The Flywheel Newsletter

Quarter 2 2019 | Issue No. 41 Contents:     Eric’s Message          Interviews         A Logistics Adventure

Message from Eric

If you read the business books about the small and medium sized companies that broke through to become larger businesses, they often talk about a transition from being radically entrepreneurial to being more conservative and process driven. The great companies work hard to try and maintain some of that original entrepreneurial spirit, while they are forced to be more conservative to manage risk.  For RQ, who is right in the middle of the “breaking through” stage, I can’t think of a better example of holding onto our entrepreneurial roots than our Logistics group.

When the DoD moved more and more to the Design/Build delivery method about 15 years ago, RQ made the entrepreneurial move to bring Architecture in-house because it made sense and would help us deliver our projects better, faster, and cheaper. At the time, we had around 70 employees total and the only jobs we had outside of San Diego took us to China Lake and Ft. Irwin, which were all drivable from San Diego. We had a single architect join the team followed by a couple “CAD-Jockeys” (as they were affectionately called back then). But they, and we, went about figuring it out, mostly figuring out how to be a Design/Builder more so than a General Contractor and Design Group. We did it because it made sense. Now that we are over 400 employees and are located from SoCal to Washington State, all the way to Virginia, North Carolina, and GTMO… we started a Logistics group in Florida because it made sense. For GTMO specifically, we are learning to be more than a Design/Builder. We’re becoming a Logistics/Freighting/Design/Builder. Clearly RQ keeps reaching further back in the process of project delivery, and it is thrilling and loaded with opportunity.

Did we know what we were doing when we took on Logistics? Of course not. It wouldn’t be very entrepreneurial if we already knew what we were doing. We didn’t know what we were doing bringing Architecture in-house all those years ago, either, and yet it became a significant competitive advantage for our company. Taking on Logistics, we knew it would produce better, faster, cheaper if we figured it out. And that is exactly what we are doing. We’re figuring it out. And we are getting good at it. And Logistics is already becoming another competitive advantage for RQ. While we continue to figure it out better and better, the excitement and buzz is tremendous and contagious. It feels like every day is a new learning opportunity and a new victory. Surrounded by “new” and “change” and daily “continuous improvement” and new rewards… How could there not be a lot of energy involved?!

I couldn’t be any more proud of our Logistics group. What a great group. This team is tackling a new frontier for RQ and doing it with fantastic attitudes, incredible flexibility, and professionalism. They work hard and smart with a drive to become the very best. I love it. They see their growing significance to the bigger picture of RQ, and yet are not full of ego. They want to be a part of the bigger RQ, and I very much want to be a part of this group on the newest frontier. Logistics is not only helping us break through to become a larger company… Logistics is helping RQ become a truly special, great company. On behalf of RQ, thanks for keeping this ride a thrilling one.

Eric Taylor

VP OF OPERATIONS

Maritime and Logistics Ops Team

Chris Ernst - Maritime Manager

I was born, raised, and spent the first 29+ years of my life in California. My wife Megan (also a native Californian) and I are coming up on our 9th anniversary in September and are the proud parents of Judah (5) and Evelyn (1).

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Joe Phelps - Asst. Logistics Manager

I was born and raised right outside of Philadelphia, PA, and moved South when I was 19 when I joined the U.S. Coast Guard. I served in the Coast Guard for 6 years as a Boatswain mate and was stationed in Key West, FL and Kings Bay, GA.

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Kenny Brown - Logistics Manager

I grew up in Saint Joseph, MO, in a little town outside of Kansas City, MO. I was in the Army for 6 years and was deployed to Desert Storm in 1990. I am married with 4 kids and a grandbaby on the way.

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A Logistics Adventure

THE SITUATION

GTMO is separated from the nation state of Cuba by military patrolled fences and defensive positions, making GTMO essentially an island within an island, resupplied solely by air or sea. GTMO is also entirely Naval Base, the second largest foreign U.S. Naval Base and secure facility in the Caribbean. Everything, from the smallest parts to RQ’s late CK2500 Crawler crane, must be shipped or flown to the island. Since the bay is in a military base and requires substantially more paperwork and clearances to enter than a standard bay stateside, locating shipping firms able to supply to GTMO is difficult and pricey.

Due to this unique geographic location, every project and venture had and has one substantial constraint in common: Logistics. Be it by water or air, delivering material to project sites is essential and plays a major role in the success of each individual project, and therefore our success in the region. As early as RQ’s first major project on GTMO, Fuel Pier C, we were working on alternatives to standardized shipping rates through chartered barges, third party aggregate deliveries, utilizing available space on the Navy-contracted Schuyler vessels, air freight, etc. In 2017, RQ strategically positioned for a more permanent solution than that of one-time negotiated rates. Our goals were to improve quality control of materials and equipment before they left the states, reduce general shipping and logistics costs, and reduce delivery cycle times for materials and equipment. Initial success resulted in increasing our capabilities and give us a footing for a long term regional competitive edge.

THE IDEA

In 2017, RQ moved to invest in a tug and a barge to then start executing our own logistics. We established a laydown yard in Green Cove Springs, FL, where all non-hazmat materials and equipment bound for GTMO would be aggregated for delivery. The RQ “Warehouse Team” received, inspected, and packed materials into 40 foot “high cube” containers, moved the material to port to be loaded, then delivered to GTMO on our barge. During this process, the team would verify equipment and materials were delivered in appropriate condition, met the purchase and specification requirements, and report this to the project management teams in GTMO before shipment.

The Maritime and Logistics team continues to refine its proficiency in QC before shipment, providing positive control of supply from point of manufacturing to jobsite delivery where the Project Management Teams assume control to point of installation, thus creating an environment for significant regional cost savings.

THE CHALLENGES

Establishing logistics and maritime capabilities has not come without its fair share of challenges (opportunities to learn). Other than the obvious challenge of we have never done this before, there were four large categories that most of the challenges fell into: assets, regulations, personnel, processes.

Staff had to learn the Maritime business such as sea-going vessels, capacities, and strengths and weaknesses to determine which vessel to invest in as the first ever RQ open water tugboat. We had to do the same when determining which barge to purchase.

Once RQ owned the vessels, the team continued learning about the federal and international regulations that govern maritime operations in order to gain and maintain compliance. The team had to learn the idiosyncrasies of scheduling, reporting, and inspections for each port we visited. We also had to learn how to source equipment for urgent maintenance or repairs to the vessel while at sea or in port. This also meant learning about the significant amount of documentation required (what it was and how to get it processed successfully), inspection and reporting requirements of the USCG, American Bureau of Shipping (ABS), Customs, freight forwarders, agents, etc.

RQ hired a crew to man and maintain the vessel, the Addy Lou and New Dawn. Finding the right crew was a learning experience in and of itself. The crew is now well established and has not only maintained the vessels well but increased their capacities and value. RQ also had to set up a land-side team for warehouse management and execution, logistics tracking and reporting, and federal/international compliance.

RQ also had to develop logistics and maritime tracking, packing, reporting, and throughput processes in order to efficiently and effectively utilize the assets and personnel, ensuring the projects in GTMO receive the support they need to be as successful as possible.

THE SUCCESSES

It’s an exciting time in the world of the RQ Maritime operation. Fresh off the heels of successfully obtaining our Certificate of Inspection for our tugboat, the Addy Lou,  we did so much more than a full year ahead of schedule. Way to go team! We are merely days away from commencing work to upgrade the structural capacity of our barge, the New Dawn. The upgrades will effectively quadruple the permissible containerized cargo capacity we already have on the barge. We’ve recently cleared some major regulatory and compliance hurdles and have our sights set squarely on improving our efficiency and capabilities right now. As our operation in GTMO continues to grow, so must our capability to provide effective, reliable, and efficient logistical support. Once again, RQ is leading the charge and establishing capabilities that no other contractor in the region can match, and it’s very rewarding to be part of a team dedicated to such excellence.

THE FUTURE

Up to this point, RQ has learned a great deal about the maritime and logistics industry through the practical experience of supporting our own projects and will continue learning as processes are refined. Going forward, our eyes are on the horizon to better support and increase the capacity of the project teams. To do this we are focused on establishing systems that are sustainable, predictable, and replicable. It’s all about being part of RQ and providing our customers the best built environment while being the first choice of all stakeholders.