September 2005 | Case Studies | Reader Profile

Masao Nishi: Managing One Big Network

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SYSCO Corporation's supply chain is undergoing a major transformation, and Masao Nishi stands right in the middle of it.

The $30-billion food service distributor recently promoted Nishi to assistant vice president of supply chain management, responsible for the flow of product from suppliers to approximately 70 SYSCO broadline operating companies in the United States.

Nishi is helping the corporation make the transition from 70 separate logistics operations to a single, three-tiered system. Under the new scheme, SYSCO will divide much of the responsibility for supply chain management among its Houston headquarters, five regional operations, and seven to 10 new regional redistribution centers.

In the past, "those 70 operating companies were very independent," Nishi says. "Each managed the movement of product from suppliers into its own DC. This took place 70 times throughout the country."

In the future, the operating companies will still function as autonomous units, but SYSCO plans to increase efficiency by treating them as part of one big supply chain network.

Part of this strategy involves finding opportunities for backhauls and continuous moves.

"We have operating companies everywhere around the country. But we also have suppliers everywhere around the country," Nishi says. "If we could look at it all at the same time, we would find a lot of inherent balances in our network."

A major part of Nishi's job is to make sure the company always has enough transportation capacity to move product wherever and whenever it's needed.

Another is "making sure that the service we acquire has a certain amount of predictability, so we know when we can expect the loads," he says. "And then it's also our responsibility to control the cost."

Capacity poses a major challenge. "Many companies are facing capacity problems, getting enough carriers," Nishi says. "It's even worse for companies that are dependent on refrigerated transportation."

Many of SYSCO's refrigerated carriers are small mom-and-pop operations. "Part of our responsibility is to grow the carriers," Nishi says. "We want to help grow a 50-truck carrier to a 100-truck carrier; if they have 100 trucks, we want to grow them to 200 trucks.

"We want to identify carriers that are strong, have the right approach, and can provide the service we need, so SYSCO can give them increasingly more business," he says.

Two-Way Street

SYSCO has to see not only that its carriers grow, but also that they are profitable, to ensure there's always enough capacity to carry SYSCO's freight.

"We try to make it as easy as possible for carriers," Nishi says. "We try to turn the equipment around quickly so the carriers can go on their way and generate more revenue."

As a large company with many receiving points, "SYSCO has to make sure that it's disciplined enough to be fair to carriers, so they can make money," Nishi says.

A more efficient transportation network will help SYSCO meet that goal. "If we can provide balanced lanes, carriers will give us capacity," Nishi says. "And lower rates as well, we hope."

The Big Questions

What are you reading?

The Blink by Malcolm Gladwell, and Conspiracy of Fools: A True Story by Kurt Eichenwald.

Business motto?

Balance capacity, predictability, and cost.

Advice to people starting out in logistics?

It's a big, important field, with so many different dimensions. There are no limits. People can jump in and grow within the industry for their entire careers.

What do you consider a successful day on the job?

When we don't have too many fires to put out, or too many surprises to deal with.

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

My wife and I like to travel whenever we get the opportunity.

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