Inflation got you down? It’s time to get proactive—and control the controllable. How well can your team manage invoices, analyze cash flow and communicate with suppliers? It might be time for a stronger digital ecosystem. Tune in to hear Dan Reeve of Esker, Inc. share his recommendations for supply chain leaders looking to combat the negative impacts of inflation and become more agile in the face of disruption with Scott and Greg. Find out why an economic downturn is the perfect time to innovate, how automation can increase customer service levels and free up staff and what you can do right now to protect your company’s future in the year ahead.

Intro/Outro (00:03):

Welcome to Supply Chain Now, the voice of global supply chain. Supply Chain Now focuses on the best in the business for our worldwide audience, the people, the technologies, the best practices, and today’s critical issues, the challenges and opportunities. Stay tuned to hear from those making global business happen right here on Supply Chain Now.

Scott Luton (00:32):

Hey. Hey. Good afternoon, good morning, good evening wherever you are in world. Scott Luton and Greg White with here on Supply Chain Now. Welcome to today’s show. Greg, how are we doing today?

Greg White (00:40):

You know what? After that experience in the Green Room, I am super excited and happy. We have one of our favorite people back.

Scott Luton (00:48):

That is right.

Greg White (00:50):

And what a fun discussion – fun and informative.

Scott Luton (00:54):

Always.

Greg White (00:54):

Mostly fun before the show. I wish y’all could be there.

Scott Luton (00:59):

Well, you know, so that definitely gets the votes for one of the best preshow greenroom sessions of the month. On January 1st, we’ll see who won that award and bestow that medal upon them. But, hey, Greg, today, not only was the preshow great, but the conversation is going to be outstanding. In today’s show, we’re going to be talking about the war against inflation. Everybody’s fighting that battle, right?

Greg White (01:22):

Inflation? I’ve heard something about it.

Scott Luton (01:24):

Well, in particular, though, with this repeat guest, Dan from Esker, we’re going to be talking about how business leaders can more successfully leverage a digital ecosystem to make bigger and better gains. So, Greg, it should be timely, it should be intriguing, it should be informational and entertaining, right?

Greg White (01:43):

Definitely all of those. Let’s do it.

Scott Luton (01:46):

Okay. Man, that’s as much of a succinct answer I’ve gotten from you in at least 45 minutes.

Greg White (01:51):

I’m just excited to get him on. Let’s go.

Scott Luton (01:53):

So, in that case, let’s say hello to a few people really quick. We’re getting weather reports from Josh Goodey up in Seattle. Josh, hope this finds you well.

Greg White (02:02):

Seventy-eight. Wow.

Scott Luton (02:02):

Hang on a sec, he’s in Austin, Texas today. That’s why the temperature is off. So, safe travels to you, Josh. Looking forward to hearing your take as we work through today’s conversation. Of course, Katherine —

Greg White (02:16):

[Inaudible] he doesn’t hear where he’s from this time of year, 78 and sunny.

Scott Luton (02:21):

That’s right. Because Josh is typically in Seattle. Everybody should know that. Big thanks to Katherine, Amanda, Chantel, Clay, the whole gang behind the scenes helping to make production happen as always. Let’s see, TSquared – who holds down the fort for us on YouTube – “It’s a foggy hump day in Baltimore.” He says, “Bring on the supply chain management nourishment.” It is coming.

Greg White (02:43):

He says it just like you do, “bring on”. Okay. You do it.

Scott Luton (02:46):

That’s right.

Greg White (02:48):

It will look better when you say it.

Scott Luton (02:48):

Oh, I love it. So, Natalie is back with us. Hope this finds you well, Natalie, “The fog and rain are reaching into North Carolina too.” I’ll tell you, as I shared at preshow, Greg, taking the kids to school today, man, you almost needed like a 20-20 extra lights to navigate the fog. It was like pea soup out there.

Greg White (03:05):

It started last night too. I mean, at least here, up here in North Georgia.

Scott Luton (03:10):

That’s right. Yeah. So, welcome everybody. We look forward to your comments throughout the conversation today. We got a great one teed up with one of our faves. So, with no further do, Greg, I’m going to welcome in Dan Reeve, Director for Sales from North America for Esker. Hey. Hey. Dan, how are you doing?

Dan Reeve (03:26):

All good, gents. I’ve got a new expression for you. I heard you in the pre-brief, I know you like my English expressions, a new one, let the dog see the rabbit. That means let’s go, let’s get on with it, [inaudible].

Greg White (03:42):

It’s nice.

Scott Luton (03:42):

We’re going to completely steal that one, of course.

Greg White (03:45):

Every time you’re on the show, you have to bring one of those, please.

Dan Reeve (03:47):

Okay. All right.

Scott Luton (03:48):

Yeah. You now have a quota. You’ve got to bring every time then.

Dan Reeve (03:50):

That’s my problem, I’ve been married to my wife for ten years, and she’s American, and I’m naturalized now. But every now and again I’ll say something, she’ll look at me and say, “I have no idea what you just said. Say it in English.” I’m like, “Well, I just did.”

Scott Luton (04:04):

So, still one of our favorites of all time is at the speed of a thousand gazelles. That one has really stuck. So, we love that from, I think, your first appearance. Hey, really quick – before we’re going to have a fun warm up question for Dan Reeve with Esker in just a minute – we want to welcome in Monica. Great to see you back with us. And Glorimar is back with us as well from California. “Mega multitasking,” Glorimar says. Great to have you here.

Greg White (04:24):

Okay. Give us a checklist, Glorimar, on what else you’re doing.

Scott Luton (04:30):

That’s right. All right. So, Dan, so we’re going to start with a fun warm up question. Although you don’t need any help in showcasing that personality, it’s one of our favorite parts that you bring every single interview. But on today’s date back in 1928, sliced bread was born. So, get this, Otto Rohwedder invented a bread slicing machine, and that led to the first sliced bread being sold in his bakery in Chillicothe, Missouri. And I’ve taken pronunciation tips from Greg, so I’m hoping I’m getting that right. Chillicothe.

Greg White (05:03):

There you go, Chillicothe, Missouri.

Scott Luton (05:05):

Missouri. Yeah. There’s no I on the end of Missouri. So, with that as a springboard, a little historical business history note, Dan, tell us your favorite sandwich and where it comes from.

Dan Reeve (05:16):

I’m going for tuna sandwich. You know why? It’s easy. Tuna sandwich, tuna melt and kind of pretend that I’m eating something healthy and it’s just easy. And whether it comes from Subway or Which Wich or wherever it’s going to come from, normally, “So, what do you want?” “Tuna sandwich.” Now, here’s the tricky thing. In England, you ask for tuna sandwich, there you go, there’s your tuna sandwich. Nothing on it. It’s just what it is. In America, there’s ten different SKUs and different options and quantities and additives. And you’re like, “Oh. It’s a bit complicated.” So, you could argue that’s better customer service. In England, it’s like, “There you go. Take it or leave it.”

Scott Luton (05:56):

Take it or leave it. Okay. I’ve never stopped think about that. And, folks, we want to hear from you. Tell us where your favorite sandwich comes from and what it is. Greg, I’ve never thought about what tuna sandwiches mean maybe in other parts of the world. But what’s one of your favorite sandwiches and where you get it, Greg?

Greg White (06:13):

Well, it seems like we talked about sandwiches earlier this week, and that happen to be a bread shop. So, Great Harvest Bread right over by where I live. And they have a Chicken Italian something – I wish I could think of the name. I haven’t eaten it in a long time – on focaccia bread. So, they slice the focaccia bread, toast it, put a chicken breast, with cheese, and this really good kind of sauce on it. I meant to look that up. Anyway, it’s super delicious. And the bread is fantastic, which really makes the sandwich mighty.

Scott Luton (06:50):

That does make the sandwich. I’m glad you said that. So, my favorite around everything out, and I see we’ve got a couple folks like BLTs, those are great sandwiches.

Greg White (06:59):

Oh, yes.

Scott Luton (06:59):

The Italian Sub, Greg and Dan, at Pat’s Sub Shop in Aiken, South Carolina. They’ve been doing business since like the ’60s. And it is a delicious one-of-a-kind sandwich. So, y’all check that out.

Greg White (07:13):

Before, you said their bread was outstanding. Do they bake their own bread there?

Scott Luton (07:17):

You know, I don’t want to give up any trade secrets, plus, especially when I don’t know them. But I think they do, I’m not sure. I know Great Harvest Bread does all their own bread. I’m not sure, but regardless, great people.

Greg White (07:29):

But it’s really good, you said, right?

Scott Luton (07:31):

Oh, it’s delicious. It’s delicious.

Greg White (07:31):

It has to be baked in-house or at least proofed and baked in-house.

Scott Luton (07:34):

Agreed. All right. So, Greg and Dan, now that we’ve made everybody hungry, I want to dive into the main subject here today. Dan, we love having you. Obviously, as we’ve talked about numerous times going back a couple years now, Dan, you and the Esker team do business with all the movers and shakers out there across the global business space. And that’s where I want to start. I want to start with, you know, what are some of your observations as to what’s going on out in the industry here lately? Let’s start there.

Dan Reeve (08:03):

Yeah. I’ll give you an example. So, I had lunch with a CFO, part of a global chemical company. I had lunch with him on Monday. And I said, “What’s going on for you?” And I’m going to sound like a broken record here because he said, “Well, Dan, again, the top CFO is pushing for visibility, chase up payments, and hold people to the terms, more focus on cash. Our cost of borrowing has gone up, maybe up to 10 percent.” So, there’s a lot of focus now on controlling the controllable. What can we do? He talked actually about a forecasting project where his reps have to forecast a rolling forecast 12 times a year. And he says, “I don’t know if they can do that.”

Dan Reeve (08:47):

But beyond 12 months, like, wow, it’s almost impossible for us to forecast what’s going to go on, because you’ve got COVID in China, you’ve got supply chain impacts. And by the way, if you look back since 1952, there’s been a global economic, political, or environmental impact in every part of the world every year. He didn’t say that, but that’s the backstory. So, basically, he said, “Look, continued disruption. We’re going to focus on what we can control. And we’ve got to try and retain our customers, keep them happy. There’s a lot of pressure.” He was describing how a supply chain owner has got a lot of work to do to keep the customers happy.

Dan Reeve (09:22):

So, again, people are now acutely aware of increasing costs and the increasing cost of cash and the impact of storing more inventory. There’s a lot of money tied up there. And the CFOs are really now sort of paying attention to how do we cut costs, how do we manage spend, how do we make sure we’re not keeping too much in inventory. But at the same time we need to have the inventory or we end up doing part orders and frustrating customers. So, again, I sound like a broken record, but that’s going on. And I’ll talk about this in a little bit, we’ll talk about a Forbes article that talked about part of the solution here is automation.

Scott Luton (10:01):

Right. That’s right. So, Greg, that’s a lot of what we’re hearing, a lot of what we’re seeing out there. Well, what would you add, Greg?

Greg White (10:08):

Yeah. Well, I think what exacerbates that is the way that people have responded over the years since the pandemic started to these disruptions, which is, in a lot of cases, to load in a ton of inventory. I just did a commentary today on The Gap – Gap. Inc., which is Gap, Old Navy, Athleta, and Banana Republic – all of which had 37 percent more inventory in Q2 of this year than they had in Q2 of last year. And we’re relieved that they are only 12 percent over the inventory they had last year. But to Dan’s point, their chief financial officer, she said that they are focusing on reducing inventory going into 2023. And that could create kind of a pendulum swing where companies are too tight on inventory or have too much of the wrong inventory.

Greg White (10:59):

A lot of retailers have done this pack and hold thing, where the goods for last Christmas, peak and fall and everything, came in too late to be sold for last holiday season. And they packed them all up and held them for this year, so we’re getting leftovers for Christmas this year. But that, also, because so much cash is tied up in that, and because cash got so expensive during this year, it’s put them in a bad position to be able to buy into the inventory they need for next spring and summer. So, it’s a double whammy, really. And how you manage your capital, how you offload that huge burden of inventory and carrying cost over the next few months is going to be critical for companies.

Scott Luton (11:45):

That’s right. Press Your Luck, it’s not just a game show in the ’80s, it’s kinda like what’s navigating the supply chain ecosystem is lately with whammies. No whammy, no whammy, no whammy, stop. Do you remember that game show back in the ’80s, Press Your Luck? Greg, no. Dan?

Dan Reeve (12:00):

I was still in school.

Scott Luton (12:03):

All right. So, folks, y’all save me in the comments. If you know Press Your Luck, the game show, bail me out here. All right.

Greg White (12:09):

No whammy.

Scott Luton (12:10):

No whammies, no whammies – well, I’ll save that for later. But really quick, TSquared talking about Reubens, Rachel’s, and Cloak n Daggers.

Greg White (12:19):

Save yourself. We’re talking about sandwiches, that’s good.

Scott Luton (12:20):

That’s right. Natalie is talking about French Dip Sandwich. I love that. And this is Pat Burn bringing up BLT. And someone on our team —

Greg White (12:30):

All excellent choices.

Scott Luton (12:30):

That’s right. Someone on our team does recall the Press Your Luck, no whammies. Thank you very much.

Greg White (12:35):

That is your wife —

Scott Luton (12:36):

Hopefully. Hopefully.

Greg White (12:38):

… placing you out of the depths, I guarantee it. It’s either her or Katherine, and I know it’s not Katherine.

Scott Luton (12:42):

All right. So, we started this conversation getting Dan’s take on what he’s seen out there talking to business leaders, some of the things that are taking place out in the industry, and, of course, accompanied by what Greg’s seen as well. Although some of what you shared, Dan, certainly applies to what supply chain leaders are dealing with when it comes to inflation, but before we get into maybe that Forbes article and three or four things that business leaders can do to fight back effectively against inflation, any other comments of how you see this current economic environment impacting supply chain leaders right now?

Dan Reeve (13:16):

Yeah. I think the supply chain leaders, in some ways, they’re pressured because you talked about buying goods and services ahead of time. And sometimes that means we can no longer stall when we pay the suppliers because we could lose our position. So, they need capital, again, to go in cash flow to then go and buy those goods and stocks ahead of time. I think the supply chain leaders are having an increasingly important role in customer service. I think 70 percent of organizations now, the customer service team, the planning, the logistics team, or allocation team will probably roll up to the supply chain. That’s been the trend of the last decade I’ve seen.

Dan Reeve (13:58):

And I mean, I’ve had building materials, leaders, VPs of supply chain say the biggest risk is burnout. Yes, they’re getting orders, but they get a ton of inquiries and questions and complaints, their inbox is a mess. He said, if they get burned out and leave, we are in a bad place. Because, one, we were preparing to grow, and we can’t do so increasingly as well. Because of these disruptions, it’s very hard to ship on time and in full. So, customers, again, are sort of bombarding into customer service team with loads of questions about where’s my stuff, when will it arrive. And what the supply chain leaders are saying is, “Well, really, what I need to do is automate that inbox, make that as easy as possible, provide proactively, provide information to the customers saying, here’s where your goods are, here’s any change use, here’s advanced shipping note, here’s the proof of delivery. We’ve ultimately gone to the shipper, and by the way, here’s an update for you.”

Dan Reeve (14:57):

Because, again, going back to that, the new trend is it’s hard to find people in the first place. Two, if you want to keep them, you have to provide technology that enables them to get a sense of satisfaction. The bar has been raised so you cannot just automate, and dare I say, chop headcount. The goal now is, yeah, maybe some of that. But, also, the supply chain leaders realize, “Okay. I need a more empathetic workforce. I need a workforce that is more engaged.” And a quote I have from a supply chain leader, “Automation provides a CSR the opportunity to serve the customer and get a sense of achievement. Now they can connect on a human scale versus just discussing tasks.” So, there’s all this stuff going on, and I think that’s a new mantra. I think the bar shifted.

Scott Luton (15:46):

Agreed. And fulfilling is what I’m hearing. More fulfilling work, right? Greg, Dan is talking our language in many ways, right?

Greg White (15:53):

Yeah. Let computers do computer things and people do people things. And I think that’s a great point, you can, by the way, handle a lot of that incoming questions and comments, arguments or reputations, whatever with technology. I don’t know if anybody’s read anything about generative AI, but it is super cool and very smart. A generative AI, basically, is a contextual language processor. So, you ask it a question about generative AI, and it answers the question. And I read the answer and I was like, “Wow. That is PhD level stuff.” So, not that you have to jump to that technology, but, certainly, the ability to use these really advanced technologies that exist today to handle the mundane and allow people to do the exception management, the critical thinking, and all of that decision making that’s required of people in the military, Dan and Scott, making life and death decisions with little, no, or inaccurate data. That is what humans are built to process. And if we can elevate them, as Dan was talking about, to that level, that creates better relationships between organizations and a lot more job satisfaction on a day-to-day basis.

Scott Luton (17:11):

Man. Hallelujah. Absolutely agree. And, Dan, I love one of your examples you talked about in terms of applying automation. Who can’t relate to a massively stuffed email inbox? And if we can address that and create more fulfilling work where they’re solving problems, I mean, iit’s a eureka moment for sure.

Scott Luton (17:31):

All right. So, we’re going to keep driving. We’re going to get into the three or four things that business leaders can do to combat inflation and uncertainty here in just a minute. But ,Dan and Greg, I got to go back here. TSquared, thank you. If TSquared is on your side, you know you’re on the right side.

Greg White (17:47):

He even knows the host. Holy mackerel.

Scott Luton (17:48):

That’s right. So, thank you, TSquared. And get this, this is Chris George Zuger, “Sorry. I was a loyal Price is Right guy.” I love that.

Greg White (17:58):

Is that the come on down show?

Dan Reeve (18:00):

Yeah, I remember that. That was good.

Scott Luton (18:02):

And then, back to the topic at hand, Glorimar loves the technology that both of you are speaking to. And probably maybe that type of AI, generative AI, Greg, that you alluded to earlier. Okay. So, Dan, this is kind of center plate. You know, we’re using lots of food analogies today. This is like the big tasty sandwich in the middle of today’s plate, if that was a discussion. So, talk to us about what are the three or four things that business leaders can do to combat this current economic environment we’re in?

Dan Reeve (18:33):

Three or four? How do you expect me – I’ve got two boards full of notes from my team right now briefing me about what I should say.

Scott Luton (18:39):

Oh, man.

Greg White (18:40):

This is why we love having you. You cannot be contained.

Scott Luton (18:45):

Dan, let’s go 17. If you’ve got 17, we’ll make time. How does that sound?

Dan Reeve (18:48):

I’ll try. I mean, I referenced an article earlier from Forbes, so I’ll try not to plagiarize and I will give credit where credit is due. This was an article written by Michael Gale, and it was a recent Forbes article. And I’ll read one paragraph. You know, you talked about pricing, fuel, gas, employment, tickets, everything’s going up. He says, “There is a solution here. It’s automation. If you could take out 10 to 20 percent of your operational costs through automation and opex is 30 percent of your company’s expenses, you could regain the 10 percent of profits inflation may have cost you. But more importantly, you drive sustained long-term competitive capabilities.”

Dan Reeve (19:31):

And by the way, Gartner did a study during the last downturn, and they called it Innovating in the Turns. And they said 70 or 80 percent of the companies that invested in technology came out 30, 40, I think, 50 percent stronger than their peers. So, it’s like innovating the downturn, sometimes that’s hard. You want money to invest in this technology. We’re trying to batten down the hatches and get through this storm. But Gartner says, “If you innovate now, you come out of it ready for growth.”

Dan Reeve (19:57):

So, with that context, and obviously Michael Gale is saying it’s going to take a while to control inflation, here’s some things you can do, and I’ll try and make it relevant to the supply chain leader. One, for certain commodities, you might run simple sourcing exercises or introducing a sourcing tool. Hey, some of my customers are doing that for me. But at the same time, we have folks who come to us and say, “I need a quick, easy sourcing tool that can try and introduce a bit of competition.” Two, a lot of folks are going back to govern spend. “Okay. Look, you know, we’re going to cut down spend or we need to know what money has to go out to our suppliers. And I need a dashboard that shows money going out or liabilities, and also what are my receivable, where can I accelerate my receivables.” I at least want to make sure that we ask customers now to really pay on time.

Dan Reeve (20:47):

Maybe we let people get a little bit slacks during the pandemic, the food industry, “We’ll give them a little break and help them through this.” Now, you’re seeing a lot of companies say, “I need to tighten that up. If anybody’s one or two days over, I want to know immediately. If anybody represents a new risk to our business, I want credit scoring to make us aware of it so we can jump in and address that.” So, you know, when you talk about money, day sales, outstanding, days payables, a lot of folks are really paying attention to that working capital bucket. I’ll pause. I’m only two in, but I’ll pause.

Scott Luton (21:19):

Yeah. So, Dan, give me just a minute because I want to get the first two alone are good stuff. Greg, I want to get you to weigh in on these first two before we move into the rest of the truckload.

Greg White (21:30):

Yeah. Well, innovation in a downturn, we’ve talked with Mike Griswold several times about that, and that is a major way that when companies double down on efficiency and they do so in a sustainable, not a temporary fashion, in a downturn, those are the ones that come out more successful. Now is the time to prime the pump for that. Because if you think it’s tough now, just wait for the next year or the next two years as we are actually in a sustained recession. And maybe we will reduce inflation, but it won’t go away next year. I mean, again, not an economist, but right as often as they are, but many, many economists, the vast majority, are predicting that we’ll still have 5 percent inflation still at the end of next year. That’s double the rate that the Fed wants. So, that will also force a prolonged recession because the Fed will have to maintain monetary policy that continues to try to drive prices down for a long period of time, et cetera, et cetera.

Greg White (22:35):

So, those companies that prepare now to tighten that window, as Dan’s talking about, are going to be really, really in the driver’s seat coming out of it. Look, when you’re in a recession, I mean, if you’ve studied any of the best investors of all time, Mohnish Pabrai, Warren Buffet, of course, Charlie Munger just surviving what is coming is how you win. Because in a lot of cases, there will be companies that won’t survive. We saw it through the pandemic. We saw a number of companies failing going into the pandemic. Capital efficiency is going to be critical and sustainable. And I don’t mean just environmentally sustainable, but I mean feasibility of operations is going to be really, really important.

Scott Luton (23:19):

All right. So, Dan, just two down, a lot more to go, but I like the overarching theme you’ve established here. Beyond survival, Dan, taking this time to get better at what you do. All right. So, first two, what’s next on your list?

Dan Reeve (23:32):

Hang on. I’m going to do two plus. The other thing is, for a while I think companies talked about, “Hey, can I get some early payment discounts? Maybe leverage supply chain financing to go and help out my suppliers. And I pay them earlier and I get a little bit on the backend.” When cash was free, quantitative easing – it wasn’t such a big issue – suddenly, I think it’s really the treasure. And the CFO that the suppliers are, “Hang on a minute. This is of interest now. We’re a big company, we can borrow and we can then sort of accelerate invoices.” Here we go – speed them around the organization at the speed of a thousand gazelles or find out who’s slowing down that gazelle, get that invoice paid, pay that supply quickly, that keeps us in the queue, that keeps the supplier alive, keeps them happy. But, also, we could probably earn some early payment discounts using our own money because we’ve been really effective with capital or we could take advantage of funders, supply chain financers. So, I think some of those things were buzzwords for a while. Not anymore. Suddenly it’s like, “Yeah. That’s real.” And it was the cost of capital of the interest rates going up that made it real.

Dan Reeve (24:41):

We talked about improving receivables, cash flow, collections. The other one is when I sat with Ruben, who’s the CFO, I said, “Ruben, you know, we’re seeing a lot of folks who’ve used our -” oh, man. Shameless plug – “We’ve worked with a lot of folks who said I’m going to apply technology to receivables, payables. The same technology can be applied to cash application.” And I said, “Why do you care about that?” He said, “Dan, the reason I care, twofold. From a CFO point of view, I care about automating cash application because now I can see who truly owes me money. What money to which divisions, I can quickly work out if there’s a dispute. Or money that actually they’ve short paid me, and it’s either fair or it’s not fair. And if I’m quick, I can go and challenge that, get into those portals, find out the information, coordinate my organization across departments and say that’s not fair.” And sometimes I think unplanned deductions can be as much as 2 or 4 percent of revenue, so there’s money to be saved there. And he said, “So, a lot of it really, Dan, is the ability to truly know what money is ours or really couldn’t be ours.”

Dan Reeve (25:52):

And the last time I was in Atlanta, I had a supply chain leader say, “The reason we want this, Dan, if I see why people are taking unplanned deductions, you know what? I want to know the reason. Is my packaging bad? Is my dock making mistakes and damaging the goods? Because if they are, hey, guess what? If I know that, I want to know that quick and I want to make process changes, warehouse changes, factory changes so I don’t make those errors anymore.” So, that’s why I think it applies to the supply chain owners as well. They want to know that. Let me take a pause.

Scott Luton (26:25):

Thank you. You’re covering so much ground. Greg, pick one of the ideas Dan just shared there and talk about the importance and criticality of it.

Greg White (26:35):

Well, I mean, this is probably going to sound like regurgitation, but I just think that cash is going to be so important going into this, that the ability to – I’ll say it – use Esker – that was nicer when you just say software generally – a solution like Esker to be able to analyze the timelines of cash to cash, and the applicability and the charges or transactions that are occurring, and whether those are fair or correct or necessary. I think all of that is really critical. And because it’s automated, it’s so much easier. So, if you can go through and optimize your cash utilization in a time like now, man, you should. You definitely should. Because the same reason I said before, cash is going to get you through this.

Scott Luton (27:30):

All right. So, Dan, a lot of good stuff. A lot of kindred spirits out there. I’m not sure exactly where we are in this massive list we’ve got.

Dan Reeve (27:38):

We’re making progress.

Scott Luton (27:40):

Making progress. Okay.

Dan Reeve (27:40):

Making progress. Yeah.

Scott Luton (27:41):

Bites of the elephant. I love it. So, Dan, what’s next? What else can business leaders do to combat inflation?

Dan Reeve (27:48):

Well, so there’s one. So, Ruben, though, he is CFO, he said, “Dan, I am interested in that concept of automating inquiries that come into customer service and orders.” And so, that’s interesting, because a lot of the time it’s the supply chain leader that cares about freeing up their customer service staff to be rock stars. I said, “Why do you care?” He says, “Because a lot of the time if invoices are delayed or challenged, it’s because an order came in, we fat fingered, we made a mistake, tax skew where it was going to be shipped from, whatever, it blows up my receivables.” And he says, “So, as the CFO, that’s why I care about that. A lot of the time that’s what’s blowing up my receivables and frustrating customers, and maybe meaning the customer isn’t going to stay with us. Or we don’t have technology to truly check what their credit status is, maybe I should be giving them more credit. So, those who are risks, tighten up the belt. Those who are not, give them more credit. ”

Dan Reeve (28:45):

Or back to that cash application idea, they have paid, “Well, we just hadn’t got around to applying that to their account yet.” We’ve all had that. How much does that frustrate you? “I’ve paid.” “No, no, no. I’m sorry. You’re on hold.” So, these are some of the things where you can apply technology to sort of make sure you don’t block the supply chain by putting bad orders in. You improve the customer service by getting the order in and getting inquiry. And doing that right and frictionless is both good for your AI process, but also good for your relationship with your customer. And enables them to go and serve their customer.

Scott Luton (29:17):

I love that. I used to be in the food industry way back when with a big Fortune 500 company. And back in that pre-digital era we were in, you’d back a truck up and the driver would wait for credits okayed that they can drop all the food. Dan, to your point, that’s only half the equation, that risk management. The other half that I love that you bring up is that maybe if we’ve got information on our fingertips and we’ve effectively applied automation and technology, we can create more business room by offering more credit. It’s both sides of the coin. I don’t think that’s thought about too often. Greg, weigh in here on what Dam was just talking about.

Greg White (30:03):

I think to your point, Scott, you can do it a lot sooner. Because once that stuff is on the truck, you might as well deliver it because you’ve already spent the money to get it there. Preempting that order, even being packed and shipped, is a better use of time and capital. So, automation makes sure things don’t fall through the cracks and that they happen in a timely and capital efficient manner. So, I’ve been there. I’ve been on the receiving end of that, Scott. A shipment where we were on credit hold and we weren’t doing that great in the early ’90s at Northern Automotive. But the driver had already arrived and we just had somebody on the dock say, “Just tell him he’s already here with it. Just go ahead and drop it and we’ll take care of it on the back end.” Well, he wasn’t their driver. What did he care? He dropped it, we’re on credit hold, we got their goods. We added –

Scott Luton (31:00):

Added to the problem, right?

Greg White (31:01):

… to the problem. That was not a fun company to work for, as you can imagine, doing stuff like that. But I mean, the efficiency and the timeliness that you can impart into your process is critical as well. Because some of this, you know, things like that, those are not only continued exposures, but it’s wasted effort on your part.

Scott Luton (31:22):

That’s right. Good point there. And, again, a universal concept that Dan’s talking about in terms of an area of opportunity is effectively automating those customer servicing inquiries, not to aggravate the customer, but sometimes it’s a simple inquiry. It can be automated with a simple response. And then, the customers are happy because they get the information right then. Massive opportunities there, universal opportunities. Dan, feel free to address something that maybe Greg shared or we can keep working through your list here.

Dan Reeve (31:50):

Yeah. I mean, it was actually a customer of mine who coined this term eight years ago. She said, “We’ve got a hot mess here, a hot box. Our email is a hot mess, hot box.” I’m like, “Well, what have you got in mind?” And she said, “Well, if you could use technology to automatically classify this and work out is it an inquiry, is it a a claim, is it a dispute, or is it actually a sales order, is it one of our white glove customers or a new customer we really want to take care of, is it a customer that’s approaching their cutoff -” they got a two 2:00 p.m. cutoff in the D.C. in the East Coast ” – well, we better prioritize those or see the wood through the trees, so to speak.”

Dan Reeve (32:33):

Because it’s so hard. You’ve all done it. After a day off work, you come in, you’re like, “Where do I start? I wish I hadn’t had that day off.” So, the reality is, a lot of our customer service folks are dealing with that constantly. You see their inboxes, it’s like, “Whoa.” So, apply technology if people just need, “Hey, what’s an update? Can I get a copy of that POD? Can you let me know what’s going on?” That busy noise, automate that, free them up to go and do the valuable stuff like, “Oh, hang on a minute. You are approaching a cutoff.”

Dan Reeve (33:11):

I had a chemical chalk manufacturer in Chicago, “Hey, our customer service team [inaudible] $20 million extra this year. We had to get orders coming in when they’ve written. We are giving you the business because your customer service, your inside team are awesome.” Back to freeing up staffs to be rock stars, recognizing them for that, and then helping them to sort of serve the customer.

Dan Reeve (33:34):

I’ll give you another example where technology can apply right here. I think because the supply chain has got stretched, products have been part shipped. What I hear a frustration from supply chain leaders is, they say, “One, we place an order, you think you’d get an order acknowledgement. We don’t always. I want to get that. I want to capture it. I want to log it in our system. What’s the date they’re going to deliver or the expected date.” Then, what we’re hearing is folks are saying, “But the problem is, Dan, okay, we don’t always get that. And if we do, the supplier has to make changes, especially in the electronic space.” So, Apple’s made some changes and that impacted the whole industry. And suddenly, the lead time, the initial delivery promise date you get is never the actual date. “We’ve run in a bit short on this SKU, so we’re going to substitute it.” Or, “You’ve hit an allocation limit so, therefore, we can’t give you exactly as much as you wanted.”

Dan Reeve (34:37):

What the supply chain owners are saying is, “I need to automatically get that information back, capture it. Can I compare that to the purchase order that we sent over? And then, can I have some alarm bells going off or some updates so that we, in turn, can proactively go and talk to our customer and say, ‘Hey look. It’s not great news, but I want to let you know about what’s going on.'” Or maybe think, “Hey, you know what? I need to go and open a relationship with another supplier in order to satisfy my customer. I need this information.” And, you know, that wasn’t possible in the past, but now technology’s available to help bring that visibility on the supply chain leaders and the customer service leaders to say, “Right. We have time. We can do something about this.” I think that’s been caused by the supply chain disruptions.

Scott Luton (35:25):

Yeah. So, Dan, you’re touching on something. So, Natalie, in the comments here, wants to combine your first one, which is the kind of overarching theme innovating during the downturn, with one of your last ones, automating customer service inquiries. And she’s combining those two and saying, “Hey, combining one and four, do we know, if any, which tech companies work with existing companies to push to what you’re saying, Dan, those latest updates and capabilities? There’s been a lot of development in the past three to five years with the use of AI.” Pushing out those latest updates and doing it in an automated fashion, any thoughts there, Dan?

Dan Reeve (36:03):

Yeah. I think, it’s funny, last night I was writing a brief for my sale. You know, I support 40 or so salespeople and I was writing a brief on proof of concepts. And I stumbled on Intel, a document on this on using AI and cognitive intelligence. And they’ve said, “We think AI can make a minimum 38 percent improvement with a company’s processes. I think there’s a $14 billion opportunity there.” So, I think there are companies who provide software as a service and are continually sort of applying that technology. And what you might want to look for is, Has that vendor gone and invested in the technology? Have they got PhDs? Literally, have they got PhDs working for them or owning their PhD while [inaudible] to the company looking in AI and then applying it. You know, have they run thousands of orders from the whole manufacturers in the U.S.? Have they run thousands or millions of invoices? So, rather than you go and have to build that technology, create a load of templates, can you tap into a service that already exists? That would be my encouragement.

Scott Luton (37:16):

I love that, Dan. Greg, your quick comment there.

Greg White (37:20):

Yeah. I mean, I think there probably are technologies out there. I don’t know what they are, but, yes, definitely vet their math. There are a lot of companies that claim to have AI, and what they’re mostly doing is they’re using models that are provided by their Cloud service provider, Azure or Google or Amazon. Those companies that are really investing vis-a-vis scientists, as Dan talked about, in real and proprietary AI and ML are very much more valuable than anyone who’s just kind of adapting and already existing model.

Scott Luton (37:58):

Yeah. They’re the ones powerfully innovating and changing how business is done, doing more for customers and employees for that matter. So, Dan, we’ve got a few more minutes here before we’re going to level set with what Esker’s doing and a lot of cool work that y’all are doing moving mountains. But before we get there, what else is on your list?

Dan Reeve (38:18):

The team, you know, innovating with me last night. What have I missed?

Scott Luton (38:22):

Love it.

Greg White (38:24):

I’m serious, the next time you’re on, have somebody find some really big markers so we can see that. Because I know you can see it.

Dan Reeve (38:34):

I’m the only one who can read it with my handwriting.

Greg White n (38:37):

Well, that’s a good point. Excellent point because you write in English.

Dan Reeve (38:40):

Yeah. I think the other thing we didn’t talk about is fraud, actually. So, fraud risk is going up. So, we talked about using technology to automatically detect if we give this customer more credits, we automatically put the orders on hold or take them off hold. Well, the other thing I think a lot of companies are looking to do right now in the procurements suite is, there’s a lot of time and effort required to onboard a vendor. We’ve talked in the past about that needs to be changed because what if you do need to go and you got a single source, and you need a multiple source.

Dan Reeve (39:14):

So, a lot of companies are saying, “Make it easier for us to onboard vendors. We don’t want to lose any of the due diligence and compliance, but can we make that easy. And can we have reminders to say, ‘Hey, Mr. Supplier, you need to update your insurance information and make sure you are compliant. Also, with the risk of forward going up, can I double check?'” This email that says, “Can you quickly pay me please?” We all get them, again, it appears to come from your chairman, but it’s not. It’s somebody who’s perhaps in Western Africa or wherever, not necessarily in Western Africa, but obviously —

Greg White (39:50):

Russia.

Dan Reeve (39:52):

It could be Russia. It could be Nigeria.

Scott Luton (39:54):

Anywhere.

Dan Reeve (39:54):

Wherever. It could be anywhere. I’m not trying to be xenophobic here. It could be anywhere. The reality is people want tools to help detect and prevent fraud. People want tools to help them detect, “Hang on a minute. You were dealing with this supplier, but little did you know they actually have an operation in Russia.” And that’s now going to get you in trouble, but also we’re going to get you in defense department regulations and – I’m missing the —

Scott Luton (40:21):

M-M – all right. So, now we’re both struggling for the acronym. Anyway, I think we know what we’re talking about. I mean, you’re going to be in trouble with compliance and —

Dan Reeve (40:26):

These tax checks, but there’s also bank checks, and then there’s also make sure you’re not going to upset the foreign office or you’re not going to fall foul of sanctions, so to speak. So, increasingly that’s all a ton of work. Then, you could even add, now governments around the world as populations – look at Italy, you got reverse population – how you need to get the tax. Okay, so you can’t just send your goods like you used to with the invoice in the box. No. Now, you have to go through a governmental layer that either they want to get their VAT. So, even though I know you are in the U.S., perhaps, but you are sending goods and services overseas, [inaudible], Africa, Europe especially, they may have a pre-approval model or post-audit model. You have to send those invoices and provide information that goes through a government layer.

Dan Reeve (41:20):

So, you can’t just send your invoice. You’ve got to put it in the right format. It’s got to be archived in the right mechanism. And it’s got to be delivered in the right mechanism. Otherwise, at the minimum, your invoice and your cash is going to get delayed. So, this is a trend the world is going, where these governments want to know what you’re buying, what you’re selling, so they get their relevant VAT. That takes compliance.

Dan Reeve (41:43):

I mean, full disclosure, we worked with Getty Images. We put the technology in there about ten years ago. And they said, “Dan, we work with photographers in 60 different countries, we haven’t got time to sit here and research the compliance rules for 60 different countries. I’ve got to send their invoices and get paid.” But, man, that’s almost like a business in itself. So, I think what’s happening is all those complexities for both supply chain and finance – you know what I mean? – can you really do all that in-house?

Scott Luton (42:12):

Right. No chance. So, beyond the compliance side, I mean, just where you started with fraud and cyber tax, if we think the job is tough now to protect our global supply chains, just wait, unfortunately, because not only will the tax grow and be bigger volumes of them, but they’re going to be even more complicated and complex. Greg, your quick comment here, we’re talking, not only compliance, but a little bit at all. And then, how we can’t in-source everything to stay compliant and protect our supply chains. Your thoughts, Greg?

Greg White (42:49):

Yeah. Well, I think of two of the biggest tech companies in terms of valuation in the world, Avalara and Deal. One who makes sure that you are paying sales tax appropriately and the other is making sure that you’re handling other compliance issues and tax payments and things like that around employees. So, there certainly is a business there and there may be a business doing that today. And if there’s not, I’m going to start one tomorrow. Because that’s absolutely a concern. I mean, aside from where is my stuff and is my stuff going to get here, it’s am I complying, am I causing myself pain and disruption by not complying with local laws and regulations and tax requirements and things like that. So, if you’re doing it yourself, you’ll reach a point where it becomes untenable and internal to your organization. So, if you haven’t reached that point, you will. And if you have, I wish I could tell you where to go right now.

Scott Luton (44:00):

Start with a conversation with Dan, how about that?

Greg White (44:02):

Yeah. I think Dan could probably at least narrow down what you’re after and how to fix it, for sure.

Scott Luton (44:12):

Hey, really quick – and, Dan, we’re going to get your last tip in a minute. And then, again, we’re going to level set a bit – Glorimar —

Greg White (44:19):

I think we might have counted two in one here. I don’t know, we’ll see if he has another one or if he’ll come up with one in the meantime.

Scott Luton (44:26):

So, Glorimar says, “Communication, communication, communication, it works miracles.” So well said and so true, timelessly true. And then, kind of going to Greg’s point a second ago – and thank you to the production team for trying to keep up with Dan. He’s moving fast, isn’t he? But I don’t want to gloss over. You know, we focused on Dan’s last one. We focused kind of on the latter half of it. But this making vendor onboarding processes easier, that’s a billion dollar idea, especially in the era where being a supplier of choice and suppliers have options, you want to make it as frictionless as possible. And then, Dan, you’ve spoken about that time and time again with us previously that optimizing that vendor onboarding process is so important, huge opportunity. Okay. So, Dan, a couple minutes before we get into what Esker is doing and how to connect with you, your final tip.

Dan Reeve (45:18):

I think the thing I’m hearing folks are saying, portals have become a necessary way of doing business, but they’ve also become the bane of our systems. We used to have paper, now we have portals. So, portals is 30 percent of our effort at least. Send my PO over there. Maybe go into there and collect my sales order. If people have deductions or disputes, they hide that data in the portal. And it’s like, “Hey, as long as you go into the portal and if want to challenge, short pay the deduction.” And it’s kind of different in Europe. In Europe, if you want to short pay something, you create a claim. U.S. is a bit more wild west, “I ain’t going to pay you. I’m going to short pay you. And you’ll figure it out yourself.”

Dan Reeve (46:01):

That data is up there in the portal. You know, you log in and you take the time to go and do that. Okay, I’m being flippant, but a lot of receivable leaders are saying, “Wow. That is a huge amount of effort. People don’t like having to do all this, but I’ve got to go in there and log it, and try and look through lines and lines of data, and I’ve only got a very limited amount of time to do it.” So, I think what I see is the jack is out of the box now. And the reality is, people are interested in technologies that could try and sort of help with those processes that I’ve described, be it payables, receivables, order management, tools that can sort of go out there and grab that data, again, helping people get to the point where they can make a smart decision. “Thank you for saving me that time, now I can see what’s going on.”

Scott Luton (46:47):

Love that. Okay. So, Greg and Dan, it’s now time to let the dog see the rabbit. Did I say that right? It’s time to get started.

Dan Reeve (46:56):

Have you seen that film – it doesn’t come from that movie, but I think it was Brad Pitt in the movie Snatch.

Scott Luton (47:03):

I hadn’t seen that one.

Greg White (47:03):

Oh, my gosh. I hope so. That is a great movie. I cannot understand [inaudible].

Dan Reeve (47:06):

[Inaudible].

Greg White (47:09):

But it’s a great movie.

Scott Luton (47:10):

Okay. All right. Well, regardless —

Greg White (47:13):

You have to watch it with subtitles on, Scott.

Dan Reeve (47:15):

Even I almost have to. I was like, “What did he say?”

Scott Luton (47:18):

Oh, gosh. All right. So, what I’m trying to say is, it’s time to get started. And one of the ways that you might want to get started is learn more about Dan and Esker and what they’re up to. So, Dan, in a very small nutshell – let me think two, three minutes here – how does Esker help organizations, especially, navigate through these challenging times?

Dan Reeve (47:38):

The elevator pitch I like to say is, you know, folks will turn to us when they’re trying to free up their staff, be it customer service staff, payable staff, collections, cash apps. They’re trying to free them up to be rock stars. And that means, as Greg said, take away some of that mundane effort. And that mundane effort, I think today, let’s start with the order coming in. If a sales order comes in, we talked about can you automate that? Can you identify problems, discrepancies? Can you automate or clean up the process for inquiry management? Because it doesn’t have a customer service team struggling with millions of questions and inquiries. Can you provide more self-service access? Not just, “Can I place an order online? Can I see your availability?” “Can you make it easy so I can just pay online or communicate with you online, because I’m working late at night and your team is not there anymore?” So, there’s some opportunity through to the order came in, now we’re going to invoice you. Most DRPs have the ability to send out invoices. So, I’m not sure I could help that much there. I could do it if you need it.

Dan Reeve (48:35):

But what folks tend to say there is, “Well, can you help us sort of -” as we talked about earlier “- manage credit more effectively? Get the invoice delivered as quickly as possible, chase it. Can we apply smart decisions to who should we chase? If we chase these folks, how does that improve working capital?” Because we have a good view on what we need to pay. So, it’s about kind of free people up to be rock stars to improve day sales outstanding, work out what you want your payables to be, earn early payments through moving people to electronic payments, perhaps, instead of paper and check.

Dan Reeve (49:14):

And, effectively, many of the leaders we talked to are held by PE firms or venture capital. And there’s this growing trend now to try to, obviously, be as efficient as possible, but lower bad debt. If I improve collections or if I improve receivables, I can lower bad debt, and that’s good for the shareholders, that’s good for the company. So, effectively, it’s freeing up people to make a difference when it comes to order to cash or procure to pay.

Scott Luton (49:46):

Lots of different ways to leverage Dan and the Esker community. Greg, I’m going to get your final word here in just a minute because we’ve made so much progress. But, Dan, I love how you’re always looking forward to having shop conversations with folks no matter where they are, no matter where their enterprise are, almost no matter what problem they’re having, and enjoy your work there. So, how can folks connect with Dan Reeve?

Dan Reeve (50:13):

And folks do reach out for me. Our style here is very much we won’t be a fit for everybody. I don’t have technology that will solve every problem. And our job is to be upfront candid about can we be a fit or not. Folks can get me at daniel.reeve@esker.com or you can find me on LinkedIn.

Scott Luton (50:32):

It’s just that easy. And, also, we want to point out, folks can go to esker.com if they want to learn more, see use cases, and a whole lot more. A lot of different resources, podcasts, events, in-person and virtual events, all kinds of resources. And our team also dropped the link to connect with Dan in the chat as well. Okay. Dan Reeve, always a pleasure. You know, you should have whiteboards follow you around everywhere so folks don’t miss a single thought you have. But until next time, I look forward to seeing you in January. Big thanks to Dan Reeve and Esker. We’ll talk with you soon.

Dan Reeve (51:08):

Cheers, guys. Loved it. I enjoyed. Thanks a lot.

Greg White (51:10):

Thanks, Dan.

Scott Luton (51:12):

Greg. man, we cover so much territory when Dan joins us. And so, this might be an unfair question to you, what’s one or two of your favorite things that Dan shared here today, Greg?

Greg White (51:28):

Anything with an English accent, first of all. He just sounds so much smarter than us, doesn’t he, because of that? Honestly, he titles it making people rock stars. But what he means by that is taking away the boring, the mundane. Don’t make them a roadie. Don’t make them unpack the instruments and stack the amps and hang the lights and all that sort of thing. Make them the rock star. And the reason for that is, because all of that roadie work can be done by technology. A lot of what he talked about is linear in terms of its logic. If this, then that. These are the rules of the game. You can input all that into technology and a lot of that into Ekser to say, “Okay. If this is the case, if this is the situation, or these are the inputs, or these are the facts, then do that.”

Greg White (52:25):

I mean, imagine, first of all, the consistency that you get out of that from a technology, never having a bad day or never missing an input or any of that sort of thing. But also, as he said, the way you can elevate people to do those things that can bring you – did he say $20 million in additional revenue by managing the customer relationship better? I can’t think of a better business case than that. Even if it’s 2 million, right? As long as it’s more than what you’re spending on the labor and you can take that labor cost away from things that should be done by technology, it’s hugely worth it. And I think we need to start – we have to start thinking in ways like that if we haven’t already.

Greg White (53:14):

Look, as he said about Italy and the rest of the world, population decline is now inevitable, even in China and in India and in the United States. At least in the States, the largest generation in the history of our country is leaving the workforce at 10,000 a day, and an extra 3.6 million left last year, even more than were expected. There’s a lot of up here kind of knowledge that is leaving with those people that we haven’t captured. We need to capture that. And those systems, automate a lot of that. The reason that it was still manual, frankly, was because those people started doing that job manually and people were afraid to automate it for fear of retribution. Now, the people that are moving into the workforce, they don’t want those mundane jobs and they realized that technology can and should be doing those. So, it’s a perfect time to make that transition.

Scott Luton (54:10):

That’s right. A lot of good stuff there, Greg. Thank you so much. And, folks, we’ve been rubbing elbows with Dan Reeve going back probably two, almost three, years now. And I’ll tell you, if you can’t tell the passion he brings to the conversation, he loves talking shop with folks no matter where you are. So, again, we’ve dropped his LinkedIn profile there. You can connect with him there. He, also, Greg, was brave enough to drop his email. So, since he was brave enough, I’m going to reiterate it, daniel.reeve@esker.com. He goes with the formal name on email. What’s that, Greg?

Greg White (54:47):

No S. It’s not Reeves. It’s Daniel Reeve. So, for those of you who are Denver Bronco or Atlanta Falcons fans, no relation.

Scott Luton (54:56):

I learned that in my first interview where I was locked in on Reeves being his last name. Dan Reeve, heck of a guy. So, reach out to him, have that shop conversation. I promise you, you’ll leave that better off knowing a lot more than you did going in. Greg, thank you very much for being here. I loved how you distill some of what Dan is sharing with our audience here. Thanks to all the folks that showed up.

Scott Luton (55:20):

And hey, Keehln, Mr. Wheeler, I agree with you, “That Greg is a genius.” Greg and Dan, sheer geniuses. Well, thanks for all the folks that showed up in the comments and shared a variety of different perspectives. Y’all come join us again later this week and next week for more content. Almost as good as Dan Reeve with Esker. But whatever you do, folks, whatever you do – I’m going to butcher that analogy against time for letting the dog see the rabbit – it’s time to get started. Deeds not words. Take some of what Dan has shared and get out there and make an impact with it. With that said, Scott Luton challenging you to do good, to give forward, and to be the change. And we’ll see you next time right back here on Supply Chain Now. Thanks everybody.

Intro/Outro (56:06):

Thanks for being a part of our Supply Chain Now community. Check out all of our programming at supplychainnow.com, and make sure you subscribe to Supply Chain Now anywhere you listen to podcasts. And follow us on Facebook, LinkedIn, Twitter, and Instagram. See you next time on Supply Chain Now.