Latest / Beyond Fulfillment Podcast / Supply Chain Optionality in a Post-Pandemic World with Jim Tompkins

Transcript

Supply Chain Optionality in a Post-Pandemic World with Jim Tompkins · Beyond Fulfillment Podcast

• 0:00
  Imagine your entire production line grinds to a halt because you can't source vital components from a single overseas supplier.
• 0:09
  Panic sets in, your customers are left waiting, and you're scrambling for solutions on the fly.
• 0:16
  How would you react?
• 0:17
  What steps would you take to ensure this never happens again?
• 0:21
  Well, today we have a special guest, Jim Tompkins.
• 0:25
  An industry legend with over 50 years of supply chain experience.
• 0:30
  He's founded 15 businesses and achieved over $2 billion in revenue.
• 0:36
  Jim will be sharing invaluable wisdom from his entrepreneurial journey.
• 0:41
  He'll also provide his advice on supply chain strategies for today, especially in the era marked by unpredictability and high stakes.
• 0:50
  He'll guide us through methodologies to identify single sourcing weaknesses, explore alternative suppliers, and enhance supply chain resilience.
• 1:01
  So if you're KE keen on staying ahead of market disruption, this episode will equip you with the knowledge that you need.
• 1:08
  Tune in as Jim Tompkins reveals not just the ongoing shifts in supply chains, but more importantly, how you can turn potential threats into golden opportunities.
• 1:19
  As always, if you found value from this content, please like and subscribe.
• 1:25
  Hello, everyone, and welcome to another episode of the Beyond Fulfillment podcast.
• 1:30
  I'm your host, Dave Gulas, and this week my guest is the founder and CEO of Tompkins Ventures, Jim Tompkins.
• 1:39
  Welcome, Jim.
• 1:40
  Thank you, Dave.
• 1:41
  Good to be with you.
• 1:42
  Yeah, we appreciate you taking the time.
• 1:45
  So, Jim, a lot of people in supply chain follow this show.
• 1:50
  Clearly, you're well known.
• 1:51
  You've had a.
• 1:53
  A 50 plus year career, started 15 businesses, doing $2 billion plus in revenue overall, written a number of books.
• 2:04
  So many people know who you are.
• 2:06
  But for.
• 2:06
  For those that don't, can you just give us, like, your backstory and how you.
• 2:11
  How you got to where you are?
• 2:13
  Okay, so 50 year story.
• 2:15
  Here we go.
• 2:17
  Grew up in Chicago.
• 2:19
  Dad was a house painter, mother was a bank teller, went to Purdue, got a Bachelor's, Master's, PhD, went in the army, became a college professor at North Carolina State University, started a consulting business.
• 2:34
  That consulting business exploded, was a tremendous success.
• 2:38
  In 2019, we were probably the largest supply chain consulting firm in the world and offices all over the world.
• 2:47
  Then 2020 happens.
• 2:49
  That's a long story unto itself.
• 2:52
  And everyone has the same story.
• 2:53
  Oh my, my.
• 2:56
  We decided to retire.
• 2:58
  And so I left the company that I was with for 45 years and thought I would enjoy retirement.
• 3:06
  I stayed retired for three weeks, and then I started Tompkins Ventures.
• 3:11
  And it's been a wonderful, wild ride ever since.
• 3:14
  So a lot of fun.
• 3:16
  Supply chain Guy through and through logistics, transportation, warehousing, inventory, procurement.
• 3:24
  That's what I do.
• 3:25
  Okay.
• 3:27
  All right.
• 3:27
  So when you got in supply chain for all those years, like, did you ever see it growing to.
• 3:34
  To the point, like when you said you had the largest consulting company in the world for supply chain back in 2019, like, when you got started in that field, did you.
• 3:44
  Did you imagine it would grow that big?
• 3:46
  No, had no view of that at all.
• 3:49
  In fact, when we started, we were a warehouse consulting firm, and then we added transportation, then we added network design, and then we added inventory, then we added procurement.
• 4:00
  Then we got into the whole technology side on the 80s.
• 4:03
  In the 90s, we got into implementing material handling systems.
• 4:07
  We began calling it supply chain in 1998.
• 4:11
  We didn't even have the word supply chain.
• 4:14
  We were warehousing, and then we were distribution, and then we were logistics.
• 4:19
  And so we evolved to the term supply chain.
• 4:23
  And.
• 4:23
  And then when we went global, after we sold a portion of the firm, the private equity, we went global.
• 4:31
  It really exploded, and we grew with supply chain.
• 4:35
  But Even going into 2019, when we had a tremendous head of steam, we had no idea where supply chain was going to be in 2024, 2025, where now the entire world is talking about supply chain.
• 4:52
  President Trump is going to make major moves in supply chain.
• 4:56
  So never had that concept of what we would be doing and where supply chain would be positioned.
• 5:02
  So it's like you put your hand in a pot of gold and out comes the world's largest diamond, and you say, oh, my goodness, what a wonderful surprise.
• 5:16
  And okay, so appreciate that story.
• 5:19
  And like you said, clearly you had no idea how things were going to evolve or how this would grow.
• 5:24
  Like, what was the process like?
• 5:26
  When you're starting this firm, you're starting in warehousing, and you're adding all these other.
• 5:31
  All these other functions as.
• 5:33
  As the actual supply chain evolves.
• 5:35
  I mean, what.
• 5:36
  What was the process of growing the company like?
• 5:39
  Well, the process of growing the company was really just kind of following the market.
• 5:43
  So supply chain kept getting bigger and bigger and bigger.
• 5:47
  And since we were successful in that field, as the field got more influential, we got more influential.
• 5:55
  And so it's not that we did something wonderful.
• 5:58
  I just got darn lucky by getting in the right line called supply chain.
• 6:03
  And then you did it.
• 6:05
  And by a lot of times in 2005, 2010, people were just starting to discover supply chain.
• 6:11
  And we'd been doing it for 35 years already.
• 6:14
  And so we really had a head Start.
• 6:17
  And it was by pure luck.
• 6:19
  It wasn't because I had this tremendous vision of what was going to happen or anything.
• 6:23
  And what it was like.
• 6:25
  It was a wild ride.
• 6:27
  Every year.
• 6:28
  I kept thinking, man, it can't get better than this.
• 6:30
  This is awesome.
• 6:31
  And then the next year would be better, and the next year would be better.
• 6:35
  And although 2020 was not such a good year, 2021 was better.
• 6:40
  2, 3, 4, 5.
• 6:42
  I mean, it keeps getting better.
• 6:43
  So it's kind of like, you know, enjoying the party while you're at it.
• 6:49
  Someone says, g, Jim, you've worked a long time.
• 6:50
  Why don't you retire?
• 6:52
  Are you kidding?
• 6:52
  Retire?
• 6:53
  I'm having too much fun.
• 6:54
  This is the fun.
• 6:55
  I'm having more fun then, you know.
• 6:57
  I mean, if I love golf as much as I love supply chain, you'd call me a bum, a golf bum.
• 7:03
  But I just love supply chain, and this is what I do.
• 7:07
  Wow.
• 7:08
  Well, and that's.
• 7:09
  That's fantastic to hear, right?
• 7:10
  And clearly, you know, like you said, you're 50 years in, and you're having more fun than ever.
• 7:16
  I mean, I think that's something everyone would aspire within their career.
• 7:20
  All right, so you brought up 2020, Covid, and all the things that the pandemic altered.
• 7:28
  Like, how would you say from your point of view, being that you're an expert and you've been in the field so long, how did the pandemic alter the supply chain as we know it today?
• 7:41
  Well, the supply chain before 2020 was kind of unheard of.
• 7:48
  Outside of those who really did it, people in business knew supply chain.
• 7:53
  But when my wife told her friends that her husband was a supply chain expert, they said, really?
• 7:58
  What's supply chain?
• 7:59
  And for years, I had to explain what supply chain was.
• 8:02
  For years, my wife explained supply chain.
• 8:05
  When Covid hit, one of her girlfriends called her up and she said, I was just watching the news, and they said, the reason we can't buy toilet paper is because of supply chain.
• 8:16
  Isn't that what Jim does?
• 8:17
  And they said.
• 8:18
  She said, yes, that's what Jim.
• 8:20
  She said, and so it's Jim's fault that we can't buy toilet paper in the store.
• 8:24
  And so all of a sudden, we became famous.
• 8:27
  I mean, we was like the guy that plays in this little smelly piano bar for 40 years, and no one discovers him.
• 8:33
  And then the next week, you show up and you're playing in Madison Square Garden.
• 8:38
  So we became the head of town.
• 8:40
  And the reason we became the head of town is because before 2020, supply chain was pretty predictable.
• 8:46
  You kind of knew what your demand was going to be.
• 8:49
  You knew what your supply was going to be.
• 8:51
  You organized it, you planned it, you put a little buffer in.
• 8:54
  Things flowed, and you were successful.
• 8:57
  Covid hit.
• 8:58
  And guess what?
• 8:59
  The supply wasn't coming.
• 9:01
  The products didn't come in, and then the demand went crazy because everyone's staying at home.
• 9:07
  So you don't know what your supply is, you don't know what your demand is, you don't know what your lead time is.
• 9:12
  Holy cow.
• 9:13
  The supply chain broke.
• 9:14
  And so now we have a broken supply chain, and companies are saying this is driving us to our knees.
• 9:20
  We need to get some resilience in the supply chain, and we need to go from just in time to just in case.
• 9:28
  Wrong answer.
• 9:29
  Just in time didn't work.
• 9:31
  But just in case, you can't make money.
• 9:34
  And so we need not to go from just in time to just in case.
• 9:37
  What we need to do is figure out how to do it, given the uncertainty, given the reality of the day.
• 9:44
  And so we reinvented the whole concept of supply chain after 2020 because we entered a period of really, really, really uncertainty.
• 9:56
  And this uncertainty, we call it Vuca, volatility, uncertainty, complexity, and ambiguity.
• 10:03
  And Vuca stole the ability to predict what was going to happen.
• 10:07
  And so you now needed to synchronized supply and demand, even though you had no idea what supply was or what demand was.
• 10:15
  So it became much more difficult.
• 10:20
  In my world, a personal brand is invaluable.
• 10:23
  A year ago, EasyDC was brand new with just a couple of customers and no online presence.
• 10:29
  Then I found Hicks Marketing.
• 10:31
  They helped me amplify my personal brand, build a solid content strategy, publish my podcast, and and 10x the number of customers we serve, all in less than one year.
• 10:41
  Do you need a marketing partner who gets you and cares about your success?
• 10:45
  Reach out to aliciaxmarketing.com for more info and tell her Dave Gula sent you.
• 10:51
  All right, and so you mentioned 2020.
• 10:55
  You retired.
• 10:56
  That didn't work.
• 10:58
  You.
• 10:59
  You quickly decided to jump in and do something else.
• 11:02
  And so then you formed what is now Tompkins Ventures.
• 11:07
  So can you talk about what led you to do that and what Tompkins Ventures is?
• 11:12
  Well, there should be a very good intellectual answer to this question, Dave.
• 11:18
  Unfortunately, it wouldn't be true.
• 11:21
  What really happened is the phone rang and a client asked me if I could help him.
• 11:27
  And I said, sure, I'd be happy to help.
• 11:29
  And so I provided him some help.
• 11:32
  And then another client called and another client called, and what we found is that there's a major shift in how consulting firms work.
• 11:40
  Tompkins Ventures was very deep in supply chain, but didn't necessarily understand how sales and marketing took place in the marketplace, didn't understand the capital side of the business.
• 11:54
  And so what we were is deep and narrow.
• 11:57
  Deep and narrow.
• 11:58
  It doesn't work in a Vuca environment.
• 12:01
  In Vuca you need to be broader than that.
• 12:03
  And so there's other consulting firms which are very shallow and very wide, but they don't know what they're doing, they don't have much experience.
• 12:11
  Those firms don't work.
• 12:13
  And then you have the consulting firms which are really good, which are very broad and very deep.
• 12:18
  But very broad and very deep is very expensive.
• 12:23
  And so you've got all these expensive people, and so your overhead is huge.
• 12:27
  And so now your value proposition is in question.
• 12:30
  So deep and narrow doesn't work.
• 12:34
  Broad and shallow doesn't work.
• 12:38
  Wide and deep doesn't work.
• 12:40
  So what do you do?
• 12:41
  Well, what you need to have is broad and deep, but you can't afford the overhead.
• 12:46
  So you don't do it based upon hiring people.
• 12:50
  You based it on creating an ecosystem.
• 12:54
  And the ecosystem contains broad and deep of people that can solve problems.
• 13:00
  And then what you do is put these teams together when they're needed.
• 13:03
  So we used our experience and our background to build teams out of expert firms that you didn't have to put on your payroll.
• 13:10
  So we're asset light, but we're really end to end and top to bottom.
• 13:16
  And that's what allowed us to be successful at Tompkins Ventures.
• 13:19
  So what we created is a environment of matchmaking.
• 13:24
  Someone tells us what the problem is, we build the organization to solve that problem.
• 13:30
  And then someone else calls, they have a different.
• 13:32
  We build the organization to solve that problem, and we don't have the overhead, so they get a great value proposition.
• 13:38
  Okay, and so when you, when you started this, what was it like building that out?
• 13:45
  Because clearly, four years later, the company's thriving, you've got a big network, 200 plus partners, if I'm not mistaken.
• 13:55
  Right.
• 13:55
  Doing a lot of business globally.
• 13:57
  And the explanation you gave makes perfect sense.
• 14:00
  But starting from scratch, building that out, what was that process like?
• 14:05
  Well, it was an evolution.
• 14:10
  We began thinking, well, this will be a United States company.
• 14:15
  And so what we need to do is have companies that do great at manufacturing, that do great on technology, that do great on logistics, that do great on third party logistics, that have a really strong ecosystem from a
• 14:31
  Capital point of view.
• 14:33
  And so we began with the United States, but the reality is the business isn't the United States.
• 14:39
  The business is global.
• 14:40
  So we then added Europe, we then added Latin America, and then we added Asia.
• 14:45
  So it was an additive process.
• 14:47
  It's not like we tried to tackle.
• 14:48
  You know, we didn't try to eat the whole Thanksgiving dinner at once.
• 14:52
  What we did is we ate first the salad, and then we came back and had some turkey, and then we came back and had some ham, and we kind of ate it a piece at a time.
• 15:02
  Doing it that way, we were sure we had the quality in before we tried to scale it to the next level.
• 15:09
  But even with the quality in and scaling it to the next level, we constantly found that we didn't always have what we needed.
• 15:18
  There was always a missing ingredient.
• 15:21
  But because of the size of the network, you're right.
• 15:25
  We have 214 business partners of Tompkins Ventures.
• 15:29
  All of these are people that have been in supply chain 30, 40 years.
• 15:32
  All of them have a huge network.
• 15:34
  And somebody in my network knows everybody that we need to know to get the problem solved.
• 15:41
  And so it's how do we communicate?
• 15:43
  How do we make this network work so we can bring the bear the solution that the clients really want us to work on?
• 15:50
  Okay.
• 15:52
  All right.
• 15:52
  And so you mentioned in the opening, right, Supply chain is now global, and it impacts everything.
• 15:59
  And it's top of mind for so many people.
• 16:01
  And then, you know, as we're recording this, you know, President Elect Trump is soon to be taking office, and one of the things you write about often is his.
• 16:12
  His proposed tariff policy, and then the impact that that's going to have.
• 16:16
  And you, I don't know if you coined this term, but you certainly mentioned the term quite often.
• 16:21
  It's called re.
• 16:21
  Globalization.
• 16:23
  So can you talk a little bit more about that and what you see coming up?
• 16:28
  Absolutely, Dave.
• 16:29
  And reglobalization.
• 16:31
  I did coin the term, and just like the story we've told to this point on this podcast, it evolved on us.
• 16:39
  We first began thinking about the Western hemisphere and how can we handle the shortfalls within the Western hemisphere.
• 16:48
  But then the Western hemisphere is impacted by Asia, it's impacted by Europe, and so we needed to have globalization.
• 16:55
  And so we were working on globalization.
• 16:57
  But what we learned is the pace of change is so great that the pace of change is going to require that we constantly have the ability to upgrade the entire supply chain.
• 17:14
  So what happens?
• 17:16
  Is President Trump, President Elect Trump going to be the president in a couple, few weeks here on January 20, he is going to do what he has promised.
• 17:28
  Now, my father told me when I was a boy, he says, jim, when you're in business, don't talk politics and don't talk religion.
• 17:35
  And I followed my dad's rules my entire life.
• 17:38
  I've never in my business context talked about religion or politics.
• 17:43
  However, what we're seeing today is what's going on with tariffs is going to have a tremendous impact on supply chain.
• 17:52
  And so I have no choice but to enter the political arena, because the political arena is coming into my world, and therefore my world has to have a reaction to that action.
• 18:06
  And so there's a cause and effect taking place.
• 18:10
  The reality is what's happening is there's an underwater earthquake.
• 18:16
  And this earthquake, I would call it a Trump earthquake.
• 18:20
  And the Trump earthquake creates a tsunami.
• 18:24
  And a tsunami is not a real big wave when it's out at the open sea.
• 18:28
  It's a real fast wave.
• 18:30
  And that wave is moving very quickly to China.
• 18:34
  In fact, that wave is going to get to China right around January 20, January 21.
• 18:40
  And when that wave arrives and gets in the shallower water, the fast moving wave becomes a very tall wave.
• 18:49
  And that wave is going to create devastation in what it hits.
• 18:52
  So the Trump earthquake is going to create the Trump tsunami.
• 18:57
  The Trump tsunami is tariffs, because tariffs are going to change what is the most economical way to run your supply chain.
• 19:06
  And so instead of sourcing from China, you're going to start sourcing from Brazil.
• 19:10
  Instead of getting raw materials from Australia, you're going to get raw materials from Africa.
• 19:15
  And it's going to change the sourcing, it's going to change the transportation.
• 19:19
  And when these changes take place, if you're not ready for them, you will get run over by the wave and it'll be devastating.
• 19:30
  However, there's another choice with a wave.
• 19:32
  The other choice with a wave is you can surf that wave.
• 19:36
  And so instead of the wave washing me out and devastation, what we can do, if we can anticipate that wave, get on our surfboard and get in front of it, paddle, get in front of that wave.
• 19:51
  The power of that wave will create the best surf ride in all of history.
• 19:57
  And so this is a devastation time if we're on the wrong side of the wave, but it's also the greatest opportunity of all time.
• 20:05
  So where we're looking at now, I do believe that President Trump, President Elect Trump has a full range of tools available to him.
• 20:16
  He can use tariffs with respect to his trade policy.
• 20:19
  He can Use tariffs with respect to his economic policy.
• 20:22
  He can use tariffs as he does so well in a negotiation stance.
• 20:28
  And so you don't know when he's negotiating and when he's serious and what's going to happen.
• 20:34
  But what you need to do is you need to anticipate the tsunami.
• 20:39
  You got to get in front of the wave.
• 20:41
  And then if you can have your supply chain in a state of optionality, so you have options, you can do this if this happens, you can do this if this happens.
• 20:52
  If you have optionality, when that wave starts coming ashore, you can alter your supply chain, get ahead of your competition and you can win.
• 21:00
  And so it's a very interesting time for supply chain because Trump has said, I love the word tariff.
• 21:08
  The most beautiful word in the dictionary is tariff.
• 21:13
  And he will use tariffs to enforce what he wants to have with respect to making America great again and so forth and so on.
• 21:23
  But the choice, Trump's going to have an impact and he's going to have a choice that's going to impact not just the United States, going to impact the whole world, but we in supply chain have a choice of
• 21:33
  making the American supply chain great again, making the European supply chain great again, making the Asian supply chain great again.
• 21:43
  And we can do that using a combination of near shoring, friendly shoring and reshoring.
• 21:50
  And there's huge potentials.
• 21:52
  The people that are prepared and ready for it are going to prosper.
• 21:55
  The ones who don't are going to be devastated.
• 21:58
  Okay, so let's get into that a little bit more.
• 22:01
  So you said having optionality within your own supply chain is key, meaning you're nimble enough to move and pivot, you know, regardless of what happens.
• 22:13
  And you mentioned near shoring, reshoring, friendly shoring.
• 22:16
  So can you just give some examples for companies out there that you know if the CEOs are listening or the owners and whatnot, just about how what that looks like?
• 22:26
  Absolutely, Dave.
• 22:27
  In fact, great question.
• 22:28
  I love how you asked it, because nimble enough is the key.
• 22:33
  We need to be agile enough, we need to be resilient enough to do it.
• 22:37
  For example, the lowest cost approach is to buy all of a certain product from a single source.
• 22:45
  Single sourcing allows you to have economies of scale.
• 22:50
  Single sourcing also gives you no optionality.
• 22:54
  You're not nimble.
• 22:55
  When a tariff is put in place on a company that's behind that tariff, your cost is going to go up.
• 23:03
  And so what I must do is eliminate all single sourcing.
• 23:08
  I need at least two different countries.
• 23:10
  I'm buying products from maybe three or four.
• 23:13
  I can't just buy it from one place because when that one place has a problem, I have a huge problem.
• 23:19
  I mean, I can ship the whole automobile, except I don't have this one component.
• 23:23
  And I don't have this one component.
• 23:25
  The automobile doesn't get shipped.
• 23:26
  And so I need to have optionality in my procurement.
• 23:30
  I need to be able to use different providers.
• 23:34
  I need to have optionality with respect to the components we've made.
• 23:38
  If we put a tariff on China that they don't like, they're going to come back and put a tariff on selling us the rare earth mineral, the rare earth materials where they hold 80% of the content in the
• 23:52
  world.
• 23:53
  And so what we need to do, we need to have optionality with respect to the design of the product.
• 23:58
  We need to move away from batteries that are based on lithium, and we need to move to different batteries where we can get the raw material.
• 24:07
  We need an option as to what raw materials we use.
• 24:10
  We need options on the transportation we use.
• 24:14
  We need options on the ports it goes through.
• 24:17
  We need options on the warehouses when they use and who's going to deliver the product to the consumer.
• 24:22
  So every single way across the supply chain we have to say, is this a point of failure?
• 24:29
  If this fails, what's our option?
• 24:32
  How can we continue to operate even though this particular link has stopped working or has had a huge cost in prices?
• 24:41
  It cost increases that we can't afford.
• 24:43
  So it's being nimble, having resilience, having the options to alter the supply chain and keep on going.
• 24:52
  That's what we need to have to move forward.
• 24:55
  Unfortunately, that's not what a lot of us have.
• 24:57
  A lot of people say, oh yeah, we have optionality.
• 25:00
  We can buy from this company in China or this company in China.
• 25:04
  You don't have an option if the tariff is placed on it.
• 25:07
  So we need to move that product.
• 25:09
  Maybe we need to start buying that product from Mexico.
• 25:13
  Maybe we need to start buying that product from Brazil.
• 25:15
  Maybe we need to start buying that product from Africa.
• 25:18
  That's going to change transportation.
• 25:20
  So we have to have optionality in transportation distribution.
• 25:23
  The technology to allow us to manage that is all really required and we can make that happen today.
• 25:29
  We can have supply chains that are resilient, agile, nimble, with great optionality.
• 25:36
  Absolutely.
• 25:37
  Okay, and you, you kind of teed up part of my next question.
• 25:42
  So clearly, right, you're, you're in this space and you talk to many different companies and you're connected with a lot of people based on what you see today, like how.
• 25:52
  How prepared is the.
• 25:54
  Is the market at large for what's coming?
• 25:57
  You know, once the, you know, once Trump takes office, since these tariffs go.
• 26:02
  Into effect, the typical corporation in America, Canada, Mexico, Europe, Asia is not even looking at the water with concern.
• 26:19
  They're laying on the beach, enjoying the sunshine, everything's fine, business is going along, and they have not prepared.
• 26:29
  There's a very few number of firms that have a re globalization plan.
• 26:36
  If someone says, well, that's a terrible prediction, what gives you any thinking that that would happen?
• 26:43
  Duh, 2020.
• 26:45
  I mean, if you don't believe me, go back and watch the news in March and April and May of 2020, and you'll see.
• 26:55
  I had a senior vice president from a major appliance company call me up, and he was in tears.
• 27:03
  And I said, man, what's going on?
• 27:06
  He says, jim, can you help me?
• 27:08
  I said, tell me what your problem is.
• 27:10
  He said, we make washers and dryers and refrigerators and freezers in our factory, and we have nothing we can run.
• 27:23
  I just had to send 3,700 people home from work.
• 27:29
  And many of these families are living check to check they need to work, but I have nothing to make.
• 27:38
  I thought, okay, maybe we can make refrigerators because we make all the sheet metal here in North America because big and heavy and clunky.
• 27:48
  But the critical component that we need to have is compressors.
• 27:51
  But, hey, we're smart.
• 27:53
  We buy compressors from China and Brazil.
• 27:57
  And so let's turn up the orders from Brazil so we can get some compressors in here, we can make some refrigerators.
• 28:04
  So they go to procurement, says, let's get those compressors from Brazil.
• 28:07
  They call up Brazil and say, we got this order.
• 28:09
  And the company says, oh, well, we can't ship you compressors because our compressors, the coils from the compressors come from China.
• 28:18
  So the compressors came from Brazil, but the coils that make the compressors come from China, and China is not shipping.
• 28:25
  China's closed.
• 28:27
  And said, oh.
• 28:28
  He said, I had to send all these people home.
• 28:31
  When I have orders for appliances, there is demand, but I don't have any supply, and I can't even make anything because I don't have the components to make a single item.
• 28:43
  We've gone through every item we make and said, is there anything we can produce?
• 28:48
  The answer was, no, they couldn't produce anything.
• 28:51
  Had to send everyone home.
• 28:52
  And here the senior vice president literally Is crying because he's so distraught.
• 28:59
  He's got orders, he's got workers.
• 29:03
  He doesn't have the materials to make this stuff.
• 29:06
  That's totally lack of resilience.
• 29:08
  And it's a travesty.
• 29:10
  It's, it's, it's believing that we have control of supply and demand without understanding the reality that there's a lot of uncertainty in the world today.
• 29:20
  Okay, all right.
• 29:22
  And so if someone's hearing this and the light bulb goes off, that.
• 29:25
  Okay, right.
• 29:26
  I need to really start getting prepared.
• 29:30
  I mean, what would you say is, is, is the next step?
• 29:33
  Well, the, the does the whole process begins with ideation.
• 29:39
  What are some ideas we have to shore up our inadequacies?
• 29:46
  And so the first thing I would say is, okay, what components of our operation are coming from China and only China?
• 29:56
  And I need to have a list of those components.
• 29:59
  And then I need to go to my procurement department, say, where else are these components made?
• 30:05
  What is the price of them being made?
• 30:08
  How much is the shipping cost?
• 30:11
  Is there a tariff from that country?
• 30:13
  How quickly can I turn that source on?
• 30:17
  Once I find a source of the products I need to buy, I then need to say, what's the source of the raw materials to make those products?
• 30:25
  Because I don't want to buy from a supplier that tells me he can make them, but then he can't get the raw material to make them because he's shut out.
• 30:33
  And so I need to look at where the components can come from, where they have capacity, where the pricing is such that I can live with the price increase if there is a price increase, and then where can
• 30:43
  I get the raw materials?
• 30:45
  So some people want to talk about us reshoring, bringing that manufacturing back to the United States.
• 30:52
  Reshoring is a great idea if you can automate it.
• 30:55
  But if you can't automate it, the labor is not available.
• 30:58
  Or can you afford it if you coming back to the United States plus reshowing kind of implies you're going to bring it back to where it was.
• 31:07
  There is no coming back.
• 31:08
  That factory got turned into a condominium.
• 31:11
  There's workers that used to work in that factory.
• 31:13
  They all took jobs in high tech and they're all doing artificial intelligence stuff now.
• 31:18
  And so they're not interested in coming back.
• 31:20
  And so what if we can't bring it back?
• 31:22
  If we can automate it, we can bring it back.
• 31:24
  But if we can't automate it, maybe what we do to do is go to a low cost country and guess what?
• 31:30
  Mexico labor is less than China labor.
• 31:32
  And so what we can do is do a good job in Mexico.
• 31:36
  Or maybe what we do is we take it to Brazil, maybe we take it to Africa, maybe we use a company in Canada or Mexico to produce it and then we bring it in the country.
• 31:46
  Or maybe we then ship it to Dominican Republic in Panama and let them fill the orders.
• 31:51
  So there's lots of different options, but the ideation is coming up with the ideas.
• 31:57
  What's feasible then to go and check out what the pricing is, what the duties, the customs are, what the transportation cost is, what the technology is.
• 32:06
  We need to manage that inventory and that transportation and then we can come up with a plan.
• 32:11
  So if this item gets behind a 25% tariff, we now can pull this lever and get a replacement for it, which is going to allow us to continue to operate and hopefully maintain the same quality and cost.
• 32:26
  And so we need to think about how do we alter our supply chain to operate even though a leg of our chain just got cut off.
• 32:38
  Okay.
• 32:40
  All right.
• 32:40
  And Jim, if people want to get in touch with you, learn more about Tompkins Ventures and how your team and your network can potentially help them with the problem they have or reach out to you for other reasons,
• 32:51
  what's the best way people can get in touch with you?
• 32:53
  Best way is just an email.
• 32:56
  My email is J as in Jim Tompkins.
• 33:00
  T O M P K I n s@tompkins ventures.
• 33:05
  One word.
• 33:06
  T o M P K I N S V E N T U R E S.
• 33:14
  All right.
• 33:15
  And we'll link all that in.
• 33:16
  Show notes for everyone.
• 33:17
  Super.
• 33:18
  All right, well, Jim, thank you so much for taking the time to be here sharing this wisdom from your journey and your insights on the present day supply chain.
• 33:27
  We greatly appreciate it.
• 33:29
  Dave, I appreciate the interview.
• 33:30
  Great job.
• 33:31
  I loved your questions.
• 33:32
  Thank you.
• 33:33
  Thank you so much.
• 33:34
  And that is all the time we have for now.
• 33:36
  We will see you next time.
• 33:40
  Sat.