Episode Summary
“What we’re doing right now would not be possible without the types of machine learning that we’re employing to pull all of those data points together to create sense of supply chain networks and everything that is happening in the world. But there’s always that human layer on top of it to make sure that we’re getting the right business context out of that data.”
– David Shillingford, Chairman of Resilience360
Companies and their executive teams have a complicated relationship with risk. Take on too much risk, and everything you’ve built could be lost in an instant. Don’t take enough risk and you won’t be positioned to differentiate your business or seize unexpected opportunities.
As David Shillingford points out, risk management is not the same as risk elimination. Instead, supply chain managers have to achieve a delicate and careful balance, one that reflects as many structured and unstructured data inputs as possible.
In this interview, recorded live at MODEX 2020, David Shillingford tells Supply Chain Now Co-hosts Greg White and Scott Luton about:
- Why taking risks with the company’s least valuable or least impactful assets can contain the damage to the operation if something goes wrong.
- The importance of having business continuity plans while also being willing to abandon or alter those plans as circumstances change.
- The need for ‘ground truth’ data from sensors and equipment, especially when human decision makers are at risk of being overly influenced by emotion and fear.
- Macro trends that involve and combine omni channel e-commerce, automation, and analytics
Episode Transcript
[00:00:05] It’s time for Supply Chain Now Radio Broadcasting live 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] A good EFT new Scott Luton. Back with your lob on Supply chain. Now, welcome back to the show. We’re broadcasting live today. Once again, promote X, the largest supply chain trade show in the Western Hemisphere, being held right here in Supply chain City, Atlanta G-A. On this episode, we’re speaking with a Supply chain technology leader who’s helping businesses and he and his firm make better decisions rapidly while mitigating risk and navigating through the ever evolving global business environment. Stay tuned as we look to increase your Supply chain IQ. Quick programing note like all of our series here supply chain. Now you can find our podcasts wherever you get your podcast from. So find us and subscribe so you don’t miss a thing. Thank you, Clay. Let’s welcome in my fearless, esteemed co-host here on today’s show. Greg White serial supply chain tech entreprenuer.
[00:01:20] Supply chain adj. trusted advisor and Atlanta City Champion tennis champion. Hey dude. That’s the champion, I said. Yeah, that’s good. I’m doing all right. Team Championship. I want to be clear on that. It was a team championship. Always is. Or I’m busy, miss. As I share with you 13 episodes to go, I’m disappointed we have not seen that golden plate yet. Yeah. I’m gonna bring you studio. I need to bring it. I’ll bring it. Maybe I’ll bring it tomorrow. We can set it up here for some of the some of that as well. As much as I want to dove into Greg White tennis history, we do not know. David does. He doesn’t have anything to do. We have an outstanding guest here today. A timely guest. David Shillingford, chairman, Resilience 360. David, how you doing? Very good. Good to be here, Scott. Great to have you here.
[00:02:04] Very timely to have you here. It really is. And we’ll we’ll touch on more about what David’s here. I’m here at mutex, you know. They brought him in. There’s so much demand and interest in, of course, coronavirus virus. But all the associated risks that’s related to that. You know, it doesn’t start and stop with that. What a spillover effect. And you know, on the short list of folks, a short subject matter experts. David’s name was near the top, flew him in.
[00:02:29] And I hear you had a very interactive session here at mutex this morning. We did. Yep. Great attendance. A lot of good questions. Good information sharing on the topic. Yeah.
[00:02:38] All right. Well, we’re going to have the chance, are our viewers, to hear more from David and his expertise here momentarily. But before we get there, David, let’s let’s give our our listeners a chance to get to know you just a little bit better. So where are you from? And give us a story or two about your upbringing.
[00:02:55] So up. Short version, yes.
[00:02:59] Reader’s Digest. Right.
[00:03:02] Well, my father was in the British Navy, so I was born in Malta, little island in the Mediterranean. Should any listeners don’t know traveled the world with my family as I grew up. I studied chemistry at university. That was paid, at least in part by the British army where I learned for eight is jumping out of perfectly serviceable airplanes.
[00:03:26] So you establish yourself as a madman at an early age? Yeah, that’s, uh. I got paid for it. Yeah. Does that help? No. Yeah. Yeah. Actually that makes it perfectly sane. Yeah. So. Left. Left.
[00:03:37] That’s as I said after it is ended up by chance in New York City helping to recover stolen art. And that, Paul, into a series of start up ventures around data and analytics and risk ultimately landing in the supply chain space. Wow.
[00:03:57] So from entrapment. Yeah, I like that. Probably not that I’m aware of it.
[00:04:05] Well, Greg, just do that with some R, R or younger listeners that do not know what entrapment is.
[00:04:10] It as a movie bhabhi about art theft. Yeah. Back in the 90s with Catherine Zeta Jones and Sean Connery. Right. Yeah. One only got no bad film with Sean Connery. Yeah. And Catherine Zeta Jones. Right. Right. Right. Not in that order. That’s right.
[00:04:24] Well so let’s as much as I’d love to. Yeah. You know, David, that you’ve got so many stories that I’m sure we could we could probably have a three hour episode and talk more about where you’re from and your upbringing. But let’s switch gears and let’s talk shop a bit. So tell us about what Resilience 360 does show.
[00:04:40] So Resilience 360 is is helping companies around the world make risk a competitive advantage? It is a critical component of supply chain visibility to be able to know not just where your assets are, but also what risks they might face and what is happening right now. So to have visibility around the assets and to have visibility around the risk and the context, we bring all of that together to help companies understand what’s happening in their supply chain.
[00:05:11] So you’re you’re analyzing not not just risk where the assets are, but the butterfly effect, too. I mean, what could be happening elsewhere that could be impacting goods or or other assets elsewhere.
[00:05:26] Exactly. Yeah. We have to look at the entire network to understand the risk that a company is exposed to. Both predictively and and in real time. Mm hmm.
[00:05:34] So, David, I had a chance to. We conducted a webinar in conjunction with Rasyid 360 not too long ago.
[00:05:40] And the sheer amount of data points that go into how you convey this. This very actual usable, very pertinent information is overwhelming. You speak to that a little bit.
[00:05:54] Sure. Well, we’re we’re we’re at an interesting time in in Supply chain management with the genesis of artificial intelligence. And what we do and how we do it will always be a human endeavor. But what we’re doing right now would not be possible without the types of machine learning that we’re employing to pull all of those data points together to create sense of supply chain networks and everything that is happening in the world. But there’s always that human layer on top of it to make sure that we’re getting the right business context out of that data.
[00:06:27] All right. So we we are, as we’ve mentioned on the front end, we’re going to get kind of an executive overview of a lot of what you shared here at mutex.
[00:06:34] So I’m looking forward to that. But before before we do that, one of the questions we always like to ask senior executives is at that time, it’s that time.
[00:06:41] Time. All right. I think I have a good idea of the answer to this, but I think what what helps our listeners often to understand. And a very precise and concise nature of what you do is to think about them walking down the hall in their business with the pain that’s in their head or their heart or the key words going through their head, right. What are those things that that would indicate to me as a business owner that I need what you do it. Resilience. 3:06 Shore.
[00:07:15] So what what is going through the business person’s head is is my supply chain optimized? Do I have the right balance between the various different components that I have to offset, offset against each other? And am I taking too much risk or not enough risk? Do I have too much inventory? Not enough inventory. So what we’re doing is helping companies achieve the right balance and visibility and synchronization end to end by showing them what what their risk is and how that’s connected back to their to their core business. I have even thought.
[00:07:46] I’m sorry. I had even thought about the possibility that they aren’t taking enough risk. That’s a really interesting concept. I mean, I think you balance that in your business. But I hadn’t really thought about that as a as a concern. And I can see where there’s opportunity there. Right. Right.
[00:08:02] Risk management isn’t about eliminating all risk, right? Correct. It’s about it’s about achieving the right balance and different companies in different industries with different cultures, different supply bases, different demand signals. Every company is going to be different and they’re going to have to make their own decision as to where they want to take the risk, where they don’t, and how they change that on a yearly, monthly, daily basis.
[00:08:27] Yeah. You want to take. You want to take probably the greatest risk where the risk is the least impact in your business. Right. So if you’re going to take a risk, take it on your least valuable or least impactful assets. We’ll take you there. Lots. I’m sure there’s lots of other ways to do it.
[00:08:42] But in the simplest case, there is a lot of different levers that people can build. And we talk a lot talk a lot about agility and supply chain that’s becoming more possible with automation. Visibility and agility is a critical component of resiliency that allows companies to take more risk but be able to quickly move from plan. A plan vaguely. Yeah.
[00:09:03] When I think of the current in the modern global supply chain, there are no shortage of factors that are front and center for some supply chain leaders. But we all have blind spots. And so using what resiliant 360 does, whether it’s growing the business, whether it’s managing the business, whether it’s avoiding pitfalls. There’s so many you can’t know everything. Right. So I really see that this is really helpful. And almost you almost have to have something like this to navigate through the global supply chain industry. So when does it switch gears? I want to really dove into what you shared here at mutex today, specifically related to some of the global threats, including a corona virus that you weighed in on a bunch of supply chain leaves that are here, manufacturing leaders, you name it.
[00:09:52] Yeah. So can you give a kind of executive overview yet? Two or three things are most important from what you shared here today that you’d like to share with our audience.
[00:10:02] Sure. Yeah, I think. I mean, the questions that really sum up the way people are thinking about the coronaviruses, where are we now? What is what has happened not just in China, but in other countries where that the virus has spread to what’s going to happen next and how is that going to impact my business? Therefore, what should what should I be doing now? Don’t tell me what I should have done a year ago. Yeah. Tell me what I should be doing today. Now that was that the bulk of the conversation now.
[00:10:32] Interesting. Because what happened a year ago can’t tell you anything about what you ought to be doing now. We didn’t have these conditions then. Right.
[00:10:40] And it’s it’s interesting that there are there are companies and it’s not quite binary, but, you know, the famous phrase. I mean, Warren Buffett, who said you only know who’s swimming naked when the tide goes out. And then we see that all version of that is playing out. Now, whether a very generally speaking, two types of companies, those who spent time understanding and mapping out their extended network so that they had decent visibility to what’s wear. And those that didn’t and those that have I mean, we have a Tier 1 automotive supplier who they actually after the events in Japan in 2011 with the tsunami. Right. They back then started modeling at their supply chain and looking to get extended network visibility. We were talking to them about this late December and they were already starting their contingency planning then. They’re in good shape as as much as they possibly can be. We’re talking you know, last week we got a call from a similar company that hadn’t done that is a very different discussion. So, sure. I don’t think anyone really saw this coming. But there are companies that were prepared for it because they were prepared for this or something like it.
[00:11:52] You know, contingency in scenario planning right on. If you do that, what this is doesn’t really matter. It’s your foresight towards it and the impact that you expect from it. And then is that sort of what your tool set? Does that help companies? Planned, but also respond.
[00:12:12] That’s right. Yeah. It’s used during planning and execution. You got to be able to put the right plan in place, but understand that the plans always everything. Plans are always going to change. And it could. It might not be as severe as something we’re experiencing now, like rhinovirus. It could be something that’s actually a daily event like weather that just creates an hour’s delay if that happens a million times. That’s a huge economic impact. So we think about the extended network, not just in terms of disruption, but also delay. Yeah. And everything in between. So every risk is a little bit different.
[00:12:48] Outstanding. Yeah. So what else from your from your discussion this morning? What else? What else needs to be heard with the bit about a business community?
[00:12:58] So one of the one of the discussions that took up quite a bit of time on the panel was trying to understand from what has happened in China in terms of the government’s reaction initially not reacting. And then a very strong reaction. What can we what can we and other countries learn from that in terms of what is an appropriate response for a government to make? We see Italy is now responding more forcefully to what is happening there, say other European countries looking very closely at Italy, more border control starting to see things happening in the US. And a lot of the questions. Well, well, what what is the right response? Because it’s not the virus that is causing economic pain. It’s the reaction to the virus. Yep. And it’s a it’s a tough balance because you have to react. But if you overreact, you create more pain than might be necessary.
[00:13:51] Yeah. All right. So if I can ask you, you know, we if we hear anything through the conversations here, through conversations we had, we had earlier at the Atlanta Supply chain Awards. Through the conversations were having with business leaders wherever they are. There is this constant debate, discussion around.
[00:14:11] Okay. Are we are we acting appropriately? Or is there a great deal of overreaction, the marketplace? And frankly, like we’ve we’ve talked to a thousand people. We hope to do from now. Yeah, that’s right. We hope 10 years from now that the story will be that this is a huge supply chain story versus human health story. Yeah, I’m not sure. What’s your what’s your take as you as you try to read the tea leaves and predict where we go from here. You seem more appropriate action being taken. Or do you see a few elements of of overreaction? What’s your take?
[00:14:48] Well, so I think it it depends what we’re talking about in terms of whether the reaction has been appropriate or an overreaction, whether we’re talking about the government, whether we’re talking about private businesses or whether we’re talking about consumers in general markets in general to demand recall, you know, how the stock market is is behaving and where an overreaction is is possible. Like markets and consumer behavior, we generally we’re seeing an overreaction from a government standpoint. We do see overreaction. And generally political political incentives are more short term than they are long term. Yeah. And the political risk of under reacting to something like this is is pretty significant. So it is likely whether it is to do with. Inside a country will or the borders of a country. We expect the responses to be pretty severe. And then in the Middle East is the business world where people are being far more pragmatic about it. But as soon as short as soon as the safety of a workforce is at peril, then factories get closed down pretty quickly.
[00:15:55] That’s right. And ships backup in ports. And you have I think a lot of folks especially that are outside of Supply chain don’t don’t know just how bad global supply chains have been impacted.
[00:16:10] And unfortunately, by both, Bob. By most accounts, most predictions that the worst is still yet to come in terms of the impact on operations, which takes us back to what Resistants 360 does and the insights there and how you mentioned some companies are much more prepared than others because. They planned for this. And they’ve got the right data released a lot more the right data at their fingertips. Speak to that a little bit more. How important, especially in 2020 in the air we live in.
[00:16:39] Well, there’s a whether a company is overreacting or underreact thing is a lot of it is is is emotional, it’s visceral, it’s it’s it’s is driven by fear and anxiety. And what show I think. Yeah. The only way to deal with that is, is with data. And it’s a classic example of where we are right now, where people are getting data out of China. They don’t know how to read it. And without GroundTruth data, either sensor based data where we see assets, where they are, how they’re acting, or where we have like our partners in the DHL network, cause we have boots on the ground, are able to say it’s open, it’s closed, is opening, it’s closing. And to be able to report that back through the network is is really the only way to deal with this and to be making the right business decisions with the right the great confidence. Yeah.
[00:17:31] Is there any data that’s telling us anything right now about China? I mean, we’re hearing reports periodically that factories are restarting, that shipments are starting to move. Do we know anything about any of that?
[00:17:43] We do, absolutely. And you have to sort of take it from the top down, because what the what the government what the federal government in China is is doing and saying is is an important part of this. But then how are the local governments responding in terms of allowing trucks to move, allowing workers back to factories? And then you have the individual company level where even if a factory is open, it is the workforce back. And what we’re looking at is how those factories are opening and closing, what percentage production they are at and whether or not the goods that need to come into the back of the fact you’re out of the end of the factory are actually able to move because a lot of the disruption has been around transportation. Right. You have a truck, but no driver. Nothing moves.
[00:18:27] Good point.
[00:18:29] All right. So I don’t want to leave this this component as we move into a little bit more of a broader conversation with David. Anything else before move broader kind of hearing some other things you’re tracking right now? Keith. Anything else that needs to be said based on the coronavirus discussion this morning?
[00:18:47] So I think that the one thing I would want to leave the listeners with is, is that there’s a risk that people are being told, I you should have done this a month ago or a year ago. Well, that’s unhelpful. But B, it’s the wrong advice because the things that people should be doing tactically to work out what is their next step, what is their plan is really the first step in a month. Yes. Five year long journey towards improving network visibility. It’s not a binary thing. It’s a it’s a journey. And people should start that journey today. Make that Technical planning part of their longer term strategic planning.
[00:19:26] Do you see that happening? I mean, do you see companies that are responding pretty rapidly to provision for that kind of.
[00:19:32] We do. We do. We we we we see across the board those are really well prepared and responding and and executing in the best way possible. We see those that are at the opposite end of the spectrum and then and then people in the middle who supply chain managers are extremely good at responding to this this type of thing. And a lot of companies are really pulling out all the stops. They just need to make that part of their culture going forward. Yeah. Okay.
[00:20:01] Let’s shift gears. Let’s go abroad as we start to kind of want for an interview down. So would you look out beyond the coronavirus and you go broader in the modern day global into in supply chain. There’s no shortage of topics, issues, innovations, you name it. What’s one or two that is getting your attention more than others right now? Sure.
[00:20:24] So I’ll give you three and I’ll tell you all three. Back to Karan Agrawal.
[00:20:27] I love as good as I can. Yeah, you can. I think two of them.
[00:20:35] People spend a ton of time talking about. One is omni channel e-commerce. The second is automation. And then the third is we’ll call it analytics. So. What we are seeing with coronavirus is a change in terms of demand signals and pull signals and there are more goods that does more online demand. So it’s a macro trend. The question there is will this accelerate some of the move online? We think it will, at least for certain certain types of products. Second, automation, as you can see in the coronavirus issues up largely by saying as a workforce issue, it is it is manifesting itself in the workforce and automation is it’s here to stay. It’s coming. It’s driving. So many of the things, particularly you look around the exhibit hall here. So it is likely that this will further accelerate that trend. And then the third is around predictive analytics. And there’s a lot of talk about predictive analytics. We’re not saying a ton of it actually in action being used day to day to drive predictive and prescriptive decision making. And one of the things that that we see is that more and more risk is being made part of that toolset. You cannot have predictive analytics without taking risk into account. And more and more, we’re seeing risk becoming intertwined in planning and execution decision making. It’s making that decision making more predictive, more prescriptive. And again, the coronavirus will accelerate that trend.
[00:22:22] Yeah, we have a almost in arguably we have risk is killing Supply chain. You look at the last 8, 10 years, whenever the right time frame is, Supply chain has to see the tables plotting leadership at the table unlike ever before. And in a similar fashion, I think risk, especially the last two or three years, maybe three or four years, I’ll defer to the experts, seems to be much more important, much more relevant.
[00:22:49] Leadership want to know where that factors into the big and small decisions that’ll be made that are being made. Is that kind of what you’re sensing as well?
[00:22:58] Yeah, that that we’ve been seeing that. But the sea change happens when. The importance is transferred from something that is important but separate to something that is part of Supply chain decision making so that planning systems, execution systems take risk into account in every decision. Only at the time we may if if we’re right about this, we might even stop calling it supply chain risk. It’ll be so predictive analytics. Yeah, that’s what it is. I mean, we call it we call it the risk adjusted supply chain, but that’s a bit of a mouthful, right? I think really what we’re talking about is predictive and prescriptive analytics.
[00:23:33] I think we’re I think we think of risk and in a couple of other terms that you use an supply chain service level or customer experience. I think we think of those in different buckets, but in truth, they are all elements of risk. One or the two. The customer experience and service level are really rolling the dice with your inventory, trying to optimize your inventory to say I’m willing to take some outs, some stock outs in it in a usual circumstance so that I don’t hold so much inventory that I break the bank and then risk being generally and probably until today, at least for me, aligned with those disruptions in the supply chain that you’re trying to minimize the impact of in in in addition to the other risk that you’re intentionally taking?
[00:24:23] Well, I think that the definition of risk should be the difference between what I expected to happen and the and what’s happened. Yeah. Yeah. And and that’s it’s not just disruption. Yeah. It’s it’s any any type of variance. Yeah, that’s exactly right. And that’s supply chain management and you’re right at it.
[00:24:42] If people use that paradigm to look at it, it will. Take on a new a new name because it will be standard risk and disruptive risk taking somehow compile. Exactly. Yeah.
[00:24:54] Ok, so as much as I’d love to pick your brain a lot more and this this conversation is really there is a big picture strategic element based on kind of what you’re seeing where businesses are going today. And then there’s just a grassroots, hey, are the folks on the front? Tippett A spear, folks, you know, in the chairs. Planning, managing warehouse is such a interesting kind of a two pronged conversation, but we have to have you back, sir. But before we wrap up this episode, we’ll make sure where can folks learn more about resilience? 360.
[00:25:32] Very simple. Go to the website Resilience 360 dot com.
[00:25:37] And there’s a great annual report that I think the latest edition just came out in. That part of the webinar was getting your members of your team to weigh in on the top 10 Supply chain risk for 2020. Fascinating stuff there. I think the replay is available for folks that go back to and register with the Rasyid’s 360 team. And you well, you may have a little of a shortage of keynotes coming up because there been so many cancelations. But anything. What’s next beyond mutex? I mean, clearly the Murdochs seemed loved having you fly in here and participating in today’s conversation. What’s next?
[00:26:13] Well, it’s a good question that we’re all getting along of invitations to to talk about coronaviruses impact on supply chain. A lot of different conferences will be speaking at the Association of Supply chain Managers later in the year. We got a no no coming up in the short term.
[00:26:29] So we’re keeping pretty busy in demand in the man also like how you put it. Have you been on CNBC yet? Because I see that comment. I see that in your future. That’s a huge question, right? Arabize talking supply chain. Not yet and soon.
[00:26:44] Supply chain risk or as David put it, predictive ethics. There were lots can be called. Really enjoyed it. David Shillingford, chairman, Resistants, 360. We’ll have to have you back on. So much more that we could dove in and pose to you, but really appreciate your time and safe travels from here. I think you’re departing the area today, right? Yep. Very good. Thank you very much, Scott. Thank you, David. All right. So as we wrap up here, we continue our coverage of Moto X 2020. Great conversation. Yeah, great day to a great interview to wrap up here. Day two, huh?
[00:27:16] Yeah. I mean, you know, this is this has been the topic of the conference since before the conference started. So, you know, there was it was a question being asked as to whether this conference would start. So this is an eminently relevant topic. It’s its impact is going to be long term. And I think it’s great. By the way, for us to be able to access your knowledge, David, because you have, you know, a really boots on the ground kind of viewpoint as well as a strategic viewpoint of what’s going on out there.
[00:27:47] Ian’s data points helping folks get better and better making decisions. That’s right. It’s a big thanks to, of course, our guest, David Shillingford here on the Roseate 360. Big thanks to our audience for tuning in. Be sure to check out other upcoming events, replays of it. Never use other resources at Supply Chain Now Radio dot com fondness and subscribe or ever you get your podcast from. On behalf of Greg White and the entire team here, Vicki and Amanda and claim Michelle hereby is here today. Scott Luton wishing you a wonderful week ahead and we will see you next time on supply chain.
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Watch Scott and Greg as they welcome David Shillingford with Resilience360 to the Supply Chain Now booth at MODEX2020.
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David Shillingford is the Chairman of Resilience360. Resilience360 is an innovative, cloud-based platform that helps companies to visualize, track and protect their business operations. The solution facilitates intuitive supply chain visualization, tracks shipments and ETAs across different transport modes and enables near real-time monitoring of incidents capable of disrupting supply chains.
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