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, everybody. Good morning, good afternoon, good evening, wherever you may be. Scott Lewton and Mary Kate love with you here on Supply Chain Now. Welcome to today’s show. Mary Kate, how are you doing today?
Mary Kate Love [00:00:42]:
I’m doing great. Super excited for this.
Scott W. Luton [00:00:45]:
We are too, now, and we’re fighting the cicadas as we were talking about in the pre show. Right, so you’re here, you’ve won the latest round, is that right?
Mary Kate Love [00:00:52]:
Yeah, because I had to close my window so no one could hear them in the background, but they are loud.
Scott W. Luton [00:00:57]:
Oh, a lot of our listeners and viewers, I’m sure, can relate. Moving right along, we have an outstanding show today. We’re going to be taking a intriguing deep dive into the ever evolving, powerful world of supply chain analytics. And we’re going to be learning from a mover and shaker that’s been leveraging analytics to produce extraordinary outcomes for years now. So stay tuned for an informative, enlightening, entertaining, a biting conversation. Cicadas don’t bite, do they, Mary Kate?
Mary Kate Love [00:01:24]:
Not so far.
Scott W. Luton [00:01:25]:
Okay, so it should be a great episode today, huh?
Mary Kate Love [00:01:28]:
Yes.
Scott W. Luton [00:01:29]:
Outstanding. Well buckled in, ready to go. I’m going to introduce our esteemed guest here today. So, Tom Butt serves as a Senior Manager of Customer Success at EasyPost. Now, prior to this role, Tom co founded the elevated Data insights and analytics platform specializing in supply chain and parcel operations, now known as EasyPost analytics. Now, with nearly 15 years of experience in both retail operations and technology, Tom has held key positions at Kohl’s department stores previously, and he’s been also involved in a variety of consulting roles. Now, his expertise spans systems, implementations, networking or network modeling, rather, and optimization, data discovery, technology, product development, program management, logistics, planning, and the identification of supply chain opportunities. With all that said, let’s welcome in Tom Butt with EasyPost.
Scott W. Luton [00:02:22]:
Welcome, Tom. How you doing?
Tom Butt [00:02:24]:
I’m doing great, Scott. Thanks for having me. I really appreciate it. And looking forward to our conversation today about supply chain data analytics.
Scott W. Luton [00:02:32]:
We are to Tom, the pride of Erie, Colorado. Right. But Mary Kate, what we picked up earlier because we did some homework on you. Tom, we understand that you’ve got a couple degrees from the University of Wisconsin and Madison, right? Home of the Badgers.
Tom Butt [00:02:47]:
Yeah, we’ve got a good football program there. Some years. So not quite as good as your bulldogs, but pretty good.
Mary Kate Love [00:02:54]:
I’m big ten, too. I’m University of Illinois, and I can’t really say anything about football to you guys.
Scott W. Luton [00:03:00]:
Well, but still, Illinois has had a dominant basketball program, Wisconsin wrestling, baseball. We’ve had some big years there, Tom. So one of the things I want to find out, though, spending all that time in Madison that you have, what’s one of the coolest things about living in Madison, Wisconsin, that no one ever talks about? Tom.
Tom Butt [00:03:18]:
We have that, you know, college sports and college town vibe. But one of the things I love is getting out a little bit farther west from Madison. There’s just these rolling farm hills. It’s gorgeous. There’s fly fishing, of all things is out there. So I’m a big fly fisherman and do that. But they have wineries and, you know, all sorts of things that are just outside of Madison that not a lot of people, it’s on their radar. They go to Madison, they go see, you know, the downtown, the state capitol, those sorts of things, but just a little outside and get some really pretty views, these rolling hills and something that people might not be on their radar.
Scott W. Luton [00:03:52]:
Love it, Tom. Mary Kate, all he had to mention is wineries, and he had me. I’m set my travel plans to hit Madison. What’d you hear there, Mary Kate, that appealed to you?
Mary Kate Love [00:04:01]:
I think the midwest can be underrated, right? In some ways like that. When we leave the city, I’m in Chicago, we go kind of the route of Michigan, but many people on the north side go the route of Wisconsin. So it’s funny, depending on where you live in Chicago is how you get out of Chicago really well.
Scott W. Luton [00:04:18]:
Love it. Love Chicago. Have not been to Madison yet, Tom, but we got some good friends there. Look forward to making the trip up sometimes. Let me ask you something else, too. We mentioned Kohl’s. I think you spent eight years at Kohl’s earlier in your career, and I bet that’s a powerful experience where, that you’re applying now with what you are doing and moving mountains out in the industry. What was one of your biggest lessons that you learned as a practitioner in the retail industry?
Tom Butt [00:04:43]:
Sure. Yeah. And I started my career there in data analytics. And really quantitative decision making was something that was drilled into us. It was, you know, for whether or not it was an engineering project or making a decision about how we moved inventory within our warehouses using data and using metrics and quantifying why youre making decisions and making sure that those are sound decisions with some business acumen and questioning wheres that data coming from? Whats the quality? So thats really where I got in the logistics and operations space. I cut my teeth on those data components and like a lot of the listeners im sure worked extensively in excel doing vlookups and all those sorts of things, but the industry has moved on quite a bit since then. But really those roots of sound quantitative decision making are where I, I learned a lot at Kohl’s.
Scott W. Luton [00:05:35]:
Love it, Tom. Now, Mary Kate, as he described that in this powerful experience there at Kohl’s, y’all might be related because a lot of his worldview, especially on data and metrics and as he called it, quantitative decision making. That’s right up your alley, Mary Kate.
Mary Kate Love [00:05:50]:
If you have data in front of you and you don’t trust the system it’s coming from, you’re not even going to use it, right? So I think making sure you have data you can trust, that’s when you feel so confident. At least that’s when I feel confident in my decisions, right?
Tom Butt [00:06:05]:
Yes.
Scott W. Luton [00:06:06]:
Data you can trust. A new national motto perhaps. Also you mentioned the Excel spreadsheets that everyone can relate to. I remember the vlookups in college. Learn some of that stuff and some of the database management tools. Oh man. We have evolved greatly since then, Tom. We’re going to get into a lot of that here today.
Scott W. Luton [00:06:24]:
Okay. So now that we know a little about you personally, we know a little bit about you, your background, at least professionally, let’s add a little more context with what EasyPost is doing and what you do there. Tell us a little more there.
Tom Butt [00:06:37]:
Sure. So easypost, we want to be the simple parcel shipping solution. Basically a one stop shop for all your shipping needs. If you’re a small or medium sized business to looking for enterprise solutions, we’re meant to scale with your business as you grow. We want to be right there with you, getting you everything you need. And I’m part of this customer success organization and what we do, make sure customers have the best of what’s available at EasyPost and really by extension the industry. So we have carton optimization solutions. We’ve got analytics solutions, which is where my background is.
Tom Butt [00:07:13]:
But we provide multi carrier shipping solutions. So if you want to mitigate risk through any one carrier or you might be able to get cheaper prices with other carriers or regional carriers might be your solution. We provide a lot of context to that and take a consultative approach and making sure that you know, we’re listening to what your needs are and then getting you, like I said, that best in class solution of what’s your love it.
Scott W. Luton [00:07:37]:
Tom and Mary Kate EasyPosts have been on the move. You know, we’ve had a variety of conversations with some of Tom’s colleagues, like John also participated in their really cool customer conference vent they had not too long ago. Your thoughts there?
Mary Kate Love [00:07:49]:
Mary Kate yeah, I really like this idea of being kind of the one stop shop, right, and being able to flex for what your customers need. And I think the way that we’re going now is people and companies are looking for more purpose built solution, realizing, hey, we don’t have to build and we shouldn’t build everything in house. So these plug and play solutions like EasyPost offers, always seems like the best approach, right?
Scott W. Luton [00:08:15]:
Making things a lot easier, taking friction out and no matter where you are in your journeys. One of the things I heard you just shared there, Tom, a second ago is helping wherever you need shipping help, making things easier, right? Taking the friction out. Mary Kate and Tom, I want to switch gears because analytics is going to be our primary theme today. When you’re with Michael Jordan, you talk basketball. When you were Tom Butt, you talk analytics, right? That’s what they know. Looking forward, learn from your expertise in your journey. Mary Kate and I both are. So let’s start with this, talk more about the role analytics plays in modern supply chain management and give us an idea of some of the types of data that’s most valuable when it comes to these powerful analytics.
Tom Butt [00:08:57]:
I think first and foremost is analytics is going to get you visibility to what’s going on in your business. So I think in the analytics landscapes of yesteryear was these disparate data sets you kind of looked at. One might be cell based piece of information. You’re looking at maybe something that’s coming out of a transactional system. A lot of times that data isn’t normalized. It doesn’t make sense when you compare it. So in today’s modern supply chain, having that visibility of what’s going on within your business, you can understand holistically where your problems are, where you have those friction points, where you know what cards you have, everything’s out in the open and you know how to play your best hands. So I think with that modern supply chains, getting that holistic data is going to give you, you know, whether or not that’s across speed, cost, quality, your inventory levels.
Tom Butt [00:09:49]:
Having all of that at your fingertips is going to allow you to make those better decisions. And that said, data is getting faster in the sense that, again, yesteryear, you were pulling an excel report, and it might take you a week to stitch everything together. Now, it should be closer to that near real time so that you are making decisions. If something you do hit a fret sheet point, you’re able to see it quickly, resolve that issue, and then move forward.
Scott W. Luton [00:10:17]:
Love it, Tom. All right, so, Mary Kate, a couple of my elements, my favorite parts of Tom’s response there, he made a reference to playing cards and knowing your hand. So for any of our poker players out there, it’s dangerous to play a blind hand. Right? Same thing can be applied to supply chain. So I love that. And then, of course, as the industry has shifted to real time for years now, who’s got time for static, static insights into a business? Mary Kate, what did you hear there from Tom?
Mary Kate Love [00:10:46]:
Yeah, I think there’s so many new pieces of data that are important to supply chains. Right. In order for supply chains to be reliable, there are so many different pieces of data that you need to collect. And I totally am nodding along with Tom when you say being able to see it and make sense of it, that’s huge, and that’s really hard to do. So even if you have the data, being able to see it all in one place and actually make decisions off of it is still hard to do.
Tom Butt [00:11:13]:
Yes.
Mary Kate Love [00:11:14]:
Collecting it is one thing. Using it for analyzing is a whole other thing, too.
Scott W. Luton [00:11:19]:
Excellent point. I remember when the term big data first came to kind of popular use. Come to your point, organizations got really good at collecting all kinds of big old tidal waves of data, but they still didn’t know for a long time how to use it effectively. And of course, times have changed a lot since then. Hey, one more thing, Tom. Do you play cards?
Tom Butt [00:11:40]:
I do. Privileged player, and I play a lot of Euchre. So team based games where I’m playing against close family. I’m from Minnesota. So those cold winters, you’re always looking for ways to stay busy and keep your mind off the coal.
Scott W. Luton [00:11:55]:
And Mary Kate, you can relate to that. Do you play cards as well?
Mary Kate Love [00:11:58]:
I don’t play cards really too much. I mean, here and there I will. But definitely a good thing to get.
Scott W. Luton [00:12:03]:
Into over winter, I would say, well, you got to. And we’ll have to have a team poker night or something. But cool hand Luke, great movie with Paul Newman. Classic movie. And one of the classic quotes from there, they’re playing cards and Paul Newman is bluffing. He said, I had nothing. And one of the other supporting actors said, well, sometimes nothing is a really cool hand. And of course, that’s how the cool hand Luke came about.
Scott W. Luton [00:12:28]:
You got to know your cards and make these important decisions, timely decisions, real time decisions, with confidence, kind of going back to what we’re talking about. So, Tom, as we keep going down, taking a deeper dive into analytics, talk about recent technological advancements that have continued to transform analytics, especially as it relates to better and optimized supply chain management.
Tom Butt [00:12:50]:
I think a big thing, and it’s been talked about for years, and I think it’s really coming into its own, is the transformation of cloud storage for your data and then the ability to transform that into a single source location. So you basically take and you do extract all your data, load it, and then you’re doing your transformations. That’s something that we’re just trying to get people to grasp. And some people are still a little leery. They’re sometimes using those on premise solutions. But cloud has really come into its own in terms of driving up both the ability to spin up compute resources, to be able to process the data faster, but then to be able to stitch together data from those disparate sources. In the past, maybe you were using something like Microsoft Power BI, or you’re using something like a access database. But that said, these modern cloud solutions, whether or not it’s Google or Snowflake or Microsoft Azure, pulling that data together and then being able to materialize that in a way that’s insightful to folks, folks is something that is really coming into its own.
Tom Butt [00:13:52]:
And then you start throwing on top of that, once you get into that single location, some of the ML AI type tools that can really sort out that data and give you a little bit more insight into what’s going on.
Scott W. Luton [00:14:03]:
That’s right. Moving even faster and more powerful. So, Mayor Kate, one of the things that Tom mentioned there, there’s still lots of folks out there that cling to old ways of doing business, right? Sometimes I might be one of those lackards. Mary Kate, what did you hear in Tom’s response?
Mary Kate Love [00:14:19]:
Well, I’m especially excited about the last point, right. If you think about ML and AI applications, on top of this massive amount of data we’re collecting and we’re able to store more data. So it kind of makes the case of, hey, collect as much data as you can store it and really work on these ML and AI applications that can make sense of it. I think if you’re not doing that, you need to be doing that. Right, because competitors or other organizations are most definitely doing that. And it’s a way to learn things you maybe never thought you would learn through sifting through all of your data, but given the amount of data, it’s not possible to sift through it with just humans, right?
Scott W. Luton [00:15:00]:
Yes, that’s right. And one additional point that you’re kind of implying there the stakes on what’s at risk of doing things in an old fashioned manner continue to be greater and greater. A lot of ton of research out there that shows the super competitors these days that are using innovative, modern technology that Tom is speaking to is creating a bigger competitive advantage gap against the other companies out there. So the stakes are only getting bigger and greater and more consequential. All right, so Tom, moving right along, we’ve already touched on how important real time data that powers real time, more accurate, more powerful, more confident decision making is. So speak to that. Just how important is that real time data in supply chain analytics? And can you give an example or two where real time analytics significantly impacted a big time supply chain decision?
Tom Butt [00:15:53]:
I think the way that the industry is going, if you don’t have analytics that are refreshing, at the very least hourly or within the day, losing dollars. So in a lot of instances, you can use these unified analytics platforms to understand data handoffs across systems and where there’s any fumble or any breakdown in those data handoffs, especially with all the IT folks that are opening up systems and making upgrades and submitting patches. Anytime something breaks when you don’t know about that, that issue can manifest. And I know we had a recent example where we had a company that put in a patch right before Mother’s Day where they were sending data from their order management system down to their stores so that their store associates could go pick orders and make sure that the buy online pickup experience was somebody looking to pick up that gift for Mother’s Day, what they would want to do. So this particular customer had sent orders down. They’d submitted a patch, said, hey, rit systems are all go for the holiday. And with analytics in real time, we saw that there was something that broke when that patch got up, got submitted, and so they had a whole bunch of orders that were sitting out there that weren’t getting picked up by the stores. The one system said, hey, we took these orders, they didn’t get processed.
Tom Butt [00:17:13]:
So with analytics, we were able to see that phone bowl in that handoff and those orders, that issue resolved, get those orders to the stores. So when people went to go pick up those gifts for mom, they made sure that the gift was there, that it was ready and the store wasn’t saying order. What order. It helped streamline that experience and created that accountability. Had that not been caught right away, that would have been something that had manifested and, you know, mom might not have gotten her gift. So really salient example that we had here recently.
Scott W. Luton [00:17:43]:
I love that example, Tom, because not whether it’s mother’s day or father’s day or birthdays or holidays, being able to protect that customer experience and in this case, preventing would have been a major problem and catching it in time to really keep it probably not even noticeable to the customer. And of course, that’s why supply chains exist. So I love that example. Mary Kate, about you.
Mary Kate Love [00:18:04]:
Yeah, I was thinking of the phrase customer experience as well, Scott, just because that is really any company’s competitive advantage. Right. How does your customer feel when they think of your brand, when they’re working with you? And that is just a perfect example of delivering that customer experience no matter what problems you face, right?
Scott W. Luton [00:18:25]:
Absolutely. Real time analytics, protecting that brand supply.
Tom Butt [00:18:30]:
Chain is where the rubber hits the road, quite literally in some instances. And your marketing teams, your sales teams, your product teams, your merchandising teams have done all of that hard legwork and to kind of fumble that at the 1 yd line by having a supply chain breakdown and impacting that customer experience, you don’t want to have that happen. So analytics can be an insurance policy to make sure that you’re executing to what your customers expect in the brand that you’re trying to build.
Mary Kate Love [00:18:57]:
Thinking about analytics as the insurance policy, that’s a really good way to think about it.
Scott W. Luton [00:19:02]:
Absolutely, Mary Kate and Tom. Tom, as you were kind of sharing that all those roles and professionals you were mentioning, all those promises that are out there making, and supply chain team is able to deliver on those promises. Right. It’s so critically important. And then going back to something else you mentioned, I think it’s really important to call out the handoffs, thousands, millions of handoffs when it comes to global supply chains. And that’s where so many things, to your point, Tom, can be fumbled. That goes with the territory. Mistakes are going to be made.
Scott W. Luton [00:19:32]:
There’s going to be fumbles. But leveraging modern day technology and a better process to catch it and keep it small, keep the impact almost non existent, that is a big part of obtaining this resiliency. Everybody talks about that a lot of organizations haven’t been able to find just yet. All right, so Tom, we’re about to get into a segment here in a minute. We’re really going to offer from your been there, done that perspective some powerful key takeaways and key considerations for businesses out there looking to leverage the opportunities you’re painting. But one more question before we get there. What other emerging trends that we should be aware of in this field of supply chain analytics that you want to call out?
Tom Butt [00:20:13]:
And again, it kind of comes back to that ability to aggregate all the data, but to be able to paint a holistic picture of what’s going on with your supply chain, maybe it’s a purchase order placed out to your vendors all the way through to your customer experience, making sure that you have that holistic vision of the experience you want to deliver, measuring that, and then setting in place the people, the processes, the technologies to be able to execute to those. I think that sort of unified experience versus in the past it was maybe these silos and everyone was managing within functions. Your customer doesn’t care how you’re functionally organized, what they care is how you deliver. So that holistic viewpoint, that holistic experience is really something that’s out there. And we have probably the best logistics company in the world. You’ve got the Amazon executing within sometimes even a few hours is really setting the bar. And so being able to make sure any business is able to measure those things holistically, you can manage that experience to help drive sales, to drive revenue and a positive brand interaction.
Scott W. Luton [00:21:17]:
Starting near the beginning of his response, I bet you have not met anything yet, Mary Kate, that you cannot measure, right? Because again, data and metrics are key. And I love his approach there to building that holistic vision and then building out all the metrics and data behind it so we can go out and execute more successfully and faster right in this competitive landscape. Your thoughts there, Mary Kate.
Mary Kate Love [00:21:40]:
I took off my industry hat for a second. I was thinking about my experience as a very experienced online shopper. And part of the experience now is I try a lot of new brands that I find through Instagram and if they’re delivery and shipping policy is wonky or maybe something I feel like I don’t really understand. If it’s not free, if I don’t, can’t trace it, I’m really less likely to take a chance on that brand. And I have a bad feeling of the brand, which is exactly what you were just saying, Tom. You know, that is part of the brand experience. And it’s probably a lot of ways you attract or don’t attract new customers too, right? Because we all expect this visibility with shipping. If I’m going to pay for something, a product, I really kind of expect you to take care of getting it to my doorstep because I’ve just paid you.
Scott W. Luton [00:22:29]:
Yes. Consumers out there don’t necessarily care how that happens. They just want that to happen. Right. Because that’s where the value is. You know, I’ll tell you, all of us as consumers, because whether we’re practitioners and consumers or one or the other, we’re still all consumers. I think the lessons we learned there, kind of what you’re calling out there, Mary Kate, are so interesting and those are lessons that everyone can relate to. It’s universal.
Scott W. Luton [00:22:54]:
Tom, looking forward to this next section because there’s so many business leaders out there. Some are, unfortunately they’re well behind. They’ve been clinging maybe to how business has been done. They’re still entering the earliest maturity steps of using analytics. And there’s other folks looking forward the latest and greatest and taking that analytics approach and focusing it on a key business need and objective. So from your been there, done that perspective, I want to dive into some advice here for folks looking to implement new analytics capabilities in their organization. I want to start with this one. Tom, what are the biggest challenges when it comes to implementing really effective and practical and focused supply chain analytics, especially for e commerce companies? And of course, the challenges, how can folks overcome those challenges? Your thoughts here, Tom.
Tom Butt [00:23:45]:
Sure. And I think Mary Kate touched on this really early on in the conversation, but I think one is taking an accounting of the state of your data. So is it high quality? How integrated is it? Can you trust it? Starting there is foundational. We talked briefly about predictive analytics and the machine learning, the AI pieces that the end of all this. There are some ways you can use those tools to help drive data quality. But that said, if you don’t have quality, you’re going to make sometimes the wrong decisions. First and foremost, just do an assessment of, hey, you know, what does my data look like today? Are there any holes? Look at that holistic picture. Understand? Can you answer how much it’s costing me to fulfill an order? You know, what’s the time in transit or time from order all the way through to customer delivery through to returns? The reverse logistics piece is something that often gets forgotten.
Tom Butt [00:24:38]:
So make sure that you’re doing that accounting. There’s some great tools out there in terms of prioritizing or triaging. What are the key metrics that you need to look at? So things like, again, what is the time to deliver to that customer? How many orders are you fulfilling successfully? How much is it costing you for that order, your order profiles, those sorts of things? Understanding where you’re at, gapping out and coming up with a plan to say, hey, where do I have my gaps? How can I go get this information, stitch it together to create that landscape where you have all of your cards laid out? You can understand where you’re maybe falling short of commitments to your customers and then prioritizing that information to say, what are some initiatives? And framing it as, is it a people issue? Is it a process issue? Is it a technology issue? You can then outline a roadmap to go shore up those gaps and then create a plan for improvement.
Scott W. Luton [00:25:31]:
Love that. You mentioned tools. We’re going to touch more on that here in just a moment. Mary Kate, the starting point there, whether you’re in a data lake or a data swamp or a data abyss, understanding where you are and the quality of your data and some of the gaps there. Important starting point, huh?
Mary Kate Love [00:25:48]:
Yeah. And especially as companies grow in many different ways, whether that’s through acquisition or just growing on their own, I think sometimes data gets lost in those processes of growth inside companies. So it’s important to take a step back and think about where are the gaps in terms of data we’re not collecting. How do we make sure we collect that? And then, like you said, Tom, next step would be stitching it all together.
Scott W. Luton [00:26:13]:
And one other point that you called out, Tom, you mentioned knowing some of the costs, such as the cost of fulfilling an order. Yeah. I think historically it’s nothing new. What’s old is new. Again, maybe some we can fool ourselves with knowing the data of the business, of the operations, of what it takes to meet customers demands. And what I’m hearing you say, you and Mary Kate both, is, it’s critical. We can’t fool ourselves into thinking we know, we got to know, we got to have the high quality, accurate data before we move forward with how we fix it or how we solution it. Right.
Tom Butt [00:26:45]:
You know, with that, maybe generation ago you’d look at your top line, high level metrics. But where you get a lot of the insights is to be able to look at the atomic level of the transaction with that customer. So how much money are you generating at the order level? What are the units within that order that youre shipping skus? Understanding what portion of your overall building, if youre running a distribution center cost goes into any one particular order, understanding that granular level of detail is going to allow you to make better decisions, because youre not just going to see an average, youre going to see breakdowns of that data, be able to understand outliers to understand bits and pieces where you might make a different decision. If you see that low level of detail, you can focus on problem orders, you can focus on items that you may be losing money on and then make a decision. Are those loss leaders? Are those things that you want to maybe trim from your product offering because it just costs too much to ship it? Some things like that, that you can really do to dive into the details when you have that atomic or really granular level of detail on that data.
Scott W. Luton [00:27:50]:
I love that. Now, this next question we’ve touched on in a more intangible way when it comes to return on investment. We’re using that example that you’re talking about the company that avoided the sales fiasco for Mother’s Day. And there’s lots of return on investment with that. One example, when you think of ROI, especially for e commerce companies, when they integrate advanced analytics into their supply chain operations, what else comes to mind from a sheer return on investment standpoint, you.
Tom Butt [00:28:20]:
Know, breaking down at the order level, how much money you’re making on that order? And what are your cost drivers for that? I know a lot of times, you know, people will focus on things like labor and efficiency gains. There is something to be said for that. But as you start to look at it, typically it’s going to be higher spend. When you look at your parcel shipping, your analytics and your last mile delivery, people spend a lot of money. You know, we see anywhere from five to ten x the cost to fulfill an order through a warehouse or through a store being vested in parcel delivery through carriers, you get USP’s, fedEx, DHL, regional carriers. But being able to look at those things and understand where your costs are in proportion to the revenue that you’re driving per order allows you to target where you can get those ROI benefits and where maybe you invest in a multi carrier strategy, you may be able to drive leverage with your carriers to be able to understand if they’re charging you on surcharges for big item deliveries. But understanding where you’re spending your money so that you can focus on those ROI types of activities, it could be something as simple as, hey, you’ve got customer that orders five different things, they’re in three different warehouses, you’re shipping three packages. Whereas had that inventory been co located, you could ship one package.
Tom Butt [00:29:41]:
You’re driving down your cost to serve your customer. In turn, your margins should be going up, assuming you’re not doing anything to hurt your sales on that. So those are some key things. Understanding again, carrier surcharges understanding where you’re getting invoiced on things that maybe were unanticipated or were a result of some friction in your supply chain.
Scott W. Luton [00:30:03]:
Love those examples. I got one more question, then I’m coming to Mary Kate for her take on some of the things you’re sharing. What other success story comes to mind of an e commerce company that really improved its supply chain operations through the power of analytics?
Tom Butt [00:30:17]:
So I’ll use an example where again, as shipping parcel deliveries out of a warehouse. But one of the examples was we said, hey, every bit of the order lifecycle should have a planned time or an expected service level agreement. So that could be, hey, an order is sent down to your warehouse, it’s expected to be shipped within 48 hours and maybe time in transit. So if your customer said, hey, I want ground shipping, I expect this order to be at my door in five days, breaking down that order lifecycle and then understanding, like I said, the time in fulfillment, the time in transit, so the time that you have handed that order off to the carrier to take it to that customer’s doorstep, understanding that full lifecycle, we’ve been able to say, hey, from what you’re committing to your customer, we’ll see somebody saying, hey, we deliver 80% on time to our commitment or to SLA. We’ve seen customers get that up to the 95, 97% range by being able to understand if an order is late because it shipped out of the warehouse late, if there was something that happened with a weather delay for a carrier, or if there was something that got missed in the handoff, maybe the order was ready for pickup by the carrier, but it missed a pickup window by a couple hours. So we’ve seen people adjust when pickups take place and as a result, drive that customer experience because that process is seamless and the handoffs take place when they need to.
Scott W. Luton [00:31:47]:
Love that you’re delighting your customers. You’re moving it from a c grade to an a grade. Now, these days, though, as my, as I learned from my kids, these ten point scales when I was in school, Mary Kate and Tom, and 80 was a c. These days it’s a b. But I don’t know how that works like that. You’re going back to the importance of delivering on the brand, and that comes to how we serve the customers. And we’re talking about 80% of the time to 95, 96, 97% of the time. Those are customers that are going to come back and back, keep customers for life that way.
Scott W. Luton [00:32:20]:
Your thoughts, Mary Kate?
Mary Kate Love [00:32:22]:
Yeah, I think there’s so many handoffs, like we said, right, in the supply chain. And so being able to collect data at every handoff will allow you to solve problems so that you can have those high customer satisfaction rates. Right. But it’s so complicated. There’s so much going on that the only way to solve those problem is to continuously collect data on every step of the way.
Scott W. Luton [00:32:44]:
That’s right. Know thy business, know thy order cycle. As Tom said earlier, I would add.
Tom Butt [00:32:49]:
There, you know, it’s called a supply chain for a reason. And sometimes your chains only as strong as your weakest link.
Mary Kate Love [00:32:55]:
Yeah.
Tom Butt [00:32:55]:
And so if something breaks without one weak link, all of that other supply chain can be compromised. So understanding with the analytics where those weak links are, you can bolster those, strengthen those, and make sure that you have that robust supply chain that your customer is expecting.
Scott W. Luton [00:33:12]:
All a’s on your supply chain report card, you can connect with Tom. You can figure out how to do that. Make happy, delighted customers. Okay. Appreciate that. There’s examples that success story. You mentioned tools earlier in the conversation, Tom. So what tools and technologies do you see is currently truly leading the way in supply chain analytics? And speaking specifically for small and medium sized business, what do you think really applies for businesses of that size?
Tom Butt [00:33:41]:
I would say the big thing with that is being able to subscribe to services that maybe aggregate data across different sources. For example, most carriers have their own APIs, but in a lot of instances, customers don’t need to go if they’re a retailer, for example, they don’t need to go build each one of those integrations, you can go subscribe to products to achieve that. Similarly, all this stuff should be web based, so it shouldn’t just be that local data sitting on one screen. It’s, hey, you’re logging into a service that’s able to provide that data for you, manage services. So instead of your team having to maintain an integration, one integration here, one integration there, and that portfolio can expand relatively quickly. That’s a really good question to ask. Is it something that we could go subscribe to a service that can provide that? So I think tools that are out there, I would say go do. If you know what you’re looking forward, write up the request process for proposals, RFP, and see what’s out there.
Tom Butt [00:34:45]:
So go canvas and see. Is there something out there that’s already built that I don’t need to go build myself?
Scott W. Luton [00:34:52]:
Don’t reinvent the wheel. Right? America came up in an earlier episode in recent weeks. Know what business you want to be in. You want to be in the technology business and build your own stuff in house, or to Tom’s point, go out and survey the market and see what you might can subscribe to, which makes management easy, takes friction out, allows your team to focus in on what they do best, what the business does best. Mary Kate, your thoughts?
Mary Kate Love [00:35:15]:
Yeah, I think that should be part of everyone’s innovation strategy, right? Is how do we partner with external technology providers, get on, you know, projects with them, whether we’re testing them out or working with them for the long term? I think that definitely needs to be part of everyone’s innovation strategy because, you know, you can’t build everything in house. And even if you’re so big that you can, someone’s probably building it better or in a different way than you or viewing the problem in a different way. Your partnerships is certainly a huge part of your innovation strategy plan.
Scott W. Luton [00:35:49]:
Well said, Mary Kate, in your time, particularly to you and Mary Kate’s, points for the small and medium sized e commerce businesses that don’t have the resources of the Titans out there, that have an army of folks that can do some of those things that make sense, pardon me, even more important for those business leaders and those in small, medium sized businesses, right?
Tom Butt [00:36:08]:
Absolutely. I think a lot of the tools out there are meant to be scalable. So good question to ask is, you know, my business may be growing, maybe small now, but what does it look like if we were to scale? And sometimes, you know, if you built something in house, you built for the solution that you need now, and it’s not necessarily the solution that you’re going to need down the road. And so there’s a lot of instances where, as you’re doing your vendor criteria selection, just ask, how would this product scale? You know, here’s our vision for our business. Do we think that this is going to meet our needs not just today, but down the road as you have those plans to expand?
Scott W. Luton [00:36:45]:
Love that, Tom. And I bet my hunches, Mary Kate, is that Tom would invite folks to kick the tires on EasyPost analytics. Is that right, Tom?
Tom Butt [00:36:55]:
You got it, Scott. We’ve got some great products out there. So anything from parcel tracking, analytics, those carrier integrations that I mentioned, all kind of a one stop shop and in yesteryear was, hey, this project is going to take a year plus to go implement. We can get people up and running relatively quickly, matter of a couple of weeks, go from zero or very limited parcel visibility to, hey, you have a full suite of parcel line analytics across multiple carriers very quickly. So lots of opportunity there. Happy to talk with anyone. You know, if you reach out to me on LinkedIn, just Tom Butt, as you see my name here, but also tomczpost.com, please reach out and we’ll get you guys connected.
Scott W. Luton [00:37:42]:
I love that. I got one more question for you, though, Tom. And folks, y’all should definitely connect with Tom, have the conversation, talk about Madison, talk about better supply chain optimization, talk about analytics, you name it. But Tom, one more thing, because you called out a really important thing. Mary Kate, if it was 1987, we could have a one year, an 18 month implementation, no problem. But those days are gone, right? Mary Kate? Who’s got time for that, right?
Mary Kate Love [00:38:08]:
Yeah, that doesn’t happen really anymore.
Scott W. Luton [00:38:11]:
So, folks, connect with Tom on LinkedIn and have the conversation also. One more thing, though, Tom. Sustainability, right? Every ecosystem, consumers, suppliers, team members, associates, investors, you name it, we’re all demanding more and more sustainability. How do you see analytics contributing to really moving the needle to drive more sustainable supply chain practices?
Tom Butt [00:38:35]:
Sure. And I would say just driving two things. So effectiveness and efficiency within your system. So the more you can mitigate the number of touches within your system, the fewer packages that you can ship by. Like I said previously, consolidating inventory and making sure you can serve your customer in the way that they want to be served is going to give you a better option. The other thing would be is consider if you’re using carriers, carriers that have carbon offset programs. So you may be able to just say, hey, if I’m shipping with these carriers or through this service, I’ve got carbon offsets versus some carriers that maybe you’re not, or maybe you’re having to reship things because your processes aren’t quite as buttoned up as they should be, or figuring out ways to mitigate returns, making sure that your customers are getting products on time, making sure that they’re getting what they want, those things can all drive sustainability, drive carbon out of the supply chain.
Scott W. Luton [00:39:32]:
That’s right. And we can all rest assured that’s what customers want, which is a good thing. It’s powering great change. And Mary Kate, it doesn’t have to be tough, right? There’s a better way of doing things out there, which is Tom’s kind of alluding to. Your final thoughts there, Mary Kate.
Mary Kate Love [00:39:47]:
Yeah, I think there’s always a better way of doing things out there. I think just this whole conversation to kind of pull it back together as we think about data, I think about collecting more data, analyzing more data, and trusting your data. Those were kind of my three top thoughts as we talked about data. And really all of that to say is it allows you to make better business decisions. Truly.
Scott W. Luton [00:40:12]:
That is right. Earn your way on the all A’s supply chain honor roll. Right? Do that by connecting with Tom Butt on LinkedIn or you can venture over to EasyPost.com. connect with the team there, I promise you. Meerkate, I’m hoping I can speak for you. We have yet to have a bad conversation with anyone. An EasyPost tell you it’s a team on the move that really gets it. And I love, I love when folks can have friendly yet really effective conversations as they drive change out in industry.
Scott W. Luton [00:40:40]:
So. All right, Tom butt with EasyPost. Thank you so much for being here with us today.
Tom Butt [00:40:46]:
My pleasure, Mary Kate. Scott, this has been awesome and look forward to seeing you guys out there and hopefully fulfilling some of your orders and giving you that frictionless experience.
Scott W. Luton [00:40:55]:
You bet. No doubt. Thanks so much, Tom. Big thanks to Mary Kate. Love, always a pleasure to knock out these episodes with you.
Mary Kate Love [00:41:03]:
Yeah, loved it.
Scott W. Luton [00:41:04]:
And most importantly, folks, big thanks to all of our global audience out there being a big part of our community and our journey. Thanks for all the feedback and support. We are very grateful. So here’s the challenge though. Tom dropped a lot of brilliance on us here today. Him and Mary Kate both. Your charge is take at least one thing, put it into practice. Your teams are ready to do business differently and be more successful.
Scott W. Luton [00:41:26]:
Lip service leadership doesn’t cut it anymore. One year implementation periods, no one’s got time for it. Take something you heard here today, put it in action. Deeds, not words. And with all that said on behalf, the entire team here at Supply Chain Now, Scott Luton challenging you to do good, to give forward and to be the change that’s needed. And we’ll see you next time. Right back here at Supply Chain Now. Thanks everybody.
Narrator [00:41:47]:
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 you listen to podcasts and follow us on Facebook, LinkedIn, Twitter and Instagram. See you next time. Time on Supply Chain Now.
