A Conversation with Vittorio Favati, TVS Supply Chain Solutions GFS

As part of LogiSYM Asia Pacific 2022, we had the opportunity to chat with Vittorio Favati, Chief Executive Officer – TVS Supply Chain Solutions GFS.

In this exclusive interview, Vittorio shared interesting perspectives and highlights of an global career that has spanned many decades. He also went on to share what he sees as the five key changes making a global impact to supply chains today and gave advice for those working in or considering a career in our industry.

Would you tell our readers a little about your background and experience?

My career has been dedicated to supply chain management from the very start, encompassing more than 30 years’ experience in the industry which began with a university degree in supply chain. The experience stems from the ground up as an operator, then assuming global roles spanning Asia, Europe, and North America and the journey has been incredibly exciting and fulfilling.

I had the opportunity to work with several excellent organisations, most notably, nearly 20 years with Ceva (including EGL or Eagle Global Logistics) and now TVS SCS.

I led/or was a member of several transformative journeys involving explosive growth to include EGL in the US, where I was a member of the executive team and grew the company from US$40m to US$3.2b.

As President, Asia Pacific for EGL and CEVA I led regional growth of the business from US$300m to more than US$2 billion. Subsequently as Chief Commercial Officer at CEVA, I led the global commercial team who delivered a record US$1 billion of new business wins in a single year.

Currently, I am leading the Global Forwarding Solutions (GFS) business of TVS SCS. We are a rapidly growing global forwarding business and uniquely positioned as an Asian based organisation. while nearly doubling the size of the company.

What are some of your greatest achievements in your career to date?

I would sum up a view on achievements around two areas: “growth and talent”.

Let me explain.

We (myself and key executives) built and took EGL public in 1995. Thereafter I played an integral role in the integration of EGL and TNT Logistics to form Ceva. We then grew to become #2 globally in contract logistics and #4 overall in total supply chain.

During my tenure at Ceva as President of Asia Pacific, I was responsible for one of the world’s largest and most complex auto-supply chain operations. We managed the supply chain for China’s largest manufacturer with close to US$500m in logistics spend.

At TVS SCS, I integrated six acquisitions into a single global brand, assembled a talented and dynamic executive and country leadership teams, and created a powerful global freight forwarding platform. Since then, the business has flourished while delivering superb top-line growth and bottom-line results.

These achievements would not have been possible without the growth we achieved and the talent that we assembled. It is immensely gratifying to drive a culture of high growth performance and to intensely seek out unique industry talent to drive such acceleration, while striving to be a great employer.

How has Business and Supply Chain changed over the course of your career?

On the global forwarding side there has been rationalisation in the form of industry consolidation with ongoing mergers and acquisitions. Even with abundant change, the industry is ripe for significant future consolidation. The forwarding industry has also been slow to transform operating efficiencies, especially when comparing to the improvements that the express integrators have made.

On the logistics side, a major change has been the shift by companies to outsource their logistics operations where traditionally it was insourced. Supply chain providers were able to make significant improvements by leveraging sophistication in the optimisation of storage and the movement of goods, and investing in design and engineering talent.
The race to digitalisation is the most profound change happening now. Our mission for digitalisation is customer-driven, through improving operational efficiencies and automation. By demonstrating success in these missions, we strengthen our shareholder and brand reputation.

What are some of the key learnings & formative experiences of your career, that you could share for others to learn from?

Regardless of the speed of digital transformation, consolidation of the industry and many other changes, this business is and will always revolve around, talent and people. I never lose sight of this truth, as doing so can result in significant consequence. The human factor in global forwarding and logistics underpins overall success. Talent acquisition, management and retention drive value to our customers and our ability to operate. People make the difference!

Something that the forwarding and logistics industry has wrestled with over the years, is to balance the risk and reward of investment into organic systems development, versus purchasing third-party market software to run our businesses. Big, broad, tenacious projects to build and maintain organic systems do have a proven track record, but to a smaller population of industry players. Many more attempts have resulted in failed outcomes with significant financial consequence. Choose internal software development projects carefully and weigh them against robust, established market software from trusted third-parties who are dedicated to developing these solutions. On the global forwarding side of the business within TVS SCS, we pride and brand ourselves as a “digital-first forwarder.” We’ve invested in ensuring every step of the journey for the customer, from quote to reporting, is digitalised, and we’re moving on this roadmap with pace.

What challenges facing the world today are important to you?

In my view, five key changes are making a global impact:

1. Changes in consumer preferences – Green behaviour and e-commerce;
2. Technology – The race to digitalisation;
3. Geopolitics – Near-shoring, quality and reliability, risk management;
4. Shock in supply chain – What will be the new norm and when; and
5. Macroeconomic – Rising interest rates, supply-side challenges, and economic slowdown.

The role of supply chain providers must be to anticipate, drive timely and necessary change and to be an agile partner to support our domestic and global clients in the midst of fluid change.

What is the role of Business and Change Leadership in addressing the ever complex & growing challenges in supply chain management?

We must be bold drivers to improve efficiencies for both our customers and our internal ways of operating by leveraging digitalisation and process improvement. This is fundamentally changing the way we do business and, and an improvement on past history where there has been a lag in the speed of this change in our industry.

Managing carbon footprint is also key: our industry relies on methods that are carbon output heavy. Taking greater responsibilities and green initiatives in carbon reduction is a high priority for leaders in our industry, driven from executive and board levels.

Sourcing, manufacturing and consumption models will continue to evolve and the supply chain industry is positioned as a strategic partner to support companies in rationalising future decisions. Low cost countries dominating manufacturing today are experiencing labour cost inflation and certain advantages are deteriorating. Shifting production closer to consumption markets will evolve. Emerging markets have matured and ongoing development in supply chain continues in order to serve those robust consumer markets.

Today, a dominance of production and sourcing is considered far-sourcing, driven by attractive labour rates in Asia. This is in a position to shift again. Manufacturing will be greatly influenced by carbon-conscious modes of transportation and cost and we may see more shifting to near-sourcing. At TVS SCS, we are confident to play a key role to support our customers when making such shifts by sharing our expertise and being agile to drive customer changes.

What are the priorities you are working on right now?

Digitalisation is front and centre for TVS SCS as we are comprehensively changing the way we do business.
We organically manage TVS “Centres of Excellence” where we centralise processes and work that does not need to happen in our branch offices. The result is that we are transitioning our highly experienced global forwarding and logistics workforce to focus far more intensely on our customer’s needs in terms of capacity, quotations, tracking and overall customer intimacy.

What advice would you give people who have a career in, or who are considering joining, Business and/or Supply Chain management?

The industry is dynamic and will continue to experience significant change. For students selecting a career path and for young professionals, supply chain is a mandatory driver for most companies and the economy. We are deeply involved with both supply and demand side planning and operations with manufacturing being the epicentre. As a long standing executive in the space I can attest it is a dynamic, challenging and rewarding industry to consider.

Please note that the views expressed by Vittorio in this article are personal, and do not necessarily reflect or represent the views of TVS SCS.