Executive Spotlight: Jonathan Murphy
Executive Spotlight: Jonathan Murphy, Purchasing Director, Independent Purchasing Cooperative
Interview conducted by Rachel Manthei, 2nd year MBA Student, TCU Neeley School of Business
October 5, 2018
Rachel Manthei: Can you walk us through how you got to your current role, beginning with what you studied in college?
Jonathan Murphy: I went to the University of Oklahoma, and from there went to work for a 3PL based in Florida (Saddle Creek). There I was a warehouse manager for about 2 years and had about 20 people working for me. I wanted to make a corporate impact in supply chain, so after 2 years I left to get my MBA from the University of Iowa, with the program based in Italy. While I didn’t focus on supply chain during the MBA, I wanted to see if supply chain was really what I wanted to do for the rest of my career. I actually did a marketing project, where I figured out that procurement and supply chain was where I wanted to be. I stumbled upon Brinker and into a procurement role through some contacts, and started buying fries, corn, and other stock items. I was at Brinker for 4 years, doing both domestic and global procurement. From there I was recruited to work for IPC, where I have been for almost 3 years. I joined as a protein buyer, managing the Canada Proteins, and started to transition to managing the US, before an opportunity was offered to be the team lead for the FoodPack team. I have been on this team for the last year and a half.
RM: Very interesting. Can you talk a little more about what your current role looks like?
JM: Yes. I focus on the procurement side, where there are 3-4 procurement managers managing different categories. I work with them to help with negotiations, contract reviews, product development, innovation, and daily interaction with the Subway brand. There are quality aspects, innovation, marketing, and forecasting that we work directly with Subway with.
RM: Does Subway or IPC handle the forecasting?
JM: We work with Subway on forecasting to make sure we’re both aligned. As far as what IPC does, on a daily basis we are interacting with quality initiatives, looking at GS1 and traceability. IPC also does a little bit of commercialization/quality, but a lot of what else we do is demand planning and production planning, as well as the procurement functions. Subway corporate then reviews and agrees to the forecasting, and we work directly with them to look at the food cost piece.
RM: Can you describe a little more of what your team does?
JM: We have over 300 SKUs that our team manages, which is 50+ suppliers and contracts we are dealing with. Items that FoodPack manages include seafood, packaging, sauces, cheese, seasonings, soup, and kid toys. Contracts are typically 6 months to 2 years out, and we are understanding how to attack these contracts. We ask if our contract is transactional or is it a strategic item, set up the contracts and negations, and then provide ongoing updates to leadership. We update them on where we are with contracts and different opportunities that we have. The other piece of my job is interacting with the supply chain team. Since innovation is a huge part of the business and where we’re heading, we interact on a daily basis with supply planning. We are helping them by providing availability, lead times, etc. to create an off-shoot inventory plan if there is inventory remaining.
RM: With all of that that you do, what is the biggest challenge you see in your job?
JM: The biggest, exciting challenge for me is time and project management. There are a lot of innovative and really cool ideas and projects going on, but making sure that we are able to be agile is really important. We might think that one thing will be the focus for the next 2 months, but that could change overnight, and we will have to look at a different product and process. I would say, then, that being agile is the biggest challenge, and understanding where the priorities are.
Talking a little more about the day-to-day, we also work directly with the sustainability piece at Subway corporate, making sure we are aligned with the brand. We spend a decent amount of our time working with franchisees – whether they have a couple stores or many stores – we work with them with requests that they have.
RM: Going back to sustainability, can you describe what the primary objectives are for Subway/IPC in that area?
JM: One of our big objectives is being aligned as a brand. We just went to Thailand in May, attending a tuna conference to understand what the most sustainable methods are for tuna. We want to get the industry experts’ opinions and bring that back to the brand. Another example is straws, a big topic we are working on. There are a lot of areas that want more sustainable options, and we are working on sourcing for them that maintain quality and safety while giving alternatives to customers who want it.
RM: Do those initiatives primarily come out of Subway corporate, or do they come out of IPC and Subway follows?
JM: We work hand-in-hand, but a lot of times the initiatives come out of Subway corporate. However, we do attend a lot of conferences, so we are able to provide input and recommendations as needed. They make the ultimate decision, but we work very closely with them. Recently team members from IPC and Subway went to a sustainability/packaging seminar together to learn about where packaging is going, and then reported back their findings to IPC and Subway.
RM: If you were to recommend 2 skills for supply chain students to focus on improving, what would they be?
JM: The two biggest things in regard to supply chain – especially procurement – is to understand the importance of planning and preparation. A lot of this goes into the art of negotiation. Taking the time to understand the needs of your company (maximized cost savings, time commitment, or other benefits) and seeking to understand what the supplier is wanting as well is very important. This lets you build out your agreement to find the best solution for yourself and the supplier to create that long-standing relationship. You will also understand what you are looking for, to determine if you want a strategic or transactional relationship, which will influence how you manage those relationships. Expanding on this would be learning the skills of cost models. We deep-dive to understand not just the overall value, but to determine yields in every step of the process, the equipment it is produced on, how long amortization is going for, and financial statement analysis to break apart the SG&A to get a better understanding of costs. A big piece of it is going beyond looking at what is on paper, actually stepping into a plant to watch a product go from raw materials to a finished, packaged product. This is where you really gain an appreciation for the product and pride in what you do.
RM: Those are great. Thank you for your time today.