Podcast Ep43: Supply Chain Management Shortages, Trends, Strategies and Solutions

transformation ground control your source for all things business technology strategy and change if you're growing your business leading change within your organization or undertaking any sort of operational or technology change initiative this podcast is for you this show covers what you need to know about digital transformation organizational change operational improvement and business growth five four three two one and now here's your host eric kimberly hello welcome to transformation ground control episode number 43 your podcast about all things related to digital transformation including the people process and technology aspects of transformation uh with me today as always it's kyle cheatham kyler welcome back to the show thank you thank you so we've got an interesting show for you today a very focused show i'd say it's going to be an epic episode not to set expectations too high but it's going to be an epic episode focused on one topic that is top of a lot of people's minds and that is the supply chain so we have three different segments today talking about supply chain management so the good news is if you like and are interested in supply chain management this is going to be a great episode for you i suppose the bad news is if you really dislike hearing about the supply chain and want nothing to do with it then you probably want to skip this episode move on to the next one but assuming uh you're sticking with us through the episode we've got three really good segments for you today first of all we're going to open things up with a segment just talking about recent supply chain news sort of a lightning round overview of what's happening in the marketplace what's happening in the supply chain industry right now we're also going to have a roundtable discussion a panel discussion with three guests later in the second segment uh the guests are going to be megan from stopwatch uh a company called stopwatch will obviously describe who they are here uh later in the show we also have amy cooper who is from a company called craft and then we also have adam cheatham who's a director of strategy and transformation at third stage consulting and the three guests are gonna join me in a round table just talking about why the supply chain's broken and how organizations can fix their supply chains what are some of the things they can be doing to rethink the way they manage their supply chains especially in light of the changes in the world and the state of supply chains here in the 2020s so stay tuned for that that promises to be a really interesting discussion with a broad set of guests there and then finally last but not least uh we're gonna have mitch on the show mitch is a senior consultant with third stage consulting and uh he you're actually he might be a manager now i apologize i think he's a manager now so uh people get promoted quickly when they perform and he's one of those high performers at third stage so he might be a manager now but don't quote me on that um and mitch is going to be on the show to talk about pains in the supply chain just what are some of the pains and sort of building on and honing in on that topic uh building on the panel discussion so great show for you today uh but before we bring on those guests uh what's uh supply chain news what kind of supply chain news are you seeing out there kyler yeah absolutely so i want to start today with kind of a global supply chain look a lot of times we talk about things that are going on in the u.s and can be more of that type of focus but i want to talk a little bit about what the global supply chain is actually experiencing right now so just to give you some numbers here in the u.s our consumer price index jumped by 6.2 percent in october um which is the sharpest annual rise in 30 years just to set some context chinese producers for our global audience here um their index surged actually 14 um in october while um while europe experienced another six percent of inflation as um we see it here so i wanted to kind of talk about why is this truly a global issue knowing that much of the manufacturing specifically for china is it within their area so why are they experiencing this huge inflation almost double what the us is experiencing yeah so that's an interesting point it obviously jumped out when you said it you know europe and north america or europe and the us are at that six percent range and then you know china's more than double that um that's could be partially because um you know i think there's been a bit of inflation in china over the years just because the demand for their products has increased and their standard of living has increased over time over the last few decades so i think that has sort of put some cost pressure on their their products but i think you know just globally speaking i think in general organizations are experiencing uh supply chain disruptions that are increasing inflation that's contributing to inflationary pressure it's not just supply chains obviously when you have less supply with uh higher demand obviously that that causes in general higher prices but you also have you know monetary policy and uh government spending and things like that that are that are putting a lot of pressure on inflation but i wonder if in china's case you know i think they were a bit more strict early on with the lockdowns and with the quarantines and sort of shutting down non-essential businesses i just wonder if that um that sort of uh earlier stop with the the whip saw effect of starting back up uh before much of the country or much of the rest of the world started up again i wonder if that's just now we're feeling the you know sort of the after effect of that those uh more drastic measures they took that's pure speculation i'm not an economist so i couldn't tell you for sure but that those are a couple things that come to mind yeah definitely i know a lot of the materials in which i researched showcased just how really detrimental a lockdown for coba 19 can be to a local economy even when you're one of the world's superpowers such as china um so that brings me to kind of my my next topic that i wanted to discuss with you and that's actually the shipping industry and what their experience had been and i i guess in even being in the supply chain world as that something that um you know i do for a living here at third stage i didn't realize the really crazy growth of the shipping industry and what that has a rippling effect on the overall organizations that are trying to pay for freight we talk about anything from you know a huge multi-million dollar organization to a small business or even an fba a fulfilled by amazon business that needs to pay for these these freight prices um so just to give you an idea they've experienced a massive amount of growth throughout this entire um global trade they make up about 90 of it now which is pretty crazy um and then it's basically the way that they uh they described it here is it's basically like paying for an uber but it's the price of the car um type of thing so just the the huge amount of pricing that goes into or the expense that goes into the shipping and industry so i wondered when we talked about government regulations which i know you you know kind of had that panel discussion of what role does the government play within this but how can you how can you as a government or regulatory industry take what's going on right now when it comes to shipping fees and see if you might put in some policies that would bring down those fees in order to kind of loosen up or shake loose the bottleneck you know my knee i'll give you my knee-jerk ration which is not well thought through and uh arguably uh risky for me to say this in a public setting but i think you know when you get the government to politicians people that know absolutely nothing about the supply chain that terrifies me to think of them trying to figure out a policy to uh improve the supply chain because i don't think they know what they're doing when it comes to the supply chain so you figure if professionals are having this hard of a time getting supply chains under control i don't know that the government's gonna have the answer um so that's you know maybe getting too um too political or sharing too much about my political beliefs but um but i do think it's there's truth to it so i don't know that uh and that is a question i want to ask the panel uh later today and it's a question i've asked a lot of people recently just because i'm interested more than anything is is you know regardless of your political beliefs should the government be involved um do you think they'll be involved you know that's a question i want to ask the experts later is regardless of what you think do you think they will get involved and i know here in the united states for example uh the us government is there's talk of them potentially taking a more active role in the supply chain so i don't know what you would do if you're the government other than say you know for for example the u.s one thing they're doing that i suppose is probably helpful in the long term is they are uh keeping ports open 24 7 some of the higher volume ports like in california so that i suppose helps because that frees up a bottleneck there i think the challenge you have though is that the fundamental problems with the supply chain right now are actually to your point uh they're actually unintentional consequences of other government policies so shutting things down because of covid whether or not you agree that that was the right answer doesn't matter because it happened so the government did it and now we're paying for it via the supply chain uh bottlenecks you add to the fact that now you have uh vaccine mandates that are causing a certain displacement of employees it's causing a certain amount of employees to quit or be fired because they're not vaccinated and they're not complying with corporate or governmental regulatory vaccine mandates that's creating issues and you could still argue you can argue all you want that that's the right answer that's the net the best thing that that's best for the uh for society that's okay but we just have to recognize that that now has a unintended consequence of furthering the supply chain issues and that's why i think the supply chain is going to get worse is because at least in the united states i know there's some mandates that are coming up this month into early next year that's that's really triggering a wave of departures or terminations of employees a lot of them in trucking a lot of them in warehouses and uh other companies that function in the supply chain so i guess what i'm saying a long way of saying i don't know that they have the answers i think the answers are that you've got to be able to retain talent you know better technology can help improve processes there's a lot of stuff we're going to talk about with the panel later today but i don't know that the government is the one to do that not enough they would even know where to begin um maybe i'm underestimating the capabilities of politicians but i've always been a bit skeptical of politicians so i apologize to those of you that are politicians that might be listening yeah i mean i think it the thesis of that statement based on what you're saying is is there is it's so complex right that having any sort of policy that kind of blankets one piece of the industry is really difficult because what would that policy say you know and we really have to think through kind of all of these emergency ex or executive orders as we call them here in the united states and what that trickle-down effect is for our everyday consumer or businesses and and again just to put some numbers behind it the they estimate that it's the maritime research consultancy that looks at all of these and kind of does these studies that um by the end of 2021 they will collectively the shipping companies earn up to 100 billion and that forecast is actually tripling to march 2022 and just to put it in perspective because i know that helped me that is the same league as titan companies such as apple so it is you know a huge huge growth area um to actually look at what that means i think you said it perfectly of you might not be able to control that but you can assimilate your supply chain as a core composite a core competency excuse me and make sure that it's optimized and really functioning at the highest level it can um and i know we'll kind of talk more about that later i think another thought though too that you know playing devil's advocate with myself and what i said earlier and to your point is that you know you think about uh one part of the government that is good at supply chain is is the military generally you know for for most government entities the military does supply chain well because they have to figure out how to get troops and supplies and equipment military gear all that stuff to wherever they need to get it and they need to do it quickly so i guess there's an argument to be made to make does the military take a role in keeping in your example if we're short on truck drivers or trucks themselves can the military help maybe i think that might scare a lot of people especially in the united states where a lot of us are you know all about freedom and not having too much of a government role so that might freak some people out but uh military maybe that's an option maybe that's one way i know um like with uh kovid and some of the vaccine mandates that are causing um uh frontline health workers to be terminated in some cases i know that there's i don't know if they're already doing this or if they're planning to do it but the united us government's talking about bringing in the national guard to help fill some of those roles so you think okay could could or should the us government or other governments bring in the military to help with trucking and supply chain management moving stuff around however they need to i don't know i don't i don't necessarily love the idea but it's an option for sure yeah and i think it's a a cultural um it's important to understand the cultural strategy um right like in germany they have a lot of supply chain regulations mandates those types of things because that's what makes sense for their country obviously from just an overall logistics and footprint they're much smaller than a country like the united states and just culturally different they're more used to heightened government interaction over here in the united states we've we've never really been that we're run by a lot of times a local government more than federal regulations so you know taking into account what that might look like but i know the national guard had helped at hospitals in new york and they had been helping at some of the la portes and just supporting those kind of high um high experiencing areas that are either have a labor scarcity or just an inability to handle the amount of of work when it comes to the ports that they actually have so that brings me kind of to my next question um which is also about government so you know just to set expectations but we in the united states here have a new supply chain dashboard that i wanted to ask you about so basically just to give you a quick overview is is this dashboard that is run and managed by the white house is a twice monthly collection of metrics that track the progress of imports and goods that are being come into the country and a lot of this information allows us to hopefully see any blockage or blockchains in the supply chain what i want to ask you about because the main piece of criticism is that twice monthly metrics there's no way you can get real actionable data out of that for a long time is what a lot of supply chain experts had said so i wanted to get your reaction to that and saying like putting all of this these resources into a supply chain dashboard that might not give actionable data is that a good idea um i suppose it doesn't hurt i just i think i'm leaning towards maybe where you're going with that which is that you know it's sort of like what you're saying about how each country and culture is different in the way you know they interact with the government and regulations and things like that same with the supply chain i mean different supply chain or different pieces of the supply chain have different issues that okay we can measure it all we want first of all i'd argue that it's probably too late by the time the government compiles all this data from presumably multiple sources and publishes and all that stuff i i suspect that it's outdated by the time they put it out and it doesn't mean a whole lot but but even if you assume that it it it is timely or relatively timely to where you could do something with it it doesn't really give you any sort of answer or doesn't state any problems that we don't already necessarily know and it certainly doesn't tell us what individual organizations should be doing to improve their supply chains by means and each organization is going to have different challenges some so one company might be struggling with shipping issues not enough truck drivers not enough trucks another one might be struggling with not enough warehouse workers um you know lack of raw materials coming from some country or some provider that the government doesn't even know about so there's just so many to your point earlier it's such a complex set of moving parts that those metrics are going to be super high level and probably aren't going to be hugely beneficial having said that i haven't looked at the dashboard i didn't know it existed so it's kind of cool to know that it's gotten that level of visibility um so i'd have to see what's in the metrics but um i suspect it's not going to tell you a whole lot about what to do or give any sort of answers to the to the problems yeah a lot of the feedback on um bigger industry ceos is is thank you very much but we actually already have all this this data you know so um it's i think it's just a way for us to decide specifically in the us and other countries globally really how do you make your supply chain resilient you know how how do you make it so that even when we are experiencing these these really huge disruptions how can your supply chain not completely fall apart like a lot of a lot of them have right now so i think that's probably what the goal is although we've we've always known that government isn't really the best practice in data management so maybe it's a positive move on their end to actually utilize some data driven activities within their decision making we'll see it could also be a expectation setting too you know a lot of what i've noticed with the governments primarily in the u.s which is the one that you and i see the most of but we have offices throughout the world to interact with other governments but um part of it it seems like that there's expectation setting that this isn't going to get better anytime soon and it's sort of like setting the expectation to american voters that this is just how it's going to be so we're not expecting too much i guess you'd say so that could be part of it they've got this dashboard that's telling us all along that things are screwed up and it quantifies what we're all seeing and feeling so therefore we're not going to expect it to get better any time soon i don't know that could be part of it it could be a political game more than anything but that's the uh that's the skeptic in me that's okay skeptic skepticism is good so um my next question for you eric because you know i love to put you on the spot is um they have identified five areas in consumer goods so five different categories that will be the most affected or that will be in the most short supply according to a new adobe digital insight survey so i wondered if you would guess some of the categories that or that you christmas shoppers out there or holiday shoppers or whatever your family celebrates during this time of year might want to just put on the top of your list as the priority to get sooner than later okay so this is specifically for christmas right for the christmas holiday season it is um that are in short supply right now so we'll call it holiday season ish okay leading into the holiday season there you go so i would say electronics or anything that require chips of sorts computers um electronics is that one of them i need like a dinger like ding ding ding yes good job okay uh automobiles i don't know if that's part of their study but automobiles seem like they're in short supply right now that is i think that's not on the list but definitely something that obviously we've done a lot on um i must have been getting number six confused with what i know is number five all right so it's not automobiles then i'd say uh uh do they track it's not really a gift though is it to have to be something you would buy for someone like gasoline is one i was gonna say gasoline would be the shortages it seems like throughout the world it's more retail items okay focusing on that but you're reminding me so much of what it means to like play games with my husband right now because when you are a digital operations consultant it's like 1500 questions and you're like just roll the dice man like just go no i know i have to over i'm not used to disappointed like give me a yes no or specifically yes i get more information that's the console than um uh let's see well uh anything with medals i'm just trying to think like toys with metals or anything with no jewelry what's that yeah okay that would include diamonds and gold and silver all that stuff that is in short supply right now um and it probably holds its value better than a lot of other stuff too okay so we've got two of the five um what else ah [Music] i'm trying to think of like toys i'm just i'm stuck on toys but clothing um what about just clothing and apparel in general that's number three good job that's all coming from uh asia pacific and that's you know things are slow as it is and now you're bringing stuff from asia pacific which is even uh slower for a lot of the world at least you know the us europe and some other parts of the world um okay so i guess i'm i don't know where else to go from there so the last two are kind of tricky so it's pet supplies so pet food you know all those types if you're going to dress up your pet for you know the holidays you should never guess that somebody just and then home and garden items were the other things that they had had seen in the oh yeah the study is just um getting those types of things um that wouldn't make sense the pet supply one surprises me but the yeah woman garden that makes sense yeah and then the popular toys just so all the you know parents listening out there are the pop fidgets do your kids use those no the like fidget spinners or these no they're like um they like pop out they're like impossible to explain if you've never seen one but my kids who are toddlers really like them i think they're more for like teenage preteen kids is what the target is but they're great for me because if they eat them and put them in their mouth they're big enough that we're not all going to choke so and then the fairy finder no idea what that is bluey toys um and then the got to glow so those are the ones on the list don't know any of those except for the pop fidgets i don't yeah i don't know any of them i guess my kids are either too old or too young i don't know which but absolutely um so and then the the electronic discounts that usually we see around the black friday type of time they're going to be a little bit less this year is what the the study had said um but toy discounts will be higher they said this year so just a little key insights for holiday shopping good to know wow okay yeah i should probably start shopping that i haven't i know that's exactly what i was thinking um as we were going through this exercise of saying like oh man we better get on it um so yeah you know give adam my husband a little nudge if he's gonna order me any jewelry which he would never do because we have two under two kids and um we can't have nice things so maybe someday when they're older give it 10 years right right someday well i think with that um you know that that's some kind of hot topic swirling around in the supply chain but i'm so excited to hear from your panel of experts here that all have really interesting views and back around the supply chain yeah let's get to it we uh and speaking of adam you just mentioned your husband adam he will be one of the three uh panelists on the discussion here we'll also have megan bowman from she's the ceo of a company called stopwatch which makes uh software related to the supply chain and then amy cooper who works with a company called craft not not the food company but a technology company called craft with a c and uh they make uh software specific for the supply chain as well so we're gonna have the three of them on here after we take a quick break and we're gonna talk more about uh why the supply chain is broken and how to fix it so that's gonna be a fascinating topic that i'm really excited for so we're going to take a quick break we'll be right back with more transformation ground control if you are involved in any sort of digital transformation or business change initiative you will want to download the 2021 digital transformation report with its comprehensive overview of business and technology trends and best practices this report is a must-have guide for any transformation project or executive team download this free report by visiting third stage consulting at third stage dash consulting dot com you can also visit our website to learn more about us or download independent reports videos and other best practices again visit third stage dash consulting dot com today to learn how to take your transformation to the third stage of success [Music] hello welcome back to transformation ground control episode number 43 i'm here with kylo cheatham you can find us with new episodes every wednesday on youtube linkedin and all the audio podcast platforms like uh apple spotify google et cetera so be sure to check us out with new episodes every wednesday and uh i'm excited for our next segment here we're going to have a segment to talk about why the supply chain is broken and how to fix it and we have three guests on the show today um as i mentioned we're gonna have megan bowman who's with a company called stopwatch uh amy cooper from a company called craft and then adam cheatham from third stage consulting who actually all three of these guests have been on our podcast before at different times so we're gonna have them all in one discussion here to talk about the supply chain so with all that being said uh welcome to the show and let's let's run through some introductions real quick thanks eric um my name is megan bowman i'm the founder and ceo of stonehenge technology labs that has built a a robust platform called stopwatch that's designed for consumer goods companies to be able to track all of their um activities uh almost like an erp wrapper uh between amazon target anything online and offline so we kind of play in that middle space between um you know products coming in the back door and and getting to the shelves uh physically and digitally and helping uh brands and manufacturers uh move quickly uh with kind of a gamified um interface and um kind of an erp upgrade is what we what we like to call it so thank you for having me absolutely thanks for being here and so that that'll be uh as we talk about retail and distribution and some of the things that happen on that customer-facing side of supply chain i'm sure you have a lot to add there among other things that we'll talk about here today so thanks for being here so amy from craft tell us a little bit about yourself and about craft yeah absolutely so thank you for having me eric i'm looking forward to the conversation today craft is a leading supplier intelligence platform and we are helping um supply chain and procurement professionals discover evaluate monitor their suppliers to create that stronger supply chain resilience that everyone's talking about today we do that through comprehensive complete supplier data both traditional and alternative data points so everything from financial operational human capital but then cyber security diversity esg you know additional indicators of risk that by combining all of these things together we're able to elevate those lenses and really see the total picture of what's happening rather than traditionally just looking at for instance a credit score so my background i am in enterprise sales with craft previously i was at duna bradstreet and gartner within their supply chain so i've been circling risk and data and supply chain for a very long time and i think where the industry is going in terms of holistic data and looking at more than just those traditional pieces is really fascinating and it's and it's driving some impactful results for our clients so thank you for having me looking forward to the conversation today absolutely great to have you and uh i'm hearing a theme here so far we're kind of talking about alternatives to your your usual uh erp ish type of software so we'll dive into that as we get into the discussion here so uh last but not least adam from third stage consulting tell us a little bit about yourself in uh third stage yep so adam sheehan third stage consulting group i'm director of strategy and transformation you know it's uh so third stage helps with uh clients who are trying to find a better fit of enterprise system for what it is they're doing as far as supply chain comes into it you know we're seeing a lot of things today with clients who are trying to get a better look at what their supply chain even looks like um how do i know when things are going to show up and how do i respond to when they're going to be late um and how do i find that out as quickly as possible right so if so many of our clients find out today that something's going to be late after it's very late and they want to know where where it is where is this um this this raw material or this finished good that i that i ordered so what we've been finding a lot from our clients is that's a big part of their challenge we also have many uh clients that are on the flip side of that where they supply a raw material which is in high demand and they can't get it out the door fast enough um to the point where um they're having they're they're losing customers because their customers are trying to find some other alternative and so if they can't be responsive um and and get their materials into the hands of their customers they were losing that relationship um so the we we're seeing the supply chain shortage on both sides right part of it from the folks that demand the supply of course but also the folks that are supplying raw materials and things like that that are necessary for meeting the needs of their customers at third stage how we help with those types of customers and clients is by first focusing on your business processes and and by understanding if there's anything that you can do internally without software without finding new vendors or suppliers to improve your processes and get a little bit more out of the systems maybe the systems that you already have the processes that are in place maybe get a little bit leaner there maybe there's a little bit more planning that we can start looking farther ahead i think about what our lead times are um not what you think they are because your system wishes that that's what they were but because but uh from a perspective of what they're actually looking like so that's where we help a lot from a supply chain perspective got it all right well great well great to have you all on the show thanks for thanks for being here um so i'm just going to jump right in i mean probably the the broadest biggest question on a lot of people's minds is uh what are some of the biggest challenges in in the supply chain today so i guess we'll start with you amy what what are some of the biggest challenges that you see with supply chains and that your customers are seeing with supply chain management in general yeah that's a that's a great question um so it it runs the gamut so what we're seeing is there are significantly varying levels of maturity within our organizations we're working with and so if we think about the top challenges right now certainly um globalization and reshoring right so customers trying to think through how are we smart about bringing back some of the manufacturing so some of the challenges with china around you know the tariffs and forced labor and um obviously shipping and port congestion issues so getting getting goods back over here um so customers are in organizations are trying to figure out how do they do that effectively without because you can't just pick up and move your manufacturing you can't just pick up and change this entire process that has been built out and executed over the last 30 years so how how are you strategic in kind of building your supply chain globally regionally and then um locally and so that's that's one really big key challenge a big key common theme that we're hearing about the next i would say is certainly initiatives and strategic thought around diversity and sustainability so understanding a baseline of who you're spending or your spend with diverse suppliers how can you improve that how can you create an impact in your local community in your regional area so that is certainly top of top of mind for many customers from a sustainability standpoint there's kind of different tiers of that so the first and the most basic is regulatory right so there are certain regulations that are being put in place around sustainability where you have to meet these these uh these metrics the second would be then um from a a brand perspective so there's there's a lot of interesting statistics out there right now around younger consumers and them wanting to select from brands that are not only committed to sustainable practices and improving um you know it improving our world through their business but they're they're certainly voting with their dollars and they're actually then protesting when when organizations are not meeting those needs or um you know there's a flag of forced labor within a supply chain for i'm sure megan knows a lot about this on on the retail side um and so so there's that brand awareness that that that organizations are looking at and then at the top level is really creating sustainable change so there's organizations like spp the sustainable procurement pledge the un global compact where organizations are joining and committing to working together they're not necessarily trying to keep their competitive competitive edge they're working together to drive significant change that's impactful so that's another big piece um i think that the other big um the other big theme we're we're seeing is really digging down into multi-tier really understanding your entire supply chain so there's there's all sorts of new regulations coming from president biden there's a new supply chain um act in germany that requires that you know everyone and you are liable if there's some if there's an infraction in one of those suppliers and so there's certainly customers are and organizations are really looking to dig deep and to dig down many many levels to understand where those risks are and then um i i'd be remiss if i didn't mention cyber so that's on top of mine for everyone because there's there's so many um new stories of of cyber breaches and and the impact is so great so we're certainly seeing um a big awareness and the supply chain teams working with the cios to really dig into this cyber security issue and how do we how do we impact that within the supply chain yeah it's a great great overview and it you know it brings to light the the whole point that it's you know when there is a supply chain problem or breakdown as we're swinging that say now it's not any one thing you know a lot of times it's these little things that sort of add up and trickle throughout the entire supply chain and any one of the things you just mentioned can create problems but when you add up all those things and they all happen together which is oftentimes happening nowadays that creates a lot of the challenge all right good stuff we're gonna take a quick break and we're gonna come right back to this discussion because we're covering a lot of really good stuff about why the supply chain is broken and how to fix it we're gonna take a quick break we'll be right back with more transformation ground control [Music] if you are aiming for transformation success turn to third stage consulting group third stages independent and technology agnostic consulting team helps clients define their digital strategies define their roadmaps and manage their transformations with offices in the us europe and australia our team helps the world's most forward-thinking organizations through their transformation pitfalls and risks if you are embarking on a digital transformation or business change initiative contact third stage consulting to see how we can help you reach the third stage of transformation success learn more about us and download independent reports videos and other best practices at thirdstageconsulting.com [Music] hello and welcome back to transformation ground control the podcast about all things digital transformation this is episode number 43. you can find new episodes every wednesday on youtube linkedin and all the usual uh audio podcast platforms we're right in the middle of a panel discussion regarding supply chain why it's broken and how to fix it so let's jump right back into the conversation i think amy you hit so many like i actually got kind of stressed thinking about what you were saying i was like forgive me a minute i'm falling down um i think another kind of thing uh more on the on the lead indicators not necessarily in the lag um would be consumer behavior i mean it's just it's just changing when my son sends me a text of a shirt that he wants um you know it's not through you know the gap or nike or even amazon or walmart i mean it is it's through some you know uh social media channel that he just saw it and he bought it and um and so i think there's as the consumers are moving around quite a bit um you know at least from our vantage point um there's more places to distribute and sell and so you know amy to your point you're having trouble getting into the back end right like just getting it to your spot but then on top of that um the continued pressure to uh you know get to the consumer as quickly as possible whether it's a you know door dash delivery or you know a quick shipment or they run and pick it up or whatever and so there's pressure mounting on you know on that side too where uh we see a lot of suppliers um and retailers making really unprofitable unscalable decisions to kind of just win that space for right now and i think combined with what amy's talking about from that you know just complexity on the back end um you know it the math only holds up for so long and so i think um i think that's another big challenge um and uh yeah it's it's it's a fun fun time to be in the space no no shortage of stressors i think what's what's the most interesting to me about about this is this is all happening right as uh consumer expectations have have really shifted uh you know you can there's an argument to be made that that that was starting to happen um before uh before kova came around but kovit has made that so much so that i want to have it delivered to my door and i want to know um when it leaves each facility along the way so i can track it so that i know exactly the moment i mean i could see the driver on my app coming towards my house with my stuff um in that expectation um you know while that's uh that's a consumer level expectation that's been set it it applies to businesses as well not only because the businesses have to meet that expectation but they also have that expectation of their partners now because everybody knows that it's possible and everybody knows that i can see this and as you start to have stressors to to the supply chain people want to double down on where's my stuff um because now that they know that there's a risk that stuff's not coming um uh that they want to be able to to see it more clearly and have more transparency in it so you kind of have this reinforcing nature which is the more lag i have the more control i want to have over it and as i start to see more about that lag and what's happening the more i get stressed out the more i want to change my behavior to fix it and it's just creates this cycle that everybody wants to be able to fix um one of the uh one of the things that i think is um we've seen a number of times as many many of our clients have a challenge where it's it's not the actual raw materials for their finished goods that they're having trouble with it's um cardboard and pallets i was like that's you know we've had clients that i could make as much product as i want but i can't ship it because i don't have pallets um we have one client go so far as to buy a pallet company to solve this problem um so that it's it's an interesting type of a concept because when you think about um getting product out the door it's not just that packaged item it's everything else that goes out with it including the the plastic wrap i'm sure that'll come up at some point too um and getting things out the door so that we're meeting the the needs of consumers yeah that's a great great point and actually a great segue into a follow-up question which is you know we talked about some of these challenges that that the supply chain in general is facing and there's a whole gamut of challenges a whole variety of things that are contributing to the to the challenges but um adam why don't we start with you on this one but how do you how do these challenges that we just talked about um how do they affect organizations and their operations and how do you see them reacting you talked about the client that bought the pallet company that was one reaction or one way that you could react just do more of that kind of vertical integration of the supply chain or to where you at least have control over over it to some degree but what else are we seeing you know with our client base um as far as how clients are responding to the to the supply chain challenges yeah that's a fantastic question and of course every client has its own response but the the general common theme is being able to have greater visibility uh they want to know where things are at and they want um and when it's coming and then the next natural uh response for most of our client is diversification uh especially for for clients who have had challenges where they're dependent on one vendor for one raw material what we've started seeing is a lot of our clients will start to say well i can um i need to start adding vendors to my uh my list here um not only from a perspective of i need to have more than one but they also start having conversations about quality right normally my my demand for quality is very high but right now my demand for speed is higher so we've seen clients being willing to say it doesn't have to be perfect it doesn't have to be less expensive it just needs to get here as soon as possible we'll figure the rest out from there um and what that that's causing those a continued chain effect which is now the supplier is paying more for that raw material and as they resell it in one way or another their prices are going up um and and that the level of visit the level of visibility that's not being achieved is compounded because now i have somebody whose raw material price went up and their their price of their finished good needs to be connected to that but they're not seeing it as clearly as they'd like to because that raw material price goes up they buy it and then they put it into their system to be used as a as a raw material to turn into a finished good and they haven't costed that differently so their price remains the same and their profits are getting chewed up by that increase in costs that they've either accepted or was a surprise to them because they don't have the visibility in their system so those are some of the more common responses with um getting more vendors uh um and loosening up on some of the the more rigid uh parameters cost quality um and in favor of lead time yeah it seems like that there's a lot of um the supply chains of today have been built for sort of a pre-2020 world where cost and quality were sort of the the biggest priorities and now you know you've mentioned a couple amy you mentioned sustainability earlier you know now there's these other considerations um sustainability flexibility speed these are all things now that supply chains weren't necessarily built for prior to 2020 but now they're being strained partly because you know the world has just completely shifted in the last couple years with pandemic and changing customer behavior and all that stuff amy and megan what what else what did we miss what other uh impacts are you seeing to organizations or reactions are you seeing from your customer base in terms of how they how they deal with this what are they doing to try and fix some of these problems yeah across the board we are seeing organizations prior to 2020 everyone would react to a risk or react to a disruption now organizations they're expecting them and they're planning for them so to some of the items that adam spoke to um they are absolutely planning expecting uh i have one customer in the pharmaceutical industry who has stockpiled three years of supply for their for their key products and imagine that overhead to carry all of the all of those all of that i mean it's it's an enormous um financial undertaking but it's required for them to be able to maintain their business operations so they're willing to do it we have an a d customer in aerospace defense they have made sure that all of their parts are within 12 hours of their manufacturing locations and so um there's a lot of a a lot of things like that where organizations are completely changing their strategy and their policies to proactively um try and get a handle on some of these risks that keep popping up and that they've learned are are inevitable i think that the fragility of um the supply chain was really highlighted with covid as different parts of the world shut down as workers couldn't go into these different facilities um that just kind of highlighted these these challenges and these problems that have been percolating for a long time and it just tipped it it tipped the scale and now we're seeing that cascade of every of the fallout of that and it's going to unfortunately take a long long time to recover um you know vietnam is is a huge manufacturing hub hub now and they've just come out of their second set of quarantine at the beginning of october so getting all of those sites back up and running to deliver the goods it's a slow roll so now they're out of it but who's going to be the next the next location globally where they're stuck so i certainly think um you know being um being proactive and thinking that there's gonna be challenges here so what do we need to adjust and you know prior to 2020 um the supply chain i don't even think consumers knew what the supply chain did it just is something your your things just arrived you clicked a button on amazon and it just got there and no one thought twice about how that was going like the logistics of what had to happen at all the different steps and so now people understand it and there's um to megan's point with the way consumers are responding they're demanding change and they're demanding things be uh be more efficient they're demanding they understand where things are coming from they're demanding they understand how things are made so it's a complete shift in the paradigm of supply chain and how we're um how we're consuming it how organizations are are managing it it's just it's going to continue continue to change i think the top three goals um gartner just released their csco report and i think it was risk management digitization and then the work from home like how do we manage especially in some of these manufacturing locations how do we manage our workforce to keep people safe and and continue to deliver the goods so it's a very complex complex set of challenges that that i think are going to take a very long time to start to tackle yeah yeah it's interesting and you mentioned vietnam and you know i i wasn't aware that they just had another quarantine or lockdown so it but that's a good example of how you know wherever we are in the world there's other parts of the world are in different places and having different responses and that's affecting the supply chain globally in uneven ways that's so that's really a really interesting point um megan what else what about more from the you know sort of the retail distribution customer facing side how are you seeing is there anything different you're seeing your customers do to react to the supply chain or anything we haven't covered yet um i think i i really like what amy and adam have shared um especially around amy when you said you know they're changing policies like we've never said that three years ago like policies did not change right um we've all been part of really stiff big you know expensive profitable organizations where like to change a policy is you know a decade-long kind of opportunity right adam's laughing um and you know each person within that organization has different you know tolerance for that understanding i was always kind of a firecracker that just couldn't like like couldn't combust you know if there was something that inefficient um but what i think what i think we're seeing is not only the policies changing but leaders are a lot more open to us coming in and saying hey you've got an incentive problem here literally like like you can change the policy but like if your procurement lead is still being incentivized on lowering their carrying costs he or she is not going to make the decision that's more of a long-term strategic place stockpile you know three years worth of materials and a pharmaceutical company and so you know going back to like you know eli goldblatt and the goal i mean you have to make sure that not only the policies are changing but also the humans that are you know incentivized either um you know consciously or unconsciously right um are making those changes as well so um i can give an example um you know we deal with a with a major beauty manufacturer and um you know some of their stuff was late and target you know couldn't um take it all right so all of a sudden they have all this you know excess holiday and it's you know november you know ninth okay well um you know these teams were never incentivized to actually talk to each other right so the amazon team would come in and take all the excess inventory throw it online tank the price piss walmart you know his target off like and there's just all this inviting well yesterday we were in a war room with leaders from every single one of the retailers to say guys how do we like collectively move this inventory to maintain you know the the um you know the integrity that we have with tar you know with target to maintain you know the promise we have in the markdown levels and that level of just kind of cross-channel collaboration the retailers don't like it because they like to keep people you know pretty pretty motivated to just do what they want to do but what we talk to brands and manufacturers a lot about is um you know the minute that you break down those silos and incentivize those individual leaders across separate retailers or separate channels to actually you know act together for the good of the company um you know we're seeing significant increases so in you know in my area companies that are breaking down those silos and actually kind of war rooming in real time across multiple retailers are are outperforming you know the old school you know kind of siloed like ten to one um and so you know um how are people reacting i think in our industry uh you know consumer goods we're seeing some people do it really really well um and it's you know policy to people kind of thing and we're seeing other people um or other companies kind of struggle with it you know it's some combination of policy and people and speed um so at the end of the day it's you know you talk about it a lot eric it's change management and how do you motivate people to to to not only you know know the new rules but to take advantage of them um is is really where we're seeing some some dramatic shifts in good ways and bad ways i mean you know it's not always when you're shifting you know me to your point when there's like years of you know uh backlog of you know policies and things like you're going to make moves that are going to hurt something or someone unintentionally you just can't you got to move so fast that you can't uncover all of the unintended consequences i think the key thing for leaders is to be really listening for those and the minute that somebody gets their you know gets their tail stuck or whatever that you know it's back to the war room okay we didn't anticipate that how do we change how do we move um and a lot of that just comes down to um you know data availability um data democratization um you know data interpretation across all levels of the of the organization and um it gets really fun it gets fun when um you know more perspectives are at the table making uh big decisions in real time yeah you get some really good points there and i think it um i think it really underscores this idea or the the fact that it's not as easy as wait it's not as easy to fix the supply chain as just order more stuff you know just stockpile more stuff get three years of inventory like the pharmaceutical example you give amy it's not that easy because uh well first of all you may not have the systems to know how much you need to order you may not have the right processes in place you may not have the right incentives or the right organizational roles and responsibilities and compensation and all that stuff so there's a ton of human behavior that needs to change in order for especially these bigger organizations to adapt and i think that's that could be part of the problem we're seeing is it's not as easy as you know we can all force it here and say well just why don't people just order more stuff or get it there faster i mean how hard can it be well it is pretty hard because it's like changing the course of a huge ship you know it doesn't just happen overnight you've gotta well and get you know to adam's point you know what do consumers do when they get nervous right they wanna control more they wanna know where it is what do we as you know supply chain analysts or procurement partners or you know data scientists what do we do we try to control more which is actually the exact opposite of what we need to be doing right now inside of companies so you know we talk about it a lot at stopwatch it's this like it's this tense up and then we also remind ourselves you know what that tense up is actually causing more more challenge so we i mean there's a huge incentive you know across our organization to just say hey that's a natural reaction it's natural that you don't want to share that data i get it but the game has changed you with me and they'll say yeah i'm with you i'm like all right then share the data right yeah and that's a big part of what you know both stopwatch and craft do it seems like is provide different data points and different uh ways and abilities to analyze the supply chain than what you would traditionally see in sort of like a vanilla you know erp system or even even supply chain management systems the traditional supply chain management systems that were more focused on efficiency throughput um cost you know tracking costs and all that sort of thing whereas now we're talking about something totally different so that a lot of the technologies the legacy technologies that are out there weren't built for this they were built for sort of that pre-2020 supply chain they were built to stay to keep distraction from the company right and that's a killer way to build software right like this software needs to work in the back end and we need a few people to be focused on it right so that you know so that the rest of the company can focus on product development marketing i mean it makes total sense it wasn't like you know those systems were built um it's just it's just fascinating and i think amy and adam of those you know touched on it as well that um that that that no longer can things be just happening in the background and it's it's fascinating um yeah yeah and i and i would add um you know the systems that have been in place for the last 30 years to manage and track supply chain and logistics and and shipping and all of these things that that are are these organizations are working on um were all built very siloed and the data that was coming into these systems was very siloed or it was incomplete and and eric as you know like the these systems are only as good as the data foundation that's sitting within that tool to be able to report and understand so you can have the best tool in the world but if the data isn't there it's not going to give you the insight to drive the strategy and the impact that you're looking for within an organization and so that's really where we've started and are really frankly changing um the supply chain data industry and that we are aggregating all of these different traditional and alternative data sets so and the thesis and what is proving correct and impactful for our customers is that looking at all of these different data points all of these different lenses of risk and opportunity is elevating the understanding of that supplier and helping companies proactively plan for risks that are going to inevitably come up but if you can have just a little bit longer of a runway you can be much more strategic in how you manage that and minimize the impact of the organization and so across the board the the days of data silos and the days of plot you know different platforms that aren't speaking to each other are long gone and i think as technology continues to improve um and and as different algorithms via ml and ai come on board we're going to start seeing these tools really speak to one another and and it's it's going to elevate organizations ability to predict and plan for some of these risks and challenges that we're seeing today and so i think you know if we talk about supply chain you know prior to 2020 um ever it just hummed along and it worked and it was low cost and everything things were okay but there were always these challenges and now that um you know since covet hit and and all of these things are kind of coming to the surface i think we're going to see over the next 10 years a dramatic shift in the technology and how things are integrating into megan's point um organizations working together to say hey you have this we have this let's blend it and let's really um let's create something that's really impactful for for the industry all right good stuff we're going to take a quick break and we're going to come right back to this discussion because we're covering a lot of really good stuff about why the supply chain is broken and how to fix it we're going to take a quick break we'll be right back with more transformation ground control [Music] if you are aiming for transformation success turn a third stage consulting group third stages independent and technology agnostic consulting team helps clients define their digital strategies to find their roadmaps and manage their transformations with offices in the us europe and australia our team helps the world's most forward-thinking organizations through their transformation pitfalls and risks if you are embarking on a digital transformation or business change initiative contact third stage consulting to see how we can help you reach the third stage of transformation success learn more about us and download independent reports videos and other best practices at third stage consulting dot com [Music] hello and welcome back to transformation ground control the podcast about all things digital transformation this is episode number 43. you can find new episodes every wednesday on youtube linkedin and all the usual uh audio podcast platforms right in the middle of a panel discussion regarding supply chain why it's broken and how to fix it so let's jump right back into the conversation if i might one of the things that's worth um bringing up like two things that i think that came up from from megan and amy that are important to latch on to a little bit first is data of course you know being able to to see it accurately if you're if your information on your supply chain is bad and you have a supply chain problem you're you're in deep water um and the other uh the other side of it though is that all of this is being driven by people um it won't in one way or another you know i like the example of vietnam because something that doesn't get spoken to very much and needs a little bit more attention is that suppliers when suppliers shut down because they have an outbreak or because they go out of business that's a piece of the supply chain that's gone either temporarily or permanently and so that causes think of how many you you have one supplier that goes down think of how many customers they might serve and all of a sudden those customers who are expecting things to already be coming from them they have a lead time in their system that says i'm going to order this from this person and it's going to arrive in 60 90 days whatever and then they don't find out that that they went out of business until it's time to order okay so now i'm now not only do i not um have somebody to order from i'm at the point where i need it now um and i had to go find somebody else to fill that in and whether it's because production is slowing down because people are shutting down for whether it be temporary or permanently um whether it's because people are you know they're the supply chain involves so many things it involves production it involves transportation it involves you know warehousing and and all and distribution all those things that start with creating something whether it's pulling it from the ground or uh or building it from scratch and it goes somewhere from there it has to get there somehow and um once it gets to that location it probably that's probably not it's its first destination is probably not its last destination its fifth destination is likely not its last destination and so this is why we call it a supply chain right there there are multiple steps in this and as people are injected into this um you have the not only the the labor shortages that are caused by whatever you want to call it um you know shutdowns uh outbreaks the great resignation all of these things um impact all of those stops and they create bottlenecks because at the end of the day people are what make this thing go and then people are what reacts after it's not going fast enough so they double down on something that now all of a sudden you're stressing something is already stressed so that as each step goes along this impact is compounded and i think that one of the things that we're going to start seeing a little bit more is people are going to get more localized and they're going to they're going to want to start shrinking the number of stops this takes um and they're going to get a bit more diversified and and what it is is acceptable to them supplementary uh raw materials is um something that people haven't been forced to think about but now that now they will be because it should be that way um stocking up is an important part of things too uh you know even before i had a client even before the even before covid with the tariffs on china basically said well we do all our manufacturing in china so we're going to stop stock up before these tariffs come into effect so that we already have that um you know i'd be curious to hear from them if that um if they ran out of materials at just the wrong time because for them it's very likely that um they're planning for these tariffs and as those things start to fade away and they start to feel like they can get leaner bam here comes covid um and all of a sudden you know the supply chain is disrupted again i think that what this is showing is that just the the complexity of not just our supply chain but of our global economy um you know we mentioned vietnam how uh how a shutdown in vietnam can in fact uh affect everybody uh that think about how many places are gonna continue to do that you know this isn't something that um is gonna go away in the next year in the next administration in the next uh the i i'm willing to bet we're gonna be talking about covet for the rest of our lifetimes at least the folks that are on on this call uh and and how it uh we've seen these trickle-down impacts and at the center of it um are the people in in placing an emphasis on that is important yeah absolutely it's uh very much intertwined and interrelated you know all this stuff we're talking about um so we're covering the whole gamut here of a lot of different things there's people process technology overall strategy um incentives a lot of the stuff we talked about so far covers a pretty broad spectrum but one one thing i want to come back to maybe dive into a little bit more is this whole concept of data and transparency into the supply chain i think amy you were mentioning that one of the trends you're seeing is that people are looking beyond just the immediate supply chain they're immediate suppliers and they're trying to look to the second and third tier suppliers and i know uh making on your side of kind of your world of where you operate you're looking at sort of the end consumer so you're kind of you know you really have to look at third tier suppliers of raw materials all the way through manufacturing production 3pl providers warehousing distribution getting it to the retailer getting it to the consumer or getting it to the ecommerce provider getting to the consumer but i want to come back to the two products that your company's providing me and megan um and just maybe talk about how you know how do your products provide some of that data and transparency that has been missing from the supply chain so far because i think part of the reason i want to have you on the show is i think that you guys both have products that are i would call them alternatives to the traditional supply chain systems and they provide some of that visibility so amy why don't we start with you you know how does how does craft help solve that data and transparency and visibility problem yeah so thank you for that eric um so then craft is collecting and aggregating over 400 different data points on any particular supplier on average so that is financials operational human capital that's cyber security scores that's esg scores diversity certifications um compliance data ownership data and so what that allows organizations to do is to have that single single source of truth on that supplier and then as you work through our different the tool and the dashboards and the alerts and the reporting capabilities you're able to not only understand what's going on within your supply chain but we can also map different tiers for you so now throughout all of these different lenses whether it be just pure financial risk or compliance risk esg so is there forced labor down in your supply chain that's gonna that's gonna catch you down you know once that's exposed so risk risk to us is a very large word right because it could be many things it could be logistics it could be shipping it could be materials commodity inflation it can be you know there's so many different things and so what what craft is focused on doing is we've created a very easy to use simple simple platform and interface to surface these these different indicators and to combine these different things to say hey your cyber security score is very high risk and your employee engagement score is also very high risk those two are correlated with an increased percentage of a data breach so what does that mean to you so each organization has a different threshold for what they're uh for for risk and what they're what they're open to and how they build out their policies around that so what really we're really focused on doing is surfacing all of these insights and then helping our customers take strategic action around that um regardless of where they are in the world we offer 100 coverage so if the data is out there we will find out we have a fantastic set of data engineers and a fantastic technology platform and that's where uh i referenced earlier the the technology pulling in all of this available data and surfacing it for these organizations is is already leaps and bounds ahead of what we had 10 years ago and it's going to continue to really evolve as as the ml and ai algorithms continue to evolve and as as more data is captured um as more data is shared um between whether it be a survey coming through or or different things that that that organizations are working on so we're really focused on a very easy to use platform and availa all the available data that that is relevant to help you understand those suppliers and then make those plans moving forward yeah imagine it gives your customers a feeling of a bit more control too because in the past i would think that it seemed like in the past it didn't really matter the stuff you're talking about didn't matter as much because as long as the stuff showed up and as long as the the vendor is reliable doesn't matter what their employee engagement score doesn't matter you know what this is cyber security policy is all that stuff that none of that matters until it does matter and now it does matter so it's it's sort of like a good timing for that product i would think yeah people are seeing now and they're hearing about it in the news they're they're seeing it um you know on their own social media people this is where kind of some of the consumer sentiment stuff comes in they're seeing it and and people are are charged up one way or another about it and so um it's just um it's it's become a very effective way by combining both traditional and alternative data points to to have a a better response and to be proactive you know like i said um everyone's expecting things now so if you can just anticipate it a bit then you can be better prepared yeah absolutely now how about on the distribution retail e-commerce side of things megan what are what are some of the how does your product fit in and how does it provide some of those alternative data sources and alternative ways of operating the supply chain yeah um first of all i guess like i can't wait to check out um but we don't you know we don't buy you know we're not we don't procure things but um i i'm pretty stoked about kind of that the idea of that visibility um i think some of our clients could really use it um i think one um one thing that stopwatch is it does and because we are on the on the consumer product side of things um it sounds really silly but like this little upc right here like um you know when amy buys this or adam or anybody on the call buys this at target they don't they don't buy it as a target sku um they actually well they do actually that's how it comes in right but they're really they're not saying oh there's a target sku that i want they're saying oh there's little kroy that i want to you know buy and i happen to be in the space of target right um well you start kind of extrapolating that out across you know any place you can get something that you like from secret deodorant to you know a toothpaste to trash bags to bag of chips to whatever um all of a sudden uh there's you know we talked about data engineering um there's just a lot of data engineering to be doing to say hey did the consumer mean this and this because our systems in black and white numbers are saying that these are two different skus because one has a target sku and one has a you know cbs sku well at the end of the day the consumer is is is you know lacroix needs to know what the consumer is wanting right um not necessarily you know the context in which they want it as much as as much as before um and with the last mile delivery and kind of all that sort of thing so when we think about the visibility pieces and what stopwatch does it basically you know as amy you mentioned that it sounds like uh the craft kind of kind of the main fulcrum is around uh supplier information um for stopwatch the main fulcrum is around single sku information um and so you know gs1 has been working on it for for years um you know no disrespect i don't think they have the technology or the engineering to to put put toward it um you know there's there's all sorts of little mini solves but at the end of the day um with the right computer vision natural language processing you know mi ale you can actually like pretty much distill everything that's floating around in the universe down to a single point of contact and then blow that back out and see what's actually happening with it so you know in the past coca-cola was always wondering about their market share like you know do we sell more coke to people who want to drink soda than pepsi right this market share was a big you know thing with nielsen and iri and you know a lot of big data houses well that's a very like lag indicator across a lot of many choices that have been made over a very compressed period of time right and so um it made sense right it made sense in the 90s it made sense even today but what makes more sense today is to understand in real time where those coke and pepsi choices are being made all at the same time because when you start looking at it as more of a game theory matrix versus a linear matrix sorry to get mathy here you actually can take advantage of your competitors downfalls so one thing we talk about a lot within stopwatch is you don't have to be the winner in every single thing you just have to win when your competitor has made a misstep right and so you know if i'm this is very general but you know if um folger's coffee is stuck on the water that's public information so what should starbucks do probably make a different decision than if they didn't know that folger's coffee was stuck on the water um and i think that's where stopwatch really kind of distills in to say listen okay this sku you need to look at the sku in comparison to its true real-time competitors and then you need to know what's happening with the sku and also what's happening with its real-time competitors and when there's a combination of they make a misstep and you make a move that's where that 10x kind of you know arbitrage kind of kind of opportunity happens and um you know the cool thing is is that we could think about it as humans but once you get it into a tech stack that it can actually kind of turn that through pretty quickly um you know the game just changes and uh and things start moving really really fast so um really stopwatch is designed to um you know kind of kind of assign brand marketers and manufacturers and people who really know consumer insights basically their brain activity and how they think about what's happening and put it into a machine learning model that then just picks it up really really fast um and so we do a lot of supervised learning you know with experts in the field and say okay how are you thinking about this like you know if folgers was stuck on the water what are your ten you know what are ten things that you know starbucks could do to um to capitalize on the opportunity and you get people who have been working in this field for a long time talking about that and you i mean it's just like oh my god what a brilliant idea what and and you just couldn't do it because you you couldn't move things fast or you couldn't tell things to change or the data wasn't connecting and so that's where we get really excited i think there's a lot of creative people in in us in supply chain um that have been constrained by you know time and barriers and stopwatches you know real goal is to blow open those time and barriers so that you know people of all different levels of expertise and experience within the supply chain can kind of input and uh and maximize their opportunity in real time yeah good stuff that now i've got that's really that's really interesting and i think those are two good complementary views of how how data and visibility and just rethinking uh the supply chain can can help all right good stuff we're going to take a quick break and we're going to come right back to this discussion because we're covering a lot of really good stuff about why the supply chain is broken and how to fix it we're going to take a quick break we'll be right back with more transformation ground patrol [Music] if you are involved in any sort of digital transformation or business change initiative you will want to download the 2021 digital transformation report with its comprehensive overview of business and technology trends and best practices this report is a must-have guide for any transformation project or executive team download this free report by visiting third stage consulting at third stage dash consulting dot com you can also visit our website to learn more about us or download independent reports videos and other best practices again visit third stage dash consulting dot com today to learn how to take your transformation to the third stage of success [Music] [Applause] [Music] hello and welcome back to transformation ground control the podcast about all things digital transformation this is episode number 43. you can find new episodes every wednesday on youtube linkedin and all the usual uh audio podcast platforms we're right in the middle of a panel discussion regarding supply chain why it's broken and how to fix it so let's jump right back into the conversation i've got two quick questions normally i would you know these are two questions that we could usually spend 20 30 minutes on each of these but maybe we'll do kind of a lightning round here and i think we sort of agreed before we we went live here that we probably aren't going to cover everything we wanted to and we probably will have to do a follow-up and i think we probably will because there's a lot here we haven't gotten to i think we've covered a lot of good stuff but a lot more we could get to um but just real quickly i know we're going to want to dive maybe deeper into this than we'll have time for but just real quickly amy i have a question for you about cyber security um how is cybersec and you alluded to it a little bit uh one of your responses earlier but what um what how does cyber security affect the supply chain what are some of the challenges with that that we're seeing right now yeah i there was a statistic that came out um over this summer and it was that in q1 of this year cyber security attacks particularly on a supply chain were up 67 percent um and so that to me is just staggering that's not going away um these cyber criminals have realized the impact that a supply chain disruption has on not just that one particular organization but everyone i mean the colonial pipeline shut down over the summer the entire eastern seaboard was in a panic trying to panic by gas and figure out what was going to happen and so um the so the overall impact is is massive when some of these things happen um and so it's not going away um there are scores available to help find those vulnerabilities there are also capabilities um to understand uh the deep web what's already there and i've i've actually run this through craft for a few clients and it's scary how many um ids and passwords of senior level executives ceo cfo very very high level people are floating around the dark web for organizations that i'm not going to name names but um the fortune 500 fortune 100 their ceo's email and password is exposed on the on the dark web for someone to buy and create an attack and so many of these tax attacks come in through these id and password issues with these like minor little security things that haven't been updated um and they are they are able to get in so um so there's that you know at the organizational level and then like i talked about the end tier so um some of these attacks are starting far downstream i think the solar solarwinds attack came in through a supplier many many levels down and that impacted i mean we all remember that one so um i think it's something where organizations are forced to now begin looking at this the cios are now talking to the the supply chain officers and formulating a plan to understand uh where do we have vulnerabilities what do we need to do to be more proactive here certainly we're seeing um organizations requesting their suppliers so some security questionnaires upon onboarding making sure that those those those things are in place to try and prevent these things because they're only getting more sophisticated and they're not going to go away because of the level of disruption that they're causing right right yeah that's a that's obviously a big concern and then you add that you know that's of course additive to all the other things we've talked about you know the all the other issues that we've already covered um and then another lightning round question that uh i'll ask you adam um is and this is a it could be a controversial question that's why i'm asking you this uh it's because i know you can handle this one uh but do you think governments will or should start to regulate the supply chain given uh all the challenges we're seeing right now and i know there's been some governments like the us government for example is talking about potentially taking a more active role in regulating the supply chain what do you think will happen there as far as regulations and just government involvement in the supply chain given everything else we've just talked about yeah i think that it's it's important to bring up what we talked about earlier which is people trying to exercise more control over what they're doing is causing problems right the reacting is causing more problems and so i i would say that and and this is my opinion and i'm of course open to all kinds of feedback on this but i would say that while government has a role in helping with the supply chain and helping loosen some of this up regulate regulating it in a way that that restricts it and is reactive and is designed to try to make something happen is more likely to have unintended consequences that cause more problems you know our supply chain we've we've been talking about today how complex it is um and in all of the areas where just one small thing can just create havoc um trying to try to act like you can make a you can regulate something in a way that you can control all of the the the undesirable impacts i think is not um is is a bit of a fiction uh that we need to to stay away from but at the same time i do think that governments around the world should have a role in helping ease some of these shortages right so um trying to get shipping containers moved through uh ports more quickly especially in areas of the world that are more uh more constricted like what what happens when a shipping container blocks the suez canal you know like there's a role in that for easing that solving that problem um but then so and that's that's how i think about it i'd be curious to see how amy and megan think about it as well as supply chain experts yeah any any thoughts on that megan or amy i i completely agree adam i i think it's it's so complex that that a series of regulations aren't going to solve the problem right i i think there are ways that small small things can make an impact for instance in southern california now our ports are now operating 24 7 to try and get things off of these ships and to kind of ease some of that congestion is that going to solve everything overnight no but it's a start i think um so i i certainly think um the visibility is um is going to be in fact impactful the fact that president biden is is putting this stuff out there i think um is going to be impactful for organizations to really force them to continue to evolve and to look at change like megan was saying earlier change isn't very very hard but i think when there's this this um visibility on a global scale i i think it does it helps drive some of those some of those changes that are are inevitably coming so yeah now what about just as kind of a closing question i'll start with you megan um what what one or two things in closing would you say that organizations and teams within organizations should be doing to kind of rethink their supply chain and really start to fix and alleviate some of these problems if you had to summarize one or two things what would that be this is gonna be crazy but talk to more teenagers but truly talk to teenagers things that are really really complex that are in our minds um when you when you sit and talk to a kid between 13 and 18 um it's not as complex in their minds and if we can get out of our own way and start to kind of look at things the way they are um i'm i'm just always always shocked at how you know there's a commercial there's outcomes razor opportunities um but we've been really predispositioned uh to to not necessarily pick those out right right that's a good point yeah sometimes we overthink things over complicated and that's the last thing the supply chain needs right now is more complication because there's already enough enough moving parts as it is um how about you adam what what uh one or two things would you say in closing is sort of a takeaway or something for organizations to think about yeah let's say start looking at it earlier in your process um get ahead of it and don't be as reactive as you feel like you have to be if you can start seeing what your key your most critical raw materials are your most critical components and understand that um at some point that's going to be impacted by a supply chain issue seeing it farther in advance no it's a my lead time on this is 30 days that's pretty good um we'll look at it 60 days before that start to think about what happens when your lead times get uh get expanded because these panic buys and all those things they happen fast i mean like i don't think the great toilet paper shortage of of 2020 is ever going to be forgotten um and that type of thing it happens fast and it's you trying to react to that in a way that is um short-sighted i think is a is a is a difficult position to be in so knowing what your your your key components are your key raw materials and and really getting way ahead of that knowing what all of your options are so that you can adjust is going to really be a really impactful thing for your business yeah absolutely how about you amy what what closing advice or recommendations would you have for organizations yeah i would just say leverage the digital tools that are available um to understand these multiple dimensions of risk across your organization and and leverage that to be more strategic to um to plan for these things they're going to happen this has you know the fragility of the entire supply chain the global ecosystem has been exposed and so um now it becomes kind of this new era of planning and and managing to that and and changing particularly large organizations it's very very difficult to do but we're starting to see that and i think it's going to continue to evolve but i would just say to to leverage um the digital tools to manage the risk and and to figure out what that means for your organization and playing around it yeah absolutely well i'll actually sorry i'll jump in kind of on that and i would i would go one step further amy this kind of goes with my teenager thing is is leverage digital tools that don't suck like and i say that with all love because i think what's really interesting is as consumers and people out in the world on the weekends like we have our phones and we're like chillin in mint and uber and like really good technology and then we come in on monday morning and we sit in front of our main train and we're not demanding you know the same level of user experience and visibility and accessibility and those sorts of things and so you know i think i think one thing that's really important for for teens to realize is that you're going to be more effective when you're working kind of you know quickly um and there are a lot of great tools out there that you know just don't don't suck um you know and uh and i think it's important to explore those um because it's amazing how much how much faster things go and how much happy you are when uh you're just working kind of you know in your brain wave that that kind of makes sense versus having to relearn an old system it's kind of that old adage like work smarter not harder right like let's be more effective in what we're doing and how we're doing it across the board and there's nothing wrong with getting simple you know there's a comment in there yeah right exactly there's a comment here we're trying to shorten the supply chain that's a great idea right if you can start if you can get more direct you can simplify this problem not only do you reduce your exposure to it but you you improve your ability to resp be responsive yeah absolutely yeah a lot of good stuff here and you know this is all interesting timing especially as we come up on the holiday season for much of the world uh in november and december that's part of why i wanted to have this this round table with you all um here today so um there's great stuff and like i said i think i definitely wanted to do a part two with you guys if you're open to it i think there's a lot more to dive into here so i want to want to thank you for your time of those this really good stuff i really appreciate having all three of you on the show here today so thank you very much for being here all right thanks amy megan and adam really good conversation i love the topics we covered there and uh some really good stuff to unpack and a lot to absorb quite frankly so uh we're gonna take a quick break when we come back we're gonna uh debrief uh some of the findings from that discussion and then we're also gonna queue up our next guest our next guest who will be on later talking about pains in the supply chain but before that we'll take a quick break we'll be right back with more transformation ground control if you are aiming for transformation success turn to third stage consulting group third stages independent and technology agnostic consulting team helps clients define their digital strategies define their road maps and manage their transformations with offices in the us europe and australia our team helps the world's most forward-thinking organizations through their transformation pitfalls and risks if you are embarking on a digital transformation or business change initiative contact third stage consulting to see how we can help you reach the third stage of transformation success learn more about us and download independent reports videos and other best practices at thirdstageconsulting.com [Music] hello welcome back to transformation ground control episode number 43. you can find new episodes every wednesday on youtube linkedin and all the audio podcast platforms be sure to check us out there be sure to also check us out on social media uh any social media platform you're on we probably are too so look for third stage and or me personally on there and we're constantly putting out uh daily content about digital transformation best practices as well supply chain best practices as well um so uh what did you think that discussion kyler that we we had a lot there's a lot we covered there there's a lot we didn't cover a lot we still could easily spend another hour with those guys but wow what did you what were your thoughts yeah absolutely i mean what an interesting group of professionals kind of talking through what the supply chain looks like from all different lenses obviously adam has the third stage experience and then you know amy amy and megan bring a whole different experience to the table when it comes to how they service their clients one thing i wanted to ask you about that amy said specifically when you asked her kind of like what are you hearing from your clients regarding specific uh pain points or anything that they need to i guess prioritize within their supply chain strategies and she had had said sustainability and she referenced some kind of world governments and and them having some connection and working together and those types of things and i wonder if you could elaborate on that a little bit more yeah it's i thought it was interesting too it um it's not always the first thing i think of when i when i think about supply chain management but as she was saying it um it it did remind me that a lot of what i read about with supply chain management in general is focused on sustainability and sort of uh evaluating suppliers and vendors based on their business practices and ethics whether it be you know their contributions or their their focus on uh climate change whether it's uh the way they uh use labor and making sure they're not using slave labor or other things that people are oftentimes are opposed to so it's it's really it's i don't know if sustainability is the best word or if it's more in my mind it's sort of like uh philosophical or ethical alignment you know it kind of fits who we are as an organization and therefore we're gonna work with that supplier you know versus the supplier over here who's not aligned with what we believe in and what our values are so i think i think it's very interesting i think it's important too you know oh yeah what your views are i mean i think you need to have uh supply chain partners that are sustainable and it's just a good way to be more active and have a more active role in the overall supply chain as well definitely and i i love their consumer focus too a lot of times we talk about the supply chain we don't always think of the end user the first type of experience and they even went so far to kind of carve it down to maybe a a gen z or millennial market a younger target consumer that has this brand new behavior that is almost immediate when it comes to digitization of their experience so when you are a a company when you're going through a digital transformation how do you forward think your customer experience and understand what their expectations may be for your products goods or services well it all starts with sort of viewing things from their perspective because when we're talking about supply chains or technology operations in general a lot of times we're focused inwardly on what's happening in our warehouse and how are we moving stuff around and we've we tend to focus a lot on our own pains and our own challenges and it's really easy to lose sight of what you know it may be painful to us but what does it look like to the customer maybe they maybe they feel the pain ten times as much as we do or maybe they just don't feel it at all and it's just more of our own issue which is a whole nother story but i think the key is to really map the customer journey from the first time they interact with your organization even before they become a customer map that journey and what it looks like in most cases that can be very very powerful and there's a few ways you can do it i mean some of the qualitative ways you can do it is to sit down with some of your customers and walk through that interaction and qualitatively understand sort of what that experience feels and looks like but then there's also quantitative data you can use too like i know one thing that we do at third stage is we do business process mining as one of our service offerings as part of our business process management tool set and business process mining in general what it does is it tracks how quickly things are moving through the process flows if you you look at the customer facing processes you can quantify where the bottlenecks where the breakdowns where the the issues with your processes that are most likely to affect your customers which may or may not be the same processes that you feel the pain of uh internally so um so anyway those are a couple things that come to mind along those lines definitely i think that's that's great advice in that almost customer sent it centric excuse me mindset um to make sure that you are understanding what their experiences and their behaviors i also loved this group because both amy and megan even you know not together do such a great job of explaining a very complex process in ways that we can understand so utilizing that data to go in and give organizations the opportunity to not only see okay you know you can you can create some variation in your supplier vendors those types of things that we're kind of used to for business process management metrics but they also bring in the in the human side of the business and saying you know you might have an issue with your overall culture because of this specific metric and i i didn't know that was even a capability until kind of amy was talking us through craft and what that looked like so can you talk a little bit more about is that a trend that you've been seeing is kind of monitoring from a data perspective the human interactions within your organization i you know honestly it's whether it's a trend or not i don't know but i think it should be it it's a it's a positive thing that i think should be more of a trend in fact um i honestly didn't know a lot about those touch points and and the technology that her company provides at craft i wasn't familiar with that technology before i first had her on the this podcast several months ago so it's uh you know that's the beauty of doing a podcast like this is you can always have interesting guests and i'm always trying to constantly push my own knowledge and and try to bring on people that i learn from thinking that if i if i'm learning i assume others are going to learn uh some as well so um so it's something new to me and i think it's fascinating i think that they're spot on with their strategy and the problem statement they're trying to solve which is what are those different human interactions and uh even the the uh the things that may seem on the surface like it doesn't have a lot to do with supply chain management like she's talking about the uh uh what she's talking about the the financial uh viability of the supplier uh the employee engagement of the supplier the cyber security ratings those are all things that in the past i don't think a lot of organizations were thinking about in fact i don't think many are still thinking about it except for customers of craft right now but um but i think they have a huge untapped market that they could be tapping into for that type of technology and there's others out there too other types of uh supply chain technologies that can help with that kind of stuff absolutely and and you'll hear in my interview with mitch right after this that i stole megan's buzzword of sparkly data and i've been using it on a daily basis and i just really love it so you know thank you for for passing that along to me but i i think it might be helpful you know just in our last couple minutes here is is to talk about maybe the three things the three key learnings that this group taught us about how businesses can optimize their supply chain um and i think one of the ones that i really took away from this is just the overall analyzation of it and looking at every part and understanding every part of the supply chain so you do have that level of visibility in order to look at any stop gaps or anything that might be happening that you might not be able to control the shipping prices like we talked about earlier but you can certainly control how you warehouse items or your inventory management when it comes to that type of thing would that be something you would agree with yeah yeah absolutely i think it's very true and then what were maybe some two other key findings that you had well i think that in addition to that analysis uh data visibility all that you know that whole bucket of stuff that you're alluding to the other things that come to mind are what you mentioned earlier in the episode about how there's so many moving parts and how complex supply chains are um you know i think we know that intuitively as consultants because we're dealing with our clients supply chains every day and we're always helping clients through it but given the you know sort of the the nature of the issues in the world today with supply chains and backing up and looking at it more from a you know 30 000 foot view like we did with that panel it really exposes like how many moving parts there are um in these supply chains when you when you look at the whole thing and there's so many just thousands if not more you know little pieces in any given supply chain that have one break so one goes wrong it it triggers you know through the entire uh supply chain sort of like christmas lights you know since we're in the holiday season you have christmas lights bulb goes out the whole thing goes out sort of like that with with supply chains um so that's probably the the other one um and then you know i guess the other it's more of an unknown for me i guess and it alludes back to something we talked about earlier which is just what you know how are we going to fix it part a but part b is is the government going to step in and do something which you know some some listening would think that's a good thing some listening are going to think that's a bad thing or you know others might not be sure but that's sort of more of a unknown of what you know what can we expect from government entities and it doesn't need to necessarily mean that every government throughout the world is going to step in and intervene but all it takes is one or two or a handful of government um entities to to step into parts of the supply chain and start regulating and that could create some you know unintended consequences too as we talked about so i don't know that that's really a takeaway it's just more of a open question that to me is a big takeaway yeah yeah big question mark there and and if i were to add one more i would say what i learned personally is just the flexibility and the moldability of processes um i know megan had said you know we've all worked for those fortune 500 200 companies where you know even filling out a form is 16 steps well maybe looking at those processes now and not being so rigid with them to be able to get your end good to your consumer as fast as possible or through a different process and adds a little creative flexibility and you know as a creative thinker i think that's something that we talked about last week of of being that business technologist is so important to kind of include it within your supply chain strategies that's usually much more technical yeah absolutely yeah it's an important piece of it for sure well good well i'm excited um to talk to mitch too about that he had some some great insights as he's one of our main consultants that helps with our clients that are dealing with supply chain issues um so i think it's a probably a good time to bring him on yeah absolutely and uh and you reminded me during a break that uh i i was completely wrong when i said his title i said he's either a senior consultant or a manager at third stage and you reminded me that he's actually a senior manager he started as a senior consultant became a manager now senior manager but that just goes to show the caliber of guests you're about to hear from someone who's gonna move that moves up very quickly within the ranks of third stage um so this is actually a clip that uh of an interview you had with him recently so we're gonna play that for you as soon as we take a quick break we'll be right back with more transformation ground control if you are aiming for transformation success turn a third stage consulting group third stages independent and technology agnostic consulting team helps clients define their digital strategies to find their roadmaps and manage their transformations with offices in the us europe and australia our team helps the world's most forward-thinking organizations through their transformation pitfalls and risks if you are embarking on a digital transformation or business change initiative contact third stage consulting to see how we can help you reach the third stage of transformation success learn more about us and download independent reports videos and other best practices at third stage consulting dot com [Music] hello and welcome back to transformation ground control episode number 43 i'm here with kyler cheatham and uh kyler you recently had a conversation with mitch otterson from the third stage team so tell us a little bit about this interview or queue it up for us so we know what to expect here absolutely this was for our sister podcast recently um digital stratosphere which comes out with new episodes every wednesday and um we talked about the episodes actually called it's actually called pain in the supply chain um so we just talked about why we're experiencing all of these issues similar to that but from the lens of someone that actually helps business through it so with that um i'd love to welcome mitch to ground control thanks for having me absolutely absolutely so let's jump in and let's start from the beginning can you provide kind of a brief explanation of what supply chain is and why it is so important specifically right now yeah absolutely so supply chain is really the operations in the order of operations that our consumer goods take in order to get from raw material into the finished good that you purchase off of somewhere like amazon and so it's the entire step and journey that all of your products take to get to your doorstep excellent and so can you kind of explain to us how you at third stage interact with supply chain with our community of clients yeah absolutely so i'm working with several clients that are in the manufacturing space right now and some of their biggest challenges involve figuring out how they're going to get their raw materials to be able to keep up with the high demand that they're experiencing it seems like everyone has record high demand and they're trying to figure out what's the best way to make sure that i can have all the raw materials i need to meet this demand and take advantage of this opportunity that my business has been presented with sure sure that makes that makes so much sense and there's a ton of news credit coverage regarding supply chain right now and so why right at this very current climate are we worried about supply chains so much you know that's a really good question and i think that it's important because we're in some we're experiencing unprecedented times and circumstances right now and it's causing disruptions everywhere a supply chain really is a system and ecosystem and we're experiencing disruptions throughout the entire system that are really causing pain and headache and ultimately uh result in higher costs for consumers at the end of the day all over the place yeah definitely i know we've all seen those very daunting satellite images of kind of all of those cargo ships out outside the la ports um and things like that so so why is that blockage happening you know i've never seen anything like that before and i hope to never see anything like that again um really you know it's the disruption that we talked about earlier where there has been a shortage of labor to be able to unpack those those cargo ships to be able to take them out of the port and truck them across the country to get to their final destination but even before that um you know so much of our so many of our goods were produced in china and during the heights of the kovit 19 pandemic they weren't able to be in factories and be able to be producing things and and that really caused a huge disruption to our ecosystem that we're just now seeing the the effects of you know several months later yeah definitely it's still interesting that domino effect because you would expect kind of the heightened issues which obviously we experienced a lot of disruption in the beginning phases of the coping 19 pandemic but now kind of as we've we've evolved to understand what life is like with going through a global health pandemic it seems like now the supply chain that ripple effect has really hit the consumer and trying to understand what that means to be a you know a consumer in 2022 if you will yeah absolutely it seems like it everywhere you turn there's a labor shortage somewhere there's a supply chain shortage it's not allowing us to get the things that we need and and on top of that we just keep buying stuff and and when demand is at record highs like this businesses are scrambling to try and figure out how can i meet this demand and and what do i have to do to make it happen so uh i would say that we are we are causing issues uh throughout the supply chain and that's caused by unprecedented demand and the inability to deliver the supply absolutely that makes a lot of sense would you say that the transition because i know you've helped a lot of our clients go through a transition that they were kind of forced into a transformation because of the cover 19 pandemic would you say that because e-commerce or digital marketplaces have kind of blown up is that a big reason of why we're experiencing additional heightened demand yeah absolutely and you know i'm very thankful that the clients that we have worked with have identified the need to to go through this transformation and that kovid was a hopefully a positive driver for that that will help to set their business forward and allow them to be thriving on on the other side of the pandemic um but i i think it's it's e-commerce everyone is looking for that amazon type experience and that's really become our expectation as consumers i want to click a couple buttons and walk out to my front doorstep and have it arrive a couple days later in addition to that you know like we talked about before the demand for just about every single product is really high there was a huge spike in the cost of lumber not too long ago uh building has been at an all-time high uh construction not into home improvement projects people are all of a sudden at home and decided to do uh diy projects and and again just so much demand for these things that it was really unexpected and it's really causing a lot of our clients to pivot in the way that they look at at their businesses absolutely i was so ready to build a she shed out in our backyard but our husband my husband was like our husband my husband was like no absolutely not mostly because he feels as though he would be doing most the work and you know he's not wrong about that but i feel he's not wrong no he's not wrong he's much more handy than i am but that is such a good point because we've been focusing a lot on the our third stage content side and just infrastructure planning so those high growth industries like you just touched on construction building and then we've also seen a huge amount of growth in renewable energies since the pandemic and then aerospace and defense and what those look like so definitely go kind of check those out we have a few blogs and videos on those um and eric and i kind of talked about the chip shortage as well which has caused you know obviously a huge disruption in many of our technology product development so probably the most important question of the day mitch as a dad is christmas cancelled because of supply chain i'm so thankful that my daughter is young enough to not really know what's going on and to be nervous about santa coming i do think that santa will still be coming but i think that uh folks really need to be prepared earlier this year and to spread out their purchases as much as they can um i've seen several retailers extend and black friday's already been extended over the last several years where it was yeah uh you know just one day then it became a week and now we're looking at black friday in october um and and really stretching that out to allow consumers to get those discounts and those prices that they're looking for that they've been waiting for all year for the holiday season that's one avenue that retailers are taking to try and fight against the spike in demand that they know is coming so you get out and do your shopping early is my best recommendation that's what i'll be doing at least yeah absolutely well thank you so much for helping us break down these really um basic concepts of supply chain i think it's a a neat time to be a consumer in the fact that we get that deeper level of understanding of what's kind of happening so thank you so much mitch for all of that great insight regarding supply chain um we're going to take a quick break and when we come back we're going to kind of dig into some best practices that organizations can utilize to optimize their supply chain [Music] if you are involved in any sort of digital transformation or business change initiative you will want to download the 2021 digital transformation report with its comprehensive overview of business and technology trends and best practices this report is a must-have guide for any transformation project or executive team download this free report by visiting third stage consulting at third stage dash consulting dot com you can also visit our website to learn more about us or download independent reports videos and other best practices again visit third stage dash consulting dot com today to learn how to take your transformation to the third stage of success [Music] welcome back to transformation ground control i'm kyle cheat i'm having a conversation here with mitch audison from third stage consulting group about the pain in the supply chain so with that mitch let's jump back in we talked about consumers and what their experience was with these supply chain disruptions but i want to know about organizations how have they been influenced by these issues yeah absolutely and really we're seeing this across all different verticals across all different industries uh it seems like no one is immune to the supply chain issues that we're experiencing so now really is a good time to to make that investment in upgrading technology to be able to to get some of those advanced analytics and and some more of those uh softwares that allow you to do what-if scenarios to be able to better account for these types of situations identify bottlenecks and to be able to make the best decision for their business sure absolutely and i i think you touched on this but there really is no industry that you've seen that is immune are there any industries you had mentioned construction earlier but any other industries that have been really highly impacted that you want to mention yeah absolutely i mean i know as a consumer the automotive industry has been heavily impacted by this um we were looking for a new car and it was insane the the amount of prices that we were up against uh lack of deals that were out there it's unlike any uh environment that i've ever seen when buying a car one of my clients i'm working with right now is in the aerospace and defense industry and i thought hey maybe they might be somewhat immune to this but the electrical components the parts that they need all the way down to the special adhesives that they need all either come from china or their raw materials come from china and their suppliers are having a hard time getting stuff over to them so um it really is a challenge for just about everyone and it impacts just about every business i've come across yeah definitely and i think it's so tough because a lot of times people say well just switch suppliers but that's never been an option before it's it's not a high um high competition area you know usually there's just one one supplier with those raw materials or those pre-assembled raw materials right yeah yeah that's exactly it or you know there's a lot of companies out there that have taken the if it's not broke don't fix it approach and they've stuck with one supplier because they've always done business with them it's just easier to do that and really we're seeing that you have to get creative when it comes to your supply chain and looking for alternative paths and options because you never know when something like this could happen i hope uh you know i don't expect another global pandemic to hit but you know it can you know things can happen and other shocks can hit a an ecosystem like a supply chain like this and and folks really do need to be ready for it right absolutely so you know this conversation has been such sunshine and rainbows so far is christmas cancelled so i i kind of want to focus on on knowing that many things are out of our control as businesses but what are some things that organizations can do to overcome these supply chain issues you know i think it really gets down to some of the basics um i think it's important to note a lot of folks are a lot of the experts aren't expecting the supply chain woes to go away anytime soon there are some some large-scale efforts that are taking place like a lot of production is being moved to mexico a lot of microchip processors are moving to the united states where they were in china so those are some long-term solutions that can help the problem but there's some immediate steps that you can take to be able to get to when the long-term stuff takes place and i think that's really thoroughly evaluating every evaluating every step of your supply chain looking for additional vendors that you can look for looking for additional buy opportunities where you could take advantage of buying more quantity if a vendor does have something that you need you could also go through and you know look for alternatives and replacements this is a great opportunity to evaluate what goes into your product and determine if it's absolutely necessary if there's another option especially knowing that hey consumers are showing that they're willing to absorb the increase in cost so if there's a higher more quality component to your to your product that you've been putting off adding maybe now's a good time to add it into your product and see if consumers react the way that you expect them to yeah definitely um and then what about like business process management when it comes to evaluating your processes looking for some efficiencies um is that something that our clients can do or you advise our clients to do to kind of help with supply chain management oh absolutely there's always opportunities to get more and more efficient there's always excuse me there's always an opportunity to get more efficient there's always an opportunity to look at your internal processes and see what you can streamline because there's often times where our clients have found that they are the bottleneck and really our clients need to be able to react quickly and so reducing some of their own internal red tape has allowed them to take advantage of opportunities when raw materials are available or labor is available to be able to make quick hiring decisions becoming more and more efficient is a great way to navigate these uncertain times excellent and then i know obviously your uh software expert when it comes to helping companies choose software that might help with things like labor shortages can so can you talk a little bit about maybe some emerging technologies like um ai or machine learning to work with processes that can be automated throughout this labor shortage that might help yeah absolutely so um with with machine learning and some artificial intelligence we're finding that there are more and more solutions today that will allow users and that will allow users to be able to react to information more quickly i think a lot of folks when they hear machine learning think that the computers are taking over and that the going to replace the people but the way that i see it impacting businesses is that it gets the right information to the right people at the right time and so a lot of our clients have very smart very capable people on their staffs that really just need to have the right information to be able to make a good informed decision and that's what these softwares are really enabling them to do they're able to enter in some of what they're seeing whether it be product lead time or identify bottlenecks are coming up and it gives those people the tools to be able to go and take care of the situation excellent and it sounds like based on what you're saying there's some options for additional software support when it comes to being able to maximize what you can do with your supply chain right now what about data and just kind of cleaning up your data making it sparkly usable actionable and um that piece that will that help with these supply chain issues you know i i think that you know the key word that you hit on in there is actionable the ability to take action on the information that's in your data and and allow that to take shape is really a benefit of these new systems and and the technology that's available in the market today so it absolutely is and the ability to take advantage of data that had been um in a silo before that existed in one part of the business but was not readily available to another to take action on um is a great opportunity for you to streamline business processes and to make the best decisions you can with the data that's available excellent well those are all such great tactics anything else you want to share when it comes to best practices regarding supply chain yeah you know i think it in general just taking a look at your entire process and and sitting down and being thoughtful about how you want to go about doing things it's it's so often that folks focus on running their business instead of working on their business um so taking that time to actually evaluate does this make sense does this work with the current environment that we're in or or is there an opportunity for us to pivot the way that we do things that's such a critical piece of running a successful business and we're fortunate that we've had clients that are they're doing just that and bringing us on board to help them out with that so continuing that exercise or starting that exercise for the first time is the biggest piece of advice i could give any business owner definitely being intentional about that supply chain mapping it sounds like is really kind of the first step to you know fixing any blockage that you may experience so if some of our listeners or community today want um some additional information on supply chain resources what would you suggest for them i would recommend definitely reaching out to us here at third stage we really do good we really do a good job of under working to understand the supply chain all the components and pieces that go into it and help to make recommendations on on how to streamline your processes and any opportunities for efficiencies so yeah i would definitely recommend reaching out to us my contact information is included in the podcast notes we just published our 2021 digital transformation report we've got some recent supply chain videos some great blog posts about the topic so definitely reach out to third stage and and see how we can help you that's my biggest recommendation excellent well thank you so much mitch for being here today if you are aiming for transformation success turn to third stage consulting group third stages independent and technology agnostic consulting team helps clients define their digital strategies define their road maps and manage their transformations with offices in the us europe and australia our team helps the world's most forward-thinking organizations through their transformation pitfalls and risks if you are embarking on a digital transformation or business change initiative contact third stage consulting to see how we can help you reach the third stage of transformation success learn more about us and download independent reports videos and other best practices at thirdstageconsulting.com [Music] hello welcome back to transformation ground control my name is eric kimberling here with kylo cheatham uh kyler that was a really interesting discussion you had with with mitch and um in our sister podcast with with the digital stratosphere podcast uh which by the way you can also find on the third stage youtube channel as well as on all the audio podcast platforms you can find both this podcast transformation ground control and our sister podcast um digital stratosphere which tends to be more bite-sized podcast i'd say whereas ground control is the two-hour you know epic long episodes stratosphere is more of those bite-sized 15 to 30 minute types of uh segments so all that being said what were some of your takeaways after that conversation with mitch yeah i think one of my biggest ones was just the ability or his recommendation to look at your distributor contracts and see if there isn't you know a different distribution avenue or some renegotiation in there i guess i never really considered that as something that was within kind of those controllables we talked about for an organization and it sounds like that's something that a lot of the third stage clients are really looking at right now um is that something you would kind of agree with yeah i mean i think right now a lot of our clients are doing just about anything possible to really get a handle on this you know the supply chain efficiency and effectiveness and flexibility and transparency and all that stuff we've been talking about uh one thing that adam mentioned in the panel discussion earlier that sort of aligns with that same mindset that mitch brought up is the example he gave in the panel discussion about how one of our clients had recently bought a pallet uh manufacturer because they couldn't get enough pallets and that's another example by the way of one small little seemingly tiny little detail in your supply chain that shouldn't cause a lot of problems but it does if you don't have pallets you have you may have all the products available you may have the truck sitting outside ready to ship it um you know you've got the container load or whatever but you don't have pallets to load it that's that's a problem so uh that's another example though of what clients are doing they're getting real creative and innovative about how they get that vertical supply chain integration or you know better handle on the supply chain whatever they need to do to make that happen so it's a good good example yeah i guess i didn't know that there was so much diversity like to an extent that you really can get creative in working with so for example he gave um that example of maybe you use for a little while some higher quality material and the customers have already proved within a specific industry with insights that they're willing to absorb that cost in order to actually get the goods that they need when they need them um and i never really thought like oh maybe you would use a different manufacturer for the plastic or those types of things that really takes kind of getting out there and working with the diversification of your your vendor core network yeah and it it also begs a question of you know we started to touch on this in the opening segment but it but we didn't go down this path but you know if you look back uh to the trend from that began i think in the probably the mid to late 80s i think it was i was a kid so i don't know exactly when it started but um but somewhere in the 80s i know that's when the whole globalization movement started as far as outsourcing um to other countries and sort of moving competencies outside of um you know your home country into other countries and the whole globalization movement really took hold in the 80s and 90s and uh this is sort of where we're at now is sort of causing people to rethink that and i think it was already starting i mean there's a lot of populist movements happening throughout the world like in the us and france and uk for sure where there's sort of like a nationalist populist sort of movement politically so you combine that with all these supply chain issues now the sudden companies i think are starting to say is it worth having you know having to put a product or raw materials on a ship on a container having it sit there for six weeks until it gets to our port and then it gets to the port and sits there for however many weeks until they can unload it and then it has to be shipped to our facility is it worth that or do we do we potentially pay more and just produce it here at home in our home country so i think it's it's i don't i doubt we're going to go back to a total nationalist sort of supply chain but i think it's it's causing people to rethink to your point is it really worth whatever savings we're getting especially when those savings are becoming uh less significant over time as the standards of living you know sort of increase in a lot of developing countries where a lot of the supply chain is based um all those things i think are sort of up for re-discussion or re-imagination at this point yeah or where are those goods right maybe you get them from a chinese manufacturer maybe you've even moved them to say if you're a us-based company to somewhere like tijuana so you actually can go physically and get them without um without you know having to use freight chips and things like that um i i can't i think on the panel it was adam that maybe it was um amy somebody said um that they basically have a client that has all of their um um it was an amd client um that has all of their goods no less than 12 hours from them which is pretty interesting in the fact like if you need something and and that footprint is really shrinking to your point just because shipping is so unreliable right now there's there's a lot of things that can go wrong within the actual transportation um piece of your supply chain so all you know all great information and i said it on the um the digital stratosphere podcast but i just want to reiterate that mitch is super passionate about supply chain you can see he's very knowledgeable so if you do have questions about anything that he said um feel free to reach out to him directly here at third stage and we can also put you in touch with him too yeah yeah absolutely it's that is good stuff and uh you know i think it's a a good uh you kind of reminded me of a another thought that in project management there's i forgot what it's called it's called i think it's called the project management triangle where you you have cost quality and speed or three dimensions of project management but you can't have all three of them at the same time you have to pick do you want cost qual you know which of those two of those three do you want you have to give up one of them so i think that's applies to supply chains as well they have to we have to start to think that you know in the past i think we've been somewhat not lucky but it's just been more a stable a more stable world a more predictable world up until 2020 to where we could get away with um you know low cost high quality and relative speed but now i think what we're seeing is that with these uh fractions in the supply chain you really do have to pick you know what's most important what are your priorities and then adjust your supply chain accordingly so that's a good sort of a good takeaway that i took from that discussion you had with with mitch awesome yeah good well well i hope i appreciate first of all uh tyler i appreciate you uh in your content contributions on this uh it's a very interesting topic every week's interesting doing this podcast with you but this one in particular i think is very interesting especially for much of the world right now so i hope the audience enjoyed it as well and be sure to check us out every week every wednesday we have new episodes of this podcast uh on youtube linkedin and all the audio podcast platforms but as kyler mentioned we also have our sister podcast which is digital stratosphere uh that is also available on youtube and all the audio podcast platforms and we have new episodes every wednesday but we also have on mondays and fridays we put out uh segments that are sort of bite-sized segments that that i contribute to the stratosphere podcast so you can check those out as well so uh thank you everyone for joining today hope you have a great week and we will see you hopefully next week on transformation ground control [Music]

Channel: Digital Transformation with Eric Kimberling

Views: 7,414

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Id: 3E7ar9QVu20

Length: 138min 35sec (8315 seconds)

Published: Wed Nov 17 2021