Narrator [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, Kim. How are you doing?
Kim Reuter [00:00:40]:
Doing excellent. Always a good day when we’re on Supply Chain Now.
Scott W. Luton [00:00:44]:
Wonderful. I completely agree. We’ve got a wonderful show teed up once again. Looking forward to your practitioner color commentary, which is going to be really good here. So, folks, today we’re diving into peak season prep, right? Hopefully, you’ve already been there, done that, and well, down that path, we’re gonna be talking with a few been there, done that. Business leaders and gaining their perspective on how you can help your organization more successfully navigate peak season 2024. Kim, should be a great show, huh?
Kim Reuter [00:01:16]:
Yeah. It’s never too early to talk about peak season, so perfect timing.
Scott W. Luton [00:01:21]:
Perfect timing. That’s right. And timing, it ain’t everything, but it’s a, it’s a lot of it, right? What if folks enjoy today’s show? We hope you do. There’s a money back guarantee. Be sure to share, be sure to share it with a friend or your network. They’ll be glad you did. Am I right, Kim?
Kim Reuter [00:01:39]:
Yes. Yes.
Scott W. Luton [00:01:41]:
All right. So, Kim, let’s get to work. Let’s welcome in our two featured guests back by popular demand, starting with Wes Arentson, manager, logistics sales with SPS Commerce, and his colleague Tony Thrasher, senior director of product management with SPS. All right, Wes. How you doing?
Wes Arentson [00:02:00]:
Good.
Wes Arentson [00:02:00]:
How you doing, Scott?
Scott W. Luton [00:02:01]:
Wonderful. Great to have you back. Tony, how you doing?
Tony Thrasher [00:02:04]:
Good to see you all again. Doing well.
Scott W. Luton [00:02:07]:
You as well. Now, we, I really enjoyed personally, and we got a lot of feedback from across our global, our incredibly smart global audience and community that they really enjoyed our last show, really enjoyed the interactions between Kim, Wes and Tony and folks. So we’re bringing another installment. Got a lot of stuff to get into here today. Little fun warm up question, folks. Little history for you. You know, I’m big old history nerd on this day. Did you know on this day, June 11, back in 1978, Texas instruments introduced the speaking spell, an electronic educational toy for kids that went on to be a really popular device in the 1980s.
Scott W. Luton [00:02:46]:
It’s been said, though, Kim, Wes and Tony, that this device was the first ever to feature a duplication of the human voice, only a single chip of silicon. My brother and I had one of these. My sister, I think, was of age, too, and we wore this thing slap out, you know, where we speak southern English, so we were trying to learn how to speak proper English. But all, all of that, I’m from South Carolina. I can say that. All of that to say, I’d like to get each of you all to share one of your favorite toys growing up that’s inseparable from your childhood. And, Tony, you’re nodding your head. I know what you’re thinking.
Scott W. Luton [00:03:22]:
You go first.
Tony Thrasher [00:03:23]:
All right, favorite toys. I’m going to go action figure route.
Scott W. Luton [00:03:29]:
Okay.
Tony Thrasher [00:03:29]:
I would say kind of heyday, the teenage Mutant Ninja Turtles. So I would have had probably every variation of those action figures paired up in some type of scheme against probably batman action figures.
Scott W. Luton [00:03:43]:
Oh, I love it. Leonardo. Leonardo was my favorite. The swords right out of the four mutant Ninja Turtles. Wes, that’s gonna be a tough one to top. We’re starting in a good one, Wes. Yeah.
Wes Arentson [00:03:58]:
Hands down, it’s, it’s Legos. We, we grew up. I got a couple of brothers. We spent a lot of time putting together things. I don’t think we followed the directions. It was kind of making our own worlds out of Legos. It was a lot of fun.
Scott W. Luton [00:04:12]:
Oh, I love it. And I tell you, Legos, since that time, hadn’t they done a great job marketing and cross branding, all that stuff as they’re taking over the universe? That’s a golden. Wes, Kim. All right, so we got teenage Mutant Ninja Turtles. We got Legos. What about you?
Kim Reuter [00:04:28]:
All right, well, first, just a small disclosure. I still lego today. It’s a great stress reliever. As you said, scott, Legos have come a long way. They’re still going. But my favorite toy as a child would have to be my Barbie doll. Convertible car.
Tony Thrasher [00:04:42]:
Oh, man.
Scott W. Luton [00:04:43]:
Mm hmm.
Kim Reuter [00:04:44]:
It was beautiful. Gorgeous, pink. I had the little safety bar on the back just in case you rolled it. But that was my absolute favorite. We hundreds of miles with that, with that convertible.
Scott W. Luton [00:04:55]:
Love it. And back in the eighties, you got about 2 miles to the gallon, I think, right?
Kim Reuter [00:04:59]:
We’ve come a little longer, like $0.50, so it wasn’t so bad.
Scott W. Luton [00:05:04]:
That’s so true, man. All right. I love the flashbacks. Kim, Wes, and Tony, we got to have to have a whole series dedicated.
Kim Reuter [00:05:10]:
Cool thing about that, seriously.
Scott W. Luton [00:05:13]:
So I want to start, though, with level setting, with a little bit of context. I referenced me and Kim, hosted Wes and Tony a few weeks ago, got a lot of great feedback about that conversation. So let’s just remind folks, Wes, if you would tell us briefly what SPS Commerce does, a little bit of your background.
Wes Arentson [00:05:30]:
Sure thing. So SPS Commerce, we help connect the retail supply chain. So whether that’s retailers sending purchase orders to their vendors, the three pls that get involved in that, whether that’s moving goods, storing pickpack and shipping goods, SPS sits at the middle of that and help facilitate the data transfer between all those parties. I specifically lead a team that focuses on the logistics side of it. So that’s carriers, warehouses, third party logistics of any sort. That’s the group we’re focused on. So you might hear a lens on that today. But Tony is very well versed in the vendor side so we’ll be touching on that as well.
Scott W. Luton [00:06:08]:
Love it. I think blessed are the connectors is one of the beatitudes, if I’m not mistaken. Wes and I love the role you all played there across the retail world. Tony, tell us a little about your background.
Tony Thrasher [00:06:18]:
Yeah. So 15 plus years of experience in retail supply chain in the space that Wes really articulated most of that with SPS Commerce. But working with logistics providers, brands, manufacturers that are shipping into distributors or retailers, working with all of those parties, kind of key players in the retail supply chain.
Scott W. Luton [00:06:40]:
Love that. And Kim, we don’t tout this enough. I think it’s important for our audience. You’ve got a deep background when it comes to supply chain and especially retail supply chain. Quick blurb about that for context.
Tony Thrasher [00:06:54]:
Yeah.
Kim Reuter [00:06:54]:
So everything we’re talking about now, I spent four years at Nordstrom headquarters out in Seattle helping with sort of a supply chain lift and change, lift and fit as we sort of called it back then. And this is crucial. You know, one of the craziest things for me, I came from Amazon. Seven years at Amazon doing e commerce and e commerce supply chain and coming and doing retail supply chain was a little bit mind blowing, right? Because we’re not talking about the time way back in the day. Like Amazon had like twelve warehouses and now like 80. When you get into retail, it’s like all the stores and the warehouses and the, you know, and we got to go into like downtown New York. And the timing and everything that needs to happen with the retail perspective, it’s just as complex, if not a little bit more complex in e commerce.
Scott W. Luton [00:07:44]:
Yes. Yes. And getting the friction out, getting the complexity out. Right. It doesn’t mean this business is simple, but how can we make it as simple as possible for our team as simple and positive as possible for our customers out there, our suppliers out there, the whole ecosystem. And we’re going to be talking all of that, especially as it applies to peak season here today. So, Tony. Yeah, going back to you here now that we’ve kind of level set around a lot of things here, including all three of you and your backgrounds and what you do, let’s get your observations for peak season 2024.
Scott W. Luton [00:08:17]:
I got a two part question for you. First, what are some of the typical dynamics involved in this peak and any peak? And then secondly, what are some of the more unique elements this season?
Tony Thrasher [00:08:29]:
Excellent. So I’m going to maybe, Kim, riff off of what the two categories you were just touching on. I’m going to just speak a little bit more about like, let’s say wholesale retail peak season, and then also, then just come back to that e commerce. That that is certainly a big part of this. But you know, if you look at the wholesale distribution calendar, really what we see is July and August. So we’re pretty close, right? July and August is when those initial shipments are, you’re going to see those surges of initial shipments to get goods populated into retailer distribution centers. And that’s going to really kind of peak out in that September timeline where retailers probably have the most inventory in their distribution center. Then they start proliferating that out to their stores through October, November and December with those replenishment goods coming from their supplier community kind of sustained and reactive to overall buying trends that season as well.
Tony Thrasher [00:09:26]:
So that’s just an important piece is like we’re really kind of getting to some of the peak season, if you will, already on that wholesale side, especially when you go upstream in the supply chain, start talking about manufacturers producing their goods, then shipping into a distribution center on the wholesale side. So like, it is easy for us to talk a lot about e commerce, and that’s obviously very important here, and I’ll get to that in a moment. But that’s an important thing to remember as well. And then you have e commerce in general, which we know is going to be pulling from those inventories in DC, pulling from inventories at the brands all over the place and three PL warehouses that we know all too well is going to be a November December return season in January type of a mold. In terms of your second question, Scott, like what maybe some of the unique elements that we’re expecting, we touched on this the last time we joined you. All the e commerce growth, it’s going to grow, but there’s still that, let’s say slowness and acceleration overall e commerce growth. So you wouldn’t expect. I don’t think we’re expecting to see just these giant leaps of e commerce relative year over year, but there is going to be sustained growth there, which is important to prepare for.
Tony Thrasher [00:10:41]:
I think the shopping season continues to extend. Even all of us can just relate to probably our shopping experiences. And I think retailers continue to be super savvy and how they promote and things that they do in the store, to extend those and almost take some of the burden off themselves to just be isolated to a certain few days or certain peaks. So expect that trend to continue. And then the last one is, I think our consumer expectations, us as consumers, has continued to evolve. I think there’s an interesting dynamic, which is increased prices. I think we’re all going to spend more than we have. And I think that is going to push us to expect just a little bit more service from a shipping perspective, a more personalized experience in the store and outside of the store.
Tony Thrasher [00:11:26]:
So those are trends that continue, but maybe a little bit of nuance for this season. Kind of married up with that calendar view.
Scott W. Luton [00:11:34]:
Tony, I appreciate that. Two quick points for our good Kim, for her take on what you’re saying or sharing there. Inflation is at 3%, I believe, last count, and we warned at 2%, at least here in the States. So we’ll see the continued, hopefully good work of getting that down so we don’t pay more or at least not as much. We want the product on the shelves when the customer is ready to make that transaction. So, Kim, anything you want to add about those peak season unique and traditional dynamics that Tony was talking about?
Kim Reuter [00:12:05]:
I think it’s going to be an interesting season. You know, what I’m hearing out in the market is that consumers are going back to stores. They want to have that experience. They are not necessarily spending money in stores, but they’re going to stores, they’re checking stuff out. And most of them are then making a purchase online later or making a purchase while they’re in the store online variety of reasons. Don’t have my size, whatever it is. So I think, you know, even more like Omnichannel has been a big topic for, you know, 1015 years now, especially for big retailers. I think we’re just going to continue to see more complexity around that because one of the things that happened, helped with omnichannel was that the store presence was down, right.
Kim Reuter [00:12:52]:
So customers weren’t expecting so much out of the stores. It was more like an online play. But now as customers are swinging back, they’re going to expect that full experience in a retail location. The tolerance for, oh, we only have these two sizes is continuing to kind of drop. So that puts a lot of pressure on inventory management, three PL management, predictability, distribution of inventory. It’s just going to become more and more complex as consumers want it all everywhere.
Scott W. Luton [00:13:21]:
Want it all everywhere. Don’t we all want that? Cause we’re all consumers, practitioners, but certainly consumers as well. Good stuff there, Kim. Okay. Want to keep driving here? Wes, I’m going to turn to you. We want to really dive in on this next segment of our conversation here today and gain you and Tony’s and Kim’s expertise and experience to help business leaders out there better navigate more, successfully navigate this upcoming peak season. So, Wes, let’s start with what measures can you take to maintain service quality, which is really important, meeting those customer expectations even when the demand is high.
Wes Arentson [00:13:57]:
Wes, I think like we talked about earlier, it starts long ahead of any peak season, and it really boils down to, I think peak season puts a magnifying glass in whatever you’re doing. Like Tony talked about. We see the volumes, we see kind of random spikes that maybe in the past we didn’t see off peak season due to maybe trends or just sales. So I think we talked about this last time a lot. It’s, it comes out of, at least from our perspective, because there’s only so many people you can throw at a problem in peak season and be able to get through it. I’ve heard stories of that from, from folks I’ve worked with where they had a much bigger Q four than they projected or they had a peak earlier than they expected, they didn’t have what they needed to support that. And that just created a ton of troubles with retailers because they didn’t meet the requirements. And suddenly they’re seeing chargebacks.
Wes Arentson [00:14:51]:
They’re seeing a lot of things. So to me, it’s automation. It’s spending time early in the season running simulations, running tests to see can we keep up with capacity if we were to get up to a certain level? Tony can speak to this more, but we do the same thing from a data perspective. We’re pushing data through our network at a level that is far above what we expect to see because we want to make sure that everything’s in place and there’s not something we’re going to run into later in the year. So it’s, it’s spending the time early, even if it’s, you know, maybe above and beyond what you expect, but to ensure that no matter what happens, you’re prepared, you’re, you’re not caught off guard, um, trying to find people that you can just quick get in from temp. It’s, how can we support as much of this as possible with the people who really know our operation?
Scott W. Luton [00:15:38]:
Love that, Wes. Uh, let’s see here. Automation getting out ahead, lots of simulations, not just throwing a lot of folks at it. We got to lean into technology, doing things differently. What else did you hear there, Kim? What else would you add?
Kim Reuter [00:15:52]:
So, planning early, I think, is the biggest thing, right. And the other kind of playing on what Wes was talking about, another thing that I see is that companies don’t plan, period. And then they get in trouble. And exactly what Wes just said. Then all of a sudden, they’re running around, they’re like, oh, my God, what do we do? So, first and foremost, you should have a set peak metrics that you measure, right. Inbound, open Pos, what do we have on our inbound? What are we expecting? Stow. It’s not just about getting it in the door. We got to get it into a sellable location.
Kim Reuter [00:16:21]:
And then, of course, there’s the outbound stuff. And every good company should have a set level, a set number of three pls, or set three Pl metric that are a metric that they measure at peak season all the time, and they’re looking at it all the time. And what I see is that companies don’t do that. And then when it does hit the fan, they’re like, well, we don’t know where to get it. Nobody’s looking at it. And then all of a sudden around, I don’t know, thanksgiving, generally, there’s some big epiphany because we finally did look at the data and we’re like, oh, crap. So plan early and then define your metrics that you want to use for the peak seasons. To be totally honest, you should be using them all year long.
Kim Reuter [00:16:58]:
But if you want to do it around peak season and use them and use them consistently all the time.
Scott W. Luton [00:17:04]:
Yes. And Kim, share them with all of your suppliers and make sure they understand how they’re being measured. That’d be a great idea. Right. So, Tony, before I move to the next question, we’ve covered a lot of ground just in this one question with Wes. Anything you want to add in, Tony, before I move to the next one?
Tony Thrasher [00:17:21]:
No, I like those concepts. Completely agree with that. It’s taking the time. And we like from a calendar perspective, it’s the folks that do this well have a rhythm immediately exiting last peak season. Exactly like your point, prepare, have a plan. Make sure you have the right plan at the right time too so you have enough time to react to that plan or what you learned from the last season, too. So we might be a little late for that this year. But obviously if that’s not something you’re doing, you should be earmarking that for January, February, March next year.
Scott W. Luton [00:17:56]:
That’s right. Hey, while you’re working on peak season this year, right to your point, Tony, we’re already where we are. We can’t change that. But track those observations you’re learning in year. So your next 2025 conversation, as you really get up to Wesson’s point, get out ahead of it, you can apply it early next year. And as Wes said, basically a paraphrasing, spend time early so you can enjoy the time you spend later in the year. Right. Because you’re more successful.
Scott W. Luton [00:18:23]:
Okay, next question. Tony, stick with you for a second. How do you balance this ongoing balance? I’ll tell you what. It just goes with the territory. How do you balance the need to meet increased demand? What we’re talking about a second ago, with maintaining operational efficiency and cost effectiveness. And by the way, Tony, before you answer, I was looking at data earlier this week from a survey of 375 procurement executives, and guess what their number one priority is for the first time in three years? Cutting costs, cutting costs. So Tony, how do you find that balance?
Tony Thrasher [00:18:59]:
I think it’s, it starts with that first piece, which is understanding where you’re expecting that increase of demand to come from. Right? So you have to use our, you know, third party warehouse kind of centering here in the conversation. Your demand is going to come from your customers, then their demand is going to come from the end consumer, the retailer, the grocer, etcetera, who are their customers. So really understanding that concept that we hear so often from you touched on this, Kim, that all these players in the retail supply chain are up against is that concept around inventory allocation. So as a third party warehouse, understanding your customers allocation strategy and where their priorities and demand are going to come from is extremely important because obviously you want to do the operational efficiencies, the cost cutting, but still meeting that demand appropriately, that’s going to feed into your prioritization in the next couple of months as you’re getting ready, last minute preparation. But I think that is the really good three pl, third party warehouses that I know Wes and I speak with on a regular basis. Obsess over their customers business as if it’s their own. And they know their customers strategies and allocation strategies with inventory, what they’re trying to get out of the upcoming seasons as well, sometimes, if not better than most of the people at that particular customer business.
Tony Thrasher [00:20:32]:
So it’s just a really important point there.
Scott W. Luton [00:20:37]:
I love it, Tony. And to put it in highly scientific terms, know the things, right, know where the demands coming from. Wes. Yeah, I think you got an example, maybe, to Tony’s response there, to share.
Wes Arentson [00:20:49]:
Yeah, I think one of the things that’s interesting we’ve seen over the years. So, like, I’ve been here almost ten years. When I started walking through warehouses, there it was just racking in boxes, especially in the, the three Pl space, the third party warehouse space. You know, certainly if you’re a manufacturer, you’ve had automation for years. But increasingly there’s been more and more focus on automation as we look at how do I increase my service levels, get more product out the door. We see more and more automation in areas where it didn’t make sense before, because as a third party warehouse, I got to be prepared for anybody who walks through the door, whatever product they want me to ship. And that means I can’t. There’s certain types of automation that don’t work because I don’t know exactly the size of the product, I don’t know the shape, I don’t know the requirements, because I don’t make those requirements.
Wes Arentson [00:21:39]:
My customer does. But more and more, we’re starting to see some of the robotics options be flexible enough to be able to handle sort of anything that is thrown at it. There’s some more complex sortation. ASRs starting to see more and more of that bubble into these third party warehouses that I think is going to make a big impact on this. When we talk about how do you scale up without scaling up cost, whether that’s robotics as a service, something that you start to hear more and more, where, hey, I can take on some robust peak, that, yes, there’s a cost, but it’s not the same as traditional manual labor, and be able to scale more efficiently as long as you’re building the operation correctly to support those robotics. And again, in advance, going back to what we talked about earlier.
Tony Thrasher [00:22:23]:
Yep.
Scott W. Luton [00:22:24]:
Kim, your thoughts there?
Kim Reuter [00:22:26]:
Everything that Tony said, basically, I have been in so many positions where we’ve actually gotten a three PL on the phone finally with the right people in the company, like the actual buyers. Right. And then all of a sudden there’s like all these light bulbs that come on and the three Pl, in many cases, educating them on how to manage their inventory in the physical sense. Right. It’s not just spreadsheets and what’s going to sell to the store. But hey, there’s a reality here of we’re not going to be able to handle 1040 footers or sweaters. So we need to think about this differently. So I would always encourage three pls.
Kim Reuter [00:23:02]:
You are the experts in the industry. You really should take opportunities to educate your customer. It will make everybody’s life better.
Scott W. Luton [00:23:09]:
Yes, it will. Good stuff there. Kim and Wes. All right, so Tony, this is not going to shock anybody. Flexibility is key, folks. It still is. Was 100 years ago. It still is now maybe even more flexibility, perhaps because of the ever evolving, ever evolving consumer demand.
Scott W. Luton [00:23:27]:
So anticipating those things that will go wrong, but ensuring all parties are in sync to mitigate that snowball effect, man, there’s a premium on that, right? What are your thoughts when it comes to breaking out the crystal ball, predicting where things may go crazy and maintaining that powerful orchestration amongst all the parties?
Tony Thrasher [00:23:47]:
Tony, I think that’s the, that’s always the challenging variable this time of the year because you expect the unexpected. We’ll probably get into this a little later as well. But even when we’re, as a business planning for the holiday season is we know the window of time that we’re going to see our peaks peak, but we also don’t know exactly when it’s going to hit. You’ve got to be ready and flexible for when you’re going to, especially on those ecommerce each picks and some of that stuff, you’ve got to be ready to respond. And then that continued transparency, we talked about the transparency through the plan with your customer, but that transparency through the season, like weekly check ins. How are things going? Anything that you’re seeing on your side? I think putting some of that infrastructure quick. 15 minutes, check in with the right business leader on how things are going. What we’re seeing so far, are we expecting to see anything differently? I think those are really good ways of just keeping the open lines of communication and then making sure you’re pulling in the right people at the right time.
Tony Thrasher [00:24:48]:
If you do see a disruption, that’s where having those trusted partners, your brand, working with three PL, maybe have multiple three pls, maybe you’re working with a technology provider like SPS, commerce and stuff can go bump in the night there. So making sure you’re bringing in the right parties when the unexpected does happen as well. Remedy.
Scott W. Luton [00:25:08]:
So Tony, just one quick blur up here. Let’s communicate when things are great, when things are so so, and when things are, of course, when they’re not going well, let’s increase those communication cadences. That’s amazing what you can learn on those good days when folks aren’t expecting a call. Kim, your thoughts on Tony’s response there?
Kim Reuter [00:25:26]:
I agree flexibility is key, but you have to have data. You have to be flexible about something, right? So a lot of people are like, oh, we’re super flexible, but we have no idea. We’re just flexing. We don’t know which direction we’re going. We’re not really sure. We’re just doing handsprings all the time. But it’s not actually productive. You have to have your data, your predictive data.
Kim Reuter [00:25:49]:
So we don’t want to look at what happened yesterday. We want to look at what’s happening in the future. And then that’s where you can really use good technology to be flexible to make the right decisions, redirect the inventory before it gets to the warehouse. We’re going to shift our bikinis from Chicago to Miami because they’re just not selling in February. But you have to have all of that data before you can make those decisions and then be able to execute on it. So yes, flexibility, but you got to have something to be flexible about.
Scott W. Luton [00:26:15]:
Good stuff there. Kim to Wes, building your support network, right. Critical. What are the critical questions, though, to ask to make sure you’re prepared when inevitably things go wrong?
Wes Arentson [00:26:28]:
Wes, I think like we talked about before, getting ahead of it, understanding an escalation path. Because, Scott, like you said, things are going to go wrong. And the important thing to understand, I think wherever you sit in this operation is everybody is in PCs. So there’s nobody who’s sitting around waiting for your call. You know, we’re in PCs and your WMS providers are there PCs, and the brand is the retailer. So you really have to have that set beforehand because everybody’s getting pulled in a lot of different directions. And if you don’t understand, hey, if I need something right away, where do I go? That has to be done well in advance because, you know, everybody’s fighting a lot of fires and you have to be able to manage that because every vendor is a little different. There’s no set path for how you escalate.
Wes Arentson [00:27:14]:
And I think that’s important to understand. That’s a call or conversation prior to the busy season. And then, Scott, to your point, the questions asked, it’s like, who are the key people what are the preferred methods when that first one doesn’t work? Where do I go next? And then ultimately, what are the downstream effects of what I’m dealing with, and how do I communicate that to ensure the accurate, appropriate level of effort is put out of this problem?
Scott W. Luton [00:27:40]:
Excellent, Wes. Love that perspective. Kim, what stood out there in Wes’s response?
Kim Reuter [00:27:45]:
Planning the escalation path is really important. I am a notorious just escalator. I just go straight to c suite on time. And a lot of people get upset about that. Cause they’re like, if you’d asked, I’m like, but I didn’t have time to find you. So that’s important because they spend, and I have done hundreds of crises that all seem to happen at 02:00 a.m. i don’t know. They can’t happen at 02:00 p.m.
Kim Reuter [00:28:09]:
they have to happen in the middle of the night. And it is very frustrating. Like, who do we get on the coil? How do we get them, who do we tell? And especially when you guys are talking about three pls, because it has such a great downstream effect. Right. So we need to, you know, let the store know that their shipment of the product that’s launching tomorrow isn’t going to be there and so that they can prepare. So, you know, how do you do that in a seamless way that doesn’t wake up the entire company to get that information. But, yeah, that super clean escalation path will make everything move much faster.
Scott W. Luton [00:28:40]:
Love it. Love it. All right, so, Tony, let’s see here. We’ve been talking about data throughout the conversation. We talked about, of course, last time we had the one two punch. That is Tony and Wes here with us. So obviously it begs the question, how can you leverage data analytics to forecast demand and optimize resource allocation? Because they are finite.
Tony Thrasher [00:29:02]:
Yeah. Excellent. Kim, I think you mentioned this, alluded to this a couple of times. Like, if you look at this year over year, and this is just a kind of demonstration of what we see as a business, which is a really good diversity of industries and product categories and fulfillment models shipped to DC for cross talking purposes, bulk, and also a lot of e commerce that’s in here as well. And you can see that it’s quite a few similarities year over year, and it’s understanding the nuances inside of each of those months and weeks. And what we do as a business is we look at, and our team has gotten so good at this over the years, tons of confidence in our ability, because obviously we go through peak season, like Wes was saying, too, just like everybody else, we know where our peaks at, like the high water mark in any given 15 minutes window, for example, in terms of orders or shipments flowing through our network, we don’t know when that’s going to hit. So we’ll run simulations to make sure that we can hit those peak of the peaks. I think that that type of preparation is transferable to everyone’s business in their own way, where again, like we have a high degree of confidence that’s probably going to happen in the month of November and probably down to the week that it’s going to happen.
Tony Thrasher [00:30:23]:
But we don’t know if it’s going to be cyber Monday at 08:00 a.m. eastern time or Black Friday at, you know, whatever. So I think leveraging the data and what you’ve learned from your business or what your partnership, like a three PL, if you’re a brand, have learned from their business. To make sure you’re prepared is a really important thing to do. And then Walib, I really like where you’re going to is for your customers that are sophisticated in their demand planning. That’s another data point that you should be plugging into this as well. That can contribute to what you’re assuming will be your year over year growth or your growth and your overall peak. So I just think, you know, take the time with that data and then use that for your preparation.
Scott W. Luton [00:31:11]:
Excellent point, Tony. I love your perspective. Kim, what would you add to that?
Kim Reuter [00:31:16]:
Yes, data is huge. And if there’s one piece of data that I would, if people were like, hey, there’s one thing that we’re going to look at your Po data, and it’s the one thing that nobody looks at. Right. Especially in logistics, once it starts moving, they start to kind of get plugged into it and they’re like, oh, it’s moving. We care now. No, you need to care when that Po is written because that tells you what’s coming. Six months, three months, twelve months down the road, a good PO will have a no later than ship date. They’ll have an expected delivery date.
Kim Reuter [00:31:45]:
All of that data is there to tell you. And that is your buying team’s way of saying, here are expectations of you without us telling you what they are. So it is available to you. So po p o. P o. P o. P o. Always look at Podata.
Scott W. Luton [00:32:01]:
I love that. So, Tony, quick follow up question. We asked Wes earlier about some key questions to ask. Right. But for you, Tony, what should we be asking ourselves? And our customers when it comes to lead times and of course, visibility, your.
Tony Thrasher [00:32:19]:
Po thing, I love that so much because it’s where my mind goes with this question, is the type of purchase order we’re talking about makes a big difference here. To your point, you’ve got that big wholesale order. Maybe you even know the plan for the entire year. So you can plan out lead times versus a e commerce order that just came through as a sales order. And you’re balancing that as a part of your overall inventory allocation strategy. So the best kind of prep sessions, and we always say like this time of year for us is an extremely busy time for our onboarding side of our business, as well as obviously reflective of our customers onboarding. They’re getting that new retailer up and ready to go, or that new sales channel up and ready to go. And they’re obviously juggling the prioritization inside of their business.
Tony Thrasher [00:33:06]:
What comes when. I think that really is dictated by when that first purchase order is coming and what the lead time is for me to be prepared on that first purchase order. And those things are going to change. But being really conscious of the fact that every relationship has a nuance based on the type of purchase order or sales orders and the shipping methods that I’m doing. But yeah, I really like where you went with that Kim, on the purchase order front because I think that leads exactly into this lead time in preparation lens.
Scott W. Luton [00:33:38]:
Yes, every relationship has its own set of nuances. As Tony said. You know, maybe not peanut butter and jelly. That’s pretty straightforward these days. Not much nuance there. But that is not the world of globe supply chain. Kimmy, you want to add as it relates to Tony response there, the po.
Kim Reuter [00:33:55]:
Is the secret sauce. Like I’m just going to tell people right now, like I preach it constantly. I’ve done it. I’ve built entire import supply chains around starting with Po. Everybody thinks I’m crazy. You don’t need to think this far in advance. But let me tell you, if you want a 99% plus preclearance and full flow of your inventory, you’re going to have to do it. And you can get 99% plus if you do it that way.
Kim Reuter [00:34:18]:
But as far as asking our customers in their lead time, what are their expectations? And I think another thing that we don’t talk to our customers about, especially in the retail space and even in e commerce, is what are your holiday sales plans? When are you going to start? Are you doing any special events? Da da da da. One of the examples company I worked with previously we were doing a big launch for Beyonce when she was doing her, um, ivy workout wear.
Scott W. Luton [00:34:44]:
Beyonce. Ah, same. Beyonce. Ah, Super bowl commercial. Y’all saw that, Shirley, right? Beyonce.
Kim Reuter [00:34:53]:
Sorry, it was my favorite one.
Scott W. Luton [00:34:55]:
Kim. Beyonce.
Wes Arentson [00:34:56]:
AI.
Tony Thrasher [00:34:57]:
Anyway, go ahead.
Kim Reuter [00:34:58]:
Sorry, I was probably too busy doing something else. But, but anyway, so there’s this huge launch around Beyonce, you know, workout gear. The logistics behind that were outrageous to make sure that that happened. And it was the last thing everybody talked about. Right. So nobody really talked about outside of having inventory to show on a shelf, there wasn’t a lot of conversation about like how are we going to support this from the warehouses, the three pls, what are the expectations? So I think, you know, especially coming into peak season, you know, what are your plans? Are, you know, when are you going to start? Are you having Black Friday? Are you having cyber Monday? You know, what are you doing? Because you know that there’s going to be demand around that. And then another little sort of industry secret is that your logistics and transportation department, for your customer, they’re negotiating space with the carriers. Okay? So they have to predict how many orders they think they’re going to have around peak season.
Kim Reuter [00:35:53]:
So you have these two, we have the buyers who are like, here’s how much inventory we think we’re going to have and how much we’re going to sell. And then you have supply chain. That’s like, we need to have this much capacity with our carriers. These two rarely come together and speak, but if you got them together, you would have a full picture.
Scott W. Luton [00:36:09]:
Ah, okay. Things we can do with full pictures. And by the way, going back to earlier, part of your response, the products are cool and all, but supply chain makes it happen. Supply chain is the details. As someone I worked with used to say all the time, Wes, let’s dial it in. We’ve really enjoyed a ton of great conversation. I want to dial it in to how SPS is partnering today to deliver this with a lot of these things we’re talking about all rolls up into a highly streamlined and successful customer experience. How’s SPS making that happen? Wes?
Wes Arentson [00:36:43]:
Yeah, a couple of things. I think number one is a focus on the customer. So building an account team around the customer so that escalation path is clear, so that the team they work with is clear and they know all the key points to be able to get from day one when that customer comes on board all the way through to one of your shipping orders in Q four and everybody’s running around. And then number two, I think just the architecture. The way we build connections is we do it right. We do end to end testing for each retailer. We’re not taking any shortcuts. We’re not doing things the fastest possible way.
Wes Arentson [00:37:19]:
In general, we’re doing it in a way that’s going to ensure that we’re meeting the requirements that retailer, so that we don’t find out later that, hey, we skipped a step and now that customer is seeing a ton of chargebacks or something’s happening that’s not delivering the orders to them. That’s something that starts with the brand, starts with the retailer, and flows all the way through that supply chain. And if it’s not done right, that can have massive consequences on the end customer on that brand. So it’s really making sure you’re approaching it the right way. So that foundation is there for Q four.
Scott W. Luton [00:37:53]:
Excellent point. Wes and Kim. You know, I rubbed elbows with and worked in the retail space in a variety of different ways over the course of my career. Retailers don’t want to charge pass along the charge backs. They’d rather have suppliers that perform really well. That’s where they’ll make a whole bunch more money and delight their customers. But Kim, any comments on what Wes just shared there?
Kim Reuter [00:38:15]:
Yeah, I mean, to your point, Scott, like a chargeback is a failure almost. It’s a we. We misjudge customer demand or you didn’t meet our requirements. Well, I guess the customer is RCV. It’s a little bit different. But yeah, you want to have. We need everything smooth. If we don’t have a good customer experience, like Wes said, if you’re not communicating, we don’t have escalation.
Kim Reuter [00:38:36]:
Pass. It’s not going to be a smooth peak season. And the thing is with peak season is if you have one oopsie. It just takes one, all of it. Like, it can take forever to recover from that. And especially during peak season, you never quite get back up completely back in the saddle if you have one. Oopsie. So, yeah, streamlining everything, communication complete.
Kim Reuter [00:38:59]:
Transparency is the only way to do it.
Scott W. Luton [00:39:01]:
Hate to say it, that’s an old cliche, but one bad apple can spoil the bunch, right? So apropos here. All right, so, Tony, I’m coming back to these nuances you referenced a minute ago with one of our last questions here. And then we’ve got a really cool, actionable considerations that, folks, you can take away from this and put in place today that we’re going to get from Wes. But before I do, Tony, we were talking about nuances a minute ago, those nuances of shipping to new retailers. Right. What are some important things to keep in mind there, Tony?
Tony Thrasher [00:39:32]:
Yeah, first, I would say that the prioritization of new retailers and new sales channels ahead of peak season, if at all possible, is big. You don’t want to be. And I’m going to come back, I’m going to come back to that chargeback conversation because I think unfortunately, that’s how people learn the nuances. Right. You know, all too often. But the sooner you can get the muscle memory, if you will, and get that new channel or new retailer operationalized into your business, either if you’re a brand shipping to a retailer for the first time, or you’re three pl shipping on behalf of your customer to a retailer for the first time. Very, very important. That is not just the technical side of the purchase order, if we will, and some of those pieces, but it’s also that business process.
Tony Thrasher [00:40:23]:
You don’t want to be going out and booking freight on a retailer portal for a collect shipment the first time when it’s a kind of high impact order. Going back to that po thread, that’s become a theme here. Kim, come back to that chargeback thought. It’s just all too often we hear our customers that they, hey, we’re going to learn about it a month after we’ve made the mistake. And what would be the absolute worst time to learn of a nuance through a chargeback peak season, then the prep up front and then still insulate yourself, if at all possible with, you know, actually going through the strokes of doing a shipping for a new channel for the first time. Before you get into that, you know, heart of shipping to a DC in September or shipping drop ship on behalf of a retailer come November. So hopefully that’s there. And they’re all, there’s, there’s those nuances.
Tony Thrasher [00:41:15]:
You got to understand them, operationalize them. Most of our big three pls do that upfront and they’ve got that all the way attached to the pickpack and chip process through their wms instrumented. So that’s just an important thing to have flushed out.
Scott W. Luton [00:41:30]:
Hey, give me good news fast, but give me bad news faster. Some model of the, uh, the second generation owner of the Vlasic food company, right? The son of the founder that took it to incredible heights. That’s one of his mantras throughout the decades of running the business. Kim, respond to what Tony was just sharing there about the nuances of shipping to new retailers.
Kim Reuter [00:41:50]:
Vendor guides are huge. We have to write it out and have it documented on what the requirements are. Yeah, because the chargebacks are crazy. And every retailer has their little tiny thing that they have. It’s got to be pink, you know, shrink wrap and, you know, whatever, like, and it’s really hard to manage. But if you can document them and you can kind of streamline them into the process, that makes a huge difference.
Scott W. Luton [00:42:16]:
Yes. Standardization and implementing standardization. So the whole team knows, the process knows, and we can hopefully automate and apply technology to make it easy to hit all of those specs each and every time. Okay, we’ve got to get into. Right before we let Wes and Tony and Kim go, we wrap this episode here, a couple final questions. I want to start with this. Wes, a simple, I love simple but proven action plans. So what would you say about some activities folks can take throughout the year that are truly necessary to complete to really set yourself up for a successful peak season in Q four in the year?
Wes Arentson [00:43:00]:
Yeah, I mean, I think it starts real early. You know, you start in January.
Tony Thrasher [00:43:04]:
Right.
Wes Arentson [00:43:04]:
Coming out of.
Scott W. Luton [00:43:05]:
Y’all catch that theme?
Wes Arentson [00:43:07]:
Yeah. Yeah. And it’s all circular and it’s all, it all moves. But I think you spend Q one looking at, hey, what do we do? Well, what do we not do? Well, you know, you’re signing on new customers. People were maybe had a bad experience in Q four with their current provider. Maybe they’re anticipating growth. They’re looking, but we see a lot of activity there in Q one. And then I think really looking at gaps in technology.
Wes Arentson [00:43:28]:
Where can we fill some gaps? How can we help facilitate more growth next year? You focus on what can I do? Then you move into Q two and Q three. You’re onboarding those clients that hopefully you signed on during Q one, you’re bringing on that technology, you’re finalizing those evaluations, you’re kicking off the implementation, really getting into those activities that help drive it. You have to be done with those early enough, like Tony said, to be able to support that Q four growth in the peak season. And then finally Q four, you’re executing. There’s not a lot of time. It’s really, let’s document what doesn’t go well so that we remember once the fog of Q four lifts, we can have ideas, but you’re not going to make a ton of changes in Q four. And then I think the thing that makes this challenging for logistics companies is you’re doing all of this while shipping out a ton of orders because there’s no slow season, there’s no time when you’re just sitting around waiting. Yeah, it’s big in Q four, but we see even last year you saw in the middle of the year just that yellow line.
Wes Arentson [00:44:27]:
You see a jump throughout the middle, normally slower season. So theres always a ton of activity. Youve got to juggle that with making the right investments, making the right decisions so that when Q four comes around, youre prepared clay.
Scott W. Luton [00:44:43]:
Excellent, Wes, and really quick. Its first suggestion there, folks. Dont make assumptions that you think you know what went well and what didnt go. Have those conversations. Dont mail in those posts. Mortem conversations in Q one to reflect on everything that transpired in Q four. I’m telling you, lean into what Wes, Tony and Kim are talking about and that’s where big time outcomes can come out of those powerful learning opportunities. Kim, really quick, you want to pick up one of those actual items.
Scott W. Luton [00:45:12]:
Wes shared, anything you heard there.
Kim Reuter [00:45:15]:
So back to the early thing. Adding new vendors one. It’s helpful if in Q one you can get an idea of how many new vendors or new retailers you may what are your business goals? How much are we playing? Planning to expand and then you’re prepared for that. Onboarding new retailers. I would love as a person who does this stuff all the time, I would love for it to be a flip of a switch and we’re good. It normally takes like six, eight weeks to kind of get everything running and so you have to plan ahead. And so that would be my biggest thing, you know. So, you know, when I worked at Amazon, I ran inbound and outbound.
Kim Reuter [00:45:49]:
We were in peak season from August till like December 25. And so don’t add people in November. That all needs to be done in June, May, June.
Scott W. Luton [00:45:59]:
Love it. Act early, act early, act early. And three other tips. Plan, plan. Good stuff there. Kim and Wes and Tony. Hey, we got Kim’s key takeaways a little bit early. You’re always early and in full, Kim, I love it.
Scott W. Luton [00:46:13]:
All right, so really quick, Wes and Tony, let’s make sure I’ve got a resource I’m going to share with folks. A cool landing page that will dive deeper into a lot of things we’re talking about and some of the cool things SPS is doing. But, Wes, how can folks connect with you?
Wes Arentson [00:46:27]:
Yeah, can reach out on LinkedIn. Had a couple people reach out after our last conversation, had some, some good discussions. So feel free to reach out.
Scott W. Luton [00:46:34]:
Awesome. Whether you’re talking retail supply chain or three Pl stuff or Lego tips, you can get maybe the plans about how to build a death star with legos from west, you never know what you’re going to get. Tony, same question. How can folks connect with you?
Tony Thrasher [00:46:49]:
Definitely the same. Connect on LinkedIn. Reach out with a message. Always interested, interested to talk supply chain. Learn from other folks experience. So don’t be a stranger.
Scott W. Luton [00:46:59]:
Awesome. Y’all connect with Wes, Antonia, and hey, connect with Kim Reuter on LinkedIn as well. Good stuff there. Always enjoy her perspective. Hey, Kim, let’s share this resource from Wes, Tony and the team here, folks. If you’ll learn more about how three pls in particular can accelerate time to revenue with Wes, Tony and SPS gang, make sure you connect with Wes and Tony, both. From SPS Commerce, Wes Armstrong, thanks for being here.
Wes Arentson [00:47:28]:
Thank you.
Scott W. Luton [00:47:29]:
Always a pleasure. Tony Thrasher, great to have you here today.
Tony Thrasher [00:47:32]:
Likewise. Thank you, Scott. Thank you, Kim.
Scott W. Luton [00:47:34]:
You bet. Kim Reuter, really enjoyed your perspective as always today. Thanks for being here.
Kim Reuter [00:47:40]:
Yep.
Scott W. Luton [00:47:41]:
Here’s a challenge. Y’all got to take something that Wes or Tony or Kim shared here today. Going back to we got to make things easier. We got to change how business is done. 99.999% of our team members want to do world class jobs, right. And we got to enable them and empower them to do just that. There’s a lot of great, been there, done that suggestions in this conversation. So take just one thing at least, folks, put it in action.
Scott W. Luton [00:48:06]:
Your team is ready to make it happen. On that note, on behalf of everyone here at Supply Chain Now, Scott Luton challenging you to do good, to get forward, to be the change that’s needed. We’ll see you next time. Right back here at Supply Chain Now. Thanks, everybody.
Narrator [00:48:22]:
Thanks for being a part of our Supply Chain Now community. Check out all of our programming at SupplyChainNow.com and make sure you subscribe to Supply Chain Now anywhere where you listen to podcasts and follow us on Facebook, LinkedIn, Twitter and Instagram. See you next time on Supply Chain Now.
