Supply Chain Now Episode 359

“We have more and more customers coming to us to talk about sustainability. When we say sustainability, we mean increasing the renewable power supply that’s in their energy mix as well as energy efficiency and other demand reduction strategies they can use.”

-Brian Rich, Senior Vice President of Customer Experience & Technology and Chief Customer Officer at Consumers Energy

 

Although most people probably focus on the energy aspect of the Consumers Energy brand, the more interesting part of their name is actually ‘Consumers.’

The energy industry has come of age as a “regulated monopoly” as Brian Rich, Senior Vice President of Customer Experience & Technology and Chief Customer Officer at Consumers Energy puts it. The notion of a customer is relatively new in the utility sector, but they are working hard to make up for lost time.

Brian works with Consumers Energy’s residential and industrial customers on their energy needs, ranging from day in, day out electricity needs to helping them address sustainability.

In this conversation, Brian provides interesting insight with Supply Chain Now Co-hosts Greg White and Scott Luton about:

  • Why conversations about infrastructure in the U.S. can’t possibly get enough attention right now

  • The relatively new impact of customers that can generate their own electricity, and how it colors their overall experience

  • How spikes in consumption (due to extremely hot or cold weather) impact operations and provide energy providers with a new opportunity to optimize supply and demand

Intro – Amanda Luton (00:05):

It’s time for supply chain. Now broadcasting live from the supply chain capital of the country, Atlanta, Georgia, heard around the world. Supply chain now spotlights the best in all things, supply chain, the people, the technologies, the best practices, and the critical issues of the day. And now here are your hosts.

Scott Luton (00:28):

Hey, good afternoon, Scott Luton here with you on supply chain. Now welcome back to the show. On today’s episode we’re speaking with one of the leading energy providers in the United States. Uh, this interview is part of our continuing collaboration with the automotive industry action group. So stay tuned as we look to increase your supply chain act. Two quick programming note before we get started. If you enjoy today’s conversation, be sure to find us and subscribe wherever you get your podcasts from. Want to welcome in my fearless Steen cohost here on today’s show, mr Greg white, cereal supply chain, tech entrepreneur and trusted advisor. Greg, how are you doing? I’m doing very well, Scott. I’m earning my trust lately. Let me assure you. Well, it is a gorgeous day in the Atlanta area. I hope it’s gorgeous up where our featured guest is from. Uh, and Greg, we’ve got another great guest lined up in a series of hits here with the AIAG, uh, keynotes and panels.

Scott Luton (01:25):

Yeah, I really love what Jim and Tanya and team are doing. Um, you know, with the corporate responsibility summit and, um, we’ve had a slew, no pressure, but we’ve had some great discussions. Absolutely. So with no further ado, I want to welcome in our featured guests here today. Uh, Brian Rich, senior vice president and the chief customer officer at consumers energy. Brian, good afternoon, Scott. Greg, great to be with you guys. And Greg, I welcome the, uh, the expectations that you said were thrown down the gun. Yes. Well, outstanding. Well, uh, Brian, as we do with each of our episodes, we try to, you know, give our audience the opportunity to get, know our guests a little better. So tell us about yourself and give us a couple of snippets from your professional journey, especially any roles that really helped shape your worldview. Sure thing. Well on the personal front, I am speaking to you now from my home in Ann Arbor, Michigan.

Brian Rich (02:23):

So go blue. I live here in Michigan, but I uh, I have lived uh, everywhere. I grew up, born and raised in New Jersey. Uh, then went to university and lived for a while afterwards in Washington, D C I lived in Montreal, I lived in San Francisco and then about six years ago moved with my family from the Bay area too in our permission and have absolutely loved every moment of living in the Midwest and being part of a college community. Mmm. Two kids, two teenagers. So when people ask me what my hobbies are, it’s whatever they do, driving them around team sports, school activities and I love every minute of that

New Speaker (02:59):

  1. But

Brian Rich (03:00):

what, uh, of all those activities, what’s, what’s one that you spend a lot of your time at with your kids? Well, my son, I have a son and daughter. My son is actually on a travel baseball team that I am one of the assistant coaches on. So I’ve been at that for about four or five years and that is a great thing for him and I to be able to do together. So I would say that is where I spend most of my collective time with that. I love that. So, um, kind of switching gears more on the professional side, what, what kind of led up to your current role? Yeah, well, I’ve been really in the energy sector my entire career, electricity and gas. I started right out of university with one of the big, I guess at the time, big six consulting firms.

Brian Rich (03:41):

And I, um, spent 15 years doing consulting. But most of that time that I was with in the consulting industry, I was consulting too, uh, electric and gas utilities in the United States and Canada. So 15 years going in and out of about 10 or so clients during that time, working on different technology and customer related problems. And then, um, about 10 years ago I left consulting and moved to one of the large utilities in California and worked there for the period of five years. And that was when there was a lot of going on around California, kind of setting the tone on sustainability and renewable energy entering the fold and energy efficiency. And then about six years ago, I moved to the utility here in Michigan. Consumer’s energy. And my role today is, I am the, as you mentioned, the senior vice president and chief customer officer.

Brian Rich (04:32):

So I work with our, uh, customers, both residential and our largest industrial customers on their energy needs, ranging from day in, day out kind of electricity needs to um, helping them set their sustainability future. Hmm. Well if fact go back before we dive more into consumer’s energy, going back to your time as a, as a consultant with the big six, speak to that. Um, you know, if we can relate to anything right now, it’s uncertainty. It’s, uh, challenges around corners. Uh, yeah. And of course trying to get things done and, and drive change during tougher times. Yeah. I don’t know if that’s feels familiar to your consulting experience, but yeah. Yep. Speak about that. How, how, how tough, what did you find that driving change when you were consulting? And is there a key element that is important for anyone that’s looking to do, you know, drive change, lead change right now?

Brian Rich (05:28):

Well, you know, it’s, it is interesting because energy and auto have a very similar, um, similarity in that they’re both very asset intensive and have long cycle times for planning. So when we build a power plant, uh, we, it takes us four or five years to get through that process and then we intend to have that plant for 40 years. So, um, when you think about the electricity grid’s need for stability and reliability, uh, you create an environment that can be very changed at birth for good reason, uh, because it’s critical infrastructure and it is a, uh, essential service and essential trust for the company. So driving change within those environments are challenging. Mmm. However, uh, we really are at an inflection point in our country. When you think about the amount of critical infrastructure that’s coming to it’s end of life, retirement. So all of our coal, so heat for example, is near end of life.

Brian Rich (06:18):

Uh, renewables and battery storage and energy efficiency technologies are more affordable. So we’re at kind of at this inflection point where we have an opportunity to really replan the future, uh, in a much different way than the past luck. It’s super exciting. Absolutely. Absolutely. The conversations around infrastructure here in the States, uh, it can’t get enough attention right now. I was reading a report card that the, I think it’s the American association of civil engineers puts out every couple of years and I think we’ve got a D plus R D minus I believe, uh, with the latest one that that came out. So a lot more, a lot more work to be done there for sure. So, Greg, I’m sorry, go ahead. No, I was just agreeing with you. More work to be done. Absolutely. So Greg, let’s dive into consumer’s energy. Yeah. So, um, interesting that you come out of big, uh, whatever the number is now.

Brian Rich (07:12):

Right, Brian, but, um, six when, when you were, when I started. Yep. Yeah. Um, before they all started acquiring one another. Right now that’s not a dissimilar situation though. Not rarely across the state boundaries with the energy trade as well. Um, so I’m, I’m curious about how you see the business changing. I mean, I’m sure you’re not the person I call when I hear a transformer explode, but it sounds like you probably have you part of your team probably deals with that, but tell us a little bit about how consumers energy interacts with especially folks in the, in the automotive trade. Sure. Well, uh, you know a little bit about consumers energy for your listeners. So we are, um, one of the, we are the largest utility in Michigan. Um, if you think about, I can’t say Michigan without holding up my hand, so forgive me guys.

Brian Rich (08:07):

But that’s what we do. And we provide electricity and gas to every County in the lower peninsula of Michigan. So we have a wide ranging set of customers, but it’s kind of where you were alluding to Greg. A lot of our large industrial customers are either OEMs are in the auto supply chain. Um, so electricity is a critical and vital service to be able to keep production when we have little clickers or momentary outages or even long sustained outages. Those have dramatic effects on our customers’ ability to produce and really have dramatic impact on the entire supply chain. So, um, when we go talk to our industrial customers, uh, the service we provide is a, um, I would say is very visible, uh, very real and very critical to their ability to operate. [inaudible]

Brian Rich (08:55):

yeah. I don’t think a lot of people understand that when you deal with big businesses like automakers and some of their OEMs, I’m sure that they are such significant consumers of energy. They often have a very specific arrangement with right, with consumers, with your, with your company. I assume not only that, but the level of sophistication from our large, what we call our energy intensive customers. Um, they have, uh, facilities, personnel and um, sustainability organizations that are every bit, uh, as engaged in our tariffs and the service that we provide and the engineering of our service. Then we are, uh, incredibly impressive organizations that are able to line up with us and work on energy challenges.

Brian Rich (09:48):

Yeah. And that’s often a very active, I mean very active, um, cooperation, collaboration to help them use it more effectively and advise them on it. I mean, to significant extent like this plant is viable, this plan is not, that’s exactly right. And you know, we find, um, we get very involved in the economic development activities that happen across the country and clearly here in the state that when a supplier or no OEM is looking to set up facility, um, and they’re looking at different States and different facilities and contemplating the different characteristics of what might be important to them. Uh, proximity is to infrastructure and the reliability of the infrastructure and the price of the energy and electric service is at the top of their decision making criteria. So is that, is that, that must be part of where you spend your time, but can you give us an idea of in your role, which it is all encompassing because we’ve basically cut out a couple of points of your, of your title.

Brian Rich (10:54):

So you handle a lot of aspects of the business. So can you give us an idea of what your day to day looks like? How you, um, spend your time? Yeah, I, you know, I think about, um, my role with my customers and if you kind of look at it in a, in a, in a graph or, you know, a square at the one top is I’m thinking about our residential or commercial, which is really our small business customers and our large industrials. And then on the other block, I’m talking about thinking about customers day in day out needs. So we have a lot of customers that call us with billing questions or reliability issues or they’re setting up your service or they’re moving into and just making sure that we have all the appropriate channels in place and solutions for customers. But increasingly where I’m spending most of my time is actually more on the longer range, uh, items.

Brian Rich (11:39):

So we increasingly have more and more customers coming to us to talk about sustainability. And when we say sustainability, we mean increasing the renewable, uh, a renewable power supply that’s in their energy mix as well as taking measures within their and plants on energy efficiency and other demand reduction strategies that they can take. So increasingly working with customers to help author their sustainability plans and then provide solutions that helped meet them, uh, achieve the needs of that’s a more sustainable future. Mm. So as we segue here, Brian, and to the bigger picture and get your take, get you to weigh in on a couple of things. Um, before we do that, um, customer experience, uh, that means so much more today than even probably a couple of years ago. It seems like so many companies are really investing in that area to not just make sure we’re delivering a, you know, a world class, uh, positive customer experience, but also measuring that.

Brian Rich (12:38):

Um, any, any thoughts on kind of the state of customer experience and how we go about that, at least from in your industry? I think you’re, you’re spot on, Scott, about the journey that we’ve been on, particularly in our industry. So it’s worth noting that, you know, we’ve grown up as a regulated monopoly. So for many, many years, uh, the notion of a customer was something that wasn’t really contemplated within the walls of the utility because customers didn’t really have choice. And what we’ve found over the last five to seven years is increasingly customers have more choice. Uh, there are more energy solutions and energy choices that customers could take. And, um, being front of mind for our customers is more important than ever before. That’s number one. And then number two, Mmm. When we think about our energy mix for future, uh, we are now leveraging, uh, customers to activate and participate in supplying energy as much as we’re actually, it’s applying it ourselves.

Brian Rich (13:32):

So whether customers are actually generating electricity on their own or even more important that they’re leveraging energy efficiency techniques that avoid us from having to build out our infrastructure. Okay. You can’t do that without a deep, a rooted trust and relationship with your customer. We work, we walk up to a customer and ask them to take measures to make their plant more energy efficient or Mmm. Work with them to take measures that on certain hot days of the year, we’re going to ask them to curtail and we’ll give them a price break on the other days of the year. These are, these are things that are rooted in a deep customer relationship. So increasingly having a good customer experience is not something that’s a nice to have, but it’s actually become a business imperative for us. And that’s a long way from a regulated monopoly that didn’t traditionally think that way.

Brian Rich (14:17):

Well-spoken. I really appreciate you sharing that. Um, um, yeah, and you, you, you mentioned the big word there that the T word trust and I’ll tell you, Greg, um, you know, we’ve never been busier, right? Sharing more stories and thought leadership out there and in the last three or four weeks or maybe going back a month, we have heard the word trust probably more than any other element or theme in these conversations, Greg. Well, we, you know, we, we’ve seen during this, this health and, and economic crisis that companies have to work together in greater measure than ever they did before. And that takes a significant amount of trust to do that. And the companies that have develop that trust, even prior to this crisis are clearly weathering it much, much better. So it’s really interesting. More than collaboration, more than cooperation, more than integration.

Brian Rich (15:16):

That trust is the thing that facilitates all of those things happening. Yep. I also liked something that Brian shared there around basically innovating with, with their customers is such a critical element to you named across industry regardless of what sector you’re in. Um, okay. So Brian, let’s keep kind of going broad here. Um, when you, yeah, look at the global, you know, end to end supply chain industry or for that matter, even the, the energy, um, sector. What’s, what’s a trend or or a development or innovation or w what is, um, what are you tracking more than others right now in terms of topics or subject matter? I think for us, what’s been, what’s been so Mmm, so, so big for us over the last couple of years is the fact that there used to be this notion of you can have clean energy but it’s going to be more expensive where you can have dirty and cheap energy.

Brian Rich (16:12):

And for us what’s really happened over the last 24 months is that we actually believe that that’s a sucker’s choice. And through the combination of renewables and, um, eventually battery storage and leveraging energy efficiency and other types of customer demand approaches, it’s actually a cheaper energy system. And you know, I’m going to say something that, um, it would probably be, uh, I think unique to people outside the energy sector, but we have a lot of capacity that sits idle. But for a few days a year when, Mmm. You know, those hottest days of the summer, we have a lot of capacity that’s sitting there idle, but for a couple of days a year and there’s a lot of cost tied up in that. And in the day where we were actually the energy efficient energy consumption in the country was increasing. That capacity was worthy because eventually we would grow into it.

Brian Rich (16:59):

But now that every home that’s built is more efficient than the home that replaced every building, every extension that some that some industrial customer does onto their facility or factory is more efficient than the one that I replaced. We’re not seeing a growth in electricity consumption and actually not having a system that isn’t overbuilt, but actually it’s fit for fit size and matching demand and supply is actually a more affordable next. So we’ve really, um, change in our thinking of the last couple of years about the fact that you can have a clean energy system and an affordable one so you can right size your energy production. You know, we talk a lot about right-sizing. Right? That’s interesting. And it’s new to us because we have not traditionally matched supply and demand, but it’s something that we’re working on hard on the last couple of years. Yeah. I got to tell you, maybe I’m late to the party, which is typically the case here, but

Scott Luton (17:50):

you know, getting, um, just like the energy industry is getting smarter, finding efficiencies, leveraging as you put it, Brian renewables and battery storage, the on the demand side basket and savvier and smarter as well. And everyone’s winning when we’re finding these efficiencies and, and this new, a better way of doing things. The whole ecosystem gets better.

Brian Rich (18:12):

That’s exactly right. Yup. Okay. Anything Brian I would love, I would love for you to, um, I really love the idea of Teslas, beautiful and energy efficient roof tiles, but I fear they may never actually produce them. So, um, maybe you can help. We, um, you know, it’s, it’s interesting, we’ve, for a long time we, we questioned whether or not solar would actually work in Michigan. It’s not, I’m not one of the sunnier places in the country, but actually, as I mentioned, we have a system that is driven by Mmm. Summer, summer. Yeah. I mean that’s, the entire system is driven by that. So on those few days a year where we really need it, uh, solar is actually a very reliable resource even in places like Michigan. That’s fantastic. And especially, you know, as Scott was talking about with battery storage and whatever other options you guys have. I mean, I, yeah, if all it is, is a non augmented service. Yeah. And it’s helpful, isn’t it? Right.

Scott Luton (19:13):

Speaking of batteries, you talk to talking about a highly innovative sector that’s on the move. Of course the battery sector will be one of those. And Brian, if you can’t share, no worries. But when it comes to leveraging that battery storage as part of your overall strategy, do you look to outside partners or how do you approach that?

Brian Rich (19:36):

Yeah, we, uh, we typically will, um, and we’re doing a couple of battery pilots now. Um, and what we’re finding is when you pair batteries with renewables, uh, they’re actually quite effective. So for example, if the sun stopped shining momentarily, having a battery backup, or if the sun sets at five o’clock, but you have blood people coming home from work and Mmm. Starting to a ramp up their electricity consumption from five to seven, having batteries that can kind of help you live through that peak a little bit more. They’re becoming incredibly more and more cost effective and they’re becoming part of our supply mix. We do work with suppliers that we don’t, we don’t manufacture batteries ourselves, so we work with different suppliers to actually put them into our systems. Hmm. So we, you know, we’ve seen in automotive and other industries, new battery technology, it’s, it’s safer, more effective, even more economically or, uh, environmentally friendly and economically friendly, um, to build as well.

Brian Rich (20:38):

And actually we’ve talked with some folks, um, around the, the summit about that topic. So as we think about what AIG has brought together here with the corporate responsibility summit, we’re asking everybody, what, what do you see as, as the value in your participation in AIG or in these summits or that sort of thing. What do you feel like you get from the, these things? Well, let me just, Mmm. Oh, I’ll answer that first with our battery conversation, then I’ll, I’ll lift up a little bit. Um, I mean we’re, we’re about to have hundreds of thousands if not millions of batteries on wheels. Uh, so I think that the convergence of transportation, electricity is becoming closer and closer and we have obviously being here in Michigan are great partners with the OEMs and, um, I think that’s a critical partnership task. But most importantly, and I’ll go back to the, the customer experience conversation we were having.

Brian Rich (21:40):

Um, we want to be where our customers are. So our customers, uh, value being part of AIG and um, yeah, as I mentioned, energy I think is a vital service to a lot of the members, attendees. So I think us being able to tell our story and, and understand what’s on our customer’s minds. Thanks. This participation, uh, something that we incredibly valuable for somebody like me who works hard to really understand what’s in my customer’s thinking in minds and plans. These are the types of forums that we seek out. Sounds like you have a generally inquisitive nature. I mean, especially having come out of big six, right? And seeing, seeing the parallels between some of the experiences you’ve had there, the automotive and the energy industry. I think having someone with, with a genuinely inquisitive nature is particularly good in these times, especially as we’re trying to transition to new means of energy production and conservation and that sort of thing.

Brian Rich (22:40):

Absolutely. We’re looking forward to it. You know, I’ll just close by saying on that topic that, you know, we talked a lot about customer experience and trust and cocreation. I mean, one of the things I think we’ve all learned is to build good customer experiences that you actually have to go listen and not come with a solution or the answer. And I think participation in something like AAG and allows us to do that, to listen to Mark agreed. That’s a Sikh Siki first understand, right? Lean in and engage. Mmm. So let’s make sure this has been a Brian Euro. Your message is right on point and you’re very efficient at making your point. So we’re going to finish ahead right on time here. But, um, Brian, let’s make sure folks know how they can connect with you. And of course with consumer’s energy. I bet there are some other, uh, utility companies, energy companies. I may want to, you know, benchmark some of the, some of the neat things that you’re up to. So how can they get in touch? Well, uh, obviously consumers, energy.com is the best place to go and, uh, customers can learn a lot about that. And as for me, uh, I’m on LinkedIn, uh, Brian consumer’s energy

Scott Luton (23:46):

and happy to connect with anybody that’s listening to this. There will be part of the summit. Outstanding. Yeah. Well, really appreciate your time, Brian. Greg, great conversation here on the area. Really we haven’t, uh, we haven’t talk to enough probably around the energy sector on splotchy now.

Brian Rich (24:02):

It’s good to get, yeah, to get on this side of the table, right? To understand how it’s produced and where it comes from and, and the initiatives that exists in the industry in particular with with consumers energy. I mean, I think it’s a, it seems like it would be a, it’s a fun place to be and you’re still making new discoveries, which seems weird when you think about it. When we’re talking about

Scott Luton (24:28):

a utility. Well that, and uh, I found it pretty intriguing. Never thought about how, how much the utilities are evolving. And I loved hearing Brian talk about how they’re viewing consumers and really engaging them and, and, and innovating with them. That was a big takeaway for me. So yeah. Nevertheless, big thanks to our featured guests on this segment, Brian Rich, senior vice president and chief customer officer at consumers energy, uh, to our audience. Be sure to check out a wide variety of industry thought leadership at supply chain now, radio.com fondness and subscribe wherever you get your podcasts from. On behalf of the entire team here, including Greg white, this is Scott Luton wishing you a successful week ahead. Stay safe. Please follow the expert advice and precautions that have been distributed. Uh, and no this broader days. Certainly lie ahead. We’ll see you next time.

Would you rather watch the show in action?  Watch as Scott and Greg welcome AIAG CR Summit speaker, Brian Rich, to Supply Chain Now.

Brian Rich is Senior Vice President and Chief Customer Officer of CMS Energy and its principal subsidiary, Consumers Energy. He was named to this position in 2019. Rich is responsible for the company’s overall customer experience and satisfaction, and for customer programs such as energy efficiency, renewables and economic development. He also oversees customer operations, digital and IT and security. Rich last served as Senior Vice President of Customer Experience, Technology and Chief Information Officer (CIO). He was responsible for the company’s technology strategy, security and IT operations. Rich joined CMS Energy as CIO in 2014 to advance the company’s strategic goals with resilient integrated information technologies. Rich is an energy industry veteran with more than 20 years of experience, including more than 14 years at Accenture and four years as a vice president at San Francisco-based Pacific Gas and Electric Co. Rich holds a bachelor’s degree in management information systems from The George Washington University, and completed an executive management program in cyber security policy at Harvard College in 2015.

Greg White serves as Principle & Host at Supply Chain Now. Greg is a founder, CEO, board director and advisor in B2B technology with multiple successful exits. He recently joined Trefoil Advisory as a Partner to further their vision of stronger companies by delivering practical solutions to the highest-stakes challenges. Prior to Trefoil, Greg served as CEO at Curo, a field service management solution most notably used by Amazon to direct their fulfillment center deployment workforce. Greg is most known for founding Blue Ridge Solutions and served as President & CEO for the Gartner Magic Quadrant Leader of cloud-native supply chain applications that balance inventory with customer demand. Greg has also held leadership roles with Servigistics, and E3 Corporation, where he pioneered their cloud supply chain offering in 1998. In addition to his work at Supply Chain Now and Trefoil, rapidly-growing companies leverage Greg as an independent board director and advisor for his experience building disruptive B2B technology and supply chain companies widely recognized as industry leaders. He’s an insightful visionary who helps companies rapidly align vision, team, market, messaging, product, and intellectual property to accelerate value creation. Greg guides founders, investors and leadership teams to create breakthroughs that gain market exposure and momentum, and increase company esteem and valuation. Learn more about Trefoil Advisory: www.trefoiladvisory.com

 

Scott W. Luton is the founder & CEO of Supply Chain Now. He has worked extensively in the end-to-end Supply Chain industry for more than 15 years, appearing in publications such as The Wall Street Journal, Dice and Quality Progress Magazine. Scott was named a 2019 Pro to Know in Supply Chain by Supply & Demand Executive and a 2019 “Top 15 Supply Chain & Logistics Experts to Follow” by RateLinx. He founded the 2019 Atlanta Supply Chain Awards and also served on the 2018 Georgia Logistics Summit Executive Committee. He is a certified Lean Six Sigma Green Belt and holds the APICS Certified Supply Chain Professional (CSCP) credential. A Veteran of the United States Air Force, Scott volunteers on the Business Pillar for VETLANTA and has served on the boards for APICS Atlanta and the Georgia Manufacturing Alliance. Follow Scott Luton on Twitter at @ScottWLuton and learn more about Supply Chain Now here: https://supplychainnow.com/

 

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