Partnering with Your Suppliers for Manufacturing Success with Mike Murdock

Connect with Mike Murdock

Email: MDOCK50@gmail.com

LinkedIn: https://www.linkedin.com/in/golfer53/

Lisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturers' Network Podcast. I'm excited to introduce our guest today Mike Murdock. Mike is the President of M2 Collaborative Solutions. He has 38 plus years of manufacturing operations and vendor supplier optimization experience. In addition, he works with cross-functional teams internally and externally. 

Mike works directly with key strategic vendors that support their daily manufacturing needs and requirements. Mike, welcome to the show.

Mike Murdock: Hey, Lisa. I appreciate the opportunity to be a part of your show and share my experiences. Just briefly, for 38 plus years, I worked for General Mills. My first 27 years focused on the day-to-day manufacturing of multiple products. General Mills owns plants in Cedar Rapids, Iowa. In July, the plant I retired from generated $2.4 billion worth of revenue a year.

General Mills is roughly a 17 and a half to $18 billion company, so that's a good chunk of revenue coming out of Cedar Rapids. For the last 12 years, I have had a unique role where I focused on working with our key strategic vendors that provided materials, ingredients, and services to the Cedar Rapids facility and our supply chain. I worked in North America, and I did some global initiatives that helped our supply chain with our key vendors.

Lisa Ryan: I know that that vendor or supplier relationship is where you put your focus, and it also got you through some tough times and these last couple of years with the pandemic. Please share with us some examples of where you saw that partnering with the people giving you the ingredients and supplies makes a difference and creates a win-win for everybody.

Mike Murdock: So, as we are all aware, our world is turned upside down. In March of 2020, the norm was no longer how the business would operate. Nobody knew how long because the pandemic was new to all of us. We didn't know what to expect. But the thing that was refreshing and encouraging for not just me but our General Mills supply chain was those key strategic vendors. I had spent years working with them to lay the foundation and build that trust in our working relationship. I wanted to have uncomfortable conversations, be very fluid, and be nonjudgmental.

It allowed us to get opportunities and issues in front of us in a non-threatening way. So what took place as the pandemic started to hit in the March/April timeframe. 

We had these strategic vendors that I had been working with for years. They reached out to me via phone calls and emails. They let me know that General Mills is a top-three priority for them. They said we would do all we could to ensure your supply chain was not disrupted. That was very reassuring.

Knowing that there were many unknowns in front of all of us now. Having that confidence and reassurance from these key vendors that we're dead in the water without their work. We can't make finished products that go out to the consumers. It allowed us to move forward with confidence, believing that we would have the materials and ingredients to make our finished product. Keep in mind that I'm talking about Cheerios, Wheaties, Lucky Charms, Betty Crocker Frosting, Betty Crocker fruit snacks, Nature Valley granola bars - I could go on and on and talk about all the different products in the General Mills portfolio.

Think about how many empty shelves there were when you first went to the grocery stores early on in that pandemic. It was hard to understand, but it wasn't very long into the pandemic that some of those things you purchased regularly weren't on the shelves. They were not available.

Lisa Ryan: Well, let's think about the vendors you were dealing with. It's General Mills, for goodness sake. You know they are a billion-dollar company, and they don't want to lose that business. There's still something to the relationships that you built. To get that type of loyalty, besides the fact that you are probably a big chunk of their business, what did that look like?

Mike Murdock: Great question. It's just not about the annual spending; it's the relationships. I was involved with from eight to $400 million a year spent for General Mills. So that is carrying a bit of influence in weight with these folks, but, more importantly, it was how we treated each other and respected one another. We took the time to understand each other's needs and the complexities of the challenges of making that finished product.

When they were providing materials, we investigated what it took for them to deliver that material or that ingredient that was so unique. We needed to be specific to our General Mills requirements. We took the time to understand what that was about and those challenges. Then we helped each other eliminate some of those frustrations, some of those things that prevented us from success. We worked on removing those things to make them more efficient in the past. More importantly, this created more capacity and made it safer for the employees. We eliminated some of those inefficient things that created stops and required people to do something that was not necessarily safe for what we wanted them to be doing. We laid that groundwork.

Lisa Ryan: In a previous conversation, we talked about things like labeling. You have a company as big as General Mills saying this is how we want it. Vendors have to do it this way, no ifs and or buts about it. You took the time to see where some of those problems were with the machinery. You reviewed some of the things and took the time to understand where your vendors are coming from. I believe it also led to that loyalty, so please share that story.

Mike Murdock: That was a great story. The result turned out well for General Mills and our vendors. It led into the General Mills organization, where we would track performance. It was all based on available uptime capacity for those particular lines. It was based on a hundred percent optimal capabilities of a line or system. As we looked at the labels that we're talking about has to do with Betty Crocker one pound tubs which I'm sure many people have purchased these one-pound tubs to either frost a cake or cupcakes or cookies or something. That label that goes on the outside, whether it's buttercream, vanilla chocolate, or wherever it is, has to be put on. It's a tub that comes in blank with no information on it, so you would think that's not a big deal. But keep in mind, that there are hundreds of these tubs traveling through the system in a minute. Hopefully, these labels are being picked up one at a time. It comes out of a magazine; it's wrapped around this spinning tub and glued on the bottom side. It spins, and there was a lot of frustration and many downtimes associated with that label being applied. We were losing roughly 26 hours a month in this process. Imagine one day out of your mouth. You're not making the product because you're fighting this label being put on to this tub of frosting.

Fast forward. We reached out to the vendor company that provides these labels for us, started sharing some information, and talked about its concerns. We invited them to come in. Along with the equipment vendor that handled this label that was being applied, we had all kinds of resources within General Mills engineers, operators, and maintenance people involved.

What it was about in the first message to everybody as we're not in this conversation to try to find somebody to blame for the poor performance. We know we've got a problem. We know we have opportunities to get better, but please understand that we are not here to point the blame. We're not here to accuse anybody of anything. We are here to gather facts and data based on information that we can track and validate.

So, with that in mind, I asked everybody to leave their opinions and emotions outside the door before entering the meeting. Because we wanted it to be a very friendly data-driven conversation, we spent a day and a half talking about all the information on the equipment within the plant in Cedar Rapids and the process at this label company in Fort Worth, Texas. We invited the equipment vendor that handles the label being placed to share some of their data and information.

Then we looked at the top five areas that we should focus on trying to improve, and we identified those. There was a responsibility on both sides of the table that needed to be addressed. For General Mills, we needed to invest roughly $30,000 in capital to improve the equipment that had been in place for about 15 years to update to some of the changes in technology that have taken place. We committed to that.

We took a group of roughly five employees from the Cedar Rapids General Mills plants down to the label plant in Fort Worth, Texas. We looked at their process. We sat down and talked about what are the things that we were asking them to do. That makes it challenging. One of the things we learned quickly was printing on the backside of the label that had recipes and ideas of how to use frosting that had been in place for ten years. Quite honestly, nobody knew why it was there, and it didn't add any value. It did add six hours of incremental handling and processing to the label company. Imagine if you can eliminate those six hours of adding ink to the backside, waiting for that ink to dry, cure before you go back, and handle it again. That's a significant efficiency gain and a new elimination of non-value-added steps and processes that create challenges on their side of making that label. It was a considerable improvement. We also looked at the layout of the sheet of the labels made. We improved that by 7%. Out of every sheet printed and cut, we added 7% more coverage to that sheet. You're getting a better yield from that initial paper or the material you're using. You're doing it in less time, and you're gaining capacity. All of this stuff starts to be win/win scenarios, which we focused on.

Lisa Ryan: When you think about something, you know when you're looking at a product, mainly a food product. I buy wine based on the pretty label, but I felt I didn't even think about it. If I'm buying frosting or if I'm buying Cheerios, you're okay buying food. That's probably the least of my attention. When it comes to that attention to detail, knowing every process area is critical. You know you're onto something when you pay attention to the minor parts of a product that have nothing to do with the taste and show those types of cost savings. There are too many times that we look at the massive parts, and where we can make a huge difference where you were making a significant difference with really a tiny part.

Mike Murdock: As I mentioned initially, we were experiencing 26 plus hours a month of downtime after we completed the work. Keep in mind that this has been going on for the better part of 10 years. There was a lot of frustration from the operators, mechanics, and everything on the plant floor. We spent roughly six months working on making these changes, improving, and adding the new technology from the capital purchase. When we got done, the average monthly downtime was under one hour. So we gained a full day of production back in. As a result of that, the employees, the operators, and mechanics on the floor started believing that there was a new way to address issues going on for years. They started becoming more engaged, more involved in coming up with thoughts and ideas about what else can we do to improve our day-to-day manufacturing process.

These were things when those guys woke up and put their feet on the floor in the morning. Their first thought is I have to fight eight hours of this label. Well, guess what - that was eliminated. It's no longer in front of them, and so as a result of that, the vendor we work with we were doing roughly $8 million a year worth of business with them. As I mentioned earlier, some companies do 400 to $500 million a year's worth of business at General Mills.

We took that same application that we improved and learned on the Betty Crocker frosting, and we applied it to the Progressive soup label. They provided those labels and saw the same benefits.

Our annual supply chain vendor award ceremony, held in our corporate office in Minneapolis, this small vendor that we're spending eight to $9 million a year with General Mills won our supply chain vendor of the year. So it was a massive win for those guys.

It was 12 to 15 months later because of their willingness to collaborate with General Mills to make the process better and drive nontraditional cost savings, which saved money for both of us. Not just for General Mills, they saved money substantially on their side of it as well. They ended up tripling their business with General Mills, and within that 12 to 15-month timeframe afterward, they were doing 25 to $30 million a year in business with General Mills.

So there's another payback for them being willing to collaborate with us and look for ways to optimize and improve the process.

Lisa Ryan: When I think one of the things that, and not that you breezed over it, but kind of went over it quickly is the attitude of the employees. They knew they would go to work and have this frustration messing around with this machine. You took the steps you needed to work with the vendors, working with everybody to fix that. Please talk a bit about how that improved employee morale, employee engagement levels, productivity, and the things you saw from the people there.

It immediately impacted the morale on the floor, and I'm going to move out of our frosting division and move up into our cereal department in Cedar Rapids. In one of the other projects that I had worked on, we saw double-digit gains in the performance of that one cereal line that we were focusing on. As a result, these were some of our most senior tenured employees in the plant. Most of them had 20 years plus experience working in that plant. When one line was chosen to be the guinea pig for this new philosophy of let's work, collaborate, and share information, thoughts, and ideas with our key suppliers and see where it will get us. That one went quick, and within a two-month timeframe, they saw about a 14% improvement on their land performance, day in and day out.

Suddenly, I had people knocking on my door office door saying, are we next? How come you're not helping us? I'll help whatever you want. It became more of a pull instead of a push. When you've got the morale, and when you've got the people on the floor that have been frustrated for years, and keep in mind these employees, for the most part, they get 15-20 plus years of experience. They know quite a bit. They understand why they're successful and see why they're not successful. When something looks like help to them, they get excited and want to be a part of it. Once they believed in and trusted that there was a process for them to leverage and use to help make their day better, more efficient, and, most importantly, for all of us safer. Sign me up. Please help us. Here are some ideas and thoughts that we've been talking about for years, and nobody has listened to us. We haven't been able to get after this. Please help us figure out how to do this. So the unique thing about that was that I'm not the problem solver; I'm the person that brings all of the significant and necessary resources together, and what I do is kind of leave that conversation. It's staying focused on factual data-driven information. It doesn't become an emotional conversation because emotional emotions take you off the path and don't allow you to get to the actual root cause of what's stopping you from being successful.

Lisa Ryan: Well, I know some of these, and manufacturing inherently we have an older workforce, and more tenure workforce it's been with us. Sometimes, we're afraid to bring changes to them because you know that they're going to fight, kick, and scratch, and we've been doing it this way for 40 years. But they're also the people, and I think you've demonstrated this nicely: when number one, they're involved in the process. But you can get that buy-in because you're listening to them, and you're doing it over time, and you're showing them how it's making them safer and making their lives easier. Then they become your biggest proponents of those new systems and get all the less tenured people to buy-in.

Mike Murdock: They became informal leaders on the floor, and they didn't even know what they were doing. That was the beauty of it. Those people became leaders amongst their peers without even realizing what was doing it.

I'll never forget one thing, and I chuckle about it often when I talk about it is out on the cereal packaging floor. Keep in mind that this person had been there 30 years, and his nickname was grumpy. That's where there may call, and I was one of the few unfortunate ones that had a pretty good relationship with him. He'd open up and talk to me, and he was on that team. He was the first to have that 14% increase in performance up in the cereal department. He became the number one advocate of the new process in that department.

He made it so much easier for me to work with other people. He would sit around in the break room and talk about, hey, my day is so much better because of this, and it wasn't about what I did for them. It's what they were freed up to do to help themself so enabling them to get in front of you know key suppliers when their key resources, and talk about in great detail, and detail. I wouldn't have the experience and knowledge to talk about with those people. Because I didn't live it eight to 12 hours every day as these people have for years, and so, when you get those people together, you almost sit back. You'll allow those conversations to take place, and then you guide them on what the process will look like to make those improvements and free them up to do the things differently than they've been doing to get those positive results.

The one thing that you know is important is it needs to be a win/win scenario. It has to be good for both sides. I always shared with our vendors that if it's good for one of us and not the other one, it's not good for either one of us. So it's got to be something beneficial for both sides.

Lisa Ryan: So, as we get to the end of our time together, boy, time flies when you're having fun.

Mike Murdock: It does.

Lisa Ryan: What would be your best tip, your best idea for somebody listening to start building better relationships with their suppliers and vendors? How do you get that process started?

Mike Murdock: The first thing that I'd say is you've got to take the time to get to know your vendors' capabilities on a very personal and in-depth level. I quickly found that the mentality of all the vendors is just trying to make my life miserable though they're sending us junk and everything else. Most of the time, what they're sending you is what you're asking them to provide. So instead of leveraging vendors' experience, knowledge, and expertise in the field they exist in, we want to tell them as a customer how to provide that material or that ingredient when, quite honestly, they know better than we do. So don't be afraid to expose yourself, and say listen. Here are some of...