This week on the podcast Matt sits down the Tracy Rosser, current Strategic Advisor at NewRoad Capital Partners and previous EVP of Operations at Transplace (now Uber Freight) and SVP of Transportation and Supply Chain at Walmart. Tracy and Matt begin by discussing Tracy’s experiences in logistics, operations, and supply chain: specifically Tracy’s journey from managing a Walmart Distribution Center to SVP of Transportation and Supply Chain. Tracy then dives into the valuable lessons he learned during his time at Transplace (now Uber Freight) in the midst of Covid-19, touching on the importance of bringing the right people to the table to make data-backed decisions. The conversation concludes with a discussion about supply chain resiliency, doing things right the first time, and the importance of having a strategic understanding of supplier relationships.
Episode Transcript
Tracy Rosser 0:00
It used to be if you didn't do things right in the store, a customer's cost to change
was driving perhaps further to another store in an eCommerce type transaction. The
cost of change is the movement of a thumb.
Matt Waller 0:15
Excellence, professionalism, innovation, and collegiality. These are the values the
Sam M. Walton College of Business explorers in education, business, and the lives
of people we meet every day, I'm Matt Waller, Dean of the Walton College and welcome
to the Be Epic Podcast. I have with me today, Tracy Rosser, who has an incredible
background in logistics and supply chain management. He recently was Executive Vice
President of Operations at Uber Freight. He was with Walmart for 22 years in a number
of roles including Senior Vice President of Transportation and Supply Chain. But he's
been involved in supply chain, operations, distribution, transportation, and other
things. He was actually even earlier in his career, the General Manager of a Walmart
Distribution Center, which is a huge, huge job. And he is currently a Strategic Advisor
for a private equity firm, known as NewRoad Capital Partners. Some of you may have
heard earlier podcasts with Clete Brewer, one of the founders of NewRoad. It's a really
amazing private equity firm that combines both, you know, investor partners with operating
partners. And so they get people with lots of investment, investing experience and
expertise, but also people with lots of operating experience. Thank you so much, Tracy,
for joining me today. Appreciate it.
Tracy Rosser 2:00
You bet. Thanks for having me, Matt.
Matt Waller 2:04
You know, Tracy, you have an incredible background. And there's a couple of things
I want to make sure I talk about with you today. One is your learnings from COVID.
And two is supply chain resiliency. I know they're two things that you have learned
a lot about and have a lot of thoughts on. But before we get into that, if you wouldn't
mind. Let's talk a little bit about your experiences in logistics, and in operations
and supply chain. And if you wouldn't mind, I'd like to go back to your role managing
a Walmart Distribution Center, which is a huge responsibility. So would you mind talking
about that a little bit?
Tracy Rosser 2:52
Sure, Matt. So I'll drop back very quickly for a little bit of context. Prior to that
general manager time. So I spent nine years right out of college in the truckload
sector, and in truckload transportation, doing you doing dispatch work, customer service
work, and then on the commercial side and operations side, and then that was kind
of my entree into Walmart, you know, worked in the private fleet for a little bit
at at Walmart. And then was asked to go learn how to run a distribution center. And
so I went through a crash course training at Warehouse 8 here in Bentonville. And
then off to Lawrence, South Carolina. And it was really interesting, Matt, because
throughout my career up to that point, I had been engaged with truck drivers in the
trucking business, and the fleet. And so I was always supporting a group that was
very mobile and not at the office at the same time. And so with the Walmart fleet,
I had, I think it was like 12, 1500 drivers that that was responsible for maintenance
facilities, bettering the western half of the US. And then all of a sudden in Lawrence,
South Carolina show up, and there's, you know, there's 900-1200 people within the
four walls of building that, that, that you were responsible for supporting every
day. And so that was probably the biggest change was, you know, leading a group of
people that you had to look in the eye and be accountable to on a daily basis, and
then, knowing that everybody there knew more about the operation than you did. It
didn't matter who they were. They knew more about the business than I did. And so
I had a lot of great teachers from forklift drivers and unloaders to managers, who
were really patient and taught me a lot about the business. But it was a great, great
learning. So I did that at the Fashion Distribution Center. And then also we had a
and this one was all under one roof. And it was the only building like it that Walmart
had Matt. And it was, I think, 2.1-2.2 million square feet. And there was a regional
distribution center on the other side of the firewall, so Warehouse 14 and 15. And
so then I had responsibility for both of those over time.
Matt Waller 5:21
I can imagine you learned a lot about just the operations of a ware a distribution
center, as well as managing people of all different types. But you also, of course,
have experience in early in your career at Walmart, you also were responsible for
Inbound US Transportation Operations.
Tracy Rosser 5:46
That, that hit more close to home in terms of what I was really familiar with in terms
of the the inbound transportation side of the business. And so in that role, I supported
all the inbound flows to the Walmart Distribution Centers. And so it was really, really
nice having the trucking experience, and then the warehousing experience, because
I could kind of tie the two together, and understand how those pieces really fit well
together to achieve overall success. And that's where I really got to know Walmart
really, really well. Because everybody in the company was a customer on the on the
transportation side. And so we purchased all the transportation needs for the company,
my team did both domestic and international, and on the inbound flows. And so because
everybody was a customer those, and that's kind of where I've always started, my my
work is trying to understand what customer needs are both internal and external. And
it was great, it was great learning about the merchandising side of the business in
a different way. Because the merchants were my customers, the vendors were my customers.
And then we worked and established what I thought was really great relationships with
carrier communities across all modes, to really help inform them of what our needs
were, and develop some great relationships that that, you know, met the day to day
business needs, but also really helped us through some very, very critical times whether
it was you know, port strikes or hurricanes or you know, just any type of disruption.
But the other fun thing that was that I learned a lot about, you know, the the network
engineering in how important the engineering side of the business was, how important
optimization capabilities were, you know, not only support the growth of the company,
but do so in a way that met the needs of the company and having a network that really
drove best in stock, best freshness and lowest landed cost. So that's where I really
learned a whole lot about the company and how the company really worked was on a broader
scale was supporting that, that inbound business.
Matt Waller 8:17
So that, as you said, heading up inbound transportation, you learned a lot about the
company, because you had to deal with so many people that were needing transportation
services. But then you shifted gears again, no pun intended. But it's a big shift
where you went into store operations.
Tracy Rosser 8:42
Sure, Matt, it was a big shift. What I knew about store operations at that point,
A being a customer, and in shopping Walmart stores, and then B everything you learn
through osmosis of the Walmart system. To me, this was like really putting the bow
on supply chain, because stores in my mind, the way that that I thought about them
was they were another point of distribution or another part of the supply chain. But
to me, that's the most important piece of the supply chain. And it's where the supply
chain actually starts. And then that and then what are your commitments to the customer
that then define how the supply chain should function? And so I kind of learned that
you had to work backwards, then in terms of really designing a supply chain. And it
also, you know, held held true from a freshness standpoint, because we were you know,
at that point in time you know, we were pretty big grocery operation. And so most
of my stores were supercenters. And again, I went into that that business with it
with literally hardly any training and I was the benefactor of a lot of really patient
department managers, store managers, market managers, regional vice presidents that
really, really taught me a lot. And I learned a lot from customers also because we
made a lot of changes during that time. And the customers would let you know it and
the customers knew price like the back of their hand. And if you changed price a penny
they would tell you. And so and our store associates would hold hold us very accountable.
Matt, I tell you, it was probably the most valuable experience I had in my time at
Walmart.
Matt Waller 10:43
Wow, that's so interesting. I've heard other people say that in all different areas
of Walmart. Well, and then, you know, as as Senior Vice President of Operations, you
will, you're responsible for over 300 stores, multi format stores, and over 20 billion
in annual revenue and 90,000 associates. That's a that's a big responsibility. That's,
that's bigger than most, you know, Fortune 500 companies.
Tracy Rosser 11:21
Yeah, it was a lot of fun. But boy, you that, you know, not only what you learn about
your internal operations, but also the communities because everybody's highly engaged
in the communities. You know, your stores are part of the community, and just the
the expectations that the communities have of a Walmart store, whether it's on a micro
basis, or macro basis. So the internal factors of driving sales and profitability
for the company and doing it right. But also the external factor as well, which I
think is much about going into the job.
Matt Waller 12:03
It's interesting, five years in distribution, five years and transportation, five
years in store operations, I would guess the next one would be five years, but it
wasn't it was longer, six years, and that is Senior Vice President of Transportation
and Supply Chain. And so during that time, you were managing global transportation,
domestic transportation, the Walmart private fleet, which is enormous. And last mile/home
delivery, merchandising supply chain services, what a big operation. Would you mind
speaking to a little bit about how that combination of distribution, transportation,
and operations played into your ability to do that? Conduct that job well?
Tracy Rosser 12:57
Yeah, Matt, you know, I was really fortunate to have that role. And in really, it
was a culmination, it was like when everything kind of came together, because of having
truckload experience, you know, prior to Walmart, a little bit of the Walmart private
fleet experience, then the inbound and the distribution centers, and then the stores
and the time with customers. I really went into that job with a lens that was vastly
different than had I not gone to the stores, I had a total view of what is it that
we need to do to fuel in stock and price, because I had seen firsthand how valuable
that was, and I had walked enough competitors to know what competitors were doing
in the marketplace. And I really, really got a sense of what was important to our
customers and our people, and so the lens that I looked at was, how do we serve the
customer in the way that they deserve to be served that's consistent with the brand
and in what we were trying to do as a corporation. And then also serve the people
and really remove hurdles so that our people can just get the job done. And empower
our people and give them the tools to get the job done. And then stay out of their
way. And, you know, I was playing around with last mile and had the last mile team
in San Bruno had responsibility for that. And we were just testing and learning a
lot of stuff like, I mean, we were just throwing mud against the wall, really trying
to figure out how we get our cost per unit down on final mile delivery. And so we
were really playing around a lot in the sandbox. And now that has become more perfected
and it's grown. And so now the number of deliveries are significantly greater than
when I was there just just because of the sheer number of home deliveries.
Matt Waller 15:07
Well, you know, ecommerce in general, not just Walmart, but in general, is so huge
now. And reverse logistics, dealing with the returns has become a really big problem
in the industry in general. Because the policies are so liberal around taking returns,
I can't remember I want to think I read somewhere that 30% of products are returned
that are bought through eCommerce, something like that. Shoppers don't often know
how challenging it is, and all the costs involved in reverse logistics. What do you
think about that?
Tracy Rosser 15:55
If the Rosser household is any barometer of returns, I would say it's probably 50%.
But but I'll tell you what it is. The returns network in I mean, this with all due
respect, it is like and this held true, like, I got to see it first and foremost,
because again, in that purchasing transportation standpoint, we had to move all the
returns, and we had to engineer a return network. And there's so much cost that's
there. Again, it's typically and it's funny, you bring it up, it is one of the and
I still think it's like one of the most ignored pieces of the business. It is a discipline
that that needs more focus to be quite candid with you. Because of all the costs and
all the waste. If it doesn't happen, right can be just huge dollars of low hanging
fruit to go get.
Matt Waller 16:52
Well, you know, I wasn't planning on bringing it up in this conversation. But I had
just read something in the Wall Street Journal about this, of course I I've been aware
of it for a long time, at any rate. I want to shift gears a minute here. You have
you are a astute leader, you pay attention to and you reflect on what you're experiencing.
And you read a lot. I would love to know, what did you learn from COVID?
Tracy Rosser 17:25
Wow. Okay, so we'll get into, into the into my last role, Matt. So I had left Walmart
and had the really good fortune of meeting Frank McGuigan, who was the CEO of Transplace,
which was founded here in Northwest Arkansas. So I had responsibility for all the
operations, Frank had just taken over as CEO, and, and so I had the good fortune of
having responsibility for the operations of the manage and transportation business.
And the manage a lot of people I think Transplace is one of the best kept secrets
in all of all of logistics. At the time, when I went there, I think we had about seven,
seven and a half billion dollars in freight under management. And so many Fortune
100 companies were Transplaces' customers. It was really interesting. So I was six
months into the job. And I spent my first six months just out meeting customers. And
so I think I visited about 85% of our revenue. And so I was just getting to know our
customers and our people and then COVID hit. And so, you know, we have a building
here in Northwest Arkansas, and in two or three days, and we were a technology company,
and that was the other thing, everybody, we had our own TMS platform and all of our
customers ERPs connected with our TMS platform. In gosh, probably three days, we made
a decision to send everybody home. And so we were and that was all around, you know,
our full operations. So we did that we went remote. And then we started to learn.
And I'll tell you, Matt, there were so many learnings from COVID and I'm going to
jump to supply chain for just a minute. What happened is resources started to become
really scarce. And so the the two biggest issues that that arose is labor became incredibly
scarce at our customers facilities, their manufacturing labor, their distribution
labor, and then raw materials became scarce, packaging became scarce. And then the
other thing that became scarce was the supply and demand imbalance because of truck
drivers became scarce. And then you had you had a dip in demand initially, and then
demand skyrocketed as people started settling in at home. So some areas demand just
declined. But in other areas, you know, it just demand just escalated relative to
resources that were available. And so what started happening is, customers were shipping
our customers were shipping from where ever they had inventory, the network did not
matter. Because you had the Walmarts of the world and the Kroger's and Target's of
the world Costco's that needed merchandise. And so people were shipping wherever they
had merchandise and their fill rates diminished from probably, you know, 100-95% fill
rates, in some cases, 40% fill rates. So you had all these trucks that were running
significantly greater distances, with far fewer units on them. So your cost per unit
was really high, your lead times have totally changed. And so and then the carriers
networks are now disrupted. And so now you had a total hodgepodge of things happening
and costs were going through the roof for our customers. Customers were starving for
data because their costs were escalating, and they didn't know why. And so we had
to go from really generating monthly reports or quarterly reports on people's networks,
to now we were really seeing the need to run data and analytics at the daily basis,
weekly basis and rolling it up so we could show our customers what was happening in
the network. And then we started to advise them on where there was waste and leakage.
But the problems were so big and so complex. What I learned is, and it was fantastic,
because it's something that I had an insatiable appetite for in my in my previous
days at Walmart. And we felt like we kept our C suite really informed is our customers
really needed to bring a CEO to the table, the Chief Financial Officer to the table,
the Chief Operating Officer, Chief Commercial Officer, Head of Manufacturing, Head
of Supply Chain. And we had customers that really did a great job of getting those
people to the table. Because the decisions were huge, the dollars are huge, customer
service impacts were huge, that they needed the data to make decisions that were bigger
than just a Chief Supply Chain Officer. And then we saw companies that didn't do a
good job of that. And so it was our job to help facilitate that. I think if good things
came out of COVID, it's the from a supply chain perspective, is information became
more real time and data and analytics and people's understanding of the drivers of
their network and cost and waste, improved.
Matt Waller 23:04
Now, everyone's kind of aware of supply chain. You know in economics they say the
best way to figure out the marginal benefit of something is to remove it. Right? In
other words, by having problems in the supply chain that helped everyone see the the
what it's doing, what it's providing, how critical it is to business, it is business,
really. How do you think this current, let's assume that, you're right, there's a
lot more information people are paying more attention to it. Do you think that'll
make supply chains more resilient in the future if we maintain that?
Tracy Rosser 23:43
I hope so and I think so. I think people learned what were the vulnerabilities were.
So I think people are shoring up vulnerabilities. And so when you do that, like Matt,
we saw people that didn't have network designs completed and or they didn't have the
capability to re-engineer their network on the fly. So as as there were external forces
that would cause you to re-engineer what your network was. And that was one of the
things Walmart did a phenomenal job. We had a great engine set of engineers, great
set of people, had great technology. And the, what I would call the realignment process,
was really sound.
Matt Waller 24:34
When will you say realigned? You mean, which DCs served which stores?
Tracy Rosser 24:40
Exactly. You know, it affects your inbound flow. So there were companies that lived
with significant suboptimal networks because they didn't have the capability and the
muscle to realign and so and everything starts with a great blueprint. So if you didn't
have the great blueprint, then there was, you know, you had to figure out where the
waste was. And so I still see that as a shortfall for a lot of shippers.
Matt Waller 25:12
Well, I think part of that lack on the shipper side often is a result of just not
emphasizing supply chain logistics to the point that they should.
Tracy Rosser 25:23
Yep, and Matt, a couple of other things that would tell you that I think about when
I think about supply chain resiliency, it's kind of doing things right the first time
gives you degrees of resiliency when there's disruption. And then the other piece
that's not talked about, and I saw this where a lot of shippers at Transplace would
own their own carrier contracts, or own their own, or they would a lot of shippers
have procurement. That held a lot of weight in the procurement divisions that held
a lot of weight in their companies. And so these are strategies that shippers have.
But what they what they failed to have is the the appropriate relationships with their
providers. I would tell you having those relationships is incredibly important and
having a strategic understanding of how you're going to work with each other, when
there's disruption is incredibly important. And so you spend all your time working
on those things when times are good, so that when times aren't good. You know, you've
got something in place that puts you in a better position than your competitors.
Matt Waller 26:42
Well Tracy this has been extremely insightful. Congratulations on your amazing career
and journey and really appreciate you taking time from your busy schedule to visit
with me this morning.
Tracy Rosser 26:56
No it's an honor to spend time with you Matt and appreciate the conversation.
Matt Waller 27:03
On behalf of the Sam M. Walton College of Business I want to thank everyone for spending
time with us for another engaging conversation. You can subscribe by going to your
favorite podcast service and searching Be Epic. B E E P I C
Matthew A. Waller is dean emeritus of the Sam M. Walton College of Business and professor of supply
chain management. His work as a professor, researcher, and consultant is synergistic,
blending academic research with practical insights from industry experience. This
continuous cycle of learning and application makes his work more effective, relevant,
and impactful.His goals include contributing to academia through high-quality research and publications,
cultivating the next generation of professionals through excellent teaching, and creating
value for the organizations he consults by optimizing their strategy and investments.
