How Herbalife Dominates Supply Chain in More Than 95 Countries

There’s never a dull moment in the supply chain industry. In order to build a resilient and strong supply chain, it’s best to keep adapting, evolving and preparing for change.??

Quartz Network Executive Correspondent Britt Erler sat down with Troy Hicks, Senior Vice President of Global Supply Chain at?Herbalife Nutrition for an exclusive Q & A.

Troy shares insight into:?

• Building a successful supply chain?
• Designing your supply chain to respond to change??
• Developing supply chain resiliency?

"What's unique about Herbalife and our supply chain is that we support independent distributors"

Quartz Network: Can you share a little bit about your background and your current role?

Troy Hicks:?I’ve been in supply chain for over 20 years, mostly in consumer products primarily. I’ve been with Herbalife for almost 9 years. I came to Herbalife with interest in the very dynamic supply chain model they have. They’ve been in business for over 41 years and are one of the largest global nutrition companies around. We’re in over 95 markets.?

What is unique about Herbalife and our supply chain is that we support independent distributors. These distributors are very locally penetrated into their communities, and they’re constantly working on changing the lives and improving nutritional habits all over the globe. They create a high touch, high support network, to their clients and our consumers. They’re really the voice of our products. They’re really the difference. It’s one of the reasons why I came to this company. Traditionally, I was in mass retail consumer products. This was a very unique shift for me, and it’s been exciting.?

"Successful supply chains are ones that can respond to change efficiently, probably more efficient than most of their competitors"

Quartz Network: How do you define a successful supply chain??

Troy Hicks:?In my experience, they have some common attributes. Successful supply chains are ones that can respond to change efficiently, probably more efficient than most of their competitors. They build in resiliency, especially in the areas where they don’t control as much of the chain itself.??

They typically are able to harvest intelligence quickly. So they can really respond to change, but they can also collect intel, and they can process that intelligence quick to be able to put it in the fingertips of good decision makers.??

Most supply chain practitioners are living change as we speak. You can be really good at planning, but life happens, and something like a global pandemic hits. That’s never been more true over time in the current state.?

Quartz Network: Herbalife Nutrition is sold in 95 countries and recorded $5.5 Billion in net sales in 2020, that’s a lot of nutrition products. Can you tell me about your supply chain??

Troy Hicks:?A lot of nutritional products. We’re slowly making the world healthier. That’s our goal. First of all, the majority of our core products are vertically integrated. That’s also true all the way through the raw material. That is around our strategy called “Seed to Feed”, where we have five strategically located manufacturing facilities around the world for which we completely control the proprietary aspects. Not only of the manufacturing site, but we also control the channel of innovation. We have over a dozen quality research labs all over the world.??

"In our model, scale is important because not only do we want to be the best quality, we also want to be able to offer a competitive price.??"

That centralized manufacturing model is great because it allows us to really control the quality, control our brand and scale. In our model, scale is important because not only do we want to be the best quality, we also want to be able to offer a competitive price.??

The counter challenge of all this benefit is that we are complex, and we have long lead times. So if you think about the majority of our products coming from a centralized point, trying to reach 95 different markets on a daily consumable, and the majority of the products are imported. They’re going into heavily regulated markets that are always changing. We’re also a food supplement and nutritional product that has a limited shelf life. So those are the challenges as a supply chain that we face. We have had to become very good at being able to respond to change and being able to recognize the intelligence of change quickly.?

Quartz Network: Could you share some of your learnings for companies looking to build a successful and resilient supply chain??

"...this is a marathon that never ends."

Troy Hicks:?I think most supply chain managers today can relate to the fact that this is a marathon that never ends. You can build resiliency, but you’re only as good as the next day that that resiliency can withstand the pressures and variabilities of your network. So we’re never done with this. The one thing that I would say over the last 8 to 9 years that we did here at Herbalife is we recognize that there is no one size fits all to be able to create the ecosystem of our supply chain. We originated, coming out of big vanilla kind of ERPs that we’re trying to do everything, but really couldn’t do anything well specifically targeted to our business. What ended up happening in those years is that you end up dictating your business process based on a technology versus having a technology support your business process.??

The one thing that we did originally to rebuild that backbone was connect a network of targeted technologies throughout our supply chain so that we had more agility on the very specific functional areas of the chain itself. That brought certainly a lot better performance in the way that we were being able to manage those activities, but it also has a downside. The downside was elongated our cycle process. So we had this great intel, and we had great systems that were able to plan very specific links of the chain. It was very difficult to collect, process, and execute into intelligence that that we could put in the hands of the frontline decision makers within our operation.??

"The one thing that we did originally to rebuild that backbone was connect a network of targeted technologies throughout our supply chain so that we had more agility on the very specific functional areas of the chain itself. "

So to complement that, what we call Network of Network Technologies, we really focused on a lot of visualization. So collecting and harvesting that intel, doing that in a faster way, and then putting that at the fingertips of our decision makers, and really giving them consolidated, smart information in a fast way that is easy and efficient to utilize. So no more spreadsheets, no more reports, it’s real time dashboards that basically give you alerts, and give you a complete end to end picture of what’s happening in your ecosystem, so you can react and respond quicker. You’re not waiting through that monthly cycle to the next?pivot point of data based on what you sold last month. You’re not continuously looking through the rearview mirror versus really forward focused.?

Quartz Network: What advice would you share to others in similar roles as yourself??

Troy Hicks:?I think it goes back to that common attribute of what it takes to be a successful supply chain, and really design your supply chain for change.

The only constant I’ve experienced in supply chain is change. So, figuring out how to become more agile, flexible, responsive, and build resiliency into your processes. Then, just keep learning growing and sharing.??

Certainly, growth is something that never stops. It’s the marathon that never ends. So if you’re a supply chain practitioner out there, just keep learning growing and sharing. There’s never a dull moment there’s never a static moment in supply.?

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