Episode #113 - Is Data the Missing Link in the Broken Supply Chain?

Transcription:

Sean Riley:

With all the fancy introductions out of the way, welcome to the podcast, Matthew.

Matthew Wright:

Thanks, Sean. Great to be here.

Sean Riley:

The pleasure's all ours. Topics that we hear the most right now, particularly in our industry, packaging and processing, and across manufacturing in general, one is sustainability and the other is the supply chain. And you are going to touch on both a little bit, but you're mainly here to give us, I guess, a unique way of looking at the supply chain issue and how to solve it. Following the events of the last few years, obviously we need a resilient supply chain. That's something that we need to build up as we could see by the empty shelves and the lack of semiconductors and things like that, that was a problem. Beyond reassuring and bringing all that stuff back to America, which can't happen overnight, what needs to happen to bring that resilience?

Matthew Wright:

Yeah. No, great point, Sean. And I think we've never seen times we've seen the last couple years. I always joked that I think we all thought the supply chain was complex prior to the events the last couple years, but we've just seen how complex it is. To me, it's a simple problem. It's a challenging one to solve, but it's a simple problem. It's a data problem and it's a standardized data issue that we have and connectivity of this data and companies together that I really think is really the underlying pin to the problems that we're seeing in a supply chain.

Sean Riley:

To expand on that thought, when you're saying data, talk to me like I'm listening to this, and as I'm thinking of supply chain, is I'm trying to get product from a foreign country to my plant. When you speak of data and matching all that up, what is that and how important is that to making the supply chain more resilient?

Matthew Wright:

I think most companies would agree they're working on siloed or individual pieces of the data that may be applicable maybe for the opportunity at hand or the thing they're trying to solve at the moment. And what we saw really during the supply chain crunch and primarily driven by COVID and other things, is that it was hard to move supply around. You talked about onshoring and even one of the challenges of bringing product back to the US or into North America is that the data necessary to do that simply just doesn't exist, and really a fluid method or some method that somebody could do something with. And examples, a lot of the data for product today be made is still held on PDFs, held in Excel, held in legacy systems, really not meant for a common language or sharing.

And I use a real simple example, if you put 10 people in a conference room and told them to solve a problem and everybody used a different language, you probably wouldn't get anything done. Much like making product, and more importantly, by enabling product to move through the supply chain, change locations, understand the resilience, and really create that resilience, you have to first step back and put all the data in the same languaging, so that when you decide to move it from somewhere in the world to maybe onshoring exactly what you're moving, if it matches the machinery, it matches the transportation and logistics systems you have. And having that visibility before you take action is really not separate from reliability, the supply chain is one and the same.

And so, that logic really starts to drive behavior. And that's just on the front side. And over time, as you start doing that thing, most other applications we understand from data technology, it starts to learn and start to be preemptive, and start telling you, "Hey, there's a conflict in this part of the world that you may want to think about because you get these five parts of your product or you do this distribution system there, and you may want to pause and think about what you need to do," and then ultimately offer up solutions and ideas. I'll pause there Sean. I got another analogy to that, but does that make sense?

Sean Riley:

Oh yeah, absolutely. And I guess the thought that's going through my head is, while all that sounds great, and I'm not dismissing it by any stretch, with everyone still battling through the issues right now, how do they incorporate that without falling further behind?

Matthew Wright:

Then the reality is, and it sounds like a quick answer, but you have to... I mean, I don't think that we're going to go back to a less disruptive time, whether that's pandemics or global issues or supply shortages. Unfortunately it sounds negative, but I think we have to just expect the world to look like it does today. And so, you have to get in and get it done at the same time as you're saying you're operating the business. And fortunately today, ourselves and others are offering resources to do that. And you really have to agree that you have to get there. And whether you start today or you start a month from now, you still have to get there. The sooner you start organizing your data, putting in a common language, allowing that data to be shared and provisioned is only going to help you as the issues come ahead in front of us. You have to get there.

And I look at it a lot like the transition to consumer technology, which I'm always baffled why industrial technology is dramatically different than consumer technology and it really shouldn't be. And we make these rapid changes with technology in our personal life, and I think we just have to start to become and exercise that muscle to do that in our industrial business life and start to expect it has to be both.

Sean Riley:

Oh yeah. And that's interesting that you say it like that because particularly in our industry, there was always resistance to remote monitoring, even though it would be helpful for training purposes and for maintenance, because they didn't want to let people onto their servers and be connected into their plants. But at the same time, the rest of the world and everybody else is perfectly fine having all their banking done online and all things like that, It was always, like you said, from a consumer perspective, everyone seems fine with it, but when business gets involved it's a little bit more difficult.

Matthew Wright:

In fairness too, the technology's caught up with provisioning obviously when share your banking information online and other people aren't getting that don't need it. It's the same thing with technology today. I just think it's been slow to adapt with industrials.

Sean Riley:

Yeah, absolutely. It's not necessarily saying one side is wrong or the other, it's just like you said, we're willing to, from a consumer perspective, but sometimes a little bit hesitant from a big business standpoint. I guess when we're talking about balancing resiliency with the supply chain, how much of that is it going to be a trade-off in terms of, "I can get things cheaper from here, I can get things more efficiently from here." What's the trade-off there from having it be more resilient, but maybe not... Cost-effective is always the easiest one to throw out, but I'm sure there's other reasons that people want to use more efficient supply chains.

Matthew Wright:

And I think the cost of the ROI, the cost of disruption today, I think companies would absolutely agree today the amount of costs that they threw at trying to bandaid a supply logistics chain that was looking for cheapest product first. It's not just that singular, "Let's look at this box versus that or this product versus that." It's how complex, how likely is that to break and is that worth the risk? And so, we saw just very critical items early through the pandemic as you recall, really hard to get. And obviously it increased the price of those products for the consumer and the companies. And I do believe there's a view now of a total cost, that's an old term, but total cost of ownership that really the supply chain challenges have brought to light. I think there'll be industries that are more adept or apt to look at that, and some industries it might still resist it and take time to get there.

Sean Riley:

We've been hearing about it for 15, 20 years and now it seems like sustainability is finally here as a thing. It's not just a buzzword, people are living the lifestyle, businesses have to work within the rules of being more sustainable it's going global. How is that going to play out in creating a better supply chain and how are the regulations and the different pressures going to have an impact on creating a better supply chain?

Matthew Wright:

Yeah. No, it's great topic. And you're absolutely right. I say we've been talking a lot, let's now start doing something about it. And I think, again, to harp on what I said to start with is, it's a data problem. There's a lot of great ideas, there's a lot of great products out there. There's starting to becoming a lot of regulations around this topic. And the complexity is, as you have the complexity of the supply chain, which we've been talking about, now you have to layer on the complexity of sustainability. And sustainability, it has really been looked at as a project-based issue before, and I really don't think that's the right way to look at it.

This is an ongoing muscle that the company or product have to continually exercise. And what I mean by that is as you're moving product through the supply chain, you have to know if it is still going to be in accordance with the regulations that are vastly different around the world and where you can resource that type of materials or product. And so again, to me, it's the same data that you need to move your product around and be more efficient in your supply chain, whether that's sourcing supply, making sure it's the right product, keeping trucks or other methods are out. You got to layer on now another lens, which is this lens that says, "Hey, it's good or bad in this area and it's not going to work in that area." And the only way you can attack that problem is getting your data structured correctly.

There's no way you can layer on enough humans and consultants to figure this out. And then to your point, what's going to make the backstop happen that hasn't happened for 15 years is a tremendous amount of regulations that are coming in front of us that, as Gartner said, companies will not meet their obligations and you can't just keep pushing that bar down the road. I think again, it's the same data at the same time, giving you visibility.

Sean Riley:

If you could just explain how a company can bridge this gap beyond, like you said, people are using PDFs. What tools are out there for people to be able to do this?

Matthew Wright:

The way I look at things from our position and the market we've created, which is spec management, I really look at us as an open API. We integrate with a lot of other solutions that further answer questions. And so, it could be an LCA tool that you could put your same data set through. If you think about just taking it back down to a simplistic box, a brown box, and you want to know everything that's in that box, how it's made, how it obviously is used, and then what you want to do is layer on top of that, what does it mean from an LCA perspective? That doesn't have to be a one time event. Why doesn't that continually live? And just come back to the dashboard if you want to cube or utilize a truck or freight correctly, integrate with one of the Cape solutions.

And so, I really think the idea is what I call a tech stack. Getting you a tech stack, dropping the silos, getting all the data in a formulated way. I happen to be very organized person, so it's how the brain thinks. And then plug in these things that further elongate, not the data, making the data different, but making the outcomes and the visibility of that outcomes better. And so, you end up looking more like air traffic control sitting at your desktop, than you do running around and trying to gather this data. And so, there's a very structured way to go about it. There's a way to grow into it. And there's a way over time to really go from just fixing the problem to being proactive to both these issues, supply chain and sustainability.

But you asked a got a question earlier, you can't ignore it. You can't just pretend it'll go away. There is no other answer to the problem than technology. And I, and we talked about it a few minutes ago. Think about the life you live on your iPhone or your Android and how you function. How do you find restaurants? How do you set reservations up? How do you do travel? You're notified about things going on in your life and just look at that. On the other hand, if you had your B2B business phone with that same type of app, that's the goal that we have to all have collectively. And it takes multiple companies and partners to bring that together. And that's why we're so involved in academia and other programs, that we really are there to try to educate and engage with other companies to make this work. It's a big challenge in front of all of us.

Sean Riley:

Yeah, absolutely. And that's what you touched on what I was thinking of, is getting myself and my company on board is one thing, but how do I ensure that the other pieces that I am working with on the supply chain are also on board using the app, for lack of a better word that we're talking about on a B2B fictional phone.

Matthew Wright:

It was great. We have a summit, which we hold in January in Nashville, and we had over 300 people there and 100 companies, and they range from every type of vertical you can imagine. And it was interesting, they had two companies sitting there. One was in the pet care industry and one was in the CPG industry. And they both were looking and going, "There's more things in common than different and we need to be able to share data back and forth." And so, to your earlier point, that that wall of resistance is dropping. Companies understand to really attack these supply chain issues, sustainability initiatives and regulations, you got to have data sharing apps much like we envision in our personal life.

Sean Riley:

Awesome. That makes complete sense to me. And I understand, though on your end, the immense undertaking it's going to be to get everybody on board with this. But I thank you for taking time out of your day today, Matthew, to come on here and give us 15 minutes of just an overview of just how important this data is and what we need to do as an industry to bridge that data gap. Thanks again, Matthew, for coming on.

Matthew Wright:

No, thanks for having me. Listen, it's a journey and it's all about educating and working together, so I appreciate the opportunity.