Interview: Agile Supply Chain Helps Drive a Company’s Financial Success

        (Pic Courtesy: David Stokoe)

A smoothly run supply chain and procurement department operates in anonymity, and that’s traditionally been the case at Vista Outdoor, according to David Stokoe, Vice President Strategic Procurement and head of the company’s Supply Chain Center of Excellence.

“It’s said that the best supply chain is the one you never talk about,” reads a slide in the deck Stokoe uses to present Vista’s latest procurement wins and accomplishments.

But when an agile supply chain helps drive a company’s financial successes, it’s hard for that department to escape the spotlight — which is precisely where Stokoe and his team find themselves after Vista Outdoor was named one of the World’s Top 50 Procurement Organizations.

Vista Outdoor was among 51 publicly traded companies in 17 industries to receive a Procurement Best-in-Class award from Beroe Inc, the global SaaS-based procurement intelligence and analytics provider.

Even more impressive, Vista Outdoor took gold in the Leisure Products category, beating out Hasbro Inc. (silver) and YETI Holdings Inc. (bronze). Vista was the best of the best for adeptly overcoming such procurement challenges as supply disruptions due to COVID, economic hurdles like inflation, and energy security concerns related to both the war in Ukraine and historically high electric and gas prices.

Beroe ranked public companies using a Best-in-Class Index that measured four parameters: cost of goods sold as a percentage of sales, inventory as a percentage of sales, payables as a percentage of sales, and gross margin return on investment. When that algorithm was applied and those numbers crunched, it was evident that Vista Outdoor outclassed the competition.

“You don’t have to look too far to see we did better than the average — and it’s certainly nice to finish ahead of YETI,” Stokoe said with a chuckle.

‘Perspiration and inspiration’

Stokoe was quick to point out that such broad metrics can’t entirely be attributed to Vista Outdoor’s procurement and supply chain efforts but instead to every department at the company, every employee working toward organizational excellence. As he put it, winning this award required a “whole lot of perspiration and a whole lot of inspiration” from his team and others at both the corporate and brand level.

He noted a few instances where Vista Outdoor and its brands racked up some clear procurement and supply chain wins during the last year or so. These included ramping up brass supply to support the ammo business; launching new products from Bushnell supported by the local China team; moving some CamelBak plastic bottle production to the Dominican Republic from China; increasing production of Made-in-the-USA helmets at the Bell and Giro facility in Rantoul; growing Camp Chef grill and QuietKat e-bike supply to record levels, and more.

“There are lots of little examples,” Stokoe said. “To use a baseball analogy, maybe we didn’t hit many home runs, but we hit lots of singles and doubles.”

He also noted that Vista Outdoor has an advantage when it comes to supply chain strategies across its 41 brands: Shared best practices through the Supply Chain Center of Excellence.

“If a brand finds success, we can share that quickly across the other portfolio businesses,” Stokoe said. “Ocean freight is a good example. If we find solutions to get container space, we’re able to share that solution across the rest of the business. These are the things we like to highlight when we talk to Wall Street about the value of the Center of Excellence. It might not change a single investment decision, but it’s another one of those ‘singles and doubles’ mentality that keeps investors comfortable in our business.”

Overcoming disruptions

Those singles and doubles that Stokoe and his team routinely hit don’t typically garner much fanfare. Year after year, even without the pall of a pandemic, they deal with all manner of disruptions — from material shortages to factory shutdowns, from clogged ports to labor strikes, from rising shipping costs to changing tariff rules.

No matter the obstacle, they work tirelessly behind the scenes to ensure that products designed and made by the company’s brands are not only of the highest quality but also reach consumers on time. They constantly work to improve efficiencies, find better processes and live up to CEO Chris Metz’s ongoing challenge for the team when he said: “We need to be maniacal about product supply, capacity, and logistics to ensure we meet as much of the demand as possible.”

Last year, however, a new and sizeable snag appeared when a massive storm off the coast of Japan clobbered a Maersk cargo ship sailing from China to Los Angeles. The squall caused a staggering 750 containers to slide off the ship’s deck and sink to the ocean floor. Unfortunately for Vista, 15 of those containers were filled with Bell and Giro gear, sending the Bell-Giro procurement and supply chain team into scramble mode.

As they contemplated how to overcome this disruption — including the need for increased production to replace the gear swallowed by the Pacific — the team used the insurance payout to charter an airplane and fly replacement products to the U.S. That plan succeeded, and the supply chain team saved the day.

“It’s a classic example of having to be creative and ensuring that we get the product where it needs to be and on time,” Stokoe said.

It’s also a classic example of why “supply chain” became one of the trendiest terms during the pandemic. It’s why CEOs began leading their earnings conference calls by discussing how their companies were navigating choppy supply chain waters, why stories about port congestion or grounded container ships made national news, and why executives like Stokoe were suddenly being interviewed by news outlets about how to best manage supply and demand imbalances.

Stokoe is happy, of course, for any recognition supply chain and procurement employees have earned over the last couple of years, including the recent Beroe honor. But with Fiscal 2023 now halfway over and the company’s procurement strategy shifting gears due to a stabilizing global supply chain and a slowing economy, Stokoe has a new goal for his team.

That objective, he said with another chuckle: “Become anonymous again.”