GAINS On Podcast Ep 9: Supply Chain Architecture

Joe Davis (00:01):

Hello, supply chain enthusiasts, business innovators, and tech aficionados. Welcome back to GAINS On, Where we navigate the intricate and dynamic world of supply chain management. I’m your friendly neighborhood podcast host Joe Davis, a curious explorer in this complex field ready to unravel the mysteries of supply chain technology. In today’s episode, we’ll journey through the world of GAINS’ distinct architecture to discover how it empowers its customers, transforming challenges into opportunities. Whether you’re a seasoned professional or new to the supply chain arena like me, this episode promises insights and revelations that will reshape your understanding of our critical industry. So buckle up and let’s embark on this enlightning voyage together with GAINS co-founder and longtime industry veteran, Bill Benton. Ready? Here we go. Welcome to GAINS On. Thank you so much for joining us on the show, Bill Benton.

Bill Benton:

Thanks, Joe. Good to be here this morning.

(00:58):

As the audience, no doubt knows at this point that I’m a bit of a noob in the supply chain business, and you on the other hand are quite the opposite. Would a storied veteran, does that make you sound too old?

Bill:

Better than a crusty curmudgeon

Joe:
Perfect. Then we’ll go with that. So what I wanted to ask you about just to kind get into things, is you have been with GAINS essentially since its inception as the co-founder. Is that right?

Bill:

That’s correct.

Joe:

I just want to take this opportunity to kind of sit down with you since nobody probably knows our solution better than you do, and to ask you a few questions about how GAINS works and why it’s a benefit to our customers. So to start things off, can you talk with us about the story behind the inception of GAINS, right? So how did things start off and where are we now? So basically, has the company’s vision and approach evolved over the years or is it kind of you still following the same North star?

(01:52):

Well, just digressing back to the crusty curmudgeon quip, GAINS was founded by my father who was a industrial engineering professor at Purdue University and a co-founder of their computer science department. So I was not there when that happened. That was truly the inception. So if you think of the north star of GAINS as being, providing methods to manage uncertainty in a profitable fashion, if you abstract it up to that layer, I would say absolutely we’ve been and are true to that North Star, and that manifests in a much wider range of decisions and processes that I think he attempted to solve and certainly maybe even could envision at the time. So as it relates to some of the topics we’ll cover today I think, we’re on our fifth generation of the GAINS architecture.

(02:54):

We’ve never been wedded to the technology du jour, but we have leveraged improvements across time. And one of the things that we’ll hopefully talk about here is how we’ve moved towards the composable architecture and that sort of clean slate thinking of how can we sort of advance the mission and that north star that we talked about and do that better, more scalably and on a broader scale than we could have envisioned when a supercomputer had less capability than our smartphone.

Joe:

Right, right. I am always just mystified by the rate that technology changes. When I think about this being the fifth version of the GAINS architecture, it seems to me that we are conscious of using new technology when we think it sort of helps us out, right, but it’s not just using new technology for the sake of using new technology to say, Hey, we have the latest and greatest right? It’s sort of the technology that we use supports that sort of North Star, if you will. That’s sort of our mission.

Bill:

Yeah and I think we frame things as solutions chasing a problem. So you see a lot of hype around AI everywhere. Some of it’s hip, some of it’s hype so to speak, and other times it’s seeking solutions for a problem. And our view is we start with a problem and seek a solution. And often new technology enables solving that better, faster, and/or on a larger scale. Sometimes it doesn’t, right? So we’re not using a technology for technology’s sake, but we’re leveraging it when it helps us seek a better solution to a problem.

Joe:

I love that. The solution in search of a problem, I have seen that a lot and I’ve never been able to articulate it that well, but that makes perfect sense. So in talking about the GAINS architecture, so could you describe the unique architecture of the GAINS solution? I don’t want to give away any trade secrets of course, but just an idea as to what GAINS does that makes it so effective.

Bill (05:12):

Yeah, I would say our tagline, and I’m not a marketing expert, I’m a decision scientist, but I do think it has meaning, which is move forward faster, and that’s empowered slash enabled by the fact that the GAINS architecture is composable. So people have heard the term digital transformation and other lofty terms, and those have some meaning, but those often result in arduous processes with either delayed or partially or unfulfilled benefits and objectives. So what composability allows is the ability to move at speed. And one of the benefits, key benefit of that is rather than rip and replace existing systems, our architecture allows us to make high impact improvements quickly. And it can be things as, let’s say spot oriented, so a spot solution, so to speak, how do we better predict lead time?

(06:25):

So people that import finished goods or raw materials or other products, the single parameter that’s probably the most important in their whole planning process and their ability to provide goods on time and at a sustainable profit is whether their lead time prediction is accurate. If they think it’s going to take 16 weeks and it takes eight, they have a bunch of surplus and that’s not affordable. And conversely, if they think it’s going to take eight and it takes 16, they’re running out of product and losing sales or shipping things by air freight, that’s really expensive. So nobody would’ve ever thought about, geez, what I really need to do is just have machine learning for predicting lead time. But if you start with the problem perspective, which is I’m chronically under anticipating my vendors or anticipating late, my vendor’s ability to ship on time, or I’m getting surprised with early arrivals that clog up the warehouse, if those are the problems, then you go back to a solution that helps.

(07:33):

And then also I would say that’s a spot solution. And then sort of like a targeted solution might be, well, maybe I keep my large investments in place for ERP or even supply chain planning systems of record, but I want to really delve into deep inventory optimization, because that really could drive 60% of the value with 15% of the culture change. So those are a couple thoughts there, Joe.

Joe:
Yeah, so I mean inventory optimization makes sense to me, I think, because I like the rest of us had to suffer through the pandemic and waiting for, being unsure when things were going to arrive, when things weren’t going to arrive. So I really got that same crash course that the rest of us got in supply chain, which I’ve heard a lot of supply chain pros say was sort of the pandemic made it easier for them to explain to their families what they do for a living because all of a sudden supply chain was just front and center. But for me, inventory optimization seems to be like that is something that everybody needs. You need to make sure that you have enough of what you want to sell so that when people come to buy it, it’s there. But what sort of other benefits does something like inventory, I imagine a lot of your capital is tied up in inventory. Is that a big cost center for most people?

Bill (09:11):

The answer is yes. And I think the other aspect worth noting here is as we’ve moved from fairly stable, predictable, global network of supply towards one that has a lot more volatility, uncertainty, and ambiguity, we should look at it as not a cost but an investment or a hedge that we use to create resilience. So there’s a lot of great new research coming out of Gartner. One of the really brilliant analysts is named Tim Payne, who talks about anti-fragile, which is not just resilience, it includes that. But this idea that investing in inventory in an optimized fashion is one of the key levers for being less fragile and making sure that you can have a sustainable business and deliver to your customer’s expectations. So yes, Joe, I mean we believe that and there’s a lot of material, and that was sort of our initial focal area. Obviously we’ve expanded well beyond that, but we still think that forms really a foundation for both optimized delivery and customer fulfillment and managing that in a profitable fashion.

Joe (10:39):

Going back to this idea of a, you said composable architecture, okay, is that sort of, again, I have to simplify everything, is that sort of like we come with a box of Legos and we talk to you and say, oh, well you know what, I want my Lego model to be this shaped because it will help serve my customer, or I want my model to be that shaped because, or it should have these features. Is that sort of what the composable architecture is, is that we sort of build it around the needs of the customer?

Bill:

Yeah, that’s a great analogy. And the other probably key concept to build on what you just mentioned, no pun intended, is interoperability. So it used to be that you’d have to buy a broad, full suite of solutions in order to affect change in each important area. What composability allows, going back to your Lego model, would be that each block of that model could be provided by a different provider.

(11:53):

So it could be that we’re providing inventory optimization and somebody else is providing demand planning, and a third person is providing multi-party multi enterprise collaboration or vice versa. And it also allows you to implement these with different teams on different timescales, so you don’t have this large left to right deployment schedule that’s four year long digital transformation, right? It’s brain damming and a lot of the benefits are deferred and you lose momentum and potentially even people along the way. So yes, I think that is a great analogy, and that’s enabled by cloud computing, APIs, and the ability to rapidly integrate functions from various providers. So it’s like best-of-breed on steroids.

Joe (12:56):

[Laughing] So if I’m a supply, oh, go ahead.

Bill:

I’m saying not that I promote steroid use.

Joe:

Oh, well, thank you. That’s good to know. As far as I know, we’ve all passed our steroid tests at work. I can’t say that for sure. What I’m understanding is so if I’m a supply chain professional, I have my sort of favorite solutions, I notice a gap in that. So say I’m in love with my ERP, I have an Oracle or an SAP tattoo, that’s how committed I am to it, but there’s something that I’m not getting from them that I need or that I feel will really help me in my day to day. So are you saying that you can still have your ERP and all the functions and everything, the tools weighted, but you could also bring in GAINS to, since we’re talking about inventory, I can use GAINS to kind of plug that into my ERP solution and get all of the amazing sort of capabilities of GAINS, but still have it wrapped in that ERP package or my current suite?

Bill (14:08):

Absolutely, and I would say, look, this has been around for a while, and they called it interfacing then they called it integration. But all of those were heavier lifts with a lot of IT resources required. And those are scarce resources in a lot of enterprises, particularly enterprises that are not extra large, but medium or even medium large, which is the vast majority of enterprises out there. There’s 10 times as many of those as there are the well-known Fortune 500 that we would recognize. So we were talking about these people with complex problems that need these composable solutions quickly. They often couldn’t leverage best-of-breed because of IT limitations. And when you get into the extra large corporations same issue right, you still have a shortage even if they are doing a wider portfolio project. So we think that that’s key is making it feasible and quick. And that’s probably, if you think of that was then. Then was interfacing integration, big projects. What is now is quick, easily deployable pays for itself.

Joe:

Is that sort of a byproduct of the technology that we’re seeing? Is that it used to be if you’re going to bring in a software solution to solve a supply chain problem, you need to tear everything out and put in this new solution and get as close as you can to the right solution for you? Or is that because the technology has advanced in such a way that now you can say, Hey, I want to take a more a la carte approach to supply chain management, I want to use this solution from this person and the solution from that person. Is that accurate?

Bill:

Yeah, I would say it’s that. So the technology architecture, but also, and perhaps as importantly, it’s a culture shift. So as we’ve moved to more cloud-based solution provisioning, we’ve moved away from this, I need my ERP to do everything. I need one huge monolithic solution that provides every function because integration trumps capability. And now that integration risks have decreased by an order of magnitude, you can compose solutions from different solution providers in a way that gives you the best fit. And that cultural mindset, it’s not prevalent yet, but it should be, right? And it does exist, and I think it’s becoming more prevalent, but there’s still a little bit of the, I would say slightly lagging perspective that the real risk is integration and we need a single solution provider, and we’re clearly not in that camp.

Joe (17:16)

So was that sort of the traditional, when we think about traditional supply chains, traditional supply chain philosophy, traditional supply chain solutions, we tend to think big like monolithic solutions. My supply chain is one monolithic piece. I go to this supplier, I go to this manufacturer, I get my items, I sell them to these people, and that’s my business. And so now what we’re seeing with globalization and what came startlingly evident during the pandemic is now these big hulking sort of solutions just no longer cut it, right? It’s like turning a freighter. We saw that, literally, turning a freighter where it takes a lot of time and a lot of space to make a change, whereas what we’re moving toward now, either driven by technology or just driven by the world that we live in now, you’ve got to be more agile. You’ve got to be more quick on your feet and able to handle changes when they come.

Bill:

Yeah, I think that’s right. And that goes back, I guess, if you will, to the moving forward faster and implementing its speed. And that is a reflection of changes in the volatility of the supply chain. So when things were pretty stable and you had one locked in supplier for multi-year contracts and they shipped you X containers a month, and you receive them very consistently, and you had sort of a just in time mentality–that worked mostly for extra large organizations, but even for some, if you will, large organizations, not necessarily extra large. And now the volatility is sort of up and down the scale of enterprise. So even the extra large corporations with a lot of buyer power that used to be able to force their suppliers to buffer uncertainty are feeling the pinch too. So yes. And how do you solve that if it’s a four year digital transformation, I’m not going to say you’re out of business, but you’re losing market share and profitability and share price, right?

(19:28):

So yes, this is the idea. Now, there are cases where a solution might fit a majority of your needs. I would say for GAINS, we have a full platform, and for certain companies it’s a great fit all the way from demand prediction to supply and purchase automation, including inventory optimization. For others, perhaps our inventory optimization is the highest value add, and they might have hundreds and hundreds of users for other parts and processes within the supply chain, where that culture change might not be worth doing. So why don’t we just plug in this center of excellence if file analysts use this. So it varies, right? The optimal solution set is not one, but it’s also not 20, right? So where do you decide what’s optimal? What areas can you leverage best of breed in a meaningfully superior way to your sort of core system of record?

Joe: (20:31):

Right. So really when we talk about a composable solution like GAINS, it really is sitting down, taking a look at your needs as a supply chain professional, taking a look at your needs, the needs of your organization, how your supply chain operates, and then decide what are the best tools to meet that. Is it one tool or is it a host of tools that I sort of bring together, I compose to create Joe’s Supply Chain Solution, the one that is sort of custom built for my supply chain?

Bill:

Yeah, I think that’s a good way to think of it. I even take it a step further perhaps, which is what are the decisions that drive value and manage risk in our supply chain? And how do I, what’s the anatomy of those decisions? What input data do I need? What solutions do I need? What processes and people do I need involved in that decision to optimize it?

(21:33):

And look, I spent the first, I’m 30 years into my career here, the first two decades were very much around a tool-centric approach. And I think we’re, and look, this is also newer to me, is this decision centric approach where we’re saying, what’s a decision? What drives it? And do I have the input data, the tools and solutions for that and the right people to do this on an event driven basis? And so yes, when you look at that, you can look and say, how do I compose those elements? And part of that is what are the solutions and what do I have and what do I need and where there are gaps? What’s the value of filling the gap? It’s not yes or no. I have a gap. I have a major gap, a moderate gap, or a minor gap.

Joe (22:28):

Wow. Well, thank you. I mean, that makes a lot of sense. The composable architecture. I know that that was a relatively new term for me, but I get it now. So that’s awesome. So thank you so much for that. As always, in talking to you, it is never enough time I could sit and pester you for days to try and up my own level of knowledge. You are a, I think the term is a font of wisdom.

Bill:

Yeah, of course. And I don’t know about all that, but do love this with a profound passion. So thanks for letting me wax semi eloquently on it.

Joe:

Absolutely. Bill Benton, thank you so much for joining us on GAINS On

Bill:

Cheers. Thank you.

Joe:
And that’s a wrap of today’s enlightening episode of GAINS on a huge thank you to GAINS co-founder Bill Benton for joining us and sharing his profound insights and experiences.

(23:21):

Today, we journeyed through the evolution of GAINS, understood the importance of adaptable and innovative solutions in supply chain management, and distinguished between some of the hype and the genuinely transformative technologies in this field. We hope that this episode has broadened your understanding of supply chain management and shed some light on the importance of staying adaptable and informed in this ever-changing industry. Remember, in the world of supply management, it’s not just about the tools you use, but how you integrate them into your strategy to create efficient resilient systems. Thanks once again for tuning into GAINS On. Stay Curious, keep innovating, and remember that every decision counts in this vast world of supply chains. I’m Joe Davis signing off until our next episode. Keep exploring, keep moving forward faster. And remember, we’re all in this together.

(24:12):

Want to stay connected with all things GAINS and continue to explore the exhilarating world of supply chain planning and design? Then don’t forget to follow GAINS on LinkedIn where you can be part of our growing and vibrant professional community. And for more content, engaging posts and updates, don’t forget to like and subscribe to GAINS On on YouTube. Trust us, you won’t want to miss what we’re sharing. If today’s podcast episode left you hungry for even more insights, we’ve got you covered. Every episode of GAINS On is accompanied by a detailed blog post for those who wish to dive deeper into the topic. Whether you’re looking to expand your knowledge or find that special morsel of information, our blogs are designed with you in mind. Visit GAINSystems.com for more. All the links you need to be found in the description below. Thanks once again for tuning into GAINS On. And remember, we are here to help you decode the world of supply chains, one episode at a time