"One on One: An Interview with Richard A. Hughes" By Jill Schildhouse, Spring 2006, Vol. 42, No. 2, p. 2
Journal of Supply Chain Management Copyright © May 2006, by the Institute for Supply Management, Inc.
Interview by Jill Schildhouse, writer for Inside Supply Management®
Richard A. Hughes is vice president, global purchases with The Procter & Gamble Company (P&G) in Cincinnati. Having joined the company in 1982 as the purchasing manager for disposable soft goods, he has moved up the ranks with such positions as senior purchasing manager of packaging purchases, director of healthcare purchases and vice president of global purchases. Hughes earned an MBA from the Florida Institute of Technology and his Juris Doctorate from Chase College of Law. He served in the U.S. Army from 1977 to 1982 and in the Reserves from 1982 to 1991. Hughes is a member of the Ohio Bar Association and the Reserve Officers Association, and serves on the executive committee for the National Minority Supplier Diversity Council Board. Procter & Gamble's New Orleans Folgers plants were affected by the wrath of hurricane Katrina, while the company's entire supply chain (including its beauty, household and family health businesses) felt the effects of hurricane Rita. Hughes shares how supplier relationships aided in Procter & Gamble's disaster recovery.
The Journal of Supply Chain Management: What Procter & Gamble manufacturing sites were in the path of hurricanes Katrina and Rita?
Richard A. Hughes: We have three different sites spread out around New Orleans: a main roasting facility; a silo where we keep the coffee beans and an unloading facility close to the port; and another warehouse and packing facility. New Orleans is coffee central for Folgers and Millstone.
The Journal: What damage did the hurricanes inflict upon your sites?
Hughes: After Katrina made its way through, all three sites were inaccessible. With the amount of flooding and infrastructure damage that occurred throughout New Orleans, we couldn't get trucks or people in. There was no water, electricity or sewage. From a damage standpoint, we were lucky. We had water damage on the roof of the silo, but it didn't significantly impact the beans stored there. There was roof damage on the main manufacturing plant and a little bit of water damage in the warehouse.
The Journal: After assessing the aftermath of the hurricanes, what was the next step?
Hughes: The first thing we did, even before we could assess the damage, was to take care of our employees and provide them the support that they and their families needed. Because our roasting facility (later dubbed Camp Gentilly for its location on Gentilly Road) was relatively dry compared with the rest of New Orleans — at 7 feet above sea level—we ended up securing about 150 trailers to house our plant workers on-site, as well as housing contractors and suppliers doing business with P&G. We drilled a well on the site to access clean water, and we brought in food service and portable toilets. Thankfully, we had plenty of coffee!
The Journal: How did your existing supplier relationships help make all this possible?
Hughes: As far as the trailers, it was also a matter of having contacts in the industry. We had relationships with coffee can suppliers who had relationships with steel suppliers, and those steel suppliers also supply steel for trailer manufacturing. So we worked through the supply chain and used existing or nonexisting linkages to figure out how to get things done.
The Journal: Beyond the Folgers plants, how else did the hurricanes affect your business?
Hughes: Three days before Katrina hit on August 29, 2005, we began a fairly exhaustive search for all the raw materials we thought may be affected. We marshaled our supply chain forces and worked to figure out what we had in inventory and where, and what we had in transit and where. We identified what we had on boats that we wanted to redirect. While it was a good attempt 3 days before the storm, it wasn't quite enough. So we learned from that and then the week before Rita really hit the Gulf Coast (September 23, 2005) we started doing the same thing — and more of it. We began shifting materials, adding warehouse capacity and bringing new suppliers on-board to keep our supply chain running.
The Journal: How did your existing supplier relationships help make this easier?
Hughes: We have some long-term supplier relationships that we have built over the years — in good times and not-so-good times. As we talked to our suppliers, they understood what we were trying to accomplish and we were working with them on redirecting materials and increasing production.
The Journal: Can you share some specific examples of the lengths your suppliers went to on your behalf?
Hughes: We had a number of tremendous hero stories about our suppliers — we didn't reach out to them; they reached out to us. One of our suppliers was a contractor that helped us in our Jackson, Tennessee, plant that was hit by a tornado a few years back. This supplier had people on the ground to help dig us out of that situation. As soon as Katrina hit this supplier called me and said, 'We've got experience getting plants back on line, we worked with you in Jackson, if there's anything we can do I'll make my people available.' 'We have another supplier who had a friend with a warehouse that was unleased. He called us up to say, 'If you want to use my warehouse as a relief center, it's available to you at no charge. Just bring your people in and we'll get them beds and facilities.'
The Journal: Do you have any examples of asking for something unconventional from a supplier?
Hughes: We had to briefly go back to our tin can supplier we used for 20 years, but haven't since we switched to plastic containers a few years back. We asked if they could make some Folgers cans for us so we could get back on the shelf quickly. The good news was they still had our artwork and molds. So, we were able to leverage a relationship that no longer existed to get us back up and running. Of course, this shows that when you end a relationship with your supplier, you should do so on a positive note.
The Journal: Did the way your department handled the hurricane situation change the way supply management is viewed within P&G?
Hughes: Yes. One of the things that came out of the situation was a renewed or continued appreciation for managing the external relationships we have with our suppliers. Part of what supply management brings uniquely to this type of situation is an understanding of who's out there that can help us. If we need somebody to go drill a well, we don't usually have well-drilling equipment. But we can find out who can provide us with the equipment to go drill a well and actually get it done. The external view of the world that supply management has is something that is very much appreciated in an emergency situation like this. Our unique skill at figuring out what's available outside the company that we can leverage to help us out is what we do best.