Dave Moynihan: A Toast to Streamlined Sourcing
To achieve a successful supply chain career, Dave Moynihan believes it’s important not to get comfortable too soon. Young people entering the field, he says, should “jump around to different industries, gain experiences, and work in different departments” to acquire the deep and broad understanding they’ll need for leadership.
Moynihan gained this insight first-hand. Starting as a production engineer in a firm that made architectural glass, he also worked in the high-technology, defense, and automotive industries before taking a position with Canandaigua Wine Company, Canandaigua, N.Y., in 1996.
Since then, Canandaigua Wine Company has evolved into Constellation Brands, a leading producer and marketer of brands such as Corona Extra, St. Pauli Girl, Black Velvet, Almaden, and many others. Last summer, Moynihan was promoted to senior vice president, supply chain.
As Moynihan works to streamline Constellation’s sourcing operation—an enterprise that spends $700 million a year on direct and indirect materials and services—he draws upon lessons learned from his previous employers.
“Each industry allowed me to take away key lessons,” Moynihan says. “For example, no industry is better at cost efficiency than the automotive industry.”
The defense industry provided important lessons on quality and reliability. “The balance between cost efficiency, which I learned from the automotive industry, and quality, which I learned from defense, has given me the ability to determine how to take non-value-added processes out of the operation without sacrificing quality,” he says.
When he joined Canandaigua Wine Company in 1996, its revenues stood at about $600 million a year. Thanks to a string of acquisitions and new product introductions, Constellation has grown into a $3.8-billion firm.
In many ways, Constellation treats its acquired businesses as independent firms. This autonomy allows its businesses to move with great agility in the marketplace. But in the company-wide sourcing initiative Moynihan directs, Constellation looks for ways to save money by coordinating purchases across the firm.
For example, Moynihan and his team combined beer and wine from two different operating companies into a single warehouse in the Pacific Northwest.
“Beer is high velocity,” Moynihan says, and isn’t very bulky, so it doesn’t require a great deal of warehouse space.
Wine, on the other hand, takes up more room and tends to stay in the warehouse longer. “We thought, ‘Why can’t we put the high-velocity beer together with the low-velocity wine?'” Moynihan says.
“The larger footprint required for wine gives the beer side a bigger warehouse with more rail doors,” he explains. “As a result, we get a larger, more efficient warehouse in a very good location—usually on a competitive rail or intermodal route—which proves beneficial for everyone, including our customers.”
Finding synergies and cutting costs combats what Moynihan calls the biggest supply chain challenge facing businesses today—the high cost of oil.
“The only way you will de-emphasize the cost of oil is to take a holistic approach to costs throughout your firm, and hope you’re better prepared than your competitor.”
The Big Questions
What is your idea of a successful day at work?
When I can help eliminate non-essential, non-value-added work and replace it with essential, value-added work, I feel great.
Decrease cycle time.
Advice to people starting out in logistics?
Work in several areas of a company. Learn as much as you can about cost and revenue. And read the business journals. Understanding business history and learning how other people solve problems will be valuable, because those problems will appear in your own career.
What’s in your briefcase?
I don’t carry a briefcase—electrons have replaced leather. I carry a Blackberry and a memory stick.
What do you do when you’re not at work?
Over the last 15 years I have added nearly 2,000 square feet to various properties I’ve owned. I do it all—build the foundation, work with heavy equipment, frame the addition, drop in the plumbing, electrical and air conditioning. When I’m not doing that kind of work, I enjoy going to my kids’ sports events.