Peter Dill - A Career in Supply Chain

Peter Dill has had 30 years of experience in Supply Chain. His experience spans across several industries and sectors of the supply chain. 
Tune in for insights to what the trends are moving into 2024.

Check out his book on Amazon: 
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Transcript

Jeff Davis: 0:53

Welcome to another episode of Chain Reaction Tales from the supply Chain Front Lines. today we have with us a special guest, somebody that actually goes back to my past and to his past. We've worked together. And a customer vendor relationship in one of his previous roles. Peter Dill is a 30 year supply chain and procurement veteran in the business here in Houston. Currently serving as a, as a senior manager over Huntsman Chemicals. Previously He was a president at I S M in Houston. Also he served our country as a formal naval officer. So I'm very honored to have Mr. Peter Dill here as a guest on chain reaction. Peter, did I miss anything?

Peter Dill: 1:40

Well, thanks a lot. I appreciate being here, Jeff, and certainly our relationship in the past and, and even going forward. So yeah, I've been in this space. Supply chain procurement for about 30 years. Spent, cut my teeth on supply chain and General Motors where I bought in the direct indirect side. Did some logistics there as well. Sea the logistics where Jeff and I knew each other from buying and selling ocean freight around the world. And then F M C technologies, buying on the oil and gas side, subsea type stuff. So I, I tell people about, the only thing I haven't bought is food. As far as going back and forth, But really, really enjoyed it, enjoyed the global aspect of it. Spent 16 years living overseas, doing various things,

Jeff Davis: 2:21

I'm gonna start off with a, with a question. I know you and I, we've been talking for a little bit here off camera, but can you maybe go into the difference between direct and indirect supply chain or procurement?

Peter Dill: 2:37

Absolutely. So for folks who aren't so close to supply chain direct is anything that, that you buy that feeds directly, really bolts on, or you send out the door to your customers. So for computers, it'd be computer chips for cars, it'd be car parts and metal and, and lighting and seating and those types of things. For the chemical industry, typically we buy one chemical, do some stuff to it, refine it, and sell it as another set of molecules for suppliers to do things with it. And sometimes that varies on the indirect side. Examples of those things would be everything else. So for instance, travel computers that everybody would use furniture the machinery in your manufacturing plant. The buildings, really everything else that you need to still, it would be another thing, everything you need to make that business run. Sometimes, depending on the company, something could be direct when it would be indirect. Another great example of that is say credit cards. Most companies credit card and that service would be indirect. However, if your company is MasterCard, that's a different story. So that's the main difference between direct and indirect. Both are vital to an industry typically, or a company. Typically direct spend tends to be three quarters of what you're, what you're spending on.'cause that's where you spend most of your money. But as you can imagine, if you're suddenly buying or constructing a, a manufacturing plant or a chemical plant, that can be a big spin and that can be millions, that can be cap.

Jeff Davis: 4:07

you have had roles in both, right? You've done indirect, you've done direct. That's correct. Do you have a favorite? Do you have a preference? I,

Peter Dill: 4:16

well, I, I had, I hate to say I have, I have a preference. I, I've, lately, in the past number of years have been more on the indirect side, the thing that. The indirect space tends to be a much wider and broader set of categories. So if you can imagine say here at, at Huntsman there's a lot of different chemicals to buy, but usually you're assigned a category whether you're indirect or direct. And typically on the, on the direct side, you. You put out biz, you do those things, but you're dealing with a smaller group of categories.'cause we never have enough people at any company to do what we need to do. And, generally, you know, that category deeper and you can really get into a lot more of the cost drivers and those type of things. Typically on the indirect side, most leaders and managers and individual contributors are responsible for a wider variety of, of things still in the same general area. But you, you tend to be more of a a master of many more things. Many more categories So it can be. frustrating'cause you sometimes you can't get as deep into a category as you want as far as knowledge base, but you have a lot more variety, a lot more, I will say excitement and I'll put that, put that in a good way. On the indirect side.

Jeff Davis: 5:29

So let's get into excitement. The past, I, I always joke with my family that nobody ever knew what I did for a living. Un until around 2020. and then all of a sudden I was immediately catapulted to the most popular guy in the meeting.'cause it's always been, we're just trying to get with the logistics guys and the supply chain guys. all of a sudden I was meeting with presidents of companies and fairly high level. We were very important for a small window of diamond. now my. Family knew what I did Take us back to your side of Covid and what that looked like in terms of bottlenecks and where you see us now and moving

Peter Dill: 6:17

forward. Okay. Absolutely. everybody has their covid stories and first of all, I wanna echo what you said about. Business in general, understanding a lot more about supply chain and wanting to know more about supply chain during Covid. And that was echoed at at the recent I s m national conference. I just attended up in grapevine, Texas. We had about, over 2000 supply chain professionals there including an interesting keynote speaker named George Bush who had had some interesting things to say. I'll tell you a really interesting story about, about Covid. Everyone has them and a lot, a lot of have'em on this particular topic. So we were I got tasked to lead a team for, for national indirect on P P E masks, just think masks and those type of things. And I think everybody had some of these stories, but mine is. That we needed masks, we needed'em fast, nobody had'em. Or if they, if they did have them like a Grainger, one of these major distributors, they said, well, we've gotta prioritize hospitals and some of these other areas, which, which certainly is understandable. You think about things like supplier relationship management, that's when your relationships really happen. You're not starting to do anything under the table or legal, but you're trying to leverage those relationships to take care of your company. we were really struggling at one point. And so I said, well, I'm going to get out there and get creative. So what I decided I would do was I, go straight to Home Depot. And of course my management and teams around me said, that's not what you do. That's not how we buy. we don't go to Home Depot and buy masks. well, everyone else I've called the normal channels are saying no, don't have any, So I went over there and asked and talked to the manager and, and, and I was literally gonna buy things off the shelf if I had to. If I saw a pallet of those suckers, I was gonna pull out my credit card and buy it. Right. Which is also basically breaking the rules too, as, you know, you have to set up a contract, blah, blah, blah. Well, to to, to my little bit of surprise, not only did they not have pallets on, they didn't have sort of any, I bought what they had so we could bring something back, but it wasn't, wasn't anything significant. When you talk about. Helping with a a, a major chemical plant. And then I thought I talked and just started talking. I said, well, what do you think? Who knows? He goes, well, I heard tractor Supply might have something. So I thought, this is really getting funny. But I was just enjoying myself. So I said, I'll go over to Tractor Supply. And I said, what do you got? You know, maybe in the back or something like that. Is, is, yeah. As maybe some of your listeners know, they're known for being a farm and implement type store. They literally sometimes are selling not only. Hammers and nails and, and feed for, you know, farmers. But they're also, have little chicks, live chicks in the background and little pens sometimes. Anyway, so I walked in there, just thought I'd talk my way and see what happened and they said, well, I, yeah, I've been a few people asking, I don't know. well, we might have a few in our. In our warehouse in Tennessee. I said, really? He said, yeah. And I said, well, how many do you have in your warehouse in Tennessee? He said, 10,000. And I pulled out my expense card and said, I'll have those and I'll take'em right now. Now I will say it took, it took about an hour and a half of two hours of talking to so and so and this, that, and they weren't used to somebody doing that. I wasn't used to doing that. That, quite frankly, isn't even authorized at my company. Yeah. But I had the, I had the Authority to make that decision. Wow. On track. We weren't doing all the things we normally do, but that's the time you gotta get creative. Yeah. And, and I'll tell you, I went back there a week or two later and somebody else had figured that out and they didn't have anymore. But that, that's the kind of example of creative thinking. Sometimes you have to do, and you and I know about in the logistics end of things, ocean freight, air freight. Sometimes you have to get creative on a regular basis. So that, that's my covid story. And I guess the example would be you know, like, like the book we'll talk about a little bit. You control what you can, you get out there, do what you need to do make sure you have the authority from your company to do it. But sometimes you gotta get out there and get after it. You

Jeff Davis: 10:14

have to stretch it. Yep. And you know, the, the. you had to do a lot of maneuvering during that time and Yeah. You did something that's out of the ordinary, right? You were going up and talking to people and it's Not a topic for today, but I encourage so many people, my kids included, who one who's looking for a job pick up the phone, go talk to the manager face to face, and ask him what you need to do to get that job. Because absolutely I'm finding that people to often just accept the first answer is the only answer. Or you know that

Peter Dill: 10:54

there is no, well, and I'll, I'll say something real quick about that. I learned from somebody in sales recently. He said, you know what, no means not yet. And I said, no, I don't know. Well, not yet, but it also means next opportunity. Yeah. Well, I like that. And understand, you're gonna get a lot of nos in this world, especially in the job market, whether you're looking for your first job or your 23rd. And yeah, that's just part of life. That

Jeff Davis: 11:15

is right. And and you know, me from a, as a, as a vendor, right? I don't, I don't accept that. No. It's a matter of finding where, the challenge is, right? And so when you're actually a, a customer who's trying to find something, you gotta go and, and be more You got to push, push, push. So, yeah, I like that you went to Home Depot and even though your company boundaries would not let you, so we talked about the categories and, and the differences between direct and indirect and where you guys were at C. I know what, what I see and what I read in terms of various industry sectors and what the current state of affairs is, and we can kind of extrapolate data to what that means. But can you kinda give us an idea of what the chemical sector looks like pre covid covid, and then what's happening now in your industry?

Peter Dill: 12:17

Well, I'll, I'll share some information that's, you know, publicly available. And again, I'm more on the indirect side, so I'm buying to support our, our our chemical plants. But we, we recently had a earnings report and, and some of the things that, that our c e o shared in included the following. So a lot of our customers, and I think customers of chemicals are, are doing the same thing. They're destocking. So in other words, they're using up the inventory they already have based on inflation and other things going on. So what does that mean? They're using up the inventory, they have to do whatever it is they need to do to make plastic parts and those type of things. But they're, so, they're holding on buying new stock from companies like ours and others, so that, that's, that's affected things. Also products and different things going on. Our, our company has a, a fair amount of focus on construction and with the, with the inflation. Not a lot of new homes being built right now. Certainly not, not many. And so when we talk about things like insulation and your walls and, and fiberboard and those kind of things, that affects a lot of chemical makers. So those kind of things are going. The other thing that's a, a key factor I think a lot of people in the chemical industry know is that When, when you think about chemicals and what all's going on out there, there's a certain amount of cost involved in making chemicals and also the energy for the chemicals themselves and also the energy required to do so. So, for instance, the price of natural gas. It's currently six times in Europe. What it, what it is here in the US It used to be 10 times, and a lot of that's being affected by, of course, the Ukraine situation. So then it gets into, well, should, should we ship those chemicals over here from the us? Should we dial down production in Europe? Maybe a little bit of both. You know, I can't get into a lot of those details, but that has a big effect of what's going on in the chemical space and also how is Europe gonna produce energy going forward when they're not, you know, taking the pipeline over from, from Russia and those type of things. So that has a big effect on, on what's going on. Certainly also the the covid situation over in China as this lockdown is, is dialing down over in China demand and need and those kind of things is ramping up. So that, that's, that's creating, we hope that creates more demand. The other thing I heard over in at the supply chain in I s M conference out in in Dallas was about when do we think a recession's going to happen? When do we think it's not? What I'm hearing from some of the economists is more of a softer, shorter recession in the second. Third quarter of of this year. So we don't know, you know, certainly economists have a big caveat at every prediction they make, but that's certainly what, what we're hearing, what we're, what we're planning for where we are.

Jeff Davis: 15:01

So I, I kind of wanna hammer down on that natural gas price'cause it is six times higher in Europe than it is here. So you're, you're, that leads to a, a much higher feed stock. To your product, right? Yep. And your industry's product in Europe, their warehouses are full, that they're depleting. Are they running or is, and this is a industry question, are you seeing factories over there run kind of as a are they closing those down? Are they putting'em on hold or are they gonna be looking elsewhere to buy supply?

Peter Dill: 15:39

That I don't know.'cause I'm more on the indirect side. Okay. So I, I really can't comment on that.

Jeff Davis: 15:44

Okay. I was just curious.'cause I, I feel like I read that somewhere. Like that's a, that's a concern for Europe and Sure. Sure. So on the indirect side, how are you guy, I guess the direct side gets affected by your entire Or affects your indirect spending and budgets as well. Right? Because if plants aren't operating at full, then then indirect budget goes away.

Peter Dill: 16:13

Yeah. It doesn't necessarily go go away, but I think your comment is more accurate to say that it certainly gets affected and, and we're certainly infected by the inflation. Of, of different things. So for instance, one of the categories I have is travel. And we think those, so that's airline, that's, that's rent car, that's hotels and those kind of things. So on one side of the fence certainly personal travel outside of what I do is roaring back. People have this pent up demand to get out and travel and do some of those things, and they're spending their own dollars to do that or not. Some people are saying, well, we're just gonna save because we don't know what's happened this recession, or maybe they're being hit by the high price of food and those things. On the business side fair amount of travel is coming back because people, sales and procurement and those kind of folks do need to get out and get face-to-face with their customers, as we talked about before. But as we know on the travel side, think of the airlines, their business really was cut in, in many cases, most cases, 90% ways crazy when Covid hit 90%. You can imagine any business taking that type of a hit. That's incredible that they're even still here. So what, what are we balancing there? So a lot of times when you have a situation like this where you're saying, well, we wouldn't, we need those purchasing supply chain professionals. Get up there, do some bids and, and save us some money. Well think about that for a minute. Keeping our airline example alive the time to, I, I know that United has just ordered got a huge order book for, for new planes.'cause they're, they're betting and they're saying we're, we're, we're staying in business and we're, we're betting, we're expanding. But you, you can bet that, that that doesn't mean prices are going down for travel, down for tickets on the, on the contrary. So maybe it's not the best idea to say, Hey, I wanna run out, run right out there and do an airline bid, because guess which way those prices are going with all of the airlines up. So you have to really be strategic. Think about what you're doing. Maybe the best thing to do is just, you know, don't wake a sleeping dog or maintain what you've got or hold what you've got. You know, I can tell you but with hotels, you, you need to get creative and it comes back to what we're talking about. Let's go talk to people. I'm not gonna name names, but I went over to a hotel recently, one of the major chains during Covid. They said, Hey, would you like to come over and see our hotel tour? I'm like, yeah, I'd love to see what we're buying, what the facility's like. This hotel manager said, look, I wanna show you this place looks great. We, we, we stuck to our guns and we went ahead and did this renovation in the middle of Covid, even though it cost'em some money and they weren't. Having guests in their facility, but they thought maybe that's a good time to do this. Okay, great. And I was just there to tour, but we got to talking and he said, well we'd like some more of your business. I said, well, that's not really happening right now. And, and, and where it happens, it needs to be on a limited basis. And, and, and they said, well, what would it take to get some folks in this, in this nice higher priced hotel? And I said, well, kind of this range of price. And they said, well, you don't understand. That's a, that's a lower level hotel.'cause we, you know, somebody needs to stay, come stay where we are, even to get to travel. They would spend the night at a lower end, not lower a lower end hotel than what this hotel was. And they said, you know what, we'll give you that price because we'd rather have somebody in hotel, our hotel maintaining break even rather than nobody in hotel that we've just done a renovation for. That spilled over to another hotel and I lengthened out the rate and kept it even after Covid subsided for as long as I could. So you gotta really have to get creative, talk to people, see what their needs are, see what your needs are, and see where you can connect and make some sort of something work for both sides.

Jeff Davis: 19:41

Heads on beds on that story. Heads on beds. Yep. Absolutely. But what it sounds, you know, we, we kind of went into the natural gas prices and then. Home Depot, COVID, and I really like how you touched on the travel and companies are having a different approach it sounds like, but some are going ahead and they're. You know, United is buying a whole bunch of planes'cause they're banking on travel prices going up and companies are gonna go ahead and do that. I almost wanna say that the, there's a theme to your story that you control what you can.

Peter Dill: 20:19

Yes, absolutely.

Jeff Davis: 20:22

Absolutely. Would you like to elaborate on

Peter Dill: 20:24

that? Sure, sure. So, and, and it actually relates to Covid, and I know you and I haven't shared this, but I'll tell you a little bit about how this got started. So during Covid, everybody's working at home. My wife and I are no exception to that. And she decided to, to embark on getting her c p a. And that's about like getting your law degree. If, if, if those of you in the industry are familiar with it, it's, it's studying for, I think it's three or four tests, which are each basically a day long. And you gotta know your stuff. So when I would say things like, Hey honey, let's let's go ride bikes. Let's go out for a date. He says, you better figure out something else to do with your time, Mr, because I've gotta study for this test. So I, I thought about it and like everybody else kinda locked down. So I started thinking about some other things I've done. I'd read a book called make Your Bed by Abu McRaven, former Head of the Seals. Also former head of all special forces. And then later on Chancellor of of University of Texas.

Jeff Davis: 21:16

I, I've watched his speeches.

Peter Dill: 21:18

Exactly. So if you watch his speech, you'll see that's, that's an incredible read. It's a very short read, which I also liked. And so I took that book back to my, when I just started Huntsman gave, read through my team and, and the whole purchasing. Department ended up reading it later on, including senior management, just some good life lessons there. And I said to myself, why couldn't we have make your bed for purchasing? So that's exactly what I did. I wrote a put together manuscript sent around to some of my former bosses and, and, and supply chain professionals, even Tom Derry, who is the global c e o of i s M, and said, what do you think? Do I have anything here? And he said, absolutely. To the point where he endorsed it. So what it ended up with, Is this book right here, control What You Can. Very short book, very thin book, but also right to the point. Basically talks about lessons I've learned and things that I would recommend less. Chapter one is clear requirements. When you think about things that have gone wrong in any kind of major or small sourcing exercise, you can trace it all back a lot of times to the supplier, the engineer. The customer, your team didn't understand what was required. And it's not just one conversation, it's, it's, it's several. The example I use is very simple. When my, my daughter was still at home, I'd say, honey, you need to be home at a reasonable time. That's failure. That's setting us up for failure. She may think it's two 30, I may think it's 10 30. Let's talk about it. Let's debate about it. Let's argue about it. Right? But let's, let's understand what's gonna happen at 12 or whatever. It's, we agree with. If somebody isn't home or those type of things, you can apply this to your spouse, your dog, your kid, your supplier, your engineer, your team. When I, I teach this, this book and this class at Texas a and m, university of Houston and several other conferences. I'm heading down to the downstream conference here in in June in GAL and invited down, down to talk about it there and talk about it at that conference, in a logistics conference. But when I talk to students, I say, Your professor, if he or she gives you an assignment for that's, and gives you two months to do it, the time to say I don't understand what's required is not the day before it's due. Same thing in business, same thing with suppliers and those kind of things, and a big part of his relationships as well. I need to have a relationship with my team or I'm giving them, if I give'em an assignment or request. They feel comfortable saying, Peter, I don't know what you're talking about. Or Peter, this is, I think what you mean. And I did the same thing with my boss. I think this is what you need. Is this what you're after? Yeah. Here it is. So simple anecdotes, two or three page chapters, one line summary. So I've gotten a lot of good good compliments. The, the two best I've gotten is from. A salesperson who said, I love this and I'm a salesman, and by the way, these aren't secrets. I want everybody to know this. I want salesmen to know these, these things I've learned and take advantage of. And from my mother-in-law, she read it and said, I don't know anything about purchasing, but these are life lessons. So that, that was a bit of a feather in the cap too. Yeah.

Jeff Davis: 24:16

I mean if a salesperson and then if a ven, if your mother-in-law compliment you, that's always a plus. That's always a plus in my book.

Peter Dill: 24:23

Well, I've got several global leaders, global supply chain folks, again, including Tom Derry and, and several other folks at Exxon and, and major companies have, have had me speak and talk about the book at those areas too. So very positive. It's, it's, it's, it's one of my passions to be able to share those things.

Jeff Davis: 24:39

That's awesome. So just gonna wrap it up here, but I think this has been, it's been enlightening. I mean, I love the stories that you have going back to Covid and, and also how you got into becoming an author, you know? Yeah. So that's good stuff. How can people find the book and how can they get in touch

Peter Dill: 24:58

with you? Well, absolutely easy as pie. Just just log on to Amazon and you can find it. Control what you can. Peter Dill. You can find a hard copy. You can find a soft copy. If you wanna see, see one of my presentations, just find me on LinkedIn. I've got a a video presenting presenting the talk and those kind of things. I'm happy to come share that With teams or groups or students or those type of things.'cause I really believe these lessons and, and I'll tell you right now, they're not.'cause of all those things I did right. Just wanna share, share those things where from the navy, from my family, from business and those things that, that other others can take advantage of. I.

Jeff Davis: 25:31

Yeah. Yeah. It's paying it forward, right? That's absolutely right. And I, I can relate to the same, right. And so fantastic Peter. Thanks so much. And, and everybody go to Amazon Control what you can by Peter Dill. I'll leave a link in the show notes so that you can get it, whether it's on the, the Apple Podcast or, or on this Google podcast. But control what you can on amazon.com, by Peter Dill. Peter, thanks so much for coming on and, and sharing your, your wisdom and experience and As every, as always everybody. We are sponsored by Bridgestone Capital that is passive income for supply chain professionals. If you want to get in touch chain investor.pro and download that ebook. thanks so much and, and I look forward to being in touch and congrats on the book.

Peter Dill: 26:26

Alright, thanks so much.