Scott W. Luton [00:00:04]:
Welcome to Supply Chain Now. The voice of global supply chain. Supply Chain Now focuses on the best in the business for our worldwide audience, the people, the technologies, the best practices, and today’s critical issues, the challenges and opportunities. Stay tuned to hear from those making global business happen right here on Supply Chain Now.
Scott W. Luton [00:00:32]:
Hey, good morning, good afternoon, good evening, wherever you may be. Scott Luton and Kim Reuter here with you on Supply Chain Now. Welcome to today’s livestream. Kim, how you doing today?
Kim Reuter [00:00:42]:
Fantastic. One of my favorite topics is coming up. So very excited.
Scott W. Luton [00:00:46]:
Oh, man, we got a great conversation. So glad to have you back. So glad to have everybody here. We got a couple business leaders we’re going to be rolling out in just a second because we’ve got a great show teed up, diving into the wide world of retail. We’re going to be exploring dynamic e commerce and in commerce trends, as well as some of the shifts taking place that have been taking place, rather that some are referring to as from click to order to brick and mortar. If it rhymes, I like it. Kim. Most importantly, we’re going to be dialing it in on how logistics leaders must rethink their overall approach to not only take advantage of the current opportunities, but also what they got to do to set their organizations up for longer term success.
Scott W. Luton [00:01:27]:
Kim, should be good show, huh?
Kim Reuter [00:01:29]:
Yes, absolutely. It’s the way of the future.
Scott W. Luton [00:01:32]:
It is. You know what? I would say it’s the way of the future and it’s also the way of the now, right?
Kim Reuter [00:01:37]:
Yep.
Scott W. Luton [00:01:37]:
Hey, folks, if you enjoy today’s show, be sure to share it with a friend or your network. They’ll be glad you did. Be sure to share it. Say that five times fast. Kim Reuters. All right, let’s get to work. Welcome in our featured guests here today, Wes Arentson, manager, logistics sales with SPS commerce, and Tony Thrasher, senior director, product management, also with SPS Commerce. Hey.
Scott W. Luton [00:02:04]:
Hey, Wes, how you doing? Good.
Wes Arentson [00:02:05]:
How are you?
Scott W. Luton [00:02:07]:
Wonderful. Wonderful. And Tony, how are you doing this morning?
Tony Thrasher [00:02:10]:
Doing pretty well, Scott. How about yourselves?
Scott W. Luton [00:02:13]:
Wonderful. Great to see you here. Looking forward to a great discussion. Wes has already got all the math figured out just to his right, which I love. All right. So, folks, Kim, Tony and Wes, before we get into, I’m really looking forward to today’s discussion. Let’s have a little fun warm up question, folks. It is national barbecue day today.
Scott W. Luton [00:02:31]:
Yes, it is. Parades from coast to coast. So did you know Thomas Edison is who designed the first charcoal bricket briquette factory back in 1921? And who’s the first president you ask that had the first barbecue at the White House. That would be Lyndon Bain Johnson from Texas. So here’s a question for y’all. And, Tony, I’m gonna start with you. You strike me as a barbecue connoisseur. What’s one item that has to be on your plate of barbecue? Right.
Scott W. Luton [00:02:59]:
And where do you get it?
Tony Thrasher [00:03:01]:
That is a good question. Self admittedly, I don’t know if Minneapolis would be considered a hotspot for barbecue. Like go south to Kansas city or Austin.
Scott W. Luton [00:03:11]:
Right, right.
Tony Thrasher [00:03:13]:
I would say I do like a good barbecue. So you’re right. Gotta be a brisket.
Wes Arentson [00:03:18]:
Okay.
Tony Thrasher [00:03:19]:
Brisket. And then some type of spicier. Let’s call it sauce on the side for just, you know, slight amount of dipping. So that’s on my plate.
Scott W. Luton [00:03:28]:
Oh, Tony, I love it. Love brisket. And the spicy sauce. It’s gotta be hot. Wes, how about you? What’s one thing? It’s gotta be on your plate.
Wes Arentson [00:03:36]:
You know, I was gonna say brisket too, but since Tony put that, I’m going to go ahead and go with that sausage they always have kind of on the side. That’s just icky.
Scott W. Luton [00:03:43]:
Good.
Wes Arentson [00:03:44]:
I’m always tempted by that. But brisket. Would my go to.
Scott W. Luton [00:03:47]:
Yes.
Kim Reuter [00:03:48]:
Yeah.
Scott W. Luton [00:03:49]:
Okay. Brisket and sausage. Quite a plate you both are making. Folks out there let us know what’s got to be on your barbecue plate and where you get it from. Kim, how about you?
Kim Reuter [00:03:59]:
I, you know, I’m a brisket girl. We actually smoke our own. And I just. I love a brisket and a good coleslaw. Like, I think those two go so well together. But, yeah. I wish I could pick another barbecue choice, but I just can’t. I would be lying.
Kim Reuter [00:04:12]:
I can’t do that.
Scott W. Luton [00:04:14]:
I love coleslaw, too. I thought you were going to say a cold beer. Cause a cold beer goes well with really good barbecue as well. All right, we got a lot to get into here today. Wes, Tony, and Kim, let’s start with some context. Let’s set the table a little bit here. So, Wes, if you would tell us briefly about SPS Commerce and some of your background.
Wes Arentson [00:04:31]:
Sure. SPS Commerce really connects businesses across the retail supply chain. Weve been doing it for 20 plus years. And really, its everything. Typically, its EDI at the core, but its any way that companies need to be connected, whether thats a retailer sending purchase orders, them sending return documentation, or the three pl being involved in that. That I know well be talking a lot about today myself. Ive been with SP’s for almost ten years now. I come from a background in WMS prior to that.
Wes Arentson [00:04:59]:
So ive been in the supply chain for 15 years now and love every minute of it.
Scott W. Luton [00:05:06]:
Oh, I can tell. I’ve had a couple conversations with Wes and he is passionate about changing how business is done. Love that, Wes. Tony, tell us about yourself, if you would.
Tony Thrasher [00:05:16]:
Yeah, happy to. Thanks, Scott. You know, similar to us, I’ve been in this, let’s call it the retail supply chain, if you will, for, for several years, you know, 15 years plus most of that with, with SPS Commerce, really focusing on exactly what Wes was framing up, helping the trading partners in this retail supply chain, whether it be a retailer themselves, grocery distributor. Right. Working with the manufacturers brands that are shipping them products and then the logistics companies that make it all come together. Both third party warehousers in terms of storage and shipping and then carrier freight broker parties that are moving the goods. Been in the space for quite a few years and concentrating obviously on that retail lens.
Scott W. Luton [00:06:00]:
Yes. So Tony and Wes, Tony especially really painted Kim, quite the ecosystem that comes together to make commerce, make business, make success happen. I think we’ve got a good bit of expertise here. Kim, would you say?
Kim Reuter [00:06:13]:
Oh yeah, absolutely. So if you’re in e commerce or doing retail in this world today, you have to be considering all channels for selling omnichannel, right? So you know, you guys know I worked at Nordstrom for four years, really helping them redefine their supply chain and their technology and how they approach things. And omnichannel was a big part of it. And I was telling a story, you know, right before we started today was that I had come from Amazon before I started in Nordstrom. Very precise. We know exactly what we have, where it is, barcode scanning location file. Like everything was precise with inventory because that’s what it’s all about. And then I went to Nordstrom and they did have one warehouse at the time that had those same policies.
Kim Reuter [00:06:52]:
But then we got into omnichannel. It blew my mind because inventory moved. Someone could pick up a shirt, take it to a dressing room, but it’s still inventory, but we don’t know where it is. And so that was kind of a wild ride. And Sp’s helps with all of these things to, to make clear communication between all those channels to make all of this bigger. But it is definitely a challenge out there.
Scott W. Luton [00:07:15]:
Yes, it is a moving challenge too, as you kind of allude to a lot of good stuff there and love. Kim, your background for this conversation is going to be great for all of our audience out there. Let’s do this more context. Tony, you are bringing the data and the factoids here today as we look at the growth of e commerce over the last few years. Tell us more about that.
Tony Thrasher [00:07:37]:
Absolutely. And I’ll go back kind of several years on this and I’m going to bring it to the highlight of the show in the title even like you’re saying. Right, order to brick and mortar. Let’s go pre pandemic. You get this steady growth of e commerce. We’re all very well aware of it. And it was, let’s say, eating away at the overall share of retail sales relative to in store purchases.
Scott W. Luton [00:08:02]:
Right.
Tony Thrasher [00:08:02]:
You have a steady growth going back several years, decade or more, whereas growing right at that pandemic level, it was at like a 1011 percent share of overall retail sales. And then you see that immediate, we would all assume took place right, like now, this spike into that, like 17% of total retail sales almost overnight goes to online and goes to e commerce. And then what’s been very interesting coming out of that is it’s really been flat post pandemic in terms of the overall share of retail sales. You see it kind of stay at that 15, 16% rate. It’s still growing, obviously, because retail sales in general is growing, but it’s not eating away quite as much on that brick and mortar. So brick and mortar, sorry, I don’t want to say it’s a resurgence of brick and mortar, but you can, consumer behavior is certainly willing to get back into the stores. And then, Kim, obviously, the way you framed it up there, it’s, the expectation is that e commerce expectation from a consumer. Folks do want to get back in the store, but they’re looking for enriched, let’s call them experiences in the store.
Tony Thrasher [00:09:12]:
So it’s just very interesting when you look back at the data, you can see the growth, the spike and then flatline. Obviously, e commerce is growing, but it’s very important to center ourselves in brick and mortar still being the majority. And the brick and mortar, let’s call it resurgence and stabilization of e commerce share of total retail sales.
Scott W. Luton [00:09:34]:
Yeah, well said, Tony. And you know, I think all of us here, because all of us are consumers, obviously, we get out of the pandemic. I couldn’t wait to get into stores and touch products again, read labels and try to find those enriched experiences that Tony’s talking about. You know, that that’s part of everyday life, right? Interact with people. I mean, it’s been great to get back out. Kim, your quick comment as Tony was kind of painting about the spike and kind of a, more of a flatter growth curve right now. Kim, your quick thoughts.
Kim Reuter [00:10:04]:
So what we’re seeing, you know, people are now relying on e commerce for their everyday things, right? You know, grocery, pharmacy, things like that. It’s become so ingrained in, like, everyday life that it’s no longer special. So to Tony’s point, people are going back to the store for a variety of reasons. Some of them just want human contact, right? They just want to, like, have an experience with another human. And a lot of it is, you know, there is unsatisfaction when you buy online, especially when you get into like, high retail items that have fits and shoes and dresses and things like that. So it’s just much better to go to the store. But yeah, people want to go back and have that experience in the store for a variety of reasons. But to Tony’s point, we need to have the inventory there and have a robust experience because what happened early in omni channel is everything shifted to e commerce.
Kim Reuter [00:10:51]:
And then people were going into stores and you don’t have my size, you know, my color, the inventory looks weak, things like that. So balance is important.
Scott W. Luton [00:10:59]:
Great point. All right, let’s keep driving. Let’s get set. Setting the table a bit more. So, Tony, let’s talk about m commerce, mobile commerce, and how it’s been surfacing and growing and playing a bigger role in how consumers are shopping.
Tony Thrasher [00:11:10]:
Yeah, so just quick definition on that. M commerce, really, mobile commerce, it’s more or less a subset of e commerce. What’s being done on mobile devices? Just that recently, like, the kind of spurred this is a topic to discuss is 60% of e commerce sales is mobile commerce. And you would expect that continue. I mean, me personally, like, I, I’ve got 99%. I’m doing it all on my phone, so I’m definitely tipping that 60% up. I’m sure many of you are as well. And then also you look at the trend and the anticipation of the trend of some of these, like, let’s call it live stream shopping experiences on all these social platforms.
Tony Thrasher [00:11:49]:
You know, you’ve got Instagram and TikTok taking advantage of how they can kind of get in here as a channel. And you would just expect as the generations go through that that type of shopping is going to grow and that would be a contributor likely to them commerce trend as well. So just an important piece to continue to keep our eyes on. It’s just understand its kind of share of e commerce.
Scott W. Luton [00:12:15]:
Tony, good stuff there. If I heard you right, 60% of all key e commerce right now is driven by m commerce. Did I hear that stat right, Tony? Which makes perfect sense as this just becomes continuing to be an extra appendage in so many people’s hands. Right? And we want to be able to do things easy and convenient without breaking out our laptop or whatever, cranking up the PC. Good stuff there. All right, Wes, question for you to handle all of these trends and shifts that Tony’s talking about and the growth, no matter what channel this ever changing customer expectations. We’re looking for new experiences. What are you seeing from successful third party warehouses in terms of strategies, processes, tech to be able to capitalize and deliver my role?
Wes Arentson [00:13:02]:
I’m talking to three pls all day long. So typically they’ve got a warehouse. They’re holding goods for somebody shipping e commerce or maybe bulk to a warehouse. I think what we’re seeing is a push into more automation. I think for a long time three pls were focused on, hey, I’ve got racking, I can fit boxes. I want to be flexible because you never know what clients going to come through your door the next day. But I think increasingly, not only from a technology perspective, we’re starting to see some robotics help with pick as e.com, you’ve got these onesie two z picks really a focus on how can we optimize that, make it more efficient. We know margins are thin, so how can we try to just push and push to make sure we’re more and more efficient.
Wes Arentson [00:13:42]:
And then I think really focus on flexibility because as we’ve talked so far, so it’s really the ability to handle everything because you never know what customers coming through your door and where that customer, as they grow, what channels they’re going to get into. Because if you can’t support that as their warehouse, they’re going to go elsewhere because it’s hard to have two different three pls managing two different sets of inventory. That creates all sorts of challenges. So being a successful warehouse in this industry is really being able to handle all the requirements quickly and navigating that environment.
Scott W. Luton [00:14:18]:
Well said, Wes. You know, everyone talks about Agile and so many folks talk about it from a very cliche way, but Wes, you’re talking about in real practical terms because you’ve got to be flexible, agile enough to grow and evolve and flex with your customers as they find new ways and new twists of how to meet the customer where they want it and create revenue and create value. Kim, what’d you hear there between Tony’s kind of level setting of some of the trends taking place, and Wes was describing what, three pls, three, three pws, you name it, how they’re evolving to handle it.
Kim Reuter [00:14:52]:
So they go hand in hand. Right. So not too long ago, like, you talked about warehouse and you talked about retail, and they weren’t really connected. Right? Like stuff came from a warehouse and you put it in a retail store. But now we have with this whole omnichannel and people shopping on mobile. People are free shopping on their mobile before they go to the store. I mean, they’re literally standing on the sidewalk. Do they have what I want in here before I actually go in or going in the store? They see a product we don’t have, we don’t have it.
Kim Reuter [00:15:17]:
We’re going to ship it to you from a warehouse. Like all of this. It’s one big solution. You cannot think about them separately now, because the shopping experience, even though we’re talking about people going back and having retail experiences, are they buying? Why they’re in there? Because there’s the experience part and then there’s the buying part. So they are not always connected or they go and they have experience. You don’t have what I have. Make that customer happy. We’re going to ship it to you overnight.
Kim Reuter [00:15:45]:
You’ll have it tomorrow, you know, blah, blah, blah. That’s where the warehouse comes in. So those two experiences are no longer separated. They are 100% linked.
Scott W. Luton [00:15:54]:
Love that. Kim. I’ll tell you, we’re big Costco fans, as any of our listeners know. My son just got a smartphone. He’s going to be in Costco soon because I’ve already seen it. He’s going to have his clipboard. He’s going to have his phone. He’s going to be double checking prices to see where his best deal on comic books or whatever else is.
Scott W. Luton [00:16:09]:
Yeah, it’s just the age we live in. All right, so I want to shift over this next. We got a lot more good stuff to get to, and folks want to hear from you. What are you seeing out there as a consumer, as a practitioner? What are some of your favorite brands doing and what are some of your thoughts here? So, Wes, I got several questions for you. As we, as we talk about successful outcome producing partnerships for companies, they’re looking to capitalize on this massive opportunity out there. So this first question for you. When it comes to finding the right partner to deliver, what are some of the best questions to ask potential partners?
Wes Arentson [00:16:43]:
Wes, yeah, if I’m a brand looking for a warehouse to partnership or partner with, a lot of what I’m asking is around scale their ability to grow with me. Because like we alluded to before, the last thing you want to do is make the huge investment to get all your product into warehouse, only to find out when you get into TikTok shop or when you get into a new EcOM channel, they’re not able to support it and suddenly you have to revisit the whole conversation. So I think that’s the first one, is where are your capabilities around scaling into future channels, whether that be brick and mortar or e commerce and really a flexibility across the board. And then I think some of the more operational questions around resourcing and service levels, all that’s going to be important because it plays into that overall experience that you’re trying to keep with your brand to ensure that your warehouse is meeting those deadlines they’re able to produce. They’re not going to have delays unnecessarily because as we’ve alluded to, consumers are expecting goods in a couple of days. When I see something that ships to me and it gets there in five, seven days, that sometimes that’s an extra click to go see if somebody else can get it to me a little faster.
Tony Thrasher [00:17:51]:
Right?
Scott W. Luton [00:17:52]:
Excellent point, Kim. You heard a lot of things ask about there from Wes. What was one of your things that may be overlooked when it comes to due diligence with potential partners?
Kim Reuter [00:18:03]:
So one, I think, can you support me for the future? Is always a big question. Right. I deal with a lot of odd size stuff because, you know, the industries that I support now aren’t normal, which is what makes them so fun. But the one thing I always look at is the integration and how long is it going to take us to integrate? How long is it going to get us to set up like, you know, what kind of hoops are we going to have to jump through, you know, to make this happen? Because in some cases, if those aren’t handled well, those are big consumers of time and money. So those are the things I look for.
Scott W. Luton [00:18:32]:
Excellent point, Kim. You’re doing some foreshadowing because we’re going to talk more about integration and onboarding here in a second. Wes, next question. When it comes to putting these successful partnerships at work in place, streamlining that customer experience to take the friction out is critical. I wish we all lived in a more frictionless world. Right? But hey, we’re making gains. We’re making gains. What’s your approach specifically at SP’s commerce.
Scott W. Luton [00:18:58]:
When it comes to partnerships, Wes?
Wes Arentson [00:18:59]:
Yeah, I mean, we’re working both with the brand and the warehouse. I mean, that’s part of why we’ve structured things in a way that we have specific teams focused on each of those different areas. And that’s because each one, even though they’re part of that same retail ecosystem, each one has very specific nuances that we have to account for. So the great thing is when we work with that brand, we work with the warehouse, we have a relationship with that retailer. We can look at that overall process and build something that’s not only repeatable, but we’re working with all parties in tandem. Because as we know, when you’ve got three, four, five different parties involved in these projects, that’s a lot to keep track of. So you need a good process to do it. But it’s also helpful when all of them are engaged and we could work together to try to produce an outcome that makes sense for everybody in a timeline.
Wes Arentson [00:19:45]:
That makes sense because to KimS point, that onboarding timeline, getting these new channels up and running, thats real money for brands and for warehouses to be able to ship the product and really meet the needs of their customers where they are because you cant see a new trend and then six months later youre like, great, we have the integration lot now lets go, its gone. Theres something new by then.
Scott W. Luton [00:20:06]:
Yes, Wes, I love that. Im going to go back. And Tony, I see youre shaking your head a lot agreeing with Wes, going back to the first part of his response around repeatability.
Wes Arentson [00:20:15]:
Right.
Scott W. Luton [00:20:16]:
Building something that you can, you know, I’ll take simplicity where we can find it and when we can find something that works, where you can rinse and repeat, there is immense value there because that is something you can scale with, which is an earlier comment, both of you all making. Tony, quick comment any there about the SP’s commerce approach or repeatability. Quick comment from you, Tony.
Tony Thrasher [00:20:37]:
I love the concept of repeatability and it’s, I often say that retailer by retailer and you would see this in like the e commerce channels too, you know, which is going to be much more similar to more of like a drop ship I’m shipping to consumer on behalf of a retailer type of model. When you get into working with a retailer, they are, you know, there’s repeatability. It’s like 85% similarities. But there’s that nuance that will get people, you want to harness that repeatability, but then you also have to respect the nuance. Yes, balance is extremely important, Tony.
Scott W. Luton [00:21:12]:
Love it. Respect the nuance. It sounds like a Seinfeld episode, doesn’t it, Tony, Wes and Kim. All right, I got one more question for you, Wes, and then I’m going to get your take because next question is on onboarding, and I’m going to get Wes to comment. So, Wes, onboarding, we’ve touched on a couple different times optimizing that new customer. Onboarding can make a massive impact on outcomes and results and taking friction out. What’s your advice when it comes to onboarding, Wes?
Wes Arentson [00:21:37]:
I mean, I think that all boils down to process. You got to have something in place with all parties involved that everybody agrees on, that that’s documented that you can follow again and again, because as we go through these integrations, each one’s, to Tony’s point, has nuances, but the overall process needs to be defined because there’s nothing worse than trying to reinvent the wheel. Each time you come up with a new integration with a new e commerce channel, you have to have some of that put in place. And that takes a lot of work on the front end, but it really allows the warehouse or the brand to take that and run with it without having to start from scratch each time and look at it as its own individual project versus, you know, sort of a larger process that. Okay, cool, a new channel. Let’s just put that into the normal workflow and get the teams engaged.
Scott W. Luton [00:22:24]:
Good stuff there, Wes. Good stuff. Kim, comes to onboarding. Anything that Wes shared there, what would you call out for folks to really take away from that response?
Kim Reuter [00:22:34]:
So I kind of the same thing I tell people all the time is that, you know, technology is great, but kind of what Wes, trust you. It’s about the process and about your business processes and about your data. I see a lot of companies, they go like, oh, we got new software.
Scott W. Luton [00:22:47]:
It’s great.
Kim Reuter [00:22:47]:
Everything. And then they have the same problems over and over again because their business processes weren’t documented solid before they got into this whole thing. So to Wes’s point, it’s. It’s really about process at that point when you’re doing integrations with, with a customer.
Scott W. Luton [00:23:01]:
Yes, yes, yes, yes. Respect the nuance. I love that, Tony. Sorry. All right, so let’s go to this, Kim, Tony and Wes complexity folks is thriving in this current environment. And you could argue it always has. It goes with the territory.
Tony Thrasher [00:23:18]:
Right?
Scott W. Luton [00:23:18]:
Supply chain, global supply chain is not for the faint of heart, but I want to walk through a few proven ways, Wes and Tony, that business leaders can untangle that complexity to decomplexify. Is that a word? And be better prepared to work with any retailer. And that last phrase is really important, right. Because there’s a lot of common demands from all retailers and then there can be some nuances. Right. So, Tony, we got four ways I think we’re going to walk through here. What’s the first one? Tony?
Tony Thrasher [00:23:47]:
I think the first one starts with the item, which is the product, the piece of inventory that we as consumers are actually purchasing. What we see is it’s very common for us to be in relationships and partnerships with third party warehouse providers that are, let’s say they were in a e commerce setting and then they’re now also transitioning into this to go to Wes’s point and agile, more flexible, maybe business environment, probably getting pushed there by their current customer base to also start getting into wholesale retail. Shipping, which is a little bit more when we see that kind of just singular retail term and the complexities that come at the item level when you get into that is just something that’s very important to, again, respect is you’re going to have packaging detail at the item level that could now potentially be dictated to you by a retailer through what theyre trying to accomplish with that particular brand. There might even be a new SKU, an exclusive type of SKU thats now being sold into a particular retailer. Not just assuming youre going to be able to take what youre doing at the even item level, shipping, e commerce and just lift and shift that to that wholesale. Obviously, now youre shipping pallets. Retailers are going to have some different ways that they want that demonstrate, and we’ll get into some more of those here in a bit. But starting at that item level, very important.
Tony Thrasher [00:25:17]:
And unpacking any differences that might be taking there with your brand or your customer, which would be the brand or the merchant, as well as any other partners that you have to help you do that.
Scott W. Luton [00:25:28]:
Yep. Well said. And there’s new worlds of item level visibility these days that we’ve got to take advantage of. Ken, I’m gonna come to you after I get the second of four ways we can decomplexify out there. Tony, what would that be?
Tony Thrasher [00:25:42]:
Well, the second one is what would be referred to as most retailers as their vendor guide.
Wes Arentson [00:25:48]:
Yep.
Tony Thrasher [00:25:48]:
I’ll give us some concepts that might be a little bit more spsy, if you will, that is so important to appreciate. You have multiple different fulfillment models that most retailers are going to support. Drop ship, ship to distribution center in both crosstalk or more referred to as just kind of a pure bulk. Maybe it’s a ship to store model. Each retailer has that nuance, and then there’s nuances inside, even oftentimes at the, what’s called product or item category as well. First and foremost, you’ve got to understand what’s being expected of you both as a brand or a merchant from that retailer within each fulfillment model and how you’re doing business with them. And then if you’re, imagine now you’re a third party warehouse provider that has multiple brands, each of which are shipping into multiple retailers. It’s not too difficult to do the math and see now the complexity that you’re dealing with as a third party logistics provider unpacking that vendor guide.
Tony Thrasher [00:26:47]:
And some of these are, we’re talking hundreds of pages long. Right. So, and that’s a little bit, some of that SPSC concept where we’re really taking some of those complexity and helping our partners on all sides of the fence understand what it actually matters, what matters to them. And Kim, I’m going to riff off of what you said, because we didn’t plant that terminology with you, and we certainly use the same thing, but the business process is not just the technology changes, it’s the appreciation of the evolution of your business process. What does it now look like if I have to go and book freight through target, for example, where previously I was in control of my own freight strategy. Yeah, very important example.
Scott W. Luton [00:27:27]:
Yeah, excellent point, Kim. Your comment there on the first two ways we can decomplexify there.
Kim Reuter [00:27:33]:
Yeah. Item data is key. Everything is driven off item data. Now. Rules are going off item data. Almost all decisions in an ecommerce order or omnichannel order are coming off item data. Where is it? How much do we have? How can I ship it? Is it Hazmat? Where can I ship it? There are even states that we can’t sell stuff into. So there’s, there’s the California laws.
Kim Reuter [00:27:53]:
We have to restrict stuff by state. So item data is big. Unfortunately, when you get into a big integration with an SP’s or a big upgrade, you should discover that there isn’t a lot of product data all in the same database. And there’s a lot of what I call tribal knowledge. Right? You have that one person who’s like, oh, no, no, you can’t do that with that one. And you’re like, yeah, well, we need to be able to have a flag for that and not just have to call you. Everything that Wes said is the item data. And having that clean understanding what it means and having it completely filled out, I guess, is the word I’m looking for is absolutely crucial.
Scott W. Luton [00:28:31]:
And I would add, as Tony mentioned, knowing what’s in the vendor guides, it could be 100 pages, could be 200 pages, but knowing what we got to do and how would be measured in terms of performance. Excellent point. I love the work you are doing there to make that easier. All right, I got two more things, one from Tony, one from Wes. So Tony, we got the third way of how we can decomplexify out there. Your thoughts?
Tony Thrasher [00:28:56]:
Next one. And this is, this was one that we run across in the forefront of the conversation. It’s the shipping requirements that are now going to be oftentimes retailer driven and most taxpayer obvious one to gravitate to. There is going to be the labeling requirements. Right. Like I’m shipping pallets. Some retailers going to require a pallet level and a box level label to automate some of the receivables on their side. You know, some of them just want it at the box or the carton level.
Tony Thrasher [00:29:30]:
Someone just want the pallet. So again, that’s, that’s important. Ties back to that, that item. You got to know what, what you’re shipping and all that connects to that vendor guy and that requirement. But again, that kind of falls into that same state is, you know, retailers have generally similar labeling requirements. Got to get it right. You got to have a high quality on the label. You know, it’s just we all too often you have a poor quality label and you’re going to get dinged on it.
Tony Thrasher [00:29:55]:
And oftentimes you’re not going to find out until that first, you know, chargeback or ding from your retailer, and then you’re going to check and make sure and improve for the future. And you just want to shorten that learning time.
Scott W. Luton [00:30:06]:
Labels are not trivial, as we all know here today. All right, Wes, we got a fourth way, and we were talking about integrations earlier in the conversation. I think we’re going to touch on that with this fourth way of decomplexifying, right? Yeah.
Wes Arentson [00:30:19]:
And I mean, the last one is grading those orders into your wms in a way that’s, again, repeatable. Know that the wms for any third party warehouse, it’s the lifeblood of their operation. I think oftentimes we’re surprised how often these, these organizations are handkeying things still, or, you know, the complexity is too much. You get a new customer, they bring out a bunch of channels. They don’t have a process for that. Suddenly it’s a bunch of people logging into portals and pulling data and then, you know, typing that into their wms. So one of the things that we always push and would recommend for any kind company is let’s figure out how to get that into your wms in a repeatable way, because it’s just not scalable to be running that manually. I know that’s.
Wes Arentson [00:30:59]:
That’s obvious. I don’t think that’s news to anybody. It’s really doing the work on the front end to ensure if we get a new client, regardless of their capabilities, the first thing we’re doing is integrating that regardless of order volume, regardless of, you know, channels, because then we know as they grow, if they get a huge spike, we’re not shut down because now suddenly we got somebody spending 60 hours inputting orders just because somebody had a great product that did well.
Scott W. Luton [00:31:25]:
Love that. The immense value of integrations. Kim, I’m gonna get you a comment, but first, Wes, I’m so glad we made it this far without sign cosine or tangent making its way to the conversation at a math nightmare for a second there. All right, so, Kim, we were just talking about four ways, right? Tony shared three. West touched on, of course, WMS integrations in particular. Your final thought when it comes to decomplexifying before we move to tech stack considerations.
Kim Reuter [00:31:55]:
Yeah. So it’s interesting that you guys called out labels, because when you’re working with one of these big integrations, like, the last thing you think about are labels, and no pun intended, it’s oddly sticky when you get to labels, like, whose name is going to be, it becomes so complex. And it’s the one thing you never really think about when you’re doing one of these big integrations. You’re like, this little three by four is going to make my life hell. And they do. So I’m glad that we called that out because they are very important. And the order management integration is absolutely key. And I want to put a little perspective on, like, what these warehouses are dealing with these three pls.
Kim Reuter [00:32:31]:
So they may have, you know, 100, 200 different customers in some of these bigger three pls. Every brand, every customer has a different shipping requirement, a different SLA, a different box size, packaging requirements, virtual bundling, kitting. Like, all of these things are happening in one single warehouse. And that is the complexity that we have to solve for because it is not the old days of like, this is a Walmart warehouse, and this is the target warehouse. This is an Amazon warehouse. And this is all they do are gone. And these three pls have to in every single customer has their requirements, and they’re not going to be happy if you didn’t meet them. It can even get down to like, things like some require 24 hours shipping, some require 48 hours shipping.
Kim Reuter [00:33:19]:
Like, and how do you manage your WMS and your order management systems to make your, where your warehouse efficient? Right. So how do you prioritize and things like that? So it’s massively complex. And I just want to paint that picture for people who may not be familiar about what’s going on inside that box. It’s crazy.
Scott W. Luton [00:33:36]:
So you better know all that stuff that Kim just dropped, and you better partner with the right folks. And I bet Wes and Tony would welcome a conversation, is my hunch. All right, Wes, we get this. We talk about this all the time. If I’ve been talking about anything, one of the things, a little on the short list, it is building out your tech stack. Do we do it internally, do it yourself mode, or you take the third party approach? What are some of your thoughts there, Wes, for business leaders looking to make that decision?
Wes Arentson [00:34:04]:
Yeah, I think it’s, you know, across your tech stack, there’s a ton of different decisions in terms of different pieces of this. I’ll speak to our lane, because I think you could have a whole separate conversation about building your own wms and that type of thing. But from our perspective, oftentimes when, when I get a call, it’s somebody who had a customer come along, they needed to build something, they built it. Now that works great until you start looking at what him was talking about. Where you have two customers, you got three, they have twelve different channels they’re shipping to. And suddenly you have this web of different connections that so and so built that knows how to fix it when it goes down. But then we’re getting back to that knowledge that only one person has. And so I think it’s really looking long term.
Wes Arentson [00:34:46]:
I mean, I think for, you know, if you have a one customer with one order channel, sure you can build it yourself. I think that is totally fair. I think it’s looking longer term to say, not just today, but five years from now. I dont just want to have one customer with one order channel. I expect them to grow. I expect to bring more customers on. I dont want to be in the business of building integrations with e commerce channels or retailer channels. Core competency as a warehouse is pickpacking and shipping within the four walls.
Wes Arentson [00:35:14]:
So I would look at making sure youre focusing on where we can drive efficiency in there. Because at the end of the day, the area that has the biggest impact on your customers, it has the biggest impact on your bottom line, is the things you do in there. Let somebody else handle, you know, all the other nuances that come along with that. And that’s. That’s really, you know, our message. I’m not going to go say a blanket statement, but it’s always right to outsource it. But, you know, I think that complexity as you go forward, just it not really sustainable to have a team driving that.
Scott W. Luton [00:35:45]:
Excellent point, Wes. Kim, you raised your finger, I think, to make a point.
Kim Reuter [00:35:52]:
Oh, boy. So this is a conversation I’ve had with a lot of companies about, you know, do you build it yourself or do you outsource it? And a lot of times, and I say the same thing Wes just said, what is your core competency? Is your core competency tech, or is your core competency selling designer clothes? You need to decide. But what happens is a lot of time, the tech department gets involved and they see opportunities to further themselves, to better their skillset, to make themselves more marketable, whatever their thing is. And some of it is, you know, they do think that they can do it better, but they just simply don’t have the skills. And that’s a really hard conversation to have with companies and to get them to do the right thing. And I have seen companies make the wrong decision, and, you know, four or five years later, we’re still trying to figure out that Tipco engine and sales are just, you know, we’re 17% cancel rate customers are rated. So it is a big consideration. But I think the core question every time is, is this your core competency? If you’re going to have to hire up a team to build this technology, the answer is no.
Scott W. Luton [00:37:00]:
Excellent points there. And, Wes, going back, I know we got a bunch of twins fans here on the show today, and as a Braves fan, that 1991 World Series pains me to no end. And yes, Ken Herback did pull Ron Gantt off first base, but I digress. Wes, folks got to determine if they’re going to be Kirby Puckett or Jack Morris, right? Are you going to be a hall of Fame outfielder or you give me a Hall of Fame pitcher is kind of, it’s a fun analogy to make, but, Wes, that’s kind of, you’re picking your business. What. Where do you want to specialize, right, Wes?
Wes Arentson [00:37:29]:
100%. Yeah. And I think the, the companies that have a really good focus on that are the companies that do well, they’re, they’re not trying to be everything to everybody. They’re trying to say, this is what I do well. I pull in really, really smart people to do the other things. I partner with smart companies to do the other things to ensure that none of that focus gets taken away. I think Tony will attest to this. I think SP’s has done a nice job of that, really focusing on what we do well, and we want to partner with companies that do the same and be that resource to them so that we can take this off their plate and really allow them to thrive.
Scott W. Luton [00:38:05]:
Yes, SP s se. What’d you say earlier, Tony? SPSC or sp ses or something like that? What? I’m trying to learn your lingo, just adding a why. Well, but Tony, you’d probably agree, right? As we make this last point, before we make sure we get y’all connected, we got some resources to share with folks, a few other things. Tony, we got to pick it. We got to determine and pick our spots and figure out we want to be when we grow up, especially as an organizational standpoint. Any other thoughts you want to add to this? Do it ourselves or outsource it conversation?
Tony Thrasher [00:38:39]:
Tony, I completely agree. Kim. I appreciate your perspective on it. Big time, right? Like, it’s right in the way I think that we look at it. And just like Wes was saying, too, like, we’re also not trying to be everything to everybody either. We’re very focused on what we’re good at and how we help our customers. And then obviously we have a partner network where we help our customers beyond just what we do, knowing the other folks that are very good at what they do.
Scott W. Luton [00:39:05]:
And Tony, I would have used that baseball analogy for the Brewers. I would use Hank Aaron. But what all time pitching great with the brewers should I use for that analogy? Tony?
Tony Thrasher [00:39:14]:
Oh, boy.
Scott W. Luton [00:39:15]:
Pick your favorite and we’ll, we’ll tackle it before we go here today. But Hank Aaron, of course, played for the Milwaukee, Milwaukee Braves and then later the Atlanta Braves. Incredible home run king for sure. All right, Tony, Wes, and Kim, I really wish we had a couple more hours here. I’m fascinated with not only what’s going on out in the commerce world, e commerce, in commerce, you name it, but some of the cool things you are both up to and what industry leading organizations are doing to do it well, to do it profitably and do it successfully in a way that we can scale right and grow the business for folks that want to grab a brisket and a beer or a cup of coffee and have a talk shot with either of y’all, let’s make sure folks can connect. So starting with you, Wes, how can folks connect with you?
Wes Arentson [00:40:03]:
I think LinkedIn is the best way. Would love to connect, whether your warehouse or brand. If you have interest in talking more about how we might work together, would love to chat.
Scott W. Luton [00:40:13]:
Okay, you heard the invite from Wes. It’ll be one click away in just a second. Tony. Tony Thrasher, how about you? How can folks track you down? Talk baseball, talk supply chain, talk e commerce. How can folks connect with you, Tony?
Tony Thrasher [00:40:28]:
I’m same as Wes here. LinkedIn. LinkedIn is great way of reaching out. Feel free to connect. Feel free to reach out. You know, always love to broker a time and have a quick zoom. I think that makes it super easy and yet personal to drive that network connection. And then, you know, we’re out there.
Tony Thrasher [00:40:44]:
A lot of these supply chain stores shows as well. So western, aren’t there? Look for an SP’s commerce booth on the trade show circuit, if you will. Stop by, say hi.
Scott W. Luton [00:40:54]:
Outstanding. Is there one coming up right around the corner? Y’all want to mention Tony or Wes or they folks should go through your LinkedIn and connect that way. How about that?
Tony Thrasher [00:41:03]:
Yeah, and I know like in the fall, like Wes and I will probably be at CSCMP. That’s one we always like to go to. So this call might be attending that look for us there.
Scott W. Luton [00:41:11]:
So, yeah, excellent, excellent organization. CSC and P has been on the move for sure. Okay, so Kim, I’m going to share a couple resources from Wes and Tony and the team and then I’m gonna come back and get your patented key takeaway. I got a feeling, folks, we should be hanging on to our socks because Ken’s gonna let us have it here in a second. All right, let’s. Let’s share a couple resources here. I love when great folks like Tony and Wes bring us some things where we can continue the conversations. And by the way, speaking of continuing the conversations, connect with Wes and Tony on LinkedIn so we can continue the dialogue.
Scott W. Luton [00:41:45]:
For sure. Folks, you want to learn more about SP’s commerce for three pls? Well, you’re in luck. We’ve got a great landing page here. You can learn a lot more about what they do to make things easy. Take friction out and drive that scale and success in your organization. So check out that link. And we’re talking labels a lot. Don’t sleep on labels, folks.
Scott W. Luton [00:42:03]:
If you’re looking for GS one labels, good news. SBS commerce can help. Okay, while we still have Tony and Wes, Kim I cannot wait to hear your favorite takeaway from these two business leaders perspectives here today. What is it Ken? Light on us?
Kim Reuter [00:42:20]:
The biggest takeaway here is the item data. And I know it is not sexy. It is not what people want to talk about, but it’s the bricks that you use for the foundation of your business. And if you have crappy bricks, you’re going to have a crappy business. I mean that’s just the end of it. So I mean that’s the key thing. If anyone is walking away from this and they’re looking, they’re considering an SP’s software, SP’s software solution, you have to make sure that you’re starting with the right data. And no matter how good your software is, no matter who you use, there’s tons of companies out there.
Kim Reuter [00:42:51]:
It’s not going to be good if you don’t have good business processes. And I think that’s why SP’s has been really successful in the space because they focus on that.
Scott W. Luton [00:42:58]:
That’s right. That is right. Build your house, your organization on, not on shifting sand. Build on a strong foundation that can support that growth. Excellent point, Kim. What was that phrase? If you use crappy bricks, have a crappy, crappy, highly high, highly scientific and technical talk here as always. Hey, I love that been there, done it perspective that all three of you all brought here today. Really enjoyed it.
Scott W. Luton [00:43:25]:
I want to thank our distinguished guests here. Wes Aronson again, manager logistics sales with SP’s commerce. Wes, thanks for being here. Thanks.
Tony Thrasher [00:43:33]:
It was a pleasure.
Scott W. Luton [00:43:35]:
It sure was. I really enjoyed it. Tony Thrasher, senior director of product management with SP’s commerce. Tony, great to chat here today.
Tony Thrasher [00:43:42]:
Likewise, appreciate the opportunity.
Scott W. Luton [00:43:44]:
You bet. Kim, always a pleasure. Really appreciate you being here as well.
Kim Reuter [00:43:48]:
Thank you.
Scott W. Luton [00:43:49]:
All right folks, connect with our friends Tony and Wes here. Check out those resources we dropped. But most importantly, hey do business differently. They dropped a ton of great, very actionable ideas that you can implement. I would say many of them straight away right after the show. Right. Connect with them, have the chat, find out other ways that they can help make change and success happen easier. Your team’s ready for it, right? Deeds, not words.
Scott W. Luton [00:44:14]:
I’m just telling you to take that first step. With all that said on behalf of our tire team here at Supply Chain Now, Scott Luton, challenging. You do good. Give forward, be the change. We’ll see you next time. Right back here at Supply Chain Now. Thanks everybody.
Scott W. Luton [00:44:28]:
Thanks for being a part of our Supply Chain Now community. Check out all of our programming@supplychainnow.com. and make sure you subscribe to Supply Chain Now anywhere you listen to podcasts and follow us on Facebook, LinkedIn, Twitter and Instagram. See you next time on Supply Chain Now.
