Supply Chain Now Episode 340
On this episode of Supply Chain Now, Scott and Greg cover the top news in supply chain for the week of April 20th.
[00:00:05] It’s time for Supply chain now broadcasting live from the Supply chain capital of the country. Atlanta, Georgia, heard around the world, Supply chain now 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] All right. Good morning, Scott Luton and Greg White with you here on Supply chain now. Welcome to today’s Livestream. On today’s show, we’re continuing our Supply chain Buzz where we’re gonna be bringing to you the latest and most important developments across the global world of Supply chain. You can find the buzz every Monday morning at 9:00 a.m. right here across in these social platforms. And stay tuned for what should be a very informative discussion where we’re looking to raise your Supply chain IQ. Good morning, Greg. How you doing?
[00:00:59] Hey, I’m doing great. How are you doing?
[00:01:01] Fantastic. Great to have you here with me. A quick programing note before we get started. If you join our livestream episodes, be sure to check out our podcast. We published Monday through Friday, sometimes well, Saturday and today as an example, we publish an outstanding podcast feature, Mickey Horner with Rising Gates Hunger. It’s part of our Logistics with Purpose series sponsored by our friends over at Vector Global Logistics. So you can check that out and subscribe wherever you may get your podcasts from. That was a great episode, Greg.
[00:01:29] Yeah, that one was inspiring, to say the least. First of all, I love that whole series. Mm hmm. Right. And Enrique and the team at Vector for helping us bring that. But yeah, what a great story that is.
[00:01:46] Absolutely. Really enjoyed the purpose around that, the passion around that. The Supply chain know how that these nonprofits are really doubling down on it’s so important. But yet check that out to our listeners wherever you get your podcasts from. And let’s see, we’ve already welcomed that. Welcome then my fearless co-host. Let’s do it formally. Formerly Greg White Serial Supply chain tech entrepreneur and trusted advisor Greg. Looking forward to the five stories we’ve got teed up here on today’s Supply chain Buzz, right?
[00:02:17] Yeah, a lot’s happened in in the last week. A lot of let’s just call it Monday morning quarterbacking happening around Supply chain and people. You know what? If you watch us, you know, you’re gonna get my opinion.
[00:02:32] You’re definitely gonna get it today.
[00:02:34] Right before we talk about what April 20th means on this day in history. Let’s give a quick shout out to Pradeep, who is joined in on Linked-In with us when we give a shout out to Neal Shaw, friend of mine from high school. Had a great conversation Saturday. He had some observations.
[00:02:52] Yes. Neal said that guy just shows up wanting to talk about anything.
[00:02:59] It NAILSMA is unbelievably percent.
[00:03:03] But Neal, it’s great catching up with you over the weekend and great to hear about all your business success. Okay.
[00:03:10] Let’s talk about Thaiday. Hi, Scott. Why the.
[00:03:16] I’m telling you, we we have a broader reach than I think we realize and cool to be able to reconnect with folks you’ve known over the years. All the way back to high school, is that right?
[00:03:27] That’s right. That’s right. So it’s neat to hear it need to have conversations that start with. Hey, Scott, it’s been twenty five years anyway. So let’s talk about April 20th on this date. In 1916, the first game at Wieman Park was played. Greg, do you happen to know what WIEDEMANN Park became?
[00:03:52] I do happen to know. And I’m going to go in reverse order. Why? And that’s because I used to live in Phenix, Arizona. And before that, as a kid, I spent some time in Chicago. It’s Wrigley Field. The famous Wrigley Gun family. That’s right. And the Wrigley mansion, by the way, there’s a Wrigley mansion in Phenix, Arizona. Because like anyone smart from the Midwest, they found a place warm to go in the summertime.
[00:04:19] Okay, Rich, you’re still my thunder. I had no idea. I might have to play a new game called Stop Greg White. What it will that. That’s right. We’re going to talk about that. All right.
[00:04:31] On this date, Owen, 19 and nineteen fifty one. The late legendary entertainer Luther Vandross was born in New York. On this date in 1972, Apollo 16 lunar module landed on the moon. Humans would land on the moon. On the moon. Only once more after the Apollo 16 mission. That would be Apollo 17. On December 1972. What was that?
[00:04:55] Greg, shoutouts and fraternity brother Neil Armstrong be the first man to set foot on the moon. Fight LDS forever. Wow. OK. So what? This has to be one of the most thankful days for lovers. Luther Vandross, some of the greatest love songs you will ever hear in your life.
[00:05:12] Legend. Absolutely unbelievable. Want to say hello to St. Clair and Clottey, of course. St. Clair. Great to be with you. I’ve enjoyed seeing a lot of your thought leadership you put out on Linked-In here lately. You know, St. Clair was on a great webinar with us probably two or three years ago. It was really well received, Greg and of course, Claudia. We’re looking forward to her comments and questions here today. All right. Moving right along.
[00:05:36] Important this one episode, right. So you’ve got a Ryder matter.
[00:05:42] Happens while you own this date. In 2008, Danica Patrick won the Indy Japan 300, becoming the first female driver in history to win an IndyCar race. A neat milestone there. Now, April 20th represents 420 around the world, especially in the cannibus world.
[00:06:02] Yeah. Getting your buzz on it and that industry as we know it.
[00:06:07] Greg, you can speak much more informed than I can. That’s a really hot industry. People are doing big companies are doing big things as cannabis continues to be utilized more and more from health care to lots other purposes. And a quick shout out to Colton and his team are going through a lot of growth, right?
[00:06:28] Yeah. So Teamone Flourish, they are a technology seed to sale technology provider for the cannabis industry. Cannabis industry includes CBD with. Is not THC, obviously real cannabis products and hemp and so hemp in the states has become legal again and now we’re back to making rope and you know, all of the other inmate clothes and all the other amazing products that you can make from hemp as well. But yeah, today is 420. I read an article over the weekend that a lot of people are celebrating it virtually.
[00:07:05] Of course, whatever it takes. Right. Whatever it takes. Yeah. Quick shout out Astroturf memory. Joseph, great to have you on, Milda. Great to have all of you with us here today. I’m trying to keep up with our Linked-In. Feed that to my left here. All right. Thereby getting a jump start on Monday mornings. Great. Great for folks to be tuned in with us. OK.
[00:07:30] Well, remember, it’s only morning here. That’s right. That is right. Or baseball or golf.
[00:07:37] So, Greg, with no further ado, let’s dove into our buzz and our first story and I’m going to adjust this screen here. So, Greg, we’re talking about an Southwire relationships in an article from Supply chain. Tell us more.
[00:07:53] Yeah, particularly in these times, supplier relationships are under a lot of strain. Recently, over the last few weeks, we’ve heard the term force mesure. Lot of people have learned what force majeure means. I’ll tell you, in case you don’t know, force majeure basically means we give and we’re not going to adhere to the contract terms because of what are called acts of nature, sometimes acts of God in a contract. Sidebar note on that. By the way, I have a friend named Nirmal Stevenson. And when we did business business with him, he’s from Chennai in India and we were negotiating the contract. And part of that negotiation was terminology, of course. And we had a term in there called Acts of God and Normal sent me a note back and said, I agree with all the rest of this contract, but but acts of God, we need to change that because all that comes from God is good. So I actually went to my lawyers and he said, I’ve never had anybody protest that particular thing, but let’s call it acts of nature for the future. So it isn’t that amazing and a great lesson that I learned from normal and continue to learn from him today. But but this force majeure is essentially saying we can’t because of external circumstances outside of our control, we can’t perform to the contract.
[00:09:22] And and we are basically disowning our performance requirements because of that. So that’s happening a lot. A lot of contracts are really, really complex in the procurement world. Companies are there going relationship based more than contract based. And I think the point of this article, when you jump into at the point of this article, is that if you want to be able to have that kind of leeway in your relationship, either as the customer or as the supplier, you need to have developed that relationship prior to now. Prior to this emergency era and by relationship, it doesn’t just mean Pat on the back in, you know, high fiving one another. What it means is a relationship that shows performance and commitment prior to this event and you get a lot more leeway. One of the quotes from the article said it in in this emergency, it’s too late to make friends. So we’ve talked a lot about relationships and trust over the last several weeks. This is another example of building trust through performance and being able to survive a time like this. So read the article. It’s very quick, very short read. Outstanding. Interesting analysis.
[00:10:43] Hey, I’m going to put you on the spot again, a stump Greg White here. We’ve got a great question from, I believe, one of our listeners on Twitter. Listener NPR. How come? Caryl cain’t restock its retailers. Now, I know this is kind of out of the out of right field for you, Greg. But if you had to I’m centerfielder anyway.
[00:11:05] So I cover the whole thing. You’re already on this board, OK. So what’s your take there? Quick take.
[00:11:17] The supply or the demand at way outstripped supply and continues to, in fact, one of my wife’s most favorite moments was when we stopped into a Walgreens and got the last bottle of of hand sanitizer that they had, not Purell. I think it was Walgreens brand, I’m not sure. But part of the issue is we’ve outstripped the capability of the of the supply chain of not just Purell, but a lot of the other hand sanitizers. And getting that back in line are back online has been difficult. Raw materials are an issue these days. We’re going to talk about this at greater depth in one of these articles as we talk about one of these articles. But a lot of things that have occurred are un precedented. Boy. We say that almost as much as new normal, don’t we? But the reality is and I’m quoting. Somebody. Sorry. Brad Jacobs here should have remembered that name, right? CEO of SVO. I’m quoting Brad Jacobs here. This is a seismic societal disruption, not a supply chain disruption. I mean, if you think about it, we completely stopped. And what didn’t stop was completely inverted in terms of of demand. So it’s just really hard for companies to recover now with workers, not workers not being able to come to work. Or not feeling comfortable to come to work with raw materials being sourced from places where they can’t be shipped from these days. Transportation is difficult and there are all kinds of interventions by government and that sort of thing that are impacting that. So there’s a lot going on. We’ll go into more depth. So hang tight. That’s when we when we take a look at this Investor’s Business Daily article A, want to give a quick shout out.
[00:13:12] Cassie, Onno and Cragg and Cal are all listening to us on Linked In. Hope you’re all doing well.
[00:13:19] Thanks for tuning alliteration there. It’s all planned. Yeah. All right.
[00:13:26] All right. Let’s go to a story number two here. Get my my talking points here. So the food chains, Weakest Link, according to this article, at least, is the slaughterhouses last week here on The Buzz. We talked about some of the meat and pork processing plants that were being idled due to Kogut 19 concerns. Right? Rod. That micro trend is going to is continuing in recent days, as reported by The New York Times in this article. Now, more than a dozen beef, pork and chicken plants have been shut down. So it’s really important to keep perspective here, right? There’s absolutely a lot of concern. There should be a lot of concern about keeping our supply chain workforce healthy and safe and protected. However, there’s over 800 plants that are part of providing processing for meat and poultry and pork. So we’re talking twelve so that the sky is not falling today. But it’s really important that folks look at these plant closures and we all understand the huge importance of protecting our workers. So let’s talk a little more about this here. Yeah. So according to this report, cattle processing dropped 22 percent last week versus a year ago. Hog processing dropped 6 percent versus a year ago. So despite the that these plants that there’s not a ton of them going down, still the impacts being felt in some of these twelve parts, 12 plants, to be fair, are very large cites. The most recent plant closures are at Smithfield Foods sites in Wisconsin, Missouri and South Dakota.
[00:15:06] So, you know, over the weekend, Greg, are all speaking of workforce protection. I spoke to a plant manager at a very large automotive manufacturing plant here in the states. And this plant was identified as essential that they provide parts to the defense industry, as well as to a lot of the commercial industry vehicles that that keep society moving, trash trucks and other things. He told me how tough it’s been to manage the workforce with protective measures in place, a physical distancing, for example, the difference in shifts. Right. Right. They’ve even identified this site here, identified that how they identify the high risk folks and sent them home with benefits. The cost to try to keep the overall workforce to keep protect those folks, but also to keep everybody healthy. So the good news here, based on this one anecdotal conversation, hey, you look for signals, right? Good news is they’re seeing a lot less and less attendance issues. So their workforce is is rebounding, is getting healthier and healthier. So that’s great. But, you know, just that conversation and certainly this article in The Times, Godspeed, all of our men and women that are out there across Supply chain manufacturing, production and transportation, you name it. Of course, our health care workers and our frontlines. It’s good to see that industry get a lot more attention and appreciation in recent weeks. But we want to see the same thing for the Supply chain workforce, right? We do.
[00:16:41] I mean, I think there are a lot of people on the frontlines and they are really doing a great job and and maintaining a great spirit. We talked about this a couple of shows last week as well. I’m actually encouraged and uplifted when I go to my rarely I’m rarely allowed to go to the grocery store, but when I do, I’m I’m uplifted by the spirit of those folks working right there on the frontline. And of course, not to equate it with the health care workers and what they’re going through, but there are a lot of people coming at people in retail and distribution manufacturing. I think know I think another point besides the fact that this is a small, small sample of of sites here in the country is, look, let’s face it, we’re living in hyperbolic times. These companies, many of these traditional media companies are fading in terms of revenue and they have to be hyperbolic to get them to get link clicks and likes and whatever. But the other thing that’s important to recognize is slaughterhouses are, ah, perishable materials. And we are wasting billions of pounds of food right now because of of the parish ability of it. So it’s it’s proper to slow down these right now. And while meats can be in in short supply, they are not out of out of supply. So, you know, this is what it’s like, by the way, to live in. An Eastern European country or that or the Soviet Union back in the day. I’ve missed countries and this is still a lot better than that ever was. But I think we have to put this in perspective that we need to be aware of the waste in the Supply chain as well. Because as we were researching for this, Scott, there were there were an equivalent number of articles that we could have looked at that talked about the waste pile of perishables as well as the shortage of goods. Yeah. Good point. So let’s just keep it all in perspective, as you said.
[00:18:52] Yeah. The context and perspective is incredibly important right now. Yes. Hey, real quick aside, Claudia mentions plastic containers and foods is up 15 percent and organic produce is experiencing a big decline. Interesting comment there, Claudia. Fred Tolbert going back to the hand sanitizer comment from Twitter. Hand sanitizer, Fred says, is textbook Epix beer game stuff, real world bullwhip effect there. Good stuff, Fred. And you know, we manage to spend an hour and a half with three Supply chain students at the University of Georgia last week, courtesy of Fred. He’s doing a lot of mentoring there. And Greg, I can’t wait to publish that EPSA, which should be this week, because I think we’re going to try and do that Friday, right? That’s right. The future is bright. These three students were some of the most measured and engaged and intelligent, organized and all of those things.
[00:19:56] I mean, truly, all of those things. You know, we’ve talked a lot about and we hear a lot about and we’re about to talk yet again about some of the flaws in the Supply chain, and one of those is, you know, is made a lot of manual intervention, a lot of spreadsheets, that sort of thing. I think this next generation, because they are so technically savvy, they are going to demand technologies that help to prevent and solve rapidly these kind of issues.
[00:20:25] Quick shout out, Bob, g.d. Interesting discussion here. Only 10. Thanks for joining us there. Appreciate that. All right. Moving right along. Let’s dove into the third topic here, if I can find the button, Greg. All right. We’re talking about coronavirus business closures and its impact on Supply chain. Tell us more, Brick.
[00:20:46] Yeah. This is the one. So this is another newly minted expert in Supply chain from investor business. Take a look. This article makes some really good points. If you are in Supply chain today, I’ll warn you, it will probably irritate you pretty substantially and you’ll be a lot. You’ll say a lot of things like yeah, of course that’s true. But. Or Where have you been for the last pick? The amount of time you’ve been in Supply chain. But there are some.
[00:21:21] Some good points made in this, and one is that Lehne and just-in-time inventory is a. Is it a drag on the supply chain because there is very little backstop, particularly at manufacturing?
[00:21:39] And that is part of the issue that we’re seeing, as Fred alluded to, part of the bullwhip effect, store runs out. Distributor runs out. Manufacturer doesn’t have any back stock and has to pump up production also. And we’ve talked about this for weeks now. This was my where have you been moment in this article, offshoring particularly to China and also having a single source for four goods. What this article talked about is that many experts feel that and I’m quoting here, massive overhaul is needed of the Supply chain. I really think massive overhaul is not necessary of the supply chain itself. It’s more of the strategies around supply chain and the risk the companies formerly didn’t see as risk that they’ve been taking. But. You know that maybe picking nits at this point, but that’s it’s an important viewpoint so that companies do awaken to the fact that they have been a bit careless and maybe a little bit cavalier with how they’ve managed their supply chain largely to the to save costs. And that’s the point of this article. But it can’t be just about minimizing costs. It has to be about balancing, balancing inventory cost with serviceability.
[00:23:09] And one perspective I want to point out here is that this was almost solely researched with manufacturers. And the dynamics of manufacturing retail are substantially different than manufacturing. Supply chain sorry, are substantially different than the dynamics of retail and distribution. Supply chain. First of all, the margins are much, much greater at manufacturing. And secondly, distributors and retailers do build in safety stocks appropriate to the amount of demand fluctuation that they typically see and targeting. You know, the level of of service that they want to provide to their customers, which is of course, always really very high at one counter. One other counter point that I think is important is that particularly at retail safety, stock is often buffered by by presentation stock making the shelves look awful because as an old time retailer, if you look like you’re out of business, you are out of business. That was sort of the mantra of retail. So you might only sell one a week or even a month, but you’ve got three on the shelf because that’s what it takes to make the shelf look full. There are some alternative impacts there as well.
[00:24:24] Couple of quick observations. The it’s interesting how they use the word unmask in the title. A bit of a subtle point there. It’s kind of weird. Claudia states Deloitte outlines a concept they are calling digital supply networks as the redesign of supply chains and memory members. Got a question for you, Greg. Are you ready? I’m ready. All right. Some memory asks, how do you make up the costs of lost revenue due to enforceable extra costs for storage of items imported overseas and are being held up for clearing at customs? So should she. She’s got second question. Bullets. Any initial.
[00:25:12] I think that goes to detention at the ports probably. Right.
[00:25:17] You read that to more and more to some memory ask how do you make up the costs of lost revenue due to enforceable extra costs for storage of items imported overseas and are being held up for clearing customs?
[00:25:34] I don’t see you making that up. All. I mean, in a time of crisis. Right. We just talked about force majeure and things like that. I think you wind up eating it. But I have to tell you that if if anyone needs to start to do their part, it is these ports and they need to relieve the detention fees where goods simply cannot be moved because government the government has intervened to essentially stop commerce. So I think that I think what companies need to do is they need to get together and go back to the ports and and customs facilities and and, you know, beg for mercy, whatever you want to call it, that they need they need to go back and try to get some records from the from the ports.
[00:26:24] Do you think force majeure will be in play in those types of situations?
[00:26:28] It depends on the contract. And as you know, the thing you’ve got to think about is ports are government entities unto themselves. So think about this. Here in Georgia, you’re asking the state government. To give you relief from something that the federal government did to you and to them. So I can see that being very tough. I can tell you this, the federal government in the US has not laid off a single person that I’ve heard. So, you know, while the rest of us or the rest of us are are giving back to society, government employees even who are not working are continuing to be paid.
[00:27:13] Well, hot takes a Greg White. So Claudia mentions, can you cancel those orders? Perhaps. I don’t know. But great question. Memory with another.
[00:27:23] Somebody might want visas or. Yeah, I think that would be tough. Once they’re in the port. Yeah. Great. There might come a point though, where it becomes cheaper to let them have the goods at the port and just disassociate yourself with them. I can imagine it coming to that.
[00:27:39] I think that some of that was going on, you know, a month or so ago when the Chinese ports were you know, they didn’t have enough manpower to handle all the containers coming in. A lot of containers, especially with produce and food kind of set and Rod in the port, I believe.
[00:27:54] So easier to do on that side. Right on the on the export side of the ocean if you’re.
[00:28:02] So, Josh, before we move on to story number four, Josh lubar, who is with Sonin, which is an outstanding innovative energy company, but also a manufacturer, made a lot of battery life, modern forward looking battery products. He came on as as an interview guest. And one of our last Today manufacturing episode said to our audience, if you haven’t checked that out yet. Please do an outstanding episode. Josh asks this morning, Greg and I. Out, out, out. Sheer first thought here and we’ll get your take.
[00:28:35] What do you think? Little rascal.
[00:28:40] What do we think will be the key takeaways for all material manufacturers going forward? Post Kogut, 19. Or as Gartner is calling it, the aftermath that we’re hoping to get into. I’m not sure if I’ve ever looked forward to the aftermath of anything, but we are in this. That’s right. So, you know, based on a lot of conversations we’re having from industry leaders, especially procurement and supply chain leaders, you know, price has been so dominant when it comes to sourcing raw materials that oftentimes it seems at generalization warning here that procurement supply chain leaders are looking past other potential risks and concerns to to address that need to get the lowest cost, lowest landed costs possible. And based on what we’re hearing and seeing and some of the conversations both in Supply chain leadership and their valuable advisors, legal and otherwise, that are helping them kind of figure out the current solutions for addressing issues and new strategies, I believe that while it may come back in a couple years, I think price is going to be more balance in terms of the priorities that that folks consider when when sourcing raw materials for their their simple global supply chains. I think we’re going to see a lot extra lot more vetting going on in terms of country of origin, origin in terms of quality, in terms of safety and a lot else. That’s right. Legalities. Yeah, but Greg White, what else would you share on that? Great question from Josh.
[00:30:20] You know, I think I think that this. Seismic societal disruption. We need to stop saying that the pandemic is causing this, by the way, let’s call it a seismic societal disruption.
[00:30:35] I think this seismic site, societal disruption, is merely a catalyst for what should have been happening anyway. And aside from the fact that it is going to crater a good number of businesses, I think it’s time that this sort of recognition occurred. Right. The single sourcing that we talked about, the ethicality and Supply chain, I mean, last week we talked about the continued continuation of forced labor, which is a euphemism for slave slavery and ethical sourcing and sustainability and provenance. You know, Daniel Stanton continues to talk about my favorite and Chris Barnes favorite word, provenance. The provenance of those sorts of things are going to come to the fore and they should they have been attempted to be brought to the fore by companies in the past. But now I think we’ll see a universal more universal demand for those sorts of changes in this fight that will be the most productive aspect of this shift in the supply chain in the new normal.
[00:31:49] A lot of good to your point, a lot of good and a lot of improvement and a lot of industry transformation that will benefit. Everybody is going to come out of this. I’m convinced there’s still a lot more research and data in terms of what has taken place and what is taking place and and what changes need to be made. But I’m convinced that there’s a lot there’s a big silver lining here, despite all the pain a lot of folks or companies are going through. Hey, St. Clair has a great comment here. The relatively recent earthquake and tsunami in Japan exposed the risk in the Toyota supply chain and their practice of clustering suppliers near their manufacturing plant. As a great comic, we sat clustering in automotive and aerospace amongst other industries. And we are going to have to revisit that long that long held strategy of the clustering effect.
[00:32:39] Yeah, I agree. To go back real quick to the Investors Business Daily article, one of the things that they noted was PDG, Procter and Gamble. Has three hundred and eighty seven suppliers of over 9000 materials in China alone. So talk about clustering. And I think it’s well documented what the issues are with their supply chain fulfillment right now.
[00:33:04] Well, let’s shift gears here and let’s talk about a global supply chain that I my guess not many folks are familiar with. I know I wasn’t on for 20, of course. OK. So cartels are scrambling as the virus NARAL’s global drug trade. I got to tell you.
[00:33:24] You know, what about OPEC? Right. That’s right.
[00:33:29] Kelly and other cartels, right?
[00:33:30] Yes. Speaking of blindspots. I got it. This was certainly one for me. I’ve never read analysis on the illegal drug trade and the global supply chain there, but I guess we all have our blind spots, right? Patel. Yeah. So for starters, this report talks about how critical Chinese producers of chemicals are in the manufacturing of illegal drugs, especially for drug cartels in Mexico. And as you might have, as you might imagine, the supply base for the international drug market, of course, has been deeply impacted by the same corona virus that is impacting all other global supply chains. But get this. So according to this report, massive amounts of ingredients to make illegal drugs can be traced to a single state substance subsidized company. And we will hand China, of course, will hand is what many consider the epicenter right. Of the global pandemic. And there’s still a lot of research in root cause analysis going into that. But this large city, as we talked about on an episode with Rasyid’s 360 couple of months back, this huge city has a very robust manufacturing sector that, of course, that was shut down after the outbreak earlier this year. So the article states, quote, advertised prices across China for precursors of fitt.
[00:34:50] Now meth, amphetamine and cutting agents have risen between 25 percent and 400 percent since late February. In quote, Matt comes from Logan Pawley and their analyst. So the raw, the precursors of fentanyl, meth, meth and the cutting agents associated with with these products. Those costs have risen 25 to 400 percent, depending on what you’re looking at. And that comes from Logan Poly, an analyst at the Center for Advanced Defense Studies. So a huge upsurge in rought your raw materials costs, right? So what’s the impact been in the illegal drug market here in the states? And I’m curious, I’m not sure where they get these data points wrong, but the incredible reporting, cocaine prices are up 20 percent or more in some cities. Heroin has become harder to find in Denver and Chicago, while supplies of fitt now are falling in Houston and Philadelphia in Los Angeles. The price of methamphetamine has more than doubled in recent weeks to eighteen hundred dollars per pound. I got to tell you, I’ve never seen any reporting on the illicit drug market supply and demand. But so maybe this is part of that that silver lining. We talked about in last last segment, Greg, we think.
[00:36:14] I don’t I.
[00:36:16] If only we could cut it off. I think, you know, what immediately came to mind is this is yet another indicator of what a bad actor China is. Mm hmm. Right. I mean, I don’t know if everyone out there has seen Breaking Bad, but, you know, as long as you’re bingeing. Watch that. And let’s look at what goes into it. As soon as you said chemicals and making it, I instantly thought meth. Bad stuff. Yeah. Fentanyl is deadly. So there’s the reduction of of any use of that. I’m all for it. But, you know, these are such powerful agents. It’s kind of like it’s not unlike other intoxicants. You know, the demand for marijuana is up dramatically. The demand for alcohol is up unbelievably. You know, people are self-soothing with this stuff. And, you know, the fact that the prices are going up tells you that the demand remains right. That’s basic economics. So I wish there was a way to figure it out. I also wonder if. If you can do the research that is credible to do this, then that is credible to provide these statistics. Where does that information go or where does the source of that information.
[00:37:43] Interesting. I don’t know. That’s a good question. I own the alcohol increase that you’re talking about. The man and I’ll call two hundred forty seven percent is what Amanda just reported. And our and our research team, Crackerjack research probably doesn’t seem like it, but clearly I’m not drinking enough.
[00:38:02] All right.
[00:38:03] So interesting stuff there. And clearly, as the story illustrates, everything has a supply chain. And, you know, Breaking Bad, if any of our listeners have not seen that series on Netflix or are looking for something that’s very binge worthy. What an incredible series that is. And it’ll open up your eyes to some of the things you didn’t realize about the drug industry and its supply chain. Yeah. All right. We’ve got a couple of questions here. Claudia is recommending Selena. An expert, I guess, probably in. She’s a global risk thought leader, maybe you’ll have to have her and Claudia on one time on one of our future livestreams. We’ve got a question here from a comment or question here from memory. Again, memory is on fire today, by the way. I hope you’re doing well. She states one of South Africa’s major pharmacy companies has had to shut down some of their local branches due to employees contracting. Koven, 19 Woodroffe Two options be better suited to ensuring both customers and employees are not highly exposed to infection. I think we’re we’re seeing we’re seeing a lot dropped. Two options here in the states, not necessarily for pharmaceuticals, I’m aware. I’m sure them I’m sure that’s taking place, but certainly in the in the food and beverage industry. Right.
[00:39:24] Yeah. Certainly there and you know, I have I have like everyone in the Atlanta area, probably in any major city in the states. If you if you come to Four Corners at any intersection, three of them have either a bank or a drugstore on them. And there was a period and I don’t know if they’re still used where you could do drive through prescription pickup. I’m thinking of a particular store near my house and I don’t have a prescription, so I don’t really know. But I know they had a drive thru at one time. I just don’t know how popular it is. But that would be yes. That would be a great opportunity. Yeah. What’s really interesting is how companies, how differently companies and even locations are. Managing the managing this crisis. I was in two different stores from the same auto parts brand yesterday and one had basically barricades that kept you six feet from their registers and the other had just plastic plexiglass screens in front of the register and you could walk right up to the register in the very same chain, these stores maybe eight miles apart. So it’s interesting that it’s up to management, individual management in a lot of cases to determine that.
[00:40:47] Absolutely. You know, speaking of different methods, we may have talked about on earlier livestream, we got my mom on Instacart. Right. Talking about ways to isolate. And those brave, brave folks, Instacart, keep you know, we were talking earlier about folks that keep our industry moving forward. They they seemingly haven’t missed a beat. I know we use them here where we live. And, you know, especially for at risk, high risk folks kind of keeping them out of the grocery stores. Yes. Martin has been such a great, outstanding service, a big shout out to the good people out there.
[00:41:24] At one point on that, I think your friend Neal Shaw mentioned that. And this is something for people to be aware. They substitute products. So if you want a product and the store doesn’t have it, they substitute it. Quick shout out to the folks at Instacart, allow people to be unfulfilled rather than to take an X. Take a a substitute. Yep. Point old brain salty.
[00:41:53] All right. We’re going to move to our final article here today and really appreciate everybody’s comments and engagement and questions. You know, we’ve got some some Curveball questions today for sure, but keep it coming. All right. So, Greg, let’s talk about what ex-POWs CEO, what his outlook is.
[00:42:11] Yeah. So, first of all, if you don’t know who Brad Jacobs is, the CEO at Expo, read up and find out. He is not only the CEO of a major company, but he’s a major investor in the marketplace. He’s got his finger on the pulse of all things supply chain, like our friend Ben Gordon at Cambridge Capital. These are probably two of the most prominent supply chain focused investors and experts that you can find. So Brad Jacobs, in a letter to shareholders, I’m just I’m sorry. There was a lot here. So I’m going to read this. This is not pre rehearsed. OK. He said twenty 20 is a lost year and that is a quote. But he is bullish on late twenty twenty and even more so on twenty twenty one. So there is good news here. The thing you have to recognize is that Brad was as late as February. Considering breaking XPO into somewhere in the neighborhood of four to six different businesses because he wasn’t getting the share multiple that he wanted out of Expo as a conglomerate, and he felt like he could provide greater shareholder value to he and his fellow shareholders by breaking them into LTL and other businesses separately and getting each of the respective market multiples for those for those businesses on March 20th. Happy birthday to me. On March 20th, he announced that he was he was stalling that plan because of the Cauvin situation. So that plan has been put on hold.
[00:44:00] Anyway, he he is bullish on things. He is the one who stole the quote from seismic societal disruption. I think it’s important for us to recognize that we aren’t. We are. What we have to recognize is that this is more about governmental intervention in societal operation than it is even about the pandemic. To give you an example. If anyone’s aware of in Kove 19, don’t live. This brilliant kid in Washington has has statistics site online and something like 18 million tests have been done. Tests have been done worldwide and there are about 2.4 2.5 million cases of COVA. That means they’re 70. They’re like 15 and a half million people out there with something else that resembles Koven. So around five times as many people have, what’s not covered as have what is Koven. So maybe we should be praying for those poor souls as well. But in any case, this is more the change in in commerce is more about the response to the pandemic than the pandemic itself. And that’s part of the statement that he makes. But he said this is something we’ve said in the past week, but I’ll reiterate it for the for the viewers today. But he said that. XPO and many other companies, I’ll say many other companies were ready for something like this because of. And he’s just mentioning things in the last 20 years, the dot com bust, right. 9/11 and the Great Recession of 2008. So these kinds of disruptions do come around every 10 years or so. This one largely governmentally induced, but but also can be halted. And we’re starting to see signs of restarting the economy in Europe and China, of course, and and now in North and South America. So anyway, the good news is he’s bullish. Megapixel was his words full extent on end of twenty, twenty and a makeable in the long term.
[00:46:24] So for business.
[00:46:27] So let let’s do one of my infamous polls. On a scale of one to 10, what’s the best way? I’d love the poll. Our listeners get a sense of how bullish they are. So what’s the best way we can frame that up, Greg? If we were to ask our listeners to give us a 1 to 10 based on how bullish they are with 10 being the the whereas that bull statue, I think it’s in Chicago. Right. Or is it New York? No, it’s it’s Chicago. Is the Chicago. Okay. So that’s like the stereotypical image of a property bust, bill.
[00:47:05] What’s that? They’re probably everywhere now.
[00:47:07] But probably so well. So to our listeners, give us from on a scale of one to 10 on how bullish you are safe for, say, for the second half of twenty twenty first half of twenty. Twenty one. One meaning not bullish at all. Lots of more shut down, lots of economic loss and 10 being as mega bullish as Brad Jacobs is. Weigh in. Give us on a scale of one to 10. Tell us where you were, what you think lies ahead for us. And as we get those in, we’ll share.
[00:47:40] All right. Mike’s here. Where are you? Let’s turn the tables on you. Oh, boy.
[00:47:49] Where are you, first of all? Can I. Can I? Let me redirect another question to you first. Do you would you agree that twenty twenty is a lost year?
[00:48:01] Oh. I think it is next to impossible to wreak to recover to the extent where 2020 is going to be a positive economic. I mean, you know, we’ve seen unprecedented. There’s that there’s that you word again and loss and shutdowns across global supply chains and beyond. Right. Professional services, financial services. I mean, think of all the other activity that has been lost. Yeah. So I don’t you know, I’m an optimist. I really I think and believe very positive, fully rooted in facts. Right. But I got to tell you, it’s tough to recover from what we have lost and what we’re still experiencing. Because when when is everybody going to be really when is beyond industry? When is society going to really feel like, you know, we can get back to that new normal and that it’s gonna be it’s gonna be late in the year and that just is as tied to so many, so many economic. Activities and wealth generating activities and production. So I hate to call it last year, but it’s not a good year. Not a good year is obviously.
[00:49:17] And and on a scale of one to 10 Scott Luton. Mm hmm. How bullish are you? So to be clear. Brads said he’s bullish mega-deal long longer term. So that’s probably well past twenty twenty one body’s bullish on end of this year into twenty. So how bullish would you say you are?
[00:49:41] I like to hear twenty twenty one. I like Tevin Tavern’s answer here on LinkedIn. I’m not just steal it blatantly. So Devin says he is a six.
[00:49:53] He’s a baby boomer with a virus that needs a vaccination. And then it’s going to grow into a bull to help with other cattle breeding the dust.
[00:50:01] What TV chatter get him on the air.
[00:50:05] Think of nature and hope your well, devins out leading one of the largest and most better.
[00:50:14] So you better mentioned them well.
[00:50:16] So tavern’s with FedEx doing big things out there, helping us get past this current environment. St Clair also is at a 6 creg. Hello, Craig. Great to see you. He’s 7 to 8, so he’s pretty bullish. Tevan also says that Brad Jacobs is speaking to his shareholders. It’s a good point. Good observation there. All right.
[00:50:37] So it’s a rah rah mome, right?
[00:50:40] We’re a quick read. A couple others P Peter is a 7 for Q4 and. I can barely read this small type. He’s a 7 or he’s a 7 for Q4 8 overall for 2020, I believe is what that is. And Tevan says that the second half of 2020 will be recovery. And I’m hoping mastication. I’m hoping that, you know, once we break into June and July and certainly August, everything won’t be back. Yeah. We know that the new normal is going to be new and it’s going to be that way for a long time. But I’m hoping a lot of the activity does free up into the second half so that we can we can make up for a lot of the losses first half of the year. So I like how he thinks there. Claudia says for some business, yes, a total irrecoverable loss, but maybe they were on shaky ground regardless. S s a great comment because, you know, there’s been a lot lots of business models, lots of industries, lots of organizations run a certain way that we’re already at risk. And we talk about at risk so much from a health care standpoint. There’s a lot of at risk in industry and in business. So, Claudia, it’s a great point. All right.
[00:51:57] Concern is, is the ones that. So Nordstrom recently signaled that. They’re struggling, right? And that is of all the department stores and we’ve talked about a lot of department stores. That is one of the more responsible. So just a week ago, an industry analysts. Forgive me, I don’t recall specifically, but an industry analysts said they had about eight months worth of cash. They could survive eight months of complete shutdown. Macy’s on the other end is around four and a half months as reported by. That was reported by Kathy Robberson.
[00:52:34] One of the best leading analysts in an all supply chain, we believe might be a little bit partial, but she is Graffy.
[00:52:41] That’s I should tell you, did she tell you to hush hush? She’s great. Big fans.
[00:52:49] But. But in any case, that it is going to be a difficult.
[00:52:55] Recovered memory just made a great common here twenty twenty is a year of re innovating business models, kind of like learning to walk again. Memory. Great comment there. And let’s see P. Air. Let me see if I can. So peire states with the lost half year, the standard ERP system, we’ll look at the recent supply demand numbers to drive inventory planning. It is critical that Supply chain professionals enter see the automatic output, especially if there is a rapid recovery. That’s a great observation.
[00:53:30] I think that great observation in the bigger portion of that observation is don’t use your ERP to manage inventory. Sheer our error sound technological solutions that are much, much more robust. And that one of the things that I think will come out of this is people will cease to use subpar technologies to manage this Subha technologies and processes, like I said, no manual, hopefully no more spreadsheets. And let’s do let’s not settle for what an ERP can give us. Let’s find a specialist focused niche technologies that can duse some aspects of the business better yet.
[00:54:10] Claudia states Neiman Marcus was leveraged to the gills and we see what happened today. Great point that Claudia. Okay. As much as we hate to do it, we could do this all day. Hopefully the our listeners are enjoying it as much as we are loved. We’ve had some really shrewd and insightful observations from from folks to in especially in mainly, but really appreciate that it makes it makes for a smarter conversation. All right. So we’re gonna move into offering a couple resources that we hope you’ll join us for. You know, we we are our team is certainly working in overdrive to meet the demand of of from the markets. Right. Folks need and they demand accurate information and best practices for navigating through these these unprecedented times is unique times. And we all have known that visibility and supply chain has been in demand for years. And it really lack of visibility has really come back to bite us here in the last last few months for sure. So tomorrow we are slated to have our webinar with E.M.T. By Reuters events on the global visibility report, kind of where we’ve been, where we are and where we’re headed. So we have moved that event from last week to tomorrow. We’re having a few Logistics challenges. It’s an international event if obviously is based over in London. We may have to move it back again. But if you register for the event regardless, you’ll be kept in the loop of when we’re going to produce it. So Tomar currently is slated for 12 noon Eastern Time, Eastern Daylight Time tomorrow, Tuesday, the 21st of April. And looking forward to hearing their thought leadership on all things visibility, right, Greg?
[00:55:51] Even the information supply chain is under duress right now. My wife will really appreciate that. I would really appreciate that because I want won’t be able to join you because tomorrow is my wife Vicki’s birthday, April 21st. So I’ll have to take her to lunch. During that, I get to take her to lunch. And so if we move that back.
[00:56:15] We would both appreciate that.
[00:56:18] Well, happy birthday to Vicki. She is a cherished member, extended member of the team, I guess. And we really enjoyed our trip out to Las Vegas with the reverse Logistics Association and all of her collaboration there. So hopefully you enjoy the day tomorrow. The two of you in the family. OK, so the other thing, you know, answer can be really frank and transparent about this, because if there’s anything that if there’s been something that I’ve personally struggled with is maintaining a certain tone during these times. Right. There’s a there’s a lot of suffering. There’s a lot of pain, you know, from a health care standpoint, from an economic standpoint. And no, that’s not lost on any us here. Supply chain. Now, however, well we’ve also heard a lot in the marketplace is a need to decompress and the need to de-stress and kind of let the hair down and take a departure from a law that covered 19 focused content and conversations that we’re all having. So in that spirit, we’re really trying to serve that need. So Greg, this Friday we are conducting our first Supply chain trivia contest. Fiat Livestream is new. We’ve got about seven different technology platforms that we hope are all going to play together very nicely. But it is going to be departure is going to be a fresh breath of fresh air, some friendly competition. And we invite all of our listeners to come check that out. You don’t have to sign up. But if you sign up via our Web site or by shooting an email to Amanda there and you see her e-mail address, we’ll send you some details of how it’s going to work. That might be really helpful. We’re offering gift cards for winners. I think the winning prize, Gregg, is going to take home a $200 gift card. That’s that’s not too bad.
[00:58:09] Well, and this is a live event, correct? That’s right. Can you follow us on spot on LinkedIn or any other platform? You’ll be notified when this starts.
[00:58:21] Absolutely. And I really hope, given this highly intelligent audience we’ve had here today. I hope we’re going to see a lot of folks, a lot of those same folks participate in what should be a hotly contested week. We need to come up with like a a trivia championship belt or something for the winner.
[00:58:40] Ok, Wayne, I can tell you that. I know I will.
[00:58:43] Well said to our audience. We invite you to join us again. It’s a departure from all the other stuff that is coming with the environment that we’re all dealing with. It is going to be a live event or go live 4:30 Eastern Daylight Time on Friday, April 24th. We may have a little bit of music maybe from our friend. We’ll hear a way again like we did a couple weeks ago. But most importantly, it’s gonna be a fun, friendly supply chain and business trivia contest. And to make it easy, you can either you can join in the moment and we’ll tell you how to plug in or if you want to get details of it earlier. You can shoot Amanda an email or register, which is first name, last name, e-mail address. Very easy at Supply Chain Now Radio eCom. Make sense you Greg White?
[00:59:28] It does to me. Can I ask just one quick question? The suran Oughton and I’m sure in the forefront of our viewers minds. Should they bring a beverage?
[00:59:41] Absolutely. That’s the easiest question we’ve got all day today, I believe.
[00:59:45] Yeah. Beverages and pizza that will get people there, right?
[00:59:49] Absolutely. And it looks like we are publishing that direct link to we say register. It’s not really you’re just providing first name, last email so we can send you a couple of details. We’re using a platform called Kahuta, which is a really neat way of of of running group trivia or even running educational events. But looking forward to that this coming Friday. OK. Greg, as we move the wrap up, what did we miss?
[01:00:18] We missed we missed a really witty comment by the dog. Clay Phillips 4/20 is Cannabis Celebration Day for 21 National Drug Tests Day.
[01:00:33] And for me, don’t. Don’t panic, folks. But wouldn’t that be hilarious?
[01:00:39] This it is funny. And for twenty nine, I believe, is National Supply chain Day, which will be part of livestreaming from point A at the GP center here in Atlanta. Right.
[01:00:50] Is the founder of National Supply chain Day, Mary Kate Love. Yeah. So join us and meet the founder of National Supply chain Day.
[01:01:00] That’s right. And Tevan said that I got the answer to your question wrong. He said bring numerous beverages, not one.
[01:01:09] So. All right.
[01:01:12] Good stuff there, Tevan. OK, so. To our audience, Scott, really, really appreciate all the engaged listenership here today. A lot of a lot of folks were going to get on the livestream at some point soon to share their insights. So thought leadership. Again, you can check out these resources we’re talking about at Supply Chain Now Radio that com find us and subscribe wherever you get your podcast from. If you enjoy our livestreams. We’ve got some outstanding podcasts for publishing this week, including the Rise of Gates Hunger, which which took place today. The UJA Students A.I.G.. We’ve got Yorga Yorga from our Point publishing tomorrow and to talk about a passionate supply chain leader. Drive and Change was an excellent interview. Rob Cook too.
[01:02:03] I mean big NASA fan. Just oh yeah. I mean unbelievably interesting.
[01:02:11] Absolutely. Yep. And of course, be sure to join us next Monday at 9:00 a.m. Eastern time for the Supply chain buzz on behalf of Greg White and Amanda and the Dog and Vicki, really the whole team here at Supply chain now wishing you nothing but the best to our listeners. Stay safe. Please follow all of the guidelines precautions that we’re getting from our health care experts. And remember this, Greg?
[01:02:38] Ryder days lie ahead.
[01:02:39] That’s right. And on that note, we’ll see next time here on Supply chain now. Thanks, everybody.
Prefer to watch the podcast in action rather than just listen? Watch Scott and Greg as share the top stories in supply chain in the Supply Chain Buzz.
Greg White serves as Principle & Host at Supply Chain Now. Greg is a founder, CEO, board director and advisor in B2B technology with multiple successful exits. He recently joined Trefoil Advisory as a Partner to further their vision of stronger companies by delivering practical solutions to the highest-stakes challenges. Prior to Trefoil, Greg served as CEO at Curo, a field service management solution most notably used by Amazon to direct their fulfillment center deployment workforce. Greg is most known for founding Blue Ridge Solutions and served as President & CEO for the Gartner Magic Quadrant Leader of cloud-native supply chain applications that balance inventory with customer demand. Greg has also held leadership roles with Servigistics, and E3 Corporation, where he pioneered their cloud supply chain offering in 1998. In addition to his work at Supply Chain Now and Trefoil, rapidly-growing companies leverage Greg as an independent board director and advisor for his experience building disruptive B2B technology and supply chain companies widely recognized as industry leaders. He’s an insightful visionary who helps companies rapidly align vision, team, market, messaging, product, and intellectual property to accelerate value creation. Greg guides founders, investors and leadership teams to create breakthroughs that gain market exposure and momentum, and increase company esteem and valuation. Learn more about Trefoil Advisory: www.trefoiladvisory.com
Scott W. Luton is the founder & CEO of Supply Chain Now. He has worked extensively in the end-to-end Supply Chain industry for more than 15 years, appearing in publications such as The Wall Street Journal, Dice and Quality Progress Magazine. Scott was named a 2019 Pro to Know in Supply Chain by Supply & Demand Executive and a 2019 “Top 15 Supply Chain & Logistics Experts to Follow” by RateLinx. He founded the 2019 Atlanta Supply Chain Awards and also served on the 2018 Georgia Logistics Summit Executive Committee. He is a certified Lean Six Sigma Green Belt and holds the APICS Certified Supply Chain Professional (CSCP) credential. A Veteran of the United States Air Force, Scott volunteers on the Business Pillar for VETLANTA and has served on the boards for APICS Atlanta and the Georgia Manufacturing Alliance. He also serves as an advisor with TalentStream, a leading recruiting & staffing firm based in the Southeast. Follow Scott Luton on Twitter at @ScottWLuton and learn more about Supply Chain Now here: https://supplychainnow.com/
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