Latest / Speaking of Supply Chain / Inside the Warehouse, Outside the Box: Today’s 3PL Warehouse

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Inside the Warehouse, Outside the Box: Today’s 3PL Warehouse · Speaking of Supply Chain

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You're listening to Speaking of Supply Chain, a meboch 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 I'm excited to be joined
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by Carl Wessinger, the CEO and founder of Smartwarehousing. Welcome Carl, thanks
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for having me. Excited to be here. Let's get into our topic today.
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So our topic today is three pl warehousing. Obviously you are an expert
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in this particular topic. How long did you found smart warehousing? So I've
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been kind of in the industry for a little over thirty years. We found
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it, I founded smart Warehousing. This will be our twenty we're going on
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our twenty third years, so twenty two years ago. All right, congratulations,
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Time flies, It seems like yesterday but twenty two years ago, it
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was it was in the fall and we started here in Kansas City, and
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it was really we weren't quite sure all the different things that was going to
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happen. But the industry has been really fascinating for the last twenty two and
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I think it's going to continue to be. I agree the industry is growing
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quickly and it is changing quickly. And I know you've grown to I want
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to say thirty seven locations now, I think that's right. I think maybe
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thirty seven or thirty eight. We opened another one in South Carolina this past
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summer and I can't remember if that's you see the thirty seven or thirty I
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think that's right. Well, so our listeners know the basic functions of a
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three PL warehouse. It's clearly a warehouse that they outsource some of their storage
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too, But there's so much more involved in utilizing a three PL as part
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of your logistics strategy. So what are some of the next level besides just
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having a warehouse to store things, What are some of the added services or
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added features that are available for a client of yours. Well, it really
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has, you know, it's changed a lot over the years and you're right.
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Originally the history was we needed a place to put some extra stuff or
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overflows, some extra boxes, extra boxes, or you know, it was
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a capacity capacity only play at that time, and so somebody had a warehouse
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or a building or facility somewhere then they were almost by default in the warehousing
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business or the three pl kind of business. Well, the world has changed
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so much in the last twenty five years, and so the value added piece
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in the complexity of the supply chain today is really what you know, we
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were constantly wrestling with on a day to day basis, and the solution side,
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and from a modern perspective today, really there's probably three or four areas
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where we kind of focus and you know, we talked about the thirty eight
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locations. I mean, obviously there's a network component to it. Having that
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side visibility is a huge component, and the data the technology. So we
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tease that SmartWare housing about having the data, the doers, and the doctors.
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Those are the three kind of components that are super relevant today and customers
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are asking for it. And the data piece, if you have the ability
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to kind of manage and orchestrate setting that up appropriately to work with the unique
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needs of those clients create those solutions almost to the tricks that are trying to
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customize them for the clients, but keeping them in a way that can be
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configured and maintained and supported without having to have a huge infrastructure to do that
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because that gets expensive as well. And so the data piece, the people
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obviously, the support, the teams, the supervision, the expertise, the
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understanding of the complexities today and then that network or that facility having appropriate facilities
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to deal with all the different things where elses today are built and designed totally
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different than they used to be. So if it's hard to fulfill orders at
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that volumes was out having I mean everything from the right power to the right
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ceiling eye to the right depths of buildings, and the engineering that goes into
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that side of the business today is way beyond anything that it used to be
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twenty years ago. So that part I understand because that's one of the core
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functions of my company is designing those facilities, and we design them for the
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owner operators and we also design them for three pl companies, So that part
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I am very familiar with. It's more, you know what happens once we've
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designed them, building we've put in the it, they've got all of the
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automation, and maybe that's the next question. What types of automation are typically
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available in the warehouses, because that's what helps you get the work done.
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You've got your data, so you've got the WMS or the TMS or the
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ERP system controlling everything and keeping tabs on all of the pieces, all the
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individuals, all the eaches, all the cases, all the palettes. But
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then when we get into the doers, as you mentioned, the people doing
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the work in the warehouses, what types of automation are you utilizing right now
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and what's coming into the field that's changing the way you're doing things. I
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know I've talked with a lot of automation suppliers, inventors and different automation that's
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available, and honestly, it's very exciting to see some of the new things
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on the market. It's not just a conveyor anymore, right, there's a
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lot of fun things that I see. CAR in the future is a robotic
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side automation side. We tend to think about it in kind of two categories.
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So you have the automation, which is, you know, all the
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metal that replaces muscle concepts. I like that. So yeah, so it's
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picking robots or retrieval systems, anything that replaces the muscle to get the product
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moved through that facility or through that supply chain design. Then the other side
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or the other categories really around the technology piece really and so it goes to
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that math question I spoke about earlier, the algorithms and the optimizations and the
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design of how how you take these orders and the cutoffs and the times that
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you were the way you price out the business and using the technology side and
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kind of the data science and you know, the operational research work from an
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engineering perspective that goes into making sure the data side works as well as the
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physical side works. And so I think our future are the work that has
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to be done as we take these supply chains and we take them to a
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different level. It's going to be trying to align that tech side and that
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automation side, because they're both extremely beneficial and so you need to just make
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sure you try to have as much of that aligned. And then of course
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there's a cost side obviously, so you have to figure out a way to
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do it on a from a financial a way to do that. So that
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it continues to offer the competitiveness that needs to be offered, and especially in
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the three PO world, and so the cap X the money's spent to get
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all that infrastructure in place is really really expensive. And you can have the
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best picking and the best sorting and the best automation, but by the time
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you get it all put in place, you're so expensive one will hire you.
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There is definitely a balance, There's a big balance there. So those
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are I think our challenge is going forward, we're going to have to figure
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out how to balance that tech, balance that automation, bring them together appropriately
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so that they are meaningful to the clients. And you know, and that's
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again goes back to some of that engineering ste from the perspective I think is
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going to be super important. You know, it's smart. Over that twenty
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two years, I think we're over four thousand companies that we've helped great solutions
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for and so it seems to me that we see that perspective just continues to
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add that value that we have based on that history and perspective just continues to
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be puts us maybe a little bit ahead of the competition when it comes to
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figuring out a solution. Sure now in terms of e commerce, we all
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know that in the past four years, and I talking about COVID is just
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beating a dead horse at this point, but it changed our industry so seismically
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that we almost have to keep talking about it. So since COVID, but
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especially during COVID, e commerce was huge on the rise, and now we
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just haven't gone back. Brick and mortar stores are not open anymore in a
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lot of places, so e commerce is king. And what has that looked
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like from your perspective in terms of the asks from the clients, in terms
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of what you're capable of doing. But you know that clearly had to have
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changed your business significantly. It really did. And yes, we're in the
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same we'd love to sort of like forget about that whole chapter and write,
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but it's not going to go away. And there were some really good lessons
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learned, to be honest, from how we had to react and the tech
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that was kind of forced into use exactly, and some amazing stuff happened,
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and so I guess there's some silver linings through all of that. But we're
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seeing and hearing today is really that ability to be able to kind of this
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omni channel be able to support all these different because the brands need to sell
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their products in as many places as possible, and so you have to somehow
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leverage that inventory across as many of those channels as possible. And that goes
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back to the productivity and and replenishment and making sure the right stuff is in
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the right place at the right time and not too much, not too little,
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select kind of that goldilocks inventory thing. The goldilocks and that sequencing world
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manufacturers pretty good at that when they're building cars or building other stuff shows up
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right as they needed as it goes down the line. And I think our
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challenge in the future is going to be trying to do that same kind of
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concept throughout a network across the country, across whatever your supply chain network looks
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like. I think those are going to be the things that differentiate the people
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that are successful in the future are going to be really good at that kind
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of stuff. Now, in that value added services scope, returns, processing
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and other value added services, customization, personalization, those types of things.
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Does smartwere having offer those types of services or is it dependent on particular facilities
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or how does that work When it comes to some of those really they're important.
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Now they're almost getting to be requirements. But even five ten years ago
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when I began in this industry, those were extras that was only for the
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super elite, that wasn't available to everyone. And now it's almost expected that
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is and can we do we have a kind of a laundry list of things
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that we're doing today that we weren't doing to your point, you know,
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five or six years ago. So the value added piece is one part of
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it. Around the physical so the returns and the way you deal with the
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pickup and delivery and the returns processing big. I think there's going to be
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a big feature there because you point out one of the things I think the
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brands have learned is that when consumers buy stuff, they might buy two,
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or they might buy three, and they might return you know, they're buying
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shoes, they'll buy three and return two, and so what do you do
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with the two. One of the funnies that I put down here on my
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notes today was around inventory in this category of return, what's considered inventory that
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can go back into usable stock and not? Oh true, that's and who
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gets to decide what that is? Yeah, there has to be a certain
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criteria, unopened, unwarn all those types of things. It's today, and
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there's it's very suggested so that your eyeballs are the discerning. You know,
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I might look at say that looks good to me, but somebody else is
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not. That doesn't. That becomes an inventory, a real inventory challenge for
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brands to figure out how to do that. So the complexity piece around the
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information is the other side that I think is going to be a real challenger.
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We work with that every day. One of the things that we put
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in place a few years ago is this, you know, from a visibility
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perspective, how do we give the data? How do we get that information
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in front of them so they can they can make actionable, meaningful decision quickly.
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And we had to go back in and rework our tech stack and the
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way we were extracting data before and use some modern technology to go put that
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into different ways, to take that data out and display it through the old
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fashioned EDI stuff. And now everything's pivoted into the API worlds and they're pulling
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data from things and now into artificial intelligen I kind of still I like the
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word artificial and tells I like to you know, my personal favors creative intelligence.
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Oh, I like that. It's not just learning what's happened in the
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past, but it's sort of a recommendation of predictive yes, And I think
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that's more the creative side, and the more creative it can get or the
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more the better, the smarter that that can get is based on the history,
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but also based on what they think that future looks like. And that's
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the kind of stuff that I think are going to be really really powerful for
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brands going forward. And you know, it's a running The warehouses and the
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fulfillment centers are not the most glamorous work in the world. Hot and cold,
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and you vesty, and you know, things are moving, and you
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might be boring some days working on inventories and all those kinds of things.
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But it's a super important part of making sure that there's great flow and great
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efficiencies and there's a lot of work to be done yet. I think this
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industry has a lot of work to be done. So you were talking a
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little bit a moment ago about the inventory, and it made me think of
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something. As we're talking about the shopping habits, the buying habits of the
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consumers, and they're they're on a particular website trying to buy something. How
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real time is that data in terms of their inventory? And I'm going to
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use Walmart just because it's Walmart, and I'm sure that they have their all
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of their warehousing completely under control. But you know, just for using a
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particular idea, you go on and it tells you how many they have in
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stock, where the location is in your closest store. But you know,
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if you're ordering it from online and having it shipped, it doesn't give you
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that information because it's unnecessary. You're ordering it online, but then depending on
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where they're shipping it to, that information has to be real time in their
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system. So the in the vendor system, in your client's system, so
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that they know how many they have on hand at warehouse A or B or
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C, or on the West coast or on the East coast, to know
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how they're going to fulfill this, what their plan B is, what the
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backup plan is. So it is the inventory information that you're able to share
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with your clients, is that in real time at least for them to be
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able to make those decisions of Okay, I need to send this to this
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warehouse rather than to this warehouse because this is the one that has the inventory
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to fulfill the order the table stakes is having because real time data as possible.
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But to your point, really it's that next level is so, okay,
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Well, if we don't have an inventory item that can get delivered using
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a certain shipping method from that shipping location, how do you get it from
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another location but still give it to the customer, give it to the end
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user the same experience. It may have to go a different mode, a
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different shipping, might be an overnight, or it may have to be a
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second day air or something different than what they expected due to that inventory not
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being in the right place. Right though, and so you're one hundred percent
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right that data piece the behavior I talk about behavior I use my children,
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as you know, they have behavior of the purchasing world today. They don't
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they don't know how to plan, they can't plan now, they have very
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little patience, and a lot of cases they're happy to put a little premium
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on that convenience. So it's a patience planning and premium acceptance for having that
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convenience that's sort of driving a lot of these supply chain challenges that I think
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that companies are dealing with today, and so that integration. I talk about
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the language being able to sweek spaniship I knew how to do multiple languages,
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you could have a conversation much quicker than if you have to stop and have
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somebody interpret it and translate all this stuff. But that's kind of what it
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is, almost like everyone needs to know exactly how to speak every language at
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any given time, and so the supply chains are catching up to that need.
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And back to the original question around COVID, and COVID has sort of
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pulled the curtain back on how far away from that we are that ideal state.
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Yeah, they're in Walmart. I mean, these guys do awesome they
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have They're phenomenal with some Amazon, a lot of these big retailers are just
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they have huge and really robust systems on how to make sure their you know,
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the shelfs are always full, and they've got great POS systems and they're
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able to take that data and get it into their PRP system. That's massive
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amounts of data, it is, and to your point, they do do
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a fantastic job of it. But they also have the problem on the back
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end where you know, you order something, you think it's all coming from
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the same place, and you get four different boxes for your order of four
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different pieces because it's coming from four different places. So they have to make
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what problem are they trying to solve. Are they trying to solve that consumer
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hey, I need it tomorrow, or are they trying to solve their own
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internal, internal thing. And it's challenging, and the retailers are pushing a
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lot of brands to, you know, offer those kinds of delivery channels that
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on me, the drop ship used to ship it to the retailer, they
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take care of it. And now that pendulum has swung all back to the
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original OEMs, the the original people that have the products, the brands are
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having to figure out how to do that on their own. Well, it
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saves a step, is save a step in it, and it should take
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some costs out too, exactly. Yeah, but you have to have a
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partner, and I think three pls. I think that's going to be a
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huge opportunity for companies that are able to do the data, the doers and
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the doctor so you know that have that ability to align all that together.
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Well, and then to your other point that you were mentioning about the data
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and getting that true intelligence behind it, that scary intelligence where it's predictive in
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telling us what we could do or what we should do with all of the
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historical data. You know, what does that look like in terms of Okay,
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we're not able to meet the demand from location A, and we've had
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to adapt some of these fulfillments from other locations. Okay, is the data
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telling them that? Are they able to get some of that predictive quality out
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of that data and make decisions? Are we there yet? Is that happening
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now or is that still a matter of really being able to mine and understand
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what the data is telling us? My guess, and I don't know if
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I could put it in a percentage, but I think it's a very small
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percentage that are in that predictive world they're able to say, hey, you
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know what tomorrow is going to look like this, and next week's going to
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look like that, and next month should look like this. That forecasting and
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that predictability I think are along way so away, way still, and I
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think it has it's a data problem. So forever the data was it was
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expensive to store, right, and so people would always store the pieces of
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the data that they thought was necessary to run their businesses well. With all
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the new technology and the new ways the data can be mined and the data
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and information can so now we went from measuring a few statuses and a few
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things about supply chain to let's measure everything and store all that data, and
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now you can start making some decisions. And that's slowly happening today. We
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don't have a lot of expertise in that world as a general supply chain population.
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I think the graduates in that those worlds today are coming out armed with
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a lot more capability and what has to be true to make all those things
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happen. Then maybe some of the people that were and have been in this
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industry for a long time where sort of I'm amazed at having discussions with some
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of the operational research and the engineering side of the scientists around the operational research
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side of the flow of optimization schedules, and it's exciting to hear what can
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be done if you just start building the math right and set up those designs,
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those algorithms in a way, and then see what happens. To watch
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the trend lines go out, it's pretty exciting. You're absolutely right. I
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also geek out a little bit on that. When I see some of my
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colleagues doing that type of work, it's fun to listen to it. I
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won't say I go as so far as to understand it, but it's interesting
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to listen to and learn a little bit more about. So we've talked a
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lot about just the functionalities of three pls and what has changed in the past
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few years. But the biggest part of a three pl is that relationship with
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your clients. So these are companies, these are brands who have of maybe
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they have their own warehousing, they've clearly got their own production somewhere, but
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they need to outsource some of that warehousing to another geography, another location.
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What does that relationship look like. What's what's critical to that relationship being professionally
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advantageous for both sides. This is probably not a great thing to say about
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my own industry, but I don't think we've done a very good job building
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that trust. I think there's a really big trust gap in the industry,
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and I think it keeps a lot of companies from feeling confident in house soourcing
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and letting somebody else do it. I mean they sometimes do it out of
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you know, necessity. Necessity not because they want to do it. They
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do it because they're like, well, I have to because otherwise I can't
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sell my stuff for a retailer is not going to let me do something exactly,
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and so it sort of forces them to do something they don't really want
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to do because they don't have a they don't have this warm, fuzzy or
22:56
this trust around using a three pl or outsourcing to somebody. That's and I
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think that goes back to that trust gap, goes all the way back to
23:06
really having great visibility to what's going on. I mean any relationship, any
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relationship. I think the way to build better trust is creating that transparency,
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being open, being honest. Mistakes happen, things don't work the way they're
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supposed to go back, how do you fix them? How do you respond
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and really allow that execution of that supply chain or what are those expectations are
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to constantly be continuous improvement. I mean, that's our slogan is creating a
23:33
better way just cost looking at getting better all the time. And so when
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we first started the business, that was what I wanted to do. I
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wanted to have a tech that allowed that communication to build that relationship, take
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away some of that trust problem, and it gets you in trouble sometimes because
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they know everything. It's like you can't ad anythin It's like almost to transparent
23:56
sometimes, but now it's it's a has struggled with that. And I think
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sometimes when you know, when you have events like we did here the last
24:04
couple of years with the pandemic, it brings it sometimes brings a lot of
24:08
players into the arena that their intentions maybe aren't this where they should be.
24:15
They might want to help, but it's also more of a profit motive or
24:18
a quick buck or something. And so I think sometimes people get into the
24:22
business because it looks like they might be able to make some money or do
24:26
something some quick cash, and not necessarily for the reasons that are really going
24:32
to be sustainable in long term. And you know, after twenty two years,
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you've learned how to do some of those things that are going to go
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twenty more years, not just twenty more minutes. Well, and I think
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that that what you mentioned is rather indicative of any outsourcing. It doesn't matter
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what it is. If you're not going to do something yourself, you have
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to trust that whoever is doing it for you is doing it the same way
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you would with integrity, with honesty. And you're right that there are a
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lot of bad outsourced vendors out there, and that's true of any outsource.
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I think of grocery shopping. When I do the instacart grocery shopping and they
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are doing my shopping for me, they never pick the right produce, They
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never pick the items that I would if they're getting a box off the center
25:15
aisle. Okay, anyone can pick a box of cereal and get it right.
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But when I give you specific instructions about the produce I want or the
25:22
size package of stakes that I want, it's up to that individual shopper.
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Sometimes I get a great shopper, sometimes I get a terrible one. The
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same thing in this larger context of this customer, This client is asking you
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to manage their inventory and ship it out to their clients using the same standards
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they would, And that is so hard to trust that someone else will do
25:45
it the way they would internally without micromanaging. And I think that's what you
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were talking about by saying that they have too much information. They see every
25:52
minute detail and want to micro manage it and make sure that it is exactly
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the way they would do it. That's just unrealistic honestly to have the exact
26:03
same experience, But it should be that they are able to get something really
26:07
close. And I hear from your conversation that that matters to you. Yeah,
26:14
that it matters that your clients are able to trust you with their product
26:18
to get to their customers. We talk about, you know, we want
26:21
the French fries to taste the same everywhere. Yes, every McDonald's has to
26:26
taste the same, and I know they don't, but they're usually pretty close
26:30
to your point, and so we work really hard to try to give that
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same experience, you know, word of our core value carrying promise keepers and
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trying to make sure that we execute on their wishes. And I don't know
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where over a thousand different inventories that think we manage across the country for different
26:45
companies, and they all have a little bit different needs, right, so
26:51
it's hard to standardize and say, okay, we just do everything this way
26:55
because they all want something a little differently and that's the probably the biggest chace
27:00
challenge. And having the tech behind it reminds you of how hey, wait,
27:03
a minute. These guys want it this way, and these guys want
27:06
it this way. These guys well, so those are all really really important
27:08
things. Scaling that is not for the faintom party. It's a lot harder,
27:15
harder than it sounds. It's easy to do on a chalkboard, it's
27:18
really hard to do. And at the warehouse level, at the fulfillment center.
27:22
But good people, good processes. We have a great service recipe that
27:26
we've used for years and usually if we stay focused and we don't get to
27:30
thinking we know more than the brand, we usually a pretty good shape.
27:34
So there's a humility piece that we have to kind of have to know where
27:38
where your role is and know what your job is so that you don't mess
27:42
up somebody upstream and downstream from that flow. So absolutely so. In terms
27:49
of what your customers are expecting from you, and each expectation is slightly different,
27:53
what are some standard KPIs that smart warehousing offers to clients and in terms
28:00
of what they can do for delivery times, in terms of accuracy, what
28:04
are some things that your clients are asking for. I'll go back and say,
28:11
you know, kind of table steaks or a certain level of inventory accuracy.
28:15
There's always some allowance, you know, because of a million reasons,
28:18
but that a high level of inventory accuracy is a table steaks. Today the
28:23
piece around inventory is changing, and so it's not just a snapshot integrity of
28:30
a snapshot of inventory. It's really the level of inventory and the way it
28:34
performs during a cycle and an order and receiving cycle, and to make sure
28:41
you're not getting your inventory levels aren't falling too far too low, or they're
28:45
not going too high. And the reminders around aged inventory and all the different
28:51
kinds of inventory today is kind of the future. And then some KPIs around
28:56
the future are around the cost to store or inventory the cost of the storage
29:03
costs of inventory at a skew level based on Turn's that's the thing now East
29:11
and it's like, Okay, I got a hundred pallets in the warehouse.
29:14
Everybody, we charge so much for a ballot or so much for a square
29:15
foot, and so the KPI now it's like, well, we need to
29:19
know if we have the velocity of that inventory, what's that look like?
29:26
Should we charge less for something that's flowing through the warehouse quickly versus something that's
29:30
flowing through the worrehouse slowly. So that's an old KPI. It's been around
29:34
forever. Hey, I need to know my hundred present inventory accuracy. Well,
29:38
now let's take that and peel that onion a million ways and look at
29:42
all these different pieces of that service exactly. It takes on a new dimension.
29:48
So service levels is the other one. So on time shipping and on
29:51
time receiving and how long those processes take, and what tech do you apply
29:55
to that, what automation do you apply to that? And then those performance
30:00
indicators, those are how they get measured and how they how they get proven.
30:03
Right if the inventory when you're on a return, well I might think
30:08
that's a good inventory, but the client might not. That beauty is in
30:12
the eye to be older sometimes, so you have to make sure you align
30:15
on what that expectation is and how that works with the customers. So those
30:21
are those are KPIs. But service levels around ends and outs inventory actually tend
30:26
to be the probably the top three. And then I think some of the
30:32
crazy ones that I've heard about, Yeah, what's an obscure one. I
30:36
mean again back to the velocity of stuff and some of the operational KPIs We've
30:42
had a we had a client that wanted to know we create optimized order fulfillment,
30:48
and then the KPI was, well, what would it have been if
30:52
the cutoff changed? Ooh, that's a math. So if you have a
30:56
two o'clock cut off in the afternoon for same day shipping, would have been
31:00
if you hadn't one o'clock? And would that have changed your pricing? There's
31:04
some really interesting ways today to measure, you know, the effectiveness and the
31:08
efficiencies of these operations. But I think the future will push us in those
31:14
directions. I think people are going to continue to ask those questions and there'll
31:18
be some that can answer them and some that can't. Absolutely, and as
31:22
you were saying earlier, as that data gets more intelligent and more predictive,
31:25
they'll be able to ask for more complicated things and use them strategically for their
31:30
own business strategy planning. And it's not just about you know, did we
31:34
deliver what we said we would deliver when we would deliver it. It's so
31:37
much more than that, because then that affects production, it affects their sales
31:41
and marketing, it affects all sorts of different things upstream. As opposed to
31:45
just yeah, customer got their stuff. It's good and we're driving that.
31:51
I think our consumer ba so used to be when you had a service person
31:53
come to your house to work on something, they said they'd be there on
31:56
a day. Now you want to become a four window and now it's you
32:00
know, you want to see the truck showing up on your phone. I
32:04
mean, it's amazing, it's changed, for sure. It has one last
32:10
question that I wanted to ask, and that is in regard you had mentioned
32:14
something about, you know, product aging and making sure that it's not sitting
32:19
on a shelf and going out of date, which brings up cold warehousing and
32:23
temperature controlled warehousing and where refrigeration even frozen storage is needed, whether it's for
32:30
food, whether it's for pharmaceuticals or anything else that is temperature sensitive. What
32:38
types of solutions do you offer in that regard, because not every warehouse can
32:45
be a temperature controlled warehouse. It's a very specialized market. And it was
32:51
sort of pharmaceuticals, some of the high end, some of the really expensive
32:54
things they would ship in certain cold or packaging away. But you know,
33:00
the pandemic again changed some of that behavior. Now it's very common to Hello
33:06
Freshes in the companies that are delivering food or pets or all kinds of things
33:09
today. In twenty twelve, we entered that cold chain world fulfillment frozen fulfillment
33:15
world, and we have a large distribution center here in Kansas City, and
33:21
then we have branch locations around the country, and so we've got a replenishment
33:24
model where we were able to support a lot of frozen fulfillment and it's growing
33:30
super fast for us right now, and it coun tend to be more and
33:32
more popular. We just came off peak season, and I was fascinated about
33:37
how much of that we did. You know, some of our ambient film
33:42
a business was a little, some of it was flat, some of it
33:45
was down a little. Based on all the big trends that you saw in
33:49
retail this year, A frozen Frozen did really really well for us. So
33:53
all right, it's an exciting part of it. And that data becomes almost
33:58
even more important because if the box shows up at your house tomorrow, can
34:02
you order to puzzle? The puzzle is still fine, But if you ordered
34:07
a file at and it shows up tomorrow, it might not be fine.
34:13
And so it becomes critical that you get that figured out, that supply chain
34:16
really really honed in, watch it, and let those systems help monitor so
34:21
that you're successful with those supply chain solutions. Last COVID question, So,
34:27
one of the things that we've seen just in general from companies, whether it's
34:30
their production or whether it is their storage and distribution, is near shoring and
34:36
on shoring and companies not having all of that outside of their main market area.
34:43
So has that made an impact for your business in terms of, you
34:47
know, American companies bringing more of their inventory or their production back on to
34:52
North American shores and needing warehousing to store it. You know, I think
34:58
there there's definitely an inventory piece to that. I think the companies that are
35:05
looking at the near shoring and reshoring, I think it's great. I think
35:08
that you'll see more and more of that happen. I think they're maybe not
35:13
going to exit completely their supply chains that they had in place, but I
35:17
think they want to enhance them and make sure that they they de risk them
35:22
in ways that doesn't you know, handcuff them and they can't have a plan
35:27
B or a plane seat. And so I think the companies like smart,
35:31
we're seeing, you know, less inventory. I think the average inventory in
35:37
the US that was a Wall Street Journal or one of the newspapers, you
35:40
know, it is like a nineteen or fifteen to nineteen percent lower this year
35:45
than it was last year. They're trying to reduce their inventory. The carrying
35:49
costs is a huge component to their ballot sheets, and so they want to
35:52
have less inventory and make it more productive. So companies are going to need
35:57
to figure out how to be able to give them data around that inventory to
36:02
the point earlier, and then it's going to change, I think, to
36:05
the way you do receiving, the frequencies around receiving. You may not get
36:10
one hundred containers in of one thing. You might get one container one hundred
36:15
times over a certain amount of time. And what does that do and how
36:20
does that work? And is the container all of one thing or is it
36:22
a mixed container of a whole bunch of things. I mean, those are
36:25
the I think the little changes that you'll start seeing over the coming years.
36:30
It makes it a little more complex. It's always easier to do a whole
36:35
bunch of one then that's true. I think it de risks their supply chains,
36:39
and I think it makes them more more competitive, and they'll have to
36:44
maintain more inventories and more locations. It's complex. You have to have the
36:47
ability to think about all those how all that spaghetti gets pulled together. That's
36:53
true, it does increase their agility, but the complexity also is as well.
37:00
It's what the customers seem to want that way, and I think that
37:04
they're going to compete with the big brands that they know how to do that
37:07
Walmart you mentioned, I mean, they just do awesome work around that.
37:10
And really all the successful retailers are spending lots of time, lots of effort,
37:15
and lots of money on creating that resilience in that supply chain so that
37:21
the little shocks that happen are felt less. Yes, And so the brands
37:27
that are out there trying to compete or using three pills like smart warehousing,
37:31
they're hoping that we can help them be the shock absorber for some of that
37:35
as well. Well. I agree. I think that that is absolutely what
37:40
some of these not Amazon and not Walmart's are trying to achieve, is that
37:45
resiliency. You said something just a minute ago, but kind of like it's
37:49
not that they're taking the production or the warehousing away from those other facilities or
37:53
those other locations, but they're just trying to bring it a little closer to
37:57
the best and a little bit closer and have some of that just a safety
38:01
net, you know, one hundred percent. Here's a great example. So
38:05
you know California a gateway from the East and the Asian manufacturing world and reports
38:10
or La Long Beach, and the inventory would come into those markets and the
38:15
ninety percent inventory would sit there and they get distributed out. So today you
38:22
can see a lot of that inventory that'll come in what they know will sell
38:27
or move in those markets will stay the rest of it. They'll go ahead
38:30
and move inland, right, So they'll let portions of that inventory move in
38:37
so they're there. Not only are they moving it closer to the end user
38:40
eventually, but their their costs are lower. But it creates more complexity.
38:45
Now I have to have two or three or four places that I'm storing whatever
38:49
my inventory is instead of one. So one is certainly easier, but four
38:52
might be better. Right for us. What's happening is then now we can
38:57
take a warehouse that we used to allocate an amount of space for a customer,
39:01
and now you can serve Instead of twenty customers on a warehouse, you
39:05
can serve two hundred. Because all those inventories are just almost past through inmenstories,
39:09
they're on their way somewhere, but they don't want to just sit there
39:13
and collect dust. Well, and I think that's where smart Warehousing and other
39:16
three pls are really going to be able to capture a larger market shares.
39:21
As these companies are saying, it doesn't make sense to have a single owned
39:25
distribution center. We can't afford to build four warehouses in four different places.
39:30
It has to be outsourced, and we have to find vendors that we can
39:34
trust and three pls that we can trust to manage our inventory and service our
39:37
customers the way we would if we were able to do everything ideally in house.
39:43
So I think that is a fantastic testament. It is wonderful to have
39:49
spoken with you today. This has been a great conversation for me. I
39:52
learned a lot. Likewise, they'll get to talk about all this stuff very
39:55
often, so listen's fun and that brings us to the end of our episode.
40:01
I know that our listeners this is something that if you have not actually
40:07
had to deal with a three pl or the concept of outsourcing some of your
40:13
distribution. Yet it will come up because this is becoming more and more prevalent
40:16
as we talked about Carl. So listeners, if you have a suggestion or
40:21
a topic that you'd like to hear about on our podcast, please reach out
40:24
to me. I am going to go ahead and share this secret. That's
40:28
how Carl reached me. Carl and his team reached out via podcast at meboch
40:32
dot com in order to be on the show. Thank you so much Carl
40:37
for reaching out. It was wonderful to have you and that brings us to
40:40
the end. Thank you for listening to Speaking of supply Chain. If you
40:44
enjoyed the show, please rate or review us on whatever podcast app you prefer
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and be sure to tune in next time. Meeboch Consulting is one of the
40:57
largest and most globally recognized supply chain can resulting engineering and advisory firms. For
41:02
nearly fifty years, we've helped clients achieve supply chain excellence and sustainable competitive advantage
41:07
across the entire spectrum of the supply chain by delivering improvements and innovation strategically,
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