Supply Chain Now Episode 381
The Supply Chain Buzz features Scott and Greg as they discuss the top stories in supply chain this week.
Intro – Amanda Luton (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 technologies, the best practices and the critical issues of the day. And now here are your hosts.
Scott Luton (00:29):
Hey, good afternoon, Scott Luton, Greg white with you here on supply chain. Now. Welcome to today’s live stream, Greg. Good afternoon. How are you doing?
Greg White (00:38):
I am doing well. It’s been a big buzz day already, which is why we’re having to roll a little bit late today, right? Yes. The Sapphire now ticked off today and wow. What an event and, um, what an undertaking.
Scott Luton (00:56):
Yes. And we’ll, we’ll touch on that later on, you know, I got a text from my mom at 12 noon and she said she could not find the bus. I knew I was in trouble, but to Greg’s point, we did push our tie. Our start time back a couple of hours for the big event that is SAP Sapphire now converge. And we’ll talk on that.
Greg White (01:17):
Okay. I found a pretty good buzz this weekend.
Scott Luton (01:21):
Okay. Uh, we are, uh, talking about the supply chain buzz today and, and this is going to be start weekly Roundup of some of the top stories in the industry, along with, uh, a passionate take, uh, usually coming from the other side of the screen. But, uh, you know, we’re here to do one thing and that is help increase your awareness and increase your, uh, your supply chain accurate. Yeah. So,
Greg White (01:47):
um, we’ll let you know if it’s news or opinion always
Scott Luton (01:51):
say, Hey, quick, programming it before we get started here. If you enjoy our live stream episodes, Hey, check out our podcast, wherever your podcasts from today, we published the first episode of a new mini series, a limited run series called this week in business history. We dove into the story of Charles Goodyear, as well as a big blue IBM and many others. All of them were tied to events that took place the week of June 15th, going back several hundreds of years. So check that out wherever you get your podcasts from. Uh, Greg, did you listen to that yet?
Greg White (02:24):
I haven’t yet. I’ve been swamped trying to get everything prepared for today and you know, preparation is not my gift.
Scott Luton (02:32):
That’s okay. That’s all right. Well, Hey, before we dive into, and when we share one story, when, uh, say hello to a few of the folks that are tuned in Stephan one, mr. Liable, we’re going to have to give Stephen a nickname. He is to these live streams is always contributing. Uh, Stephan hope. This finds you well. Hey, Kumar Kumar is tuned in via LinkedIn, uh, Kumar. We’d love to know where you are tuned in from. Uh, so, but thanks for joining us. Ah, let’s see here, Kathy, from Huntington beach, California. I bet it is gorgeous out there, Cathy. And it’s almost lunch time in Huntington beach to surf surf highest today. That’s right. Uh, we gotta find out. I don’t know. I think, uh, let’s see here. The comments are, are popping up so quick. I’m having a hard time keeping up, right? Hey, cookie cookie says Jason Moss with Georgia manufacturing lines. GMA always speaks highly of you guys thought I’d listen in cookie. I hope we don’t let her down. That’s right. We can’t let Cokie down, but welcome. And thanks for joining us here on the supply chain buzz. All right. So let’s pause there. And I want to dive in to, well, a little bit of this day in business history. So Greg, do you happen to know who this gentleman is? I’m going to guess that that’s mr. Goodyear, the blimp gave it away kidneys.
Scott Luton (04:00):
So speaking of Charles Goodyear, who did not make an appearance on today’s podcast on June 15th, that’s today, June 15th, but 1844 Goodyear would receive a patent from the U S government for the vulcanization of rubber. And that’s from that Goodyear coined himself. Uh, it con the patent came on the heels of trials, tribulations, hundreds, if not thousands of experiments by the one relentless Charles Goodyear. I wonder if he ever went by Chuck, but do you have any idea, Greg? Uh, why there was a need to vulcanized rubber, any guesses I do, but I want you to say it. I have a little trivia of on, on rubber and tires myself. So let’s let you share your part. Well, first off it’s a vulcanization comes from the Roman, got a fire Vulcan, and that’s where, uh, the, a term from, so back in the early 19th century, rubber was really popular.
Scott Luton (04:59):
However, because it was not vulcanized yet, uh, in the summers, it would melt and be just a stinky mess. And in the winters, it would be really hard and it crack. So that was holding the rubber industry back in many ways, vulcanization, which was really discovered on accident, because I believe as the story goes, Goodyear knocked over some rubber and some, uh, chemicals, including sulfur. And it happened to hit on top of an oven. So it got heated and it led to some properties at that. He’s like, Hey, we’re all to something here. So, uh, serendipity, which is a beautiful thing, is what helped lead Goodyear to vulcanization and, and furthering an industry, which of course, uh, transportation industry, how much different would that be, uh, had that discovery not taking place. I just saw a quote from Thomas Edison that said, you may not get the result you want, but that does not make it useless. That’s right. Right. Well put as always. Okay.
Greg White (05:59):
Yeah. Interesting. Also that tires are colored black, right? Rubber is actually white. And initially, if you look at historic pictures, the tires are actually white. I presume that they, they colored in black because tires driving through mud white tires, driving through mud look pretty terrible all the time. Right. And when the streets were nothing but mud,
Scott Luton (06:24):
right. I had no idea. Yeah. I had no idea. Well, uh, so all this took place June 15th, 1844, when he got the patent that really started changing things. There’s a lot more to the story. And if it interests, you check out today’s podcast, we released wherever your podcasts from including just what is the connection between Charles Goodyear and the Goodyear company. We all know, and some of us love, alright, so Greg, we’re going to dive right in. We’ve kinda got a hard stop today, right? Based on the event, some of the things we’re doing. So let’s dive right in, uh, on today’s show, we’re going to continue scanning the headlines, you know, give you some snackable content, really get we’ll get Greg and my take on some of the headlines and of course your input and your comments and your opinions. Please do chime in. Before we dive into this first headline, Greg, let’s say hello to a few, a few other folks. Okay. Let’s do it Joshua. So Kumar is connected with this own LinkedIn from India. So thanks for getting back to us there. Kumar. Great to have you here today. Stephen was talking about a majestic Zeplin on that last slot, that last image there, which I think was Wingfoot to, uh, I think they’ve got four good years ago
Greg White (07:45):
sign. I noticed that’s interesting.
Scott Luton (07:46):
That’s right. Uh, Josh, you are right. Greg. Josh was sown in his tuned in, and really interesting company. Always a pleasure to have Josh on board, the one and only Amanda Luton. Where else would you be? All right. Great to have you, Amanda. And you know what, uh, one of the hardest working men and industry recently published author now, he’s, he’s canvasing up the side of mountains, Don long. Great to have you here. Uh, Don and hopefully, uh, you’re doing well. We look forward to meeting you or, uh, we look forward to tackling stone mountain at some point with you, uh, in an upcoming Sunday. Alright, so Greg, let’s dive into this first topic. Let’s dive into this first topic. We share this via social media in the last couple of days and got, got a lot of feedback, including some folks whose grocery stores don’t look like the image in the, uh, the picture there.
Scott Luton (08:44):
So leading off here, our grocery stores may not look normal until the fall. So let me share a little more. So in this story from supply chain, Dov, United foods, CEO, Steve spinner said last week in an earnings call that pantry loading and restaurant shut downs. Well, they’ve all created an incredible and unseasonal demand for grocery stores. Now that’s nothing new, right? Uh, but suppliers, as many of us have seen are still struggling to catch back up with that level, those enormous levels of demand in particular, spin remarked on the order, fulfillment rates that U and F I is seeing with its suppliers that quote, the fill rate is certainly the lowest that I’ve ever experienced by or seen by 1000 plus basis points in Quip. So while spinner said, net sales increased 12% year over year for his organization in the quarter to ended May 2nd, he said stockouts and low stock levels are still holding even bigger sales gains back. So Greg, you know, you and I chatted with a variety of CPG leaders in recent weeks. And one of them in particular has told us about what this next observation from spinner is. Quote, the largest manufacturers had discontinued on a temporary basis, thousands of items, thousands of skews, right? To focus solely on producing the ones that consumers need most in quote, Greg, your take here.
Greg White (10:19):
Um, my first take opinion, 1000 basis points as an unnecessarily hyperbolic term to use it’s 10 percentage points is what he means. Um, which means because the average fill rate to grocery is around 98 to 99.5%. They’re still getting 88 to almost 90% fulfillment from their vendors. Now that is dramatically lower, but a thousand basis points is really only 10%. So, um, and I think part of the blame falls to the grocers because of their, and I’ve seen it, the erratic and manual nature by which their ordering, um, has sent inaccurate signals up the supply chain and has probably, you know, put, uh, distributors and brands on the back foot in terms of responding to demand. So it’s been, it’s been a little bit difficult. Pantry stuffing has been, we consumers have been responsible for a lot of unique demand, um, patterns or lack thereof. So it’s going to be difficult to, um, to do it for a while. What I see is a lot of, and we saw this some months back, a lot of blame shifting here. Um, and I think we just need to acknowledge that communication between the parties in the supply chain needs to be better in order for this to get better and to recover from situations like this.
Scott Luton (11:51):
Yup. Now, what was interesting, as, as mentioned, we put this out in social media the last couple of days, and a lot of the feedback we got was where is this at? Because where we live, we don’t see nearly this level of disruption items. And, you know, as, as Amanda and I talked about previously, we use a lot of Instacart. It’s been a great resource for us the last three months. And we’ve seen a lot of substitutions, but generally speaking, you know, we’ve, we’ve been able to get what we need. Um,
Greg White (12:18):
well, I mean, you have to, you have to also acknowledge that, um, some of the, some of the companies that are experiencing this are groups of independent grocers, which might even have lesser systems than some of the chains do. So if you shop at a chain, you may not see the same impact that you see with independent or smaller chain grocers.
Scott Luton (12:41):
Great 0.2 other quick points before we recognize a few of the folks are tuned in number one, uh, I saw the, this past weekend, I saw two grocery commercials that touted robust supply chains and their jingle that was for me in their jingle, in their, in their commercial. Yeah. Wow. And then secondly, Kroger has an earnings call that I think you’ve pointed out to me this week. It’d be really interesting to see what I believe the, at least the U S is the largest grocery. You know what they’re seeing?
Greg White (13:09):
Yeah, that’s right. Yeah. Alright. It will be interesting to see that,
Scott Luton (13:14):
uh, jock is tuned in from all the way from Brazil. So this finds you well via LinkedIn down there in Brazil. Uh, let’s see here, Kevin Bell, one of our favorite laughs dream guests, uh, the infamous person behind the quote, go ahead and say it,
Greg White (13:32):
it is possible to take advantage of an opportunity without being opportunistic
Scott Luton (13:37):
very well. Kevin shared that on a live stream with us several months ago, Kevin hope this finds you well here in the Atlanta area. And then finally Stephen says, I am sure the unnecessary wild ordering that Greg mentioned created an even worse bullwhip effect than usual. Some companies seem to focus on selling more than actually making sure more arrives, great point Stephan
Greg White (14:03):
when, when the process becomes so emotional, because a human being is involved, it’s very difficult to, because literally the signal is different by that. Person’s take on a particular day. I’ve done that job back when it was manual. So I believe me, I know, and I served companies that, that have done that and still allow a lot of human intervention in orders. And you can see that impact every day, 84%. Um, I think, uh, Manhattan associates did a study. 84% of all human intervention in supply chain is wrong.
Scott Luton (14:35):
Wow, Holy cow. Right. It’s a lot of inaccuracy.
Greg White (14:40):
I mean, it’s, we just don’t, we don’t have the data or sometimes we don’t remember the data or sometimes our emotions or instincts overwhelmness. I was the guy who said, no one, know my business, no computer could know my business better than I do. And that was right for about six skews in my store.
Scott Luton (14:59):
Love it, love it. Uh, never adult moment with the one and only Greg white. Okay. Done it. We’re going to move right into the second headline here. So bots continued to be hot. According to this story from modern materials handling the autonomous delivery robots market for warehouse management is set to grow tremendously and, and, and, uh, an analytical study or analysis is also commonly called from frost. And Sullivan says that the global warehouse automation market will almost double. So it was 14 billion in 2019 is projected to go, uh, hit over 27 billion by 2025. So what do you ask are some big drivers, right, Greg? Yeah,
Greg White (15:46):
I do ask that you’re right, Scott, sorry.
Scott Luton (15:50):
Uh, ever heard of an ASR S automated storage and retrieval systems, which are extremely popular right now, hot market in particular book because these systems offer increased inventory storage density, right? Reduce labor costs, and they increase inventory picking accuracy. So a lot of companies are bringing in these ESRS platforms, also AGV automated guided vehicles and AMR autonomous mobile robots. Those are three of the big drivers that is fueling this growth. Finally, the analysis also predicted an expedited recovery in countries, such as the U S and China do in part the large adoption of warehouse automate automation solutions that that’s already there. We’ve already wrapped her head around it. And our companies have been investing in that for years. So Greg, your take
Greg White (16:43):
well, and we talk a lot about, you know, people are asking us all the time about reassuring and nearshoring and that sort of thing. And how do we manage this enormous generational transition of workforce that’s occurring right now? This is it. And my guess is that that number 27 billion is probably low by 2025. Um, you know, Amazon started this way back in the late nineties, early two thousands. Um, and of course companies like gray, orange and geek plus, and dozens of others are out there offering all of these ag AGVs AMRs and ASRS systems. And we’ve been simulating it for a long time with things like voice, uh, operated, picking, or voice prompted picking and, or robotic assisted picking truthfully. Um, we need to, we need to raise the bar for humans so that they can do what we’re really good at and let the machines do the picking and, and sorting and the physical aspect of it. Right. Excellent point.
Scott Luton (17:49):
Greg White (17:50):
point. In fact, Victor Garcia is tuning in via LinkedIn. Victor hope this finds you well. I’d love to find out where you’re tuned in from. He says, we need human compliment on decisions and humans and making more value, add an intervention. That’s going to hurt. Um, quick commentary. You know, we, we visited a manufacturer it’s been about a year or so ago that they had just implemented a recently had implemented the ASRS system. And the good news is the company did not let go a single human and even further the maintenance team that takes care of all, everything out there on the site, they actually got more money because they sitting in the training. So the new, how to work on the robotics behind it, uh, and, and the hot tech behind it. So that’s like as a great win-win that doesn’t always happen of course, but, um, still, uh, it was a neat tour for us.
Greg White (18:43):
So I think that what happens here is that it frees up people from doing those $15 an hour jobs in a distribution center to take those 2 million skilled trade jobs that were still unfilled when we were at near full employment, the welding jobs and other trade jobs that, um, are better paying more satisfying and more fit to human, um, you know, to human skills. So I agree. And I think that there will be a net either no M impact or actually uplift in employment because of that, again, again, remember this generational change has 10,000 people leaving the workforce every single day. And the predominant workforces prefer analytical and, and technological work. That was not easy to say,
Scott Luton (19:41):
alright, moving right along. Uh, so, you know, Greg, I was very hesitant and chose my words very carefully because you are the resident M and a guru. Uh, and I don’t really, you know, from what my little purview, it seems like it’s at least been a solid market for a lot of transactions.
Greg White (20:00):
Scott Luton (20:01):
Um, so I’ll say that it continues to be a solid market for deals and this headline, which is brought to us by the great people over at the Lodestar digital freight platform containers with a K was bought by the cart systems deal was valued at $12 million. Containers is based in the UK and its platform offers quoting, booking, tracking, and dashboard analytics, and much, much more. Of course, the car systems, most folks know is a Canadian based international technology company that specializes in logistics, software, supply chain management, software, and cloud based services for industry, uh, Greg container’s leadership expects this move will help it grow and reach a broader audience. In fact, uh, on the other side of the coin, the current CEO, Edward Ryan was quoted as saying, quote, logistic service providers operate on tight margins. Those that don’t move quickly to digitize their customer experience will be faced with higher cost to serve. We’re looking forward to working with containers, customers, partners, and team of domain experts to help the logistics community capitalize on this opportunity, Greg, your take.
Greg White (21:16):
Well, I agree, first of all, then we’re going to talk about this tomorrow. Can I preview that? Sure. We’re gonna talk about this tomorrow. We’re dropping the new series tomorrow called tequila, T E C H Keela sunrise. I will not be drinking as far as any of, you know, um, but what we’re gonna talk about is what’s going on in tech, particularly with growth, investment and advancements in, in companies and in supply chain tech. But this is a great example of the ability for companies like the kart, who, um, while you may not be the most well known company in industry have long been investing in technology. In fact, a friend of mine had a company that facilitated same day fulfillment back in 2002 called same day solutions and Descartes, uh, invested in that, uh, some years back way ahead of its time for the time, but really cool tech.
Greg White (22:12):
Uh, so the cart has been visionary on some of these kinds of solutions, and this is a great way to leverage up both their solution and to help fulfill a demand that they must clearly be seeing in their vast customer base with this solution. So expect to see more of this happening. We know that deals are getting funded. We know our friends at, at flourish, um, software, right in the cannabis supply chain industry, we know verus and just also closed a funding round and various and sundry other companies there. I said it again, Scott, various and sundry other companies have, have closed rounds and the, and the news continues to come in. Yes. So we’ll talk more about that tomorrow on tequila sunrise, but
Scott Luton (22:55):
love it, love it. Say hello to a few folks. Patrick Kelly, Patrick Kelly, the produce group guru produced podcast. Uh, I saw over the weekend, he had a great show on apples and, and on the front end of the episode, he was diving into each Apple and tasting it right there. It was, it was captivating content. So Patrick hope this finds you well, wait, just kidding. That’d be something shipping. Mike Mead says, stay in school kids, probably a reference to, uh, the, the, the evolving automation industry. True,
Greg White (23:32):
but not necessarily are the do skill jobs mean technologically skilled jobs. I mean, there are people getting paid hundreds of thousands of dollars to do welding, right? Plumbers are making $90,000 a year plus, and et cetera, et cetera. So
Scott Luton (23:49):
well, John kind of agrees with you here. He States the jobs won’t end. They will change. People are good at thinking, not repetitive work, good stuff there from jock in Brazil. Yes. To go down there and talk to him about that. Kathy Mauro Robertson, uh, with logistics, TNI is tuned in at least on the front end here with LinkedIn. I’m glad you got an alert as well. Cathy, I have enjoyed if you’re not following amongst other things, Kathy on Twitter is my IQ, which really low to begin with is raised every day about the stuff that she tweets out. She’s on. A lot of these earnings calls to begin with
Greg White (24:26):
and also a very dedicated Walker and hiker. So if you want to get motivated, watch her on Twitter, both for supply chain knowledge and for health tips.
Scott Luton (24:39):
Yup. One more comment. Before we move into our deep dive of today’s buzz, this comes from Don or for good friend, Don long, as you have said, many times Greg automation and manufacturing, and likewise in warehousing should be to supplement our workforce. Not necessarily to replace it with automation and technological improvements. Businesses should prepare for organizational redevelopment for its staff rather than downsize and get stuff out there
Greg White (25:07):
about, I mean, with the re and nearshoring efforts, we’re about to try to replace an 805 million person workforce. We don’t have enough people to do that. So we will augment with robotics.
Scott Luton (25:20):
Yup. All right. Real quick. I’m not sure why the comments not appearing in my feed, but Leah Luton, my mom is to mom via Twitter, and I was able to see the tweet on that feed. But for some reason it’s not hitting our streaming art feeds. That’s okay. Mom, hooked hope this finds you well, good to see you. Glad you’re here.
Greg White (25:38):
Ask her if she hurt now, I’m just kidding. She here, but most comment or,
Scott Luton (25:44):
alright, so, uh, Greg, you’re going to take us into a deeper dive, really answering the question. How far has the digital supply chain advanced? So tell us more.
Greg White (25:55):
So first of all, um, this article is from May 5th, which was about half the pandemic ago. Time-span yeah, but worth the read it’s aged. Well over the last several weeks, it’s still relevant. It talks about, um, where supply chain has come to and where it has to go and, and what sort of things transition, uh, or are required to make digital transformation and digital transition happens. So it’s in, um, logistics management magazine by Bridget McCray, uh, on May 5th, how far has the digital supply chain advanced? Alright, check that out. Uh, we’ll put a link here in the show notes. Uh, but anyway, cap Geminis research Institute, and, you know, we hold cap Gemini in their supply chain practice, Cindy Lago and the rest of the team in high esteem here, great organization doing great things for companies. Um, they said that the spend on technologies, hardware, software and services will cross $2 trillion by 2021.
Greg White (27:05):
And yet only 35% of companies are really monitoring their operations. In real time. One form of digital transformation. We talk about control towers and things like that all the time. And we’re going to talk more about that tomorrow morning as well. But, um, these are the kind of things that help us. And of course, these are the kinds of things that have come to light during this pandemic, because as we talked about just a few minutes ago with UNF, that connection between retailers and suppliers is important. And of course, real time understanding of where your goods are, where your assets are, where your people are, is really, really important. So, um, you know, in another, I’m just checking out some of these statistics. Um, third, only 38% of companies are giving employees the tools they need to collaborate digitally with one another. And that go ahead.
Greg White (28:04):
Does that surprise you? It does. Cause it’s actually down in terms of percentage from just 2012. Now the definition of digital has changed over those years. So it is a pretty surprising, I mean, we ought to be farther along is, is the point that they’re making. Now, on the other hand, there is a lot of, um, a lot of progress being made, particularly let’s pick 2012, um, because companies have moved to the cloud. And when, when people didn’t really understand what cloud meant, I used to just tell them it is a huge computer that you don’t have to have in your office that has virtually unlimited power, right? So that allows you to ingest and process more data and do so more rapidly and calculate more complex algorithms. And that is what is starting to change things for planning and forecasting and optimization in the supply chain is that there is no limitation. These days of power, you couldn’t possibly have the amount of hardware onsite that you need to do. Some of the calculations. I can verify that because we had to take blue Ridge to the cloud back in 2011, precisely for that reason, we just couldn’t process the data and process the calculations fast enough without it.
Scott Luton (29:27):
Do you see a near fodder?
Greg White (29:31):
He is obsessed with hair.
Scott Luton (29:34):
You know, he is a, uh, we’re going to have to have the comedy hour here.
Greg White (29:39):
Maybe we should. Yeah, we should have supply chain comedy and supply chain trivia. You know, people have, have kind of fallen off, I think, except for a couple of the Sarah’s Sarah Scutter and Sarah Barnes Humphrey, still doing their, um, happy hours, right. People have kind of fallen off the bandwagon. Maybe we need a supply chain comedy hour.
Scott Luton (30:00):
I love it. I love it. You can be the headliner. Alright. So, uh, getting back to digital supply.
Greg White (30:09):
Yeah, there’s a ton, there’s a ton in this article, but they talk about cloud. They talk about robotics, they talk about automation. They talk about, um, technology supporting planning and operations and optimization. The point was, is not to go super deep into this article, but to encourage you to read it because it was very well researched, very well put together and very well presented. And let me tell you, it is a read relative to today’s standards. I think if we put the link up on LinkedIn, it would say something like eight minute read or something like that. So, so be prepared to have a cup of coffee. Uh, but there’s a lot in here. You know, they’re talking about things like do, um, do, can we augment the systems that we have, or do we need to quote unquote rip and replace? Um, some years back I saw companies and I, and I really liked this trend ceasing to replace some of their core, uh, technology systems, some of their core, uh, system of systems of record like finance and accounting and inventory management.
Greg White (31:22):
You know, what keeps track of what you’ve got on hand that does the simple things. Some of those are really old technologies and what companies were doing were putting, they would put a data layer on top of that extract extract the valuable data out of these ancient systems, rather than replace them, extract the data of value out of it and place it in this data layer and then feed it to other solutions in and accelerate their growth towards transformation. By doing that, I can’t tell you that there’s not a better way to do it today, but I can tell you that if you can avoid replacing your ERP or finance systems and augment it with best practice or best in breed, best of breed technologies or technology suites, um, you’re going to get there a lot faster.
Scott Luton (32:08):
Yeah, well put it’s, it’s tough to cover anything digital supply chain in a couple minutes, but Greg, I think you’ve done it nicely as did the folks over at logistics management, uh, which seems to be a great source for content. So, um, alright so real quick, a couple of it’s been a very active stream today. Folks are getting their week started off on an energetic right here. Uh, the stream is alive and well. So Kochi had mentioned earlier. I think I shared this, uh, the, the cloud equals the data centers of old maple, which equal the old mainframes, but all of that is offline and, and it’s cheaper and it, well, uh, uh, I think it’s cheaper cause you can pay for just what you need. It’s right.
Greg White (32:55):
Automate it to spin it down in right with most cloud providers. But, but to Cookie’s point, if you go all the way back to time sharing, which I think was in the sixties and most people did that with digital or, um, or with Cray super computers. I’m not even sure if Craig is still around or IBM. Um, you actually shared time on machines and over, over time we have developed and improve that model. It’s literally taken 50 plus years to get there. But, um, it is to the point where I’ve a very good friend who has worked at a number of these companies and it is to the point where if you’re using the machine, you pay for it. If you don’t use the machine, you don’t get a bill. Well, you get a bill for zero, but, but, but still, I mean that’s highly advanced and that, and what they’ve done is they have democratized time sharing. That was what Koki is talking about so that anyone can afford it. Even we can afford it. Scott Love
Scott Luton (33:59):
that. Uh, good stuff. We’ll, we’ll, we’ll continue to cover the, the digital supply chain and look forward to what technology, what else it brings in the, in the months ahead as we are into recovery and hopefully we’re into the post pandemic and we’re moving on,
Greg White (34:15):
check out this article. I’d love to hear what people say. In fact, let’s, I’ll post something about it on LinkedIn and let’s see what folks have to say.
Scott Luton (34:23):
Outstanding. All right, Amazon in trouble with the EU, Amazon’s had its name written on the Blackboard. So the wall street journal is reporting that the European union will be filing formal antitrust charges against Amazon. These charges mainly focus on the company’s treatment, of course of its third party sellers they reportedly. And this comes from the wall street journal. They reportedly will accuse Amazon of using data from the third party sellers and it’s competition against them. For example, using the data to launch similar products, at least article site set, right? The charges are expected to be announced this week or next week. And this is comes at the same time, Greg, where Amazon is reportedly being investigated by two U S States, both California and Washington. So a lot
Greg White (35:13):
after the yeah, and we reported on this, this finding or this, uh, the, the information around these findings in the States a few weeks back, and this was not long after Amazon had told Congress that they were not doing that. And some current and former Amazon as that story, um, alleged share that they are in fact doing it. I don’t think this is a surprise to anyone, right? I mean, I’ve never met someone who’s selling on Amazon, who isn’t afraid of Amazon stealing their data. Right. I just want to be clear. I’m not saying they’re stealing their data, but it is possible that that is a well founded fear.
Scott Luton (35:59):
Well, you know, when the wall street journal came out with that explosive investigative report, it’s probably been about three weeks, four weeks ago. Now we knew that was not just going to die. Right. Um, so this isn’t to your point, I don’t think this is surprising to many, uh, you know, I think all consumers, it’d be great to get down to the bottom and get out of the shadowy, you know, the, the murkiness between Amazon and, and the folks that they are co-op, uh, coopertition is a term. We talk about a lot, but, uh, it’s just a, um, we need a lot more sunlight in this area. We’ll see what comes of it. But, uh, Amazon we’ll see when the EEU levels, uh, those charges, all right.
Greg White (36:41):
When, when the harsh light of day hits it, I don’t think Amazon’s going to look very good on this topic, unfortunately, but hopefully it prompts them to be more diligent or more fair with their sellers, whichever the finding, um, uncovers.
Scott Luton (37:00):
Yeah. So we’re going to say with retail in this last headline, so, you know, w we try not to, I had to say, Hey, does the retail apocalypse continue? We don’t want to give into hyper bowl, but that, that has that phrase become quite a cliche here, going back 12 months or so. So in this story from Bloomberg, as many as 25,000 stores may close for good in 2020, of course, that’d be a record. Uh, we set the latest record in 2019 at 9,800 stores. So this would be a record by far, um, all this is according to a report from core site research amongst those stores at particular risk stores in malls, which makes a lot of sense. Yeah, department stores also makes lot of sense and clothing shops, of course, apparel, that industry has taken a bunch of lumps. So get this according to commercial real estate company, Cushman and Wakefield, the United States has the most retail selling space per capita of any country in the world, but yet the lowest sales per square foot. So this reckoning probably has been in the works for quite some time, for many the pandemic and the widespread store closures may be the final straw or in some cases, ton of bricks that has broken the camel’s back. Greg, what’s your thing?
Greg White (38:20):
Well, it it’s to be expected, frankly. I mean, malls are virtually dead. I don’t know if anyone lives near an old traditional mall. Um, and yet it doesn’t seem like that long ago that we were all complaining that our kids were hanging out at the, all that all the time. But, um, retail is, is over positioned even when, um, even when e-commerce was not nearly as prominent as it was. And because of this blip up in e-commerce as a percentage of total retail sales, it won’t fall back to where it was, which was around 8% annualized growth of eCommerce each year. It will fall back to a higher rate and a higher percentage of overall retail sales. So this has to be expected and many, many companies, uh, and this is, look, this is a long history, many, many companies, they expand too fast. They get ahead of themselves and over their skis in terms of real estate obligations.
Greg White (39:19):
And they start to adjust their numbers to justify more locations, hoping that they will sell. This is just, um, you know, this is the sins of the father visited on the son. If you will, this, this will end and has ended some retailers and, um, will actually will wind up being a better thing for the economy. If you’ve heard of these zombie companies, right? The ones who are barely surviving by servicing the interest on their debt, those companies are of no value. They’re a complete drag on the economy. And there are a lot of those in retail that are just surviving, waiting for some miracle to happen for them to break out and become a valuable company. Again, we’ll probably end a lot of those companies. And in the end it will be better for consumers.
Scott Luton (40:14):
Yep. So you’ve got a variety of questions around some of these companies, how their business has been run, right? Not in every single case, but many of them, but also look, consumers are buying so much different. And the pandemic in many cases is, has, will continue to accelerate a lot of those changes in behaviors, Lee, Lutin his own, this, this live cast, my mom, she placed her first Instacart order because of the pandemic. And then that’s just one tiny little example. The conveniences that we’ve all become kind of spoiled with via the Amazon effect, frankly, you had new consumers that are, that are discovering some of these things for the first time. So the reckoning that the brick and mortar part of retail as sad in many cases as it is, especially for the companies that are well run or, or are,
Greg White (41:10):
yeah. I mean, we will lose some good companies well, right. And some bad ones will survive as well. So yeah. Um, it’s going to be, it is going to be, to quote our friend, Jenny from, from say picks it, it’s going to be a reckoning. Um, it’s not going to be pretty, but this is merely a categorization of the failure of many companies that were too tight on cash over overly exposed on debt and real estate, um, or, you know, are poorly managed in terms of their growth methodology overall.
Scott Luton (41:44):
Yep. Well put, okay, we’re going to wrap, we’re going to move from this news here and we’re going to do something a bit atypical for us here at the buzz, at least on this show. Um, so if you don’t regularly read fast company, it’s really a neat, um, you know, content comes in a wide variety of angles, wide variety of spaces. It’s really, it offers some unique reporting, unique points of view. Uh, and I’d welcome our listeners to check it out. Recently, fast company interviewed, I think this is this new to me came out last three or four days. They interviewed a variety of black HR leaders. So their aim was simply the, get their thoughts and perspective on what’s taking place now, here in the States, especially. So this, um, we are too, you know, we are trying to, to really double down on this listening tour of ours and seek out opinion and, and to, um, to learn and be empathetic and really discover, uh, insights and perspective from a variety of other folks, right?
Scott Luton (42:56):
A lot of folks are jumping to assumptions and jumping to long held beliefs, and that’s not going to help us here. So, uh, it, this angle of this article really spoke to me. Then as I read it, we determined that our audience needs to hear it, especially some of the perspectives shared. So what we’re going to do your audience, I want y’all just to focus for a second on these words and strip out of your mind, any assumptions, any your current positions, just try to empathize with what Janell is saying in this perspective. So I’m gonna, I’m gonna read this. So this comes from Janell Peterson, people, operations manager with precision heart, one of the five folks, they interviewed a quote X it’s excruciating having hard tier field conversations with my 12 year old and eight year old about how some will view them without knowing their sweet, console’s having the quote, talk about how to stay out of harm’s way all while trying to preserve their innocence, knowing that it may not even make a difference. It’s heavy worrying about my hardworking husband when he leaves the house to provide for the family. He cherishes and loves so deeply. And at work when even with an amazing HR leader, who’s making space, the job I love has had some tough days. I’m swallowing down a lump in my throat to contribute on a zoom call in quote, Greg. There’s so much commentary and perspective and takes needed on news these days, but in my mind that speaks volumes and hardly even needs any commentary.
Greg White (44:42):
Yeah, I agree. You know, we received also a, a link from one of our trusted advisors, um, of, I think it was a Harvard business review article called dear white boss, which everyone should read. Everyone should read. It was very well and rationally conceived to, um, to expose the little things that happen each day to reinforce the differences that we see we promote. Um, we subconsciously feel whatever. Um, and it’s worth getting that perspective just for all of us to have that aha moment. Right. Um, yeah. I mean, what, what can you say to that?
Scott Luton (45:29):
I think one thing for me, at least I want to challenge everybody. We’re challenging ourselves to really explore what true empathy is, really explore all the Assam, all the micro assumptions that anyone, any human makes through the years of relationships and doing business and, and, you know, and, and, and really examine re-examined and reread, examine every assumption, every position you hold and just go out and learn from others right now, it is so needed. And, you know, we’re going to get through this, this, um, this time and, and here in our country’s history, uh, and change is going to happen. It’s got to happen, but really double down empathy right now, it is so needed. And, uh, I appreciate everyone’s understanding and, and, and about the little departure from the typical buzz subject matter here today. Okay, Greg, the good thing is, is we are about action here, regardless of what we’re talking about.
Scott Luton (46:29):
And we take the role of facilitating conversations and, and just helping give them space to happen. Um, that’s a big part of our role. So if any of what we just covered appeals to you, and you know, what, even if it, doesn’t, it’s really important to be a part of these conversations, you know, just go and listen, go and put it on mute and listen, uh, July 15th, we’re going to have a very Frank 90 minute discussion on the state of race and industry. We’ve got an outstanding panel, um, to, to quote the article that Greg shared from HBR that was written a while back. But, but all of a sudden it’s super relevant once again. Um, you know, we don’t see these panels up to give us the, um, the, the, the unquestionable gospel. We bring a panel because we want them to share. We, we really want our audience to share, and the conversation is where we’re all going to benefit. So it’s not about delivering the silver bullet or the magic wand. It’s about facilitating the conversation, Greg, your thoughts.
Greg White (47:35):
Um, we are going to get an unvarnished, but professional perspective from Tandra and David and DC. So I’m really interested, particularly in Tandra’s take, right. I really have a ton of respect. We’ve known her the longest of all, uh, of all these folks that we’re working with. And, um, and I just really appreciate the way that she approaches everything. My strong suggestion would be listened to one of our articles or one of our episodes where we’ve interviewed Tandra. She is a no excuses for anything kind of person. She N she understands and thinks about how, um, how to survive in the world that she grew up in and, and how to help people of any race, color, creed, orientation to survive in this world today. And she does it every single day.
Scott Luton (48:32):
Yeah, well said. Okay. Um, so join us July 15th. You can go to supply chain, outrider.com. We’ll make it easy. I think we’ve got the direct link in the show notes here. Please join us. Even if you’re not going to actively participate, come and learn much like that. That’s what I’m looking forward to doing. Okay. Let’s say a, to just a few folks here right quick as we start to wrap up our friend, Tom Valentine, I think Tom, you and Greg, uh, co presenter served on a panel to an engineering consortium here recently. So
Greg White (49:04):
yeah, a week ago, it seems like yesterday, but yes, it was a week ago. Fantastic. By the way,
Scott Luton (49:13):
when is he not? He’s always, he’s salt of the earth. Um, Stephen, thank you for sharing, uh, Steph and put the link article that Greg was sharing in the comments, at least on LinkedIn feed. So Amanda, why don’t we, why don’t we say that from, uh, Stephan and share that out across each of the streams, make it really easy for folks to check out that article, um, you know, going back to the comments, uh, actually, uh, Jayden greetings from Utah, Jaden, thanks for tuned in, are tuning into our buzz here today on LinkedIn. Great to have you, um, let’s see, Amanda had some comments here about, about the comments. We just read it and she says, Hey, painful to read. I try to put myself in her shoes and it would be a constant source of fear and anxiety.
Greg White (50:02):
I think about the talk that you just have with your kids about bullying or one of my daughters, thankfully, very athletic now, but was heavy as a kid. Right. And she had that, but that’s just that that’s, that’s something that can change, right? So, you know, everybody wants to protect their kids. You want them to be able to remain young and, and naive as long as possible, but, and having expose them to the realities of the world because of who they are at such a young age and stuff.
Scott Luton (50:33):
Yup. All right. So we talked about July 15th. Let’s talk about, uh, June 25th. So we’re going in reverse order, uh, just, uh, 10 days from now. We’ve got a really interesting, uh, webinar coming up all about ERP in the post. COVID the post pandemic environment that we all are hoping is going to be here ASAP in some parts of the world. It is, um, we just found out today, so we’re, we’re teaming up with rootstock on this webinar, uh, on June, on June 25th. And it’s free by the way, you can go to [inaudible] dot com to register. We found out today, Greg, that stock is going to be bringing a customer and someone that knows ERP and has gone through the journey and is, uh, well prepared for the, um, for this next phase we’re going into. So I’m looking forward to that June 25th and, uh, Greg should be a neat session. Huh?
Greg White (51:25):
Yeah. I love the juxtaposition right. This week is SAP Sapphire. Now conference. We’re going to talk about that a little bit, but I love the juxtaposition of little ERP and big ERP to get a perspective on the marketplace and how that impacts just what we were talking about, digital transformation and, and, um, you know, whether you should rip and replace right. In terms of, um, your foundational core systems.
Scott Luton (51:55):
Yup. So join us June 25th, a real quick aside to safety. Also, mr. Reliable, he’s on a lot of these live streams. Hope this finds you well where you are. Sady okay. I think we have kind of teased us up a little bit. So today did kick off the SAP Sapphire. Now re-imagined the Sapphire now converge is the kind of the digital marketplace for all kinds of content and discussions. And Greg and I are really pleased to be part of that. Um, Greg, we saw a lot this morning and to our listeners, this is why, uh, this kicked off at 10 45 it’s while we had to adjust the buzz timeframe. So appreciate your, your roll with the punches there. And, uh, in this day and age of internet overload, uh, we had a few channels, right? The good news is in the update we got from the SAP team. If you’re interested, not only is registration free, but it will continue to stream on SAP, his LinkedIn account and their Twitter account. Right. Um, Greg, you know, I really enjoyed in particular, uh, one of the, the senior porch leader, uh, sharing about how already their digital transformation, where they leverage a lot of SAP offerings have taken their sales reports from three months, their roll up from three months to 20 seconds. Love. I love that. What was your, one of your favorite moments?
Greg White (53:25):
You know, two things, one, um, Christian Klein, the CEO, he, um, opened up the discussion with Lutes from, from Porsche, um, talking about how you can configure your own vehicle. And they went on to tell us about the real time interaction. Let’s say you change your mind from non leather to leather seats or whatever that’s real time while the vehicle is being built. So that’s impressive. And the other thing, and I think this is really very important. There were lots of discussions around digital transformation and inner enterprise communication and coordination. But the thing that really stood out to me was Christian recognizes that the marketplace can no longer tolerate three, four, seven year ERP implementations and has, has outlined a plan for how to get the, the deployment of certain solutions down to four months. Right? Imagine that, has anyone ever said that in the history of earth, earth, SAP implemented four months? Wow. Has that been said before? And that is a really, really impressive, um, initiative. So, uh, I hope they pull it off. That will be, that is throwing down the gauntlet to the rest of the rest of the, um, supply chain and big tech community.
Scott Luton (54:47):
Yup. Yup. So if you missed today, Hey, no worries. There’s there’s three plus more days. Yup. You can go and register at the link we’ve got in the show notes. If you have a problem registering, shoot Amanda, a note, Amanda, at supply chain, radio.com and we’ll make sure we get you plugged in or share what we know at the time as you y’all, as you might imagine with any big event, especially any big digital event right now in this era, there was a lot of, uh, shifting gears and whatnot, but a shoot Amanda note, and we’ll get you pointed in the right direction. Don’t forget it’s free. Yeah. Right. That’s my favorite. Absolutely. Um, again, supply chain now radio.com uh, really have enjoyed this. This was a bit of the expedited buzz here today. We’re going, gonna finish up about 15 minutes earlier than what we’re typically finish up. Uh, Greg, we’ve got a couple of calls lined up to get some experts on about us MCA. So we’ve got to get to work, right?
Greg White (55:43):
Yeah. We got to do that. We haven’t been talking about us MCA and it’s about time to get back to it. Don’t you think?
Scott Luton (55:48):
Absolutely. So a big thanks to all of our audience members for tuning in, sorry, we couldn’t get to some of those great comments out there. It looked like y’all had some very live discussions in the streams. Um, find more resources, conversations, meaningful stories, all about business and the world of global supply chain and supply chain R rated.com on behalf of Greg white. This is Scott Luton wishing you all a wonderful week ahead, you know, do good, give forward and be the change. And with that said, we’ll see you next time here on supply chain now. Thanks everybody.
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