Tom McCormack is Taylored Services’ Chief Information Officer (CIO). He’s been in IT for more than three decades, most of that time in logistics and warehousing. He came to Taylored with solid credentials, including stints as CIO or CTO at a pair of companies with annual revenues in the billions of dollars.
As I prepared for our interview, one thing that leaped out at me was that you had worked for Taylored previously before returning as the CIO. Can you explain how your career developed and how it brought you back around to Taylored?
Sure. I’ve been in IT for probably between 30 and 35 years, specifically in the 3PL/warehousing space since ’97, so it’s about 23 years in 3PL.
I came up as a developer, and over the years, I just jumped between different roles — writing code, doing queries, doing reports — so I have a very in-depth understanding of the IT space from the ground up.
As you mentioned, this is my second go-round with Taylored. The first time was in 2004, and I worked with Mark Taylor directly. Taylored Services didn’t have any real systems in place at the time, so I put a WMS and an ERP system in place for them. I also tackled an RFID project for Walmart when Walmart initially kicked out its first program. We did that for a watch customer … in 2005. I stayed for another year or two, then moved on [to positions as CIO at the world’s largest vinyl window manufacturer and CTO at 3PL World Wide].
Ultimately I found myself coming full circle, back to Taylored. I originally came back in 2013 as a consultant to help the new leaders get a handle on some of the systems. I knew them pretty well because I wrote them! Eventually, I had lunch with Jim, the CEO, and he took me on full-time as CIO in 2014. From 2014 on, it’s been a heck of a ride.
So you more or less were the guy who laid the groundwork for all of what Taylored is doing now with technology?
Yes, that’s correct. It was a pleasant surprise, coming back eight to 10 years later, that it was still the framework they were operating on.
Let’s dive into that a bit because you’ve spoken in other interviews about the high level of integration Taylored brings to the table. You’ve got complete end-to-end integration, while other 3PLs need to bolt together a functioning system from off-the-shelf third-party systems. Can you elaborate on the difference that makes for your clients?
For us, integration is the essential part of the relationship, and it’s the first piece [we address] with the customer when we have our initial conversations. You know — after the sales guys sell all kinds of crazy things, we get on the phone, and we tell them how we’re going to deliver it.
Integration is the art of having data come from one system and then cleanly move into a second system without issues. The way we do that, and the way we differentiate ourselves from our competitors, is our internal investment in technical staff. On staff, in our building, we have two EDI [Electronic Data Interchange] experts; we have a couple of DBAs [database analysts]; we have a product management team — a PMO office that is dedicated to the onboarding process, which is part of the integration. And the technologists that we have on-staff [are] the same kinds of people you would find behind the curtain for a company that develops off-the-shelf software for the same thing: integration.
The fact is, we’re able to do the integration ourselves without depending on off-the-shelf software. We don’t have to rely on another outside company and their project schedule to do integration. We’re able to walk our customers through.
I have not seen an integration yet that has started and ended the way we thought it would; there are always twists and turns. If we were to work with off-the-shelf software, like most of our competitors, we would find ourselves trying to take shortcuts or [having to] get on the phone and depend on another company to make a custom software change. Worst case scenario, we’d have to let the customer know that it’s something we’re not capable of doing and look for some awkward workaround. We don’t have any of that with our integrations, and we’ve probably done between 50 and 55 integrations with different customers.
The other part that makes us very, very competitive is that our team has integrated with various systems: just abWe ERP out there, whether it’s Microsoft, it’s SAP, other WMSs — we can integrate with them, so when we provide people on the phone [to] speak to the customer, those are the people that will be putting the integration in place. In most cases where we have integration or an onboarding that goes late, we find the constraints are on the customer side.
Pretend for a moment that I’m an entrepreneur who doesn’t know the logistics industry, but I’m trying to grow my business and scale. That means I probably need to choose a 3PL partner, so what are the “don’t know what I don’t know” kinds of problems facing me as an entrepreneur that partnering with Taylored could smooth away?
Well, that’s a good question because there are two ways to look at this. There’s a physical “don’t know what we don’t know” and technology “don’t know what we don’t know.”
Let me start with the physical side. We find with many of our customers that they’ve come to us because they got hit with the inability to forecast e-commerce. After all, we can’t tell what the consumer is going to do tomorrow. The problem with an entrepreneur trying to work that on their own is that you can’t develop a solid staffing model that will stick. You don’t know when customer orders spike, [and] all of a sudden, you’re expecting 30 orders, and you got 1,000 orders so that entrepreneur who’s starting up in eCommerce will struggle with it.
Two-day delivery is pretty much standard today, so if you’ve got an eCommerce order out and it takes five days because you don’t have your labor situated correctly, that’s a problem. Taylored, as a 3PL, can leverage a larger pool of labor, which allows [clients] to maintain their service-level agreements with their customers.
From a technical standpoint, the biggest thing that we see in eCommerce and any general fulfillment is the process of cold replenishment. In many cases, you have two areas. You have a place where you have your pick slots, called the “ocean side” real estate. That’s the expensive real estate, where you walk through an aisle, have a cart or a robot with you, and pull something off the shelf and drop it in the cart.
Then you have what’s called reserve, which could be five or six levels high of pallets that have all the product in stock. When orders come through, we use a pretty robust process to determine what to replenish, how to pull it, how much to pull, and where to put the product based on things like product velocity, [or] the product’s weight.
All of these factors — these actual product attributes, the ability to move from reserve to pick front — are pretty complex, and we find many of the people who have come to our work with pen and paper or they’re walking down an aisle with a regular shopping cart as you’d find in Shoprite. That’s just the best way that they can handle it.
But on our side, with our technology, our advanced WMS, and the way we set our systems up, which are also customized to each customer to match their SLAs (service-level agreements), we’re able to smooth out and put a lot of that stuff behind the curtain. All the customers are concerned with is that “I gave you 1,000 orders, and you shipped 1,000 orders.” We take that whole process of replenishment, of velocity, of making sure that there’s an efficient pick, and we take that on our own.
So from your customer’s perspective, all of the nuts-and-bolts stuff goes into a file called “don’t need to know.”
Yes, exactly.
I’ve seen you speak about compliance issues in industry publications and how you make that work for clients. Can you elaborate on that and explain how it would look from the perspective of the same hypothetical entrepreneur?
Compliance is a dirty word in our business. When we hear the word “compliance,” it’s usually associated with a retailer with a chargeback program. If your labels don’t look the way they want them to look when you ship to them; if you’ve not sent within a ship window or a few other things — what will happen is the retailer will put a credit (chargeback) on our customer’s invoice. And obviously, the last thing you want is to see a credit on your invoice because your label had a missing barcode.
So what’s good about a 3PL, and Taylored in particular, is that we have experience. We have a library of labels, packing slips, bills of lading, all the documentation required for compliance for over 100 different retailers. In addition to that, in the non-technical sense, Taylored has a dedicated person, a director of Audit and Compliance, who acts as a champion for our customers in fighting punitive chargebacks with these retailers.
Regardless of compliance, irrespective of how well you do off the dock, some things happen that are not in your control. We’ve seen many cases where the retailer handles the transportation, so they’ll call the trucker in, pull up to our door, load the freight, and ship it out [to] go across the country. Then when they open the door on the other side and pull the first pallet out, they find out that in transit, the labels got smudged together, they got scraped, they got scared. That automatically goes back to the customer as a credit on the invoice, and that’s where we come in on audit and compliance. We’re able to help fight those chargebacks and get our customers free and clear of those credits.
The other part of compliance is the shipping window. It’s routing within 24 hours for specific retailers, routing within 48 hours for others. There are different rules for different retailers. For a customer whose core competency is not distribution, it’s a full-time job for one of our customers to have somebody in-house to understand the compliance guides for all of these retailers to the granular level of, you know, what web portal do we go to get a PRO number for a truck coming in for Amazon?
We take all of that; we do a lot of that electronically with the customers, so not only do we take the burden from our customers, we don’t have to do the work at that manual level that most people would do because we have everything already. We keep everything. We have a library of compliance documents, and we keep our customers updated on any changes that are made.
Keeping your clients updated leads neatly to my next question. Let’s talk for a moment about how the data flow through your system. I’ve worked in tech, and I’ve worked in retail, and I know that this is a really core piece of functionality. Can you explain what Taylored brings to the table, in terms of keeping your clients informed and in the loop?
To me, that’s the journey.
After you’ve already gone through the onboarding, you’ve integrated with us, and we’re exchanging data or receiving your product and shipping it. Now we’ve gone through the initial setup of the account, and now we’re going to watch the product —we call it the “brown box” — travel through our facility. That’s the most important thing for our customers: to have visibility.
We’ve invested a lot of time and dollars in putting together a web portal that touches several different systems, from the data coming into the company to data going out and presenting it on a single page so that our customers can look at their supply chain. They’re able to take a look at the inbound purchase orders, the receipts coming into the building, the status of processing those receipts, the orders that we receive for the fulfillment, the status of the orders as they go through the process — there are 10 or 12 different statuses or milestones they travel through that our customers can track.
The portal also is an excellent way for a customer to tag an order or a specific document, maybe a purchase order, with comments and a question through the portal, which is sent directly to their customer service rep for action. As for the framework, there’s a WMS system, we have the EDI system, a shipping system, and a separate inventory pull data warehouse. They all speed up their different systems, pull data from the different systems, and normalize that data so that it’s one black box as far as the customer’s concerned. It keeps the phones from ringing. It gives them the immediate, instant satisfaction, you know? “Get me the info now!” We’re able to provide that.
It also keeps us honest, and I’ll tell you that there are times where our customers will get in there — because of the amount of data we share, we’re very transparent. They may see a problem in the works before we catch it on the floor. Our customers and Taylored collaborate; we work together as a team.
When I interviewed Taylored CEO Jim DeVeau, he spoke highly of your technical skills and how they’ve enabled Taylored to do remarkable things occasionally for a client in crisis. Do you have a favorite war story of saving the day for a client in a tough scenario?
Here’s one that was pretty crazy.
About two and a half years ago, we had a transportation client come to us in the eleventh hour. They have a transportation business where their vendors — our customers or vendors — would go to a web portal developed by another 3PL. Through that web portal, they were able to look at the POs [purchase orders] and then build the shipments in their building, and then ship them to the 3PL, and the 3PL would have that integrated system with these ASNs [advanced shipping notices], and they would be able to receive it and then ship it out.
That 3PL, with this customer, had bad blood. They got into a situation where the customer, coming to us, waited a little too long. They gave us about two weeks, and what we had to do to get this business was developing the same thing that this other 3PL did over the last two years. [This] was a vendor portal where a vendor could:
- Come to your website.
- Pull a purchase order from our customer system through our system.
- Pick and pack orders in their building.
- Create these ASN labels through our portal.
- Print them locally to the vendor.
- Label the boxes.
- Pull us up for an appointment.
And we picked up the product from the vendor’s location to bring it to our warehouse.
We took that on, and I’d say within two weeks, we pretty much had what the other 3PL had developed, and we were able to have about 600 vendors hit our website and create these advanced shipment notification labels on their side and ship them to our building.
That was a nice account. Granted, the first two weeks of getting that up and running, we were probably 60 percent there, but we were able to bail our customer out at the end of the day. Then eventually, I think it was probably about two or three months down the road, we finished that project. That was a little bit of a challenge, but it was fun.
