People: Jim Kellso, Intel Corp.
When a tree falls in the Bolivian rain forest, someone might not be around to hear it, but there's a good chance it is being tracked with RFID, thanks in part to Jim Kellso. Kellso, whose day job is planning Intel's supply chain future, helped the Nature Conservancy implement an RFID program that lets it trace legally harvested timber and cut down on illegal logging in Bolivia.
"With RFID," Kellso explains, "we can track a tree—from cutting to the lumber yard, all the way to the retail store. That visibility ensures that the wood used in a dining room set, for example, was harvested legally."
Unusual projects such as this are commonplace for this unique individual.
Though Kellso holds the intriguing title of supply chain master at Intel Corp., he didn't start out as a logistician. Industrial engineering was his profession of choice because it fed his fascination with functionality, he explains.
"My father was a mechanic and tool-and-die maker," Kellso says. "When I was a child, he would explain to me how things worked. As a result, I developed a love of figuring out how products are made."
Kellso received an industrial engineering degree from the University of Michigan; during summers, he got "grease under the fingernails" working in Detroit factories.
After graduation, Kellso became a production line engineer at a compressor manufacturing facility in Ohio. When the manufacturer decided to construct a new factory, Kellso joined the design-build team.
Over the next decade, Kellso designed and built manufacturing facilities that produced everything from automobiles to food, pharmaceuticals, pulp paper, newspapers, and gun tubes for cannons.
While Kellso was developing his burgeoning reputation in the plant automation industry, famed chip maker Intel was bulking up the automated material handling systems group at its semiconductor factories. In 1987, Intel recruited Kellso to join that group, beginning his 20-year journey with the firm.
Though he is a top executive now, Kellso wasn't afraid to speak his mind even as a new employee. When Jerry Hardin, the executive in charge of implementing Intel's new global logistics organization, presented his vision for the department at a meeting in 1990, Kellso felt Hardin lacked a strategy for achieving his goals.
"I approached Hardin after the meeting and said, 'You don't have a good strategy; you need someone in charge of strategic planning,'" Kellso recalls. Rather than chastise Kellso for speaking out, Hardin told him to draw up the details for the position. "I did, and he offered me the job," Kellso says.
This combination of gutsy moves and being in the right place at the right time has resulted in a rich and rewarding career with Intel.
During the mid-1990s, Kellso experienced firsthand the impact product design changes have on the supply chain. When Intel shifted a component for Game Boy players from a socket chip to a cartridge, it ended up with a product five times larger.
To accommodate the bigger product, the company began a massive distribution center construction program, building new facilities in Malaysia, the Philippines, the Netherlands, and Costa Rica simultaneously. Kellso oversaw construction of these global facilities.
The chip's larger size also significantly increased Intel's transportation costs, so Kellso and his team searched for ways to maximize shipping efficiency. "We developed a new logistics strategy aimed at integrating our supply chain with customers and suppliers," Kellso explains.
The experience helped Kellso realize the importance of being logistically prepared for major design changes. "We began to focus on planning and anticipating supply chain problems three to five years out," he says. That's how Kellso became 'supply chain master.'
"In my current position, I conduct long-range research to determine what supply chain issues Intel is likely to face in the future," he notes.
Matching Demand to Supply
As part of his focus on integrating the supply chain, Kellso spends a lot of time trying to predict the unpredictable: customer buying behavior. Intel's biggest challenge is matching customer demand with supply in order to minimize inventory, he says.
"It's very difficult to achieve," Kellso admits. Customers aren't sure what they need, product suites change constantly, and manufacturing complexity and difficulty grows as Intel's chips become smaller.
"In addition, Intel has billions of dollars tied up in factories all over the world that need to run efficiently and effectively," he explains.
The need to accurately predict demand has led Kellso down a path not normally traversed by supply chain professionals—but one for which his engineering background serves him well.
"I'm developing advanced mathematical modeling and simulation technologies to better understand customers' buying behaviors and patterns," he notes.
Today, Kellso is at the top of his profession. While many people assisted and guided him throughout the course of his career, Kellso believes one individual is largely responsible for his success: a former boss named Earl.
"One day Earl smiled at me and said, 'Jim, I am tired of working. So, you're going to do your job and my job, and I am going to take credit for your work. But in two years, you'll have my job,'" Kellso recalls.
While Earl may sound like the boss from hell, Kellso appreciated him for providing "opportunities people my age are never offered," he notes.
Earl also taught Kellso about little black books—but not the kind you might think.
"Earl suggested I keep a little black book of ideas," explains Kellso. Thirty years later, he still follows that advice.
"When I hear something intriguing, I write it in my little black book," he says. "When I ride the tractor on my Arizona ranch, I pull the book out and think about those ideas."
Kellso wrote down "static inventory is bad," for example, after hearing a speaker at an industry conference. Having spent 35 years working on static inventory—designing systems and processes, constructing buildings, and training people around it—hearing "static inventory is bad" as a universal truth threw him for a loop.
"It took me awhile sitting on my tractor to internalize that I spent my entire professional life perfecting an idea that was 'bad,'" he says.
From that "tractor time" session, Kellso developed the idea of inventory in motion—which is the driving vision behind Intel's global supply chain today.
Although Kellso didn't plan to enter the supply chain industry, upon reflection, he is sure it was the right move. The complex and ever-changing nature of the logistics industry keeps his short attention span in check, he jokes.
"What I like most about the field is that it is dynamic," he says. "The supply chain is always ripe with opportunities for improvement, and that keeps me interested."
An Extended Family
Jim Kellso's professional life revolves around complex supply chain theories and strategies. His private life, however, is no less complicated, thanks to his 11 children—ages 13 to 30.
Eight of the 11 children are adopted, including a group of seven siblings from the Philippines who, at the time of adoption, ranged from 18 months to 11 years old.
In the early 1990s, Kellso spent time in Manila overseeing construction of Intel's new distribution center. "During that time, my wife and I decided we wanted to adopt a Filipino child," Kellso explains.
The adoption agency called Kellso's wife one day to report a group of seven orphaned siblings on its difficult-to-place list. "They asked if we would consider adopting the group. My answer was, 'no way,'" Kellso laughs.
That night, however, he dreamed about building the kids' bedrooms, putting new seats in the family van to accommodate them, and installing a high-capacity thermal water heater. "The dream was an omen: 'These are your children,'" Kellso decided.
"We've spent the last 12 years raising these extra seven kids," he says. "That is an operational and supply chain challenge all its own."