Pat DeDonato is the Senior Vice President of Supply Chain Management for Cartus. As such, she is customer to a large proportion of the moving and relocation industry worldwide. Steve Jordan talked to her to find out how Cartus manages its supplier relationships.
Cartus is the largest relocation management company in the world. It started business in 1955 in Connecticut, USA, so this year is celebrating its 60th anniversary. The company works with almost half of the Fortune 100 companies, employs 3,000 people in 18 offices worldwide, and last year helped 171,000 people relocate to or from 150 countries. The company provides a livelihood for many of the world’s corporate movers and destination services providers.
Pat DeDonato is responsible for the management of the Cartus supplier network. She’s worked for the company for 28 years and has seen the business flourish and adapt to meet the changing needs of its most exacting clients. Although Cartus works with the giants of industry, its worldwide client base includes companies of all sizes and in all business sectors, all with specific and varied needs.
So, how can a company that must have tight process control to manage its high volume and vast supplier base, provide a bespoke service to rival that of much smaller, fleet-of-foot relocation companies? “We have our standard processes across the company, but we are very flexible with what services we can offer and are constantly evolving to improve our service offerings,” explained Pat. “We can, and do, custom design our processes to suit each client’s needs. We have a dedicated team who work closely with clients regardless of whether they are small, medium or large.”
Managing the network
Cartus manages its supplier network very carefully using a matrix system that balances cost and service standards, and through a continual process of site visits, audits, and compliance assessments, ensures that suppliers achieve the company’s exacting standards. The matrix is very precise and leaves nothing open to interpretation; therefore, it’s a necessarily objective process.
As a service- and cost-driven business, supplier relationships are critical to their success but of secondary importance. “We select members for their expertise and reliability,” Pat explained. “We monitor our suppliers on an ongoing basis and make sure we align our customers with companies that are experts in their field and understand their unique needs. Service is the ticket to the game; suppliers operate as an extension of Cartus, so it’s very important who we place our customers with.”
Each supplier’s performance is repeatedly entered into the matrix, with customer feedback being of prime importance. And whether Cartus retains them as a member of their supply chain depends not only on customer feedback but also on numerous other factors, such as innovative practices, meeting or exceeding service metrics that are measured quarterly, offering competitive pricing, and more.
For international household goods, those suppliers that have proved themselves capable of providing the required quality or service and ability to accede to Cartus’ compliance requirements take part in a transparent e-procurement system. This allows each company to bid on moves for a specific route. “As long as the service standard is met, we will choose the best price for the route,” explained Pat. “It creates an element of competition on every move. If a company’s service is good but they are not getting moves, it may be because the costs are too high.”
Cartus also manages the price and service balance by controlling the volume given to each supplier. On international moves, this allows a company to negotiate with shipping lines for the best price for a given volume; however, service is still key. “We can negotiate the best rate depending on the volume we give the suppliers. But without the ability to offer the appropriate level of service, they won’t be offered the move,” she explained.
Getting a foot in the door
Keeping high standards for their suppliers helps maintain Cartus’ reputation. “Over the years, we have built up our networks based on service, cost, and compliance,” said Pat. However, she added, if a customer is relocating to an area that is not served by the network, or if the existing suppliers are not performing well, the company will engage in a full procurement exercise to see what suppliers it would like to invite into the network. The company will check out potential suppliers in the area and start a conversation with them.
Importance of moving
As with all relocation companies, the moving industry plays a crucial part in Cartus’ operation. “Moving companies are at the frontline of many of our engagements; they not only represent themselves but they also represent Cartus,” said Pat. “We have to make sure we have enough suppliers to cover our capacity but also the right suppliers going into our customers’ homes. The importance of the moving industry can’t be overestimated.”
Working with compliance
Compliance is a huge issue that faces not only Cartus, but also the industry as a whole. Complying with local laws in each country as well as the US and UK regulations on bribery and corruption can be a minefield. Companies that work with Cartus not only need to meet the company’s compliance standards but must ensure that their entire supply chain does, too. This includes the treatment of personal information, prohibitions on bribery and corruption, health, safety, security, and the environment. “We’ve invested very heavily in a risk management system called ‘Compliance 360’ that enhances our ability to collect and report on supplier compliance,” explained Pat. “It produces a whole view of each supplier’s compliance level, houses all the relevant information and can track and run reports on individual suppliers as a clear demonstration of global compliance.”
It is essential that all suppliers acknowledge their contractual obligations. However, the system isn’t entirely self-regulatory. Every six months, Cartus runs international watch list checks on its suppliers. Every year, suppliers must take an online certification module to make sure they are trained properly with respect to customer service, business ethics, US foreign corrupt practices, the UK Bribery act, and other legislation. “We make sure that we remind suppliers of this often, and when we are onsite with them we do a double check to confirm the self-certification,” said Pat. “Our reach is very wide, and our commitment to compliance is at the top of our priority list.”
Pat isn’t opposed to using a third-party compliance certification service but currently, she feels that the internal system is sufficiently thorough. However, if Cartus became even stricter with its regulations in the future, third-party monitoring wouldn’t be ruled out.
As with any company and process, things can go wrong and mistakes are sometimes unavoidable. Pat was extremely clear on the process for dealing with these mistakes. “It depends on what goes wrong and where. If it’s a compliance issue, it goes straight into the 360 system.” This triggers an evaluation to see whether any law has been broken or if a simple conversation is all that’s necessary. If it is a service defect, their ‘Service Watch Programme’ aims to help the supplier regain the position in the network and help them improve. If it’s more serious, it could be the end of the relationship. “We can work with each other to provide a solution or we end the relationship, depending on the issue,” explained Pat.
Of course there are many countries where corruption is endemic, and it seems that nothing can be done without making facilitation payments. However, Cartus has a zero tolerance on this practice. “It’s not acceptable for us,” explained Pat. “Legislation prohibits it and even though Cartus is a US company, it does business all over the world so we are committed to meeting the laws of all the countries we operate in.” Pat explained that if this means a shipment of goods is delayed, they just have to accept it as an unfortunate fact of life in that location, and they always explain the situation to the customer. “Communication is key,” she said, adding “one hundred percent of the time, people understand we have to abide by laws.”
Pat did say, also, that disclosure was much preferable to discovery. “If a supplier is struggling for any reason, we need to know about it as soon as possible so we can work with them to arrive at a solution or, rarely, make a decision to end the relationship.” She added that it was imperative that any problems be disclosed by the vendor—not discovered by Cartus or, worse still, by the customer or client.
The changing relocation industry
Cartus has been in the relocation industry for 60 years. Over that time, the changes it has seen have been many. Developments in technology have changed the face of relocation forever. But Pat isn’t fazed by developments in technology; she embraces the possibilities of them building their business. “It will help us improve our services,” she said, making special mention of the Cartus mobile phone app and the annual ‘Best Innovation’ awards given to suppliers at the annual Cartus Global Network Conference in recognition and celebration of their development and implementation of new products that enhance the business.
But will technology ever take over completely, making relocation professionals redundant? Pat thinks not. “There are so many moving pieces to a customer’s transfer that need to be coordinated in a single place,” she said. “A lot can be done through technology to make it easier, but it still needs the human touch to help them through that time of their lives. They need to get on with their new job, and we need to make it easier for them to do that.”
Cartus was founded on a simple vision: to ease relocation for its clients and their transferring employees. That vision is still as strong today as it ever was and, in an ever more demanding world, the supply chain for the world’s largest relocation company needs to be on its toes. Top service, competitive pricing and an absolute adherence to risk and compliance requirements are fundamental. It is likely to stay that way for the foreseeable future. Click here to see the next Editor's Pick
Photos: Top right and middle left: Pat DeDonato has been with Cartus for 28 years.
Photos courtesy of Carol Gibson.