GAINS On Podcast Ep 10: Interconnected Supply Chains

Joe Davis (00:01):

Hello, supply chain pros, business buffs and tech enthusiasts. Welcome back to another episode of GAINS On, the podcast where we dive deep into the world of supply chain management, planning, and design with a blend of expertise, enthusiasm, and genuine curiosity. I’m your friendly neighborhood podcast host Joe Davis, and today we have an exciting episode lined up for you. We are thrilled to welcome back GAINS On favorite, Supply Chain Pros to Know Lifetime Achievement winner, and Vice President of Industry Solutions at GAINS, Amber Salley. And joining us for the first time, Paul Baris, Vice President of Planning Strategy from enVista. Today we’ll discuss the fascinating and complex world of interconnected supply chains. We cover everything from the benefit of an interconnected supply chain to the challenges and technical advancements that help manage supply chain complexity. So whether you’re a seasoned professional or new to the supply chain arena, like me, this episode promises valuable insights and actionable takeaways. So grab your favorite beverage, no judgment, settle in, and let’s get started. Paul and Amber, welcome to GAINS On.

 

Paul:

Thank you very much. Glad to be here.

 

Joe:

So the reason we had you out today, enVista is a partner of GAINS and what does enVista do specifically?

Paul (01:19):

So enVista is really an end-to-end supply chain consulting company that really we cover WMS, planning, network modeling, Microsoft. We’re a Microsoft Gold partner, so we really do the end-to-end space for people, process, technology within the supply chain. And we do warehouse design and automation as well. I can’t forget that. Those are pretty big ones these days.

Joe (01:44):

Yeah. Oh yeah. Yeah. Those are the cutting edge of technology right now. That’s where we’re seeing a lot of really cool stuff happen. Excellent. And Amber’s with us because she is an overall expert and she keeps me from saying things that are too stupid. So we’re always happy to have Amber on the show.

Amber:
[laughing] Yeah.

Joe (02:02):

We’ve been talking about a lot of supply chain trends lately. So one of the things that I’d like to talk about is just some of the trends that we’ve seen and then kind of talk about how GAINS and enVista would meet those challenges or are following those trends. So the first one I want to talk about is interconnected supply chains. So we have this idea of supply chain, which I think now is at this point, it’s kind of a misnomer, right? Because not a chain, you think of a chain, you just think of interconnected links. This is really like a supply web, supply tangled mass, right? A ball of twine. So in thinking about that, so there’s interconnected supply chains, what are the key benefits of having an interconnected supply chain?

Amber (02:46):

So I like your analogy of a web as opposed to a chain. I think that is a good representation of how ecosystems are structured these days. And as we think of complexity, which is a natural course of evolution for most companies, the complexity itself is resulting in organizations needing to have more visibility to what’s going on in their full ecosystem. And in the past that visibility might have just been getting some insight into what your suppliers, your first, your tier one suppliers are doing, or maybe your direct customers are doing. But now with this complexity, companies want to have more visibility into what their supplier’s supplier’s suppliers are doing. They have a better understanding or better ability to predict what is occurring and what capabilities those suppliers have so that they can better sense what the ripple effect of any disruption in their tier end supplier network could have on them as the end user. And say with the downstream part of the supply chain, having more line of sight into what your customer’s customer’s customer, the final consumer of the product or service is doing. Because again, the ripple effects of how those consumers purchase or engage with the product will impact the company in the spiderweb itself.

Paul (04:35):

Yeah, absolutely. And I want to just sort of touch a little bit on what Amber said, right? The whole concept of this ecosystem or this web that we’ve been talking about here. I mean that’s been talked about really for a couple of decades. I remember back when I was in grad school and we talked about supply chains competing against other supply chains. And I think really what we’re starting to see more of that and then your point Joe, about how you pull one little thread that you didn’t necessarily realize where it was connected and all of a sudden you have that cascading effect. And I think where the digitalization trend is happening, it’s allowing for that visualization and the fast timely response of that information and then also the rapid modeling so that you can then sit there and do the what if analysis and things like that.

Paul (05:34):

So now you’re not sitting there with an Excel spreadsheet having to model every new scenario that comes along. You can start create this technology platform where in some way you can almost game out scenarios that potentially could potentially happen where you could say a disruption typically takes the form of, I’ve got delays, I’ve got shortages, I’ve got demand fluctuation. I mean, you can create these into use cases if you will. And then as an organization you can start to replan if you will, what some of these use cases might be and then you can respond more quickly to that. And a tool like GAINS really helps with that scenario planning.

Joe (06:23):

Yeah, absolutely. I guess, but the first step in that sort of before you can model that supply chain is to really sit down and think about what your supply chain is made out of, right? Is that something that people typically do? Do they sit down and map that out, or is it just they take it as red? I’ve been working with a supplier for 10 years, they’ve never given me a problem before, so I assume that they know what they’re doing and I’ll just stick with them.

Amber (06:47):

I would characterize it as maybe more of a maturity, organization maturity condition, where companies that are less mature in how they think about supply chain and maybe companies that think of supply chain as just the delivery or just the production and not thinking of the other enablers that ensure that a product is getting sent on time to the customer. Those that are less mature might be the ones who were in the camp of really haven’t thought about what the supply TV ecosystem looks like beyond their suppliers and beyond their customers. But then as the complexity of the real world starts to hit them, and that could be something like their suppliers aren’t delivering at the level of service that they had been accustomed to. So then they may have to look out for other suppliers or try to work with that supplier to understand what’s going on in that supplier’s environment that’s leading them to basically even in a manner that the main company isn’t used to. And that’s when they start to think about what does our full ecosystem look like? Who are all of the different participants in our supply chain whose actions do have impact on us? And we didn’t realize it, we were less mature, but as we are growing or mature and thinking of supply chain differently, then one of those tasks is mapping out everything and and really understanding how all the different parts of this integrated ecosystem are impacting each other.

Paul (08:50):

The consumer expectations on the Amazon delivery and the expectations of the lowest cost and this endless aisle, if you will, of product assortment. All of those just compound that issue that Amber was really talking about right, where if you don’t think through how you’re going to handle that long tail of product as an example. So one of the challenges that we see an awful lot is we see companies with a tremendous long tail of inventory, right? Because they’re trying to provide service to customers, but then they overbuy or they don’t think through what their minimum order quantity needs to be in relation to that total demand picture, and there’s connectedness there. So those are all variables that come into play. And if you don’t think through those, then all of a sudden you’re wasting a lot of money, a lot of warehouse space, et cetera, et cetera. And we saw a lot of that during COVID too, quite honestly. And companies in some cases took advantage of that and got rid of all of their excess inventory when customers would just buy whatever was available. But we’re seeing that coming back now where customers didn’t necessarily learn from that.

Joe (10:11):

Right. Yeah. And you mentioned that technology is a way that a lot of people are trying to deal with this. And I mean, I’ve said it before on the show, I’ll say it again. I’m always amazed that anybody can do supply chain planning on spreadsheets. I mean, it’s really one of those things that people should be committed for their effort, but they should know it really is a better way. There’s another way out there.  Yeah I just saw a recent survey that they and said that 59.8% of respondents to the survey still use Excel spreadsheets as their primary planning tool. I can’t imagine tackling something so complex that way.

Paul (10:52):

I grew up with spreadsheets and as a planner in industry and scheduling production lines and buying inventory, using spreadsheets. And you’re right, your mind gets blown sometimes about how complex you have to do this in order to do it well. But I’m very bullish on the planning space these days, and I really think that over the last five to seven years especially, I think companies have really started getting very good and going beyond what I would say is sort of planning 101 with just your basic deterministic models and very simple EOQ calculations, you name it, right? They’ve gotten much more robust, right? They’re doing things like probabilistic demand, right? We’re talking about things stochastics or statistical modeling, if you will, within the planning space. One of the things that I’m bullish out about with GAINS is the integration of the network modeling and the inventory planning tools because they play off each other an awful lot.

Paul: (12:03):

So that’s an example. And that’s all got to do with A) I think vision, first of all, the leadership in a lot of these companies recognizing that it’s not good enough, the users are demanding more because they need faster, better answers. And then obviously with the advent of new technology from a coding perspective, and I’m not even talking AI and ML yet, right? I’m just talking about in-memory processing and just the ability to be able to handle many more calculations much, much faster so that they can model and evaluate all of these different permutations and scenarios. And they do it in a way that in front of a user interface that an average person can now start to understand. And you don’t need to be a rocket scientist, right?

Amber (12:57):

As someone who started my career in an organization that was very progressive in their use of technology, and I was on my first job out of college was working for a global manufacturer who had been on a spreadsheet driven planning process, but we were deploying a state of the art supply chain planning technology. So I came in as one of those, I guess say Gen-Zer of supply chain because I came in with leveraging technology. But as I have had my X number of years in supply chain and I’ve worked with organizations that have not even yet made that leap, some of the things that I have identified as the benefits of leveraging technology are using a tool like GAINS who 1) be data repository for all of the data in your supply chain. Whereas when a heavy spreadsheet driven environment is in place, data is everywhere.

Amber (14:00):

And not only is data just everywhere in all these separate spreadsheets, and many times the data is of port quality. So tools like GAINS help with improving data quality. And Paul, you mentioned AI and machine learning, and that’s an application that we see good use for is the application of AI machine learning for improving the quality of data, not just using those technologies to improve the quality of data, but with what I said about companies wanting to have more visibility into what’s going on in their full ecosystem and seeing what their supplier’s supplier’s suppliers are doing. Even if you don’t have a good way to actually get that data of what your supplier’s supplier’s suppliers are doing, you can use technologies to help predict what that data actually is. So you can use that in these models and in your scenarios to give a sense of what your options are so that you can make higher quality decisions. Another thing that Paul mentioned that I want to follow up on as well is when he mentioned the linking of the design to the planning, just this idea of being able to do that north south orchestration and be able to have a closed feedback loop of data and decisions all the way from the operational time horizon, through to that stream time horizon where you’re doing design. Because a spreadsheet driven environment, you really can’t create that structure to align the decisions and activities from design through to execution.

Paul (15:45):

And Amber, I would even say that one of the things that we’ve done at enVista is not just at the design stage with network modeling, but we’ve been able to with what we call our product flow methodology, we actually do that in a tactical perspective as well, where over the course of a year, we will change the assortment within different distribution centers based upon shifting demand patterns. So we’re doing that almost in real time in some cases. And one of the things that we’ve seen when we do that is you’re able to get a better solution of your network design, first of all, but you can design your inventory and your fulfillment strategy and your material handling and your building. So it all works together cohesively. And that’s the problem that we have with a lot of situations is that planning has always been sort of outside and you do a design, even an automation, you can have the best automation, but if it’s been designed for the wrong size of orders or the wrong frequency of shipments or whatever the case might be, it won’t work, right? So you need to come up with a design that’s agile and flexible of course, but you got to scope it out so that you’re working in the right box.

Amver (17:12):

So Joe, you started the section by bringing up the stat about spreadsheets and the use that use the spreadsheets. And even as companies are thinking of going off of spreadsheets onto a technology dedicated to support supply chain planning, what is true in the market right now is that most technologies were built for a way of working that’s 30 years old. So with what Paul was just talking about of how VUCA is impacting the frequency of needing to revisit decisions and policies and targets. Most of the standard technologies out there today weren’t built to do that. They were built from when things were simpler and things were more predictable and at GAINS, as Joe, you have had people on your podcast to discuss is that at GAINSour approach is you need to think of leveraging technology in a way to support, well, you can do a 2024 that you could not do in 1984.

Joe (18:27):

And that wraps up today’s insightful episode of GAINS on a huge thank you to Amber Salley and Paul Baris for joining us and sharing their expertise. We hope you found our discussion as enlightening and as inspiring as I did. If you enjoyed this episode, be sure to subscribe, rate and leave a review on your favorite podcast platform. Remember, in the ever evolving world of supply chain, staying informed is key to staying ahead. Until next time, keep learning, keep innovating, and keep gaining with GAINS On. I’m Joe Davis signing off. 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.

(19:24):

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