David Poirier:National Grocers Co's industrial engineer

David Poirier:National Grocers Co's industrial engineer


IE visionary delivers the goods for grocery supplier


David Poirier, an industrial engineer, played a significant role in creating and launching the strategic vision of Canada's largest food wholesaler and retailer.
In 1981, when he graduated from the University of Toronto with an IE degree, he avoided the region's two largest employers, Ontario Hydro and General Motors and joined National Grocers Co. Ltd., to become that company's first industrial engineer.

The reason for choice in Poirer's word is - "I wasn't particularly interested in going into an organization where they could tell me with certainty where I was going to be in 2 years, 5 years, 10 years, 20 years. One of the things that appealed to me about National Grocers was they hadn't a clue where I was going to be. Therefore, I wasn't constrained by their stereotyping of what a career would look like."

Poirier's boundless pursuit of opportunities has served him and his employer well in the 17 years since. Poirier literally blazed his own career path at National Grocers and its parent company, Loblaw Companies Ltd., for whom he is now senior vice president of logistics, planning, and systems.

He has generated opportunities for more than 80 industrial engineers at the Etobicoke, Ontario, firm and inculcated the entire corporation with IE savvy. His skills in strategic planning and business systems reengineering helped National Grocers over the past 10 years double the amount of product going through its distribution centers while adding no square footage and a minimum amount of labor.

But it's Poirier's role as a visionary that has made the greatest impact. In 1993 he was one of the leading forces behind National Grocers' "Vision '98" five-year strategy to improve the company's performance in its eastern Canada operations for Loblaw. In January 1996 he took on his current job, helping implement the vision coast to coast for the 75,000-employee Loblaw, which has a total of 360 corporate and 547 franchise stores under a variety of banners, and wholesales to 4,723 accounts. The plan's success appears in the ledgers of Loblaw's 1997 annual report:

* Sales in 1987 totaled $8.631 billion, dipped in succeeding years, then slowly rose to $9.356 billion in 1993. Four years later, sales topped $11 billion despite losing $1.52 billion from curtailed U.S. operations over the same period.

* Operating income inched from $190 million in 1987 to $200 million in 1993 before leaping to $272 million in 1994, $320 million in 1995, $359 million in 1996, and $426 million in 1997.

* Return on sales, at 2.2 percent in 1987 and 2.1 percent in 1993, is now 3.9 percent.

The value of Loblaw stock has soared 400 percent since 1993. Correlating with these ledger successes, the company saw scores double on measurements of quality and employee satisfaction. "We've seen phenomenal results with improvement in quality," Poirier says, citing one distribution center that dropped from 14 errors per thousand to 2 errors per thousand in two years. Systems thinker or psychologist?

"Dave has been the chief architect and chief strategist for transforming that company," says D. Scott Sink, president of Learning Leader, a consulting firm in Moneta, Virginia, and an IE who has served as a consultant to Loblaw. "He's really transcended what I call traditional industrial engineering. The traditional industrial engineering mindset tends to use a lot of paradigms about methodologies for improving things; we tend to put boundaries around things. Dave has a multidisciplinary mind. Though he was trained in industrial engineering, he understands that succeeding means bringing an industrial psychologist's mind to bear." Indeed, when Poirier describes his own role and contributions as an IE, he devotes the bulk of his talk to employee behavior. You're likely to come out of the conversation with the impression that Poirier is the company psychologist, not its strategic planner, and that he's the activity director organizing morale-boosting events rather than the systems manager streamlining $11 billion worth of products through 20 distribution centers across the second-largest country (in area) worldwide. "Did somebody tell you I'm an IE?" he says, laughing. "I'm a psychology major," he jokes. But for Poirier, as a key to effective systems change, people's behavior is as important as process. "I'm very big on measurement and management systems within the business," he says. "But those are the things that IEs tend to know anyway The reason I focus so heavily on the people side is because that's the area that gets missed so much."

Poirier is a man of dichotomies. Co-workers and subordinates describe him as perfectionist and patient in the same breath. "He's extremely perfectionist," says Ronald Foti, vice president of industrial engineering for Loblaw Companies and a member of Poirier's 12-person management team. "Dave is always looking for the small details in everything. His bar is probably higher than everybody else's that I've worked with so far. But what really makes a difference with him is he's extremely patient. In eight years of dealing with him and working directly under him for six years, I never, never saw him lose his cool." Co-workers' descriptions of Poirier are dominated by praise and admiration. "Dave is exceptionally bright, just pure intelligence combined with a degree of astuteness; pragmatism, if you will," says Rob Almeida, a chartered accountant (Canada's equivalent of a certified public accountant in the United States) and vice president of development and reengineering for Loblaw Companies. "He has the necessary ingredients of leadership: courage, intelligence, and wisdom. There are a number of people who have been mentored and developed by Dave, including myself."

"Balance" is a key component of Poirier's philosophy, not only guiding his approach to systems reengineering but also serving as the foundation of his life. "Balance in life between serving your organization, serving your family, and serving your community, that's something I hold very near and dear," says Poirier. He also makes sure he keeps a well-balanced management team. Says Almeida: "If we get too young, he'll bring in more experience. If we get too old, he'll bring in more youth. If we get too pragmatic, he'll bring in college grads to bring in more theoretical thinking. If we get too theoretical, he'll bring in more operators." "Getting a mix of backgrounds and ideas can really bring out the best in everybody," Poirier says. "The other thing I've found is that people learn the most from those around them. So, to create an environment where there are significant differences in opinions and backgrounds - an environment of diversity in a number of dimensions - enables an individual to experience other viewpoints that help them shape and formulate their future decisions. It's the fastest way I know of learning in an experiential sort of way."

Poirier began his own industrial engineering education early in life. His father opened a series of textile factories and served as the general manager of each until assigned to open another plant. Poirier was born in Montreal, but his family moved frequently, including spending a year in Trinidad, and eventually ended up in Toronto for his high school years. His dad enjoyed engineering, though he wasn't formally educated, and he passed that appreciation on to his son. "He used to bring me into the plant and tell me how things operated, how they were laid out, and that sort of thing," recalls Poirier. "I always found that of interest."

Poirier attended Carleton University in Ottawa to pursue a combined degree in engineering and law. "I was interested in the mechanics of how things worked. At the same time I didn't want to be a highly technical engineer, and I always was interested in law as well - in the logic, structure, and strategy of it." After a year he decided the combination was too much to handle, transferred to the University of Toronto, and pursued industrial engineering, the perfect marriage of his avocations. "There's a strong parallel between law and industrial engineering," he says. "It's really around thinking about systems and structure and the bigger picture of things - looking at businesses as systems and models and being able to see the entire organization as a system. Law has a very similar kind of structure to industrial engineering." It's often said that attorneys manipulate cases by "turning on the finer points of the law." Some of that technique apparently stayed with Poirier. "He has the ability to zoom out and zoom in," says Sink. "He can get altitude - talk strategy and policy - for the firm, but he also has the ability to drill down right into the warehouse and be able to understand the small opportunities and make those things happen." Foti mentions the same strength: "He's always able to take something at a fairly low level and connect it with tremendous ease to the grand strategy - how something small is relevant to the overall picture." That year at Carleton also imparted what to Poirier has been a more important lesson in industrial engineering: common sense. It came from a chemistry professor. "One of the things he was a fanatic on was understanding whether a solution made sense or not," Poirier says. "If we put away our calculators and estimated what the answer would be, he'd give us full marks, plus some."

Poirier passes on the professor's lesson to all industrial engineers who come to work for Loblaw. Poirier's team once studied which of two warehouses should become a centralized site for distributing certain products, part of an attempt to get those products to the marketplace faster. At the start of the study, the two distribution centers were fairly equivalent options. Six weeks of calculations determined that one would save the company a total of about $25,000 over the other. "The problem was that in that six-week time frame, we lost about $75,000 in profit by not selling those products. There's an example of where it's critical to look at the value of the additional detail and accuracy We'd known at the beginning of the study that we hadn't omitted any major points, but in our zeal for the ultimate truth, we ended up missing a business opportunity by about six weeks. Time and time again, the first thing I look for in a problem-solving environment is what makes sense and what would approximate a reasonable solution. I think that's really the key to the successful application of industrial engineering. I don't want to diminish the point of accuracy in things; I think that's really important. But in people's zeal for accuracy I find they tend to lose the context of the problem."


Blazing trails Poirier's first employment with Loblaw was a summer of lugging cases at a Cash & Carry. Because National Grocers was becoming unionized at the time, he decided the company would make a good subject for an industrial relations class project during his third year in school. He interviewed the vice president of distribution and industrial relations, who offered Poirier a summer job doing small projects on centralization, scheduling, and cost benefit rationalizations. His senior year he again turned to National Grocers, this time for his thesis proposing that low-volume items be centralized into a single warehouse. He joined the firm full time after graduation. "And lo and behold we built it two years ago, so I guess patience is one of those values that pays off," he says. Landing in a corporation totally unfamiliar with IE concepts, Poirier thought he could have a dramatic impact on the company. "I thought coming out of school I could pretty well do anything I wanted to." He laughs and continues, "I quickly came to the realization that it was a little more difficult, and maybe that's why people hadn't done it before me." Nevertheless, it was only the first boundary Poirier was to cross within the company His current position is his ninth, every one a newly created job. He's never had an incumbent to serve as a benchmark, never had precedence to fall back on, never had a job standard to rely on or rewrite. "In some ways it's scary," he says, "but it's always been about new things within the business, so that's exciting." That, he says, is what being an IE is all about.


"It's been much more about creating possibilities than conforming to realities. I find it odd that we take industrial engineers trained anywhere from four to seven years, bring them out of school and make them masters of change, and then encourage them to follow career paths that everybody else for the past two generations has followed," Poirier says. "For me it's been a lot more exciting and dynamic to join an organization that's really about creation and possibility, and that's provided me with the kind of environment that's enabled me to create the depth and breadth of change that we've created within this organization." Along the way Poirier was fertilizing the company with his own IE approach to issues. In his first job as distribution project engineer he developed evaluation measurements.


His next stop was the finance department, where as manager of profit planning, he analyzed costs and revenues through the entire corporate stream. Before he began the position, the business operated in separate functional areas. "Finance did their thing, distribution did their thing, sales did their thing, and procurement or the buying group did their thing," he says. For the first time the company was looking at the costs and revenues associated with the entire process of serving stores. Poirier continued to advance quickly through the organization.

After his period in finance, he stepped up as manager of systems development, coordinating all the systems for National Grocers.

Then, only three years after joining the company, he became director of procurement administration and systems development to help Loblaw centralize the service divisions of National Grocers and its three sister companies within Ontario.

Now Poirier had experience in finance, distribution, and procurement to go along with his IE training, so National Grocers made him senior director of corporate development to deal with issues of conflict and commonality among the functional areas. "I wasn't an ombudsman; I was to apply basic industrial engineering and problem-solving skills to areas where people had conflict," he says. For example, distribution and procurement were at odds over effective use of warehouse space. Distribution wanted to keep as little inventory as possible so the warehouses wouldn't get jammed, whereas procurement wanted lots of product available for the stores. Poirier's solution was to charge the products a carrying cost, crediting distribution for congestion costs. Procurement made more accurate purchasing decisions based on inventory levels, while increased inventory became cost neutral for the warehouses. As inventory went down, efficiency picked up; as inventory went up, their revenue increased. The only staff Poirier had was a secretary; otherwise he had to draw on expertise from the affected divisions. "It was a good thing, because it required me to engage the people who were being changed in the environment that was being changed. Too often organizations hire consultants or change management people, either on their staff or externally, and they point to an area in business and say, 'Go change that, go fix that,' and it never seems sustainable. One of the reasons it isn't sustainable is they haven't created an environment that welcomes sustainable change."

In 1988 the company, recognizing Poirier's ability to cut costs, moved him back into distribution as vice president of development and management services and for the first time put the responsibility of managing distribution into the hands of an industrial engineer rather than traditional distribution people. Poirier began the work that would eventually double inventory flow without increasing facilities, while cutting as much as a week off delivery of some products. He says this was done project by project. "We approach it on three levels. One is very detailed and grassroots - determining what kind of equipment to use. The next level is determining what distribution center should carry what products. A third level is deciding whether we need distribution centers, what will they look like, and where should they be."

In 1991 he added information systems to his responsibilities and chief information officer to his ever-lengthening title - "I tried to get paid by the letter, but they couldn't afford it," he says.


In 1992 he became senior vice president of development and chief information officer, overseeing procurement as well. During this time industrial engineering became an institutional entity within the firm.


"The industrial engineering competency would not have been built into Loblaw if not for Dave," says accountant Almeida. "The integrated approach to performance improvement - integrated being people, technology, and process - and all three levers driving performance improvement, I think that's his legacy." Because of Poirier, one executive was convinced to hire an IE. While he was attending a conference in California, he bumped into Montreal native Foti, who was about to go to work for Intel. Foti instead joined Loblaw in 1990. Two years later he went to work for Poirier as the first of what is now an 86-person force of industrial engineers that is frequently called on by the whole company, not just distribution. The total number of employees in Poirier's division is about 2,500. "As we were learning new projects, the business became very hungry about trying to be more efficient," Foti says. "So from the small focus that we used to have, which was only a portion of the distribution centers, we moved toward transportation, and we also moved into what I call white-collar reengineering - into the finance group, into the retail side of it, into research and development, and into the logistics group. And obviously the business is growing very quickly, so we get involved in every new site design."

According to Foti, the growth in the number of IEs was the result of two business goals: more savings and faster change. The resources to do both were right there in the industrial engineering group. "That's why the group grew exponentially," Foti says.



Says Poirier, "We've considerably broadened the definition of industrial engineer from a person who did industrial engineering standards to a very capable individual who can effect change in a multitude of arenas and circumstances that will contribute to the success of the organization." Company visionary Having established himself as just such a person, Poirier was tapped to come up with a process of managing the strategies and tactics of Vision '98, a concerted, corporate-wide effort to make the company leaner and more competitive. While formulating the vision with help from consultants, Poirier learned what he considers now the most valuable fundamental: "Creating the right mindset for people for change was critical to the success of change." He draws his concept of systems change as a pyramid comprising four balls. The top ball is the investors' viewpoint of the business, the middle is management's view, the bottom right is the way the business is organized, and the bottom left is the way it is operated. "One of the problems businesses have had in the past is they've always looked for what I call the pink pill," Poirier says. "They're going for the simple solution. They'd like to buy a different way of operating." So they might look only at the organizational ball and institute training or incentives for employees. They may look at the operations and invest in new equipment or new processes. They may look at the investors and add or shed stores, or they may reshape management with a new cultural attitude. "We found there was a link among all of these four balls," Poirier says. "They're all critical to manage at the same time for effective transformation. That's where I really started to understand organizational change." For IEs, focusing on process change in the operations ball is not enough. Reaching a goal of cutting costs by, say, 10 percent may mean getting products out later, which ultimately doesn't serve the investor's need. It also may not align with the organizational ball because employees fear reducing costs will result in losing their jobs, so they have no incentive for change. "In the past when we'd gone through cost reductions, massive training programs, investment decisions, or strategic planning sessions, they tended to be in isolation," Poirier says. "And what we needed to do was create a comprehensive solution for everything." They started with the company's 65-word mission statement. "It was an awesome mission statement," Poirier says. "I used to shove this in front of people who were new to the organization and let them read it for two minutes and take it away Then I'd ask, 'What does it say?' Nobody could answer." So the company tossed it and posed the question, "What is the enduring purpose of the business?" Says Poirier, "We ended up coming to the conclusion that our purpose was to serve the daily needs of our customers. That's not particularly flashy. The merchandising guys didn't really like it because they couldn't splash it on the ads in the paper. So we said we'll stick it on the wall until we come up with something better. Now it's 1998 and we still haven't come up with anything better. It's compelling, and everybody understands it." The statement melds with Poirier's philosophy to look at context, not the finer points. "We've gone through remarkable changes as an organization because we're not just about selling another tin of baked beans. What we focus on now is the understanding that the value of our organization is directly linked to the lifetime value of our customer base. And really, every organization is." Loblaw currently serves about 7 million shoppers a week. To build business, the firm needs to do more than entice new customers, an achievement which, in the grocery business, adds considerable merchandising expenses in the form of "loss leaders," products such as 49-cent paper towels sold below cost to attract people into the store. The company can more effectively build business by holding on longer to the customers it already has (industry surveys say the average consumer stays loyal to a particular supermarket for a little more than three years) and getting those customers to spend more money in the store. "What happens if somebody buys one more head of lettuce in our business?" Poirier asks. "What happens if they put one more President's Choice [Loblaw brand] item in their basket? What happens if they substitute two President's Choice items for two national brand items? The increases in profit if we get every customer to make those small incremental changes in behavior are huge, absolutely enormous. Just by any one of those things we'd get a 50 percent increase in profitability" To change customer behavior, the company decided it simply needed to provide better value. With this simple premise, "to get customers fresher product, faster, and at lower cost," Poirier began a system-wide change of the entire supply chain to be process-oriented instead of function-oriented. Equally important was that employees see their roles as part of the end result, from the stocker in a local store to the accounts payable clerk in corporate headquarters whose mishandling of an invoice could cause a warehouse to run short of inventory, in turn causing a store to be out of stock on a certain item and forcing the consumer to seek the item from a competitor.


This is where the industrial engineer merged with the industrial psychologist. "The thing that was really key to me through our training was that we had to create a compelling reason for employees to contribute significantly to this organization at a time when labor was somewhat tight," Poirier says. Salary, benefits, and incentives were only part of the equation, he discovered. "A compelling reason for people to give their all for an organization can only be brought about through a values-based organization. So we spent a lot of time on values within the organization. We didn't invent or create the values. We discovered the values within the organization - learning, serving, excellence, and integrity." Leaving fingerprints Learning goes beyond training to letting employees experiment and take risks. Serving means not only serving customers, but also serving stakeholders and fellow employees. Excellence deals with quality improvement. "Some of the work was with systems, and the rest of it was really about the people, and getting folks to understand the impact of mistakes that they made and measuring those mistakes, giving people feedback on the frequency and the cost of mistakes," Poirier said. "Give people a real sense of ownership of the quality. Before, they didn't care because they weren't told about it." The fourth value, integrity, fires Poirier's passion. "Integrity is not just about right prices in the stores, and it's not just about telling the truth. Integrity is creating an environment in which people can be honest and open and direct and really be themselves. They don't have to come to work and wear some type of armor." Or even a tie. While the company employed some superficial measures such as casual dress days, it also instituted a culture that recognized that people come to work with different core values, different ways of expressing themselves, and different comfort levels. "Imagine the energy drain in any organization in which people have to put energy into not being themselves. If we can create an environment where people are being themselves, we'll probably get about 30 percent more energy out of everybody," he says. "That's what integrity is really about for us, so that when people come to work and then go home at night they don't kick the dog, grab a six-pack of beer, plop themselves in front of the TV, and curse about what a miserable life it is. "My dream is for everybody in this organization to go home at the end of the day and feel great about how they contributed to the success of this organization, and how in turn this organization recognized how they've played an important role in its success. So at the end of the day, at the end of the week, at the end of the year, when they look back, they have no regrets about their career with this organization, that they can say they made a meaningful difference in the success, they can see their fingerprints on this organization, they've made a tangible difference. "When we've got 75,000 employees like that all feeling the same way about their contribution to this business, whether they're a part-time clerk in the store or the president, imagine how you'll feel when you walk into the store and buy those 49-cent paper towels. The store is going to feel different." Poirier already has members of his team feeling that way. Foti says IEs courted by other firms prefer to stay at Loblaw, where they are encouraged to look far beyond their specific job duties. Almeida says part of the fun of working with Poirier is the trust. "I never have a doubt in my mind when I interact with Dave as to whether or not he's looking out for what's in my best personal interest," Almeida says. "From pushing me to go for more training and education to pushing me to take on situations I consider high risk, he's empathetic in any situation: what's the right thing to do for the business and what would help Rob grow the most." For his part, Poirier continues to push himself. Turning to Loblaw's visions for the next five years and beyond, he observes, "There's loads to do. Loads. There's absolutely no shortage of opportunities." "Dave is always looking for the next thing," Foti says. "And before just jumping into the flavor of the month, he really looks at how this thing can fit into the overall vision or the overall organization and make sense. Dave is always able to look into what would make us unique and what would be hard to copy and really give us a competitive advantage. And I think by having him always looking ahead, that will create a culture that is obviously not perfect but that is definitely in the right direction."

While Poirier desires that all Loblaw employees leave indelible fingerprints, he downplays his own achievements. "It's not about titles or roles or offices or responsibilities or public acknowledgment," he says. "It's having the opportunity to be part of something and help make it great, and carrying on from being great now to being great in the future as well." Clearly, Dave Poirier is someone who makes an impression. At Loblaw, his legacy is everywhere. In an understated way that Poirier might appreciate, Foti says, "You know what? He's not just going to leave fingerprints."


The Dave Poirier Files Favorite saying: "There's no limit to what a person can do or where he can go if he doesn't mind who gets the credit." (From David Williams, former president of National Grocers. Poirier has this saying on a desk plaque.)





http://www.entrepreneur.com/tradejournals/article/20950469.html
Industrial Management • May-June, 1998



David Poirier is now Chief Executive Officer of THE POIRIER GROUP, a consultancy organisation.

Contact address:

5580 Explorer Drive,
Suite 509 Mississauga, ON,
Canada L4W 4Y1
Business: (+1) 905-624-5855
Facsimile: (+1) 905-624-4940

david.poirier@thepoiriergroup.com



David Poirier is co-author of CHAPTER 1.2, "THE ROLE AND CAREER OF THE INDUSTRIAL ENGINEER IN THE MODERN ORGANIZATION" in Maynard's Handbook of Industrial Engineering, 5th Edition.