Intro/Outro (00:01):
Welcome to Digital Transformers, the show that connects you with what you need to build, manage, and operate your digital supply chain. Join your host in a timely discussion on new and future business models with industry leading executives. The show will reveal global customer expectations, real world deployment challenges, and the value of advanced business technologies, like artificial intelligence, blockchain, and robotic process engineering. And, now, we bring you Digital Transformers.
Kevin L. Jackson (00:33):
Well, hello everyone. This is Kevin L. Jackson, and welcome to Digital Transformers on Supply Chain Now. It’s January – no. Check that. It’s February 2023. And the entire retail industry last month was at the NRF Big Show. In fact, I did a short article where I kind of teased today’s interview, and we were talking about breakthrough. So, this is an IBM sponsored discussion about how the retail industry is going to breakthrough in 2023. I’m really excited to have as a guest a three-time CEO and two-time entrepreneur and a current Big Lots Board Member, Sandra Campos. And joining her on the show is IBM consulting partner who specializes in supply chain transformation, Mark Meister. Thank you very much —
Sandra Campos (01:49):
Hey, Kevin. Tthanks for having us.
Mark Meister (01:52):
Yes. Thanks, Kevin.
Sandra Campos (01:53):
We’re looking forward to a fun conversation again.
Kevin L. Jackson (01:57):
Right. Yeah. Absolutely. So, where are you today physically there, Sandra?
Sandra Campos (02:00):
I’m in New York. I’m in New York.
Kevin L. Jackson (02:03):
New York City. Okay. And, Mark?
Mark Meister (02:05):
I’m outside of Lancaster, Pennsylvania with one of my clients at a frozen distribution center.
Kevin L. Jackson (02:13):
Oh, wow.
Sandra Campos (02:14):
Mark, you are always, like, in the place to be.
Kevin L. Jackson (02:17):
He travels a lot. Don’t you?
Mark Meister (02:18):
I was in the Middle East last week, so it’s been a busy few weeks for sure.
Kevin L. Jackson (02:23):
Oh, wow. I’m going out to Dubai in a couple of weeks. I just missed you, so to speak.
Sandra Campos (02:29):
We need to have one of those maps so it’s not where’s Waldo, but where’s Mark [inaudible] find you.
Mark Meister (02:36):
Absolutely.
Kevin L. Jackson (02:37):
But to be honest, Sandra, I am so honored to have you on the show. I’ve seen quite a few of your CNBC interviews, and I’m starstruck to be honest, and really impressed, really impressed with your personal background and professional insights. Could you please share with my audience your personal and professional history? It’s so fascinating.
Sandra Campos (03:06):
Oh, my goodness. Well, you don’t have that long for this show and I can go on a long time. The good thing about, I guess, age is some wisdom and things you learn along the way. But I would say just as an introduction into who I am and how I’ve gotten to where I’ve been throughout my career, it really started as a first generation Mexican-American with parents who were immigrants, who were entrepreneurs out of necessity. And as entrepreneurs, they actually had a tortilla factory, in which I started working when I was a big whopping eight years of age. But from that time on, until, basically, the end of high school, I experienced assembly lines, making dough, working all along the factory, being on the logistics side when the trucks would come and pick up and deliver boxes going to supermarket. So, I was always really focused on entrepreneurs, building businesses, working with customers. We had a retail store at the front of the factory as well. This was in Texas when I was growing up.
Sandra Campos (04:10):
I ultimately wanted to leave Texas, wanted to get to New York City. I thought I wanted to be in fashion to be a designer. I was absolutely not talented enough to do that. So, instead I said, “Well, I’m going to become a CEO or president, so how do I do that?” And I started looking at different people in the industry, and I charted my path the way that they had basically done theirs. I just wasn’t trying to reinvent the wheel. I just thought, “Okay. Well, they must have gotten there. Why can’t I? I’ll do the same thing.”
Sandra Campos (04:37):
And so, as my career kind of progressed, some of it intentional, some of it not intentional, you know, we don’t always have a straight path towards what we envisioned in the beginning. There were a lot of curves. It’s a rollercoaster ride having experiences both on the corporate side, which I worked for iconic legacy brands like Polo Ralph Lauren, Oscar de la Renta, Donna Karan, et cetera. But in all of those businesses also we had what now is called entrepreneurs. We didn’t speak that language before. But we were building businesses and divisions within those organizations. So, I was able to really truly build something from nothing into a very substantial and large size organization. And so, within that time, you also have experiences that you don’t get when you have one single role and one single title, because you wear multiple hats, just like an entrepreneur does.
Sandra Campos (05:29):
So, I was able to just gain more and more experience, and that was to my benefit. And then, I started really enjoying learning a lot of different things. So, I started kind of taking my own path and went from corporate to becoming an entrepreneur. I launched the first celebrity brand management company for Selena Gomez when she was 15 years old with my partner, Tony Melillo. He and I pulled together a business for six years that was quite substantial and really interesting across 14 different categories. And it was at a time in 2009 going into 2010, the entire world of digital started changing. And so then, supply chain started changing and a lot of different learnings.
Sandra Campos (06:08):
And so, I’m kind of elongating this story, but at the end, every single role that I’ve had and every single company that I’ve been a part of or that I’ve created have been really impactful to me in terms of understanding to be a broader leader, to understanding more about from beginning to end of the process and every little piece in between. So, as I evolved from entrepreneur back into corporate, leading businesses that were up to a billion dollars of retail, having a very different trajectory over the past ten years because it was focused on digital, and really rebuilding brands that have been legacy brands that needed to be revived, that needed to be turned around, I’ve had a lot of that experience.
Sandra Campos (06:46):
And got to be in a place during the pandemic, even though it was a really challenging time, I was a CEO of DVF, Diane von Furstenberg, and we had to completely change the business model. And I ended up leaving the company the middle of the first year of the pandemic, because we were all sitting at home not buying $500 dresses, and no one knew it was going to happen at retail. It actually ended up pivoting me into a role where I became an interim CEO for a company that was focused on supply chain, but had a 3PL. And with that, I was able to dive deep, and a lot deeper than I certainly had, overseeing businesses into exactly what all those metrics are, exactly what can change in terms of order management systems and warehouse management systems, and just the change in what was happening.
Sandra Campos (07:30):
So, that kind of led me to a lot of conversations, which you just mentioned, on CNBC, because everyone was talking about supply chain, what was going wrong, what can we do, what do we need to do. And so, that conversation has been one that I think is going to continue over the next ten years, which is why I’m really happy to be here, and also learn from Mark, who’s an expert, and talk to you guys just in terms of what I see as a retailer from the retailer’s perspective of what’s really the most critical for us to focus on.
Kevin L. Jackson (07:58):
Wow. That’s amazing. I cannot imagine what you haven’t seen going from a tortilla factory worker on the line all the way to the board. You sit on a board of directors right now for Bit Lots, and fabric, and Daniel’s Jewelers. And as you said, you often address digital transformation and supply chain topics in your CNBC interviews. Does that really, I guess, compliment or intersect the advisory work you do on the different boards?
Sandra Campos (08:39):
Absolutely. And that is because on boards, I would say, there’s a lot of different levels of experiences with executives who are phenomenal. And I’m very proudly a part of the Big Lots board. And there’s a lot of people who have great experiences, but there’s not always a lot of people that have supply chain or an understanding of supply chain or have been through digital transformation. So, it certainly does – I don’t want to say separate you, but it certainly does help you when you’re having these discussions about evolving businesses today. Because it is 2023, and basically as we all know, digital and online, e-commerce has grown exponentially and will continue. And now there’s even more challenges of, like, how are you going to grow that, and how do you grow it profitably because now we have a whole new set of metrics that we have to work with.
Kevin L. Jackson (09:26):
Yeah. Yeah. And, Mark, you also have a very impressive background. How did you wind up in supply chain transformation at IBM Consulting?
Mark Meister (09:38):
Oh, absolutely. Thanks. Thanks, Kevin. I’m glad to be here. Like most kids graduating high school, I grew up in New England, ended up in the Ohio State in a big Midwestern school. And probably midway through freshman year studying accounting, I realized that this is too slow for me and I wanted to do something faster. And supply chain was just kind of really coming into the eminence of the domain, and I switched over to supply chain pretty much right at the exact time that it blew up. I finished up college, went right into tech, working at Manhattan Associates learning software and package implementation work. And then, immediately pivoting to – call it – broader consulting and working in some of the biggest consulting companies in the world, Capgemini, IBM, Cognizant. And then, taking a little bit of a break and going off and starting my own consultancy and working as a VP in industry for some time before coming back to IBM and really leading our supply chain practice.
Mark Meister (10:32):
And throughout that time, I think you’re always chasing experiences and learning opportunities. I think that’s why, ultimately, I really thrive and love this consulting environment because you’re always seeing new challenges and new events and supply chains are constantly moving. And I think that’s the exciting part of this this time right now, is, supply chain is becoming a competitive advantage. It used to be kind of a back office cost center world, and now it is front and center competitive advantage. And it’s going to make or break your company from a profitability perspective and from a going [inaudible].
Kevin L. Jackson (11:04):
We’ve learned how important it is just over the past few years. And last month, during The Big Show there in New York City, one of the headlines was that the retail industry is smarter, faster, and more innovative than ever before. I mean, they had to do something after all of the massive changes with COVID and with digitalization. But, Sandra, is that true? Is retail actually smarter, faster, and more innovative today?
Sandra Campos (11:53):
In certain ways, yes. But there’s still a lot of retailers that have legacy systems that need to be transformed. And it’s not easy. It’s not like you can just go, we’re going to flip the light switch on and then all of a sudden you’re going to be modernized. There’s a lot that goes into it. As Mark certainly has a lot more experience as it relates to even consulting across enterprise level companies, there used to be a lot of different, “Okay. We’re going to do this. We’re going to do that. We have all the tech stacks quite large.” And I think we have an opportunity to have a very smart and agile technology stack today. But it requires a lot of foundational fundamental changes in ERPs and other systems, which are costly, time intensive.
Sandra Campos (12:38):
And I don’t know exactly what the analogy would be, but you’re trying to do something at the same time that you’re running business. So, you’re racing towards trying to make sure that you’re driving revenues, you’re driving profitability, you’re driving growth. But at the same time, you have to change a lot of the foundational systems. So, you have to retrain people. There’s so much involved in it across the entire chain. So, yes, we have smarter system capabilities, we have a lot more automation. And I love that. Personally, I think the automation and workflows, that’s helpful to any organization. We all know that there’s been a tremendous amount of discussion over the last month about ChatGPT and what AI is doing overall in the industry. And that goes across a whole host of different sectors and different aspects of a business and running a business.
Sandra Campos (13:25):
So, we are smarter, we can be smarter. There are a lot of tools now that we have access to that we certainly didn’t have access to five, ten years ago. But their foundation, the fundamentals, the financing – and especially if you have an omnichannel business – making sure that everything is integrated, has to be much more agile, which then leads into what headless commerce is trying to do now. And you mentioned fabric as a company that I sit on the board of, but that’s exactly the point, is trying to make sure that there’s a lot more agility and flexibility in how we develop our tech systems, and how do we make sure that we are positioning ourselves not just for today, but for the next five, seven, ten years. Mark, I love to hear you on that.
Kevin L. Jackson (14:05):
Absolutely.
Mark Meister (14:05):
Absolutely. I think that analogy we use often is we’re trying to rebuild the plane mid-flight —
Sandra Campos (14:11):
There you go.
Kevin L. Jackson (14:13):
Yeah. We do the plane midflight.
Mark Meister (14:14):
… that’s exactly correct. And as we work with our clients across the globe, there’s so much great new innovative technology, but how do you plug it into this existing legacy infrastructure while maintaining service level and customer expectations. And that’s ultimately the challenge at hand for most of our clients. It’s not what is the right tech, it’s how do you sequence it into your business and how do you infuse it to create value. And the exciting part for the next, you know, couple years will be solving those problems for our clients and for retailers is, what does that next generation look like? And building that into their existing infrastructure and slowly re-architecting that.
Kevin L. Jackson (14:52):
So, one question about that, there are always multiple challenges, but how do you prioritize? Do I worry about getting my revenue in today, now? Or do I use that money to build better infrastructure and buy one of those machine language things and get that ChatGPT so I can make more money later? How do you work the priorities?
Mark Meister (15:25):
Well, I think what clients are seeing is the core systems are becoming a big focus right now, so warehousing, ERP, point of sale. And getting those systems in a place where they are foundational and they are strong and they’re stable. Especially as we see the challenges in the industry, it’s critical in order to add that layer on top. These really advanced technologies such as ChatGPT or advanced automation or robotic process automation, those all require that the core systems be in a good spot. And so, it’s a mix of how do you build for the future. And then, when you build for the future, you really want to make sure you’re putting the time and energy into creating the right hooks and pipes so that you can layer on additional technologies down the road.
Mark Meister (16:11):
And that’s always the hard part with tight budgets and constraints in the market and interest rates up. It’s really convincing in working with clients to show the value of we might not know exactly how this pipe is going to be useful to us in the future, we have a rough idea, but let’s put it in now because to do it in the future, we’ll have to dig up the foundation. And that’s the biggest piece for clients, is, how do you invest now so that you can build on a stable infrastructure and not have to go back and rebuild.
Kevin L. Jackson (16:39):
Well, I know that the infrastructure is important. Technology is critical. But, Sandra, one of the most important things is people especially in retail. What about the talent? What type of talent and experience are needed in retail supply chain?
Sandra Campos (17:01):
Well, I think this is a very, very good point, because one of the recent discussions – I guess it’s not really that recent, but maybe in the last year – I’ve seen a lot of discussion around retail bringing in talent from outside sectors. And whether that might be in CPG, in beauty, in energy, in finance, and other sectors that they’re bringing in individuals, we need to do a better job of training. And that training – now, I’m going to date myself – going back to when I first entered this industry, we had a lot of training. And that training included going from department to department and learning the various functions. Since then, individuals are very siloed. Their role has one narrow path. You don’t have true visibility across the board. So, it’s incumbent upon us, as an industry – it’s my belief – that we need to be able to bring these training programs back where we give people visibility.
Sandra Campos (17:55):
You know, Mark mentioned earlier, supply chain was really back of the house. It’s a back of the house function. It wasn’t really as sexy to talk about. It’s an absolute fundamental essential. And even leading businesses, while you’re not involved in the day-to-day, it’s important to really understand how that’s going to impact your profit and your margin. Because it can either take it down or it could increase it, and it can be a good thing or it can be a bad thing. And we’ve seen what’s happened in the last three years where it was a really big negative. Transportation costs, we’ve seen all the shipping impact. And we talk about circularity and sustainability, but we need to train people. What does that truly mean?
Sandra Campos (18:30):
So, I think that number one, we need to be able to start with programs early on. Even before people determine whether or not they want to get into the industry, we need to be able to give that visibility. So, Mark is a perfect example. He just said he got in right in the beginning when he came out of college. I don’t know if that’s typical or not, but I would think that we need now is a time that we can actually showcase and share how important supply chain is to a business in general. And that it’s not an unsexy part. It’s actually incredibly interesting. It’s incredibly international. The globalization technology has changed supply chain. So, you learn a lot of that with it as well. You’re not just singularly focused on supply chain.
Sandra Campos (19:12):
And, also, I want to say, supply chain, there’s a lot from A to Z in terms of supply chain. So, we use these two words as if it’s all encompassing. But supply chain can mean everything from manufacturing to robotic automation at the warehouse, to shipping and transportation in between, and all the systems that go in. So, there’s a lot within it. And I think it’s really incumbent upon us to turn it into something that’s really interesting and sexy, because it is. But we need to be able to speak to it that way. We have an opportunity now to do that, and IBM certainly has an opportunity.
Mark Meister (19:45):
Absolutely. And I think talent is probably one of the most passionate things for me. I think there’s been a big lack of focus in the past couple years, and a lot of this is pandemic related. But now that we’re back in, it’s how do we create talent. And it’s really incumbent upon all of us as consulting firms, as retailers, as technology providers to build this next generation of talent, we have to bring this next generation along, we have to put them on the projects, we have to put them in the field, we have to feel it and see it head on.
Mark Meister (20:18):
I look back when I was first out of college, we were on the road every week and we were with people from around the world, our colleagues from India, our colleagues from Europe, and we were all in that warehouse, and we were all learning together. And having that cross-cultural learning and just seeing it and being in it together, you’re learning how the actual product is moving throughout the global supply chain. And that is, I think, the mission of all of us, a leadership teams throughout the North America and the world, to go bring this next generation of talent.
Mark Meister (20:52):
To your second point, Sandra, you’re absolutely accurate, supply chain is now driving that – call it -commercial conversation. I mean, so many times I have a client conversation where they’re asking what can the warehouse do, or what can the transportation network do. And we just immediately “What do you need it to do? What is your business? Where’s your commercial growth plan? And let us understand how that is going to impact so we can build you a supply chain to meet the business’ needs.” And so, we consistently are seeing kind of that new conversation of building a supply chain for the future. Not what can this warehouse do.
Mark Meister (21:26):
And that third point, I think, is also really interesting that you mentioned about supply chain, those are two words. From a university perspective, you still think of those pretty classic plan, buy, make, move buckets. But when you think of those buckets, they are wildly different. The talent needed for planning versus the talent needed for distribution, it’s a completely different skillset. Math and science and heavy analytics is living in the planned world where you really need that energy, that execution focus, that drive to be in that warehousing distribution side. And that’s the other part of that talent model, is, it’s not one type of talent. It’s all types of talent and all types of personalities. So, I think everyone can be in supply chain. It’s a very inclusive, I think, community.
Kevin L. Jackson (22:06):
Well, one thing, you guys are talking about something and some of the audience may see it as an aside, but where does culture play? Because we are in a globalized society and there’s so much culture involved with products and how people interact with one another. But there’s even a different culture when you are trying to digitally transform your environment. So, is this talent war? I’ll start with Mark. Does it involve culture as well?
Mark Meister (22:52):
Absolutely. You know, I’ll tell a quick story. When I first started out of college, my first team was 100 percent from India, my leadership team, my coworkers. I grew up around people from all over the world, but this was a really interesting environment because you’re learning a whole new culture right away, right out of college. And I remember it was a Wednesday morning at 9:00 a.m. and I came in, and nobody was in the office and I couldn’t understand why. And it was the India-Pakistan cricket finals. And you learn right then and there, there’s just a different culture and a different world of importance, a different sport that mattered.
Mark Meister (23:30):
And that team, we really flew around the world working on different projects together, and learning from each other, and how they view the world, and what their challenges are in their supply chain, where they see shortages, where we have challenges. I think that’s critical to that learning phase, is learning from people all over the world. And to be able to take those skills and – call it – cross infuse it. I look at those experiences and I cherish them immensely because that is what taught me and made the leader I am today. And the experience that I have today, it’s from the work we’ve done. Intelligence is one thing, but I think experience is what drives true change and true – call it – development.
Kevin L. Jackson (24:08):
Wow. So, Sandra, you’re a Latina, right? And so, you have these cultural views, you have a viewpoint as woman, you have worked in so many different industries and environments. How does culture play in this?
Sandra Campos (24:28):
Well, first of all, I’m just going to say, Mark, how cool is that, what you’ve just said. Because that’s another area that I will absolutely agree with, learning international business development, international communications. Being there, certainly when you’re starting out in an industry, you don’t realize exactly how impactful that is. But even as my career evolved and I became a CEO and I was having negotiations and conversations with either distributors or franchise partners all over the world, whether it was in China, Southeast Asia, Russia, Middle East, et cetera, just having had that experience previously of going and working with manufacturers and developing product in different regions made such an impact in terms of how I knew to communicate across the table, or I would learn how to communicate across the table. It’s very different from country to country in terms of how they manage that. So, I think that’s very, very cool. I don’t think it’s a topic that comes up very often in terms of supply chain and the learnings that you get from that and being able to drive talent into that. So, I just wanted to kind of put a little highlight on that one.
Sandra Campos (25:34):
As it relates to how I see things and what I think where we are going, some of the areas of focus now is nearshore manufacturing. And that really has to do a lot with Central America, Latin American, countries that are in a way, certainly, advanced to a certain level, but are also becoming more advanced in another level. Last May, actually, I was in Panama with Bloomberg for a summit there. And it was all about, again, how do we really help these Latin American countries get to a place where they can actually get more of the business because we need nearshore sourcing opportunities, because if we ever have another situation, like a pandemic or just not having the reliability 100 percent focused in one region of the world, we need to diversify our supply chain. That was part of it.
Sandra Campos (26:26):
I think, culturally, looking at how do we make sure that we, again, aren’t singularly focused on one area, one region of the world that can develop all of our product needs, how do we make sure that we are helpful to some of these countries that may not be there yet, but we can help them and help provide those tools for them so that they can be more important. It’s incumbent to kind of have a dual partnership. We can’t just rely on them solely to be able to develop these things without knowing how to deal with us as a country or as businesses as well.
Sandra Campos (26:57):
So, there’s the cultural part, for me, you mentioned I was Latina, one is, I’m looking at these countries, whether it’s Guatemala, Honduras, there’s so much more that’s happening in Portugal and other areas, depending on the category of business. But we can do a better job of helping them to get prepared so that they also become more important to us and we become more important to them. So, hopefully, that answers that question, but I do think it’s a dual responsibility. I don’t think we can just expect that they’re going to be there now after decades and decades of relying on, basically, the eastern part of the world to develop most of our goods.
Kevin L. Jackson (27:36):
Yeah. It’s also important that it’s not exploitative either. I know Vice President Harris just recently highlighted a new agreement to try to expand the two-way trade between the United States and South America. But let’s sort of get back into the technology side. So, Mark, digital transformation is all the rage, but what role does technology and automation play in making retail smarter, faster, better?
Mark Meister (28:18):
Absolutely. Well, I think the biggest shift in the last couple years, especially since the pandemic, is the physical automation, robotics, conveyance, automation, goods-to-person solutions, sortation. The traditional warehousing has always had those types of solutions. And it’s always been kind of a how do we save money on labor and automate. And it’s always been a good conversation. It’s now becoming a must have conversation with labor shortages and challenges on labor reliability and surety supply issues. The need to automate your distribution centers and the need to automate all parts of your business is becoming a table stakes conversation. And we are spending a ton of time with our clients talking about the next generation of automation, robotic picking, goods- to-person, [inaudible] removals, pack station optimization, put wall optimization, parcel sortation. These are all areas of incredible investment, in both big players from the European automation houses to startups in Silicon Valley. Everyone is moving toward an automated environment and building automated solutions. And that is driving, I’d say, a credible demand in the industry. And then, also to our talent conversation, large talent shortages in these spaces.
Kevin L. Jackson (29:31):
Yeah. So, it seems like that all we really need is enough data and artificial intelligence, and we’ll magically get all the answers. So, Sandra, is that true? Is technology the panacea for everything that hurts us? What important technology players do you see in the marketplace to help us get to that technology nirvana?
Sandra Campos (30:00):
Well, I want to pick up where Mark just left off, because, yes, it is table stakes in terms of looking at fulfillment centers and automation and being able to actually have more productivity and efficiency within that, because it is the table stakes today. However, it’s expensive. It takes time to learn. And we cannot forget that you just mentioned AI. AI is only as good as the people that are delivering the information to it. So, the more information you get, the better it becomes and the more it learns.
Sandra Campos (30:33):
Oftentimes in the retail industry, we end up swinging the pendulum from one extreme to the other and think that there’s going to be one panacea, and then we have to find our way somewhere back into the middle. So, I’m always a little cautious of saying something is going to change everything that we have just with one solution or with one new area of focus, because they’re still new. I mean, there’s $9 billion worth of capital that’s being invested every quarter in supply chain technology right now. It’s not all proven. It needs time. And obviously Mark and his team and what he’s doing, in Manhattan Associates where you were, Mark, for many years, these are experts, they’re doing it. But, again, a lot of this is new.
Sandra Campos (31:15):
So, as we’re developing new technology, as we’re seeing new needs, as we have a whole new fleet of new retail out there with new retail expectations and new valuations out there, and all the different expectations on the metrics that have changed and evolved, we still have to remember that this is new. And we’re going to need to make sure that we are cautious. I’m very optimistic about a lot of these things, but they’re also very costly to an organization. And you do need to have people that are trained in it. And you need to have the foundational capabilities from a technology standpoint to be able to make sure that they get integrated and they’re integrated well so that you can be successful with it. So, while I think technology is fantastic, amazing, and there’s many businesses out there that I could list a name that I think are going to be next generation, I want to be very cautious about how we go about it.
Sandra Campos (32:03):
You know, again, we talked about ChatGPT, you’re seeing now some of the failures of ChatGPT. It’s not perfect. Things are not perfect yet. All of a sudden everyone’s going to run to do everything on ChatGPT and forget about the human. There’s now new automation, I saw a company yesterday that’s automating t-shirt production without humans. But at the end of the day, there are humans and you have to have humans. So, we can’t forget and discount that we still need to have talent, we still need to train. We need to be able to do it in tandem with technology and make sure, as Mark said earlier, what are those needs that your organization has and build that into the technology roadmap.
Mark Meister (32:43):
Absolutely.
Kevin L. Jackson (32:44):
No. Great. And, Mark, what about sustainability and technology?
Mark Meister (32:50):
Absolutely. And I’ll echo Sandra’s comments and follow on. Profitability is becoming the big conversation, too, as interest rates have gone up and the ability to borrow against these needs has gone up, how do you put these technologies in profitably. Because there is an unlimited budget to spend on CapEx and put in the most advanced robots, and the most advanced picking systems, and the most advanced store associate experience systems. It requires the ability to scale with profitability in mind, and that requires a lot more skill than ever.
Mark Meister (33:22):
And when it comes to sustainability, I think that is also going to become a table stakes conversation. I think we’re already there and it’s hitting the market hard. And everyone’s starting to – call it – ruminate on what do I do about sustainability. And is it a separate silo that I have? How do I infuse it into my overall culture? I look at sustainability as something like project management or analytics. These are going to become core, everybody will have sustainability skillset. It’s going to be expected that you understand sustainability and that all the projects you do have a sustainability lens to them versus a standalone effort, that a lot of it is today.
Mark Meister (34:01):
And I think we’re seeing that shift to we need to measure the sustainability of the warehouse, for example. We need to measure the sustainability of our stores. It needs to be built into every piece of the process. And it becomes that table stakes idea. And it is becoming very important to consumers, very important to the employee base of how do we make sure we’re doing things in a sustainable way. When we work with clients, I think, anywhere that extreme waste exists right now is getting deep scrutiny because we can’t continue to waste – call it – natural resources and things that are really important to this planet at the pace we’re doing. And we have to create – call it – sustainable models to build up the next companies.
Kevin L. Jackson (34:43):
Sandra, go ahead.
Sandra Campos (34:43):
Okay. I want to jump in on this one because, yes, it has to be fundamental. But keep in mind, this is also something that’s relatively new. It hasn’t been taught. Europe has been far more advanced than we are in the states. There have companies that have been doing, like IKEA, for decades, Burberry for decades. They’ve been farther ahead of where the U.S. is. But then, there’s also a bit of a conflict because the consumer, and Gen Z in particular, who talks about how important this is, also at the same time is buying from Shein and making it one of the biggest retailers out there. And it is nothing but fast fashion and nothing but throwaway fashion. And still the apparel industry is one of the worst offenders.
Sandra Campos (35:27):
And so, number one, there needs to be standardization. What are the metrics that we’re going to hold everybody accountable to? There is nothing right now today. So, yes, it’s a topic at the top of the list, but how do we effectively measure that and ensure that companies in various sectors are meeting those objectives that we have on a global basis. That’s a major miss right now, in my belief. And it’s something that we need to be able to drastically improve upon and really create something, whether government is doing it or whether it’s a company leading the way to be able to standardize it, that’s one thing that we need to be able to do.
Sandra Campos (36:03):
The second thing is that we need to do more training. And we need to put that as ,not only the top of the agenda, but there needs to be actionable takeaways that every department and every function is responsible for within a company. Because that sustainability factor goes all the way across an organization, every single piece of it, whether you’re using paper, what you’re doing at the warehouse, what you’re doing on the computer, everything in between. Everybody went crazy for crypto and Bitcoin and mining, and then all of a sudden you’re hearing it’s not sustainable. So, there’s a lot of things that kind of change over time as we learn as well.
Sandra Campos (36:37):
So, I think standardization metrics and making sure that, not only is it part of the agenda, but there have to be actionable takeaways that each department, each function, each role, and each individual is taught on a regular basis. And we have continuing education to help when we have turnover and organizations and they come in, you need to make sure that that’s part of the value system and also something that is actually functional within a role.
Mark Meister (37:06):
Totally agree. You nailed the KPI thing, Sandra. And I think before we can really make sustainable changes, we have to get super clear on the baseline of the measurement. Sustainability measurement is critical. And once that becomes just like profit or revenue or any other core metric to a business, everyone knows that these are our three or four. We’re measuring carbon, we’re measuring water, we’re measuring energy, whatever that makes sense for that department, that group where it becomes infused into the vernacular and just the reporting of that organization, I think that will be the big foundation to push now, “All right. How do we actually take it out and how do we start to make it more sustainable and iterate on top of it?”
Sandra Campos (37:51):
And it’s also like a golden seal of approval. You should have that seal of approval. So, where and how do we create that and how do we make sure that we’re holding companies accountable to follow that.
Mark Meister (38:01):
Absolutely. And the trade-offs too. I think that’s the other piece is these trade-off. The sub-optimization of sustainability, I think, will be a big topic on this group may get great sustainable goals and they’ve optimized their microcosm, but then that has created a massive sustainability issue for another group because they’re buying differently or they’re sourcing. And so, their energy price went down, but another group went up by 5X. And how do you then cross-functionally measure sustainability at a macro impact so that you don’t sub-optimize this at a business or unit level.
Sandra Campos (38:32):
And that you don’t also push those extra costs under the consumer because that’s happened. Whether it’s organic farming that you’re paying more for organic foods, whether it’s sustainable products because sustainable fabrication costs more. Well, why? We’re passing that off to the consumer. Is it greenwashing? You know, there’s a lot of things. This is a very big topic, obviously, but I think it’s one that we have to get much smarter and much better about. We can’t just say, “Okay. Yes. We’re sustainable. We’re checking the box.” Because there’s a lot of ways that we need to be more sustainable and truly be able to impact the environment.
Kevin L. Jackson (39:07):
Yeah. But all of this, once again, it’s a balance. You sit on the board, so if it’s not profitable, I don’t care if it’s sustainable. Maybe that’s the answer. But you really have to have visibility across all of your business processes so that you know where you are in that balance. So, enhancement of visibility across the supply chain when you’re supporting basic tasks, like tracking and tracing, picking and packing. How can we increase that visibility, Mark? Because what are your clients doing as they sort of jump head long into digital transformation in order to enhance that visibility across the supply chain so that you have the metrics so that the board can understand the gravity of their decisions?
Mark Meister (40:12):
Well, I think that’s one of the reasons why IBM acquired Envizi and that technology is being infused in our portfolio is that measurement, and that’s one of the big parts. And as we work with clients, I think it’s really around that measurement. And one of the challenges that we push through these new projects is when we get into we’re going to kick off a big large transformation, how are we putting sustainability measures in place for that program and what are the sustainable impacts and outcomes of that program. So, I think it’s got to start to infuse in that CapEx process of saying we’re going to do this X, Y, Z project, and yes, this is our revenue enhancement, our cost savings, but then here’s our sustainability goals for our project. And that’s, I think, the conversation that’s happening as we start new projects. And then, taking along that chief sustainability officer and infusing that into our day-to-day operations.
Mark Meister (40:59):
I think, Sandra, you said earlier, it’s becoming that baseline talent model, how do we train everybody on sustainability. Project management is a core skill. Everybody should have project management skillsets. That’s just part of kind of growing up in the business world, you learn how to do professional project management. Sustainability has to be the same exact thing. It’s just the baseline set of skills that you have. And it’s part of your training all the way starting from high school to college, to your initial training programs in your corporations. And then, it becomes built into the fabric of the company. And you don’t have to then kind of force it or push it. It’s second nature. It’s built into the muscle memory of the organization.
Sandra Campos (41:40):
Mark —
Kevin L. Jackson (41:40):
So, now we’re coming —
Sandra Campos (41:42):
I was going to say, Mark, what is the benefit of Envizi? If you can talk to that just briefly.
Mark Meister (41:47):
Envizi is as an ESG tool. It does a really great job at measuring ESG and reporting out and allowing corporations to start to get those measurements in place. We’ve seen really good success with it. My brother and I, were in technology, run that portfolio, and we are seeing a ton of demand from our clients to get those measurements in place. And then —
Sandra Campos (42:08):
[Inaudible].
Mark Meister (42:09):
Exactly. Absolutely. And we’re in this point now – call it – action at the board level, at the shareholder, level, there’s an expectation of an ESG report and management, and you’re seeing proxy votes, and pieces like that. That’s now pushing down to the next layer of the C-suites and making sure the C-suite organizations have their own sustainability measures, which will then push into their organizations. So, we’re seeing it flow down and we’re seeing those roles exist. It’s just going to take time, to your point again, on this is new. I mean, it’s not wildly new, but how to operationalize it is new. And I think that’s part of the focus over the next decade.
Kevin L. Jackson (42:46):
Yeah. I guess what we’re seeing is that these metrics are actually driving cultural changes, which are really important linkage. So, I really appreciate that, Mark. But as we come to the end of our time together, I want to sort of start wrapping up with Sandra. What’s in store for supply chain and retail industry in 2023?
Sandra Campos (43:16):
Well, one, from a manufacturing standpoint, absolutely diversifying your suppliers and the network of suppliers. So, diversifying it to a lot more nearshore. Hopefully, we’re going to be able to actually see some domestic production take a hold and be comparable in terms of price points so that we can actually ensure that we have some more products that are made in the U.S. I think that’s still going to be a big goal, but it’s one that we need to have. So, one, diversification of supply chain in terms of manufacturing.
Sandra Campos (43:46):
Two, is making sure that you have a technology stack that is agile, that’s flexible, that gives you the ability to kind of put in and take out when you need to. And that’s going to change. You know, it’s inevitable. It’s going to change. It’s the one thing that we know that there’s going to be something new next year, the year after. There’s going to be things that might come in that’s better and you might have to make some changes there. But the technology, the flexibility of a tech stack will be the second one that I would say.
Sandra Campos (44:14):
And third is the talent pool and making sure that, again, out of that $9 billion that’s being invested in supply chain, some of that has to be around the workforce and the talent and the training and the education, and making sure that we’re able to do that. We’re able to bring more women to supply chain as well. Because while they may be on one side in terms of product development and manufacturing, they’re also none other side of the supply chain, which might have to do more with the logistics and the last mile. And so, we need to make sure that we’re having more of a balanced and diverse world, and that goes into AI and technology development, because we need a female perspective as well as the diverse perspective when we’re actually training our technology tools. So, those would be the three areas that I feel that are going to be really important. But I agree with Mark as well, this is the next ten years.
Kevin L. Jackson (44:58):
Great. Thanks. And, Mark, what do you see in 2023?
Mark Meister (45:02):
It’s hard to argue with Sandra. You really nailed the three. I would definitely echo number one, for me, it’s talent, talent, talent. Building a sustainable talent engine for the future and having global talent, onshore talent, nearshore talent so that we can meet the needs of our clients. I think that’s going to be the top piece. Second, I spoke to a little earlier, is automation and how we continue to automate businesses and automate the way we do work so that we can focus on the higher value work such as sustainability. And then, three is, really, that surety supply, that you alluded to as well. I don’t see supplies getting better quickly. We’re going to see shortages of goods for quite some time in various markets. And understanding your supplier base and being able to diversify and skew rationalization in all the right areas to make sure that you can manage in a scarce supply world, I think, is going to be a big focus. I don’t think we’re going to come back to a spot where we have kind of this unlimited capacity that we had in the past 20 years.
Kevin L. Jackson (46:03):
Wow. Great.
Sandra Campos (46:04):
I’ll add one more, if I can add another one, and I think [inaudible] as well.
Kevin L. Jackson (46:06):
Sure. Absolutely.
Sandra Campos (46:06):
And we’re talking about it and we’ve talked about it a lot, but the visibility. So, you just mentioned in terms of product and oversupply, you know, we’ve seen what has happened to businesses when they have excess inventory. We have to be able to create technology tools and analytical tools that help the predictability of inventory needs, because that goes into a circular economy, it goes into sustainability. There’s so much that it impacts in terms of profitability. We saw what happened in 2022 with retailers having excess inventory. So, what happens? You do have a ton of markdowns. And your competitive markdowns that you can’t not do it if you’re competing with another one that’s marking down every day. And those markdowns impacted margins and profitability. And some of the biggest retailers were impacted by it. So, that continues to be a need. We really haven’t seen, or at least I haven’t seen, anything that’s really that best in class that can have and provide that visibility for forecasting inventory needs. But it is an essential. So, it’s an area that I think has to continue to be prioritized.
Kevin L. Jackson (47:09):
Wow. Thank you very much. We have really covered the waterfront in this broad ranging discussion. So, Sandra, in wrapping up, how can our audience reach out to you to learn more about the retail industry and digital transformation?
Sandra Campos (47:31):
Always LinkedIn. I’m a LinkedIn [inaudible]. So, LinkedIn, I am there, sandracamposnyc. And I try to respond to as many people as I can. It’s really important to me to make sure that I help as many people as possible. So, whether that’s through various introductions or just input and thought leadership, I’m there.
Kevin L. Jackson (47:53):
Wow. Well, thank you very much. And, Mark?
Mark Meister (47:56):
LinkedIn as well. Absolutely, it’s the best way to get in touch with me.
Kevin L. Jackson (48:02):
Well, thank you both very much.
Sandra Campos (48:04):
I know you’re going to be at a warehouse the next time we see you too.
Mark Meister (48:07):
Always. Always.
Kevin L. Jackson (48:09):
Yeah. In the freezer again.
Sandra Campos (48:11):
Once we create that map of where you’re located so that you can actually have the GPS track you, make sure you put it on LinkedIn.
Mark Meister (48:18):
Absolutely.
Kevin L. Jackson (48:20):
So, thanks again both of you for spending your time with us. So, in closing, I would like to invite everyone to check out the wide variety of industry thought leadership that we provide at supplychainnow.com. And you can find Digital Transformers and Supply Chain Now wherever you get your podcast, so be sure to subscribe. But on behalf of the entire team here at Supply Chain Now, this is Kevin L. Jackson wishing all of our listeners a bright and transformational future. We’ll see you next time on Digital Transformers.
Intro/Outro (49:06):
Thank you for supporting Digital Transformers and for being a part of our global Supply Chain Now community. Please check out all of our programming at supplychainnow.com. Make sure you subscribe to Digital Transformers anywhere you listen to or view the show. And follow us on Facebook, LinkedIn, Twitter, and Instagram. See you next time on Digital Transformers.
