Supply Chain Now Radio Episode 229
Supply Chain Now Radio, Episode 229
Prefer to watch the podcast in action rather than just listen? Watch Scott and Chris as they interview Bo Hagler for SCNR Episode 229.
Scott Luton and Chris Barnes welcome Bo Hagler into the Supply Chain Now Radio studio in Atlanta, GA.
[00:00:05] It’s time for Supply Chain Now Radio Broadcasting Life Supply chain capital of the country, Atlanta, Georgia. Supply Chain Now Radio spotlights the best in all things supply chain the people, the technology’s the best practices and the critical issues of the day. And now here are your hosts.
[00:00:29] Hey, good morning. Scott Luton here with you lie 1 Supply Chain Now Radio. Welcome back to the show. On this episode, we’re going to be discussing some of the new technologies that are bridging the gap between buyers and suppliers, especially from a manufacturing standpoint. On a quick programing note, like all of our series on Supply Chain Now Radio, you can find our replays on a variety of channels Apple, podcasts, SoundCloud, YouTube, wherever else you get your podcast from. As always, we would love to have you subscribe Still missing thing. And before we get started here, let’s think all of our sponsors that allow us to bring these best practices and innovative ideas to you. Our audience from Apex, Atlanta, the Effective syndicate ProPurchaser.com Talentstream Manymore. You can check out each of our sponsors on the show notes of this episode. OK, so let’s say hello to my esteemed co-hosts here today. First up, we have Chris Barnes, a picks coach in the executive director of Apex Lanta, Chris. How you doing? Hello, Scott. Good to be here. Good to have you back with us. You’ve been you’ve been everywhere here lately. What’s going on? There is a lot going on. Supply chain is hot. splotched is hot. Good. You know, as we always say, it is a wonderful time to be working in the world of global supply chain these days. Right. And also, Will Harewood, founder and chief of angeles’ at Backbeat Marketing. Will he doing? I’m great, man. And you’ve been you just got back from Chicago, which went down more into. Yeah. Your mom’s early. Was up there. Freight wives love. They do. To a year.
[00:01:54] And then actually back in Atlanta in May. Mm hmm. So, yeah. Yes, a wonderful show. It’s a lot of energy there. Like you were just saying, this great time to be in Logistics and Supply chain for sure. It’s just getting bigger and better.
[00:02:07] Absolutely. And you know, will you also serve as a coast on our Supply chain City series? We got a big show around the corner. Yeah. With the folks are over over at store. Yeah. Which a big growing left and right.
[00:02:17] We can talk to them in a in a in a bit. So it’ll be it’ll be nice to see where they’ve been. And I think I think we probably talked to them twelve months ago so it’ll be great to see what’s happened for them and that twelve months that they have had a lot of stuff going on from really every aspect and looking forward to that.
[00:02:32] Absolutely. So before we tackle some more, the notes from around industry want to welcome in our featured guest here today, Mr. Bo Hagler, CEO at LAF Source. How you doing, Bo? Good. Thank you for having me. You bet. I really enjoyed the, you know, some of the prep we’re doing the prep conversations we’ve been having. You been leading I think a fascinating organization is doing some really unique things, especially from a buyer supplier standpoint, kind of like we Lu to earlier. But looking forward to picking your brain on a wide variety of things here shortly. Great. OK, so before we dove in to the interview with Bo, we’ve got some news and notes from the newsdesk. Stuff taking place from across the India in global supply. So, Will, I know you got some things from your recent travels later latents? Yeah, sure.
[00:03:17] Well, I was at freight waves this week where it was zero degrees in Chicago. They were upset about it. They said that was too early for that type of weather. I have no idea. Every time I’m there beyond September ish, it seems to be about the same. So what do I know? They seemed a little taken aback by their like matto. It’s too early for this. Like we say with the heat, probably. Right. I’m sure you’re going to start showing up in May. But but anyway, it was great.
[00:03:44] I’m a big fan of those shows. I went to the one in Atlanta, too.
[00:03:48] And they do a great job with their production and the way that they have the demo. They have the demo days where they get everybody get seven minutes start ups. And it doesn’t necessarily have to be started like Jenny. Mm hmm. Put out there, you know, their latest tech platform, veha, one of the seven minute demos. And, you know, they they they do like over the course of two days. They literally do like 60 or 70 of them because they’re only seven minutes. But those are great to watch.
[00:04:23] And then after you get done, seven minutes. Well, actually, I think it’s the perfect time because you have to you’ve got to really drill down into your pitch, you know, and and what’s funny is that it is derivatives of kind of the same stuff. Like there’s a lot of lot of digital freight marketplaces out there. And I know because Backbeat has two or three of our own that are clients that totally get it. There’s there’s a there’s a cross-border one. There’s an EOD one, you know, et cetera, et cetera. But but so you sort of watching like LLC what they’re do and then they share their platform and end either it shows well or it doesn’t need that. They tell the story well or it doesn’t. So what I’ve been telling. Folks that want to get into it, it’s like, well, if you can tell the story, well, then you’re actually going to get a really nice boost because so many people doubt. Yes. Yeah. I will never get an invite to a seven minutes. It’s not true. Yes, you are.
[00:05:14] We can’t say our first name in seven minutes, I think.
[00:05:16] That’s right. Nevertheless, no gravestone. But that that was great. A lot of energy because of that. And one of the things that we there was a lot of talk about was, again, integrating ours, a service for trucking because the EOD deadline. Again, this is the third straight year. We’ve had a deadline in December. And it’s December 16th. So just a month from today is the day that the AOB r.d tech is now is now grandfathered out. You can no longer use it. You have to have telematics that gave him a year last year ticketing to and and by all rights. It’s at about 30 percent adopt adoption amongst amongst carriers. And so and the only thing that’s really going to stop or make people adopt it is when they start getting pulled over and taken out of service. And that’s, I think, what you’re going to start seeing in December, maybe for the first time. But we’ll see. That is three years.
[00:06:17] And they haven’t said that. And interestingly enough, one of the things that happened last year that even I mean, last week that even spurred this on was one of the big E.O.D. Providers, Omni tracks, had a huge outage and like a half of their customer base up, truckers could not they weren’t getting their hours of service data uploaded. So they were noncompliant. Basically, the whole reason why they have the you know, why this exists is so that you be compliant with the with the federal the Federal Motor Carrier Association. So that was the whole issue. And it’s brought up this about the technology basically within the cab. Like what do you do when you’re in a remote location? Right. And some providers. And this is the time now because people are making are going to start making this decision on December 1st, because these guys, if certainly procrastinated this long, why not procrastinate in a couple of weeks?
[00:07:14] So they’re going to be looking at the tech and hopefully finding the tech that is that that updates that the data and the hours of service and the routes within the cab and they call this edge computing is what they call it, edge computing within the cab. And then when you have connect connectivity, it uploads that to your administrator and everybody gets that. So it’s not like a if you give it like streaming, you know, if you’re out of mobile range, it is going to happen. Right. Right. At least for the foreseeable future. So some of the tech relies on that. So if you’re atmo range, it’s not updating.
[00:07:51] Well, to I can tell you, we drove the Supply Chain Now Radio transit van to Austin, Texas in the last week or two and you’d be surprised how many pockets where you don’t have that coverage. So that’s right. So there’s going to have to be some stopgap until there is more. And, you know, we’ve touched once before. Well, what’s underreported oftentimes is rural inaccessibility. Right. You will find in the Internet and and, you know, all kinds of devices. So naturally, it’s going to impact the transportation markets. We’ll see. We’ll see how this stuff takes root. OK.
[00:08:25] Well, and again, it’s it’s the guys who were forward thinking about it. You know that again. You would think rule the day when we hear in a couple of weeks when so many of these, you know, it got millions of drivers are going to have to make this update.
[00:08:43] It said, what are they going to choose? You know, they’re going to choose the things that that that are paying the bills.
[00:08:49] Right. Yeah. Well, already items first and work the best. Right. Right. OK. So I know. So I’m sure that was a lot of the. But. So anything else that really struck your fancy in Chicago? Well, you know, while we were there, I’m sure this was by design.
[00:09:04] But Carnevale announced, you know, 40 million dollar race. So just so they could dominate the, you know, dominate the headlines the right way. Yeah. And they announced their top 25 different waves, top 25. They caught the freight tech 25. Amazon was the leader of that again, Project 44 behind it. And then convoy up at number three. But, you know, it’s a lot of the companies that you see and expect Flex Port is in there for kite’s is in their C.H. Robinson is in their Uber freight. Certainly Mode’s Smart Schnyder ship. Well, and on and on and on.
[00:09:47] But remember, we had Kristen Forecki on. Of course, Boy Bear over the summer. And it was it was my first opportunity. You might have already had some to sit down with a member, their leadership team, and then really understand the story firsthand. Remarkable. Yeah. You know, we talked about their incredible culture. Practical, meaningful culture, none not learn lip service of continuous improvement. Yeah, yeah. They’re already disrupting the transportation market in a way that a non cliche way. Right. Right. Friend Greg White hates the inaccurate usage of the term disruptive. So, Greg, if you’re listenin. But man, what a incredible story. So no wonder they can.
[00:10:25] I mean, I spent 40 million dollars would indicate that that message is is continues to resonate with all the tech that they’re due and the drop in hook, you know, with the trailers that that Christine told us about while she was here.
[00:10:37] We’re gonna sign up. We’ve got a van now. Yeah. So that space I was kicking myself before we could easily back hauled some of some goods back from Austin, made it made a couple of bucks on a. Plus I’d like to see it firsthand. Just saw. I know about the process, about the mixer we could have gotten with that money. Right. All right. Anything else on the front end. No. No. It was a great show. And again, a freight waves lab will be in Atlanta in May.
[00:11:05] And I feel sure that we will do everything we can to broadcast from there. And we’ll see how that goes. But I’m definitely sending it. And yeah, well, we’ll keep reporting on that.
[00:11:17] Fantastic. Great to have you back or looking forward to. We’ve got some really neat episodes. We talked about the Supply chain City series here on Supply Chain Now Radio. Looking forward to that as well. But we’ve got a great interview here. And before we dove into to Beau Hagler story. See you live. Source Chris. The Apex Lintott chapter continues to grow and expand its education offerings. Think the last few weeks you’re at one of the the iconic Atlantic companies talking about supply chain and classes EFT continue at Georgia Tech. I think you’ve been across the state helping folks get better at managing their supply chains, right? Sheer.
[00:11:51] Well, what I’m more excited about is the future of Supply chain. We’re seeing a lot of universities signing of new student chapters. That’s just that’s the future of, you know, for all of us. That’s the career plan. So not only, you know, the larger, you know, the classical schools, Georgia Tech, those types of organizations, but we’re seeing new thing. Just last night I was at Georgia Gwinnett College. That’s our newest student chapter. They’ve got a great program out there. Great campus, great facility, a big chapter for our audience. Right? Jenny picks. Yes, sir. So apic student chapter Supersport is supporting them as best we can. They have about 50 people in the new program and we’re heading out to to West Georgia College as well. And so that’s gonna be our next chapter. To apic student chapter, we sign up.
[00:12:36] Outstanding. And that is, you know, we’ve talked about this lot. I feel like I’m beat that horse sometimes. But, you know, it’s that awareness. We all don’t know what we don’t know. You know, I graduated college without ever sitting down with a manufacturer or taken a plant tour or or ever understanding what goes on across a global end to end supply chain space. And so actually, if you don’t know about it, it’s not to be a career opportunity. Right. And for most people, for most humans. So love to see what what. Apex Land is driving in the board’s drive. And because at that you get these folks, which is free about a way for any students listening. It’s free to become an epic student member and associate with these student chapters. And it really provides an outstanding professional development and learning opportunity, right?
[00:13:19] It does, yes. Leslie, the key thing is it’s free. Obviously, you have to have somewhat of an interest in it. You don’t want to just sign up to get stuff. But yeah, that’s the key things, the free factor. But wowser, we tell people that listen, our podcasts, if they don’t like what they listen, it’s a money back guarantee. Sure. Sure. Let’s say the same experience with student chaplains, right? Well, that’s exciting to see. Well, just the level of interest.
[00:13:38] I think it’s all driven by career, you know, job opportunities, obviously. Right. As the professors are starting to see that more as a space for kids, for students to get jobs. Yeah, that becomes they want to start promoting it and pushing their students then that. Well, encouraging their students in any direction.
[00:13:54] Outstanding. Well, appreciate the good work. Apex, Atlanta in the chapters Driving and GOSWELL pro-China, a 60th anniversary with a picket line right around the corner these days. Right around the corner. Okay, so to our audience, we’ve got a Supply chain leader sitting with us here today that we’re gonna dove into. What Soares has been doing, some really neat things. And we’re gonna learn more together here over the next few minutes. So so welcome back in Bo Hagler, CEO at LAF Sauce. Good morning again, Bo. Good. Thank you for having me. So before we dove, before we kind of talk shop and get your insights on what’s going on across the world, Supply chain, let’s get to know you better. So tell us what you grew up. Grew up in Augusta, Georgia. Okay. All right. Not too far from here. The CSR, right? Yes. Right. Exactly. Most people may not know what the acronym stands for, but central Savannah River area. So our outworn raised in Aiken County. Okay. Across the Savannah River. All right. We went to a guest all the time against Agusta Mall and a Regency Mall, which. Right ladder’s right. I think still sitting there. That’s what we did out. That was a big city for us. We did our. Christmas shopping and whatnot. Right. Most people know Agusta because of the Masters. Yes. Yes. We’re all the people in the guts to leave during the Masters, is that right?
[00:15:06] Ready to rent their houses and hardware. That’s Mantz where they make their money. Exactly. Yeah. Makes that Christmas money.
[00:15:12] So tell us a little bit, you know. You know, give us the Reader’s Digest version from Grown Up in Agusta and told, you know, serving as CEO of Liow Sauce. Tell us a little about the journey between.
[00:15:22] So I graduated from Georgia Tech here back in 1988 and started my first software company right out of school. I don’t recommend recommend that your kids don’t do that. But it was an application for enterprise asset management, basically not supply chain, but inside the four walls of a plant maintaining equipment. And we we had that company for about 17 years. We integrated in with ERP systems back in the 90s and had customers in 17 countries in eight or 10 languages and then sold the company in 2006 to an ERP provider called Q.E.D. out of Santa Barbara, California, with offices in about 22 countries, was with Kutty for seven years. In a number of leadership roles, I ran their strategic product units. Basically, they had acquired a bunch of companies like ours and I ran that group of products and was responsible for sales operations for a while and ended up as V.P. of R&D. My last couple of years and I had a one of the investors and board members of a company called IMAP G. WSJ.com, which is the world’s largest manufacturing marketplace here in Atlanta, and asked me if I wanted to come Rod from my hands at that company and that when I came in they they had this product they had acquired from Switzerland called saucing parts that they had renamed LAVs Source and became clear to me that that was where there was really an interesting opportunity. And so we we we took that product which started off as a string, you know, supplier management and strategic sourcing system focused on direct materials and built it out to cover basically all of the other supply chain processes related to upstream supply chain. And we spun it out as a standalone business in 88. We closed on a series, a financing and been off to the races since about September of last year.
[00:17:17] Outstanding. Wow. So quick question to leak. Going back a couple of stops leading R&D in a technology space. Mm-Hmm. And of course, also being an entrepreneur, you come at school for 17 years. What do you think in whichever direction would take? What do you think is most overlooked about what makes Trew successful research and development innovation efforts in the technology space? Or what’s one of the things that folks get wrong all the time? But from your experience, do you think on the man?
[00:17:49] Well, I mean, in a startup environment, you know, the most difficult thing is if you don’t have a background in working for an organization that has a kind of a rigorous process for developing software, you can end up making a lot of mistakes from a technology standpoint.
[00:18:07] But but really where the biggest potential errors come from is really on the product management side, not going out and speaking to customers and building products that the market wants and trying to sit inside your office and build things that you think people want, which you’re almost always incorrect. Know there’s there there was always there was a saying that when we’re sitting around a table that since none of us are buying the software and none of us really get a vote, you know, so we always have to go outside. So I was talking to an entrepreneur. I’d be I’d say, you know, drive your product innovation and your product designs based on what the market wants, not what you think they want.
[00:18:42] I love that. Absolutely. All right. So let’s talk a little bit more about Liow Sauce. You kind of alluded to what the organization does here a few seconds ago. But tell us more. What kind of problems is the organization solving?
[00:18:53] Right. So we’re upstream supply chain. So a lot of when people think about supply chains, you think about downstream, you think about Logistics. So we are prior to that. So it’s easier to give an example from maybe a customer perspective. So we have a one of our customers is is Dana.
[00:19:09] They may drop trains and axels. They have about a hundred and forty plants around the world and 30 countries or so. And they have close to 80 percent of their manufacturing of their parts or are taking place in that 30, 500 suppliers around the world. So when you think about a company like that and the partnership that they have to have with those direct material suppliers, it’s it’s daunting. You know, it comes in the form of when new programs come in. New program in the automotive industry is like a new project, a new product. They’ve got to go through they got to go through initial costing estimations and they’ve got to get to bring their suppliers into that quoting process and get in and solidify on pricing. And then when they get awarded the business, they have to launch a process. They go through quality such as, you know, AP Cupids and P. Pappe processes or production. Part approval process because you can’t just start making it, you’ve got to design the part, you’ve got to build the tooling. You’ve got to test the part. It’s got to be certified all the way up the line. So when you start actually making parts, it all flows back to the customer’s plant and it’s all meet specifications.
[00:20:17] And, you know, in the automotive industry, everything is just in time. So there’s there’s no slack. Everything has got to be perfect. So when you light a pressure in that industry, a tremendous amount of pressure. And, you know, they’re always trying to squeeze cost out. So there’s not a lot of fat in there. And so any mistakes, any disruptions in that supply chain go straight to the bottom line. So, yeah, I you know, another is give a and in talking to customers and I spend most of my time out, I’m talking to existing customers or talking to sales prospects. We kind of went in and talked about, you know, the complexity of the upstream supply chain. And, you know, it’s it’s almost like a spaghetti chart. You know, you see all the interactions. Most of these interactions are happening with spreadsheets. Everybody has ERP. They have quality management systems. But everything that I’ve just talked about has done on spreadsheets and emails. No matter how big the company is, whether it’s the OEMs or we end up doing it the same way.
[00:21:09] So you’re saying spreadsheets are big and supply chain supply chain? It’s a.. It’s the biggest it’s still the most popular planning tool that I know of. It’s Excel. Excel. Exhale. Have to excel.
[00:21:19] Right. Well, in the advance, companies actually had it stored on SharePoint. And the ones that are not very disciplined are sitting on the employees drops. That’s good point. Right. So how do you how do you aggregate that? So, you know, if you if you take, for example, you know, once a program launches and now they have one to two years before they actually start production, the bill of material associated to that item is going to change between 40 and 50 thousand times. And all of those times can impact the pricing of it. So talking about your cost creep, you know, if you don’t manage that, you don’t say, you know, who’s responsible for that? Is it? Oh, the customer drove that change. They need to pay for that. Well, if you don’t if united with a documented, you can’t pull it off spreadsheets, you’re going to eat the cost.
[00:21:54] You know, the other one, the other unique aspects of the automotive industry is beyond the pressure and beyond the price controls. The products have to be rigorous and from a safety standpoint, because people can get. That’s not cliche, right? Ryder is similar to the airspace industry. There’s some critical components that that, you know, beyond control and the cost and making sure all those changes that you alluded to, you know, come off. I mean, the product, the quality has got to be job one still to bar the phrase from. Right. What? Ford had that in the 80s, I think, or something? Well, you looked at me that there were Vannevar, right? I think that’s right. I’ve got to think back.
[00:22:34] Well, we also do business in the aerospace defense. So you think safety is not a concern? There are medical devices is another. I mean, because they all have the same kind of issue. They’re supply chain. They’re making engineered parts from blueprints and shipping it back. So it’s it to me. I just I still can’t. LLC has v.p.’s UPS supply chain sleep at night. You know, where are my parts? Are they going to come in on time? Are they gonna be the right make the right specifications? Are they going to kill somebody down the road?
[00:22:59] Gosh. Now, one. The things that you mentioned earlier, you love to get out and talk with the customers. So our next question. Was he ask you about where, you know, every CEO kind of takes a different he her takes a different approach. Here she takes different approach where they spend their time. Clearly talking to customers is one of the places you like to spend your time. Where else?
[00:23:19] Well, I take that information from the field and then bring it back to product management. You know, I think, you know, we’re a young company. We’re we’re we’re growing. We’re innovating. And so, you know, I feel like one of the things that I can do is have firsthand knowledge of what’s happening. And so with my background in R&D and product management, I I probably I have an affinity for that. So I spend most of my time out in the field and then working back with our development teams and, you know, making sure that we’re building stuff that’s going to meet the customer’s expectations rather than just building stuff that we’d like.
[00:23:53] And we think are neat right back. Is that what you said earlier? There’s gotta be demand for at the market. Otherwise, we’re just wasting a whole bunch of time and resources.
[00:24:00] That’s called shelf where we’ve all we’ve all been guilty of building shelf, where at some point in our life decides that you want it to be applicable to what’s going on in the field. Stuff changes all the time, right? Especially with the advances in technology. You don’t know what people would do in Vienna versus on different platforms. So to be able to hear that firsthand and then give it right back to your product manager. That’s what everybody needs to be done, right? Yeah, exactly.
[00:24:22] And you know, you know, you’ve done it right when you can go to five other customers afterwards and you see everybody has the same. Exactly. Build something.
[00:24:28] And yeah, that’s the key. It’s usually a universal ishere. Right. At least for the 90 days. And then it changes. Right. Yeah. It’s always a. Right. So you’re are. You must it’s like you get a crystal ball. The question someone asked. Let’s talk. Have you already spoken to some of the current challenges that are facing suppliers? But what what else is out there? What else are keeping that proverbial BP supply chain up at night or keeping suppliers up at night?
[00:24:55] Well, I mean, it all stems from a lack of a lack of data, you know, so. I was meeting with a senior executive of a large manufacturing company that controlled a $13 billion Supply chain budget.
[00:25:06] And when we kind of went through and we showed in two slides in our first meeting, one was kind of the chaos and goes, that’s my world, you know. And then we kind of showed how you could you could put a system in place to kind of streamline all these processes and standardize all this data. And it goes, that’s what I’ve been trying to do. And from there, he kind of went on to a story of trying to talk about how he looked at the problems. So he cited a KPI on time deliveries and his target on time delivery of 95 percent, currently at 87 percent. The delta between those two costing him $1.8 billion a year. But what was interesting to me is when he started kind of peeling that back and trying to say, well, what caused that? Well, one of the big categories was expedited cost go OK. Well, that’s a cost free call shipping stuff. And. But really, when you peel that back further, what you realized was is that it really stemmed from miscommunication within the supply chain during the launch process. So a supplier I’m gonna make it up in North America had not received one of those 40000 bomb changes and built a half million dollar tool against the wrong version of the bomb.
[00:26:13] Nobody knew it until parts were received at their location. And now, listen, they realize we’re not just in time environment. We have a tool that’s going to take four months to rebuild it. So what do they do? They start expediting parts over from Europe, which there you get your extra cost and then they put that supplier over capacity. And so now they’re short deliveries of their customers in Europe. Four months later, when they go back on line in the U.S. with the new tool. They forget to tell them to adjust their volumes for the year and they end up with four months of excess inventory at the end of the year that they can’t sell. You know, so it all stems from this miscommunication and it really comes down to the data. And what he said is, you know, we have we have teams of people that are looking into our 200 ERP systems in trying to figure out where we are with our supplier. And we have out actually have artificial intelligence. We’ve we’ve applied to this data to look for patterns between the earpiece. But at the end of the day, it takes us 90 days to code to collect a report and 20 to is only 22 percent accurate. What can you do with that?
[00:27:12] And what it what it really came down to is we really kind of looked at it is the vast majority, 70 percent of the data that he was trying to manage is in spreadsheets. And how can you manage? How can you manage those processes and try to do analytics against hundreds of thousands of spreadsheets? It can’t be done. So to me, you know, it sounds you know, here it is, you know, 2019. And we’re still talking about, you know, companies still lacking the ability to bring standardized data in. So, you know, digitizing the supply chain, you know, it’s it’s not real sexy, but it’s it’s it’s the building block that everything else leads on. And with that data, then you can get into really interesting conversations around analytics, machine learning, IAPT devices and things like that.
[00:27:53] Huge force multiplier. So you were speaking about some of the ways that that data is helping to alleviate some of the challenges you mentioned. Tell us talk to us more about the impact of data in and in global supply chain.
[00:28:10] Well, as I was saying in the example, you know, with without having that data, you don’t even know that you’re in trouble, you know. And so, you know, in talking to other V.P.s of supply chains with customers, you know, what they’ve told us is that we have teams of people that their job is to be deployed out into the field around the world, to go help distressed suppliers, you know, and is a partnership. Right. It’s not an adversarial. But we need to know when suppliers are struggling. And in many cases, we don’t know that they’re struggling because we lack the data to tell us that there’s no leading indicator, because, again, it’s it’s in spreadsheets. And so when the crisis occurs, they deploy the teams. But at that point, the damage has been done. So now we’re in firefighting mode. So with with data, they’re at the ready. You begin to see leading indicators or trends that would indicate that there’s something going on. We had a we had a v.p.’s supply chain that relate a story where they had a good supplier in Mexico that had always delivered. And then all of a sudden they started shorting their deliveries a little bit. And over a month period of time, it became a crisis. And what had happened? Has it been an earthquake a couple years ago? And they had one of their presses had been damaged and they didn’t want to share it, that the machine was down because they were scared that the customer was going to come take the tool and take it somewhere else. And he’s like, you know, if we had some sort of indication, you know, at the plant, this is where maybe IAPT comes into play. You know, we would have actually seen that coming and could have avoided, you know, the firefighting we had to go through.
[00:29:40] So the ability to get out front, to beat, to proactively lead when it comes down to it, rather than leading the reaction. Right. The firefighting, the deployed teams that might try to put the genie back in the bottle.
[00:29:54] Yeah. So, you know, for simple data. So data coming back and it says, you know, here was. This was the ’80s and I got back in and I actually only received 85 percent of that. So that becomes a trend or you start comparing that with a number of nonconformist defects being reported against it in the severity of them. So you start comparing those those two metrics and all of a sudden you can see, you know, where there isn’t a potential issue.
[00:30:16] And again, when you’re dealing with, you know, thirty five hundred or five thousand suppliers, you know, around the globe, it’s hard for the human to actually be on top of all that data all the time. And so that’s where technology can come in and really help you get ahead of that.
[00:30:31] So though I’ve got my Epic’s hat on here and I’m trying to I’m trying to figure out what you guys really are when mean, where you work, where you’re playing, which which space.
[00:30:38] Sounds a little bit like supplier relationship management.
[00:30:41] I think that’s an accurate depiction. We are we are a description of our product. We’re a supplier relationship management that focuses on all the data in the business and processes associated direct material suppliers. We started off as a strategic sourcing system, but most systems in that space focus on the indirect, you know, so they are buying off a cap standard parts off a catalog and it’s about large volume of high volume, low dollar items. So it’s really about efficiency. But in the direct material side, it’s a lot more than just price. You know, as we’ve been saying, you know, so we’re trying to bring all of that data and all those processes together in one place.
[00:31:19] And I heard you speak on other venues. You talk about a single source of truth. Isn’t that one of the value drivers?
[00:31:26] Absolutely. And that’s where all customers start with, you know, the example I gave out earlier. That’s that’s utopia for them is to get that, you know, get that single source of the truth.
[00:31:34] You know, we go back to the customers that we come in because most some have grown through acquisition. So it’s not unusual for West to go into, you know, any company and to see that they have five, 10, 20, 100 different ERP systems because they’ve grown up over time. And so even though we’re coming to a standard supplier master, they have the same supplier, has different supplier numbers depending on the system that they’re in. So when they sit down for sourcing events, when they’re ready to award new business, many times in these in these sourcing councils, they can’t even agree what supply they’re talking about. And so what they say is that we end up not making decisions because we’re arguing about who we’re discussing. So when you’re trying to rationalize your supply base and you’re trying to get efficiencies, you know, if you’re if you don’t have everybody on the same page and, you know, you may have a supplier that’s been that’s been blacklisted in one region, but the other region is still continuing to award in business because there’s nobody even communicate that that’s happening.
[00:32:30] So the so the companies such as Dana, that they would be your customer. Correct. And we’d be there. Yes.
[00:32:35] So, yes, it could be an OEM and using a tool like ours to manage their tier ones. We have I would say in the automotive space, we have most most of our traction is with the Tier 1s managing their tier 2s. Yeah. So we. Yeah.
[00:32:49] So is there. I’m thinking about this from a business side. Is there any way that the suppliers could benefit from using the system as well? What they have to opposed to being for say hey you have to use.
[00:32:57] Yeah. And that was a model that was tried. You know, maybe 15 years ago or so where they tried to force it in and charge the suppliers. You know, we personally look at the suppliers as an extension of our customer. We have 35000 active users in our network today. 85 percent of those are suppliers, which means that they’re doing most of the data input, which is good for our customers, because in the past they were emailing out spreadsheets and then hammering it back in or typing it back into something else. So now the suppliers are feeding you standardize data. So we need to treat them, you know, with the respect that they deserve and make that their job very easy. So the first thing that we try to do is just make it easier than what they were doing in the past. But secondly is to them provide them value and maybe some analytics back on the data that they’re providing that can help improve their business. And so the focus has got to be on the supplier and what it what’s in it for them.
[00:33:51] You mentioned a couple of times a tooling. So that’s that’s a pretty big asset in terms of automotive supply chain I think or.
[00:33:58] Yeah. Yeah, it’s it’s been so pretty surprising when we we go in to you take a course, a company, a Tier 1 supplier, that’s $3 billion dollars in revenue. It’s not going be unusual to see that they’re manufacturing $600 million dollars a year in new tooling and that tooling is spread out across a thousand plus suppliers. And that tool has to be stay and stay in service for 15 to 30 years to make spare parts. So knowing where that tool is and and then knowing its condition, you know, is this key?
[00:34:27] Yes. We know on that note, as someone that’s been in the middle stamping industry, you’d be surprised how tough it can be to manage tools and tooling. And especially across Ghosh, the global footprint like you’re talking about when you’ve got, you know, hundreds, hundreds, if not thousands of plants and facilities. That’s a big challenge. We’ve seen a lot more of the RFID tags being put on tools to help address, you know, because when you’ve got to make the parts or spare parts. Kind of tough do that, too.
[00:35:02] When they go through and they get an audit. I mean, we’ve we’ve had customers that were budgeting tens of millions of dollars a year to have to replace lost tools. Yeah. You know, and that’s that’s an embarrassing loss. Tools we lost at the supplier, lost at the Siplon. They showed it to the supplier to use it and don’t know where it is. You know, we had a we had a customer that relate a story one time where they had a supplier that had gone out of business and they were they weren’t using the supplier as much as they had in the past. So they didn’t focus on it. And about a year later, they when they were doing an audit on their tools, they realized that the supplier had one of these tools or had several of them. And when they talk to the receiver, they’d already sold the tool. And it it showed up on the market two years later in China, making counterfeit parts, using substandard metal. So in an embarrassing situation. So not only is it just lost money, but it can certainly cause downstream problems if you don’t if you don’t manage those assets.
[00:35:53] So let’s let’s take a left hand turn back on to the technology side. And you you’ve alluded to a couple of them that we’re seeing very prevalent out in the industry. I.T. clearly is one that’s revolutionizing. And we’re really we’re just scratching the surface and what truly can take place while especially with. And everyone’s got kind of a different take on 5G. But a lot of the folks we’re talking to and a lot of the research we’re reading, it’s going to revolutionize and really enable these technologies like outie to do some really, really neat game changing things. What other emerging technologies have you been tracking, especially from the manufacturing supply chain space?
[00:36:32] Well, I think I.T. is a really interesting play in our world and specifically on the tooling. So so we just talked to you’ve got, you know, hundreds of millions of dollars in tools and assets going out in the field. So putting AYATA devices on him is good because you can track where they are. You want to know when they left the plant because you’re not allowed to move a tool in just, you know, outsource it to another plant. You would have to go through a new production part approval process, you know, before you could do that. But putting IATSE sensors on tooling has another benefit it would weave. We actually piloted it with a couple of our customers last year by putting these devices on the tools in their supplier plants and running it. And what it does is it actually sends back data to tell him when the tool ran, how long it ran, how many cycles it ran. So now all of a sudden, if you can compare the amount of cycles against the actual products being produced, you can start seeing do we have a scrap problem? You know, we know that scrap should be, you know, 5 percent or whatever. But, you know, this tool ran enough last months to ship us 10000 parts, but they only seem to produce 5000.
[00:37:36] What, the delta. Were they using this tool? Was a supplier using the tool for somebody else’s parts? You know, is. Is there excess scrap, which may indicate that they’ve had a change of ownership in the plant and maybe they have people that are running the tool that don’t know how to use it anymore? Again, leading indicators. So now that leads you into capacity. So that’s a big question. And a lot of the industries that we sell to is, as you know, they’re constantly being given scenarios. What happens if, you know, you know, the OEMs increase their orders by 20 percent. Where do I have a capacity problem? And the only thing that the manufacturers can rely on is what the contracted capacity was that was established at the time. It was it was the contract was written. But by being able to put IAPT devices on the tools in the plant, you can actually see demonstrated capacity. And so when you see changes in demand now, you can see where you really have bottlenecks where before and and again, suppliers in many cases can be the last time doing I’ll be the last people to tell you they have a capacity problem because they want to try to make it work.
[00:38:33] Right. Right. They want to keep the business and get our business.
[00:38:36] Absolutely. But, you know, the you know, the owner of that tool deserves the right to know. You know, if they’re not able to deliver to their customer, too. So it’s you know, it has to be a partnership. And using devices like that really provides the manufacturer with visibility they’ve never had before.
[00:38:51] So I think let’s look at it on the flip side. Some of the concerns, sensitivities that you’ve seen, maybe some organizations have that keep them from fully implementing some of the latest and greatest technology. What do you see in there?
[00:39:06] Well, some of it is just it’s still new. You know, so we we have not found a lot of IAPT devices that can do this. We’re starting to see him on the company. We’re not manufacturers of AYATA devices. We don’t want to be in the hardware business. We’re basically in, you know, in the software and analytics. You know, we we came across a company that was spun out of South Korea that built this tool in conjunction with Samsung, who had 40000 tools in Asia that they were trying to do exactly this. And now they want a new company. So some of it is just getting the word out, getting the technology. Now, when you start talking about putting IPTV devices on tooling, you know, there’s a lot of different kind of manufacturing processes. You know, they’re stamping and there’s injection molding. And some of these environments are pretty harsh. You know, they’re 400 degrees, they’re wet, you know, and just, you know, putting technology on them. And so as the technology continues to evolve, I think it will become cleaner. You know, more prevalent, I would say. The other thing is you do get into a contractual issue, you know, because you’re putting devices and you’ve got visibility. And so it has to be built into the contracts with the suppliers to to get there. Go ahead. But again, how this can benefit the suppliers is you can now start giving preventative maintenance type of feedback on how that tool is running. You know, you know you know, is it making the parts right? Is it time for. Is it time to be tuned up? So you can again. I think AYATA Devices is a play that can provide a real value add to the suppliers, too. So it’s a win win relationship.
[00:40:31] Huge. So let’s break out your crystal ball one more time. Let’s talk about the future of supplier management. What else? The future. If you’re making some bold, fearless predictions and don’t feel compelled to. What does the future look like? Well, I think it’s along the lines of what we said.
[00:40:50] I mean, you’re the future still starts with doing the basics, just like we were talking about. If you going to design software products, you need to go out to the field and get firsthand information. They’ve got it. You know, manufacturers have got to, first of all, figure out how to standardize and digitize this vast amounts of data that is currently sitting in spreadsheets. And that starts so you can talk about all the technology. Well, but if you don’t have that as a starting place, then you’ve got nowhere to go. But once that’s in place, then looking at technologies like I.T. and analytics. So, you know, we’ve adopted a it’s called a data lake. It’s basically a generation after the you know, the OLAP systems. And those technologies are really cool. I mean, we have in our database over 10 billion quotes in our system, supply quotes 10 billion and we would have been a B with a B. You know, because the product’s been around for 20 years. So there’s there’s lots of history in the system and we can interrogate that data in fractions of a seconds with the new technology.
[00:41:47] This technology typically comes with machine learning algorithms. So now the sudden you can go from looking in the rear view mirror, looking at current snapshots or the trends of how you got here to applying machine learning algorithms on top of that to predict what’s going to be in the future. So you may have a good supplier today, but because of some things that have happened, you know, six months now, the math may show that it’s actually trending in the other way. And you might want to second guess, you know, sourcing with them on this new program. Mm hmm. You know, so I think it’s you still got to get the basics done. You’ve got some really with that. And you’ve got some really cool technologies between I.T devices and with the anti-New analytic tools that are coming out that have gone so far have come so far. I mean, I was responsible for for be-I when I was at the ERP company. It is amazing to see how that technology has changed in just the last five years.
[00:42:35] But what is be-I business intelligence, data warehousing? Yeah.
[00:42:40] So it’s interesting. Do you. One of the new things in Supply chain now, at least conceptually that we talk about is sustainability. And that means not only, you know, how you as an organization are managing conflict minerals and what you’re doing to your environment, but it’s also having making sure your suppliers are doing the same responsibilities. So are you guys doing anything around supplier compliance or not? Not compliance, but Ryan helping them be better companies or.
[00:43:05] Yeah, we we have a supplier management system that customers use to go out and create different we call them supplier scorecards and they may have them around a number of things that could be insurance, could be financial, it could be diversity, you know, corporate sponsor ability, it could be conflict minerals, it could be anything that they build.
[00:43:24] And so it’s not unusual for our customers to track through that tool over 400 data points to then pull all that information back together to create a a scorecard to say this supplier, you know, is seventy nine out of 100 and how do they rank to other suppliers? And so you’ve got to be you have a way to collect that information and you’ve got to have a way to keep it up to date. And again, if you think about, you know, a company with 400 data points and, you know, 5000 suppliers, I mean, you’re you’re talking about a vast amount of data. It’s got to be updated. You can’t you can’t put teams of people. You need technology to help manage, manage and maintain that.
[00:43:59] So, Chris, will ya? You’ll get ready. I like that last question you had, Chris, about defining the acronyms. We love our acronyms and supply chain. And we have a lot of our some listeners that our students write. We get a lot of feedback from folks that are currently in undergraduate programs. And I’m a push on the spot with two other acronyms that that both shared during the interview here. But first, let’s make sure our listeners can can follow up and learn more about LAVs source. Where’s the best place that folks can do that?
[00:44:28] Well, you can go to our Web site at W W W dot lops source dot com. You can also find me on my LinkedIn profile as well as in other ways to contact me.
[00:44:38] Outstanding. Beau Hagler, CEO at Love Source. Congratulations on a really impressive career. And congratulations on the growth that you’re having. Laughs. Horse We look forward to having you back on and putting our finger back on the pulse of the organization. Thank you for having me. Yeah, have a great year. It’s hard to believe or admit that. Remember Sciarrotta 1019, but you’ll have a strong finish to the year. Thank you. OK, so Chris and Will, you know, we love our acronyms and. Right. A couple others that I picked up on just because you were used to hearing them, right? Uh-Huh. One was bomb. So for our listeners, that net that may be figuring out what bomb stands for. I know it’s in the apex body of knowledge. The B okay. Chris, what would how would you define that something was very dangerous and explode.
[00:45:31] Keep it away from your supply chain. So Bill, that is not it. It’s not in the bill of materials.
[00:45:36] You talked a lot about the changes that take place in the thousands of changes. Chris, for the lay person, how would you how would you describe what that is? It’s just basically the parent child relationship of a finished good or a parent item in the subcomponents of go into it. So as the engineering designs change, the bombs can change very regularly as well as you were speaking to that earlier. But so. So if you’re listenin, bomb a bill of materials. And then the other one I picked up on it was A-s in any one think that that one’s familiar.
[00:46:13] That’s the advanced shipping notice is Ryder. I’d call that an email email we sent that it’s on its way as well. You know, we move so fast.
[00:46:25] And the neat thing, whether it’s a PIC’s or whether it’s other bodies of knowledge that help teams speak the same language in Supply chain, that enables us to move faster. And then in this global business environment, how things are changing minute by minute.
[00:46:41] So that kind of speaks to the value of education and speaks to the value of, you know, why you look at some of these supply chain service Haitian programs. Right. So and on that, Scott, you just want for any any certification students. So if I can drop few more in there and he mentioned either directly or indirectly, you talked about the upstream and downstream supply chain. So any any student of apic should fully understand what that represents. I’m not I can tell you what it is today, but he did reference it. Strategic sourcing is another key concept that we talk about in the CSC S.P. modules, obviously be-I conflict minerals. You should understand what conflict minerals are. He didn’t say this, but he was talking about total productive maintenance. So when you start applying IAPT to tooling and using that data to predict when maintenance needs to be done, we call that total productive maintenance. And then he talked about capacity man management, but he’s the first person to ever say it and I study it. I know what it is demonstrated capacity. So I was impressed that he dropped that in there as well.
[00:47:36] Mm hmm. One of the thing I picked up AP Kewpie, which I have not heard since my time in metal stamping advanced product quality planning. Right. Which is kind of a framework of all things procedures and techniques to make sure that the right parts and everything’s taking place from a from a total quality standpoint, especially in automotive. AP kupe you hadn’t said that thing about seven years. Thought about what would the PPE or the people P Papua have? Luxon Part of a process. You told me three times I still don’t know one, which is a sub part of a peacekeeping role. All right. ABC That’s right. Oh, what a great idea. Thanks so much, Beau, for for sharing more about not only what source, but about some of your insights from across industry and what’s taking place in the Supply chain space. So let’s wrap up today this episode on some of the upcoming events that we’re gonna be at together oftentimes. So we just got back a few weeks ago from Austin, had a wonderful time at E.F. TS Logistics CIO Forum. Many of you may know if you’ve heard any of our previous podcasts, E.M.T. Is not part of the rorters organization. So they’re gonna be growing quite a bit in the months ahead. Our next event is going to be at CSC m.p.’s, Atlanta’s CSC Peatlands Roundtable lunch event in January 2020, where they’re bringing someone in from Nasrat to talk about some of the regulations and what it means for transportation companies.
[00:48:59] That is an open event and you can learn more at Atlanta. See SCMP dot org. And then in February, we’re taken to your ready for Vegas. Yeah. Man, yeah, we’re going to Vegas our February 2020. We’re gonna be joining the reverse Logistics Association at their conference next. Right. That’s gonna be you know, we talked about this a lot, but reverse Logistics, especially in this e-commerce age, is a Groh is a incredibly relevant aspect of India in Supply chain. So in the RLA is working hard, Tony Shroder and whole team over there to help best practices proliferate out globally. So globally, Organ’s global organization and their yearly big conference expos will be out in Vegas in February. Are l a dot org? Yeah, information virtual Logistics. Probably never more prevalent than right now. I’m with you. Yeah. And you know what? What I have uncovered or learned as we learned from that group. Is just how many companies are really that they’re still trying to feel our way out. It comes, returns and reverse Logistics and sustainability and and the circular economy for that matter. Yeah. So it’s been fascinating to be a part of that with we partner with RLA or multiple categories. Tony’s a man.
[00:50:17] Okay. Then we’re come back. Atlanta, what’s taking place? Any guesses? In March 2020. What’s taking place here in Atlanta? Spring break. Oh, at war. That’s some. Yeah, of some import. So the 2020 Atlanta Supply chain awards are back. That would be you really working with this team here? Had an outstanding year. One event took place in March. Twenty nineteen year old out. We recognize about fifteen different companies that were driving excellence across different aspects of the Indian supply chain. We’re back for year to march temp. 20:20 nominations are open. Yeah, registrations are open. Whoo! And sponsorships are up. And you have and we’ve added new categories including Bo. You’ll appreciate this one. The Supply chain Startup of the Year so our listeners can learn more at Sabbat Atlanta Supply chain Award WSJ.com. Early nominations have included organizations Fast Fetch and Gray Orange which gray and orange robots? Robots. Now we’re fortunate to be hosted by mutex. So mutex is one of the largest supply chain trade shows in the country. Expect to how many people will take guests to Madox? Fifteen thousand at twenty. Thirty thousand? Yes. Unbelievable. All coming up right here in Atlanta on the Supply chain City at the Georgia World Congress Center. In it, a day two of Moto X, they’re hosting our Supply chain awards. So GW1 bigger, going better. We Christian Fisher, president CEO of Georgia-Pacific is our keynote, SHANN Cooper, who is legendary in many ways.
[00:51:56] I mean, she led the Lockheed plant in Marietta. She was chief transformation officer at West Rock and now she’s our emcee for the awards show. So we’re excited about Usher, too. One last note about that event. Moto X is free to attend free me networking, best practice sharing market intel, you name it. Moad X show dot com to learn more and take Marta in the whole event can cost you $5. That’s right. Yeah. Get a hot dog and a coke. He got a better life with its big trucks, so no big deal. That’s right. Murdock Sheer dot com. Looking forward to that. OK. Big thanks again to our featured guests here today. Bo Hagler, CEO, lob sauce. Big thanks to my co-host Chris Barnes. And we’ll hear way, sir. Great to have you all back in the studio, Major. And to our audience, be sure to check out other upcoming events. Replays were interviews, other resources at Supply Chain Now Radio dot com. You can find us an Apple podcast, SoundCloud, all of leading sites where podcasts can be found. Be sure to subscribe us. You missing thing on behalf of our entire team here. Scott Luton. Wish you a wonderful week ahead and we will see you next time on Supply Chain Now Radio. Thanks everybody.
Bo Hagler brings nearly 30 years of manufacturing and supply chain business application experience to LiveSource, a supplier relationship management solution for direct materials. Bo guides the company’s vision and provides corporate leadership in the strategic areas of technology and research, operations, and performance excellence. Prior to leading LiveSource, Bo was CEO for MFG.com, the world’s largest manufacturing marketplace. It was at MFG.com that Bo lead the spin-out of the LiveSource product into a stand-alone company and completed the company’s Series A funding. Subsequent to MFG.com, Bo served as Vice President of Research & Development at QAD. He joined the company through the acquisition of FBO Systems, Inc. where he was founder and CEO. While at QAD, Bo also ran several strategic business units responsible for sales, service, product management and research and development. Bo received his bachelor’s degree in management from the Georgia Institute of Technology. Learn more about LiveSource here: https://www.livesource.com/
Chris Barnes is a supply chain guru and the APICS Coach. He holds a B.S., Industrial Engineering and Economics Minor, from Bradley University, an MBA in Industrial Psychology with Honors from the University of West Florida. He holds CPIM-F, CLTD-F and CSCP-F designations from ASCM/APICS, one of the few in the world. Barnes is a professional education instructor for the Georgia Tech Supply Chain & Logistics Institute’s Supply Chain Management (SCM) and University of Tennessee-Chattanooga Center for Professional Education certificate courses. Barnes is a supply chain advocate, visionary, and frequent podcaster and blogger at www.APICS.Coach.com. Barnes has over 27 years of experience developing and managing multiple client, engineering consulting, strategic planning and operational improvement projects in supply chain management. Connect with Chris on LinkedIn and reach out to him via email at: email@example.com.
Upcoming Events & Resources Mentioned in this Episode
SCNR to Broadcast Live at CSCMP Atlanta Roundtable Event: https://tinyurl.com/y43lywrd
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