know the levers to pull to be able to react to get those to move.

Mark Hiddleson 4:41

Yeah, and it's matrix because it's it's a blend you're not I mean, you've got people a lot of times don't realize this where else there's all these that can be sales can be driving Milan or warehouse functions. So when you say matrix, you don't just get to be in a vacuum in logistics, you've got other factors that drive you know you're in Inventory, how fast things get out the door. When you get your order, you get all your orders between 330 and 430 on a Friday, the last day of everything.

David Smith 5:08

So when all the transportation challenges that are going on not only with the outbound, but the inbound freight as well, you know, it's it, everything, everything's connected,

Mark Hiddleson 5:17

everything's connected to everything, you've got a lot of experience in dealing with that. And you've got into some, you know, you're one of the few people I know, I've seen a lot of robots in the industry. But when I think of robots, I think that David has been managing robots since it was Kiva. And I'm gonna try to find a link to put in the description of what a Kiva system is. But I like what you said, you blend, not just technology, but people are a huge part of any solution. I think a lot of people when they implement automation, you are here looking at I think it's the wrong way to look at as you're eliminating positions, I mean, you're really you're finding a better way to integrate, like you say, create a holistic solution. So tell us a little bit about kind of that automation side. And keep us now Amazon robotics.

David Smith 6:08

So it's, it's been bought by the by Amazon. But you know, it's not just about maximizing your capacity per square foot, you know, with today's labor market, as tight as it is, you know, we're not putting people out of work by limit these types of things, we're just increasing the capacity facility, or making ourselves more profitable, and more competitive, and we're meeting our customers needs otherwise, people that do work, there won't have jobs, because you can't keep up with customer demand.

Mark Hiddleson 6:35

Exactly. And that's what we're running up against right now. It's we don't have the people that mean, to execute what we need to execute. And then now we're looking at growth. And I've talked to a lot of leaders in this industry, and they're saying the same thing. And also, what I see is that the automation isn't always the full. It's not the full answer. And I've seen you attended one of the logistics, we call it poolside, poolside logistics one on one, because it's kind of a roll up your sleeves, it's top minds in the industry. And we we looked at an installation that I think it was a was a middle seven figure, you know, five $6 million solution. And the way we got involved it is we bought their old system, and I looked at the old system system looks pretty good.

David Smith 7:22

Yeah. You know, all too often, though, you know, a lot of times that automation gets put in and you've worked so hard to make the automation work that doesn't feel like automation itself. But you've got to find that right balance between what what you needed to do and and use it for what you install it for, you know, how many times have you seen or, or system has been put in and it was designed to do one thing, and the business changed, and they didn't change their automation? And so they try to get their old system to do something that's not tended to, and it's more work in itself? You know? Yeah. Yeah. You can update

Mark Hiddleson 7:55

any have to evolve that. I mean, I think that's part of that matrix approach, because like you said, there's variables that change. And when you do, you're trying to get an 18 to 24 month payoff. Well, I mean, you look, we've just lived recently through some 18 to 24 months that nobody could have predicted. You're right. But it

David Smith 8:14

could be some of the symbols that they just like the project we

Mark Hiddleson 8:16

did in California, just document insertion to totes and things. It doesn't sound like much, but that's a that's somebody that's a person that you eliminate that you don't find you're eliminated. You don't have put there. So now their production flow does have more productive. Yeah. So I remember so the first project I did with you was the Mervyn's project, and we didn't. We weren't the first vendor that you guys approve. And that was the business about eight or nine years was that was the one of the first big projects I did on my own with specialized storage. What have I forget what we didn't get the original bid on that? Right? What happened? Yeah, the original vendor. The day they were supposed to show up to start decommissioning that building, contacted me and pulled out. They pulled their bid on. You're supposed to start yet. Because it was like a one month mobilization. Well, that was a big project. What was conveyor welded to the ceiling, there was the tank, and I'm gonna ask you another question about, so what? So on the day, they were supposed to show up, and then what happened?

David Smith 9:19

Then we start scrambling, looking at everyone else put in bids, and we put feelers out. And luckily for us, you, you stepped up, you came in and started within a week. I was really surprised you had people on site within a week. And we had a hard stop on that, because we had to turn that building back over the landlord, and we had a huge penalty that we would have had to pay. So you know, we didn't have a lot of flexibility to get out of that facility, and we had somebody else coming in. And

Mark Hiddleson 9:43

that's a facility that I really love because they were automating, I mean, that a lot of that stuff like they had a pallet conveyor that was 600 feet long. And I know a lot of this stuff that they put in was, in a way it was to me it was ahead of its time because I've been in a lot of distribution centers, obviously. But then by the time we got our hands on it, it was a dinosaur.

David Smith 10:04

Yeah. Yeah. It was it was a lot of fun. A lot of stuff got ripped out of there, the shipping sorter and all kinds of stuff that was there's a lot of stuff mine was scrapped.

Mark Hiddleson 10:13

Yeah. And that's what was one of the first big projects that I had done like that. And I was surprised. I mean, the amount of scrap that was there the amount of labor involved to get it out there, but we were, you know, the way our business works is we find people who can use a smaller look, you know, they need to want to see the conveyor. They need a piece of this or a piece of that or people needed stuff. I don't know if you remember, I painted a big back then I wasn't that technologically it took like homecoming poster paper like butcher paper, and warehouse liquidation. I drove out there in my motor home with my kids. Yeah.

David Smith 10:47

I remember that your son was running around selling stuff to people. Yeah, yeah.

Mark Hiddleson 10:51

Yeah. He actually it turns out Cody's working for us now, and I don't know if he was working for us when we did the project to Owens, a minor. But he brags that he's 27 years old. He's got 16 years of

David Smith 11:05

really does. It's true. Yes,

Mark Hiddleson 11:07

it makes a difference when they've seen some stuff like that. And that project was good the way we met. So the way we first met always laugh about this because I was selling everything. It was office furniture, and we really don't normally get into that. But we were running out of time and I'm like, I'll roll up my sleeves. I'll go out there. I'll sell the stuff myself on Craigslist. Like I said, we did it classified. So the first time we met, I had your office set sold. Yeah, so my desk, I'm more Hiddleston there's no big hurry here, sir.

David Smith 11:39

Yeah, that was fine with me. I popped up a bar table and went work.

Mark Hiddleson 11:43

Yeah. So it was a it was one of those initial feelings where I'm like, Okay, this is gonna be okay. Because I've dealt with a lot of people. And you know, the first thing you do is you go and shake your hands like okay, buddy, you're moving.

David Smith 11:55

Now, kind of we had to get out yet we had short timeframes.

Mark Hiddleson 11:58

And we made it because you guys were super supportive. Is it? Was it Randy long? Was that your? Yeah, he's really Cardinal now. Yeah, Randy's with Cardinals. So he was great to work with. I mean, we wouldn't have been able to, we executed quickly. That's one of the things we can do as a company. And I've tried to develop a network of resources where, no matter where we are in the country, we can find good people get the job done committed to a timeframe. I think that's when a lot of things people don't realize on a big project like that. The biggest thing is finishing on time. No, yeah. So yeah, that was a lot of fun. So tell me more about when you did gap I wasn't too familiar with. I know we supposed to say gap. I could have edited it out if we're not supposed to mention but you're not in fine. You consolidated. There was a really neat project that you did there because he had multiple brands, they were multiple buildings. Do you mind sharing some of what the thought process was how they were able to get efficiencies move three buildings in the one? Well, they they had done away with the old factory store brand. And because the price points were so close together, so they closed one of the buildings there. And I remember that

David Smith 13:08

the shipping sorter was such a huge issue because we bought it back from you leave and it was such it was like a midnight type transaction. It was kind of interesting. I think you said you're in your, your Prelude that your coast to coast, I can attest to that target listener because the first job we did was Salt Lake City, which wasn't very far from from Napa where you're based on and then we went to Kentucky, which was a heck of a lot longer drive. The last one was in New Jersey. So yeah, we've literally gone coast to coast.

Mark Hiddleson 13:37

Yep. And you've done I've done a couple projects in Philadelphia, but I'm pretty sure that what was it cranberry?

David Smith 13:43

Cranberry was the same very, yeah, cranberry, New Jersey.

Mark Hiddleson 13:46

I think that's the record for the farthest east. We've gone it is Far East. Yes. And and that was an interesting project. It was one of those things where they had a large contractor and there they were doing the big systems automated automation deal, but they needed somebody to be commissioned to pick modules. It was a tougher sale and it was different sizes. It was awkward, but he gave us an opportunity I really appreciate that. We went out there and then there was this other pile of rack that I really really wanted and he told me you know just be patient like we don't know what we're going to do. But hang in there and at the end and then you were right as as we were completing our job we had like a we were sweeping floors, picking up bolts making sure everything's plugged in then it goes okay you guys have about 10 containers of racking that we have to get out of here my my facilities on the West Coast and so for me my always plan B if I can't sell it, which a lot of times I have, you know have a network of people out there who want to buy material but I can't sell it. It's coming back to my art. So luckily, I'm pretty sure we we translated all of those loads of racking it's not easy, but we put it on containers. It went on a I call it the two To train to train, and then they take it to what's it called? Where the train? What are those called? I'm losing depot. Yeah, depot transfer station where they take it off trains and put these containers on trucks and trucks deliver. Yeah. So yeah, that was a that was a great opportunity. And you were right. So

David Smith 15:20

yeah, I remember seeing some of your stuff and Mantega that was thrown that Jersey, Jersey do like years later, I was picking through your yard there

Mark Hiddleson 15:27

in we pot. We brought two containers back from Kentucky to was the same kind of thing. And it's funny anytime I tell somebody what I do that in there a contract or anything. I've got a lot of guys that I've met over the years, whether it's at a restaurant or on a tour or bar or something, and you start trading war stories on it. Oh, yeah, we decommission the big facility. I have all these carts. They're like three tiers stainless steel cart or something. And the guy goes, my warehouse is full of them. Because they are they're worth like, 350 bucks apiece, but who's gonna sell at those cards? Well, right. Yeah. And that's kind of what we're known for. As people. You know, we they're from Kentucky, there were those cage carts. Remember those they folded down? Wheels are like super heavy duty carts. Yeah. And what do you get you use them for something like that was leather genic reason we picked on something we use cherry pickers and then pick into them and then stage the product of that. So you would go up on a cherry picker with that whole cage. So it kind of converted into I've never realized that. So you can roll it around. But then you put it on a piece of lift equipment. And then that goes up. They pull the orders that had like a garment rack, or it could have been cases or anything,

David Smith 16:43

right. It's a lot like the ones you made for us and Toys R Us and

Mark Hiddleson 16:47

Nevada. Yeah, yeah. And I definitely want to I want to talk about so. So two things. So Kentucky at the gap. You You mentioned that conveyor pain disorder. Yeah. So we bought that. And we had that sorter I can't I think we had it quoted to Rite Aid. And they were like, not making the decision. And we had it and it was, you know, something like that it's price to move, because they gotta make a decision. We're taking it down. It's even going straight to us. If we have to do anything else with it, the cost is basically going to double. Right. So we had some interesting conversations at the beginning of that job. Who was gonna get the job? And if it was gonna get canceled. You you really you have always it's one of the things with my clients. And I've been lucky because that particular case there was something was going to be done. That wasn't right. You stuck up for us. I mean, I don't want to go too much detail. Definitely not going to mention who was involved.

David Smith 17:51

No. Yeah, yeah, we got to be dumb enough. We've been doing business for years and through different companies, you got to treat people fairly. And they was that some stuff that was needed and taken that that wasn't unfairly so. I can't live with that kind of stuff.

Mark Hiddleson 18:06

Yeah, yeah. He took a really hard stand. And I'm what I'm talking about is the company where they said our legal department is bigger than yours. So no matter what, yeah, we're gonna we're like, Yeah, I noticed. Oh, I forgot. So you have other certifications that you have one of them is the charis, is it pronounced Karis, the negotiating? Yeah. And one of the things is funny is a lot of times I can pick up on if somebody's been to those negotiating classes. And it always I feel a little more comfortable. And I think like people think if you're negotiating, you're trying to get the other guy, you're trying to get that person. And I think people have had that training, they realize you're not trying to get the other person. You're trying to build a long term relationship, right, where you're negotiating, but you're trying to find a third alternative that's better than either one to come up with on credit.

David Smith 18:55

So yeah, that's the goal. I mean, yeah, I don't want you to get rich off. And I need you to make money. I need you to be around like some I call

Mark Hiddleson 19:03

in orders has spread over a long period of time, and you've earned my trust as a client. I know I can I can execute and send 20 Guys across the country to do a job and then you can trust me to do the job. So yeah, with the conveyor Toys R Us came to me and they it was what was it late October, whatever it was, was your major. The holiday rush. Oh, is that gives the gap? Yeah. Yeah, yeah. Yeah. And they had a facility here on the West Coast. We're doing a teardown Fresno. Yeah. So Fresno needed parts. And they worked out right. They were shut down.

David Smith 19:41

Yeah, they had a catastrophe, catastrophic failure of their so yeah,

Mark Hiddleson 19:45

so what we did and I think all of this happened now speaking of pairs, negotiating everything we had quoted, I gave kind of a Rite Aid I said, Look, if you guys don't execute on this, we're selling someone else right now. I think we sold it back to gap. For half of what we had a quota to. It was like a bird in the hand. It was the old it was exactly one bird in the hand. This is work. Yeah. In the bush. I think I said yes. At it was probably five o'clock Eastern time for sure. We might have been later. And when our guys got back to work in the morning, they're like disorders gone. Yeah, guys, did they have ninjas come through the roof of the building and take it out? Or that was my

David Smith 20:27

major. That was my major, just kid as it was called before they started cushy. Yeah, and that was not that's not the movie business.

Mark Hiddleson 20:34

And but they they made it right. I mean, they made it right. Oh, you made them make it right on every single step of that. Yeah, we were able to, you know, they were up and running, I think within 24 hours, and even back then that was before supply chain was a, you know, you and I've been doing this since people didn't even know what this like, what is this? There's a supply chain. Got it? Yeah, they only knew it when things screwed up. And so things are kind of screwed up. But they were even back then I think parts for that conveyor was like 24 weeks or 18 weeks or 14 as long time. Yeah, it was coming from overseas from Germany. Yeah. And so I also really wanted to talk about toys r us too, because that was a neat project that really

David Smith 21:18

do we get into the reasons there were behind the APL there. I know I read an article that was written in like 2012, where there were some issues with Amazon. So they originally they were on the platform with Amazon and they didn't like Amazon business practice. They've sued them. And one that what they got was the ability to do all the wrong online theirself. Well, that was that was a double edged sword. So they, you know, they they contracted out to a third party that had their major facility out of Columbus, the previous year, they weren't able to fill all the oops. So that was something they had to obviously they can't grow your business. If that's the case, you lose, you lose market share pretty dramatically. So they, you know, they had a 12 month turnaround, you get that up for Fall season. And we got that thing up and running in October. You know, and I always tell the story that for the middle of the month of October, we did 540,000 orders. And the 24 hours after Thanksgiving, we did 595,024 hours so that the sales spike is obviously dramatic. Yeah. Yeah. Go from 40 employees to over 506 weeks.

Mark Hiddleson 22:22

Yeah, it was incredible. Just remember the timeframe on that you had us making some very specific picking cards, and they were aluminum. And they were I mean that that facility. It was fairly automated and that Akiva system, right? It wasn't 100% key but that absolutely Pinky will the whole thing was Kiva pickiness storage was we had a bulk storage that was behind it that supported it. And then inbound was was obviously nakivo. But the rest is the rest of it all picking packing was all Kiba and Kiva have I keep describing chemo, but it's basically a robotic, and I'm going to try to find a short one minute video clip. And then I went to pro matte, which is the pro material handling industry is put on by material handling MHI material handling industry. And they feature all the latest and greatest in robotics technology. And now, there's probably at least three or four maybe 10 generic Kivas, right, it's basically a robot that picks up an entire shelving unit. Yeah, brings it to the picker, and

David Smith 23:29

then picks up the selection card that you're selecting into as well. So you preload the the locations with the right size box based on the order type you're getting. And then when that when those orders are completed, you're picking 12 orders at one time. When those orders are completed, it takes it over to a packing station that is packed and shipped. Very a lot of moving parts.

Mark Hiddleson 23:49

It's an important multiple things, you've done three different three different companies have used the Kiva system,

David Smith 23:56

right? To Owens and minor headed as well. But it wasn't mine, it was a much smaller piece of just in their perception that the gap still we could do more with five or six people in that bikini area than we could do with 20 of the Pequod.

Mark Hiddleson 24:10

So do you want to you want to share any of the projects that you're working on currently, I know that you're, we you and I were talking about maybe doing some consulting things, we've got some clients here in the direct consumer industry that their, you know, their experience, you know, like is somebody like you, you've looked at so many projects, you know, where, where the problems are with, you know, how to structure an RFP for automation, how to track mean the metrics and the KPIs. And in the matrix nature of the challenges we're facing. So, I know there's some opportunities for consulting out here, you're in, you're in Fort Worth, right and you Dallas, Dallas, Fort Worth. So you're looking for more local opportunities. And what are some of the you know, what are some of the type of projects that you're interested in getting involved in?

David Smith 25:02

Yeah, it seems like everyone like lead that I've been working with is is trying to justify putting in automation, you know, is it going to pay back what they think is going to pay back? Is he going to do the volume they think it's going to do. And the majority of the ones I've worked on lately, the automation did they sense the level they were willing to go to, they were not going to get the bang for the buck that they had asked for, because they were trying to, you know, just automate a small piece of it, and they weren't really, you know, it was going to end up being a big workaround. If you're going to go automation really got to kind of go big or go home. And really, you know, what, the money you save up front is going to be spent exponentially back end just, you know, don't go for a partial solution, try to get the entire solution. And then how much?

Mark Hiddleson 25:45

Like, how much time is it normally involved in one of these. And I think I mean, my, you know, we looked, we did an event, and I like to do an event about once a year that features a project, and we're gonna, we're gonna come back, because it's been, I think it's been five years since we did that event where we showed the automation when we toured their older facility and looked at how they were doing it there. And then we had a virtual tour of the new system that was almost complete. And one of the mistakes he made on that installation, when they, when they went through their ROI. They have multiple, you know, a lot of companies if they're in the third party warehousing business, which is really what they are, they're a fulfillment center, but they have they don't own the product. And they're they're doing a service for somebody else. So they don't have a lot of control how the orders come in. But what they've done on their volumes in the justification is they included a process, it's so it was it was wine, shipping, so most half their orders were one of this one of that one of this one of that maybe it was three models, maybe it was four, maybe it was a case, but half their volume was a club, where that means all these identical orders, everybody's getting one red, one, white, one, or low or whatever. And those, there was no payoff on the system. Because those you can just line up for the guys. Gravity conveyor tag bag, it's out the door, but they had used that volume. When they were looking at the payoff. They said, Okay, they plugged all the numbers in, and I was No, there's no ROI. There's no ROI for that in for me. You know, we're I say we're, the technical term for what we do is called a systems integrator, what I do what what I'm really I'm a Systems disintegrator. The best systems, I've added the ones I've taken apart, right? And I agree with you, I think people, I don't know how you could be blind to the fact that you're using these numbers. And everybody in the room had to know that release, that the people running the warehouse, for I just wonder how that disconnect happens. And I think that's why it's important to bring in, you know, somebody like you, I tried to be, you know, seems like if, when solutions game, if you still hammers, every problem looks like a nail. Right there. That's true.

David Smith 28:01

And there's, you know, people can have the data and, and a cursory understanding of what they're looking at. And make that mistake, you've got to spend time on the floor, you've got to spend time on the operation, understanding where the where the bottlenecks are, what the problems are, and what are you trying to solve for? You know, that's the other thing is, Are you are you trying to just put more volume through how much volume and what timeframe, you know, and the thing is, don't shoot for the volume depth curve. Most businesses are in growth mode shoot for, but you're gonna have to feature otherwise. It's kind of like the freeways in place in California, when they get done with them. They're obsolete, they got started. Because they don't handle the volume that they needed when they started five years ago. They need to anticipate volume five years from now. So so they started tearing it up and redoing it again. I mean, yeah, that's what happened in any warehouse system, the overloaded or it doesn't, it doesn't give you what you need. Yeah, yeah.

Mark Hiddleson 28:54

And so as you're saying, all this, I'm trying to think about the way to get you on an airplane to fly out here, maybe we will have two or three, because there's just as you're talking, I'm thinking of three clients who could use and I call it a project, because the other thing you mentioned data, a lot of don't, they don't have their data house in order, because it's new, did some research between 2019 and 2020. On data, we actually one of the reasons I'm doing this podcast is I hired a bowtique data firm, because they wanted me to introduce to my clients and I'm like, well, before these guys, anybody, let's see what you can do. Right? And they were small sometimes, you know, there's big companies that will do this. But a lot of times I think there's an advantage to having a small company who can just help you start generating what's even possible. And one of my research was that when a company looks at their data, they need to look at, like what their team's capability like what's the leadership capable of, is their leadership, really data savvy? I mean, if you if you have it, you might have an IT team. But does the leadership know that enough in there. It's called the Digital consciousness index. And then your clients are your clients, that digitally savvy like for us. Some of our clients are, but it's like out of 1000 clients, you know, only 40 are digitally. And even those they don't they're not looking at their cells, what's the digital consciousness of the cells? What's the digital of their operations? What's in all those data? Now, there's, with the cloud, you know, I'm starting to learn what the cloud means. And I've always been a late adopter. But But getting that data piece, right, and that's where your expertise come in. It's like, well, let's look at our, our, where's our staff? Where's our leadership? Where's our IT department? What are the tools we're using? Now? What are our customers capabilities? Because then you can tell them? That's a matrix, a matrix?

David Smith 30:45

And is the data correct? And do you have enough you have enough history of the data to make sense? I mean, you need years of data, so that, you know, going into a fourth of July holiday, what to expect or fall season, you know, because it's fairly, it's fairly predictable. If you can look back through history to see a 10% bump or 5% Bump, or maybe a little lag on certain weekend weeks, you know, and then you can prepare for that, and that you don't have staff standing around, or you're not short on staff. And so the overtime, and then we'll do you understand the data, you know, this means you have tons of data, it doesn't mean you understand what it means. But what's it telling you? And what we know, how can you take that data and make it actionable? into changing the way you do your operation? To make it more efficient?

Mark Hiddleson 31:25

Yeah, absolutely. And you did a project that I wasn't familiar with, and, but I heard about it with H me with their something to do with the fleet.

David Smith 31:37

We did a fleet refresh. So we have time with with older trucks. And the thought process is, well, if you can extend your older trucks, you're saving money, you're not having to buy trucks. And, and that's, that's absolutely false. In most situations, it was, you know, get you're not buying new trucks, but you got to calculate all the downtime and maintenance costs. And, you know, the cost of the human capital of people sitting around because the truck is down, and the capacity loss is huge. And then there's the mental health aspect on the workers that they come in, you know, the equipment is junk, and then it's older and dilapidated. So you started going to trucks and and people's attitudes change your downtime stuff, you know, not as bad. Obviously, your your repair costs have dropped dramatically.

Mark Hiddleson 32:22

So how just carry I mean, I know you can't tell us it. But um, just all those things you're talking about are real costs, right? And that's why I take I say, I take a holistic approach to say, how do you factor in the attitudes of the driver, but when I look at it, like, that's the number one KPI for, if your attitude sucks, you're not doing anything. But how can an intangible but

David Smith 32:43

when you look at you know, we do employee opinion surveys, whether they, you know, we scored consistently low on equipment, availability, equipment, quality, condition of equipment, I mean that, you know, you can't put a different KPI to it that, you know, it does, it does account for attrition, it does account for people's attitudes. And it's, you know, that's just an intangible thing you better have, and with the turnover, that the labor will be what it is, you think you can do that, to keep labor happy, is crucial.

Mark Hiddleson 33:13

Yeah. And what I hear you saying is, you mentioned the assessment. And so I look at and so you know how to when you're doing a matrix, a situation, you know how to gather that data, because there are ways like you're saying, it's not easy, but you can't, you can do employee satisfaction surveys, there's other I do what I call a space time audit. And you know, it's an acronym for SP, but the A is for assessment, right? You have all these assessment, because it's, and then Accept where you are, is even we've assessed it, this is where we are. So that's a that's a great project. And so what so how did they what was the solution that they wasn't a timing for for certain vehicles? or certain fleets? Or how did that how did it execute? Yeah, we,

David Smith 33:57

I mean, we put together a proposal and looked at the the spend on the worst 150 Bar trucks from a maintenance standpoint, and pretty, you know, came up with a calculator that would basically look at the the labor expense of being down the time that those those machines were down the time they were in the shop, the labor, the cost of it be in the shop, and the new truck for free. You know, I mean, you're saving money by getting new trucks, you get better gas mileage with the newer vehicles that you know, the first 70 Miles warranty for repairs, if you do have a repair here and there. But literally, we were saving money by getting new trucks and and then you know, you've gotten a better image of your product driving down the road with your name on the side of the fence like that.

Mark Hiddleson 34:41

That's it. I mean, so, is there really a cut? I mean, that to me, even if you had five trucks, it's worth doing the

David Smith 34:49

you know, but you've got to because those other trips are costing you money. I mean, if you can get a brand new truck, and it's cheaper than what you're spending on your old truck, how can you not do that?

Mark Hiddleson 34:57

And I was just thinking I'm even down to the The simplest thing with us, like, we know that our final art people, you know, I do all the sales, I do all this design, the last people that my clients see are my installers. And it's funny even just, you know, we've always had pretty new trucks and I want to have a new truck. But for a lot of reasons, it's the reliability be surprised how many people can't make it to work because the car trouble and you're like, Are you kidding me, we've been working on this for six months, that it's the science of drawing the material got here today was like,

David Smith 35:28

in our drivers, or, you know, our drivers of other rural areas, and they, they're, they're out 24/7. So, you know, I can't have somebody break down and back roads in Mississippi, at two o'clock in the morning, you know, one, we've failed service, health patient, and two, it's dangerous. And it may take hours to get a tow truck they are if we're able to get on and off.

Mark Hiddleson 35:48

So I want to ask you a couple final questions. And I can even make multiple choice, but I'd like to know, like your, your mentors, top mentors, he had in their best advice. And then also because he got such a great background in technology, if you have any favorite tools and software,

David Smith 36:07

you know, I mean, software is always changing, I'll start there, there's, there's less and less players in the market, it seems like these days because they wish that some consolidation, whatever you get, you're gonna have to customize, you know, whether it's Manhattan SAP, red Ferrari, you know, we've used red very, for late we measure it also places, it's really it's part of the vessel market, but you're gonna have to, you're gonna have to, you know, modify it to meet your individual needs. It's an off the off the shelf product that you've got to customize. And, you know, and that's, that's really what you're buying is the the partnership of the their system engineers and things. I mean, all the systems can do about the same thing. But now how, how willing are they to work with you on customizing things and other other fees to that, that base and things like that, as far as mentors go? There's been somebody, you know, through the years, somebody that, you know, the gentleman named Bill, Aaron was a great editorial, we get my first genome job, you know, years ago and Mervyn's and that has been mainly along the way that I I've not just learned from people I've worked for, I've learned from people that work for me, too. You know, there's something there's something everyone has to offer, you know, and if you're open to it, you can learn even the smallest things can help you, you know, get better every

Mark Hiddleson 37:17

day. Yeah, that's the teach and be taught, which is the T of my space time on it is me teaching but be teachable. Yeah, I love what you said about the, the technology piece is that it's the relationship. That's almost that's what this that's what the reason I'm doing this is I have people you know, I'm with you. There's probably only a handful people in my network. I mean, I've been lucky to have, you know, 20 or 30 people that have really only did the data thing I looked at the numbers too, and we track two thirds of my business in the last 17 years. I can track it back to about 25 or 30 people because it wasn't you know, it's not just and I gotta give a shout out to Mike Fernstrom. So my, my my figuring we were there were five of those a day I started my company was a work tour and I was in the leadership of warehousing education, warehousing, Education and Research Council, which is work wrc.org And I was the president for several years. One thing we always had a an event in Reno. And it just so happened to me with the day I started my company was the day before the Reno thing so we're all going in an SUV we carpool it was Chris Murphy, Mike Fernstrom. Tom Vander Weide. It was a it was crazy group all leaders and I started a new company and I was sick to my stomach. It's funny, I don't get carsick. I don't get any namesake. seasick, but I quit a pretty good job to take off on my own. And my first one was like, he was like, Don't worry, buddy. I got your back. It's funny. He up to that time, even though Mike and I served on the board together like I was a president. He was he was super he was mister arm's length relationship with your suppliers, right? Get three bids. Everything has to be the numbers. I'm not giving him it's like man, I've least earned a peek underneath the ship. Yeah. And so I was like, great. First room. First room has got my back. But it was within probably six months after we started the company had me there was a unique project in with Mervyn's on the West Coast and they needed to get a bunch of shelving they need to get rid of that big airline and we we had the resources and then he he introduced us in that Salt Lake and so those relationships are and I want to pop my podcast as a way for me to get back to you guys right if I can shout your stories from the rooftops add some values to way because I've always thought about it. There was no way I could ever pay you back for the things you know that you've helped me with in my career. So I'm hoping this is a way that we can do that. So I know I've been busy. to your wife, in some instances, you know, both in and Tracy and some other places and, and the thing that really impressed me was, was your honesty, and you're in a business where there's not, and I don't want to disparage the business, but there's a lot of people that don't do it for you. And I know that firsthand, because I had RFPs going on. And I had people call me off from beside deals and, you know, find your fees and all kinds of stuff to be replaced by RFP information

David Smith 40:25

that, that that I, you know, I probably saluted them from the process. And, and honestly, you're doing your say, you're gonna do you're, you're there, when you say, you're gonna be there and you get the job, they'll do it. You prove that to be on so many jobs. I can't even count, you know, I mean, if you'll get a job done on Jersey, and to set the timeframe for the listeners, that was right after the hurricane hit, those are areas with no power could only get gas every day. If it was it was not that deal circumstances out there, say the least. You came through and they always have. So I said, I'm here for their long term relationships. And when I need stuff for the first I call, yeah,

Mark Hiddleson 41:03

I appreciate that. David. Folks, we've been talking here with David Smith. He's a really, really, really dynamic and talented supply chain leader, proven track record has spanned decades, multiple industries, they're really, really relevant. Today's supply chain challenge, right? environment is not a challenge. It's not a problem. It's a challenge. And I would say it's not a challenge. It's an opportunity. So what's the best way if somebody wants to get in touch with you, David, either, if they're looking for consulting limited, they got truck fleet that want to look at technology project, what's the best way for somebody to get a hold of you? Right now?

David Smith 41:45

They can, they can either email me or call me the one. I don't know if you can put my contact information, although

Mark Hiddleson 41:50

the habit will definitely contact information in the description. And then are you willing to give out your personal email? I mean, you don't have to if you don't want.

David Smith 42:01

It's dgareysmith@hotmail.com. My phone number is 972-365-2288.

Mark Hiddleson 42:11

Awesome. This has been just great, David. I mean, I've been looking forward to this conversation. You're one of the reasons I'm doing this project. And I know it didn't make total sense at first. But I mean, this has been a blast. It has really been a blast and good connecting with you guys. Great connecting with you again. Yeah, very great client and good friend. I appreciate it. Yeah, absolutely.

Outro 42:34

Thanks for listening to The Tao of Pizza podcast. We'll see you again next time and be sure to click subscribe to get future episodes.


58 views0 comments