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Adapting to Consumer Behavior: The Role of Omnichannel in Supply Chain · Speaking of Supply Chain

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You're listening to Speaking of Supply Chain, a Mebach podcast. This is a
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show for logistics professionals looking to learn more about the latest innovations in supply chain.
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Each episode will feature a conversation on topics such as mitigating supply chain disruption
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and reducing risk, current automation trends, sustainability initiatives, and more. Let's
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dive right in. Hello, and welcome to Speaking of Supply Chain, where
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we explore trends, current events, and innovations impacting the logistics and supply chain
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industries. I'm your host, Ellen Wood. Today we are excited to be
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joined by Joe Henderson from de Pasco, and we are going to be talking
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about omnichannel fulfillment and some of the challenges that companies are facing in this area.
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Welcome Joe, Ellen. I'm so glad to be able to come on
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the show today. You and I've spent so much time working together on various
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marketing activities. It's nice to actually to participate in one for once. I
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know usually we're behind the scenes. Today we are front and center. I
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am really looking forward to our topic today because it's an interesting topic. I'm
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sure today we are talking about omni channel fulfillment, and so I looked this
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up. The word omni channel didn't even exist until the year twenty eleven.
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Isn't that crazy that something that is so pervasive in our industry today has only
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been around a little over a decade. I think this is where we get
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the back to the meanings and concepts. I don't think the concepts knew and
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that's something really importantly distinguishes that we've been moving in this direction since the eighties.
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You can start saying that like globalization some of the overseas manufacturing, the
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introduction of international business as a main channel is really when we started shifting.
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We didn't have a name for it, but it stopped being manufacturer, distribution
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center, retail store, and that was literally the only path you had.
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So I think we just really started progressively labeling it differently. First, you
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have online, you have catalog, you have stores, and even online.
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You know, we've really failed to appreciate that only opened up to the broad
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public in about ninety eight, so we've only really had online as a focus
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for the last twenty five years. As I worked into traditional distribution, it
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was all about multi channel transformation. It was like oh, I need to
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have internet, and I need a catalog, and I need a retail store.
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And I've been doing that, like you said, up until four or
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five years into my professional career, and then it was omni channel to come
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out. We've taken multi channel transformation and we made it into omnichannel, and
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we had to continue to rebrand it because boards mean things. But I think
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this natural progression of consistently addressing the customer where they wanted to be addressed,
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that has been a theme that's really been in business for the last thirty years.
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We've just relabeled it as it became more specific, and it became an
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umbrella for a lot of interconnected concepts and technologies. Of course, and so
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those consumer buying practices, I mean, we know that the past four or
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five years have been monumentally changed, but I mean you're talking about even before
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that, some of the buying practices had changed. What are some of those
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bigger changes that we've seen in the past, let's say decade that way,
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we include a little bit before COVID and of course after and I think what
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you see there is really again the customer driving the whole process. You know,
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you said about the last five years. Let's just nail it on the
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head. It was COVID suddenly the thing where people would occasionally go to the
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store occasionally buy online. We were still seeing that shifting over time of more
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and more people buying online. To say it, Amazon was a thing,
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and it really drove a different kind of consumer preference. But then COVID came
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along and you're suddenly you've required everybody but essential workers to stay home. Even
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if your preference was fifty fifty, it now be maybe eighty twenty, it
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maybe ninety ten. Suddenly the thumb was on the other side of the scale.
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And what that did was just accelerate something that was already happening. Now
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you had to scramble and go do I provide this as a would be nice
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will? Now as a firm, it's a provide this or die kind of
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concept. Can I deliver things to people that I couldn't deliver to before?
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Greatest example is fast food. You just spent fifty years specializing in You're going
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to go to the store, I'm going to go to the counter, or
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I'm going to go through the drive through, and you did not mess with
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that since nineteen sixty. Now suddenly it's like, wait, I have to
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do door dash, I have to actually put things into different styles of packaging,
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different configurations. I need to start being creative with do I keep this
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food hot? And so there's a lot of things that suddenly Fast Food was
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like, wait, we haven't been asked to change anything for fifty years.
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Now in five months, you're having to fundamentally transform your business or die.
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And then there was the misallocation of risk of that decision. So, for
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example, if you're McDonald's, okay, you still exist on every single corner.
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You could probably fudge this a bit and be fine. But when you
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start talking about mom and pops, local shops, local eateries, I think
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that they were really disproportionately impacted by that change of suddenly, Oh, I
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built my entire thing about my one brick and mortar store and serving my walk
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in customers. If I do not make this transformation, I will not be
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here next year. And so it's really interesting to see that this change,
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this trajectory of history also was not equally impactful. There were a lot of
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different companies that were impacted disproportionately, and it was almost always inversely related to
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their size right well, and even for aside from COVID, because of course
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the restaurant industry suffered significantly during COVID when people just weren't going out to eat
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or they the restaurants that did stay open didn't necessarily have that door dash setup.
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They didn't have delivery. I mean, I worked in I managed a
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pizza delivery place for seven years, so I'm familiar with that concept and that
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was part of our business plan and part of our structure. But you know,
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the other types of businesses that don't include that type of planning into how
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they're going to get clients, how they're going to serve customers, they don't
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know how to do it. But even after COVID, after lots of businesses
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went under, that's still an incredibly prevalent piece, that last mile delivery of
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getting your product to your customer. And people don't always consider maybe restaurant retail
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to be part of the supply chain, but it really is. Last mile
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delivery affects that just as much as it affects Amazon or Walmart or any of
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those other larger brands. So in terms of brands responding and some of the
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implications, so we're talking about restaurants. What about some other companies? How
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are they responding to these shifts? And I think it starts with because we
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said it's all driven a consumer preference, I think it's necessitated a different focus
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on technology. You know, you're not thinking about do I just acquire a
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WMS anymore? It really is this for a distribution centers, it for a
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fulfillment center. Suddenly something that was a broad generic term and it just was
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like check the box in your evolutionary journey. Now you're having to put a
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lot more thought about what is the actual purpose of it. Do I have
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that sub feature function set that really hones in on my business, my targeted
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clientele and is built for purpose. Especially when I think about the large enterprise
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systems that we were implementing on on prem Suddenly there was a lot of bloat,
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There was a lot of features you never needed, or you were acquiring
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feature two because you were going to use it in six years when you had
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the revenue goals you were looking for. So I think that whole selection of
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top technology is where I've seen that biggest change. Now, then you think
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about what we're dealing with right now, where we've got a little bit of
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the economy slowing, a little bit of pressure from the banks. When it
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comes to interest rates, there's now becoming an increased conflict between the finance team
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and the operations team. Operations team goes, I just need to accomplish this,
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I need these feature functions good finance goes d indeed, um, now
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can you wait a year? Are we going to be okay? If you
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just because they're thinking cash flows money in the bank giving, maybe the interest
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rates will curve and they don't want to be at the peak when they buy
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a thirty year loan. You know, there's a lot of different ebb and
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flow right now between those that are trying to meet the customers needs and those
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that are very due, diligently trying to protect the company's best interests and their
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longevity. And so we're seeing a lot of these cycles get drug out because
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of that, a lot of finance and accounting people, a lot of capital
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expenditure experts being pulled into these bids to say the payoff curve is no longer
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five years. That they off curve could be eight, could be ten,
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And that directly influences a lot of considerations like when are you going to be
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in the black If you're a startup, maybe what do how appealing are you
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to buy out if that is your chosen trajectory. A lot of these things
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like the balance sheet can be silently weighing down on the business and completely altering
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the trajectory of these companies. One of the things that you said is that
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sales cycle is longer other than finance. Is there anything else impacting that?
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Where they're saying, you know, okay, let's let's take a deeper look
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at this. Are there additional business units or additional aspects of those companies that
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are impacting that? So let's start with that operations team, you know.
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So one of the things that I've run into personally is that the whole by
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the monolithic suite and you'll have it in three years. You know, I
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work for Starbucks, Oracle, Obie. It is absolutely essential for these multibillion
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dollar companies. But when you bring it down the market, you start talking
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to mid market, you start talking to emerging into low enterprise, and a
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lot of them are like, oh, I'm going to hand you a check
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now, it's gonna be three years before I actually get something out of this,
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and they're beginning to push back on that. You're starting to see people
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coming in call it tier two, tier three even of technology provision, and
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their whole promises speed of delivery, Can I give you this one to two
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things, can I do it really well? And can I stand it up
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tomorrow. So we're seeing the shift of the whole tech stat Now you may
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grow up into these big enterprise and glue together style systems, but right now
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what we're seeing is a little bit more of a gnosticism. Some of the
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way that you can improve that buying cycle is to focus on one thing.
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So instead of going to your finance team and going, I'm going to go
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with Bob's monolithic software. It does WMS OMS and Julian Fries and the science
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fans team goes, well, how can I do do village and so on
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that in a reasonable amount of time. So now they're going, we've got
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a sales cycle with the WMS, We've got a sales cycle with the TMS.
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We've gone out and done rate providers, and we exist now in sas
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based technology that can go. Okay, Now that I have all these things,
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I just integrate them and they play together. So people are focusing at
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the sales level of let's do one thing, let's do it well, let's
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to it fast. Now I open up my API, I open up my
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data, and you can invite and cross data between all these different platforms,
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and now you build this bespoke, very nimble supply chain that does exactly what
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you need to when you need to do that acquisition. So I think a
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lot of brands are just finally comfortable with that whole business or the bulk of
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it is now moving to those direct channels. You know, when I came
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up in supply chains, they were highly optimized around the distribution center. I
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have my suppliers, I restock, I then put it in inventory. I
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have safety stock, I pull up everyplenish I put it on, I restock
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into the store. Being able to look at how a supply chain is optimized
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around that, It's generally around truck schedules, delivery cadence every day, every
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other days, every other day style replenishment, and really filling the front of
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the house. So when everybody's shopping on their phone and replenishment is now based
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around them, it's not about the retail customer. They're still important, but
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we're still experiencing a little bit of that showroom concept of you really are just
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coming in to look and then you just pull out your phone and you order
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from Amazon. Anyways, So I think a key focus of this is now
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worked it into the art effects. I need things that make me e commerce,
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that make me omnichannel, that make me direct the consumer, and I
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need it now. I don't need it in three years, and ideally I
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want to do it in the exact cadence and feature set that I want.
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This helps with working capital flow. This helps for companies to grow faster because
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they're not over buying, but they're still razor focused on what is that customer
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profile that I want to serve? And so with some of these these companies
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that provide these these software and these IT solutions, are they I'm sorry,
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we were talking about restaurants a minute ago. So now the term in my
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head is ala carte. You know, each of these little pieces that they
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can get one at a time as they're needed, as the as the customer
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grows their business and they're able to add on these additional functions. Are we
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seeing a shift where companies are going back to those original vendors and adding on
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the things, or are they cobbling together a Frankenstein's supply chain solution that's going
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to meet all of their needs. I mean, we'd like to say that
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everybody's doing it the perfect, the first way every time. But I think
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you highlight one of the dangers of this strategy as well, which is are
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things truly interoperable? You know? Can I pull something out if it's no
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longer working, if I need to move on safely? That's actually been true
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because you're buying for features and then usually running some kind of integration layer.
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It does allow for you to pull things out, put things in as you
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need, and you're not necessarily as locked in as you used to be.
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Generally, the pain point here becomes what imaginary line in the sand exists north
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of a billion, somewhere in that two to five billion range, where those
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things that made you successful now need to fall away. Call it the Peter
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principle of technology adoption. What got me here is not going to get me
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there. There is going to come a moment of reckoning because if you've cobbled
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together these large mid market solutions, they're mid market solutions. They do what
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they do they do what they do well, but they usually have very clearly
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defined squares that say up to this point, but not past it. There's
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probably some point and if you are super successful now it would be a great
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problem to have. But if you're super successful you hit about the five billion
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markets, like I may have to rip all of this out to bring one
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of the big players in because there is now suddenly something that demands this big
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multinational enterprise style focus. It's not to say either strategies bad or neither,
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or this path is not worth going down, but there are things that somebody
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should keep in the back of their mind of there is going to be a
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sequence to this. Yeah, there's a limit, and especially when you get
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to that point is I mean, it's a good problem to have, you
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know, kind of like our question that we were talking about earlier, our
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personal discussion, but you know, there's there's going to be a time when
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you're going to have to make that call and that you know that it's no
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longer going to be this not that it's simple, I mean it's it's still
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complicated, but there is a point in which you have to make that call.
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So what are some how are the how are the paradigm shifting? How
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are they moving? And you set this one up perfectly, So I'll just
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give you a credit where it's due. You know, omni channel, It
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really is about omni channel, and it's about thinking that from the start.
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You know, So omnichannel buying habits are just now. They're expected regardless of
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the size of your firm. If you've crossed about call at twenty to twenty
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five million in revenue, you're not really a local firm anymore. You're starting
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to kind of grow up. You're either at the state level, you're at
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the national level. You might be dabbling in international, and so you just
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have different considerations than you probably opened your doors around. So you aren't too
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small for two day shipping. You probably are starting to feel pressure around local
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delivery time windows, some of that white glove style information handling that just comes
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with the bigger players. If you want to be in that market, if
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you want to be able to steal eyeballs from them, you have to at
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least come up to that level that has been really set in the stand.
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Let's call it it's Amazon, it's Jet, it's Walmart. They offer such
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high degree of call it operational transparency that now you have to be able to
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compete with that, even if it's only just to the minimum viable product level,
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that's just indirect. Well, how do we address retailer you know,
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do you have stores? Are you experimenting with pop ups and flash sales?
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Well, there are things that go on in the back of the house.
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People are starting to ask for buy online, pickup in store. They're thinking
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about ship from store. You know, when I was growing up, before
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I was a professional, even it was mind blowing to me when game Stop
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started allowing you to log into their website open up a store. Oh I
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want this game. Well there are three units and there at the mall six
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miles down the road. That happened a lot sooner than I think people realized.
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I think I was doing that back in two thousand and four, you
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know, so there's a lot of this stuff that kind of was that precursor
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and it was really cool. But there's still the chance of disappointment. If
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I saw that and that was one copy and I went down the road,
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what's to say a guy in the store didn't pick it up sooner? You
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know, So we've had even we've even added guarantees around that to say I
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bought it, it's in my name, it's going to be there. That
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is the confidence of it. I did that a couple of weeks ago.
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So there just there was a fire pit that I wanted. I looked online.
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The store had it in stock, but there was a limited amount.
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So I bought it and did for click and collect, just because I did
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not want to take the chance that on that beautiful sunny Saturday, someone else
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in that store was going to think, oh, I need a fire pit.
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You know there are there are cautions around that though, And this is
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one you're talking to borrow from you. This is one of my wife and
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I ran into. Just the other day, we were looking at some sun
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chairs at Costco. We're sitting in the store looking at them, going Okay,
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I can buy them here for one hundred and fifty bucks, go home,
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open up your phone. They want a four hundred because what they had
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done was they had baked all of those supply chain costs into it. It's
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a big it's a bulky item, it might require some white globe treatment,
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and so they're like, if you want to buy this online one it had
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to be a two pac and two even at two pac rate it was like
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another one hundred and fifty dollars, but no, it was free pickup in
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store. And because we've just been to the store, you just get this
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kind of disconnective highway robbery, like you're being taken advantage of. Now I
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can appreciate it as a logistician. I literally called my wife down and went,
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what you don't understand is operations shipping pig up. They're baking their administrative
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costs into it. But for big items, big bulky items like that,
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the shift between I'm looking at a price tag versus I'm looking at my phone
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can be jarring. And so if there is not transparency in that, it
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can start feeling manipulative. It can start feeling like, yes, I will
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offer you everything you want for a price. I've noticed this also for you
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know, we were talking restaurants earlier. Now I'll talk about grocery delivery and
19:08
instacrt. I use Instacart to order my groceries and just pick them up when
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I'm ready. You know, I'm a busy mom. I have, you
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know, work, I have a long commute. So you know these things
19:18
are our godsend to me at one of the benefits of COVID. I know
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that's a horrible thing to say, but it's a great thing that has come
19:26
out of that that almost every grocery store is available on Instacart now, But
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the prices for each individual item are higher through Instacart than they are in the
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store. And so that something I have to weigh. You know, if
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I'm only picking up two things, is it really better to order it on
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instacrt or just walk into the store and get those two or three things,
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or for a large grocery order? And am I willing to pay an extra
19:48
fifteen twenty dollars for that grocery order just for the convenience of not having to
19:53
go in and go shopping? And most people I find are, you know,
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that that convenience and that customer experience is so valuable that they're willing to
20:04
spend that extra money on that service that the store is providing, and God
20:11
bless them for it. But there are there's manipulative, manipulative things that are
20:15
there from when I came up as well, you know, I think back
20:18
personally to my time at Cabello's. You know, there's positive revenue reasons that
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companies do this. We have study at Cabello. As I said even ten
20:27
years ago, if I can make you come into the store we used in
20:32
the store pickup, call it my online pickup store, whatever you want to
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call it. If we can get you to come to the store, we
20:37
put the customer service desk all the way at the back of the school,
20:40
all the way at the back. I'm not sure if you've been into a
20:41
Cabellas. These things are two hundred fifty thousand square feet, are enormous.
20:45
So if I can get you in, I'm going to make your order be
20:47
at the entire back end of a football stadium. I'm going to make you
20:49
walk the entire way across it, and I can guarantee you almost to the
20:53
dollar that you're going to spend fifty dollars getting to that back of the store,
20:56
because you're gonna walk by and go, oh, I bought a fishing
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lineup. I didn't. Oh, here's spare real up, here's a jacket,
21:03
here's some cool weather here. And as you're going you're thinking, oh,
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I need this, and I need this, I need this. It's
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the consumer product version of don't go to the grocery store when you're hungry.
21:11
You don't go to that. You don't go to any retailer and go,
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well, I'm just here to buy shoot because by the end you've walked out
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with a full ensemble. Right. Yeah, And that's what happened when I
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picked up my fire pit at Minards. It's all the way at the back
21:23
of the store. I walked through. I had to walk past cleaning supplies.
21:26
Oh I need that, had to walk past the garden center. Oh,
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I really do need a planter over here. And yeah, I'm not
21:33
allowed to go to Minard's unsupervised anymore. It's that's my punishment. I'm not
21:37
allowed to go by myself. So, but you're right, that is that
21:42
is one way that these companies are incentivizing and trying to I know you use
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the word manipulate, but to capitalize on incentivize. You can find positive words
21:56
for it. It's psychology at the end of the day, it is it
21:59
is all about the buying psychology, and as marketing people, we are there
22:03
for it. I mean I would have endcaps on every single app to get
22:08
back there, just to say, oh, here's something that you forgot you
22:11
needed when you walked in the store. Today. So I love it.
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I love that that is something that they're doing. But that's the marketing person
22:19
in me. So when we're starting to talk about some of those those business
22:25
models and providing that back end support for all of those decisions that they're making
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for all of those click and collects, whether it's whether they're doing the fulfillment,
22:36
and maybe that's another part of this question, is doing some of that
22:41
fulfillment. Yes, we're talking about the client walking into the store, the
22:42
customer walking into the store to pick up their item. What about when they
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just want it sent to them and those fulfillment centers having to pivot and make
22:52
sure that those customers are also receiving the same customer service levels. What's changing
22:59
there? I think there's two parts of this one, so I'm gonna break
23:03
this up. One is the customer themselves, and two is the fulfillment part
23:07
of the question. And you'll understand here in a second. We're seeing a
23:10
lot of brands that just don't think the path to success anymore is tested out
23:14
online, build up capital, open a store. You know, when I
23:18
owned my comic bookshop, that was exactly what I did. Start on eBay,
23:22
start small, justify the model. Suddenly you're in a retail store and
23:26
that was achievement. Many brands are just skipping the physical footprint. You know,
23:30
they're experimenting with highly seasonal pop ups or tempt Space's best example, everybody
23:36
knows about Spirit Halloween. You know, they show up in your mall.
23:38
They're there for two months. Their entire business model is the entire rest of
23:44
the year. They're a theater company. They're there to provide costumes, they're
23:48
provide teeing things for parties or for you know, doing putting on shows.
23:52
And then two months out of the year, suddenly they buy up an amazing
23:56
amount of retail space. You've been in one. They're minimally set up.
24:00
They're designed just to create a go in by your stuff, get out style
24:03
set up, and by the second week of November tops, they've completely vacated
24:07
that space. It's an amazing model, but it requires a completely different consideration.
24:12
When you consider online to be your main business. You have this high
24:15
degree of seasonality you have to be successful, but now you're not required to
24:19
maintain that physical footprint. So this gets to the second part of one.
24:25
What a companies really want to be How are they addressing the market, how
24:27
are they serving their customers? The second part becomes a space itself. We're
24:32
seeing really interesting discussions right now around micro fulfillment, repurposing of retail footprints,
24:38
you know, strip malls that are just there. Well, it doesn't require
24:41
a lot of retrofitting. All those empty malls from the nineties, we've we've
24:45
got them here in our city, and all of these retail spaces that are
24:49
just nostalgic for us are empty, sitting empty, and now they're getting bought
24:56
up by the most usual or they're getting filled by the most unusual thing.
25:03
Sometimes it's a dark store where you see this space in this empty ghost of
25:10
them all, but it's incredibly busy inside because they've they've capitalized on the fact
25:15
that this space existed, and that's where dark stores dark dcs. It's wonderful
25:21
lexicon that we should be dug into because oftentimes it's not the store itself,
25:26
you know. So if you're in the mall and you're seeing that shuttered operation,
25:29
it's not the previous tenant. Oftentimes it is just a company that's gotten
25:33
very creative and has moved in and they're just going to leverage that space because
25:37
of the existing infrastructure of the mall, they've got the delivery dock, they've
25:41
got the ability to send things out. All of those things sit there in
25:44
the back of the house and can be used to retrofit that space. One
25:47
of our customers we're dealing with is actually a three PL that their whole stick
25:52
is buying up this space to essentially create series of store sized micro dcs for
26:00
that purpose of dynamic and flexible fulfillment. So this also becomes one of those
26:06
resources will be reallocated where they're most efficient. It's capitalism at its core concept,
26:12
which says inefficiency will be worked around a bunch of retail space not being
26:17
used. Somebody's going to come in, set up their three PL offer it
26:21
as a service. Now that is productive space. Again. We're seeing landlords
26:25
that find that appealing as well, because there's less maintenance on these things,
26:29
there is a lot more longevity in the contracts. I wouldn't be surprised.
26:33
We haven't seen it yet, but I wouldn't be surprised if there's a large
26:34
contingent out there starting to think about the office space that is sitting open right
26:37
now, and is that also suitable for setting up pop up fulfillment operations.
26:45
Yeah, no, I agree. How do how do smaller companies play in
26:48
this arena? Because we're talking about large companies that can afford these spaces,
26:53
these opportunities, these softwares. How do smaller companies compete? Well, the
27:00
first thing is just another customer. Let's just start with that. You know
27:03
what you want to do, know who you want to do it for,
27:06
and the ability to keep an honest self reflection of what your business is going
27:11
to be should be the first part of every vision statement. Before we've gotten
27:14
into the operational plan, before we've gotten into how we can do it,
27:18
let's start with what we're doing and who we're doing it for, then into
27:22
what you asked. Actually, it's a cliche, Let's be honest. It's
27:25
a cliche, but it's constant. And there's a reason it's a constant is
27:27
that, since we've had the dawn of say, structured business transaction, structured
27:32
business relationships, you either find a way to do the same thing as your
27:36
competitor and do it better, lower cost, higher quality, a little bit
27:40
of both, or you just fundamentally change the game. And in the last
27:45
twenty years, I think what we've seen is a shift from I want to
27:48
do what they do, but do it better too. They already are doing
27:52
it as best it could possibly be done. Most of the fundamental transformations we're
27:56
seeing is around disruption, and that's where small business and mid markets really get
28:00
to thrive. Is coming out and not just saying I'm going to do that,
28:03
but better is going Yeah. I think that idea was flawed from the
28:07
start. So we're seeing a lot of new technology, new products, new
28:11
ways of approaching these problems. Some of them aren't going to work. You
28:15
know. The failure rate of businesses is ten percent, you know, or
28:18
is ninety percent? The survival rates ten It's a very quick way to test
28:22
ideas. But I think we're seeing that shift towards let's change the game entirely.
28:26
And so when emerging brands are pivoting to new techniques, we're talking about,
28:30
you know, supply chains. Let's skip the point about what you do,
28:34
why you do it, thinking generalities, Let's go to Back to School.
28:38
It's one of my favorite movies. We're talking about widgets. What's a
28:41
widget? It's a thing that doesn't exist, but it has a structure behind
28:45
it, something that everybody has to do. Do I run my own shop?
28:49
Well, okay, Shopify, Square, eBay. There are a number
28:52
of different really quick templatized websites that can be set up. You can be
28:57
selling widgets overnight. I want to distribute these widgets. Do I have storefronts?
29:02
Well, Amazon, eBay, Jet to Walmart, blah blah blah,
29:06
Amia, all of these. Every single one of these is like point and
29:08
click, put in your scoop, Boom, You're listed. There is no
29:11
barrier to entry because these guys get their pennies for selling your products. So
29:15
I can run my own website. Now I can distribute through marketplaces. How
29:18
am I going to distribute it? Well, there's three pls that are ready
29:22
to step in. I don't have to own a warehouse anymore. I just
29:26
have to run a virtual network that could be CpG, Refrigerated White Glove.
29:30
Okay, well, maybe I just go with one that lets me have direct
29:33
to consumer or e commerce as part of their service offering. I have a
29:37
storefront, I have marketplaces. I now have three pl I haven't actually touched
29:41
anything. I haven't had to own a supply chain. I have to own
29:45
anything. So you're now even getting into three pls that specialize in post sale
29:48
support. So one of the biggest problems of direct to consumer was the pullback.
29:52
Does it go to my DC, does it go to my vendor?
29:55
Do I just refund it and walk away? Now we're able to work in
29:59
concept ups around ESG and last mile and replenishment. All of those things I
30:04
just said could be virtual. You could just not own a thing. You
30:07
could be orchestrating this out of your wee work. And this allows for that
30:11
flexibility to say, maybe I want to be in the widgets market and I
30:15
don't have to think about owning a store, owning a distribution center, owning
30:18
trucks, going out and doing these things because we have this ecosystem of both
30:22
hardware and software providers that can help you get up to speed very quickly.
30:27
So I know that was a really long answer, but I really want to
30:30
think about, like, how is it going from production to sale? So
30:33
if you don't want to do it, there's a provider that will step in
30:37
and do it for you. They take a small cut of your revenue,
30:41
they take the whole thing off your hands. To go back to there's an
30:45
old adage. There's an old adage for this too, which is when you
30:48
look at yourself, ask what is my business? What am I actually doing?
30:51
Who am I actually serving? Well? I want to sell widgets good.
30:55
I don't care about distributing them. I don't care about selling them.
30:56
I don't care about designing them. Go find firm to do that, and
31:00
go back to being what you want to be. Maybe you're a manufacturer,
31:03
or maybe you are good at retail. Let's outsource the manufacturing and focus on
31:07
retail. You can really say not only what do I want to do,
31:11
but how much of it do I want to do? And how much is
31:14
what I do genuinely value add for that customer? What adds a value?
31:18
And what can I go? I have no interesting distribution, you know.
31:22
So the endpoint of that is everything I just said, More so than ever
31:27
before, smaller firms can come. They can break in, they can create
31:32
a buzz, they can gain market share, and they can thrive because a
31:36
lot of what would have been considered enterprise level maturity has been brought down market
31:41
by these very nimble technology providers. So it's now accessible to them, it's
31:47
now available, and so that I think brings you to your final point that
31:56
we discussed and what is that. While it really comes down to whole news
32:00
is fast, How fast and I do this? You know, how fast
32:06
can I create something get it out there? Because the Internet effect is real,
32:10
we know that the longevity of cool has gone down a lot faster than
32:15
ever before. So I can't sit here and go, oh, I'm going
32:17
to go through design and putting it out. In three years, I have
32:21
a product and up somebody already copied it. We can't survive those cycles anymore.
32:24
So I think that's where the best part of this cons is, I
32:28
can do this now. Everything we just discussed. All of these providers technological
32:32
hardware, they're clamoring for business right now, just in the way you theorize
32:37
about you know, thus scrappy startup, they're gonna go out there, They're
32:39
gonna do something. There are scrappy startups in the provider space. I deal
32:44
with them every day that are coming to me and saying we do this,
32:46
and we do it very well, and it's all we want to focus on.
32:50
How do we perform partnerships around that. So I didn't really appreciate just
32:53
how many small niche technologies we're out there really focusing on how are you doing
32:59
your rate engine, how are you accessing the parcel marketplaces, how are you
33:02
doing your tms? And so they play well with each other. You get
33:06
to build these dynamic text acts and because you can now approach them all,
33:08
there's a lot more things that can be paralyzed in that adoption process. I
33:12
don't have to go all right, these are going to go one after others
33:16
sequentially, and five years down the road, I'll have a supply chain.
33:20
A lot of these can be stood up by themselves with the configurations and then
33:23
you just bolt them together with that integration lare afterwards. So when we think
33:28
about my company, for example, we're deploying warehouse management, distributed order management,
33:32
those can be done in as little as ninety days, you know,
33:35
depending on the complexity of the customer. Of course, if you've got a
33:37
big, sprawling network, it's longer. But for what these small businesses need
33:42
being able to go, we can come in. We can give you a
33:44
distribution solution in ninety days. That is transformative for a lot of these companies
33:49
when they're looking at how am I going to scale up into the mid market.
33:52
One of my other partners works on implementations. Their commitment is they can
33:55
hook together two software systems, software and a hardware system, a control system
34:00
at DC they need twelve weeks if it doesn't exist. If it does exist,
34:05
it's usually two weeks of configuration, you're off to the races. So
34:07
even as you start adopting these things, you can get the benefits of those
34:12
quicker. You're not paying on day one and turning it on on day three
34:15
sixty five, and now you're back to chatten that finance team to justify why
34:20
did you spend all of this money? You know, so I mean a
34:22
new hardware vendor that's ready to stand up in thirty days just about every week
34:27
right now, as I'm seeking technology partnerships, it really is just a wild
34:31
time to live in because that cycle time between inking the contract, deploying the
34:36
system, generating roy and then looping back to go, okay, now what
34:39
other holes do I have in my tech stact? This can become a very
34:44
big game changer in the operations space. So this is really benefiting firms.
34:51
You know, they don't feel like they have to make trade offs anymore between
34:54
with or without buy this system, don't buy this system. They don't feel
34:59
the over buying features they'll need in that five year timeline you said, and
35:05
maybe I don't hit the growth milestones and now I'm underwater. So they buy
35:08
what they need now they build a more responsible acquisition timeline that says, good,
35:14
in twelve months, we're going to look at this again. In twelve
35:15
months, we're going to look at this again, and it becomes a very
35:17
You bring continuous improvement mindset into acquisition methodologies instead of a five to ten year
35:24
cycle of capital expenditure of research and research and research and delayed decisions and research
35:30
and up the window of opportunities past. This allows for that nimbleness that allows
35:35
for small business and mid market to be able to compete and to be able
35:37
to do so successfully. You know, so you said my last question,
35:40
my last point. So I always have to flip this around. You know,
35:45
everything I've walked you through, from providers to time to value to the
35:49
changing kind of similar sentiment, it really becomes what market disruptive idea of you've
35:53
been sitting on. You know, where is your widget? What can you
35:57
take out into the world, Because if your answer was I don't have the
36:00
money, I don't have the resources I don't have the back end. All
36:04
of these things can be stood up very economically sensibly to allow for these disruptive
36:09
ideas to get out there. So it's never been easier to have your idea,
36:15
identify your specific clientele, and then reach them in a very surgical manner.
36:20
Fantastic. I love it. I love that this agility is allowing for
36:24
all of these new new ideas, new products to reach markets that they never
36:30
would have dreamed of being able to do a decade ago. I think it's
36:34
fantastic, and it's it's only going to benefit the consumer in the end to
36:38
have that amount of choice. I mean, that's really what it comes down
36:44
to. Is the customers going to decide where they're going to put their money.
36:47
You can either accept that, and I say that accept I probably skipped
36:52
a point there. I hear a lot of pushback on will I don't want
36:55
to do it this way, I don't want to do it that way,
36:58
And the answer is it's not your choice. More consumers are enjoying an amazing
37:04
period of voice of the customer driving the decisions of these firms, And frankly,
37:08
if you don't want to do it, I guarantee there's a startup,
37:12
it's going to be there next week, that's going to go that's great,
37:15
and we want those customers. So you don't get to say I'm the big,
37:19
gargantuan retailer and I'm going to define the way the customers going to interact
37:22
with me because the Internet has allowed them to say, no, that's great,
37:25
I'm going to go back to the mom and pop who is willing to
37:30
deliver a very tailored, targeted experience for exactly what you need. You just
37:34
have to be willing to seek those providers out exactly well. You know what,
37:37
one of my favorite things about our conversation today is that everything we talked
37:43
about kind of went back to or where we ended up with this. You
37:46
know, what is your idea, how would you do this? What would
37:50
you what would you focus on if you're the company, if you don't want
37:57
to have to do this, if you want to outsource these other things that
37:59
you don't want to do. It all comes back to the conversation that we
38:02
had that is only available on our gated content on YouTube. So if you
38:07
are not a subscriber to speaking of supply chain through our website, you really
38:13
should be because it all ties back together of really focusing in on what your
38:21
dreams are and what you hope to achieve and making it happen and getting rid
38:24
of all the rest. It was perfect our discussion today. It fits in
38:30
absolutely and it gives me the chance to promote our additional content. So thank
38:37
you very much for that. I appreciate it. Thank you for getting to
38:39
hear the science behind what I do, part of the academic that I discussed
38:44
at the front of it. Because at the end of the day, there's
38:45
never really been a better time to be in logistics. It's just so exciting
38:50
to see the rate of change, the implementation new technology, and then that
38:53
core theme of but it's not inaccessible. It's out there if you want it.
39:00
You can build the supply chain you want, and that's probably the best
39:02
thing for our economy, for customer service, for continuing to keep all of
39:07
this goods flowing. Is there's just such a vibrant ecosystem that I don't even
39:10
think was there five years ago. It really is. And it's like you
39:15
said, we've we've worked with each other for years now in different areas,
39:20
but we are marketing people and we've had numerous discussions numerous interactions over the years,
39:25
and it's gotten so much more fun. I mean, you're colating that
39:30
the subtext is, if this isn't exciting to you, if this isn't such
39:35
a transformative moment in the market, are you really excited by logistics? Right?
39:40
Are you really so riot? Are you really driven by supply chains?
39:44
Because if you are, it should just be a great time to be a
39:46
lot of decisions thrilling. Well, and clearly you and I are the means
39:52
who are excited about this, so that's fine. Well, Joe, thank
39:57
you so much for joining us today. This has been a lot of fun.
40:00
I hope it's been informational for our guests who are listening in. And
40:06
you know, like I said, if you are interested in these little side
40:09
conversations that I've been alluding to throughout my conversation today with Joe, please do
40:14
go to meback dot com slash podcast and subscribe to it so that you can
40:21
get access to that gated content as well. If you are listening out there
40:25
and you would like to be a guest on our podcast and tell us a
40:29
little bit about your story, tell us a little bit about what you're passionate
40:32
about in supply chain. Feel free email me anytime at podcast at mebock dot
40:37
com. As always, thank you for listening to Speaking of Supply Chain.
40:40
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