[00:00:05] It’s time for Supply Chain Now Radio. Broadcasting live from the Supply chain capital of the country, Atlanta, Georgia. Supply Chain Now Radio spotlights the best in all things supply chain the people, the technology, the best practices and the critical issues of the day. And now here are your hosts.
[00:00:29] Good morning, Scott Luton here with you on Supply chain. Now welcome back to the show. Well, this episode, this can be chock full of key takeaways from 2019 from a supply chain point of view as well as some key things look for in 2020. It will be featuring Chris Barnes, Greg White and myself in a recorded live from a CSICOP Atlanta roundtable event in the recent weeks. So stay tuned for what promises to be a very lively discussion on a quick programing note. Like all of our series on Supply chain now you can find our replays on a wide variety of channels Apple podcasts, soundcloud, youtube really wherever else podcast from. As always, we’d love to have you subscribe so you don’t miss anything. And now join us for this very lively conversation with Chris Gregg myself. Five, four, three, two, one.
[00:01:23] All right. So let’s talk about some of Chris Barnes key takeaways from 2013. Think about, you know, obviously professional development, innovation, technology and some of the goings on, obviously, 2019 when it comes to transportation. Terrible. Very rough year. Yeah, but what sticks out when when you go when you when we look back on 2019, a couple of years from now. Chris, what what’s going to stick out?
[00:01:46] Well, one thing I learned was always go second.
[00:01:49] So that’s the lesson.
[00:01:55] And that’s the lesson of when everything goes lie in 2020, 2020. I like to think about that when they.
[00:02:03] Well, obviously, the big a big factor was the I don’t like to keep talking about Amazon and every Supply chain discussion, but it’s hard not to. That was really the urbanization of warehousing. Yeah. Or the micro warehousing kind of came up with some new terms where not only the the the one Peel’s, which are the owners of the warehouses are being more strategic. But when private equity and hedge funds start investing billions of dollars in owning Industrial property, that sends a big message in terms of what what’s going on in the Logistics Froome.
[00:02:34] It’s right. And also one of the observations you made last year, about half way through the year, is that you heard the term White House being uttered out of the White House. Yeah. Supply chain Jain and that’s a yeah.
[00:02:45] That gets back out to where we are. We the collective we as a supply chain professionals is it’s just a great place to be. The job market’s great. The the notoriety is big. I mean being supply chain professional these days is can get you up to up to supply chain in terms of her up the food chain and careers corp.’s chief supply chain officers, whatever they are. And that’s really that’s really had a big impact. So I’m seeing things, whether it’s NPR, the Sunday morning shows where I can say at least weekly something someone’s going to mentioned supply chain and in their discussion that’s probably the first year 2019 is probably the first year that you heard somebody outside of the industry.
[00:03:22] Yeah. I mean, ah, I can recall anyway, somebody outside the industry talking about supply chain when the White House was talking about it, when consumers I saw somebody tweeting about the supply chain. They were they were upset. They were tweeting, too. I don’t know, Shopify. Sorry. No, I’m not. Yeah. Somebody some e-commerce companies, you know, complaining about the customer service. I haven’t got my thing. What’s wrong with your supply chain? When I saw that tweet, I was like, wow. Yeah, well, you know, things have changed. Things that changed. Humors even know what Supply chain is.
[00:03:52] I think one of the things that has helped that there’s a variety of light that’s being shown owned to the industry. And I think one of the things that is maybe raising the awareness is there’s been a ton of talk about infrastructure. Right. And the infrastructure upgrades we need, at least in this country, if not elsewhere. Definitely elsewhere, certainly elsewhere. But here, you know, interstate system, you name it, we have a lot of challenges related to infrastructure. And of course, who uses that infrastructure to get consumers the goods they want to rise or one day. So I think that and to your point, Greg, I think that as e-commerce has continued to as we all know, we knew it would grow and take a greater and greater share of the retail market. We believe we’ve talked of this for all three of us. Consumers are starting and have been for a while connecting the dots of what enables that to happen, not just Ford, but also the return side. And what has enabled returns to be incredibly too easy probably in this day and age.
[00:04:56] Yeah. Another key theme out of 19 was. Exactly. Not only people, but executives talking about sustainability. I’m seeing that more in CEO presentations or discussions around the stock market. They actually bring up sustainability in their strategy around sustainability, in their discussions club and an ethical supply chain net.
[00:05:15] Right. I mean, you know, sustainability in and of itself. To me, I’m starting to think about sustainability is not just environmental sustainability, but true end to end sustainability. The supply chain and for supply chain to be sustainable. It has to be transparent. Right. You have to you have to predict protect the provenance and the chain of custody of the product. You have to you have to be environmentally sustainable and you have to eliminate bad practices, unfair trade practices. Right. Slavery. I mean, some products are still they are still produced with slavery. Can you believe that that still exists in today’s world?
[00:05:58] So, Greg, that’s supply chain is so boring. Let me tell you how boring it. Yeah. Yeah. Tell us why. Wait. Siplon, we call back to you. That is so boring.
[00:06:05] We call that the triple bottom line. That’s how you’re measuring. So you’re measuring both of social performance as well as environmental and the profit side.
[00:06:13] Well, look at accrues to the it accrues to the value of your brand and your share. Shareholder value in a positive and a negative way. And it’s not just you. And I think it’s appropriate that now consumers are holding brands responsible for all of their supply chain the vendors that they do that they do business with. Right. And because who has more power over those vendors and how they do their business than then the brand or the merchant? Not I mean, I can tell you, as a former merchandiser and a retailer, you can get a get a vendor to do just about anything. If you just ask. And if you just ask him not to use slave labor or, you know, or child labor or underpaid labor. I mean, you know, I think there’s a you know, there’s a a new awakening to this. And I think it’s largely brought to us by the younger generations. But it’s so valuable and so long, long time coming.
[00:07:14] All right. So what I want to ask you both about that, Mitt. More comment around health care supply chain. And then I want to ask you about Asia and a forward look of the asset making 2020. And Chris, there’s there’s lots of several things that drive e-commerce. But of course, warehousing and fulfillment is what helps make that happen, to want to only get your your kind of forward looking snapshot snapshot on that. But before, do I think one of the other trends that continues to emerge that that’s being leverage more and more is supply chain for global health care. Right. So the last Atlanta Supply chain awards in March twenty nineteen, we recognized as a global health task force right now. Carla Johnson. Yeah. Was the is the supply chain manager for their truck. Global Truck Homeware co-managed Inish. Right. And you know, we all know what’s really intriguing to me is in that case, Supply chain is literally saving people’s eyesight and getting the medication they need to very remote parts of the globe to make sure we’re preventing an illness that gosh, can you imagine losing your eyesight simply because of lack of access or lack of health care or lack of ability to get what you need? So I think we’re going to see more, more stories. Obviously, U.P.S. being the first there drone program to be the first to get the federal sort of certification flight. Ford and U.P.S., all the technology that’s under that premier banner. I think 2020 is going continue to see more, more prevalent use. And I think probably creative use of supply chain in health care. Any thoughts before we switch gears and talk A on I mean, where else?
[00:09:03] Yeah. I mean, I think, look, health care is and probably should be the driving force of supply chain. And yet it’s I think and we talked about this with some folks at UBS. It’s under reported Undern exposed. Right. Because there are so many things that go into a supply chain when you’re talking about life saving products. Right. And we talked you know, we mentioned it just a couple of minutes ago, a product, product provenance. Right.
[00:09:32] Making sure you’ve got the right product because it at that time, I hear that I’m like, no need to cool it. It’s a really cool word, provenance.
[00:09:40] I learned it big. I learned it before I even started Blue Ridge. I was doing consulting with a company called Henry Shine, who has a very advanced supply chain in the health care industry. And provenance was a big issue. So there were in the day and I’m sure there still is this concern of diverting. And then. The concern of of counterfeit goods and provenance and chain of custody were ways to thought to battle that chain of custody is important, right to know who had this product. If it was to be refrigerated, did it remain refrigerated? Ryder if it was to be frozen or whatever? Those are all important parts of it. And those are so important in health care supply chain that they have driven down to things like food, supply chain provenance and chain of custody. Hated the frozen goods remain frozen. Right. Did we shoot nitrogen over the.
[00:10:33] Probably exposing a dirty little secret of produce. But where we shooting at nitrogen over the produce while we were flying it from Chile or Peru or wherever, you know. So, I mean, there there are all kinds of things in health care supply chain that kind of trickle down to other to other industries and supply chain.
[00:10:53] Let’s get more visibility. It’s as high as sagacity. It is time. I mean, it’s it’s time for it to. The markets demand it. Consumer demand and that transparency and visibility into how things get here, regardless of what sector critics comments. Yeah. Just quick, we’ll say that word again.
[00:11:07] Provenance, provenance. When you say that, I think Muppets say it again.
[00:11:11] Provan on Amarna, provenance that none at the proper evidence.
[00:11:17] I’ll start out again. I was in my clothes. There’s gotta be some folks saying revenants. What is the provenance? What does a Muppet is going to? AUDIENCE MEMBER Woody Allen. It’s actually a guy and especially that spiel because that feels like the 70s when I was a little kid. I think that was actually on Laugh-In. Also. That’s right. It probably meant I could be away game and a provenance. However, I think if they were triggering I.V.F. What was the collection? Sorry. Yeah.
[00:11:44] So now, you know, the the.
[00:11:48] Well he he was touching on on bitching. Bitcoin will be blockchain. Blockchain. Yeah. That’s where it’s gonna when you talk about traceability and you know. Course. What happened. Jenny custody. That’s that’s a tie and then we end up about that. Yeah. That’s still kind of being talked about.
[00:12:03] Yeah. Do we all agree that blockchain is not a cliché flavor to money? It is a transformational force in global supply chain. I think the concept is that we’re gonna see how it’s going to be applied or who’s gonna. I’m gonna make sure it gets flat. Yeah. No, no. Good. I’m going to. I mean, if somebody else doesn’t.
[00:12:21] I think there are a lot of companies out there trying. Ironically, although I guess we could argue this is health care supply chain. Ironically, the cannabis market, because of the regulations around the product, they require a tremendous amount of providence and then and and chain of custody of affirmation. And I can’t see a way to do that without blockchain. Okay. Because I mean, the reason I say that is that, you know, you guys know, I’m I’m on the board of a company that does tech in that industry. So what I’ve seen is that these companies kind of go in and out of being in compliance. That’s a nice way of saying sometimes they’re breaking the law and they’re just plain old drug dealers and other times they are legit dispensaries. And the only way to stop that because. And part of that is because of the costs. I don’t want to just throw it out there like they’re doing it willy nilly. The cost of taxes are excessive in that industry. And it and it motivates people to go that way when they need cash. They go off the grid. But we have to we have to solve two problems. Obviously, taxes are too high. But let’s let’s take that aside to keep these companies legit. I think blockchain is the sole solution that can do that. OK. Right.
[00:13:35] Let go, Chris. Quick thoughts before I went. I want to get to warehousing.
[00:13:38] So, you know, I was going to say, let’s just transition right into that. I see that as I think you get to talk about 2019, the future.
[00:13:44] I bring it back. Okay. I live in agreement and OK, we’re going to loop back to 2009.
[00:13:48] So, again, you know, we’ve seen here and obviously here in the Atlanta area as we’re here at a SC Competes Atlanta roundtable event about set to interview three Supply chain leaders here in Atlanta, a huge Logistics up. Talk about Supply chain single out. But Casher are warehouses and distribution centers, fulfillment centers throughout the metro Atlanta area for a variety of reasons. But what what are you looking for, 2020? You know, I loved your tagline, Chris. Saving the world when a warehouse, warehouse or housing is your forte.
[00:14:20] That is that’s my part of the supply chain these days. Yeah. As I kicked off, I think it’s gonna be the continuation of that micro warehouse and concept where a million square feet, facilities and economies of scale are going to kind of go the go the way of lean, you know. Yeah, it’s good to have those four staples type of product, but the commodity type of products are going to have to be stored in. What I’m seeing is a market container in a parking garage downtown and you pay 20 bucks a day to have that spot and that’s your warehouse and get booted. Don’t get told every night. Yeah. So those types of things are going on where you have these, you know, New York City, Atlanta, wherever, Chicago, San Francisco and those highly dense areas. Right. You need those many. Daryl warehouse is going on right there. Then the urbanization of warehouses as well. Re gentrifying the old buildings, sorting it close to city centers.
[00:15:07] Yeah, but the product close to the e-commerce users, right?
[00:15:10] Yes, I’m calling that edge distribution. Edge edge distribution. So there’s this concept called edge computing where you put servers and servers and data hubs physically close to people so that so that the data gets to their their computer microseconds faster. And this is not a dissimilar concept. It’s putting the product where the customers are so that it’s easier to distribute to them quickly, because I think people look, last year we were talking about two days. By the end of the year, we were talking about one day and same day and now we’re talking about hours. Yeah, in terms of delivery time. If we’re gonna get there, we’re gonna have to do what you’re talking about.
[00:15:50] Right now, I’m waiting for the point to order something from Amazon. And they sent me an email. Say it’s already in your basement.
[00:15:54] Yeah. So that’s what we’re storing. Right. Right. Hey, you need this. You just get a delivery. You need you need this one. Yeah.
[00:16:01] And a carry on off EFT is some some guests that we’ve had. Is the company’s like stored or laser. You know, it’s almost like the not the uber of warehousing but it’s going to like you need something for a month. Some people don’t need warehouses for two years. They just need it for short term.
[00:16:17] That’s right. Or they just need a tiny, tiny portion of one. And there’s plenty of excess capacity out there because of the proliferation of of warehouse facilities in the market.
[00:16:26] My vision is as well on the warehousing technology side. I can see a company getting smart enough to say buy our warehouse management system and oh, by the way, we’ve got warehouses you can use it in. So kind of blending of those. I’ve always thought of it as the inverse, but I hadn’t thought about it that way. That could happen to be out of the right. It’s a whole new industry there.
[00:16:44] All right. So we’ve got to kind of bring things to a close and then we don’t weigh in.
[00:16:47] I have to. And they have got time to keep doing that. And then we’ve got. Do we have to go to commercial? Yes, we have commercial hedging.
[00:16:57] So you want to weigh in on 2020, especially from a standpoint you can’t go anywhere without hearing that two letter acronym is Excite. And I make sure that. Yeah. I mean, it is it’s enabling small business and large business, single entrepreneurs and massive seems to save so much time, get so much more done.
[00:17:19] Yeah. Well he’s. Yes, I agree. Let me let me wrap up on this talk, this micro warehousing thought and expand on it a little bit, because one of the things that I’ve seen in 2019 and I know we will see more in 2020 is the rise of what I’m calling the ACA as opposed to FBA, the anyone but Amazon class of Solutions. It’s companies like Stored, it’s companies like Vink Ylem who are e-commerce platforms. It’s it’s three P L’s. It’s you know, it’s radio. It’s Shopify. It’s geek plus. Right. It’s companies like that that are allowing you to simulate virtually everything that Amazon can do for you without being saddled with the burden of Amazon. Because what Amazon is doing is de-motivating a lot of their merchants and they need an option. And so I see the rise of this class. I’ve heard the noise from the from the merchants who who are on the Amazon platform. And sure, they’d like to stay there. But I think they’d like to be less reliant on Amazon so they can take some of the physical Logistics, they can take some of the other capabilities away from that and simply use Amazon as a marketplace. So I see that class, the anyone but Amazon class on a getting together right. Integrating stored with Vink Ellerman stored with with, you know, various and sundry other products, Shopify and things like that.
[00:18:40] So that you’ve got an option at least an option. Right. And anyway, I see that that’s starting to accelerate in 2020. You know, and I look, I’m a big believer in the way that we have been taught. Forecasting our entire lives is wrong. So let me just put that out there. And the reason that we end the comments just blew up. The reason that the reason that we’ve been taught it wrong is because the data that was available for forecasting when forecasting was conceived in many of the forecasting techniques that are used in Supply chain today were were actually designed in the late eighteen hundreds or early nineteen hundred. So that should give you some perspective. Right. They’ve been adapted over time, but there’s still foundationally the same as back then. And that’s because the data that was available wasn’t as robust as we have today. And now we have this incredibly robust amount of data and vast, vast amounts of data and instantaneous data, not Riina 90 days limit data. It’s. And what that data allows us to do is it allows us to forecast the consumer and the influencers on the consumer or customer. If you’re if you’re let’s say you’re your customer is a is a brand or it’s a retailer or a distributor or something like that, you can you can also semi simulate and forecast that.
[00:19:59] But because the data is available, we need to think about changing forecasting an A.I. is the vehicle that does that. OK. I can take all those inputs like a human being can and interpret that to say, hey, Billy, Bob is going to buy a new coffee filter because, you know, every month he comes in or, you know, this person came in and and refilled their prescription 30 days ago, 30 days have gone by. It’s time they’re about to come in again. Right. Sure. Your product is in your basement because we anticipated that you were going to need it, right? Yeah. And and I can actually do that. I mean, if you think about it all, artificial intelligence is is human intelligence accelerated? It’s repeatable. It can ingest a lot more data. It thinks and learns like we do. It just does it so much faster. It’s not even as black boxy as some of the other technologies that we’ve used in Supply chain. It’s actually explainable. OK. It has curiosity. Right. It goes and tries this and runs into a wall and then it tries down the hallway and realizes that this is an artificial natural curiosity.
[00:21:09] It’s not strange. It really is. And, you know, there’s a guy, Danny Longa, who’s I would argue is one of the most influential people in A.I.. He makes gaming and his company provides gaming tools. And he said that curiosity is the most important accelerant of learning in artificial intelligence, because curiosity has you try things. OK. And if you think about it, how did little kids I mean, think about we stop learning at such a high rate as we get older, but little kids earn it, learn at a very high rate because they’re curious and they hit an impediment and they try it again and they learn. I can’t get past that impediment. Let’s go around it. So A.I. is critical to a lot of what we’re doing. It’s a big thing. It’s 120. It’s a huge thing already. It’s already being used. Theme for totally theme. Well, yeah, I mean, it’s ah I would argue it’s already a big theme. I would argue that it’s already being used. I think it needs to be advanced. And I think people need to cease to think of it as as an extension of the old ways of forecasting in a new way to do that.
[00:22:14] Here’s a change. The biggest reason why I think 2020 is going to bigger is because Asia is no longer for the folks that understand programing, programing and coding and technology. It is being, as we know, we’ve talked about lots shows democratized. And when something becomes for the people and and folks like me that are non-techies and use it and embrace it, you get more comfortable with it and then you plot and all Portsea business. And that’s why I believe 2020 is it is going to be the theme twin for a lot of our programing.
[00:22:45] Well, education it is. Yeah. Oh, sorry. OK, long time. Yes, both. Well, I forgot his question, but it sounded good. The answer is yeah. Yeah. You know what on that?
[00:22:55] From an education theme, I met my daughters in university. Now she’s studying computer science. And I think in in five to 10 years, to your point, democratization of computers, I think computer programing is gonna be a fundamental class even at the elementary school level. I think we like reading, writing, arithmetic and computers because it’s so prevalent in society.
[00:23:14] I think we’re not far from I say not far. I mean, it could be decades, but we’re not we’re in in the age where we could see computer programing becoming automated. Enter, enter. And artificial intelligence is the vehicle to do it because let’s face it. But you have to understand just logic. You just have to learn what is the problem you’re trying to solve and what’s the best way to solve it.
[00:23:37] So so we got to wrap because we got our first interview right around the corner on this has been Chris Barnes Greg White and yours truly Scott Luton talking about kind of some of the things we whatever we want to talk about, look kind of. That’s pretty accurate. But the Muppets look back on twenty nineteen and give 20/20 what’s to come. So be sure to check out all of our podcast wherever you’re podcast from, including Supply chain. Now Radio’s Dick Kosmo. Be sure to subscribe. Check us out on YouTube. Do subscribe and we wish you a wonderful start to 2020. Thanks buddy.
[00:24:11] And into provenance. Provenance.
