Supply Chain Now Episode 421
In this episode of Supply Chain Now, Scott and Greg share the top stories in supply chain for the week for the Supply Chain Buzz. In this week’s episode, Scott and Greg welcome Mr. Supply Chain himself, Daniel Stanton, to the podcast.
Intro – Amanda Luton (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 technologies, the best practices and the critical issues of the day. And now here are your hosts.
Scott Luton (00:00:29):
Hey, good. Monday morning, Scott loot and Greg white with you here on supply chain. Now. Good morning, Greg. How are you doing? I’m doing well. Good, good, good weekend. Yeah, it was very good. Uh, you know, we’re all on the East coast waiting for a storm to hit. That’s going to fizzle out so now, but we need some rain. So we’re getting a little bit of that as cast off. So yes. And so to our listeners, let’s do a weather report. Everybody talks about it, whether no one does anything about it. Uh, I think that was, um, I’m not sure who that was. Calvin Coolidge or, or, uh, Tom Sawyer or somebody who knows Mark Twain. Um, all right. So welcome to the buzz. Uh, on today’s supply chain buzz, Greg and I with a special guest, we’ll be talking about some of the biggest developments and news stories in the global supply chain industry.
Scott Luton (00:01:21):
And, uh, we’re, we’re going to be working hard to increase your supply chain acute. Now that special guest is a big one, Greg, right? It is. Do you want me to say it or do you please, mr. Daniel Stanton, mr. Supply chain. That’s right. Nina’s today when he, what he’s up to some schools that he’s working with and, um, maybe even about a book. Yeah, that’s right. So when he’s not talking with the movers and shakers, CNN, MSNBC, Fox news, CNN, you name it. We had to fight his agent to get him on, but he’s here with us. He’ll be in a stopping in about 1220. So stay tuned for that. After we tackle a few headlines, uh, Greg, one quick programming for, we give some shout outs to what looks like a very rowdy audience here on a Monday morning. Um, so Greg, you know, if folks enjoyed live stream, they got to check out our podcast.
Scott Luton (00:02:17):
You can subscribe to our podcasts wherever you get the podcasts from today, we publish a really neat conversation with Angela Kerr with Spotsy. Uh, not only was Angela part of NASA a while back, which is always fascinating, but spots is doing some really cool things. When it comes to providing supply chain visibility and tracking, right of shipments. Angela told us it ain’t rocket science and who would know better than her actually have two people who who know about space travel. So it is fascinating to talk to her. She is a pure engineer, but also a FA a fascinating story, her career and her vision, right. That’s right. Uh, extremely bright. Been there, done that. So you can find that podcast wherever you get your podcasts from. Okay. Let’s recognize for a few folks before we dive into the headlines. Uh, Chris Barnes. Good morning. Chris says weather talking, whether it must be a Monday.
Scott Luton (00:03:21):
That’s true, Chris. Good to have you here, Lisa. Good morning, everybody happy Monday. Lisa hope this finds you well, uh, via LinkedIn, wherever you are, Joseph Valentine, uh, uh, passionista when it comes to reverse logistics, he says, hello from New York. Hope this finds you well, Joseph of course, sometimes day. Yep. Every day is Valentine’s day. You can’t do a live stream here at supply chain with clay Phillips and Amanda Luton at the helm. So there are quarterbacks kind of behind the scenes. Appreciate all that they do. Uh, let’s see here. Um, David Glover, good morning from Minnesota. David. Hope this finds you. Well, it’s probably a little bit, I bet it’s it’s uh, I was about to say Chile, just comfortable in Minnesota this time of year versus a hundred degrees down here. Right? They may, they may be cooling off, but it seems like we just talked to somebody up there and it was pretty toasty.
Scott Luton (00:04:15):
I really, um, well, they got plenty of lakes to chill out in. So, uh, jealous, regardless, uh, Akil happy Monday, greetings from driver logistics in India, Akil. Hope this fight Juul. Now, Muhammad real quick. He says, given the pandemic, do you think there’ll be a demand for supply chain individuals in the future? I think there’s a demand, right? Right. And yes, that’s right. Great question, Mohammed. I mean, you know, we’re all coming at this from different, different angles and different points of view, but, uh, I agree with Greg, not only is there a huge demand now there’s going to be an even bigger demand in the months ahead. Just our take here. So great to have you here, Muhammad. Uh, and then let’s see Lisa. Hello from North Carolina. Good morning, Lisa. I’d love to know what part of North Carolina you’re from. And do you prefer Western or Eastern barbecue?
Scott Luton (00:05:09):
We’ll see, we’ll see how she answers that the great barbecue debate of North Carolina. Right? Right. All right. Chris is also charming in, as it relates to Muhammad’s question, he says to the man for supply chain resources started growing with the boom of e-commerce fall about trade Wars. And now the pen Dimmick excellent stuff there, Chris. Alright. Uh, uh, more sure on a mesh from Detroit. So shout out eight mile. That is right. Uh, match. Great to have you here. Thanks for tuned in being tuned in. So, all right, so let’s dive into the first headline and then we’ll circle back and keep the comments come and keep the questions coming. And of course your, your take on what we’re gonna be talking about here, including
Scott Luton (00:05:58):
Our special guest, mr. Supply chain here in about 20 minutes. All right. So let’s add this graphic as we talk about our first headline. Now, if you’re like Greg and I are big fans of the supply chain Dobbs, a great publication. In fact, they’ve got a series of them, retail, uh, uh, CIO, Dov, I believe you name it, but supply chain, that was one of my favorites. Just keep diving. That’s right. Keep diving. This headline is something that came from supply chain, dive Matt Leonard. Uh, and we’ve been tracking this for a few days. So we’re gonna talk about corporate commitment to sustainability. So MIT and an internet shell MIT and their center for transportation and logistics has partnered with CSC MP to produce the first annual state of supply chain sustainability report, several of the, of its findings, which we’re gonna talk about here.
Scott Luton (00:06:51):
Uh, the research focused on over 1100 supply chain professionals surveyed in this is, uh, this is a big point surveyed in fall 2019 before the world changed. That is right. So yes, that’s, that’s that’s important context because here in the States, um, certainly that was before the world changed. So let’s, let’s walk through some of these findings. So first off, nearly half 49% of all companies surveyed have indeed corporate supply chain sustainability goals, but a whopping 35% do not. And what was deemed surprising by the researchers is this next note social issues. And again, at the time, this is fall 2019. That was those examples where child labor, slavery worker welfare, all important. However, we’re probably leaving a few off the table in terms of what corporate commitments are our look like now, but social issues at the time received far more focus in company’s sustainability goals than environmental issues and those examples, of course, carbon emissions and waste.
Scott Luton (00:07:57):
That’s what the research found beyond social issues. The retail industry was more concerned about waste than carbon emissions. The transportation industry was more concerned about carbon emissions than energy management and the manufacturing industry focused on water and waste. It makes a lot of sense. All right, I’m going to get Greg and, and audience. We’ll get you all to, to chime in on this too. But one last point here, as we all know, of course, what we were just talking about with Muhammad and Chris, the role and influence of supply chain professionals continues to evolve know 80% of the respondents in this survey say that they influence corporate sustainability efforts in some way, shape or form quote, in this quote, from the research here, the report quote, in light of this trend, it appears that the days of have a separate sustainability department with a limited role or fading in quote, okay, Greg, I’m going to get you to respond and then we’ll get, see what our audience is thinking about with this.
Greg White (00:09:01):
So can I, uh, ask for clarification on that last quote, please do we mean that there won’t be a separate sustainability departments or that the limited role will be fading? You know, it seemed like they were phasing out sustainability departments.
Scott Luton (00:09:22):
I took away from that quote in terms of context of the full article, was that rather than it be a chief sustainability officer that was separate perhaps and in a functional area that was separate than the rest of the enterprise or organization is that they were, that was being blended across, you know, every functional area is going to have some sort of responsibility when it comes to sustainability,
Greg White (00:09:45):
Took away from it. Okay. So they’re going to roll it into the role the day to day roles of various departments. Um, well, frankly, I think that’s a mistake. Um, I think that we need some, we need, we’ve talked a lot about corporate social responsibility. We did that, um, AIAG seminar on corporate social responsibility, and I felt like that was a great focus and it did bear out exactly what we were taught. What was mentioned here, the transportation industry concerned about carbon emissions and energy management. We talked with a couple of energy companies in that session. Can companies continue to respond to what’s in the limelight? This is my, my observation, then be intentional and active, right? And you can see that by the variation in focus from the various industries, retail versus manufacturing. Um, although both are focused on waste and I think that’s good.
Greg White (00:10:52):
Um, the retail industry, especially with e-commerce coming to the fore, they’re going to have a bigger and bigger concern with carbon emissions. And I think things like intelligent routing and things like that will need to come to the fore in, in retail. But at the same time, I think we have to recognize they can only focus on so much. Uh, my feeling is that a CSR or an ethical business initiative is, is required. The, you know, the forced labor, which is just a euphemism for slavery is a major issue, not only in China, but in India. Whereas in terms of numbers of people in India, though, India seems to be making much more progress and intentionally so than China. Um, but I think you, you have to look at all of these things and understand the dynamics. It’s not unlike looking at supply chain. You can’t just optimize for co optimize for costs and not optimize for risk. It’s a optimization
Scott Luton (00:11:54):
Or multifaceted solution. Look at it that way. Well put good stuff there. All right. Real quick. Want to share a Lisa? So Lisa who settler from North Carolina, she’s working in Charlotte as to the barbecue debate. She’s a huger transplant. And so maybe she has, she hasn’t decided yet. She does not feel qualified. Actually. That’s really, that’s really bold and impressive to do that. That is right. Our friend, Don Edward Long, uh, says, hello, uh, via LinkedIn, Don hope. This finds you well. We’ve been tracking you between your book and your appearances and your continued scaling up, uh, mountains across the Metro Atlanta area. I hope this finds you well. And let me point out, appreciate what you do to give back to the fellow veteran community. So good stuff there, Don, uh, let’s see your T squared T squared who always tunes in via YouTube. And if you would, uh, Greg, you said last week that we had had, we had this, um, their name earlier, so a T-square 2001, shoot your name. And so we can refer to you properly, but he says, or she says that the, the demand for supply chain professionals is not relenting anytime soon. Agreed there. Uh, let’s see here. We already weighed in a Stephan. Of course we can’t do a live stream without Stephan in Dallas, right, Greg? That’s correct. Good mom.
Scott Luton (00:13:19):
Can we, haven’t connected with claw
Scott Luton (00:13:21):
Here lately. So she, um, is she now she’s from Argentina. That’s not said right there and you speak Spanish very well. As folks were, were charming in where they were, where they were catching. I was trying to make sure that, that she wasn’t maybe traveling abroad during this very challenging time. So Claudia hope this finds you well and great to have you here. Uh, one final shout out, uh, Yessica is tuned in via linked in and yes, we’d love to know where you are tuned in from so great to have you. I saw that earlier. Yeah. Sheila say OD, Hey, Hey, good. At good morning. Good afternoon. Your time. Maybe good evening, maybe, but great to have you here on Facebook. It could be good middle of the night. Yeah. That’s all right. All right. So let’s keep driving. Uh, we got to stay on schedule when we’ve got a VIP.
Scott Luton (00:14:20):
Yeah. That’s right, right. Alright. Second headline. Everybody is, we’re talking about rare earth metals and how outside of China they’re even rarer, but not because of, of, um, where you know, how, how much they are kind of in the raw form. Well, we’ll talk to this in a minute. So interesting article by Jamie Smith over at the financial times, uh, all about rare earth metals. And let’s define these real quick because I had this wrong not too long ago. And it had some con folks Twitter point out what I had wrong, what I had, right? So the term typically applies to 17 elements that are critical to electronics, advanced weaponry aircraft. You name it right. Despite their name, the us geological survey describes them as quote, relatively abundant in the Earth’s crust and quote. But it’s the processing that makes rare earth, earth, metals, and light commercially viable products, which is chock full of not only complex technical, um, uh, rigor, Moreau. How about that word? But environmentally is huge. It comes at a huge cost and that’s one of the reasons why we don’t have the same degree of infrastructure, all about rare earth metals here in the States. Um, and it’s also why you don’t have an abundance of it. It can’t be found in every country and there’s, there’s not a, uh, uh, a robust and diverse supply chain when it comes to rare earth metals. So guess who Greg is the world’s number one producer of rare earth.
Greg White (00:15:57):
I would love to hear, I would love to get comments because I bet almost everyone can guess this. So I’m not going to say this makes me look intelligent. It is has to be China.
Scott Luton (00:16:06):
It is. Uh, and by, by quite a margin China accounts for 80% of the global mind supply of rare earth and an even higher share of the manufacturing of powerful, rare earth magnets, which are in particular valuable for advanced aircraft production in the, like so recently Chinese media speculated that in a retaliatory move for us missile sales to Taiwan, that China was going to cut off rare earth supplies amongst other things to Lockheed. And when you think of, uh, the rare earth magnets and rare earth metals, and you think of a highly technological company like Lockheed, that’d be a big blow because now they’ve got to figure out where else to go. So the article here reports that tentative steps are underway that would lead to collaborative efforts between the EU Australia and the U S to build a new, rare earths supply chain. Maybe we can call it something different. Rare earth is just not spilling off the tongue this year.
Greg White (00:17:09):
Scott Luton (00:17:11):
All right. So Australia in particular, I didn’t know this in particular, Australia is gonna be critical to the effort. Did you know that it holds a sixth of the world’s rare earths deposits and it’s home to Linus corporation? It could be Lenise [inaudible], which is the only big non-Chinese rare earth producer. One last point here, the article sites, Dudley King’s North Dudley Kings North, love that name, a professor at Curtin university, who is an expert in rare earth as saying, quote, China could severely limit the rest of the world production of electric vehicles, hybrid vehicles, wind turbines, MRIs by reserving the use of Chinese domestically produced rare earth for the Chinese domestic manufacturing industries in quote, okay, Greg, your response first, and then we’ll go to the audience here.
Greg White (00:18:04):
Yeah, I think we need to distinguish a couple of things. One is the presence of rare earth materials versus the production capacity. There is no doubt that China has 80 to 90% of, of that production capacity. Um, and 36% of all rare earth deposits. Right? The other thing is, it’s funny, we just got finished talking about sustainability, uh, because China is the number one provider because they are more than happy to destroy the earth with the challenging, uh, environmental issues. And many companies are more than happy to let them do that, right? And that, that allows plausible deniability by companies around the world to say, China is the one destroying the environment. I think it’s also important to recognize that rare earth materials are plentiful throughout the world. In fact, if you put the rare earth deposits of Brazil and Vietnam, strangely of tiny country together, that equals the rare earth deposits of China, the U S um, very, very small, but, um, between Australia and some efforts here in the States round top mountain, Texas is one.
Greg White (00:19:24):
Um, they, they believe that, uh, I think the companies, U S U S rare earth, they believe that they can fulfill 17% of us domestic demand from this one mountain 1,250 a foot mountain in Western Texas. So there are deposits in Wyoming, and there’s actually a shuttered, uh, facility in California that may help as well, but still the, the volume really comes from China, even of those deposits and Brazil and, um, in Vietnam. And then Russia has plentiful deposits as well, but the U S is relatively small seven. Um, I don’t know what it is very, very small amount. I love that. I love Monday quantification or whatever. I don’t know what it is. Well, uh,
Scott Luton (00:20:19):
Fascinating. You know, we were just talking and we’re gonna talk more here towards the end of the show about pharmaceutical industry and how, you know, a lot of folks are aggravated about, you know, how much we depend overseas for many of the pharmaceuticals that we use day in, day out. And there’s, there’s an interesting development there we’ll talk about, but we’ll see, you know, obviously some big differences between big pharma and pharmaceuticals and we’re earth, but we will see this development between Australia, the EU and the U S and what that leads to and how successful, uh, and when it comes to diversification, um, you know, what that will bring. So, uh, let’s do this, you know, our, our guest here today has some specific experience and expertise, own rare earth. So let’s go ahead and let’s go ahead and bring in mr. Daniel Stanton, mr. Supply chain, author of supply chain management for dummies. Good morning, Daniel Howard, or good afternoon, Daniel. How are you doing
Daniel Stanton (00:21:19):
If something like that, I’m doing great. You guys, and thanks for having me.
Scott Luton (00:21:26):
It’s been a delight. We’ve had a chance to reconnect with you a couple of times over the last few days, and really excited about you being here and sharing your wealth of expertise. But before we get, you know, find out where you’ve been spending your time, or some of the things between your ears weigh in on this rare earth, earth metals, a development.
Daniel Stanton (00:21:44):
Yeah. You know, the, um, so railroads, you know, just, uh, you guys covered a lot of it. I’ve, I’ve been listening in and following on LinkedIn, uh, also sort of the technical term is lanthanide group metals, just because of where they said on the periodic table. Like you said, it’s, it’s not that they’re that rare, it’s that, um, it’s just the, the, the processes that we use to extract them and get them to the place that they’re in usable form. It do a lot of environmental damage. And so, um, if you go back, not that many years, uh, the U S was the leading producer by far. And, um, but you know, then we started coming out with things like environmental cleanup regulations and, um, and, and, and basically, you know, uh, allowed, um, China in particular to just gonna take that over. Um, I’ll tell you the thing that intrigues me about it though.
Daniel Stanton (00:22:36):
Like, I, I totally get it as a strategic issue because, um, rare, rare errors really are important for the electronics industry and electronics are important for a lot of things in defense, as well as, um, you know, just problem solving and technological advancement and, you know, likely even things for like quantum computers as we’re moving forward with those technologies. But it reminds me of the story of titanium, which I don’t know if you guys know that story for, from the cold war period, but titanium is another one of these elements. It’s actually pretty common, um, really, really useful as a metal and very difficult to refine and process because it, you know, as soon as it gets exposed to a little bit of oxygen, boom, you, you mess up the process. So the Russians got really, really good at refining titanium and the U S designed an entire airplane, the sr 71 black bird that was made out of titanium and somehow, or other, you know, the, the story that we now know is that, um, the U S central intelligence agency set up a bunch of front companies that bought the titanium from Russia, and then delivered that to, to the, uh, defense industrial complex to manufacture these airplanes.
Daniel Stanton (00:23:57):
So the aircraft was specifically built to spy on that’s. Right. So I, you know, I, I don’t like to be a conspiracy theorist, but I’m enough of a student of the history to know that, um, geopolitical forces do come into play, uh, with supply chains. And, um, you know, I certainly think having robust, reliable supplies of rare earth metals is good for the global economy. Um, but I think, you know, what I would really love to see is investments not just in, um, developing new sources of supply, like you talked about in round top mountain, I think there there’s even an old list or a lanthanide mine in Nevada. Um, but, but I’d also like to see investments in, um, new processes for refining it so that, you know, maybe we can figure out how to mitigate those environmental issues.
Scott Luton (00:24:58):
There’s gotta be a way, but I am so glad you brought up the lanthanide because as I was writing down all 17, these elements, I’m like, you know what, I’m going to trip over every third or fourth one. So I’m gonna let Daniel say the smart stuff
Daniel Stanton (00:25:13):
With friends like me,
Scott Luton (00:25:16):
Hey, real quick. Uh, our friend supply chain queen and Sherry Harnish, uh, tuned in, and she says she tuned in specifically because she knew you’re talking rarer. So hello, Sherri, and hopefully, uh, you and your family are doing well. Okay. So Daniel, we’ve gotten a sh you’ve got no shortage shortage of things and projects and initiatives that you are either leading or part of what, what are you tracking here lately that you can share with suppliers?
Daniel Stanton (00:25:40):
I came with a list brother. So, um, you know, top of my list right now. And I think for a lot of other people too, is back to school stuff. Um, this is going to be like the weirdest semester in every way for all of us. Um, so, you know, we’re w my wife and I, Scott, I know you guys, you and Amanda in the same spot, little kids at home, so whatever we’re doing, we got to do that. Plus figure out how to be homeschooled teachers. Right. Um, but, um, you know, universities are on their way back in trying to figure out how to manage this. I got to share, I got a, just a terrific, um, note from Brian few gate over at the university of Arkansas this morning, he’s got a, kind of a welcome back to school video. Um, and so I’ll, I’ll go ahead and I’ll, I’ll post a link, uh, to, to Brian’s video when we’re done here.
Daniel Stanton (00:26:31):
Cause it’s cute. It was a lot of fun. Um, but it’s a good opportunity to bring up the fact that Gartner just got a huge award. I think you guys have talked about that. I I’m sorry. Uh, university of Arkansas, I got a huge award from a number one ranked undergraduate program in the country. For sure. I don’t, I don’t know if they do a world ranking or just a national ranking. I think gardeners is national, but very well deserved, but that, that team at the university of Arkansas, they’re, they’re sharp, they’re great researchers and academics, but they’ve got fabulous connections to industry and do a terrific job of staying engaged and giving back. Um, so kudos to them and the great stuff that they’re doing the whole way around keeping up also, um, soon to be home of the, uh, supply chain hall of fame, they’re building that down there at the university of Arkansas campus.
Daniel Stanton (00:27:25):
Um, so, um, studied what, what Walmart does, right? I mean, it is the Walton school of business. It’s not a coincidence supply chain programs in the world is in Fayetteville, Arkansas, put it that way. Um, you know, there are a lot of folks in that neighborhood that, that really gets supply chain and taken seriously. Walmart, obviously, um, Tyson foods is headquartered right down there, J B hunt, right. Global transportation company and, um, ABF, Arkansas, best freight. So, um, and then of course the other effect that you get there in Bentonville for the university is, you know, you have, you have, Walmart is kind of the center of gravity, but all of the companies that, that supplied a Walmart on any kind of significant scale, right. Have a meaningful presence in, in Bentonville, right? So like, you know, the, the big CPG companies have pretty senior folks who live in Bentonville, so they can be close to that customer. Um, and the university benefits in a big way for that effect and that engagement ecosystem really, it really is. It really is. Um, and it, and, and Northwest Arkansas is a beautiful place on top of it. So, um, and, and then I’ve got to throw in a plug. Um, I think you guys may know in my days, uh, when I was working with Caterpillar and living in Peoria, Illinois,
Scott Luton (00:28:56):
Let me, let me chime in just really quick, because I want to make sure that our dear friend and supply chain is boring. Quarterback. Chris Barnes is listening.
Daniel Stanton (00:29:07):
There you go. Put the, put the years on mr. Barnes. So Bradley university, um, back in Peoria, Illinois, um, uh, several years ago now, um, probably eight years ago, I think, um, began on this journey that a lot of universities have to say, we need to have a formal supply chain program. Um, and, and it was really a lot of fun for me to, to work with the folks there to figure out, okay. So how do you build a program? What are the things that you need to cover? How do you engage industry? How do you, how do you really make it a great experience for students? Right. So we can be attracting the best and the brightest into the career field. Um, so, um, I, I forget that there’s some sort of a meme about, you know, just when you think you’re out, they pull you back in.
Daniel Stanton (00:29:57):
So I, you know, I moved down to Charlotte, North Carolina, uh, a few years ago now, um, and, and have remained a cheerleader for Bradley, but with all the stuff that’s gone on with COVID and the fact that everybody’s sort of teaching remotely now, anyway, um, we’ve taken advantage of that opportunity. And they’ve asked me to come back in and teach the intro to global supply chain management course with them this fall. Um, but, but I got to say, Bradley is a great success story. Cause you know, the, the, the program, um, by design, you know, the students, it is multidisciplinary. So they pull in folks from the business school, uh, where they’ve got a lot of emphasis on marketing and on professional sales and, uh, from the industrial engineering school. So it ends up being really a nice interdisciplinary mix. And when you get students with sort of those two different backgrounds sitting in the same class, you end up with much more interesting conversations about supply chain management, right? Good point
Scott Luton (00:31:03):
Curve ball. And I want the, you and Greg a curve ball here, because we’ve got a pretty serious question in the comments and, and I’d love for y’all to just kind of weigh in here. So this is an unnamed LinkedIn user, and Dan, you had just mentioned COVID-19. So how about some comments and COVID-19 layoffs, including supply chain professionals and what this might look like in the next six to 12 months, how can supply chain jobs being greater demand if companies are contracting, uh, Greg, I don’t know if you want to weigh in really quick. We were just talking about this before Daniel came on, you know, um, the, the professional skill sets and the need for supply chain management and, and folks that get it and can do it, especially globally that that’s really in demand. Now there’s some economic trends that are, that are there, of course challenging all in any hiring, but Greg, how would you respond to this, this, uh, audience?
Daniel Stanton (00:31:56):
Yeah, I really think that’s the only vulnerability for supply chain professionals is those companies that are struggling to make it, because I say this all the time, right? If, if you built your house on sand and you’re lucky enough to survive this flood, don’t be foolish enough not to build your house on stone next time around. And that’s because companies have had manual, um, emotional, uh, unautomated poorly constructed or inappropriately risk managed, uh, supply chains. And those are the companies that are in trouble. And I would say this further to those professionals, if you see those kinds of things, if you see company insisting
Greg White (00:32:40):
To stick with manual or spreadsheet, or, you know, uh, shaky risk management start looking for a job because they’re out there and those are the only type of companies, not the only, those are the main types of companies that will be at risk. I’ll put I, and, and, uh, Daniel [inaudible]. How would you respond to these things?
Daniel Stanton (00:33:03):
Yeah, well, so the first thing is, um, it’s a great question. It’s an important question. Obviously, it’s a really personal question. Um, and so the, the, the way that I think about this is really based on, uh, some work from a buddy of mine, by the name of Jason Schenker, I can put up a, a post to, um, a book and a course that he has, but, uh, Jason’s an economist and he focuses a lot on recession, but he does it at sort of a global level. He’s actually one of the most accurate economic forecasters in the world ranked by Bloomberg. But Jason talks a lot about recession at a personal level, right? Because it turns out when you think about recessions, they can happen to us individually. They can happen to companies. They can happen to industries, they can happen to countries, they can happen to the whole world.
Daniel Stanton (00:33:53):
And so the key is thinking about recession, thinking about what it takes to make yourself recession proof or resilience, um, and then understanding, you know, where to look for opportunities. So I think the argument that I would make is the profession of supply chain management is extremely resilient that, you know, the way that companies are going to have to respond to the disruption of COVID-19 is by, um, thinking more seriously and doing more work in their supply chains, whether the company did well or whether the company did poorly, it is going to have to put effort and expertise around supply chains going forward. That said, um, some companies aren’t going to make it through, right? Some industries are going to do better than others. And so while I think, um, what’s one of the things that’s really nice about supply chain management is that the skills are so transferable.
Daniel Stanton (00:35:00):
Um, I’ve got a blog post that I did, uh, a little while back talking about how supply chain management is useful in so many different industries, right? You can go from electronics manufacturing to CPG, to, you know, even commercial real estate and retail supply paint, right. You’re just sitting in a different piece of the supply chain, but the better you understand how this whole whole supply chain works, the better decisions you can make about what you need to do as a company at any given moment. So, um, there, there, aren’t going to be any easy answers for an individual who’s looking for a job who’s been laid off. That’s a tough spot to be in. Um, I will say, um, it’s important, you know, if you’re there, um, to, to be self aware, to not let it get to you to, to understand that, you know, honestly, it, it can be, it’s really easy to take that stuff personally, when in fact it’s not something that we did right or wrong, it’s just wrong place at the right time.
Daniel Stanton (00:36:05):
So it’s an opportunity to, to retool, to, to learn, to become a bit more emotionally resilient. Um, a lot of folks that I know when they go through these, uh, four strands editions, you know, you find that, you know, the first week or so, it’s sort of like, Oh my goodness, my identity is tied to my job. Right. And instead what happens is over time, they begin to align their identity more with their professional career, and they become more aware of how important it is to invest in themselves. So eating better, staying healthy. And, and it often is the transition point to, uh, an up curve in their careers.
Scott Luton (00:36:49):
So tIntro – Amandathe LinkedIn user appreciates the commentary and I’d love to dive in, uh, Sherry and Jenny and clay. I’ve got some interesting comments around, uh, gender equity and, and how the pandemic is really set in that back, uh, for the sake of time. Let’s circle back to that. Cause Daniel, I know you’ve got a couple of developments to share, but thank you, both Greg and Daniel for weighing in to clearly something that is, uh, sensitive.
Daniel Stanton (00:37:14):
All right. So should I keep going on my list please? Yes, please. So, you know, we were talking about, uh, Jason Schenker, so he’s got a course about becoming recession-proof up on LinkedIn learning. Um, so I can, I can, uh, post the link to that also. Um, you know, if folks don’t know LinkedIn learning has now not just introduced a bunch of supply chain courses, but they’ve introduced to complete learning paths. So, you know, it’s a series of courses that walk you through a lot of different supply chain stuff. Um, and so, um, you know, for folks that are missing out on going to conferences that need to get professional development units that want to prepare themselves for supply chain role, I just, you know, I couldn’t be a bigger fan of the LinkedIn learning platform, anybody that is a LinkedIn premium member. So what is that like 30 bucks a month, right.
Daniel Stanton (00:38:06):
And if you’re serious about using LinkedIn, you probably have the professional membership anyway, what you get LinkedIn learning for free. It’s part of the package with that. Um, for folks that aren’t premium members, a lot of universities offer access to it. Um, I’m working on my doctorate at Cranfield. I can get into LinkedIn learning through their library. Um, the other places that, that I tend to, you know, do stuff. I, I used to have the list, but like know MIT and Harvard both provide, but, but it’s not just Ivy league schools. It’s most of the schools that I engage with, um, all of the students, all the faculty can, can get into LinkedIn learning for free. They just don’t know that it’s there. The other one that’s a big deal is folks who are on active duty or veterans, you know, Scott, that that’s a passion that you and I share.
Daniel Stanton (00:38:59):
Um, there’s a program you just sign up and you get a free year of access, totally learning and for spouses. So anytime that you get PCs, a permanent change of station orders, this is a big challenge for military families is, you know, how do the spouses have careers when you keep picking up and moving every couple of years because of the military? Well, LinkedIn has a, has gotten on board with that and, and they’re providing spouses with free access to LinkedIn and LinkedIn learning to help them with those transitions every time there’s a PA uh, PCs. Um, another one I wanted to throw in, I think you guys probably saw this on LinkedIn. Um, my, my new book, uh, from last week digital supply networks. Um, great, great read about, um, you know, not just all the buzz words like IOT and blockchain and AI, that’s all in there.
Daniel Stanton (00:39:57):
They’re good explanations, but what these guys have done an amazing job of is really tying that back into what does it mean for supply chains, right. How does that integrate with, with supply chain processes and lots of examples, lots of case studies in there. Um, so I highly recommend that book and, and driving some great conversations on LinkedIn around it. Um, the next one, uh, just announced that I’m going to be speaking at the [inaudible] conference, S C tech 2020, September 21 to the 24th. Um, so, uh, that announcement came out last week. I’ll be sharing more information about that pretty soon. Um, and I’m working on, uh, the, the update for supply chain management for dummies. I know I owe you guys, I’ve got a stack of autograph copies that I’m going to ship down to Atlanta so that you can use them as giveaways for your audience. Um, but uh, I got to get them in the mail, so that they’re useful. It’s always the logistics, not the great plans, right?
Scott Luton (00:41:02):
That’s right. Hey, we can’t have any supply chain disruption with supply chain management for diabetes. We got to get it. We’ve got to get it here in the supply chain city,
Daniel Stanton (00:41:09):
If anybody’s going to get it right, it’s gotta be us or else we’re, we’re all in big trouble. Um, you know, kind of the last thing that I just wanted to make sure we’re talking about, and we’ve kind of hit on it a little bit, but you know, when you guys asked me, you know, what’s hot in supply chain, what, what should we be talking about? Um, I, you know, anybody that isn’t talking about supply chain risk right now, I think is just tone deaf, right? And, and I, I think the rare earth metals, the lanthanides yeah, that’s, that’s a supply chain risk conversation. I think COVID-19, that’s a supply chain risk conversation. I actually think a lot of the industry 4.0 stuff is a supply chain risk conversation, because if you are not onboard and adopting that, guess what you’re, you are vulnerable Greg.
Daniel Stanton (00:42:01):
Exactly what, what you were saying. Um, so, um, you know, one of the things I was thinking about when I was listening to you guys talk earlier others, another, uh, new book that just came out, which is a collection of case studies that covers all of these things. There are case studies in there about risks. There are case studies about, uh, sustainability. So, um, I don’t know if you can see that supply chains in action, um, was edited by Richard wilding over at Cranfield university in the UK. Um, but, uh, case studies in here, um, I did one about counterfeiting, which in fact actually, um, kind of touches on those. Yeah. Um, my, my buddy Steve-O O’Sullivan has a case study in there about supply chain disruption. So, um, you know, what I’ll say is it’s a little bit pricey, kind of an academic book. Um, but what I, what I love about it is the, um, you know, I think case studies are really an interesting way to learn about complicated topics. And I love the breadth of the topics that are in here for supply chain folks. So there’s a lot of different stuff that you can pull it.
Scott Luton (00:43:18):
All right. So we’ve got, uh, a special comment just for you to come from Stephan Daniel. He says, he’s got to have one of your signed books that your book supply chain management for dummies is the reason he’s in supply chain. How about that name?
Daniel Stanton (00:43:31):
I did finance trade originally, so that’s awesome. But Stephen, thank you so much or I’m sorry. Right. We may need a way to figuring out working butter today, but, but for better or worse, we’re in this together, man.
Scott Luton (00:43:46):
Awesome. Thanks so much. And [inaudible] has always part of our, especially our buzz livestreams, hope this finds you well, she really appreciates the resources that you and, and Clay’s in a good job of throwing some links in there, uh, have brought to the table. So really appreciate that and hope this finds you and your family will snap. All right. So Daniel, uh, no shortage of, of great resources of a lot of great initiatives that you are do what, you know, con um, I was about to say concert
Daniel Stanton (00:44:16):
Scott Luton (00:44:18):
Trade shows, books, uh, research, uh, in the classroom and who, uh, I would, man, you know, how cool of a thing would that have been to learn supply chain in college from, from Stanton? So a lot of
Scott Luton (00:44:32):
Good stuff there. So if there was one thing as we wrap up, uh, your segment here, if there’s one thing that you’d like to challenge your audience to do, or that, you know, if, to hear anything, if there’s one big thing they need to write down, what would that one big thing be Daniel
Daniel Stanton (00:44:45):
Supply chain, risk management, figure out what that really means and start doing it. Not just talking about
Scott Luton (00:44:54):
Yeah. Yep. Well, put Greg, you want to respond real quick on that. We’re about to talk about that particular concept, the father of supply chain, right? Keith Oliver and his original philosophy. So I’ll say that
Daniel Stanton (00:45:08):
You take it easy on Keith man. Oh boy. Oh boy. The term to mean something very different from what he had in mind.
Scott Luton (00:45:20):
Well, I will take it easy on ki well, you know, this was, I knew we had the buckle up prior to Daniel Stanton coming on board and he did not disappoint you set the bar. So, um, really as a fellow veteran, um, I really appreciate what you do to what Greg calls, you know, giving forward and, and really helping veterans find that successful transition it, you know, in light of everything else that’s gone crazy in 2020, that challenge is still very real. And so finding veterans that have made that transition successfully getting them to share back and, and, and helping others avoid some of the pitfalls is so important. Appreciate what you do, appreciate our friendship. And we look forward to having you back on soon.
Daniel Stanton (00:46:02):
Great to see you guys. Thanks very much. Keep doing what you’re doing.
Scott Luton (00:46:05):
Thanks. Awesome. Thanks so much. Daniel Stanton take care. Wow. Uh, I’ve got my 17 pages of notes and we still have a couple. I love it though. I mean, what you see is what you get with with Daniel, very genuine. Um, I mean, there’s a reason why he’s, he’s asked to weigh in, you know, not just coast to coast, but globally these days and what’s going on within supply chain. So always a pleasure to have him on before we move into this next news story. Greg, anything else? I mean, there’s so much shared there and from the audience, anything that you’d like to point out? Yeah. I’d like to acknowledge a couple of things. One is that one of the statements early on was that, um, a lot of job loss in India and, and a lot of that has to do with the fact that India has been aggressively locked down. I have a number of friends who own or work at companies in India. Um, and you know, the natural effect of that is, is what we’re seeing. And the other is that Sherry also said that women are more significantly impacted by this than others. And I think, you know, there are a lot of, there are a lot of, kind of fallouts of this seismic societal disruption, again, that we’re going to talk about this self-imposed collapse, calamity of commerce,
Greg White (00:47:30):
Whatever you want to call it, um, that we have to think about. That’s one of them sustainability, and whether sustainability efforts will be sustained, right. And the progress that we’ve made on race and gender and, and diversity generally in the industry, we have to keep our eye on the ball on those things, not just get singularly focused. I’m hopeful that the awakening as Daniel was talking about to risk management, which had largely been ignored, will create an awakening to keep our eye on the multiple aspects of supply chain and industry and business that keep us going well put, all right,
Scott Luton (00:48:10):
Quick follow up points there. You know, Daniel talked about supply chain risks. That was just one big thing. That’s really important to hear him boil everything down to that one big point. Sherry talks about how 50 to 85% of ESG risks happen in supply chain. So, you know, as a supplier,
Greg White (00:48:28):
What’s that probably closer to the 85% number. Yeah.
Scott Luton (00:48:32):
If you’re in supply chain, uh, that, uh, along with what Daniel shared, we’ve got to double down and get really serious and meaningful, deliberate about managing mitigating risks. Also, Jenny from, uh, COO of say picks one of our favorite organizations out there, um, say pics has a lot furthering the body of, of supply chain management, best practices and community and networking across Africa, but in particular in South Africa, um, they’ve got a great event coming up, Jenny, I don’t know if you can, you can hit the link in the comments. Um, but we’d love to give folks the opportunity to learn more about what you are doing there. And that event coming up, I think in about two and a half weeks from now, so great to have you here on the program. Okay. So man, we are, I should have had, I should have went ahead and had that fifth cup of coffee before we got started here today. I need it
Greg White (00:49:25):
Right. I don’t know, man. I feel like I’ve had 10 cups of coffee. I feel like listening to Daniel is, is a cup of coffee.
Scott Luton (00:49:34):
Alright. So let’s talk about the, how, according to one article father knows best and when, and it’s referencing the father of supply chain. So this would be interesting. Greg, tell us a whole lot more here.
Greg White (00:49:49):
Yeah. So, um, Keith Oliver, the father of modern supply chains is watching the, um, most prominent or common. What do I want to say most impactful test of his invention, uh, with a sense of pride and reservation and concern and around the drastic, uh, goal, the drastic, uh, efforts to realign them. And he’s concerned that that will hurt consumers, not the least of which I love this, uh, aspect of his message is he’s completely against what he calls nationalizing chains, uh, meaning having government and particularly politicians intervene and in supply chain affairs, I think that’s a significant point. And I completely agree with that at the same time. One of the things we have to acknowledge here is, is risk. So, um, that’s, you have to, you have to mitigate the involvement of politicians with the goal of mitigating risks, either for the nation or for supply chains, right?
Greg White (00:51:00):
So we’ll get to that in a second. But anyway, so everyone knows 1978, Keith coined the phrase chain of supply while at Booz Allen Hamilton, big consulting firm at the time, maybe still now consulting with Phillips. Um, a quote from Keith that I think is important to listen to this strikes me nationalization or, or pulling supply chains, reassuring, nearshoring, all of these efforts to reconstruct supply chains. This strikes me as a short term victory for the political, at the expense of the overall economic intellectual and global social progress says, Oliver it’ll make it easier because the supply chain won’t be as long. There’s no doubt about that. The costs will go out up without any doubt whatsoever. So prices will go up and we’ll hammer the consumer. That’s a pretty bold end quote, sorry. That’s a pretty bold statement. Um, maybe be in the spirit of the day is slightly hyperbolic, but I understand where he’s coming from.
Greg White (00:52:06):
I think that the concern that he is stating there too, is that the possibility of a dramatic overreaction to the current state is dangerous and that’s not inconsistent with what many of us have discussed here. Um, you know, we’ll yeah, one of the things we have to think about is will such a significant disruption happen again. Um, and is the cost of mitigating the potential of a sustainable or of a significant disruption, is that sustainable? So, uh, one of the things that the article talks about as many companies fail to keep up with demand and leaders of those companies like James Hagadorn of Scott’s miracle grow are owning it. That humility is appropriate. According to Keith Oliver, another quote from him, the shortfalls demonstrated in supply chains with the recent events are primarily management failures. He says we do actually have the philosophies, concepts, tools, and technologies to manage global extended enterprise supply chains.
Greg White (00:53:15):
The failure is in their rigorous application is management concept was rigorously designed for cost reduction, nearly the exclusion of mitigating other than cost risks. So, uh, it was a ruthless means of reducing costs and complexity, uh, in and in the supply chain. Um, there’s another quote here basically. Uh, uh, there’s another, uh, quote here where he talks about that as well. I’m going to skip that and get to this point while not an intentional tech tenant of, of his original principles. It was somewhat inherent if not a prominent one, this concept of risk mitigation, and he does acknowledge the companies needed to consider risk more heavily. In fact, Timothy lasted or one of his, uh, cohort at, at Booz Allen Hamilton is now a professor at, uh, Virginia’s Darden school of business States that companies should not trust a black box like AI to handle disruption, look all over, I think, agrees with this skepticism.
Greg White (00:54:32):
Um, but he still has a point of pride in terms of this invention around, um, while these shocks are not insurmountable, they are very disruptive to the supply chain and he believes might even be a catalyst for making supply chains, a bigger part of a company’s strategic plan to quote him just one final time. The progress has been huge. He said, but quote, I am frustrated that the potential has not been realized in quote. So not only is he concerned about nationalization, the meddling of politicians, but also the misapplication potentially, or the dogma in approaching supply chain methodologies, his feeling principally is that the failures of supply chain in this seismic societal disruption are largely due to the practitioners, not to the effect and disruption on supply chain. I’d love to hear what your thoughts are on that, too
Scott Luton (00:55:40):
Thoughts, uh, you know, for decades and decades, we could point to proven, uh, best practices, proven approaches to supply chain management and by and large stick to that and not feel the great pain of not, not changing, not updating, not moving with the times, unlike today, when change is as rapid as ever. And, and that what that causes is relevant, best practices, relevant approaches that many point to as long-held standards, those things, all of those things are getting challenged and rightfully so more than ever before. So folks that cling to them are going to have their work cut out for, so we’ve gotta be more open to challenging any and all norms. The secondly, uh, as it relates to nationalization, we’ll talk about this a little bit more in this, this last headline. Um, I would challenge I would challenge
Greg White (00:56:35):
Scott Luton (00:56:37):
Meaningless maybe, but governments that won’t think about nationalizing, why don’t we support these industries long before we have a crisis when it comes to work force and technology and infrastructure, and a means to, uh, invest in an economic development and, and, and, and create the right environment, which will avoid some of the huge, massive pitfalls we’re in. So that would be my challenge rather than, you know, talking about national nationalization. Now let’s, let’s move all that upstream and get a lot more proactive.
Greg White (00:57:09):
And our good friend, Tom Valentine would 100% agree with you. You know, Tom is really knowledgeable about the pharma supply chain and how regulation and tax, uh, disadvantage and things like that drove pharma out of the country. In fact, Puerto Rico, arguably the 51st state, um, had significant Puerto Rico and, and the Virgin islands both had significant presence in certain industries, both oil and in pharma that were driven out because of disadvantage from an economic standpoint for those industries. And that of course wound up largely in China. And now we’re talking about how to get it, get it back. We, what we will do is we will likely implement the same advantages that we had before to get them back. We just have to have the wherewithal to sustain these kinds of things. If we really believe that that’s important, that’s a different kind of risk, right? The kind of risk that, uh, that the supply chain faces. So I, I know this is going to surprise you, Scott, but I completely agree on that. Holy cow, first as a first audience. So, uh, I think, no, I mean, that’s a, that is a well, that’s a well conceived argument. And, and because we are experiencing, you know, the, the, the blow back of having done it undone that benefit in the past, I think it shows the danger of politics and government meddling in these kinds of things. Yup. Well, so
Scott Luton (00:58:50):
Plus here, let’s get a couple of quick takes from our audience here before we tackle the final deadline. And we’re going to go over by a few minutes here. Uh, Yusuf says we are in a harsh situation where we should focus more than ever in the service of our logistics and supply chain rather than worrying about reducing
Greg White (00:59:08):
Cos one, take one second point, which let me just say that, that goes to precisely the inverse view of supply chain that I have to Keith. And that is that supply chain is not all about it is not all about optimization. It is not all about cost reduction. It is all about risk. And that risk includes cost cost is simply one of the risks that we have to acknowledge risk of service as Yusuf is talking about is another risk risk in terms of, I would say brand equity now is one of those things you have to acknowledge. And customer affinity is one of those things you have to acknowledge. And there’s so many other things that you have to acknowledge in terms of risks. We need to start thinking, as Daniel was talking about a little bit earlier, we need to start thinking about supply chain in terms of all of those things that create risk, because why chain, if you think about the beginning of supply chain, the beginning of supply chain was us growing or hunting our own food. And we limited the risk because there was one party involved, my sphere, my seeds, whatever, right? And as we add complexity, we add risks. So we have to acknowledge the risk that we are. We are creating in order to create convenience or reduce costs or, you know, add to the economy.
Scott Luton (01:00:34):
All right, I need it. I’m going need a whiteboard illustration of those earliest supply chains, Greg. All right. Jeff Miller says, let the black boxes run the routine processes
Greg White (01:00:44):
That can be made repeatable through some
Scott Luton (01:00:47):
Level of AI free the humans to solve the thorny problems that we will never give to the black boxes. I agree with that, Jeff, but I would, the challenge to all of us humans is that we’ve got to be willing to do just that
Greg White (01:01:00):
That’s the harder work I would argue, willing and unemotional. And that’s where, when we impart that knowledge to AI, we then hand it off, right? Because the issue with human beings is we are emotional and forgetful. We don’t handle the same prices or the same, the inputs, similar inputs, I’m the same way. So I agree with that though. We feel like it’s handled by mechanization. Then let it do it one way
Scott Luton (01:01:28):
Comment here from Claudia. And I may be taking this out of context, but I like to anyway, uh, she used suggesting to Stephanie,
Greg White (01:01:35):
They S they leverage
Scott Luton (01:01:37):
So cultural and multi-lingual assets along with supply chain. Yeah.
Greg White (01:01:42):
Scott Luton (01:01:43):
She may have been talking with the conversation they were having kind of in the comments, but I think that’s such an important thing that that is certainly can be a huge competitive advantage there. So, Claudia, thanks for pointing that out. All right. We’ve got to get into this.
Greg White (01:01:56):
Go ahead. Let me just wrap really quickly on this, because I want to be clear on what and why I disagree with some of what Keith Oliver said. And one is that I don’t believe that this was pilot effort or error. I’m sorry. Look, this disruption. And we have to acknowledge this. We have to, if we’re going to proceed appropriately, this disruption was not pandemic induced. It was government intervention induced, right? This seismic societal disruption was a rapid near sin cessation of societal norms that wound up up ending commerce. So this entire situation was in fact meddling politicians, right? And meddling, perhaps because they felt like they were doing the right thing for society. But nonetheless, it was an intervention, not an impact of a natural cause that that has changed this. And we have to acknowledge that we also have to acknowledge Scott, as you alluded to before, we have to rid ourselves of some of the old best practices of supply chain, like using historical demand, like chasing efficiency, ruthlessly, and underestimating risk in order to survive and thrive in the future of supply chain. The reason why many of our best practices exist today is because of the data to allow us to do any better practices did not exist when these foundations were created, but they do. Now we have to acknowledge and employ those. Yeah,
Scott Luton (01:03:28):
The old proverbial joke, you know, the dog chases after the car, it catches the car and he is like, what do I do next? Well, in often cases, the car doesn’t matter anymore, by the time you catch it. So you’ve got to catch that in the moment before you waste tons of resources and burn out your teams and everything else, uh, in doing so, so good stuff
Greg White (01:03:46):
There. Uh, let’s, let’s talk about, um, Kodak. So, you know, Kodak in that, you should say that again, Scott, let’s cut back Kodak. I mean, think about how long it’s been since anyone has ever said that. Well,
Scott Luton (01:04:03):
You know, I got to admit as I was, as I’ll share, and before we went live here today, Kodak has a plant down in Columbus, Georgia, and we had the chance years ago, great team down there, they hosted an event. They gave us a tour and we really got to rub elbows with a wonderful team. And it really calls me to kind of di dive deeper into what Kodak’s been through in particular, these last 25, 30 years when it’s a, it’s had some challenging times to say the least. Um, but this development in particular is a really interesting one because as we’re talking about nationalization, as we’re talking about supply chains, where, where recent experiences are leading governments to say never again. And, and, and we’re not going through that again and all that stuff, this is an interesting development. So let me share this. And then Greg, let’s get everybody to weigh in.
Greg White (01:04:52):
Scott Luton (01:04:54):
You know, we were talking to rare earth earlier and how countries were looking to diversify their sourcing. Well, this is really a same story, different supply chain in our fourth and final headline. Yeah. So a few weeks back, if you recall, Greg, we were talking pharmaceuticals and again, Chinese dominance in the pharmaceutical supply chain for that matter, the illegal, if you remember the illegal pharmaceutical supply chain, they definitely have that long ago. Right?
Greg White (01:05:18):
Scott Luton (01:05:19):
Um, just like with rare earth, there’s a new found interest in becoming less reliant on pharma sourcing, uh, in China F and efforts are already a foot that aim to, reshore a portion of the pharmaceutical manufacturing industry week, which is where this report comes from, says that Eastman Kodak company is creating a new division to manufacture generic pills and tap tablets. The new division will be called yes, Kodak pharmaceuticals. And it’s getting Holy cow, a $765 million loan from the U S government, right? So the funds are going to, and as part of, uh, the, uh, the COVID-19, uh, relief package and where certain executive orders could be triggered to help create things like this. And, and, uh, that’s my highly technical language, but that’s, that’s what gives the authority to make this happen, right? The funds will be used to build out and refit the company’s existing facilities in New York and Minnesota, the company will be adding 360 direct jobs, another 1200 indirect jobs at those locations. Now, according to the article, and this shouldn’t surprise you, I think the same ratios can be applied to a variety of sectors, but Americans consume approximately 40% of the world’s supply of bulk components used to produce generic pharmaceuticals. And only 10% of those same materials are manufactured in the state. So of course it’s upside down like so many sectors.
Greg White (01:06:54):
Yeah. So, you know, Greg, I would ask him,
Scott Luton (01:06:57):
You know, Kodak has made a wide variety of what third parties have called questionable moves. Some have worked many others, especially in recent history have not worked. So what’s your take here? Are they going to be able to shift gears, stand up a whole new division, holding a whole new sector, despite some of the chemical manufacturing that’s part of their pedigree and really make this happen in a meaningful way. That’s going to move the needle and not just make it a wild goose chase for a met with the American taxpayer.
Greg White (01:07:25):
I can’t say that they will, but I can tell you that before they changed leadership, there was absolutely no way this was a dying nonvintage visionary dinosaur prior to the hiring of Jim continence, I believe is, is, is his name, uh, we of last year as CEO, but the company had actually made a turnaround though. They were only worth about a hundred million dollars. Um, just late last week, uh, they had get this, their operating profit had actually gone down by 66 million, but somehow their net profit went up by 116 million. So Jim is doing something right there. Uh, in fact, as of whenever this was announced, was it Thursday or Friday? Whenever this was announced, the company went from a $1 million valuation to 1.6 billion. So congratulations to Kodak you latest unicorn in, in America. Um, so I think they are much better equipped. Jim continents is much better manager than they’ve had in the past.
Greg White (01:08:32):
And I’m really happy for some friends who work at Kodak because the company was dying. It was dying. That’s all there was to it. I mean, the stock had not moved off of between $2 and $2 and 50 cents over the last year. So, um, this to me is an indication of, of a common lesson. And, and while there are lots of reasons to be concerned, Scott, as I can hear in your question, there are lots of reasons to be concerned. I look at it this way, optimistically one, it is never too late to pivot. For instance, Sony started out as a beam curd company, right? Nokia started making started out making galoshes before they invented the cellular phone. So if you have the right leadership and you have the right vision, any company can pivot, those are both dramatic pivots. And the other lesson is, and listen carefully here, especially if you are a startup or a, a big company, when you solve problems for the government in times of crisis, you make a bundle G Harley Davidson GM companies like that. The military industrial complex has been doing this for centuries. So this was in my estimation. And again, this is unresearched. Some Jim continents had some discussion with the administration that said, we are a chemical company. We can make the chemicals that we need to reassure these pharmaceuticals. And the administration is willing to make a bet on that. And they basically what may be the largest SBA loan in the history of earth. So, well, you know, I think the, uh,
Scott Luton (01:10:20):
It, in the article that we sourced this from an in industry week, um, it was, it wasn’t, it was a very succinct article and I would love to see the terms and conditions behind that $765 million loan. Cause I think that’s, that’s a, that’s a blind spot. I’m not sure if other reporting organizations news media has have that. But I think anytime I see a massive, massive transfer of taxpayer wealth, you know, I’d love to know that the deal behind it, you know?
Greg White (01:10:51):
Scott Luton (01:10:51):
You’ve alluded to and what some of the comments of literature.
Greg White (01:10:55):
Yep. It is, uh, there’s a huge challenge with,
Scott Luton (01:10:59):
And the upside down pyramid that is the pharmaceutical industry, the rare earth industry and plenty of others, but there are reasons why that is this upside down. So, um, let’s see if in a very smart fashion
Scott Luton (01:11:14):
And then in a fashion that’s not, um, short, um, it’s gotta be sustainable, right? Yeah. And successful. So hopefully that’s what this effort will be to bring, to restore some of the, uh, pharmaceutical manufacturing. But, um, interesting nonetheless, okay. I have a lot of comfort that it’s alone. Not a grant. Yes, that’s right. If it were a grant to go specifically to your point and Keith Oliver’s of nationalization of that’s. Right. All right. So, uh, all the comments looks like Daniel stands already back and he has included a link to, uh, the LinkedIn learning courses that he referenced specifically about supply chain management. So check that out. I saw other links earlier from clay and from Jenny, uh, from that that say pics event, y’all check out those resources, uh, love to be able to bring those to our listeners. Let’s also talk to speaking resources.
Scott Luton (01:12:11):
Let’s talk about two of our new series and tequila sunrise in particular, Greg, all with all the, um, I’ll, I’ll, I’ll defer to the experts, but there’s still a lot of MNA activity going on despite the pandemic, uh, environment. So tell us more about tequila, sunrise, and what’s your, your, your latest angle here. Yeah. And that’s what we talk about. We talk about founders and small companies and small and big deals in supply chain tech, right there. There’s a lot of discussions around tech, not a lot of discussions around supply chain tech. So my goal with this show is to keep people up to date with what’s going on in industry businesses are getting funded. Funding is down to about 2018 levels, so not dramatically down, but, um, well, I shouldn’t say that in some cases it is dramatically down 30% or more, but, but that’s still at 2018 levels, 2009, it was a boom year for fundings.
Scott Luton (01:13:11):
Um, but we’re also talking about what do these, some of these crazy terms mean, what is a series a, what is a seed round, right? What do venture capitals do? I think we’d all like to know the answer to that, but it’s a chance to educate yourself on how funding gets done, how founding gets done and who’s doing it. And it has, uh, launched to rave reviews and stuff. Six episodes since, uh, we kicked off the series, we’ve had a ton of inbound interest and I really, you know, frankly, as an entrepreneur, I’ve learned a ton through the course of you sharing your, your knowledge and your, your pulse. You got your finger on the pulse of the market, Greg and it’s good stuff. So you can find tequila, sunrise, uh, currently it’s in our main channel, right? So if you subscribe to supply chain, now you’ll get that.
Scott Luton (01:14:02):
However, it’s also in its independent channel. So you can search tequila, sunrise and subscribed to that specifically. And Greg will probably shift that over in the next few weeks and they’ll make, it’ll make a ongoing, recurring guest star appearances in the main pipeline. But what, what’s the, what’s the timeframe look like for that? Yeah, probably in the next few weeks, just to give you a little bit of a preview, I’ve got a couple of entrepreneurs and one of the major investors in supply chain tech, uh, Ben Gordon coming on the show soon. So you’re going to get to hear from the real experts.
Scott Luton (01:14:39):
Ben is always, always a interesting captivating interview, so good stuff there. And then a secondary series this week in business history. Uh, this is, you know, I should have named this one in case you thought you knew X listen to the full story. Cause it really, you know, uh, just like with Kodak and some of these other stories we talk about here on the bus, I love getting the rest of the story that isn’t in. Oftentimes the history books and what we learned in school or your MBA, whatever. Um, and this week, uh, we publish today, uh, the story of Elijah graves, Otis who changed architecture and S uh, city skylines around the world. When he came out with a first safety elevator. Now, Greg elevate, he didn’t, he didn’t invent the elevator, which is the common, I think you could ask anybody that would be the common response.
Scott Luton (01:15:33):
He, you know, he, uh, uh, invented the first safe one for people, uh, and get this when he, when he rolled it out, right? A lot of his entrepreneurial efforts was based around the New York city area. He founded the company Otis elevator company in Yonkers, New York, but he needed a way to convey back in the late 19th century that, Hey, I’ve got a safe elevator. It’s not just an elevator, it’s a safe one. So at the world’s fair in New York city, uh, he had his team lift him up on an elevator and he had an ax, had a, he had a guy or gal with an ax at the bottom shop, the main rope, and everyone expected him to fall to his death, but his system worked and he was quoted as saying all safe gentlemen also. And there was a lot more to this store.
Scott Luton (01:16:27):
What I really admire about folks like Otis and many of the folks that are in these comments here, and folks we have come on it is this passion and pursuit of always the next thing better. Can we, we’ve got to make it better. Yeah. This works for now, but how can we make it better? Just doing a little research. It was so a big part of his DNA. And, uh, and, and still today, Otis worldwide corporation is a 13 plus billion dollar company with, with, uh, tens of thousands of employees around the world. And it’s why we have skyscrapers, frankly. So, um, good stuff there. You can check it out this week in business history, wherever you get your podcasts from. If you can’t tell, we have little bit of fun cranking this stuff out and learning ourselves, right. Well, by the way, you can still ride in one of his original inventions.
Scott Luton (01:17:16):
The last 19 stories of the empire state building go to the very top of the empire state building. It’s still an old fashioned manually operated elevator. So even though it’s called a safety elevator, it’s a little bit scary compared to the regular elevator that takes you to the 86th floor. Well, hope hopefully I’ll enjoy those new series has a different spin on our core content. It’s really, you know, uh, clearly different niches. There are different interests. So y’all check that out, give us feedback, let us know what you think. Okay. Finally, uh, y’all got to check out our August 19th webinar coming up with rod shirk and Kelly Barner. There’s gonna be a ton of thought leadership that weighs in on the post COVID-19 supply chain whenever we get there, but that you’re going to hear unique. Been there, done that perspective, especially on procurement from rod and Kelly.
Scott Luton (01:18:08):
And, uh, you’re not gonna wanna miss that and it’s free to attend so good stuff there. And, and Greg working folks go, if they can’t find something, we mentioned something we mentioned today, I would say they should go to supply chain now, radio.com or anywhere you get your podcasts. If you’re looking for one of the shows or YouTube, that’s right. We have been, we’ve got a massive laboratory now on YouTube. So if folks, if you want to, you know, find some video, uh, uh, montage or footage or debate or discussion on anything in supply chain, you’ve got to check out our YouTube channel, a lot of stuff there. Quick note on this week in business history last week, Scott talked about the cannabis industry, so he can tell you how to get high and stay there, sir, elevators. I love it. Um, uh, really appreciate it, Greg.
Scott Luton (01:19:06):
I know we’re, we’re 20 minutes over here, but we’ve had a ton of great discussion that we had a home run guest. Um, you know, there’s no shortage of events, news, and developments in the industry that is going to lead us into the post pandemic times, not as global supply chain and really appreciate not only doing it with you and clay and Amanda, but also all the folks tuned in with us on Mondays. Uh, really appreciate it. Um, all right. So on that note, the challenges, the challenge, and it’s for everybody, especially us, uh, do good give forward and be the change that’s needed. And on that note, Greg, we’ll see you next time on supply chain. Now
Would you rather watch the show in action? Watch as Scott and Greg welcome Daniel Stanton to Supply Chain Now through our YouTube channel.
Daniel Stanton is known around the world as “Mr. Supply Chain.” He’s the author of Supply Chain Management For Dummies, and his courses on LinkedIn Learning have been viewed more than a million times. He is the president of SecureMarking, a supply chain tech startup that was chosen for the Air Force AFWERX Technology Accelerator by Techstars. Stanton has been recognized as an “IBM Watson Supply Chain Futurist” and as a “Pro To Know” by Supply & Demand Chain Executive Magazine. He earned a Masters in Logistics Engineering from MIT and is a doctoral researcher at Cranfield University.
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