[00:00:00] Gaurav Malhotra: This technology is going to be parallel to internet. For people like us, we use internet so commonly and what’s going to happen is we’re going to wake up on a daily basis. We’re going to have a bunch of prompts that we will either send out or will be sent out on our behalf because of whatever workflow and algorithms we have.

[00:00:21] Voice Over: Welcome to Supply Chain Now the number one voice of supply chain. Join us as we share critical news, key insights, and real supply chain leadership from across the globe. One conversation at a time.

[00:00:33] Scott W. Luton: Hey, good morning, good afternoon, good evening, wherever you may be, Scott Luton and the one and only Tevon Taylor here with you on Supply Chain Now welcome to today’s show. Hey, Tevon, how you doing today?

[00:00:44] Tevon Taylor: I’m doing great. How about you?

[00:00:46] Scott W. Luton: I’m doing wonderful. It’s not 117 degrees in the Atlanta area, so I’m doing okay today. We’re in probably in the 90 ones, which is okay. Huh?

[00:00:55] Tevon Taylor: You’re lucky. Dallas is 105 today, so we’re hot.

[00:00:57] Scott W. Luton: Oh my gosh. Well, hey, that’s almost as hot as this conversation we’ve got coming up a big, big show here. Today we’re going to be exploring some of the latest applications of artificial intelligence across supply chain. We’re going to be diving into the common challenges of pilot paralysis. Stay tuned for more on that. We’re going to look at how AI, when applied in a targeted and appropriate manner, well it can offer almost immediate results, big impacts for your team. We’re going to be taking a look at the upskilling and the reskilling that’s often required for workforces to optimize their approach to AI across the enterprise. And this might be my favorite part, we’re saving it for last. We’re going to be looking deep into our crystal ball and offering up an accurate glimpse of what the next five years may look like when it comes to AI manufacturing and end-to-end supply chain. All that and a whole bunch more Tevon. We’re promising the cake and the ability to eat it too here today, but we’re going to deliver on time in full aren’t we.

[00:01:54] Tevon Taylor: Are? No doubt

[00:01:56] Scott W. Luton: As always. So folks, stay tuned for our terrific conversation and Tevon, given all of your leadership and expertise and contributions across global supply chain, look forward to your insights and commentary as well. So folks, lots of actual takeaways ahead. Tevon, if you’re ready, if you’re buckled up and got your socks pulled up and ready to go, I’m going to introduce our wonderful guest here today. You ready?

[00:02:19] Tevon Taylor: Let’s do it.

[00:02:20] Scott W. Luton: Alright, so our featured guest folks who brings 25 years of experience in supply chain to the table, especially in areas like technology, logistics, transportation management, trade compliance and planning, and folks don’t sleep on your trade compliance professionals, they’re terrific resources in your organization. Our guest is a trusted service and sales leader and he’s built and led all sorts of high performing teams from the ground up and they’ve really moved mountains out in industry and get this. Our guest is a fellow Aggie. He holds several engineering degrees including a master’s degree in industrial engineering from this right, Texas A&M University. Go Aggies. So please join me in welcoming our featured guest here today. Gaurav Malhotra, partner and supply chain technology leader with EY. Gaurav, how you doing?

[00:03:07] Gaurav Malhotra: I’m good, Scott. How are you?

[00:03:09] Scott W. Luton: I am outstanding. I’m not quite as, so you’re up in Chicago, so you’re starting to get some cooler weather. We were talking about it earlier, I bet in about a month it’s going to be perfect to be dining outside of Chicago, huh?

[00:03:23] Gaurav Malhotra: It’s just a very, very beautiful time of the year, honestly, both weather-wise, everything that goes around here in Chicago, the amount of events and social settings that the city has to offer. I mean you just can’t ask for anything better, right?

[00:03:38] Scott W. Luton: I’m with you. And of course the food Tevon, the food up in Chicago. Oh my gosh, you can’t beat it, can you?

[00:03:45] Tevon Taylor: No, I love the deep dish. That’s my favorite pizza up there. One piece will fill you up for the day, right?

[00:03:51] Scott W. Luton: That’s right. And you have to

[00:03:52] Gaurav Malhotra: Work out extra cuisines wise, you all know, right? I mean Chicago, you name the cuisine and you name the type of restaurant you want and you find it right here essentially.

[00:04:04] Scott W. Luton: No doubt, no doubt. Alright, well I would love to spend the next hour picking your brain on all things Chicago, especially food, but there’s something else I want to ask you about Gaurav and that is you had a terrific family vacation, really a pilgrimage to Kauai not too long ago. Tell us more about what comprised of that visit.

[00:04:24] Gaurav Malhotra: Yeah, it’s interesting, Scott, that you asked about that, but me and my family have been following this monastery as disciples of the monastery for 20 plus years and the monastery is based in Kauai, up in the mountain in Kapa, and we feel very fortunate and blessed to be associated to it. So to your point, this is just a few weeks ago, we had our annual pilgrimage, that’s our annual tradition to be able to go there and we make this a bit of a pilgrimage and a little bit of a vacation where we break the day up and do all the things monastery related that we’re supposed to be doing, including service, et cetera. And then given kids we keep part of the day for other things related to social and enjoyment and stuff like that, we’ve just been very fortunate to have that format, to have that affiliation in all the teachings that’s come out of that to us as a family essentially. Given the supply chain topic that we’re talking about here, just a connection that you may find interesting.

[00:05:33] Scott W. Luton: Sure.

[00:05:34] Gaurav Malhotra: So the monastery actually has a temple there that is fully hand carved, built over decades. So one of a kind in the world honestly. And it has had its own set of supply chain uniqueness tied to it, given it was hand carved in India, brought over across the ocean by very skilled artisans who then were coming over decades to Kauai and finishing the unfinished stones and then assembling them because there’s only a few of them that are all over the world that can actually do things like that. And now it’s fully assembled a marvel of its kind that hopefully a lot of people get to go witness and enjoy and get the blessings from essentially.

[00:06:25] Scott W. Luton: Oh my gosh, Gaurav, I’m so glad you shared that with us. It’s a great introduction to some of your values and of course you wove in supply chain because there’s a supply chain behind everything. And one thing Tevon that I love that he mentioned on the front end of telling us about that trip is including his kids so they can see the values and the call to service. He mentioned what a terrific, terrific pilgrimage. Tevon respond. React to what we heard there.

[00:06:53] Tevon Taylor: To your point, there’s a supply chain behind everything. I mean most people, including myself before I got into supply chain, you just think something appeared there or it happened there. You didn’t realize all the pieces that go in place and especially something on an island, you assume that’s where it was, everything was done, you didn’t think it was done somewhere else and brought over. And I love that because everything can go back to the simple pieces and parts that go into a supply chain to make something look complex, but it evolved from somewhere else, right?

[00:07:23] Gaurav Malhotra: That’s right. If I could Scott and Tevon, so that’s one side of the supply chain and years or decades that’s come to build something like that. One other experience that we had during this trip was we were there when tsunami hit out in the coast of Russia that then traveled through the ocean and there were all kinds of tsunami warnings and stuff, so we had to evacuate under mandatory evacuation and this was a first experience with something like that. But there as well, again, another type of supply chain challenge that needed to be accommodated, reacted to that was unforeseen if you will, which is what we see in today’s world around macroeconomic, macro political, geopolitical, et cetera, conditions. So much uncertainty that has to be reacted. It was honestly very fascinating to see how local authorities at a moment’s notice reacted to what they need to react to and manage everything, getting everybody to safe grounds and then getting them back in a matter of less than 10 hours or so. Right.

[00:08:27] Scott W. Luton: Wow. It is fascinating. Tevon took Gaurav’s incredible experience that he and his family had, the humanitarian logistics and those professionals that have really been able to really dial that in and level it up to do incredible things now and really the greater supply chain efforts that go around responding to these awful, awful disasters, it is nothing less than amazing, huh?

[00:08:51] Tevon Taylor: I agree. There’s a lot of logistics out there that’s not for profit and just a great example of humanitarian need and taking care of each other at the end. That’s what logistics is about is taking care of each other.

[00:09:04] Scott W. Luton: That’s right, and I can’t go further. I got to give a plug to a great nonprofit partner of ours that the acronym is ALAN, that’s the American Logistics Aid Network and they do outstanding humanitarian work all around the globe. So give Kathy Fulton and the ALAN team a call. Alright, so Gaurav back to our topic at hand. I’ll tell you I’m looking forward to when your book’s coming out because you’ve got more than 25 years of industry and consulting experience, what you bring to the table and a lot of that of course as I mentioned earlier, supply chain, trade planning, compliance and tons and tons of technology. So I want to level set for just a minute. Tell us about your role at EY and we know EY does a lot of things in global supply chain, but give us a couple of highlights of what are some of your favorite things that the organization does to serve this industry and push it forward.

[00:09:53] Gaurav Malhotra: So as it relates to role Scott, as we mentioned, I’m the supply chain technology leader for the firm and what that entails is basically helping establish the overall strategy for us as a firm in line with market trends in line with our client expectations, particularly when it comes to technology, leverage technology embracement within supply chains and how that moves the needle particularly for our clients to develop the right competitive advantage, differentiation, value creation elements at a highly strategic and bold level essentially. And in the process someone like me works with a number of other parts of our firm. We call that bringing the power of the firm even in supply chain related transformations that is required to fully serve our clients in a holistic manner from strategy to process to execution to some cases downstream operations based on the need of the hour. Now the point around what EY does, particularly on the supply chain side, I would simply summarize that by saying that we help our clients create the right value and the right outcomes for their supply chains in an integrated holistic manner that moves the needle for them as an organization, their shareholders, and ultimately serving their customer base in a highly, highly efficient manner.

[00:11:30] Scott W. Luton: Gaurav. Okay, we can make a whole episode around your last response and there’s a couple things I want to pull out Tevon and get you to and also hear what your thought there was competitive advantage. It’s amazing. Supply chain has always been able to create competitive advantage but now it’s expected to and now it has such a unique and powerful ability to deliver in very powerful ways. We can start and start with just delivery service levels and then secondly, no islands of excellence. Did you hear as he talked about getting the right outcomes in an integrated in a holistic fashion? As I like to ponder a lot, Tevon in this golden age of supply chain tech that Gaurav could probably share a whole bunch of perspective around we have a terrific opportunity to go bust down silos, but in some cases we’re creating more silos because of all the capabilities we have. But Tevon, what’d you hear there in what Gaurav does and of course the role EY plays in global supply chain.

[00:12:30] Tevon Taylor: I was never smart enough to be a consultant. Andersen Consulting helped me pay for some of my college, but I love what they do because he said it quite clear, the right outcomes, the right value. I think of Stephen Covey, you think with the end in mind, so what’s the outcome you’re trying to get to? But using the power of the firm because everyone that’s operating in supply chain right now, they’re doing it the way they’ve always done it. It’s very hard to move the ship. Someone like EY comes in and says, Hey, let me not only tell you about your supply chain, but talk about the technology and the end to end. So it’s not just pieces of your business, we’re going to look at the whole thing and look at outcomes and value. That is very powerful just in what you said and makes me a little jealous. I didn’t go into consulting.

[00:13:13] Scott W. Luton: Well, you could have been very successful, Tevon, I’ve seen you work, but Gaurav, kidding aside, I’ll tell you as the fearless supply chain technology leader in this age of truly, it’s remarkable what we’re accomplishing moving just one element, moving so much from reactive to proactive mode, right? It’s some of my favorite big time trends. It’s an amazing time to be in supply chain tech right now. Gaurav, is that right?

[00:13:40] Gaurav Malhotra: Oh, you can’t find a better time and I think Tevon just said that someone like me thinks about technology and this includes emerging technology, the topic at hand here around AI as well as just an enabler. But those enablers today that are real practical in nature to move supply chains to what I call towards a more cognitive, more reliable state. I say this word autonomous is overused. So I like to not use it as much and hence I say towards a more cognitive and reliable state. It is just so very real in times of today. Now when you club that with the complexity of supply chains and the uncertainty that supply chains are having to react to that have almost become second nature given everything that is going on around us, whether that’s nationally or globally, it just becomes a very, very complex but fascinating space and challenge to work through.

[00:14:47] Scott W. Luton: That’s right. Completely agree. Alright, so let’s bring the power. That’s another phrase that Gaurav used that we’re going to have a lot of fun with throughout because he’s bringing the power of technology to make things better in global supply chain in a very holistic manner. Let’s get into AI adoption in supply chain. We have a lot of conversations around this because I think the more examples, more use cases, the more really practical stories that we can bring to our audience, the better they can wrap their head around the immense opportunities and hopefully find more progress in their own organization with innovative technology. But let’s talk about misconceptions first, Gaurav. What’s one common misconception you often hear about, especially when it comes to AI in factories and compare and contrast that with the reality that you’ve seen yourself.

[00:15:33] Gaurav Malhotra: And maybe I’ll take a couple there, Scott. I mean what I hear generally speaking a misconception one is that AI is here to kind of solve for everything, and that’s in factories or in supply chains in general more broadly as well. The second is that AI is only leverageable in large complex settings where there’s huge budgets available to be able to incorporate that for the right areas within factories. And the last thing is our factories produce so much data and whether that’s stored in the historians, the SCADA layers, et cetera, and there’s common misconception that you’ve got to have your data in a pristine state to be able to have AI readiness and start an AI transformation or AI leverage. And that’s a misconception. So not true if you will, or I should say to the contrary because AI as a technology has the capability to kind of sift through both structured and unstructured data to be able to then produce the right output, whether that’s inside the decision making, in some cases, some autonomous workflow and actioning for you to be able to reduce the workload or increase the productivity, the efficiency, the quality, the safety, whatever areas you may be targeting within the factory setting.

[00:16:57] Scott W. Luton: Tevon, I love these three misconceptions that Gaurav put out there and my favorite one is probably the third one where your data doesn’t have to be perfect. Gosh, if you wait on, as I heard it put the other day, if you wait on your data to be perfect, you’re never going to get around to driving real incredible transformation. Tevon, what’d you hear there?

[00:17:17] Tevon Taylor: Yeah, I actually like it when you use something like GPT and you do give a little garbage to it and it comes out with something better than you expected. It’s almost like, it’s like, okay, you’re a little dumb but let’s make you look smarter. But I agree on the, it’s not going to solve everything and you don’t have to be a big company. If anything, it should level the playing field where smaller mid-sized companies can use it to compete against the big companies that are literally tied up in bureaucracy and red tape. They have policies on how you can use AI. So I think it levels the playing field. I kind of like that.

[00:17:50] Scott W. Luton: I’m with you and this trend that’s been around for years, how the small can almost out mighty and outcompete the big because the grand equalizer that is technology. I find it all fascinating. Let’s talk about pilot paralysis, Gaurav. So a lot of organizations when I read this phrase I’m like, yep, I’ve been there a time or a hundred. From your experience, what are the critical foundational elements that companies got established before attempting to implement AI at scale?

[00:18:24] Gaurav Malhotra: So we’ve had a number of emerging technologies come to life over the years that we’ve seen or over decades, right? I mean I had a big hand in our blockchain strategy at one point in time, in our IoT strategy at the other time, and obviously now every one of them have had their potential and a leverage. I think it’s only fair to say that AI as a technology has far greater potential and it’s starting to come out right now. Having said that, every one of those cycles have had the issue of this pilot purgatory that people get stuck into essentially. Now I like—

[00:19:04] Scott W. Luton: That even better. Gaurav, pilot purgatory.

[00:19:07] Gaurav Malhotra: You—

[00:19:07] Scott W. Luton: Hear that Tevon? I like that even better. I’m sorry, go right ahead.

[00:19:10] Gaurav Malhotra: No, no, no, but to your point, and Tevon said this in the previous response, that for companies and organizations to be able to leverage the full potential of this technology, there has to be a very structured approach on how do you embrace and how do you go about it. And for that you have to have the right foundational elements identified, understood, and tackled appropriately because if you don’t, then you’re not getting to the full potential. On the contrary, if you do, then this has the potential to transform your entire enterprise and to your point level, play the field potentially and things like that. Now those foundational elements are things like governance and risk and security, responsibility, trust, integration, architecture that have to be handled. And by the way, not just at the supply chain level but at the enterprise level.

[00:20:10] Gaurav Malhotra: You have to have an enterprise wide strategy around those when it comes to AI in particular. And data is obviously a big component of that. We just talked about it. And once you have that and the right guiding principles to support those foundational principles that are aligned to your enterprise strategy, well understood by all the right stakeholders, then you move further into the journey which relates to the function in question, the use cases, the prioritization, the value, and the outcomes you’re going to receive through it. The final point is how do you have a continuous improvement loop to it? Because this is not a one and done, the technology continues to evolve. You have to have a governance and a mechanism that is looking at this on a continual basis.

[00:20:54] Scott W. Luton: Yes. Okay, two quick observations and then Tevon, I look forward to your response here. Number one, I look forward to that book coming out, Gaurav, I really do. You can tell you’ve been doing it for quite some time. And then secondly, we talked about cricket in the pre-show. What’s one of the most dominant cricket teams out there?

[00:21:13] Gaurav Malhotra: I mean obviously you’ll say I’m biased, right? But the team in India is a dominant team.

[00:21:20] Scott W. Luton: So you’re not going to beat that cricket team in India, the best of the best, the championship winning cricket team without an incredibly deliberate, methodical strategic plan where you have thought through all those different elements that Gaurav just put out there. Now Tevon, there might be an Aggie analogy there as well that I left out, but what’d you hear there from Gaurav?

[00:21:43] Tevon Taylor: Yeah, I don’t know if I want to talk about Aggie football just yet, I’ll jinx them. But AI is not an algorithm. It is about data, process, people, leadership and aligning those. So that’s your foundation. If you don’t have that foundation, the pilot will stay the pilot and you’re going to be in that purgatory. So you absolutely have to have those things lined up like you mentioned.

[00:22:06] Scott W. Luton: That’s right, and I bet a lot of folks listening or viewing this podcast conversation right now have been in that pilot purgatory, whether AI related or many other ways that we can get stuck there. Call Gaurav, folks, call Gaurav, he can help you. Alright, let’s do this. Let’s talk about, you mentioned those bringing the power to get the outcomes and deliver a competitive advantage. We’ll get more into results here. So Gaurav, what are some interesting examples where AI has really delivered significant supply chain cost reduction? Not down the road, not a couple years down the road, but immediately, especially when it comes to financial relief. That’s how you spell relief, right? Not Rolaids anymore. Also, how do those immediate outcomes of course contribute to long-term successes and long-term resilience? Give us some examples of that.

[00:22:57] Gaurav Malhotra: There are many leading large organizations, some cases small as well, that have leveraged this again in a structured, methodical manner, getting huge bold benefits and they cut across the spectrum. So again, in the logistics and transportation space, companies like UPS and others — and this is public knowledge — are leveraging this technology embedded into their current processes and technology and leading to huge, huge benefits from the standpoint of route optimization and fuel savings that they’re able to get. And that’s being replicated through the LSP patch particularly because obviously logistics service provider, this big thing from the standpoint of route optimization and fuel cost. And by the way, that then translates into driver satisfaction, the driver hours that they’re able to reduce and leverage them for other things in the equation. You then go into the manufacturing side of the house. We all know when it comes to preventive and predictive maintenance, particularly now around predictive maintenance, this technology is being widely leveraged both for equipment monitoring and then through that monitoring, being able to detect and then send the right level of alerts, in some cases also do autonomous actioning to reduce the downtime to better the maintenance and the life of the equipment in question.

[00:24:27] Gaurav Malhotra: Essentially. It’s a lot of leverage in that equation. And then there are parallels to that when it comes to training or the ability to be able to give the shop floor user the right set of instructions that they need to be using virtually all in a highly guided manner to be able to do their job functions more safely but more accurately, ultimately getting to better quality and output in the equation. And again, there are many, many large manufacturers that I could quote that are doing that and getting huge benefits from the standpoint of the overall productivity from their plants.

[00:25:07] Scott W. Luton: I love those examples and I want to add a few more and Tevon, these might ring a bell with you because we’ve talked about some of these together in previous shows. Freight invoice auditing — some of these big-time shippers, you can’t throw enough people at auditing and getting invoices right. And it creates such a resource suck, for lack of a better phrase, tons of friction. AI is being applied in incredible ways to really alleviate that. Parcel shipping — “where’s my stuff?” That can take thousands of hours each week answering and taking care of the consumer and giving them information. AI is changing that game dramatically. And one of my favorite recent examples, not too long ago, we had a big-time CPG player that a lot of folks would recognize — taste of new generation, I’ll put it — and they were deploying big-time agentic AI and decision automation solutions out amongst their warehouses and get this, they had at one point per month in this part of their warehousing ecosystem, 14,000 exceptions that required manual interventions per month. 14,000. And do you know where they took that number to? Once they acted on the art of the possible and brought in agentic AI to eliminate decisions or enhance their team’s ability to make better decisions, they took that 14,000 number down to 27. You heard that right — 14,000 to 27. You think people had some more time on their hands to protect, not do as much overtime and enjoy their weekends. I mean it’s remarkable. Tevon, your thoughts.

[00:26:37] Tevon Taylor: Well, everything can be kind of summed up. I’ve heard manufacturing, inventory, transportation, maintenance, and it’s all about reducing, making it better, optimizing. But AI is delivering on quick wins and cost savings, right? That’s the first step. So you have the quick wins, but then it’s also laying the groundwork for this adaptive supply chain that can make the future of the supply chain less disruptive, less volatile and more flexible.

[00:27:05] Scott W. Luton: That’s right. And better environments, more success, better days for your people. And that’s my favorite element to this whole golden age of supply chain tech story that we continue to build chapter by chapter. So Gaurav, speaking of agentic AI, it’s just remarkable what’s going on. Let’s dial it in more there because we’re truly hour by hour unlocking more and more of the autonomous supply chain. And I hope I’m using that word correctly because Gaurav, as you mentioned, folks are throwing that around left and right out there. So let’s talk about this. Are there specific areas where agentic AI is already demonstrating — beyond what we’ve referenced — maybe already demonstrating its potential in factories and in supply chain? What else are you seeing there?

[00:27:49] Gaurav Malhotra: There’s a lot of general lack of education and understanding around this technology. I mean obviously a lot of buzz, a lot of hype. People have to have a deeper understanding as well. And to your point, right, the technology has evolved and will continue to evolve. So it went from AI to GenAI to agentic and now it’s moving towards its next evolution so to speak. And that’s why that continuous loop is important. Now it’s important for all of us to understand what was the difference between Gen versus agentic and why does agentic, to your point, give us the ability to move towards that autonomous or what I call ecosystem orchestrated cognitive supply chains. And the primary difference is that in the case of agentic versus Gen, agentic has the ability to be able to act on your behalf and in a lot of cases reliably act on your behalf as a result of consumption of a lot of information that it analyzes and then knows what to act on so that you are then just left with potentially either validating and or working on very, very complex exceptions that you need to work on.

[00:29:07] Gaurav Malhotra: That’s what some of the examples that we all talked about earlier and or some of the newer ones, particularly from an end-to-end perspective, is what companies are starting to use agentic for. And I’d say particularly around unforeseen macro conditions, whether that has impacted ocean drastic patterns that now a company is having to react to see how they can still meet the service levels or minimize that disruption, and they’re using agentic to be able to analyze the network across the patch globally. And then through that analysis, this technology then gives them the recommendation. In some cases acts on it. You can use these types of alternates to minimize the disruption and still be able to hopefully meet your service levels to your customers essentially. The second is now around this whole network analysis, not around a disruption but call it around these tariffs and everything. I mean how do we use this technology to quickly analyze our historics if you will, and then tell us how should our network overall be placed so that it is much more resilient to these type of unforeseen and or even foreseen changes and we still are cost effective both internally but then more importantly to our customers.

[00:30:25] Scott W. Luton: Well that last example, Tevon, I think the other opportunity when it comes to designing our network, transportation networks and whatnot, it’s not a one and done. And it’s amazing how technology allows the dynamic aspect of that to constantly optimize no matter what scenario is being thrown at us. But Tevon, what’d you hear there from Gaurav?

[00:30:47] Tevon Taylor: We’re moving from just offering and analyzing to taking action within certain guardrails. But the way I look about agentic, I look at it like, hey, don’t just tell me something’s going to fail, schedule how to fix the failure or the part, adjust the production, right? So it is taking it the next level where engaging in that action part that you never saw before. It’s not just analyzing, it’s analyzing and taking action.

[00:31:16] Scott W. Luton: So Tevon, what I’m hearing there, and there’s a quote from a president and it’s escaping me right this minute, I think it was a president, but basically the quote was don’t complain unless you got a solution. And what you’re speaking, the great news there is all this technology is enabling people not just to point out what’s going wrong, but action it and solution it right there. That is a beautiful, beautiful thing. Gaurav, speaking of beautiful things, I want to get into the beautiful human element that still powers global supply chains forward in so many different ways. And we were talking about maintenance in the pre-show, all those incredible maintenance professionals out there, the planners, the forklift drivers, the pickers, packers, the machine operators in our plants. Let’s talk about how in this increasingly AI-enabled and autonomous supply chain world, the vital role that humans still play and will continue to play. How do we ensure that AI augments that rather than replaces those vital human capabilities and creates new roles and new opportunities for the humans out across the globe?

[00:32:24] Gaurav Malhotra: I think first it starts with all of us getting a deeper, good understanding of this technology because it’s almost a given that we can’t escape this, so we have to embrace it. And I just tell everybody that we get an understanding and embrace it because to your point, it’s something that is only going to complement things and that embracement should be with that level of understanding. Once that’s done, I think what this is going to do is leave humans for really creative critical thinking and through that creative and critical thinking focus on unique things that are highly complex in nature that they need to focus on because their involvement is necessary and then divert the rest of their attention and the rest of their energy towards the enterprise differentiation in other ways that they are able to contribute to essentially. And that’s how supply chains — again, we’ve now talked about many times that this leads to the potential that we’ve all been waiting for and it is going to get real. And through that now humans all have to focus towards those creative critical things as well as differentiation further. And that differentiation can be new channels, new products, new offerings, new business models that we can then think about versus running and executing on supply chain mundane tasks if you are right.

[00:34:05] Scott W. Luton: Yes. Alright, so Tevon and Gaurav, I’m going to keep it real. Something we’ve said a lot around here, ever since this golden age of AI has been around: if you don’t like to learn new things and if you like doing the same thing the same way eight hours in a row every single day, you’re not going to have as many opportunities versus those that lean into this golden age and are willing to learn and are willing, as Gaurav was saying, to find new ways of how they can bring value — unique human value — to our supply chain ecosystems. And the good news there, Tevon, is until AI, agentic or otherwise, can go out and meet suppliers or customers and go have lunch and go ideate around opportunities and challenges and unlock new ways of working together — who knows, that might be next week — but until that, that is a uniquely human ability and we got to lean in and empower the human workforce to do more of that. Your thoughts here?

[00:35:04] Tevon Taylor: Yeah, two things. One is I’ll quote the late Fred Smith. He said, if you don’t like change, you’re not going to like extinction either. So that’s the first. So you do need to embrace it, but I love that point, humans will be in the loop. There are things that humans excel at, like creative problem solving and navigating ambiguity that you’re just not going to see AI do in the short term. But more importantly, there should be other things you’re focused on trying to invest in things. I mean, think about your daily — I think the point was made — adding productivity over the mundane task. There are things you could be doing versus the mundane task that if you had AI doing that, it’s just going to further things all humans are doing. But I do like Fred’s quote because he said it quite a bit, he’s right. We’ve got to embrace that change, embrace AI or face extinction of whatever job function or whatever you’re doing.

[00:35:55] Scott W. Luton: Very true, very true. And hey, maybe one day AI will become big Dallas Cowboys fans and then we’ll really know they’re becoming more and more human, Tevon. We’ll see. And by the way, Gaurav, Tevon Taylor is the biggest Cowboys fan I’ve known. We’ll see what they do this year.

[00:36:12] Gaurav Malhotra: There we go. We’ve got the gig in common there, Tevon.

[00:36:17] Scott W. Luton: So let’s do this. I love — I got a two-parter question for you, Gaurav, and this goes back to there are certain what I view as responsibilities that, as companies are leaning into AI possibilities and investing in that and really transforming their approach to managing supply chains and leading their business, at the same time a lot of leading companies are investing in their people and upskilling and re-skilling their workforce to help them better prepare to find more success for themselves and their organization in this AI-driven supply chain and factory environments and much more. So how do you see companies making that investment in their workforce? And secondly, are there specific skill sets that you’d recommend to business leaders and the employees themselves out there that are really becoming more and more critical in this AI golden age?

[00:37:09] Gaurav Malhotra: I think in line with the discussion that we just had, Scott, I see this to be one of the most important elements that can set a company aside in a positive manner through again the evolution and the journey we’re on so to speak. And this cuts across industries, by the way. And yes, almost every one of our clients and or every company that you hear of is focused on that piece of one: how do we ensure that we uplift our current workforce to again have a deeper understanding and embracement of this technology? We call it AI in everything we do because the applicability is such in whatever shape or form in everything we do. And it starts with first an education, a deeper understanding, and I see many of my clients and other organizations leveraging different formats to be able to uplift that education within their workforce as a whole.

[00:38:15] Gaurav Malhotra: Then through that education, it starts with arming individuals and arming the workforce with the right tools, with the right platforms, with the right technologies first to start potentially playing, but then to start incorporating them into their daily functions, whether that’s around internal operations improvement, whether that’s around improving how they’re serving their customers, et cetera. And that’s starting to happen as well. Now, all of that, Scott, requires a certain element of culture change as well, and that can come top down as well as from the sides, and that’s needed as well, meaning you really need to move the needle from the standpoint of embracement by the majority if not all. And that I think requires a shift in the culture because obviously change is never easy, not embraced by everybody. But this one I think is here to stay. I say not in the enterprise world, but give this thing, call it three years or so, roughly speaking thereabouts in our daily lives, and it may be less than that, this technology is going to be parallel to internet. For people like us, we use internet so commonly and what’s going to happen is we’re going to wake up on a daily basis.

[00:39:39] Gaurav Malhotra: We’re going to have a bunch of prompts that we will either send out or will be sent out on our behalf because of whatever workflow and algorithms we have, and they’re going to do a bunch of actions for us, if you will, and make our lives easy, give us the responses and our insights. And then that same thing is going to start to translate into the enterprise world not too far from there.

[00:40:02] Scott W. Luton: Again, it could be a whole podcast series on what you just shared there, Gaurav, and I want to speak to the questions we posed to him. Tevon, I want to share just a couple quick things because we’re talking about upskilling and reskilling the workforce and some specific skill sets that business leaders should consider to invest in. Of course analytics, of course prompt engineering as Gaurav mentioned, change management, a little bit more of a broader skill set, but gosh, in this ever fast-moving world involving AI and otherwise, and a lot of organizations are struggling with that change management piece. And I would argue what’s old is new again, is being able to understand the business and helping your people understand the business. There’s an old tool been around forever, V-stream mapping. You get a bunch of people in a room from different functional areas and you map out the flow of a factory or really any type of business that, in my experience, has unlocked these eureka moments in the handoffs between the functional areas. And gosh, the learnings that teams and organizations can take from those exercises where you gain major alignment of upstream and downstream — man, then you can figure out where to apply technology and where there’s some unique human-driven value that can be delivered. Your thoughts here, Tevon?

[00:41:18] Tevon Taylor: I’m starting to laugh because you say value stream mapping and that seems like just yesterday, but we’re aging ourselves. I had a customer actually email me yesterday and I said a term that’s a little old-fashioned in supply chain and they replied and said, that’s old-fashioned. Then they came back because they realized they were being ageist. But when it comes to approaching it, upskilling, reskilling — that’s table stakes. There needs to be AI training, that cross-functional rotation, kind of dipping your toe into what’s changing. I wrote down the parallel to the internet because again, it seems like yesterday we’re listening to the dial tone of AOL and we’re like, this is so cool. The websites were horrible looking, there wasn’t really a lot of data, but our brains didn’t wrap around where we’d be today. Just like in 20 years from now, we’re going to go, how did we not see this? But the most important thing that I’d say is that companies really need to realize that it’s not the technology alone that delivers the value, it’s the people. So the people are still delivering the AI, the people are still supporting it, just like pilots still are flying planes that are highly automated compared to what they used to be. It’s the people behind it. That’s really what’s going to make this happen.

[00:42:33] Scott W. Luton: So true Tevon, so true. And there’s tremendous opportunities to all of our listeners out there that are maybe anxious about this period we’re going through because we’re getting thrown so much. There’s so much noise. You got the geopolitical, you’ve got the trade environment, you’ve got all the innovation and change going in the industry. Going back to the basics, going back to the basics, get rooted in the basics. It’ll help you foundationally get through these uncertain times and find lots of opportunities and success. Let’s do this. Gaurav, we’re about to get — Tevon is, no pun intended, already looking at the future because we’re going to get you to predict the future here in just a second. But before we get there, I want to double down on this notion about keeping people at the center, the beautiful human element at the center of all these technology advancements. What would be your advice? You’ve worked with some of the most successful companies in the world that have been able to do this. What would be your advice?

[00:43:27] Gaurav Malhotra: I think that is paramount. Keeping humans at the center of this. I think Tevon just said it’s technology and yes, it has a large potential, but just an enabler if you will — and yet a huge enabler — but humans are the ones that are necessary to be able to think through the right leverage with the right outcomes and value that gets driven through it. And humans are the ones that have to embrace it, drive the right change and uplift themselves and the community and ultimately the organization through the cycle, if you will. And time and time again, even through this, we have seen that organizations that have kept humans at the center through it — in fact, we have an approach, and this is through research with Oxford University, where we talk about this from the standpoint of humans at the center, so to speak, exactly the term we use — is so necessary. And if you don’t, this transformation is not going to lead to the right results sets that you’re looking for, the right level of adoption that you’re looking for, not within the organization, but then outside as well. But humans have to be at the center, want to think through how to leverage and bring it all together and convert those, what I call moonshot and or bolder things, to reality, ultimately to adoption.

[00:44:55] Scott W. Luton: Oh man, Tevon, I would argue on top of what Gaurav just shared there is humans are more apt to be at the center of what we’re trying to do with technology if they’re informed. And yeah, I say it a lot, I believe in it, we should do it with our people, not to our people. And of course, communicate, communicate, communicate has got to be the tool we use to inform our workforces. And I saw one data nugget along these lines earlier this week based on research. We’ve all heard about the power of storytelling and its ability to help communicate in ways where the divides are bigger. Did you know that leaders that are able to communicate via the power of stories and really optimizing their storytelling ability can up their effectiveness 22x in terms of who they’re communicating to and whether they retain that knowledge or what they’re sharing or they don’t. Now I just told all that in a really bad story, so don’t do what I did, do it better. But keeping people at the center of what we’re trying to do technology wise — your thoughts?

[00:46:06] Tevon Taylor: It’s a simple story and I could tell many stories of success and failure based on this key point. So if you bring your operations, your sales, your marketing, the planners, the frontline employees — if you bring them into the pilot or the design phases, guess what? They’re going to embrace it a lot faster. They’re going to adopt it. It’ll be part of your culture. If you don’t, then you’re going to recognize the pain and suffering of not including them because then there’s going to be the fear factoring. And storytelling happens if you don’t tell a story. And what I mean by that is if you don’t involve your employees on the front end, they will make up their own stories and start storytelling amongst themselves. Next thing you know you’re fighting that machine versus them going, this is amazing, right?

[00:46:52] Scott W. Luton: You want to have some of those good stories and share those good stories. You don’t want to give all the good stories to other folks. That’s excellent advice. Play up that ownership factor and involve your folks at the beginning of these initiatives. I love that. You’ve got a tough, tough question. This is a billion-dollar question. This is why you’re able to get out there and move all these mountains. I would argue, based on the homework we’ve done about you, you’re able to more accurately predict the future. So looking five years down the road, what do you believe will be the most transformative impact of AI? Not just on the factory floor, but the broader supply chain?

[00:47:30] Gaurav Malhotra: Yeah, it’s a tough one, but obviously a valid question, Scott. One, I’ll start by saying — and this is based on history with several other emerging technologies, RPA, IoT, blockchain, VR, AR, et cetera — this certainly has a much broader, much deeper potential in supply chains and more, and it’s a given. We can’t run away from it. There is a notion that within five years, or at the point of five years or so, this technology in almost every case may become more intelligent than humans, if you will. And that’s a scary thing to kind of think through. But that’s the evolution. That’s where we’re headed. And by then, I do think for a lot of the organizations, this technology will lead their supply chains to a much tighter orchestrated, cognitive, autonomous supply chain — no question. And supply chain practitioners, supply chain individuals are going to be thinking about bringing very unique, bold differentiation through other elements.

[00:48:44] Gaurav Malhotra: And those other elements will be opening new channels, opening new markets, opening new boundaries, new products, new type of offerings, and new business models. And that is the exciting potential that this will offer. My last point there would be — to capture all of that understanding and embracement, the change thing that we all talked about is very, very important. So I just encourage all of us to take the time to get a bit of deeper understanding, to start to embrace this, not to run away, if you will. And it’s just a very, very cool, very fascinating technology that will only lead us to good times, good spot, good world, as long as again, it is done in a responsible manner. We shouldn’t shy away that there are risks associated to it, and that’s why done in a responsible manner, that’s a very important element of adoption.

[00:49:43] Scott W. Luton: Gaurav, well said, well said. And Tevon, what I heard there from someone in the know, that’s a lot closer to the bleeding edge of technology than I am, is there’s lots of reason for very practical optimism about where we’re going. And yes, there’s some uncertainty and there’s anxiety, but there was with any technological revolution throughout history, right? And those that see it for the opportunity that it is and find practical ways of upskilling and finding opportunities and learning new things, they’re going to be in better position to enjoy the fruits of all of this incredible innovation and transformation. But Tevon, what did you hear there?

[00:50:23] Tevon Taylor: I have no doubt that the crystal ball of the five-year plan — maybe it’s shorter, maybe it’s longer — but supply chains have to evolve from this reactive, fragile approach to a self-healing, resilient, able to operate on its own and adapt as autonomous supply chain. I mean, that is the way of the future. And boy, it’s sad because the headaches that you have to deal with in the supply chain of today and the past and the future, we’re going to laugh and go, I can’t believe we used to do it this way. That’s what’s going to happen.

[00:50:53] Scott W. Luton: That’s so true. That is a — you can take that prediction to the bank, Tevon, that’s a great call out. So one last thing. One of the things that Gaurav mentioned was the intelligence factor and how it’s really going to — I mean, gosh, it’s rivaling the human intelligence factor. We’ve already talked about the differentiating things between them, but it’s amazing. It’s really amazing. Play around on ChatGPT if you don’t believe me. But I want to just a little throwback, folks. Go watch — there’s a great movie that came out, I think it was 2013, and our loyal listeners and watchers know I mentioned this before — but Joaquin Phoenix was in a very unique movie called Her. And I watched that movie and I was fascinated with it before I even began to understand artificial intelligence. And now I think it’s even more relevant than it was 12 years ago. So go find it. I’m not going to ruin the ending, but it will make you think along a lot of lines that we’ve touched on here today. Alright, Gaurav, great, outstanding episode. I want to make sure — I bet you’re really busy keynoting, working, delivering value, bringing the power. I bet you travel a lot as you work with leading businesses and innovative leaders out there. But how can members of our audience track you down and have a fun shop conversation with you?

[00:52:09] Gaurav Malhotra: Yeah, I think the easiest way would be through my LinkedIn profile, Scott. So obviously people can contact me through LinkedIn. EY.com and my profile through EY.com can be the other way to get in touch. Those would be the two channels.

[00:52:23] Scott W. Luton: Outstanding. And we got to get ahold of some of those pictures from that outstanding pilgrimage. I’m so glad that you’ve been with us, Gaurav. Alright, so Tevon, before we sign off here, before I thank everybody, I got to get your patented key takeaway here today from what we heard from Gaurav.

[00:52:39] Tevon Taylor: I took so many notes and if you saw my chicken scratch, I can’t believe I can read this, but I love the points that he made. AI enables us to move the supply chain. It’s going to make it more reliable and cognitive from a state standpoint, and then it’s going to level our playing field. The pilot purgatory — avoid that, right? So get out of pilot if you can. Embrace it, embrace bringing your team in, get the quick wins to level the playing field. And most importantly, this one I kind of highlighted it — amplifies human value, does not replace it. So I love this episode. A lot of good takeaways.

[00:53:15] Scott W. Luton: Oh, absolutely. Good, practical, actionable takeaways. And I would just add to your key takeaway there, as Gaurav was talking about — the right strategy to avoid that pilot purgatory, man, targeted building trust along the way, including the people, that transparency that you need and applying it to the right problems. And folks, you don’t start with the solution. You don’t grab a hammer and go chasing nails, right? As the old analogy goes. You try to figure out what the problem is first, right? What are we trying to solve first and then work backwards to find the right solution, AI or otherwise. But what an outstanding conversation here today. Gaurav Malhotra, partner and supply chain technology leader with EY. Gaurav, thank you so much for being here. And we’re going to have to go through your agent on that rock-and-roll tour, I’m sure, sharing your expertise around the globe, but we’re going to have to have you back for a second coming soon.

[00:54:15] Gaurav Malhotra: Oh, enjoyed it, Scott. So thank you to you and to Tevon for the opportunity. Appreciate it.

[00:54:19] Scott W. Luton: You bet. We’ll do it on the scene up in Chicago and consume some terrific pizza and tasty adult beverages, Tevon, as we do it. But Tevon Taylor, the one and only Sheriff Taylor, as you’ve earned the new nickname around here, always a pleasure to knock out these conversations with you.

[00:54:35] Tevon Taylor: No doubt. Thank you so much, Scott.

[00:54:37] Scott W. Luton: Appreciate what you do out in the industry. And folks, make sure you connect with both Gaurav and Tevon on LinkedIn. But hey, to all of our audience members out there, hope you’ve enjoyed this episode as much as I have — lots of practical, actionable expertise from our guests here today. But you’ve got some homework: you got to take one thing, at least one thing that Gaurav and Tevon shared here today, put it into practice, share it with the team. Deeds, not words. That’s how we’re going to keep transforming this incredible global supply chain ecosystem that we all play a role in and leave no one behind. So with all that said, Scott Luton here challenging all of you out there: do good, give forward, be the change that’s needed, and we’ll see you next time right back here on Supply Chain Now. Thanks everybody.

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