November 2006 | Case Studies | Reader Profile

Mark Smith: Remaking SC Strategy, Again

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It is amazing how much can change in a mere 18 months. When Mark Smith left his job as head of operations for GTSI in early 2005, the company focused mainly on reselling information technology products—such as notebook computers and software packages—to government organizations.

But in September 2006, when Smith returned to the Chantilly, Va.-based IT firm as vice president, supply chain, he found the company transformed.

Today, GTSI's main business is assembling products from a variety of vendors, along with services provided by its own staff and third parties, into complete information technology solutions for the government.

The changed business model places new demands—such as the need to coordinate with multiple product manufacturers and service providers to deliver the right solution—on the supply chain.

"The exciting challenge is figuring out how to improve and change the supply chain function to support our new initiatives," says Smith, who oversees procurement, distribution, and logistics in his new role.

"We need to establish additional competency for buying services, and develop robust e-commerce technology that interfaces with suppliers and trading partners," he adds.

This is not the first time Smith has helped remake GTSI's supply chain strategy. Back in 2000 and 2001, many GTSI suppliers responded to financial pressures in the high-tech world by cutting fat out of their operations.

"High-tech companies began tightening their supply chains and eliminating many inventory management programs that were available to us and other resellers," Smith recalls.

Before then, if certain products were not selling, GTSI could swap them for items in greater demand. If prices dropped, manufacturers offered credits that allowed the reseller to revalue its inventory. All of a sudden, those protections disappeared.

"The end of those protections required us to change our inventory and fulfillment strategies. We began to rely heavily on the drop-ship model," Smith says. "We wanted the ability to fulfill orders without actually touching the inventory."

To track the progress of inventory that doesn't pass through GTSI's hands, carriers' web portals have proven invaluable. "I'm not sure we could survive without them," Smith says.

Keeping Up With Uncle Sam

Besides adjusting to changing inventory management programs, Smith and his team must work to accommodate the U.S. government's procurement regulations because federal sales account for 97 percent of GTSI's business.

The requirement to buy products made in the United States, for example, sometimes limits GTSI's supplier base. Complying with these rules requires research and documentation that companies selling into the private sector usually don't have to perform.

With 25 years in operations management, one lesson Smith has learned is to stop analyzing problems and challenges forever.

"In today's business environment, particularly with the changes we're driving here, supply chain professionals have to be disciplined," he says. "I try my best to imbue that spirit among our team. We take the issues at hand, drill down to the core actions, and execute."

The Big Questions

What do you do when you're not at work?

I like to read and play golf. I also coach youth basketball.

What's in your laptop bag?

My notebook computer, the Wall Street Journal and Washington Post in case I get time to read during the day, and a stack of bills I haven't had a chance to pay yet.

Business motto?

"Simplify, focus, and act" is one motto I liked at my previous job and try to apply at GTSI.

First web site you look at in the morning?

GTSI's intranet. I need to keep on top of what occurs outside the company's operations department.

Ideal dinner companion?

Bruce Springsteen.

If you didn't work in supply chain management, what would be your dream job?

Teaching high school and coaching a high school sports team.

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