Two Paths To Supply Chain Success

While CMAC, Inc. falls into the top 10% of Motorola’s hardware partners, 60% ($13 million) of the integrator’s revenue comes from its services offerings. These services include supply chain software implementation, process mapping, wireless infrastructure design and installation, Lean Six Sigma (striving for better quality at a faster pace) consulting, project management, and change management. After hearing the list of services that CMAC offers, the former VAR in me was screaming the question, ‘How can this integrator pull off offering such a wide variety of highly technical services?’ Bryan Moss, CMAC’s president & managing partner, believes the answer can be attributed to two things — cross-trained high caliber employees and strong alliances and partnerships.

Three Tips To Increase Your Supply Chain Expertise
So, how does CMAC find the ‘right’ (i.e. high caliber) people? “Most companies outsource to headhunters to find people,” says Moss. “We have four full-time recruiters on staff who are constantly looking for people who fit the profiles our projects require.” The total cost of CMAC’s recruiting efforts equals $350,000 a year.

When it comes to experience and skill level, CMAC’s recruiters look for a few things. First, the integrator wants people with a minimum of five years of working experience in at least one of four fields of expertise. These fields of expertise — engineering, IT, Six Sigma, and logistics — provide the core competencies needed for CMAC to deliver its supply chain services. “Our customers obviously have complex requirements,” says Moss. “As a consultant, being in the spotlight, our employees need to be at a very high level of competency.”

Finding good employees is the hard part. Retaining them is a simple matter for CMAC. “By hiring people with above average pedigrees, our compensation has to be higher,” says Moss. “We estimate that our employees’ salaries are 20% higher than other supply chain integrators in our space.” Of course, Moss will be the first to admit that above average compensation plays but a small role in retaining employees of this caliber. He points to a clearly defined career track and continuous training as invaluable benefits used to keep employees around. Whether the employee is in sales, service, or support, Moss says that all employees need to have a clear direction of what they need to do to advance their career. Sometimes this career path heads toward a management position, but often it’s just advancing up the pay scale. “We may give someone a two-year goal to advance from a Six Sigma green belt to a black belt,” explains Moss. “Or for a sales rep, to continue to sell our portfolio of products and earn additional compensation, they need to complete certification courses yearly. In addition, as new product lines are released, sales reps need certification before selling.” According to Moss, CMAC spends an average of $4,000 on every employee each year in training and certifications. The integrator’s 52 employees have a combined 200 certifications. “Some certifications costs as much as $10,000 a year,” Moss explains. “The most costly certifications are for wireless hardware, RFID (radio frequency identification), and Six Sigma.”

The third key to CMAC’s workforce is the utilization of contractors for short-term projects. According to Moss, the benefit of hiring contractors is that you can quickly acquire very experienced talent. Indeed, CMAC uses some contractors with 30 years of experience. “Many of the contractors in our database are retired from full-time employment,” explains Moss. “They are looking only for project-based jobs as opposed to 10 years of employment.”

Click here to see how one VAR used contract workers to service an 800-location retail chain.

Of course, Moss says there are some things you should be aware of when supplementing your workforce with contractors. First is infrastructure. This includes such things as Web-based time and expense tracking, ticketing software to manage support calls, and at-home or in-the-field connectivity to the home office. “Contractors should be able to operate from anywhere like full-time employees,” says Moss. The other consideration is pay. Moss explains that most contractors want to be paid weekly as opposed to biweekly like CMAC’s other employees. “When you’re juggling a handful of projects and won’t get paid for at least 30 to 60 days, you’ll need to have deep enough pockets to pay for this group of resources on a weekly basis,” he says.

Three Tips To Maximize Your Supply Chain Partnerships
Strong employees create an internal component to CMAC’s success. Alliances and partnerships form the external crux of the integrator’s success. When it comes to finding a good partner, Moss says that, on the surface level, he looks to see that a partner can provide complementary solutions to what CMAC offers. However, he goes on to say that it’s more important that the combined effort will benefit both parties. To build and maintain a strong, mutually beneficial partnership, Moss says there are three steps.

First, develop a value proposition together. Both parties should sit together to build a business case, which should clearly identify the benefits to both parties. “If you take the time to develop a methodology for rolling out something together, it has a better chance of turning into a long-term alliance,” says Moss. “Many partnerships fail because one side feels like the other isn’t doing as much work. This can be avoided with a clear plan created with the input of both sides.”

Second, it’s important that every department affected by the partnership is part of any discussions. Moss points to failed partnerships where only both sales teams met. “The sales departments might feel great about how the partnership is going to work, but you need buy-in from those people completing the implementation, too.” He also says that it’s important to develop joint methodologies of how to implement the solutions and where responsibilities lie.

Finally, Moss says that a sure sign of a strong partnership is both sides getting certified in the other’s products or services. This shows commitment and a mutual investment.

For an example of how CMAC’s partnership strategy plays out, Moss points to one of the integrator’s field service partnerships. “We have a software partner who specializes in field mobility, which is a growth area for us,” explains Moss. “We sat down together and determined what our value proposition would be together.” CMAC contributed industry experience, process mapping capability, business case development (ROI) capability, software deployment methodologies from a program management perspective (Six Sigma), and hardware (procurement and implementation). “The software company brought the software functionality we needed, a development team, and a referenceable field mobility solution.” Both sides now work together with a common goal and clear expectations of responsibilities. Due to this partnership, CMAC’s field mobility service revenue has increased 25% in the past year.

Analyst group Info-Tech Research estimates that the U.S. IT services market will exceed $97 billion by 2010. For CMAC, the end result of having high caliber employees and strong partnerships is the ability to tackle a variety of service projects, regardless of vertical market. “Having resources that can attend to wireless design and installation, RF scanning and configuration, and software integration means that we can service many verticals,” says Moss. “As industries cycle up and down, we can maintain a consistent level of business. When you’re a small integrator, you have to find a way to have resources that can service many areas.”