CEO Newsletter
December 2003
Observations from Tom Weisz, President & CEO TMW Systems
Dear Fellow Executive:
I'd like to extend my gratitude to all of you who attended our 17th annual TMW Systems User Group meeting this month in Cleveland. If you were here, I'm sure you will agree that User Group was filled with useful opportunities to learn and network that can't be found elsewhere. If you did not attend this year, I strongly encourage you to start thinking about attending next year's User Group, which we are already in the beginning stages of planning.
To understand why I believe User Group is an opportunity that none of our customers should miss, here are some highlights of events from User Group 2003. Copies of some of the informative material presented at User Group are also available (see below for details).
Keynote Speakers
Directly back from Iraq, Brigadier General Charles Fletcher, Jr. was gracious enough to join us. General Fletcher is the Assistant Deputy Chief of Staff for the U.S. Army, and was the person primarily responsible for logistics in the Iraqi war. In his keynote address, he shared details of the Army's battle plan, stressing how important logistics was to the endeavor, and how crucial planning ahead is. To me, the enormity of the mission and the logistical accomplishments of our troops is illustrated by just two of the many statistics that General Fletcher sited. First, the distances. Did you know that the distance from Kuwait to Mosul is twice the distance from Normandy to Berlin? In WWII, it took nine months to cover the ground our troops covered in the Middle East in a little over a month. Second, the amount of stuff transported. The amount of material moved in the Iraqi war was astounding. General Fletcher noted that among the tens of millions of tons of material that was moved, 54 million gallons of diesel fuel was hauled for hundreds of miles. That's enough fuel for 2000 rigs to go from Bangor, ME to Bakersfield, CA. His speech left no question as to how important logistics was in winning the first phase of the war. General Fletcher ended his speech with a moving salute to soldiers.
Retired three-star U.S. Army General William "Gus" Pagonis was the other keynote speaker, taking time out from his post as Executive VP of Logistics for Sears, Roebuck and Company. General Pagonis led the logistics operations for the first Gulf War, receiving high praise from General Schwarzkopf. In his position at Sears, General Pagonis has been instrumental in revamping the retailer's operations, and he has been one of the key players in Sears' dramatic turnaround. In his keynote address, he shared many of his management strategies, including the importance of having one point of contact for the success of any operation, on both military and corporate battlefields.
Executive Session
General Fletcher and General Pagonis were joined by Bill Parry, VP in charge of Logistics for Giant Eagle, and Martha Germick from Shell Lubricant, as panelists for our Executive Session. This session has always proven to be valuable, and this year was no exception, with many important industry issues discussed. One key topic of discussion was the new hours-of-service regulations that go into effect on January 4th, 2004. It is agreed that there is still much uncertainty about the effect that these changes will have, and that the changes will impact different carriers in different ways. All panelists agreed that issues will arise as the changes roll out. Most feel that the 14-hour on-duty rule that states these 14 hours must be continuous will be the real limiting factor. From the shippers' perspective, the new hours-of-service regulations will not be an automatic license for carriers to raise rates, and both shippers and carriers will need to work together to navigate these uncharted waters. Carriers will need very detailed cost accounting and reporting systems in order to justify any rate increases.
Closely related to hours-of-service, another topic discussed at the Executive Session was how to manage and collect on detention charges. The general consensus is that there is much confusion in the industry on this topic, and the standards set to handle detention charges have not gone far enough. Everyone needs to protect their interests, but an element of fairness needs to be built into the system. Up-front communication will be a key to the solution, as will determining ways to decrease the cost of product handling while increasing asset utilization.
Innovation was the final topic discussed at the Executive Session, with an emphasis on setting processes in place with the willingness to adapt. Solution-oriented thinking is crucial to being an innovative carrier, as is changing the metrics used to measure effectiveness, and ongoing dialogue and collaboration. Planning and preparation are the key to successful innovation so that there are no surprises.
The discussion among the shipper panel and the 40 some carrier executives was most informative. One well-known industry leader made the following comment to me after the session: "I spent two hours each way on a plane for this two-hour session. While on the plane, I was thinking that spending four hours for a two-hour session was not a good use of my time. But, Tom, this session was well worth it. I am coming back next year."
Call me. Let's keep the discussion going.
Technology
Of course User Group 2003 offered opportunities for technological learning, including over 100 classes that took place over the four days, as well as the latest and greatest technology available from our vendor partners in the vendor showcase. These resources offered the opportunity for users to address operational challenges and maximize their technology investments.
Beyond the classes, I reviewed TMW Systems' performance from 2003 in my opening speech, as well as gave a preview of some technological initiatives on the horizon. The theme of User Group 2003 was "Results Now!" which is the name of one of our newest and most exciting initiatives. Results Now! addresses the need for immediate access to information and can help you operate your business proactively, by giving you information to make adjustments as circumstances dictate in real-time. This initiative will enable you to identify the key performance indicators needed to run your business, what standards to compare performance to, and the ability to communicate the standards and expectations of your company to everyone in the organization. It is a proven way to measurably improve your business. Many of the companies who attended User Group have already seen the improvements that Results Now! can generate, and I encourage you to talk to us more about what this initiative can do for your business.
Networking
This year, we had over 550 attendees from 140 companies. More than 51% of them were managers and executives. I am proud to say that User Group has become one of the premier trucking conferences held each year. This conference, is all business with a little fun mixed in at night. It is a unique opportunity to learn how you can measurably increase your company's productivity.
Although the classes are a large part of this learning, much of the "key" learning comes from talking with colleagues from other companies who have similar challenges, and comparing notes about what works and what doesn't. Networking opportunities have consistently been rated as an important reason why people come to this event. It's the casual conversations about real-world situations and industry issues that can help us learn from one another. And the main benefit for all of us is how the sharing of this knowledge makes each of us stronger, and strengthens our industry as a whole.
This letter is not only a recap of User Group 2003 and an invitation to User Group 2004. It is also an invitation to stay in contact with me (just hit reply to this message) and with our TMW team throughout the year. Let's take the momentum from User Group and continue to build on it as we aim for a happy and prosperous 2004.
Cordially,
Tom Weisz
President & CEO
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