Justin Smith interviewed John Curtis, CEO of JEC Consulting, to discuss facility design.

 

Listen to the full episode below and subscribe to the podcast on Apple.

 

Highlights

• Learning about time management – 1:21
• Always continue to learn – 2:59
• Getting clarity of a message – 8:39
• A great partnership – 14:22
• Understanding the business better – 17:31
• Technology is a little scary – 22:38
• High-level technology investment – 40:34
• The best way to reach John – 48:00

 

Episode Resources

• Connect with John Curtis
• https://www.linkedin.com/in/john-curtis-0a5660b 
• jcurtis77777@outlook.com 
• Connect with Justin Smith
• https://smithcre.com/ 
• https://www.lee-associates.com/ 
• jbsmith@leeirvine.com 
• https://www.linkedin.com/in/justinbsmith  

 

Justin Smith 

Hey, John, how’s it going?

 

John Curtis 

It’s going great. How are you doing?

 

 

Justin Smith 

All right. Well, welcome John Curtis, thank you for spending time with us today. It’s helpful just to learn a little bit more about you and your background. Understand some of the experiences along the way because I imagine every company had a different role. You were there for different amount of time and you worked on certain projects. Each part is like a great building block into who you are now. So, if you have any that were noteworthy, or ones that relate to today, that’d be most helpful.

 

John Curtis 

Oh, it’s great and I appreciate the invite. I really enjoyed the last time we got together and I think we could kind of go further this time. So, thanks for the invite.

 

Justin Smith 

Yeah, happy to. So, where did it all begin?

 

John Curtis 

Way back, Grant wasn’t even born back then. But in 1985 started loading trailers for UPS part time. Great job to have when you were in college, most of us started young and kind of worked our way up. I went from loading trailers, as a teamster, to part time supervision, full time supervision manager, and ultimately a division manager, which to give you size and scope, about 1000, teamsters, and 150 management people. So, a lot of great experiences. I learned a lot about time management and setting expectation and holding people accountable. And as a young kid, dealing with teamsters, that were older than my grandfather, it was quite an experience to gain that respect and to be able to really have them work as hard as they can for you. And as you said earlier, the building blocks it really did help throughout my career because if you can be successful in leading UPS in a management labor environment, it really becomes easier in other companies that don’t have the union in place. So, 17 years there and had a chance to get into medical supplies distribution at Owens and Minor.

 

Justin Smith 

Think that 17 years, that’s how long I’ve been in brokerage with Lee and Associates. So, it’s pretty cool to think of like, if that were my primer, and then I went off to go and do great things for other organizations, knowing what I know now. How many capabilities have you built up? How many skills and what an impact you can have? So it’s great to think of that as your primer. Then getting into Owens and Minor in medical supplies and where it went from there is like, you’re fully formed, and you know what you’re doing a little bit more. That’s pretty cool.

 

John Curtis 

Yeah, I think what’s great about it you can take the things that would really help that next company, but you’re always continuously learning. So, I didn’t know a lot about medical supplies other than companies that we used to serve as a UPS, but really pulling both together. So having that transportation background, that management background, leadership background, and then learning more about medical products, med tech and med device, it really kind of morphed into what I continued to do after the Owens and Minor experience. Owens and Minor is a 130 year publicly traded company founded by Gil Minor, where the Owens and Minor comes from and really a great company, great organization, and really takes good care of the customers. So, I learned a lot more about the close tie to the customer that you need, in order to maintain these accounts in this business and really grow. From there I went to a company that’s very similar, Medline Industries, the differences they’re privately held. It’s a family run business. They have had enormous growth and really smart people that run it. It was it was exciting to work for a company that didn’t have to answer to shareholders and analyst expectations in Wall Street and worry about capital investments and how that was going to look at the quarterly review. They spend money where they know they can grow the business and make money.

 

Justin Smith 

You hear about them growing all over the place. I feel like every day, we’re opening a new several 100,000 foot something or other we’re kicking off construction on another project. Most of the ones I’ve seen have been East Coast. Yeah, they are blowing up right now.

 

John Curtis 

So it’s funny, you bring that up, back in 2004, when I started with Owens and Minor, they were kind of like a blip on the screen that come in and it secure some drapes, really small stuff. And as we watched they figured out what to manufacture. They figured out where to have their distribution centers, how to invest their money and really now they sell about 70% of what they manufacture. Owens and Minor is more of a buy from the big manufacturers put it on the shelf and then as their hospital customers are ordering from them, they’re putting a markup on it, and that’s how they make money. Medline is actually making the products they’re selling and have grown tremendously. You’re seeing them probably on LinkedIn or hopefully you’re dealing with them from Lee & Associates as well, but they are putting up half a million square foot distribution centers all over the country. They buy everything cash. So, all their material handling equipment, their buildings, their manufacturing equipment, is all paid for by cash. So they’re really poised to not only continue to do what they’re doing now, but even grow.

 

Justin Smith 

I love seeing those kinds of companies that can grow that way. It’s great.

 

John Curtis 

Yep. From there I had a past employee of mine at UPS go to C.R. Bard, which is a medical device manufacturer distributor. A global so I actually was the global logistics director for C.R. Bard. So really had responsibility for the two main hubs here in the US and in Europe, as well as dotted line to all the other regions that we service. So really learned a lot more about what a global network looks like, how to improve it, how to take some of the best practices that we’ve developed here in the US and incorporate them whether it makes sense around the globe, really great job learned a ton. We got acquired three years ago by Becton Dickinson, BD. Bard became part of BD, I went from global logistics to North America, because obviously at a $20 billion company, there’s not one person running the globe for them. Great company was able to do some special projects for them. Most specifically, their global facing DCs use third party logistics company to manage their distribution. When they had come in to see C.R. Bard and saw what we’ve built at C.R. Bard, they said we’d rather it look like this. So my first big job was going from outsource to insource. I took all their employees from the California DC, Indiana DC, North Carolina, DC, and converted them to BD associates. So really, the model that they had, which they thought worked well, we were able to make a really big improvement by insourcing and having people really understand what they’re doing for the patients and how their jobs really matter. It was tough to get that message across when they were 3PL because they worked for FedEx. It was kind of like you could never really get the clarity of a message until they were employees and totally understood what’s inside those boxes that they’re shipping and the impact that they’re making on people’s lives. It changed the morale, it reduced the turnover, obviously saved a lot of money. But really money wasn’t the main reason we did it was more, making sure that we really had a team of people that were focused on the customer. I learned a lot of that, again, at Owens and Minor and at Medline because if you don’t, there’s plenty of companies out there that will take care of those customers. So, you got to learn to really satisfy to a high degree.

 

Grant LaBounty 

How long did that transition process take from outsourcing to insourcing?

 

John Curtis 

That’s a great question. So it’s funny people think you just go in and make the offers and boom, everybody’s happy. But really, what I had to do is develop a project plan that incorporated human resources, quality ops, supply chain, the business, because we had to validate this plan before we told FedEx that we were going to make a change. So, a lot of behind the scenes, a lot of modeling, a lot of policies, and we had to change all of the HR policies because we weren’t FedEx. We do things completely different than all big companies do. We had a quote, we have quality and regulatory requirements that you have to have a quality plan that your people can recite and know and make sure that you’re within those quality policies. FedEx had something that was more overarching to all of their 3PL customers and really not specific enough to a medical device company. It’s a great question. So it took a year, it actually took a year between pulling the people together, making sure the model makes sense, changing all the policies, having a new quality policy, and then told FedEx, which they were very good because we’re a big shipper of FedEx anyway. So we had them in a good spot, because we’re shipping $16 million worth a small package a year. So leaving wasn’t as bad as if we didn’t have that relationship. It might have been a little bit more difficult, but it really wasn’t. It was a great, they had a project team. We had a project team. I actually did one distribution center at a time. I started out with you in California because it was the hardest to keep people so that was the one, I went to first. Made a roadshow went and made an individual offer to all 500 associates. And ironically, we didn’t expect this to happen but 100% of the teammates for FedEx signed up. There was maybe a handful of people that were 70 and they said, I don’t want to go through a whole other new company. But predominantly 100% acceptance, which, typically, if you’re in that 70-75%, you’re doing something well. So that’s an excellent question and we could probably go on and on about it, but it made a huge change to the culture, to the productivity and ironically, BD already owned these buildings. So it wasn’t like you needed a 3PLs brick and mortar, unit racking and MHP. All of that was already BD’s. So it made the transition, it was truly a labor play that we don’t need to pay somebody a mock up to go out and find labor, we can do that ourselves. But great, great question. And it was a great project, I really learned a ton. And some of my consulting companies are looking at either going to outsource or bringing it from an outsource to an end source. So, I can really speak in depth to both sides, the plus and minus and, again, all of these building blocks kind of set me up to the to do what I’m doing today. So a year ago, this month, working from home COVID time, like most really made a decision, I was traveling every week, 49 weeks a year Monday to Friday, I made a decision to open a consultancy that really focused on all of the things that I’m doing for these big companies for the last 35 years. So though it’s new, because I’m the owner, the one running it, it’s all very similar to helping companies the way I used to help the companies that I worked for. So really, there’s three prongs, there’s management consultants, I’ll go in and look at the org chart, look at the SOPs, look at the work instructions, look at the process flows, and make recommendations based on what I see and what I would do. I actually designed in the way I started talking to Justin, I designed and redesigned distribution centers for a company called Peak Logic, a 30 plus year company and we really do great work. I’ll get into that a little bit further in the cast. But I’m their operational expert, I’m the one they bring in to say, Hey, we have great engineers, we have great vendors, we have great pricing. We don’t know if this design would work in a distribution center. So, I can validate it, I can make some changes to it, and truly build it the way I would want to run it. It’s really been a great partnership, because they needed somebody that does what I do. I’m not the CAD guy, I’m not doing all the drawings, so I need them for that piece, but I love making things better. I love designing. I love becoming more efficient. It’s something that I really enjoy. The third prong, the last prong is actually help companies with small package spend. So just like this company did for my past company, they have proprietary models, we look at their spend, we look at line item and invoices to see are they paying what they should? Or is there some opportunity to renegotiate whether it’s rates, whether it’s percent off discounts, whether it’s surcharges, we find a good deal of money between 10 and 20%. So that’s again, shared opportunity. The company makes most of it, but a company called Spend Management Experts here in Atlanta and they really do great work at pass UPS guys. They used to do the profitability for UPS. So, they have a line of sight into potential opportunity. But that’s the 35 year, high level snapshot of how I got to where I am today.

 

Justin Smith 

I love it. It opened up a bunch of topics and a bunch of things that I think a lot of people don’t always look for when they’re thinking through making improvements, right, because you’re always making more improvements. When you reach the end of your expertise or your teams and you’re trying To figure out, you still have a problem, and how do you fix it? That’s a knowing who can help with that, and what are kind of common issues people are facing? That’s the big stuff and I think that’s part of this insource and outsource and when you do what, where and when? I would think through facility design seems like that’s one of the biggies. We’ve got existing ones, right, and you’re growing, and you’re starting something new from scratch. You have your current one, this is talking of what CEOs are usually dealing with, and scenarios. Then you have like, mergers and acquisitions. I bet consolidation is a whole, like another opportunity, where design can have a big impact. So are those kind of the three times you see people usually need, you’re usually dealing with those challenges?

John Curtis 

It is Justin, and it’s funny you and I talked about this months ago, the Prime Time to get us involved, is before you go out, in either build, buy or lease a facility. So you and I will talk in that old school, let them buy a million square feet, get somebody in there to design it, and they’re happy. New school is more that strategic partner to say, if you could get a design company in early and have the ability to understand the business better. If it’s already up and running, we go check it out, first, we get a better idea of their operation. If it’s Greenfield, we just spent a lot of time talking through their business and their needs. We offer up either technology or different systems that really changed the footprint dramatically from what they thought they needed to Yeah, ultimately, what we would recommend, and we do. Of course, build that sales growth in whatever they anticipate five to 8%, whatever it is, so we can really design and build and give folks a really good idea of how long they can hold that space. Of course, acquisitions, things happen that change that scenario all the time. But I think the best example I can think of is we have a big company that we just put a system in in Tennessee, and they went out and they bought 100,000 square feet, beautiful distribution center but we put in a pallet shuttle system, which I don’t know if you’re familiar there. It’s like the greatest thing for very limited skews, but really fast-moving skews. So you’re getting 2000 pallets a week that come in, it’s the same item, same lot or a lot of companies don’t even really manage by lot. What ends up happening is you can actually use this shuttle system with no aisles in between. So those 10-foot aisles that you build into a traditional selective rack environment to turn a piece of equipment around, you don’t need anymore. They’re all right next to each other. This distribution center, and again, I would never say who it is. They could have done this in half the space and half the space today is empty. They’re thinking about demising walls and sublease. I’d really love to get in in the beginning and be able to offer some recommendations and some solutions that might just leverage their capacity better than they do today. One of the limitations is everybody is just remembering selective rack and you drive around and you pick up pallets. There’s better ways for these companies that really have a mass quantity of pallets coming in and going out. That’s one example that if we can get in early, we can bring a lot of experience a lot of ideas and design capabilities but typically we get called after they bought it, they leased it. We still make it very efficient but it’s funny, I’m actually working with Lee and Associates on this exact scenario today. I visited them last week, and they flow stack pallets. It’s a big company but they flow stack. They’re building a new distribution center here in Atlanta, good size distribution center. They want to options have been able to go higher because what they’ve always done is just you got a 36 foot clear distribution center that you’re only using 12 feet of. So we’re designing some systems for them that we believe would be a real game changer in the new DC. But this is that opportunity we look for, we’re going to give the contractors the specs of what they need to build as opposed to the other way around.

Justin Smith

Build the system first, then go get the property. What do you think are the major things that are stopping people from taking that systems first approach, just the way we always done it. Or is it just something that’s slow to filter through the knowledge base of people that are out there that are working, or just people that don’t have that expertise that are promoted into positions where they need to make these moves and they haven’t had this kind of background? I would think we’re all preaching to the choir a little bit and maybe it’s becoming that way more so but it’s a challenge.

 

John Curtis 

I think it’s what you said first, I think it’s what you grew up with. A lot of these warehouse people have been running warehouses for 20-30 years and not really knowing what’s possible. I’ll tell you, the other thing is, when you were talking, I was thinking with the additional lead time that companies have to wait for these new buildings to go up. They’re having more opportunity to be strategic and to ask some questions because they’d have to wait a year and a half to build and put up anyway. So I do think some of it in our lead times very high now as well, as you can imagine, but I think part of it is the way they’ve always seen it done it. And I think part of it is sometimes some of the people have been doing this for a while this technology is a little scary for them. All the robotics and I’m going to talk about AGVs in a little while. It’s not even new. As you guys know, it’s AGVs, the first one came out in 1950, something so it’s not like it came out last week, and we want to check in make sure it’s going to work. I do think some of the folks that have been around for a while, you just drive in the warehouse, you pick up pallets, you put them away and as long as you ship everything that came in by the cut off, you did your job. Then the real question is, how much more could you have done? How much could you grow the sales without growing the labor? How much can you leverage the technology that’s out there today that truly makes the job easier, safer, more efficient, better quality to the customer, all of these things that we’re going to talk about today is really a benefit for the customer. It’s very efficient, but it isn’t the only reason companies are looking at this type of automation today. Probably the biggest reason is the lack of people out there that want to come in and work in warehouses. It was it was tight before COVID it’s even tighter now. So the more of those positions that you can deskill, and you don’t have to go out and get 50 temporary people who come to work for two or three days a week. You can really now leverage technology, keep your skill people that do a great job, there’s always going to be a need for those folks. But these ones that that come and work for a month make enough money to disappear with temps. Okay, so they come a couple days a week, he can’t manage a business and he can’t have any idea of if you’re going to be able to ship clean when you have a workforce that’s very unreliable. So in the past, spending the money and payback if it wasn’t at three years, it was a deal breaker. Today, companies are saying, what’s the bottom line for the return on investment, and we can’t staff our building today. It isn’t a nice to have anymore. It’s a have to have. So that’s what we’re finding today. I’ve been dealing with AGVs for over 10 years now and I’m a true believer but It seemed like it almost took this COVID where you can social distance in your office, you can social distance in your cafeteria, move tables out, move chairs, you still have 1000 people coming to work in these big distribution centers. In med device where I come from, they can’t work from home. You need them all there because a lot of these products are actually in support of COVID vaccinations, needles and syringes and in the likes of it. So how do you have some social distance in that million square foot distribution center that runs 24/7 with three shifts. Really the answer is, supplement AGVs along with some of the great folks that you have that do care and do come to work every day. So it’s getting to be a real balance of not just the cost but also the cost to serve. How do you get the packages out, if 40% of the people don’t show up to work over the course of that day? And of course, all industries are different, but at med device these hospitals, these patients they’ve been prepped for surgery the next day, they expect what they ordered to be there and the right quality and the right time. They’re not really too concerned about how do you get it done? I think technology and automation is really the answer or it’s becoming more of the answer.

Justin Smith 

It’s interesting when you take what would be the most common scenario of shipping times and if you’re going to make turnarounds faster, and delivery faster, that should prompt action and automation. But when you take the lens of life sciences and medical device and PPE supplies, and you add that whole other lens to it, where it’s not the box that sits at your door, it’s the box that’s at the hospital. That’s a whole other variation on a common theme and like how it’s being applied to different types of operations. I’m sure there’s a version of that for aerospace, for automotive, for apparel or a bunch of different companies that are in different product lines. But are still affected nonetheless and still have some of the same common forces and challenges they’re dealing with.

 

\

Justin Smith 

Change the calculus, change the formula. Maybe last question, I realize we’ve done a pretty good job with our time here. You were mentioned in projects in Tennessee, Alabama, we just had our Nashville offices are I think it’s our 61st office open up and hearing about more and more projects over there. I know a lot of the auto manufacturers are over there. We all know about Memphis. What’s going on over there? What are you guys doing over there? I know location wise, it’s such a great spot to help out all the different markets. What are other factors that are drawn people there?

 

John Curtis 

Labor seems to be better than it is in some of these big metropolitan areas. The cost. I’m actually working with one of a referrals from one of the gentlemen that just opened that Nashville office up, and it’s a company that’s located out in California but they’re shipping throughout the country and placing a distribution center in that Tennessee area really takes care of 60% of the orders that are going to the east coast. So it’s going to be a huge leverage on transportation expense. The rates from what I understand very good, very low, and are able to staff and a lot of these companies have FedEx Companies, so they’re close to the mothership of Memphis. I’m hearing more and more things going on in that area and in the past I really didn’t. But I think it’s getting to be one of the places people want to be.

 

Justin Smith 

I thought you, me and Grant we’re going to be moving to Austin, Texas. It looks like we better change our plans a little bit.

 

John Curtis 

No, I think you’re a California guy forever out there and in the beautiful weather, unlike Boston, where I grew up. You got to worry even, even now, you could continue to get snow. But I think most California people stay put.

 

Justin Smith 

I appreciate you talking me off the ledge. Well, John, I appreciate it. That’s super great. I really appreciate you making the time. I think you gave people a lot of ways to know how to think about things and when to bring in help. So the best way for people to reach you is LinkedIn seems like it’s pretty good for you, or what’s best for you.

 

John Curtis 

Yes, LinkedIn is definitely the best mode, and where all my contact information resides. Please reach out if you have either questions, or you have something that you really need to improve on. And again, I appreciate the time.

 

Justin Smith 

Thank you, John. We’ll catch up with you soon. Now we have to go find a client. Let’s see who has a John problem. That’s what we’re busy out there looking for. So we’ll keep our eyes and ears open.

 

John Curtis 

Absolutely. guys have a great weekend.