The Logistics of Logistics

The FarEye Story With Kushal Nahata Kushal Nahata and Joe Lynch discuss the FarEye story. Kushal is the CEO and CoFounder of FarEye, a company that enables enterprises to deliver at reduced cost with a superior customer experience. About Kushal Nahata As the CEO, Kushal is responsible for driving the vision, strategy, and growth at FarEye. A dynamic leader, Kushal drives the culture of 'customer-first' at FarEye which enables the team to deliver value to FarEye's 150+ clients globally. He is an effervescent thinker who is passionate about enabling the digital transformation in the logistics industry and making it customer-centric. He is constantly working towards empowering companies to champion operational efficiency and customer experience. Under his leadership, FarEye has achieved an impressive growth rate with rapid geographical expansion. Kushal enjoys training budding entrepreneurs and guiding them through their journey. He has been mentioned in the coveted 40under40 list by Business World and The Top 25 Software CEOs of Asia for 2020 by The Software Report. About FarEye FarEye's Intelligent Delivery Management Platform is making the delivery experience better for everyone. FarEye enables enterprises to deliver at reduced cost with a superior customer experience. The low-code approach provides an environment to develop applications with a quick turn-around time and minimal code to shorten the "concept to ship" cycle. The platform leverages millions of data points to predict the shipment journey and improve the delivery experience. FarEye helps companies orchestrate, track and optimize their logistics operations. The company's flagship logistics management software supports the entire supply chain — from first-mile seller pickups to last-mile delivery — to provide end-to-end logistics visibility, reduce operational costs and improve customer experience. Key Takeaways: The FarEye Story Kushal Nahata is the Co-founder and CEO of FarEye, a delivery management platform that leverages technology to provide low-cost, efficient, and sustainable shipping to ecommerce companies. In the podcast interview, Kushal describes how he and his partners founded FarEye in 2013 and expanded the company to over 50 countries worldwide. Kushal and his partners founded FarEye in India, but soon found their customers were asking them to support them in other countries. Today, FarEye operates out of 6 offices located in New Delhi, Singapore, London, Manchester, Dubai, and Chicago. FarEye's delivery management platform includes the following solutions Intelligent Delivery Orchestration Real-time last mile visibility Last mile operational control with shipment status check-in calls Day-to-day operational clarity for drivers and increased operational efficiency (number of deliveries, fuel etc.) Intelligent Delivery Visibility Multimodal visibility across air, ocean, rail, road, parcel and intermodal logistics Parcel visibility using order ID, purchase order or SKU number Yard visibility and control tower visibility Carrier and route performance visibility Sustainability dashboard for carbon emission control and visibility Dynamic appointment scheduling Data analytics, exceptions and alerts Intelligent Customer Experience Flexible and self-service slot booking for deliveries & returns Instant order-level track and trace capabilities Special delivery instructions(pickups, drop offs, messaging) Secure & seamless communication with drivers Digital proof of delivery and customer feedback Wallet integrations Personalized product recommendations Safe & compliant deliveries Learn More About The FarEye Story Kushal's LinkedIn FarEye Gartner Supply Chain Conference FarEye LinkedIn @FarEye on Twitter The Logistics of Logistics Podcast If you enjoy the podcast, please leave a positive review, subscribe, and share it with your friends and colleagues. The Logistics of Logistics Podcast: Google, Apple, Castbox, Spotify, Stitcher, PlayerFM, Tunein, Podbean, Owltail, Libsyn, Overcast Check out The Logistics of Logistics on Youtube

The North American inbound supply chain was well-run and extremely cheap before the pandemic brought disruption to the logistics and transportation space. Since the pandemic, the shipping industry had to adapt and is still adapting to this uncertainty. Prices are going up, congestion is at an all-time high, and we won't recover from these challenges overnight. Join Joe Lynch as he talks to John Murnane about the disruption in container logistics. John is a senior partner at McKinsey & Company. At McKinsey, he is the leader of the logistics sector. So he covers everything from air & ocean carriers to warehousing & fulfillment. Listen and learn more about the shipping industry, shipper & carrier relationships, sustainability, end-to-end shipping, and much more. Find out about the disruption in container logistics and how it can be solved. The section below is transcribed. Transcription has limitations so there may be grammar and typo issues. Disruption In Container Logistics With John Murnane Thank you so much for joining us. Our topic is disruption and container logistics with my friend, John Murnane. How is it going, John. I am doing great. Thanks for having me. How are you? Excellent. I am glad we are talking about this topic. Please introduce yourself, your company, and where you are? I am a Senior Partner at McKinsey. I am based in Atlanta. I lead McKinsey's Logistics Sector globally with a colleague named Martin Joerss, who is based in Hamburg. Tell us what you guys do over in that McKinsey's Logistics Practice. We call it a sector, but we serve the logistics industry. For us, that is all the different, interesting, fascinating parts of logistics throughout the global supply chain, ocean and air carriers, forwarders, folks doing container leasing, and Marine services. We do a lot of work in ground handling and transport, terminal operators, and rail trucks, both asset-based and brokerage. We also do a lot of work in the warehouse and fulfillment. I serve companies that operate fulfillment, real estate, and industrial developer. We also do Last Mile post and parcel returns, plus all the folks that are in and around that space doing data, transparency, tech, robotics, and all the fascinating, fun companies that are trying to knit it all together. Do you work more with shippers or the actual logistics providers? We work with both. In the group I lead, the logistics sector, we serve companies that make a living in moving stuff around. I have got a number of colleagues in a practice that is adjacent to ours that are in manufacturing and supply chain. Those consultants and partners serve the big retailers and manufacturers who pay to have the goods moved. I do not know what you guys did at McKinsey but it was not so long ago that there was no logistics practice. It was logistics and supply chain or supply chain and logistics or manufacturing supply chain and logistics. It was always the tail end of something else. We have arrived because we have a McKinsey partner who is responsible for watching over us. We have got 100 McKinsey partners that I do not know if we are responsible for it. [caption id="attachment_7990" align="aligncenter" width="600"] Container Logistics Disruption: The pandemic hit the shipping industry in many ways. People started buying a lot more, which meant more containers being moved while the staff was low. There was just a lot of congestion.[/caption] The business needs some babysitters. Tell us a little bit about you. Where did you grow up? Where did you go to school? Give us some career highlights before you joined McKinsey. I grew up in California, pretty close to the ports of LA and Long Beach, but did not get into logistics. At a young age, I was a Mechanical Engineer at Duke. I worked in entertainment for many years at Disney and the NBA in finance and design roles, which was a lot of fun. It is not as entertaining as logistics. When I got into logistics, it was at McKinsey. I went to Business School at Michigan and then I joined McKinsey. You joke about logistics being the end. I got recruited into the travel and logistics practice because I knew a thing or two about travel. I started serving logistics companies back in the day. This is 2003 or 2004. It was not sexy. Logistics was not quite as hot as it is now, but I found the work fascinating. I liked the people. I got into rail, parcel, and trucking, and then I moved to South America to lead our logistics practice. I was in Chile for three years and then I got into the ocean space and Marine terminals. I have been hooked ever since. It has become more fascinating given all the things that we have seen in the last years, from the eCommerce boom to automation to the push for sustainability and what happened with the pandemic. It is fantastic that you have got that South America experience because I feel like we have had so much stuff in China for so long. I have nothing against China, but it makes more sense to ship stuff from Mexico or South America in general. We do not do nearly that much business with our South American partners who we fully understand compared to China. There are lots of bags coming in and out in a lot of air freight. I was in Chile, which does a lot of flowers and salmon, and exports a ton of copper and minerals. Let's talk about our topic, which is the disruption in container logistics. Why don't you take us back to before there was this disruption? Talk about what was going on in the space back in the day? You hear a lot about underinvestment in infrastructure and "failing" logistics infrastructure in the US. Many years ago, things were working well. If you were a manufacturer or a consumer, you probably had the lowest cost supply chain in the world that was able to get you products from anywhere in the world any time. The cost was quite low and the supply chain runs very well. It is smooth. As such, it was something that a lot of people took for granted. It seemed very opaque compared to now. Many years ago, if you were moving freight, your stuff disappeared into the ocean for three weeks or a month. There is also opaque because no one has looked into it. We have all learned how important it is. I used to serve clients and I did a lot of marketing and sales work, helping people with sales and pricing. I serve clients in logistics. I remember hearing sales executives complain to me. I can't make these value-based arguments. I can't talk about our value prop because I can't get access to anyone that matters. Ten years ago, people had a well-ran, extremely cheap North American inbound supply chain. And they took it for granted. I am talking to a procurement leader four levels down and they do not care about our value. It was opaque because, to some extent, there was not engagement on this topic at the highest levels, and certainly, there is now. Many years ago, you had a well-run, extremely cheap North American inbound supply chain. The infrastructure did not get bad overnight. The pandemic hit us in three ways. One is we all started buying a lot more stuff. We did not spend any less. We stopped spending on travel and restaurants. No new car, no vacation, but I can buy crap online. I can upgrade my house. I did some of that myself. I am in the house more and I invest in doing some things around the house. I got an indoor bike to stay in shape, but we spent 20% more money on stuff. I always call it not your grandparents or great-grandparents pandemic. In the 1920 pandemic, 50 million people died worldwide and there was poverty. We joke that the COVID-19 or 20 that we gained from sitting around eating and buying stuff. That is not to discount all of the misery that it brought, but most of the misery was isolation for us. When you have a situation where there is more volume being purchased, that means more containers and more trucks move. At the same time, global capacity fell by about 14% or 15% over a similar timeframe. If you have been paying attention, that probably feels intuitive. We had people that were sick so we could not stack. We had operations that were shut down at times. We had congestion because people were stacking and storing containers because they could not get them to the next place and they were waiting and also every stage in the value chain. We all saw the earnings releases that talked about, "I am 65% short of the team. I need to operate these warehouses." They are open, but they are not running anywhere near full capacity. If it is 20% up in demand and 15% down in supply, you have got a congestion problem. On top of it, those increases weren't smooth. If those increases were smooth, our logistics industry might have had a chance, but it was overnight, then it stopped and started again. That made for some challenging times, and you ended up getting what you got, which is pretty poor service, long lines, congestion, delays, and uncertainty where things were. You also have price increases because the companies that were moving the goods were trying to manage to make sure that they were at least taking good care of the clients that were willing to pay the most. It became challenging for our shippers. I do not think it hit the biggest shippers, the Home Depots or the Lowe's. Those guys had contracted rates. They call them the bat phone when they call the shipping companies. They did not all of a sudden get double or triple the cost of a container. They were okay. It was a lot of the other smaller players. You mentioned this spike 20% up in demand, 15% less in capacity, but if you were 20% or 30% off in your headcount in your consulting practice, you could address that internally because you are all a team. This was across a whole bunch of supply chains that are spread out across the world. Communication was always difficult given time zones, languages, and the lack of computer systems. The coordination and fixes were all slow. I was talking to my daughter and she is in Portland. She was excited. She called and said, "The couch that I ordered in October 2021 is going to be here. I forgot what it looks like." We are all getting used to waiting a little longer than we used to, but it is nice when they arrive. We still seem to have these shocks every once in a while. Shanghai had more COVID. In the US, we are seeing shortages of headcount in a lot of places, especially in warehousing, dock workers, and trucking. There is a lack of capacity when it comes down to it. [caption id="attachment_7991" align="aligncenter" width="600"] Container Logistics Disruption: The two things to watch to know when congestion and prices will moderate are consumer spending on goods in North America and labor availability.[/caption] I know everyone wants to know and figure out when this is going to be over. I do not think it is going to be overnight, partially because I do not think that the disruption is going to be over soon. The fact that we have got basically almost no trucking going on in China despite the manufacturing plants being open, but the trucking operation is pretty much ground to a halt. It means we have got days of inventory that are going to stack up and then need to be pushed through the system. The disruption and uncertainty are going to be a part of our new normal. With regard to when the average demand and supply get back closer to where they used to be, it is going to be a matter of consumer spending and labor. We love the idea of things normalizing and getting to a new normal, but we are seeing inflation and other problems. We see the war in Ukraine and the recurrence of issues in China with COVID. We have trade issues with China. In a lot of ways, the new normal is not normal. The new normal is going to change because of events outside of our control of weather or geopolitical. Change is going to be more prevalent in the coming decade than it was in the last few, which is why to some extent, I think we did have that false sense of security that everything was working. We did have a period of relative sanity, which allowed us to fine-tune the system despite its insufficient infrastructure. We talked about the way it used to be pre-COVID years ago and what happened. What is next? What is next is recovery. I think that, in time, we would expect to see supply improve and consumer spending on goods moderate a little bit. We are seeing an increase in consumption of services, which makes sense because there is the ability to do that. My wife works in travel and she has never been busier. People are eager to get back out and travel again. I do not think we are going to see the end of events and discontinuities. Those are two things to watch to tell us when congestion and prices are going to moderate are going to be consumer spending on goods in North America and labor availability. Talk about those shocks. There are many ways we can describe this. We could say our supply chains got a little brittle, meaning they broke rather than being bent. Another way to describe it is we have too many risks in there and a lack of resiliency, depending on how you want to talk about it. We know we are going to have some more shocks in this system. How do we deal with all that? There are a few things. A lot of this is ongoing. It is already happening. We need to stop looking at the supply chain as a simple commoditized part of the operation. It is not a simple call center. It is not something that should be managed by a small team in procurement focused on the cost lever. This is a C-level topic. The supply chain is and forever will be a C-level topic. Shippers need to be thinking about all the things that they can do to accept the fact that the logistics industry will always be more complicated than it used to be. Part of that is more safety stock. I know you are an auto guy. The old just-in-time Math assumed simple, easy commodity-priced trucking and logistics operation. The world is more complicated than that. Certainly, some companies are looking at how I can think about de-risking my supply chain, both in terms of the number of locations that I sourced from, to increase the number so I have more flexibility. If I lose one node, they will be looking at nearshoring and reshoring. The math on those deals is never easy, but they are certainly spending time thinking through that, especially thinking about that in light of new sustainability targets. All of my clients are hearing calls from their clients who are hearing calls from their customers to say, "How can I be more sustainable? How can I meet the new carbon aspirations?" You hit a whole bunch of topics. I want to break them down a little bit. It speaks to where we are at in this business. The first thing you said is this is no longer a small decision. When I used to sell logistics and supply chain services, the way I sold mostly less than truckload in some truckloads, but we had the technology. I remember I would call and say, "I want to talk to the owner, the CEO, the head of operations, or a general manager." We impact finance because we are going to take some of those functions away. We do it as part of our service. We interface with the sales guys because they are the ones who are always saying, "Where is my stuff?" We work with your ops team on the inbound and we work with your logistics team. A lot of times, when I would call that C-level guy, they would say, "Talk to Tony in the back." The disruption and uncertainty in the shipping industry will be a part of the new normal. It's not changing overnight. I would go see Tony and back, and he did not want to have a strategic discussion. He did not care if the finance guys had to audit the bills. I said, "We audit the bills because we have a TMS," and I start my whole spiel. I am going to parody this a little bit. He was like, "Those guys got me Kid Rock tickets." That is why he bought from that logistics company. He did not have that strategic focus that I wanted my customer to have. One of the things we have all been through is when you call that guy and say, "I want to manage all your freight. I want you to use our technology and you are going to see all of your shipments there. He says "I will give you an Excel spreadsheet with all our loads in it. You put your price in and if you are cheaper, I will give you those lanes tomorrow." I was like, "I do not want to save you $50 on tomorrow's load. I want to save 10% on your annual spend." It would be like, "What are you talking about?" The number might have been used to bend. We spend $500,000 a year, which is bad enough to leave it to somebody who does not care about the strategic function of logistics. Now that number got to $5 million, you go, "What the hell, guys?" There is a lot of change on both sides of that transaction that we are going to go through over the next few years. I have a good friend who is a former CEO of one of the container lines. He says, "Enough with this value base. I lose customers for $50 a box. It does not matter how much better we are." That was the history. In that world, you do not have the right executives in the decision on the shipper side. You do not have the head of sales, marketing, or operations. You have someone in procurement. When you have someone in procurement, they have one metric, which is how they can get the unit costs down. You also need to get better on the sales side. The guys that I work with, the carriers, trucking companies, and railroads, now have an opening to say, "It was not so commodity-based," but they have got to be able to deliver. They got to be able to go and articulate what they do that is different than the next guy and why that is worth it. I always use the same analogy back in the olden days when we had stockbrokers. They are transactional. You would always hear the term churn. They wanted to churn your account, "I want to sell your Dell stock and move you over to Apple." They make money on both of those transactions. Those guys did not care about your overall financial picture. They cared about what you had in your investment account. Now we have moved to financial planners. You do not hear anybody say in their stockbroker. Financial planners are aligned with their clients. They say, "We are going to get paid 1% or 1.5% of what you have in your account. I want to make you rich so I can get 1% or 1.5% of that every year." It is the same thing in this business. We have to switch out of this transactional thinking and move to that financial planner. A lot of companies want to do that. They do not want to be ringing the bell and having the siren go off that they made $1,000 on a transaction and celebrating at the office that day. That is a lack of alignment and it is yesterday's news. You will see more gain share partnerships and relationships like that between carriers and shippers. It takes real change on both sides. This will be the shock that gets the awareness to a place where those things are pursued. Not just between carriers and shippers, but to some extent, between different players in the logistics chains, carriers and ocean terminals, railroads and trucking lines, warehouse fulfillment operators and last-mile parcels. One of the things I want to touch on briefly is the timeout containers. We will get more back to the containers for a second. We started using containers a lot in the late '50s and '60s. There is a book, The Box That Changed the World. Prior to that, we could not even do global trade because the cost of logistics was so high. That was a tremendous innovation. We have seen this change the world. We would not be doing nearly the global trade we do now without it, but we have not seen a lot of innovation in that space. Now we are starting to see information technology. That is another piece of that. Speak to that and the sustainability that is important to us. The technology has come along in terms of tracking. It is available. You will see more adoption of that, especially in the reefer space, but also in dry boxes. I have seen a lot of startups and investments in foldable boxes and alternative equipment. The main way we are going to get better sustainability on our container fleet is by finding better ways to extend their lives. I never heard that. We are throwing a lot of those out. [caption id="attachment_7992" align="aligncenter" width="600"] Container Logistics Disruption: 75-80% of containers are leaving LA empty so they can be filled up in China with more goods while there is a shortage. That's because the supply chain has always been an afterthought.[/caption] We lose track of a lot of them because we do not know quite where they were. Telematics, tracking, and things like that will help there. How long does a container last? There are containers out there that have been in the fleet for twenty-some-odd years. The average is probably closer to 12 to 15. There are all sorts of uses. One of them is use for alternative storage. If anybody from the container ship lines is reading, give me a call and I will deliver you 50 containers. I live about 25 minutes out of Ann Arbor. There are some farms and not quite rural, but I always drive by and think, "What are you doing with that container?" They only need them where they need them. Our supply chain is imbalanced. They need them to pick up soybeans and send those to São Paulo. The fact that they are in Ann Arbor does not help them a whole lot because of the amount of money and time spent to get them down there. Managing that global fleet better and extending its life would be great from a sustainability standpoint. It comes up a little bit on my show about sustainability. Some people might be shaking their heads and say, "I do not believe that the man is causing global warming." I always say, "I do not care what you think. It does not matter what I think." This is what consumers and brands are asking for it. When one of those big brands says, "What are you doing?" you better have an answer. It is too late to do anything at that point. You do have to embrace it now. There are a lot of small ways. When it is over the road, we are trying to get rid of empty miles. That starts with measuring the empty miles, which brings me to another point. We were saying that 75% to 80% of containers are leaving LA and Long Beach empty so they can go be filled up in China with more goods for us. Meanwhile, we have a shortage and we have gone mad. It is illogical, but the understandable conclusion from the supply chain is an afterthought. The supply chain has always been an afterthought. It is not designed. It just happened. There are many forces well beyond the global supply chain that decide what is our import and export balance with China and where do we manufacture intermediate goods for auto? There is nothing logistics can do to account for the fact that there is that much import-export balance on goods. With empty backhaul and empty miles within the US, there are a lot of things that the logistics industry can do to help. There are smarter ways to reroute though there are still a lot of empty miles even in the US. I have become more aware of this. There is the empty truck that is moving from LA to New York, and you go, "That should never ever happen." I do not think that happens nearly as often as it used to, but what is becoming more of a concern is the half-empty trucks and you go, "I had 10,000 half-empty trucks leave this location. Is there a way?" I know there are technologies and the guys over at flock freight and others are saying, "We can do something about it." The main way of getting better sustainability on container fleets is by finding better ways to extend their lives. We will see more shared loads and multi loads where everyone will call multi-stop, where we are going to say, "That truck is full." That is good for the environment and truckers. For the shippers, we are going to have to figure that out. We do not want to put I-can't-move-your-food onto a truck with auto parts. We have to be careful about how we manage it with the shippers but I think it is going to lower the price of shipping. Once we are fully loaded with the real cost of all of this stuff, whether it be the drivers, assets, new vehicles, or the autonomous and electric vehicles that we bring in to make a more sustainable fleet, the cost per unit is going to be higher. It is going to put the burden on us to figure out how we can make better use of each of the units. Maybe it is two hours later, but that allows me to share a load and double my density on the chunk move. All of those things can happen in time, but it takes great collaboration between carriers and shippers to make it work. The transparency and tools of the data exist to be able to do it, but it takes tremendous collaboration and trust to get it done. I am going to put you on the spot here. I know you work with a lot of different companies. I want to tick off some standard categories and what kind of work you are doing for these companies. Let's say an over-the-road carrier calls you. What do you tell them these days? What would be a typical project you would work on with them? Over the road, carriers were doing a lot of work and helping them think about how their network is going to change as manufacturers figure out a new supply chain or as we try to start to think about electric vehicles and ultimately autonomous vehicles. Not just how should you think about the timing of those technologies, but what are the network decisions you are making now that will feel sub-optimal in 5 or 10 years because the investments that those companies make in assets and infrastructure are not short-term. We are helping them think about sustainability in terms of how they can help their shippers with their sustainability targets. Those are some of the big themes. Do you talk to any brokers, 3PLs, and non-asset-based? What are you doing for them? Sustainability is a topic for them in terms of how I can provide. I am already helping them knit together. A lot of them are trying to figure out, "How can I knit together solutions across modes? How can I optimize those around sustainability targets?" We are doing a lot of work almost across the board in growth. How do companies find growth? There are a lot of new freight flows that are coming, not just because there are always new freight flows that are coming, but sustainability and the targets that all these companies are taking on are creating a whole lot of new goods to move. We are working with a lot of companies, whether they be asset-light, asset-heavy, broker, truckload, but also parcel and the like. It is like, "Where do you find freight? How do you get it? How do you leverage the tools today to find those companies?" Do you work with Final Mile or Last Mile guys? We do. We work with from a pallet and LTL Final Mile, and heavy goods Final Mile. We do a lot of post and parcel work. We have got a huge practice globally that has done tremendous work in helping drive efficiency in the postal space and parcel as well. They need it. Those companies are struggling. [caption id="attachment_7993" align="aligncenter" width="600"] Container Logistics Disruption: Once the real cost of all these new things comes, the cost per unit will increase. It's going to take time to manage that. There needs to be a great collaboration between carriers and shippers to make it work.[/caption] From what I understand, the Final Mile for home delivery to goods is the most expensive part of the journey. I was not being critical of the post office. We want it to be better, but we put a lot of constraints on it, and I think it is the hard part. I do not want a pallet delivered to my house and then distributed all of those parcels to my neighbors. I would like just my piece delivered to my house. Getting my piece delivered to my house is expensive. The costs are getting better relative to the pallet moves because the density of residential delivery has come up so much. Many years ago, the density of residential delivery was terrible. It was hard to make the economics work for the big parcel companies. As our volumes have gone up, that has improved the relative density, but it is still tough. What about warehousing and fulfillment? We have seen so much change in that space. What is going on when you work with them? First of all, permitting and getting sites are extremely challenging. The sites have to be closer to current consumers. If you want a site or the old model of three sites in the middle of nowhere, you can still get that. If you want the sites that people want now, which is one hour or maybe even less outside of every resident in the country, those sites are hard to come by. We do work with developers on construction and permitting on how to do that well and how to forecast and identify where the sites are going and where you need to be. We are also working with operators on how to drive productivity in those sites. We are doing a lot of work on how to refine, recruit, train and retain talent. That is a theme across all logistics. I was talking to somebody about a paint company and they said, "We do not have anyone retire from this location." It was their DC. The reason they had no one retired from there is because it was a young man's game. He did not want to walk 10 miles picking stuff up and moving stuff around. We have to make that job in the warehouse easier so you are not breaking your back. If you walked by an auto assembly plant and walked through it, you would see that nobody was doing a job that was backbreaking or that required excessive strength, crouching, or reaching. We have eliminated those and we see that same mindset move into fulfillment. Those guys are going to become technicians rather than strong backs. We have had conversations for years about technology in the fulfillment space. Now it is happening. They made fun of us many years ago because it was early and no one had proven all the economics. It was whizzbang cool stuff, but is it having an impact now. There are certain functions that are being largely automated and you are seeing high ROIs. Also, you have got a lot of technology now that is more flexible than it used to be. Building the $10 million conveyance system just for this client and then hoping you retain them is a scary proposition for a fulfillment operator. Having flexible, robotic assets that can move seasonally or move to a new facility if you lose a client. We are also seeing longer contracts which helps. Fulfillment operators are saying, "I do not want to do a three-year deal." You can't facilities for that and build a location if necessary for a bigger customer. We are trying robots now. This is becoming somewhat like automotive. In automotive, what we learned is if you give me one year, I am not going to invest in it. From a container line standpoint, a lot of people are trying to figure out how to facilitate end-to-end shipping better. The payback cycles on some of those technologies are getting shorter, but it is hard to make many of them work on a three-year contract. We are seeing a lot of fulfillment players and manufacturers agreeing to 5 or 7-year deals or agreeing to co-invest in the technology that they want to offer something that customers can't get elsewhere. Let's circle back to the beginning. What do you talk to about the container people, the guys with the ships, the rail, drayage, and the modal? From a container line standpoint, a lot of them are trying to figure out, "How can I better facilitate end-to-end shipping? I do not know if I want to own all those pieces of the operation." It does not do me a whole lot of good to get it to the port if it sits in the port. Much worse is it does not do me a whole lot of good if I am sitting at the pilot station waiting to get into the port. A lot of the conversation and work in the container space is, "How do you collaborate with the terminal, the rail operation, and the consolidation or deconsolidation facility to get boxes and get them back?" The whole concept of end-to-end is probably the strongest when you think about container terminals, dray, rail, or trucks. Figuring out how to create more seamless, more partnerships, and share data to do that. In some of those, you see the metrics and the CMAs of the world that are investing quite a bit in buying companies to knit together that offering, They are buying over the road companies here. They made an extra $100 billion or something in those ship lines during COVID. To your point, they are investing in that end-to-end solution. Somebody said this to me and they work closely with one of these companies. They said, "Do not be surprised if we see single-use containers because we do have a trade imbalance with China." If that container is only going one way and I have to ship it back on a boat that is filled with containers that are empty, somebody might say, "Why am I shipping it back there?" "It is because these are expensive containers." Do they need to be expensive containers? Could they be less expensive and single-use? I know somebody is going to say, "What about recycling and all that?" There is a design that has to happen here. We got people like John and his team there. They will figure it out. From my perspective, we see it in automotive. Sometimes, you ship back the containers that brought your stuff. Sometimes, you do not because it does not make sense because it is one way. Do you guys work with air freight companies? We do but it has been a challenging and rewarding a couple of years for air freight. The belly players have been tough because they have not had the majority of their capacity with many of the passenger lines, much of the passenger capacity down. The pure freight players have done extremely well. Airfreight was a key enabler and one of the early winners in the pandemic and continues to be. I think the questions on air freight are how can they use advanced analytics to drive even better forecasting of volumes and, therefore, even better service levels and yield management? We think there is a lot of opportunity in the air freight space around advanced analytics and pricing. I heard it from Flexport and the guys over freight ways. One percent of all overseas volume is on air freight, but it is 30% of the revenue. What it speaks to is you are not shipping auto parts, usually on a plane. You are shipping electronics, chips, medicines, and stuff like that that is high value and small. Mostly high density. Value per cubic foot is off the charts. That ratio feels approximately right. I also heard that 50% of the air freight is passenger planes. That is why air freight prices absolutely skyrocketed. [caption id="attachment_7994" align="aligncenter" width="600"] Container Logistics Disruption: A lot of the work in the container space today is how do you collaborate with the terminal, the rail operation, the consolidation & deconsolidation facilities? It's all about creating partnerships.[/caption] They were flying anywhere. They moved up first. Ocean container rates have skyrocketed too, but in the air cargo, when your supply chain breaks down at some point, the only option you have is to get it there. It is the last resort for a lot of things and the first resort for high-value cargo. A lot of companies, for the release of the phone, will send enough phones for the first couple of months via air, and then they will send the backup to refill stock via ocean. In a pandemic, it was the first choice. The majority of the global air freight capacity is the belly of the passenger. When so much of our passenger fleet was grounded without anyone to pay for the international passenger move, you lost the belly cargo. I heard somebody use the term preighter, which is passenger freighter. They sometimes took the seats out of planes and filled them up. Other times, they put stuff on the seat that you might have been flying to a conference on. Now, it has got a stack of mobile phones on it. I am going to try and summarize all this and then I want to get some final thoughts before you go into what is new over at McKinsey. The topic is disruption and container logistics. John talked about the steady-state. We will talk about many years ago, pre-COVID, and what happened during COVID, that horrible time with demand spike, capacity down, sick people, and broken supply chains. We learned how brittle our supply chains were. You talked a little bit about what is next and where consumer spending is going. We are spending more on services and a little less on products. We are going to see how the industry reacts to what are still shocks and aftershocks of what happened. We do not even know the implications of the conflict in the Ukraine and inflation. We are better, but we will see. Lastly, we talked about what we learned during this time that logistics is not a commodity and that we have to insist on a seat at the table. We no longer be just a commodity service. John took us through all of the different things he and his team do with their clients. Any final thoughts on this big topic, John? We have been talking so much about eCommerce. It is going to be omni commerce. You have seen a bit of a drawdown and a correction back. We talked about ten years of eCommerce acceleration in two months. That was true. You have seen brick and mortar make a comeback. Some things are better are bought in person. My kids bought mattresses online and they are like, "We love it." I was like, "I am going to have that mattress for ten years. I have to lay down on it." I am not going to look at 5,000 reviews. I love eCommerce, but to your point, some of those shopping experiences are going to have to become experiences, not a pain in the ass experiences. Everyone wants to go to the Farmer's Market or a cool boutique. We have to get back to a cool experience if I am willing to leave the house. For shippers, many of them want to get to a place where they are managing more on Omni channel commerce supply chain. One of the most frustrating parts of the pandemic was when we had out-of-stock items on the website and obsolete items sitting in storerooms in the retail centers. That was painful and was a function of having two supply chains, which is the case for many shippers. They built their old brick and mortar supply chain, then they added a supply attender to eCommerce, and they did not talk to each other. You will see companies now figure out, "How do I have one more flexible Omni commerce supply chain?" There are going to be some variations. There will be times and products where you want to buy online or in-store. Certain companies will have a blend of the two. That is where we are going on that front, which we did not talk about but I think is important. It also needs to be designed. It has to be created. It can't be a bolt-on because we bolted on the gig economy and thought that, "We got an eCommerce solution." Instacart, Shipt, and some of those solutions for grocery, from what I understand, the grocery store companies are losing money on those and they obviously do not like that. The gig economy stepped up. It is great. We are always going to have it. There's a lot of opportunity in the air freight space around advanced analytics and pricing. We are always going to use it in logistics, but it needs to be managed by logistics guys who are operational experts and good at routing and technology. It can't just be, "Bob down the street buys groceries for the neighborhood. It does not work as the way it needs to." We are going to see those grocery stores become grocery store/fulfillment centers in some cases or maybe one fulfillment center in the Detroit Metro area that serves all of the eCommerce. Some of those business models will evolve. Even a company as great as Instacart or some of the early applications is adding cost on the top of the already existing flow and retail, brick and mortar, and all that stuff. The ideal way of doing that is to have dark stores that are designed for efficiency and pick, pack, and ship, not for the grocery experience that we have all grown to love. Tell us what is new over at McKinsey and how do we reach out? Do you have any webinars coming up or case studies? We love to have conversations. The best way to get in touch with us is on our website. It is easy to find me or any number of colleagues. You can send an email and we will respond. I will probably get the email. If I am not the right person to talk to, I will find someone else. On the site, we have got an interview with Sanne Manders, the COO of Flexport, which is great. We are putting up content all the time. What conferences are you guy going to? I know we are excited about TPM in 2023. When is that? TPM is in Long Beach in the early spring every year. It is still a long way away. I do not know what the next conference we have got. We have coming up in May 2022 in Northwest Arkansas. I interviewed a professor from the University of Arkansas, the number one supply chain school carrying Gartner. John, thank you so much for taking the time. Thanks so much for having me. It was a pleasure talking to you. I look forward to keeping in touch. It was my pleasure. Important Links John Murnane The Box That Changed the World Flexport Sanne Manders https://www.LinkedIn.com/In/JohnPMurnane/ – John Murnane https://www.LinkedIn.com/Company/Mcinsey/ – McKinsey & Company About John Murnane John advises companies across a variety of industries and continents on their transformation and growth efforts. His broad cross-sector experience ranges from hospitality to global transport—including hotels and airlines, ocean and air freight, and trucking and distribution—and spans the value chain from capital-intensive real estate development to asset-light brokerage and distribution. He advises clients on growth at both a strategic and tactical level including M&A, new product development, value-based pricing, digital sales, and sales force effectiveness. The Logistics of Logistics Podcast If you enjoy the podcast, please leave a positive review, subscribe, and share it with your friends and colleagues. 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Want to know how you can deploy a smart warehouse for your business? Today's guest is Dan Gilmore of Softeon, a company that provides a full suite of flexible and robust end-to-end supply chain software solutions to deliver success. He joins Joe Lynch to talk about the idea and technology behind their system. They discuss some of the big trends impacting warehouses, e-commerce, and retail. From labor shortages to automation, Dan enlightens on the benefits of WMS and WES for any business. Tune in to better understand the perks of this new smart technology for optimizing your business! The section below is transcribed. Transcription has limitations so there may be grammar and typo issues. The Smart Warehouse With Dan Gilmore Today's topic is the smart warehouse, with my friend, Dan Gilmore. How's it going, Dan? Great Joe. Very happy to be here today. Yes, I'm glad I'm finally getting to interview you. Dan, please introduce yourself, and your company, and where you're calling from today. Yes, again, Dan Gilmore. I'm chief marketing officer of a supply chain software company called Softeon. We'll get into that maybe a little bit more in just a second here, but company's headquartered in Reston, Virginia, just outside Dulles Airport. I happen to be in the Dayton, Cincinnati, Ohio area. Buckeye through and through, so go Bucks. Why, I got to say go Blue now. Man, you dragged me down. Anyway, Dan, what does Softeon do? Sure. Well, again, it's a supply chain software company, primarily supply chain execution. The company was founded in 1999, first customer all the way back then was L'Oréal, and just proceeded to build out a suite of solutions, very broad and deep capabilities. That includes warehouse management systems, as I said, that all the stuff that kind of goes around warehouse management systems. People package those differently, but things like labor and resource management, slotting optimization, yard management, and those kind of tools. And then a newer thing, which we'll get into today because it's so critical to what's happening in terms of the smart warehouse, is something called warehouse execution systems, which have been around for a while, but really gained prominence the last couple, three years, as a way to optimize and orchestrate order fulfillment level at a capability that's just beyond even very good tier one WMSs like Softeon has. And then the category of stuff called distributed order management, which has to do with the optimal sourcing of product based on customer commitments as well as network capacities and constraints, and how do I get the lowest cost alternative that meets the customer needs, very prominently in omnichannel commerce. It's almost essential in retail, but we have a lot of B2B type successes in distributed order management as well. So there's some other things, but that gives you a pretty good flavor of what we do. You guys started well before eCommerce was a thing, so you still support stores and that kind of warehousing? Sure, so I mean, in addition to traditional WMS type capabilities, and for retailers, that would largely was store replenishment, now moving in obviously to eCommerce fulfillment, but many retailers are also looking to have a lot of activity at the store level, whether that's buy online, pickup in store, curbside pickup, or store fulfillment, so we've got some solutions there, both in terms of the distributed order management that I just referenced a second ago, is the tool that's going to say, "Hey, the best place to fulfill this order from based on the time commitments as well as inventory availabilities, labor availability, et cetera, is store three, four, five, six, seven," and then have the ability... So first you identify where is the right location, and that could be obviously a DC or a third-party facility or something like that, but the first word is the best place to source it from, and then if it's a store, we have a store module that facilitates the inventory transactions, and the picking transactions, and the shipping at a store level. Yeah. That became a thing. I mean, I know, I think Target's one of those companies that delivers a lot... If you buy something online from them, they're more likely to ship from their stores these days. Yeah, if it's a huge... I've seen a figure. I don't know, and it keeps rising. The whole market has changed. The more high-tech feel and touch, the less back-breaking work and less bending over and lifting heavy cases. It's like 80% or 90%. Yeah, I was going to say around 80%. That's the number I had in my mind too, that they're doing it from stores, which is rather incredible. Yeah. Well, before we get into all of that, tell us a little bit about you. Where'd you grow up? Where'd you go to school? And give us some career highlights and bullet points before you joined Softeon. Yeah, sure. Again, I've been pretty much, except very early in my life, an Ohio guy, my whole life. I grew up in the Akron, Cleveland area, and then got a job with NCR after grad school. I got an MBA from the University of Akron and I got a job at NCR, that was here in Dayton. I was a project manager, kind of in charge of barcode and data collection, and the way serendipity just kind of works, I moved from barcode data collection systems, and wireless systems, and then got into WMS, and was into consulting for a while, so I actually have done a lot of marketing in this space. I was also a chief marketing officer at RedPrairie before it got acquired by JDA and became ultimately Blue Yonder, but earlier in my life, I spent a couple of years implementing WMSs, a couple major projects down there in the Cincinnati area that really helped me learn a lot about how the technology actually works, and what's good, and what's less good. Notably, in 2003, I started a publication called Supply Chain Digest, which changed the face of online supply chain and logistics, news, and coverage. I still keep a light hand on it. I still write a column once a week still for Supply Chain Digest. Yes. I know I have read that. It's funny. I did a lot of blog posts in the past, so when you are a writer, I joke I might research a little different than a professor's research. I Google, and you start to realize which publications have good content, because I'm a blogger. The bar's a little lower for a blogger than it is for somebody writing in a publication, and I would just go, "Man, oh man. This is a good..." Supply Chain Digest always had good stuff, so anyway. When and why did you join Softeon? Yeah, it's been about four years now, and I had done actually a little bit of side consulting with Softeon before joining, and was just impressed with two things, first off just the breadth and depth of the software and a number of innovative capabilities, but just as important as that, I mean, there's a lot of companies that got good software. We think we've got bleeding edge software, but a number of companies out there. But really just the approach to customers and success, so I've never seen a company that consistently put its own interests behind those of its customers on a regular basis, and was just not going to let anything get in the way of a successful implementation, and that's really a track record that's unequaled in the marketplace, so just the care and concern for success at the customer level, and not looking at everything through a lens of how many professional services hours I can sell or something like that. It's really just kind of a different attitude, and that really intrigued me, and plus the company needed some help in the marketing area to get that message out, so a combination of those factors led me to join Softeon. Excellent. Well, today's topic is the smart warehouse, with my friend Dan Gilmore. Obviously, things have changed quite a bit in this business, so talk about some of the big trends that are out there, that are impacting warehousing, and eCommerce, and retail. It impacts everybody And these, most of the audience is going to say they're living these, so you know, it's not like these are big surprises, but it's still kind of nice just to put it all in context. Obviously, the growing distribution and labor shortage and there's a shortage and manufacturing. Very acute, and everywhere you go, that's what you hear about, and just the turnover levels, and the retention, and just unprecedented, even with the wages rising substantially, so that's everyone's concern. That is naturally... And actually, after about a decade of very flat wage growth in warehousing and distribution until a few years ago. Now all of a sudden, of course the costs are taking off. I mean, Amazon is over $20 an hour with attractive signing bonuses. In many parts of the country, maybe a couple, three months ago now. With parental leave for 20 weeks. I saw it on TV yesterday. Is that right, now? I did not know that. That would be a very attractive benefit, and that's the advantage. And then Target, maybe two or three months ago, announced that they were raising their wage, in both stores and distribution centers, in some markets, not all markets, but in some markets at $24 an hour, and you think, "But that's $48,000 a year," so... And assume there's probably some overtime in there, right? Whatever, so a husband and wife, I'm just making up an example there, working at a Target DC in those markets, they could be pulling in $100,000 a year for a family, which is not bad money. [caption id="attachment_7940" align="aligncenter" width="600"] The Smart Warehouse: With the e-commerce-driven cycle time pressure, it's unbelievable how fast you can get products these days.[/caption] If I could add something into that, Dan, I think also... And this has come up on my podcast a few times. If I had a choice right now... I'm getting too old for that kind of work, but... I can't walk 10 miles a day. I think we needed to make that job easier, and we're going to get to that, because this is what the technology does, but I think it also makes the job more attractive, when they can say, "I go to that job, and I'm learning all this cool technology," as opposed to, "I'm just a strong back." If you can bring somebody in, there's a different feeling when I get to wear all that high-tech gear, and use high-tech systems, and say, "I'm part of the supply chain," as opposed to, "I'm just a strong back, and I walk five miles a day, and nobody gives a damn about me." Yeah. There is no question about that, and I think both in terms of just a shortage of labor, and second just the ability to attract people into this career now, it's just the whole market has changed. I think that more high-tech feel and touch, and less back-breaking work, and less bending over, and lifting heavy cases, and all the kind of things that [inaudible 00:09:32] for a long time. I think you're spot on on that dynamic. And if we do have a shortage, that means the people we do have have to be more efficient, and the way they can be more efficient is with tech of course, and we'll get into some of that in a minute, but... So that's one big trend that's going on. What's another big trend that's happening? Yeah, well there's a bunch, and they're kind of interrelated as well. Obviously, the eCommerce-driven cycle time pressure, so obviously it's led by Amazon over your tablet, it's unbelievable how fast you can get products these days, even somewhat obscure products. Not that long ago, I needed a new power cord for my HP computer, and somehow, Amazon was able to deliver that the next day. I'm like, "How do they have this cable someplace that they can get it to me in one day?" I think of all the thousands and thousands of cables that are out there, and they've got mine. So the cycle time pressure, and that both is in terms of getting the order processed from when it drops into the DC and out the door. Obviously, companies are also moving distribution facilities closer to the customer, so the transportation part and parcel part of the journey is cut down as well. I mean, I can't remember the specific numbers, but I think it's Home Depot is building 170, 180 different of these local fulfillment centers that are being the largely cross-stock type of facilities that bring bulky items in and get them right to the customer in addition to the big giant warehouses that they already have. It's a fact of life. Eventually, we will teleport or whatever the product from the warehouse because it seems like we are reaching the Laws of Physics there that it can't be here any faster but maybe we will find a way. I remember probably five, seven years ago, I was working on a digital marketing project. I was helping this distribution center, nice good size in Chicagoland, Peoria, and they said, "We're one-day shipping to 65% of the population of the US," and that was always what Indiana, and Illinois, and I guess there's so many DCs down in Ohio, could always make that claim, and that was good enough. So if you said, "I have a DC in the Midwest that can get me to the East Coast, and I have one out West," and that was good enough. We're not seeing that anymore. Yeah. I mean, we're going to get to increasingly where same-day delivery just becomes a fact of life, and rather incredible, and you've heard Amazon and others talking about getting it down to two hours, or 30 minutes, or whatever again. Well, that's what Target's doing with those DCs. I mean, their DCs are their stores, and we think we'll get to Walmart doing some of the same. No question. So, what's another trend that you're seeing out there? Yeah, well just because obviously we're calling this the session, we're going to talk about the smart warehouse of the future, that's largely here today, but we've got smart everything, right? We've got smart houses, we've got smart cars, we've got smart refrigerators, we've got smart toothbrushes even. I saw that a couple years ago. I'm not sure if it's exactly taken off or not, but monitoring how often you brush your teeth. But what has that really meant? Well, primarily, it's just talked about internet connectivity and sort of some kind of analytics around it, so you know, easy example is John Deere, or Caterpillar, or companies of that kind, putting sensors and other IoT-type devices on their equipment out in the field, so they can get a sense for how people are actually using it. They can do predictive maintenance on it. They can say, "Hey, your guys aren't using the equipment as effectively as they could if they change their techniques," or et cetera, et cetera, so I think it's certainly timely, and if we're going to have all the smart things, it's time for the smart warehouse too, but as we'll get into for the rest of the broadcast here, it's a lot different than just plain more internet connectivity, and sensors, and things like that. That can be part of it, but it's just a small part of it. But the bottom line of it is, we are entering a new era of warehouse software technologies that are in fact much smarter than we've ever had before, and I've argued publicly for a couple, four years now, that we really had about 20 years of relatively incremental progress in WMS technology. I've used this in speeches before, but a few years ago, I pulled out of cleaning up my office around the holidays, as I often do, and I found an RFP from a major food company for a WMS circa 2003. I looked through that, and I thought, "You know what? This doesn't look all that different than the RFPs we're seeing in 2019, or 2020," or whatever year I was looking at that. Really, the big difference is I looked at it, I said, "The big difference is not in the functionality being asked for." It's just that today, a lot of that functionality is in fact core product, configurable product, whereas back then, maybe a lot of it had to be achieved... more of it had to be achieved through customizations. I think that's probably true, but the fundamental way a warehouse operates, WMS operates, didn't change all that much from give or take 2000 to 2020, or somewhere in that kind of a range. But now with the smart technologies that we're talking about, they are brought in to bear by the warehouse execution systems, working with WMS I talked about before. This is a new ballgame, and it's going to be a fun for the rest of the discussion here, to talk about that. So you threw in a new term there. You said warehouse execution system, and I know you said those have been around for a while, but they're now becoming kind of the norm, did you say? Just becoming very prominent, and the value's starting to be recognized. What is it? They came about actually a good while ago from a couple, three companies really, that had the belief, and I think correctly so for most WMSs, that the WMS systems did not care enough about equipment throughput and utilization, so you wound up with big peaks and valleys. Now, anybody who's been in a distribution center, even a really busy one, you've seen it where there's all kinds of activity at the beginning and the middle of the wave, and then as the wave starts to dissipate, even on a big, expensive, huge sortation system, you've got a relatively small number of boxes moving around, waiting for that wave and everything to close out. When you say wave, does that mean the orders come in waves? Yeah, the work is released in what are called pick waves, and that's based on any number of different attributes. It could be the carrier schedule, or value-added processing that needs to be done, or just workload balancing across different pick areas of the company, so you organize the work against various attributes that constitute a block of work, that's typically referred to as a wave. Yeah, so the problem is that I know I've got all these trucks that are going to show up, and they're taking different orders, so maybe I'm working to that order that's going to fill up that truck, or orders that are going to fill up that truck, and the problem is, to your point, is we've got already maybe a shortage of head count in there, and now when we have waves, now I'm not being efficient, because I've got too much work at one moment and then not enough in another. Yeah, and the whole goal of WMS, and what we're going to talk about today with the smart warehouse, is really overcoming... I mean, obviously you've got to plan and execute based on the workforce that you have here today, and we'll talk about that. So just having a warehouse management system that gives me stuff was great in the past, but you're saying, "I'll help you with a WES," or warehouse execution system. "I'm going to help you manage the flow. Manage the flow of work and the resource utilization, so that's exactly right. In and just new ways. Part of that still ties into that interest in level loading or making the flow of goods across an automation system more smooth and consistent, because if you can do that, a couple things. First off, the total throughput of the system is likely to be better, and second, if it's a new facility, you could actually probably get by with a smaller sorter, if you will, because you're going to be able to utilize that sorter more consistently over a block of time, a shift, or however you want to look at it there. And the other kind of breakthrough that Softeon has had is that WES, while it has its roots in that level loading of the automation and better utilization there, the WES works extremely well even in non-automated facilities or lightly automated facilities. [caption id="attachment_7941" align="aligncenter" width="600"] The Smart Warehouse: The fundamental way a warehouse operates didn't change all that much from 2000 to 2020. But now, with smart technologies, this is a new ball game.[/caption] As a matter of fact, one of our leading customers, I'm not sure I can say their name, so I'm not going to, but actually did a press release a couple years back that talked about a 50% productivity gain from implementing WES, warehouse execution systems, on top of an existing Softeon WMS, and doing that in a totally manual environment, because everything is part of a system, right? You can have a sortation system, or you can have a goods divergence system, or put wall system, or whatever. It's got a certain capacity, certain throughputs, inputs and outputs, whatever. Well, 20 workers walking around on a three-level case pick module, they're a system too, and they have inputs and outputs, and throughput, and expectations, and all that. You know, the one big difference is that with a more manual system, you can actually throw more bodies at it, and up to a point of diminishing returns, gain throughput from that area, whereas a heavily automated system, kind of its rate is its rate, and you're not going to do a whole lot to affect that. But this is what it... When you mentioned throughput, I mean throughput is everything, whether you're a plant, or whether you're a freight broker, or whether you're a warehouse. The stuff that goes out the door, the stuff that we can actually charge for, is what we want to do, so having a warehouse management system is great. Obviously, that was a big... By the way, I know there's certain warehouses, old ones, still don't even have that, but you're saying to really be as efficient and effective as you need to be in today's market, you need a warehouse execution system, that gets me the flow, gets me that throughput. Yeah. I mean, it may not be for everybody, and there's certain things you can do where you can take a core WMS and just add some select capabilities from a full-blown WES, if only a modest or... I'll call it a modest level of that kind of automation is necessary, so it's not necessarily for everyone, and I don't want to position it that way, but it's certainly something that you'll want to take a look at. Big boys need it. Yeah, sometimes you get to where you've got a significant number of workers, but even smaller operations, things like the automated release of work to the floor without the human being needing to be involved, that's going to be attractive even for a midsize operation for sure. So, first thing we need is we need to get into this... It's a WMS. That's a given. And you said there is incremental improvement for many years. Now you're starting to see big improvements, might even be driven by the market, that needed big improvements in recent years, and part of that is this WES. What else is there, part of that smart warehouse? Yeah, there's a whole bunch of stuff. Let me just first, just as a reminder, the automation, because automation is... Obviously, that ties to the labor shortage, and even just a couple years ago, it was very common to talk to DC managers or logistics executives, and automation wasn't necessarily very high on their radar. Today, almost close to 100% of the companies we talk to, even smaller companies, are looking at automation of some kind. Now, that can be big automation, where you've got traditional sortation systems that can be very large, goods-to-person systems, those kind of things, but there's also a lot of interest in lighter, more flexible, and less expensive technology, things like what are called put walls, and a huge interest in automated and autonomous. What's a put wall? Okay, so a put wall, in great simplicity, is a structure, a technique built on a structure, which is a module with a series of cubby holes or slots, and I could have one of these modules, I could have... We have one customer that has 80 of these modules, and what you do is you pick the orders, and then when you come to the put wall, you distribute the order, the picks excuse me, to the different orders that need that product. So I batch pick the product. I bring it either mechanically or manually to the put wall, and typically a series of lights says, "Okay, this cubby hole number three here needs one of this SKU. Put one in. This one needs two of that SKU. Put two in. This one needs one. Put one in." That process repeats itself until all of the items for a given order are complete within that cubby hole, and then at that point, a... And that's called putting. That's why it's called a put wall. It's because you're picking the order in batch, then you're putting it into the put wall, and then around the backside, lights will turn on that indicate, "This cubby hole is now complete," and the operator comes up and touches a button typically, and that starts the printing of the label and any shipping documentation that's required, and the order is packed and shipped, and off you go. It provides a tremendous amount of productivity, very flexible. You can start small. We had one customer that started with one put wall module, then added eight or nine more because they liked it, then they added 20 more because they really liked it. Did this all over a couple, three year type of period there. So for any kind of piece picking, especially of soft goods, but other types of products as well, but often driven by eCommerce, but not only by eCommerce, but any kind of heavy piece picking operation, put walls can be a great solution, but you've got to have the right software to do it. So you've got that big, like almost a shelf, and you said like cubbies on that, that I push... So I'm putting product through it, so I've got to put... So maybe I walked over and I got 10 sweaters that are all the same, and this cubby gets one, this cubby gets one, and as I do that, I'm scanning it or it's recognizing that it's in there, and it's informing the other side of the cubby that- When the order's complete. When the order's complete, so maybe it needs two sweaters and a pair of shoes, and that's That's correct. The bottom line is we are entering a new era where all technologies are, in fact, much smarter than we've ever had before. So that's just one more way. I mean, what do you call it? Is that part of... The technology is only part of it. The other piece of the cubby, the walking up to that, that's kind of... I could be putting those in bins in the old days, but this is putting that on steroids. Yeah, it's just a new way of doing it, and there's a lot of... We'll talk about this actually, in terms of optimizing materials handling systems, because to get this right is not a trivial task, and I don't want to steal all my thunder from later on, but the ability to rapidly turn these put walls, these cubby holes, is the whole key to the success. If it's taking you a long time to do that, you're not getting the throughput that's required, and probably wasting your time and money. But if you can rapidly turn those by making sure the inventory gets there on time, and efficient execution at the wall, on both sides of the wall, then you've got something that really can drive a lot of productivity. We've got, I don't know what the number is, it's quite a few customers now that are using put walls, and when we go out to some new customers, we've got some videos that show them in operation, and you can tell they're just really, really interested in seeing how this works. I think it's the technology, along with the mobile robots, that you're just going to see any kind of eCommerce, but any kind of piece picking as well, you're going to see a lot of adoption going forward. I can say this from... I'm an automotive guy originally. When you used to go through a plant, you would see people lifting heavy things when I first started, and crouching down, and doing functions that were hard on the body. And maybe it's not hard on them one day, or one week, or one month, but over one year, you're going to have a bad back, or bad shoulders, or bad knees. Same thing happens in these DCs, or the warehousing, so this automation you're talking about is making it easier on the workers, which means hopefully, I'll be able to keep my workers healthy and make that job, again, more attractive. Yeah. Just quick anecdote, I one time talked to a VP of logistics at, I think it was Sherwin-Williams, the paint company, and he noted that on the manufacturing side of the operation, they were always having people retire and throwing retirement parties for them, with some cake and whatever. He said there was no one that ever retired from the distribution side, and that's because the heavy work of picking cases of paint is a young man's job, so as people got older, they just couldn't do that work anymore. So I think people are obviously rethinking that, for... The aging population is another factor, but how do I make the work easier so I can have somebody in their 50s and 60s continuing to do this distribution center job. I think also, Dan, again I've said this once before on my... probably twice before on my podcast. If you gave me a choice to go work in an old-school warehouse or go deliver food or deliver groceries, I'm going to do the grocery delivery. I think I can make decent money, and I can sit in my car, and I don't have to hurt my back, or hurt my knees, or walk five miles a day. So we have to make these jobs more attractive, or we're not going to be able to keep and get good people. Yeah. There's no question about that, and I think this automation that is of such interest, the jobs now, they've become more like a technician and less of an order picker. I like it. Yeah. So besides a put wall, what's some other automation you're seeing out there? Well, again, I said the automated mobile robots, autonomous mobile robots, or AMRs, there's a huge interest in that. One of the interesting things is that both put walls and mobile robots, you're seeing a lot of adoption and interest by third-party logistics companies, and I think this really just makes the point. In the past, 3PLs were very reluctant to do any kind of heavy automation, because they couldn't sync the return on investment with the contracts that they had from the shipper, so if the shipper... To pay off that equipment's going to take five, seven, whatever years, and the shipper's only going to give you a two- or three-year contract. The risk of automation is just too great. Well, these other kind of systems, and that includes also things like voice, and pick-to-light smart cards, things like that. They're all kind of connected in some ways, but those kind of systems can be put in for much less expense, much lower risk, and again, be incrementally adapted. You can start with three mobile robots and see how you like it, and then add seven more later on or whatever, until you get to the optimal point for your operation. But the fact that 3PLs are making this kind of investment is a whole new phenomenon, and just speaks to the way you can incrementally get into the technology and the high-level payback that they're seeing, because we're very strong in the third-party logistics arena, just as an aside, so we're seeing it very closely, and the number of 3PLs that are interested in these kind of mid-range or lighter picking systems, not heavy automation, but other, it's often somewhat newer technologies, I think really just speaks to the changes we're seeing out there in the marketplace. Yep. And by the way, those robots, depending on the facility, they're not necessarily always replacing people, because I talked to the guys from... I think it was the CEO or the president from DHL. He says, "Well, we thought we would be replacing people with robots." He goes, "The more robots we add to a facility, the more work we end up getting for that facility, and we end up hiring more people." Yeah, and you know, it's just everyone has a shortage, right? So I mean, there's jobs going unfilled, so if the robots are taking some of that slack, if you will, but there are very few, if any, case studies of people adopting these technologies and they're still looking for people even after the automation, so- [caption id="attachment_7942" align="aligncenter" width="600"] The Smart Warehouse: WES (Warehouse Execution System) will help manage the flow of work and resource utilization.[/caption] Yep. So what's another thing we need for that smart warehouse, Dan? Well, I mean now let's just kind of get into it in some more detail. Really, and we talked about some of the core software components if you will, things like warehouse management systems, warehouse execution systems, but a platform for integrating these automation, both heavy and... or traditional and newer-age capabilities. We'll talk about that in just a second, and then there's some enabling technologies, things like rules engines, and a simulation, and some other things, so we'll talk about that, but I like to say the core warehouse operations excellence is still the foundation, right? So how do I get that right? That typically involves traditional WMS-type capabilities. What does that mean? Well, I mean what kind of defines a warehouse management system versus an inventory system is the pervasive use of mobile terminals, and barcode scanning, wireless RF devices, or whatever term you want to use there. And then a lot of system-directed activity, and this whole notion of task management and task monitoring, where the system kind of is orchestrating the different traditional tasks of put away, receiving put away, picking, replenishment, et cetera, and support for multiple strategies around that. I want to have lots of different picking method options, and want to have lots of different replenishment strategies that I can use. And then you know, things that have been around for a while, like slotting optimization, and detailed labor management, labor reporting, things like that. So the foundation really is core operations excellence. That's what everyone should strive to get to, but today, there's now ability to take that even further in terms of different types of capabilities that we think are defining what we're calling the smart warehouse. Yep, and you used a term there, that was integration platform. What am I integrating? Yeah, you're integrating primarily different materials handling technologies. That can be things we've had for a while, like conveyor transport and sortation. It can be some of these newer technologies, like robots and put walls. But the key really is, and again, we'll talk about this in just a second here, but the key really is how do I optimize the flow, so I don't have these islands of automation that are all doing their own thing? I recently talked to somebody in the apparel industry, and they have a very large and highly automated facility, I think somewhere down in the Atlanta area, like a million or two million square feet, and they're seeing their throughput from that building, after huge investments over years, certainly initially and then over time. They're seeing the throughput actually decline, and what's happening, he believed, is that business keeps changing. They keep having all these new requirements in terms of how an order needs to be processed, and what they do is they just keep building new wave types. We talked about wave planning before, and now they're up to like 70, 80 different wave types, and every time there's another problem, create wave type number 82, see if that solves our problem. That's not solving the problem, and part of the reason is because the system is not looking holistically across the facility, and seeing how I can optimize the flow of work as a whole, not as an individual subsystem. I think that's really part of what we're talking about here with the smart warehouse, and that's the kind of thing that traditional WMSs have not done. Yeah, so that integration platform, that means I can connect all my... So all the tools, all the different systems I'm using, all connect easily through that integration, as opposed to the old way, which is a standalone, $100,000 integration with expensive people who have to code. Yeah. That's certainly part of it, and then it's managing the flow of work across that. I'm maybe getting ahead of myself again here, but I'll just say for example, you can have some scenarios where I have different paths for an order to be fulfilled. One of the paths, and the most efficient for certain kinds of orders, is in fact maybe a group of put wall modules. But let's say that that put wall area, for whatever reason, starts to be congested, and all of a sudden now there's a big backup on the conveyor feeding into the put wall area. Well, the system is going to automatically recognize that, and for some period of time, route orders away from the put wall into manual cart picking, which takes them to the packing station, same packing area where the put wall [inaudible 00:33:11] leads. And then when the congestion is clear, then the system automatically reroutes that work back to the put walls again. So now you're looking not only at the plain integration, but actually in monitoring the flow of work that's happening and making realtime decisions accordingly. Yep. You know, I'm an automotive guy, and we had all of those years where we started... We used the term "smart factories," and it was just the same thing, how do we increase throughput? Because what can happen is you can end up with a local optimum, where some guys are building a big, big stack of inventory, and does nobody any good. What is all that excess inventory doing for me, right? What makes more sense is to say, "We're going to get this so there's a flow to it, and we're not building up too much inventory. There's no bottlenecks." I think this is kind of the same thing you're talking about here, is how do I arrange my people so I don't have these guys sitting around because they already finished, while these guys are, to your point, congested area? The core world's operations excellence is still the foundation. No, and that's really... The term flow manufacturing came out of exactly what you're talking about there, and was largely developed, initially, in the automotive industry, so we're talking about the same thing, and now we're talking about flow distribution instead of flow manufacturing, but the fundamental concepts, more of a pull-based system, more being aware of capacities and constraints, more concerned with the total flow of goods, not what's happening at one individual area. All those are very consistent, whether you're looking... The principles that were established earlier in manufacturing are what's being applied here today in distribution. Right, and I'm just going to assume that at one time, the WMS, a big selling point would be, "We'll tell you where your inventory is at," and that was probably a big step up, right? But today you go, "Of course it does that. Now I'm going to tell you how that inventory moves off of your shelves and out the door, and how you bring new inventory in." Yeah. It's amazing. We still see quite a few... I mean, every week we see somebody that's calling or emailing in, and then we talk to them, and it turns out they don't have that realtime visibility to inventory, because they're using some kind of paper-based system or something, so it's amazing, and sometimes these are even good-sized companies. But in general, yes you are right. Certainly anybody that's implemented any kind of tier one, or tier two level even, WMS should be having that realtime inventory visibility, and doing that, and that gets into that operations excellence I'm talking about. That's the foundation, right? I've got to know what I got, and where it is by lot, by batch, by serial number, by whatever attribute is important for your operation, or combination of attributes, or whatever. That's the foundation, but now we're saying, "Okay, how do we optimize on top of that, to just get more product out the door at a lower cost?" Yeah, it requires investment. I mean, having a WMS tells me, "Here's information," but it's not enough anymore, to your point, is we need all of this to get there. Yeah, and that's where kind of... You asked me about some of the components of the smart warehouse, and I talked about it from a kind of a product category perspective, but now I'm talking about it more from a almost philosophical and one of the things is one of the key foundations I that constraining condition awareness. What's happening in my building? What's happening with the flow of goods? One of the things that first really got me to understand WES in a deeper way is this notion that it's always on, listening and monitoring the environment. If you think about a traditional WMS, it's more sequential oriented. I receive product in, I put it away. I replenish pick sites. I do the picking. I take it to packing or value-added services. I put it in the receiving staging or shipping staging. I get it out the door. All very good, and a lot of companies don't have that, and organizing all of that, and automating, if you will, that is a big step forward. But we need to take it to the next level, so if you think about this notion of the system is always on, monitoring throughput and flow, so there's certain rates and certain throughput that I'm expecting, so I need to be able to have a flexible set of dashboards supported by event alerts and notifications that there is a problem, that says, "Here's what's happening across..." However I want to define it in that area, I can define an area as a case picking modules, as a whole three-level case pick module. I see that as one unit, and I want to know what the throughput is there. Maybe I want to see it at each level of that pick module, so I can see it more granularly. What's really nifty about this is that that new level of visibility to activity, and throughput, and bottlenecks, and alerts, and corrective action, automated, increasingly automated, if there are bottlenecks, but that provides a nice set of realtime dashboards, and really cool-looking stuff that people can see what's happening, "I have this many orders pending. Here's how many have been completed, or here's how many are in picking," or all of that kind of real level of detail. But to understanding what's going on here with the smart warehouse is the system is using that same data that's being exposed to managers and supervisors. That's what it's using to make decisions as well, and I cited that example of being aware of the backup that's happening in the put wall, and automatically for some period of time routing work around that until the congestion is cleared. That's what's really kind of different now about this kind of visibility and this kind of activity monitoring, and being able to flexibly do that at however you want to, again, define. Processing area could be evaluated, services, it could be piece picking. You know, all these things, and obviously now the design is that these different flows throughout the facility are in sync, okay? I'm not getting all backed up in packing, which is causing problems way back in picking and replenishment, because I haven't automated the visibility and I haven't automated the flow release in a way that's going to be cognizant and aware that I've got a problem here, and here's what I need to do about it for some period of time until it corrects itself, or suggesting, or just taking action, to solve the problem. You know what? You sent me a PowerPoint, and I have this up here, and it's got that realtime, configurable dashboards, and one of the things that always drives me crazy going to warehouses... Well, it's been a while since I've seen somebody hand me a piece of paper, but somebody handed me a piece of paper that had like 40 columns, and it was like an Excel spreadsheet or something. It maybe have spit out of a system, I don't know. But it had so much, and I looked at it. I was like, "What am I supposed to do with this?" I like the idea of being able to configure it for those KPIs that I care about. I don't want to measure everything. That's just me. Tell me the four, or five, or seven things that really matter, that tell me my warehouse is moving in the right direction, that things are working well. I see also, I'm just looking at it in here, it says, "Orders with issues." I also love the idea that I don't find out about the issues in next week's report. I find out about them real time. [caption id="attachment_7943" align="aligncenter" width="600"] The Smart Warehouse: One of the things that got me to understand WES in a deeper way is this notion that it's always on, listening and monitoring the environment.[/caption] Yeah, that's absolutely true, and then the point that you made actually, kind of a nice transition to this notion of another component we talked about, the realtime visibility to capacities, and constraints, and conditions out there, and then the always on nature of the WES, but now, also we talked about looking at a table of 40 rows of information or whatever, and what do I do. And it's all in the past, too. It's in the past, but I think it brings up a point there, which is today, even with higher-end WMSs, this is one of the learnings and insights that we have, there is still a tremendous amount of decision-making that is being done by human beings, so just as the manager or whoever you were talking about there in your example, staring at a 40-row spreadsheet or whatever, you see the same thing today, of managers and supervisors staring at computer screens, trying to figure out what the right thing to do is next. Here's the reality. Every time you do that, first off, you introduce some latency into the system, because it takes time to look at the different screens, and to think about it, and to make decisions, and scribble some things down on a piece of paper to remind you this needs to be taken care of or whatever, okay? And then simply, in most cases, there's no way a human being can make the optimal decision in the same way that a computer can, because even if you're a really smart guy or gal, there's just too much data, too much to try to process at one time. So part of the capabilities of the smart WMS is the much more advanced software-based decision-making, so things like order batch optimization. Given a given block of work, what's the best way to most effectively execute that out on the software floor? What we think is absolutely huge is this notion of the autonomous warehouse. That's a term Gartner has used, others have used it as well, but it talks about being able to automatically release work, without the need for a wave planner, or inventory expediters, or all the kind of people that you see often involved in these kind of decisions about what work to do when. So work is really sort of attributes, things like the order priority, the inventory and resource availability, what kind of optimization opportunities are there, you know? The bigger the order pool, the more optimization opportunities you have, because there are just more data to be optimized, conditions to be optimized, but also you've got... but you can't hold on so long that you're not getting the throughput out the door. Courier cutoff time, this is a huge one. I mean, even in sophisticated warehouses today, at 4:00 or 5:00, when the UPS or the FedEx or whatever truck is leaving, you often see... And we've made commitments that eCommerce is going to ship today. You see a certain amount of chaos going around, trying to figure out if all the orders that need to go on that truck have been on the truck and what to do about it. What we're talking about here, we're saying, "Okay, listen. We know this is the work. We know how long it's going to take to pick and transport that work, those orders, to the shipping dock or whatever," so the work is going to automatically release itself at the beginning of the day. We're more concerned about optimization. We've still got a lot of decent amount of time, so we can focus on doing it the most efficient we can, but as you go throughout the day, that needle starts to change from the focus on efficiency on cost to efficiency on customer service, and making sure those items are on there. And the system just does that automatically. It's configured to take those into consideration. So now those orders are getting on the trucks automatically, without the chaos, and without just the difficulty that's going on out there. This is just a whole new... This is step change capability here. I mean, we're talking about a system that's kind of self-learning and optimal how it releases work, and this is just not a concept we've had in distribution software before, and this is what really defines what we're calling the smart warehouse. Yeah, and it's interesting. I had a boss in the past, when I was young, and I remember I sent an Excel spreadsheet to him, and it told a story. I sent it to him, and he pulled me into his office, he says, "Joe, this is a great Excel spreadsheet." He says, "So I have to go through here and I have to come to the same conclusion you did," and I go, "Well, that's easy. You just look at the..." And he goes, "No, no, no." He goes, "When you send me this Excel spreadsheet, send me a recommendation. I don't want to have to come to a conclusion. That's your job. You could attach the data as backup, but give me a recommendation," and I feel the same way about running a warehouse. Don't make me figure it out myself. Give me an alert that says, "This is a problem." Say, "This is how many orders are at risk," right? "This is how many orders need to get on that truck that aren't done yet." Give me that. And just to show you, as a simple example, still a lot of people, especially for eCommerce, are doing manual cart picking, so I may have a cart that's got a certain configuration, three by three or four by four... What I mean by that, three by three would be three shelves that each have room for three cartons each, right? So I have nine total orders that I'm working on there. Well, most companies that we see do that today, they're doing it with paper picking, or pick by label, or something. There's some attempt to do that more efficiently, but just something as simple as cart picking. The smart warehouse can take it to a whole new level, so first off, you've got again, as I said, this order pool that's out there, and at any one point of time, and now I'm probably going to have done some cartonization logic there to determine what should go in what box, especially with a multi-carton order. In most cases, there's no way a human being can make the optimal decision in the same way that a computer can. Even if you're really smart, there's just too much data to process at one time. If you're shipping, just for example, you don't want to put perfume in the same carton as apparel, because of the obvious contamination that can happen there. But now somebody comes up, a picker comes up, and scans a barcode on that cart. The system's going to automatically know it's this configuration, three by three, four by four, whatever, and it will have done some optimization, typically in terms of what's called cluster picking, where I'm going to take that cart to one location, and then I will have put as many orders as I can on the cart, assigned to that cart, that have the same set of SKUs on them, so I can minimize my travel distance. Hopefully, I'm being clear on what that means. So now I get to that location that says... And this can be done with lights or it can be done with barcode scanning. It says, "Okay, take one of these from this location, put it in carton slot three one," which is the third shelf, the first location. The next one is three two, the next one is two three, the next one is two one, whatever that sequence is, right? So I'm doing that in a way that makes it very, very efficient. But we could take it even still beyond that. What if a high-priority order comes on? The picker is walking along. As long as there's a location on that cart, whether it's a carton or a tote they're picking into, if it hasn't been started, we can remove, automatically, a lower-priority order and insert a higher-priority order that has just come down onto that cart, as long as... We typically do it so the picker doesn't have to turn around and go backwards. As long as the picks for the new order are ahead of that picker, okay? And we do that without the picker even being aware that it happened. Yeah, so you can kind of expedite, automatically, like, "Hey, I got a truck that's going to be here in an hour and we haven't even started yet. Let's get this going." Yeah, or just maybe a customer... We say if you get an order in by 2:00, we'll ship it that day, and it's 1:58, and all of a sudden, an order just drops, right? I got two minutes, you know? Or whatever to do that, so the system's going to automatically insert a higher-priority order where possible. I like something you said in there, that we talked about the labor problem with these guys walking around maybe five, 10 miles in a day, and one of the reasons we're going to quit, especially if you're me. I don't want to walk that many steps. If you can optimize, so when I walk over there, all my orders are in the same area. Then I walk over here, and all my orders are there, as opposed to one order on one side of the warehouse, another order on the other side, where I'm walking and going, "What the hell has my life become, where I walk back and forth like this?" Yeah. Costly too. That gets into the order pool optimization as well, because the bigger the batch that I'm working with, the more opportunities I have to gang those picks together, so on a given cart, I'm maybe walking very few feet. And then, just to your point, this is where you get into the whole notion of mobile robots and whatnot too, because now perhaps I go to the pick location, I pick the order, but instead of putting it on a pick cart, I'm putting it on a mobile robot, and the mobile robot's going to move onto the next location, or onto packing if the order's complete, or whatever, so I'm walking very little at that point, or comparatively little, which is obviously one of the attractivenesses of the mobile robot technologies. Again, so this is hopefully it's becoming clear here. This is the nature of the warehouse is changing, and part of that's going to have to be to not only be more cost efficient and get more out the door with the staff that I've got, but it's making sure the people have a less miserable work experience, and hence hopefully are going to stay with us a lot longer. Man, this is not your grandpa's warehouse anymore, and I think to be competitive... It used to be like, "Wow, these guys are high tech because they have a WMS," and now we're starting to spin out the automation, and the warehouse execution, and the integration platform. This is all getting really high tech, and you think this was probably the lowest-tech business there was 25 years ago. Yeah. I mean, it's just inevitable, and how is that all going to play out? It's going to be interesting to see, but again, I think the lighter automation techniques, including the robots and the put walls, are just so attractive in terms of their flexibility and expandability, and now when you add... And there's, we'll maybe talk about it a little bit about this, but there's machine learning and artificial intelligence, all kind of things going into... involved here, so yes, the warehouses are becoming technology centers, and if you see the kind of private equity money that's flowing into robotics firms, and AI firms, and others, obviously a lot of the smart money thinks that's where it's headed too. Well, and also I think companies are starting to realize, retailers and other eCommerce companies, are starting to realize the importance of a real well-run warehouse. What's those guys, Quiet Logistics? They got bought by American Eagle. That was American Eagle recognizing, another traditional retailer, saying, "We're going to buy ourselves a warehousing company, because that's how important this business is." Yeah, and of course, Quiet was actually the force behind what has become Locus Robots, one of the big mobile robot vendors. That happened because Amazon had bought Kiva Systems right before that, and kind of left Quiet without a partner, they were building the business on, so they went out and invented their own robots, so yeah. [caption id="attachment_7944" align="aligncenter" width="600"] The Smart Warehouse: What's really different now about this kind of visibility and activity monitoring is being able to flexibly do that however you want to define a processing area.[/caption] Yeah, that's right. Bruce Welty was on my podcast. He's the founder of Quiet, and he said... I don't know when, a long time ago, he got a phone call saying, "Hey, you guys using those Locus Robots?" And he says, "Yeah. How do you like them?" "We like them a lot." And they said, "Can we come visit?" "Sure." It was Amazon. Amazon looked around, said, "We love this." They bought Locus, and then they stopped supporting... Or no, that was the other one. Or was that Kiva? I'm taking it back. That was Kiva. A couple of other things I'd like to just bring up about the smart warehouse. As much as broader use of some auto-ID-ish, or IoT-type devices. RFID is starting to make something of a comeback, years after the Walmart debacle in 2003, or 2004, or whatever, but certainly there is, I think, you're going to see many manual scanning activities that are going to disappear as RFID moves its way back now, from being implemented at the store level by customers concerned with eCommerce fulfillment, for inventory purposes. You're going to see it move back up into the distribution operations, so I think that will certainly be part of it. IoT, I mean, we're already doing things today, like for example, we're partnered with a pick cart. That's internet of things. Yeah, correct, obviously. A picker with a pick cart can walk up to a pick zone, and the IoT automatically recognizes it's this cart with this person on it, so it automatically turns on the lights, the pick lights that are on those four pick locations. It's a minor thing there, but that's just the kind of advancement we're going to see, and we've even done some stuff with kind of congestion management, and COVID or whatever, where we can actually tell exactly where somebody is in the aisle using IoT, and being able to assign work based on a realtime visibility to who's actually closest to that work, but also in a COVID area, being able to space people apart so that they don't get, say, within eight feet of each other, or whatever how that happens to be, whatever metric you want it to do, to use there for that, or constraint. So there's some very interesting things that can happen there. You know, this is still kind of slow-going. It hasn't taken off as fast as many people think, but I think you're going to see RFID and IoT start to make some real inroads over the next three years or so. Then, we have this notion, or follow the notion of Gartner on what's considered to be called conversational voice, so transactional voice is doing a picking or a palette build or something using voice technologies, and typically reading in a check location, check digit, and some of those kind of things, and doing a hands-free pick, or replenishment, or whatever the task might be, but we're starting to get now into more of a dialogue, so we're already to the point now where we can have a supervisor take a smart phone and say, "Hey, show me how I'm doing on wave number 235," or whatever, and then over a smart phone, that's going to bring back exactly what's happening now, or, "Where's our replenishment for location 3652," or whatever. So we're still early in this game here, but certainly we'll move to more of a dialogue going on with the WMS and WES than just plain transactional voice type technology. We think this is very exciting, and where the future interface of the software is going to really head. Yep, and this is where that integration platform you talked about comes in handy, so I can connect to all this stuff. The new killer app that comes out, I can get it. Yeah, and you know, we've done a lot there, so automation and optimization of materials handling systems is certainly a key part of this. I mean, we really refer to it not just as the smart warehouse of the future, but actually the smart automated warehouse of the future, due to the interest in the technologies we've talked about several times already today, so we can directly connect with these picking subsystems, like walls, like pick-to-light, like voice, like whatever, without the need for third-party software. Everyone else uses some kind of software from the put wall vendor, or from the pick-to-light vendor, or from the voice vendor, or whatever. Adds another layer of integration, adds another layer of cost, and it often results in people operating in kind of silos. We can directly control a lot of these materials handling technologies, and it allows you to operate those and optimize those in the context of everything that's happening in the warehouse, and all the information that's available, which just provides you a lot of benefits over time, because again, you're not just trying to operate in silos. I talked to somebody that was using a pick-to-light system the other day, a couple months ago I guess, and they talked about how at the end of every week, they've got to go in and clean up all these picks that somehow never happened, never were executed in the pick-to-light system, and, "I'm not quite sure why that is," but it just wouldn't happen with the way we're approaching things, because we would be aware of that. It probably is waiting on a replenishment or whatever. The problem is, the pick-to-light vendor doesn't do replenishment. The WMS vendor does it. So you've got these kind of silos going on here, and there's a lot of opportunities, and in terms of that integration platform, we think this is especially true for mobile robots. People are using the mobile software of the mobile robots, but what that does is it limits, again, sort of the total optimization that can be achieved, but more importantly, you're now totally dependent on that robot software, and what if you want to add different robots? Or what if you want to change horses three years from now? Or there's a better mouse trap, or faster, or whatever that happens to be. Now you can become locked in, so what we think the market really needs is a mobile robot and broader automation integration platform, almost like an operating system for automation in the warehouse, that's going to allow you to have visibility to and optimization of robots of different kinds from the same manufacturer, of different types for different manufacturers, so you're not locked in. It's like a plug-and-play type environment here. We refer to it not just as smart but the smart automated across to the future. Three years from now, you can keep the robots you have if you want, keep the 10 that you bought, but now you want to add five more from a different vendor. Plug them into this operating system, and have instant connectivity and the ability to optimize for performance. We just think that's the much more low-risk approach going forward than locking yourself into a vendor today, the software that's coming from the robot vendor. Yeah, and I think, let me get back to the idea of a smart warehouse, it's all about throughput. If I have different systems, that are connecting, that are doing local optimums, that's a problem, because it's not supporting throughput. So I always need that one... I'll call it the one source of truth. That's the main system, to say, "This is all about getting stuff out the door here," and so- Yeah, I wanted to bring up just one... I think earlier in the broadcast, I talked about wanting to give an example with the put wall. We've talked about put walls several times now, but again, I referenced that the whole key is to turning over those put walls. Well, here's the kind of scenario that... The cubby holes in the put walls. Here's the kind of scenario we're seeing, where let's say there's a three line item eCommerce order, and two of those line items on the order come from a cart and flow rack area that's very close to packing. I mean, those orders are efficient to pick and short distance to transport. If you don't do anything else, and the third line item is actually coming from a slow-moving mezzanine pick area, that's farther away and is less efficient to pick. If you don't do anything otherwise, what's going to happen is those first two items from that order are going to show up rather quickly, and then they're going to sit, and wait, and wait, and wait, and they're going to wait 10 minutes, 15 minutes, 20 minutes, 45 minutes, whatever it happens to be, for that third item on the order to finally show up. That cubby hole's been tied up that entire time. What's the smarter warehouse way of doing it? What's the WES way of doing it? It would be to recognize that difference. Let's say it's 25% slower to go through the mezzanine or whatever the number you want to use is. We would release just that third line item in effect 25 or 30% earlier, and then after the time it takes to pick and transport that, as it's on its way to the pack station, now we release the other two orders, line items, just for the cart and flow rack, so voila, they show up at the put wall for processing at relatively the same time, and now I'm able to turn that wall without the latency that would occur if you didn't have smart software to do that. So hopefully that's an example that makes it somewhat clearer as to how the optimization really can affect operational performance. You would never be able to get that done manually. Just doesn't happen. Man, this is like drinking from a firehouse. This is so much going on in this. So, Dan, put a bow on this bad boy. Give us your final thoughts on this. What do I need to get to have that smart warehouse? Yeah, well I mean, first off, it provides a ton of benefits. It's going to reduce labor costs. You're going to have higher and more consistent DC throughput. You're going to reduce your need for automation, in terms of things like the number of diverts, or get more throughput out of the automation you have there. We didn't talk much about labor planning today, but that's a big part of it. You can dynamically assign workers throughout the course of a shift, from one hour, 8:00 to 9:00, 9:00 to 10:00, 10:00 to 11:00, wherever they're needed most and in what quantities. Improved automated decision-making, we talked about all that. So you know, it's really just an assessment, and certainly if you're heavily automated, there's a lot of opportunities for you, but as I tried to make the point earlier, even if you're only modestly automated or not automated at all, these things, these capabilities can have some real benefit for your operations. I think the important thing to note, related to Softeon, is these can be implemented very incrementally. I could implement a traditional WMS, and let's say I just want the labor planning and allocation part of it, as I just talked about a second ago. We can take that capability from WES and just, if you will, attach it to the WMS, to give you a solution. Conversely, if you want to implement WES and leave your existing WMS in place, we didn't talk much about that today, but that's a key dynamic. But you need cartonization, which is a warehouse management function. You can just attach, if you will, cartonization to that WES implementation, so flexibility is key. That's what we try to design. We call it a share component library, that the applications can borrow components, and functionality, and services from each other, and we're pretty confident that give us a chance to understand what you're trying to accomplish, and what your operation's like, or whatever, that some combination of these technologies are going to have a pretty good fit and really take your warehouse to a whole new level than we've seen over the last 20 years. Excellent, excellent. Well, man, it has changed a lot. Dan, what's new over at Softeon? What conferences you guys going to? What's new over at- Yeah, so we just got done with the MODEX show a few weeks ago, and it was a big success for us. We not only showed the smart warehouse, kind of presented the smart warehouse capabilities. We actually had a lot of equipment, pick wall, pick-to-light, other technology, packing stations, et cetera, right in our booth, and at the bottom of every hour, we did a presentation, had consistently good traffic the whole time, and then we actually did a... They have an educational track. We actually did a session on the smart warehouse of the future, available on Softeon today. It was very well attended, so that was good. We'll be at the Gartner Supply Chain Symposium. I think it's early June, down in Orlando, and then kind of a break after that, but we just finished up a series of broadcasts, educational broadcasts, called The WMS Bootcamp, six different sessions from everything from building the business case to how to implement successfully. [caption id="attachment_7945" align="aligncenter" width="600"] The Smart Warehouse: Even if you're just modestly automated, these capabilities can have some real benefits on your operations. These can be implemented very incrementally.[/caption] It was a huge success, but all that's now available on demand. If they go onto softeon.com, you'll be able to find some links to that, and I think if you have any interest in WMS any time soon, or even mid term, this will be... They're noncommercial educational sessions. I think you'll find they add a lot of value. The feedback we got on it was outstanding. Dan, what I'll do is I'll put a link to those. If you give me the link to those WMS Bootcamp, I would like to watch it myself, because I think this... We just went over this, and it has gone from simple to just more complex over time, and you know, you guys are simplifying it, but to understand what's required requires a bootcamp. Well, there's just a lot of... We wrote a lot of lessons over time, and I brought in some consultants and people that I knew really knew what they were talking about, in terms of like building the business case. We had some folks from Invista that came on and did that, and I just had some experience there, exposure, I knew they knew what they were talking about. I assume that applies to some other consultants as well, so it's a real nice series. It's noncommercial. If you want to learn some tips about how to get WMS selection and implementation right, I think you'll find the bootcamp serves you well. How do we reach out and talk to you over at Softeon? Yeah, easiest way to get to me is just via email. My email address is just DGilmore@TheSofteon.com. You can also use contact@softeon.com for just the general inquiry box, but love to hear from you. Hopefully came across that I at least know a little bit about what I'm talking about, and I'd love to discuss your problems as well. Yep. And what I'll do is I'll put a link to your LinkedIn profile and also a link to Softeon's website, and anyone who wants to reach out can reach out and talk to you about the smart warehouse. Thanks, Joe. I really enjoyed it. It was a great conversation. Thank you. Thank you so much, Dan, and thank all of you for listening to my podcast. Your support's very much appreciated. Until next time, onward and upward. Important Links Softeon Supply Chain Digest WMS Bootcamp DGilmore@TheSofteon.com Contact@Softeon.com https://www.linkedin.com/company/softeon The Logistics of Logistics Podcast If you enjoy the podcast, please leave a positive review, subscribe, and share it with your friends and colleagues. The Logistics of Logistics Podcast: Google, Apple, Castbox, Spotify, Stitcher, PlayerFM, Tunein, Podbean, Owltail, Libsyn, Overcast Check out The Logistics of Logistics on Youtube

Supply Chains in VUCA Environments with Jim Tompkins Jim Tompkins and Joe Lynch talk about Supply Chains in VUCA Environments. Jim is the Founder and Chairman of Tompkins Ventures, a partner firm that helps executive teams address five main problems: entrepreneurial growth, industrial development, leadership, logistics partnerships and technology. About James A. Tompkins, Ph.D. Dr. James A. Tompkins is the Founder and Chairman of Tompkins Ventures. Jim Tompkins is an international authority on designing and implementing end-to-end supply chains. He is a serial entrepreneur who has started several businesses; worked with private equity; designed many industrial facilities and automated materials handling systems; implemented many supply chain information technology solutions and worked to enhance the performance of many 3PLs and 3PL clients. Earlier in his career, Jim founded Tompkins International. During his tenure as at Tompkins International the company evolved from a supply chain consulting firm into an end-to-end supply chain consulting and solutions company, with business units focusing on supply chain consulting, material handling integration, and robotics. His 40-plus years as CEO of Tompkins International and his focus on helping companies achieve profitable growth give him an insider's view into what makes great companies even better. Jim received his Bachelor of Science in Industrial Engineering in 1969, his Master of Science in Industrial Engineering in 1970 and his Ph.D. in 1972, all from Purdue University. About Tompkins Ventures A partner firm that helps executive teams address five main problems: entrepreneurial growth, industrial development, leadership, logistics partnerships and technology. Founded by business strategy and supply chain expert Dr. James A. Tompkins in 2020, Tompkins Ventures has more than 60 partners who have all held executive positions. Each of the selected partners have a passion for helping organizations turn one or more of the above big problems into a competitive advantage for their company. Tompkins Ventures is headquartered in Raleigh, NC with partners spanning Africa, Asia, Australia, Brazil, Canada, Central America, China, Germany, Indonesia, Israel, Panama, Mexico, United Arab Emirates, United Kingdom, United States. Key Takeaways: Supply Chains in VUCA Environments VUCA Environments VUCA stands for Volatility, Uncertainty, Complexity and Ambiguity. How to handle VUCA environments and unprecedented times. Covid-19 is VUCA, a "black swan" event. What happens to Supply Chains in a VUCA Environment? VUCA can also be hurricanes, wildfires, social evil, political issues, and others. It's not just one event; it's a combination of many. 2021: Uncertainty about uncertainty. Supply chain: the art and science of synchronizing supply and demand. COVID and the associated VUCA forced us to completely redesign what we do and how we do it. The supply chain strives for control and predictability, the opposite of VUCA. Finding solutions that can adapt to VUCA environments. How to be more resilient? Understand what visibility and awareness entail. Creating a many-to-many network. Embrace a digital supply network. Visibility needs to lead to actionability. Connect the process through artificial intelligence that can address the problem. Deploy machine learning to create rules and guidelines. Create agility with AI to work through VUCA environments. Supply chains instead of supply chain Be aware that every product has it's own unique supply chain. Reshore and nearshore supply chains and manufacturing to increase resiliency – the anti-brittle supply chain. Focus on optionality as optimality is obsolete with VUCA. Learn More About Supply Chains in VUCA Environments Jim's LinkedIn Tompkins Ventures LinkedIn Tompkins Ventures The Mandate of Supply Chain Resilience 2020 – It was one heck of a decade The Logistics of Logistics Podcast If you enjoy the podcast, please leave a positive review, subscribe, and share it with your friends and colleagues. The Logistics of Logistics Podcast: Google, Apple, Castbox, Spotify, Stitcher, PlayerFM, Tunein, Podbean, Owltail, Libsyn, Overcast Check out The Logistics of Logistics on Youtube

What Will Tomorrow's Freight Broker Do with Ben Buchanan Ben Buchanan and Joe Lynch talk about what tomorrow's freight broker will do. Ben is VP of Account Management at Loadsmart, which is transforming the future of freight, they leverage artificial intelligence, machine learning and strategic partnerships to automate how freight is priced, booked and shipped. About Ben Buchanan Ben Buchanan is VP of Account Management at Loadsmart, leading a team of account managers and sales representatives focused on growing relationships with enterprise and small/medium enterprise shippers by providing additional value to address their unique challenges. Ben has a decade of experience in freight brokerage across various leadership roles, building best-in-class teams for high growth and scalability while delivering for the customer. He earned his logistics stripes at GlobalTranz, learning the business and riding the fast growth wave to impactful leadership positions, and under Buchanan's leadership at Loadsmart the account sales team has grown in headcount by 860% and in revenue by 578% (1H YoY 2020 - 2021). Ben holds a BA in Political Science from Arizona State University and currently sits on the Board of Directors for the American Charter School Foundation. Prior to GlobalTranz he worked as an educator and high school basketball coach. About Loadsmart Transforming the future of freight, Loadsmart leverages artificial intelligence, machine learning and strategic partnerships to automate how freight is priced, booked and shipped. Pairing advanced technologies with deep-seated industry expertise, Loadsmart fuels growth, simplifies operational complexity and bolsters efficiency for carriers and shippers alike. Key Takeaways: What Will Tomorrow's Freight Broker Do Ben Buchanan is the Vice President of Account Management at Loadsmart, a digital freight brokerage that leverages cutting-edge technology and strategic partnerships to help shippers and carriers move more with less. The freight brokerage space is rapidly transforming as digital freight brokerage companies like Loadsmart deploy technology to automate processes, reduce cost per load, and deliver a superior customer experience. In the interview, Ben describes 5 things that freight brokers will be expected to do in the very near future. Of course, some of the industry leaders like Loadsmart are delivering these innovations today. Instantaneous freight quotes created by a dynamic pricing tool that delivers the right price with guaranteed capacity. No more back and forth emails and phone calls haggling over pricing. Dynamic pricing powered by artificial intelligence provides an instant rate that reflects the most updated market intelligence. Mode optimization automatically included in each quote. Mode optimization has traditionally been promised, but not delivered because the analysis was completed by people who didn't have the data or tools. Now, mode options with instantly bookable rates across modes including rail, LTL, PTL, and FTL, enable shippers to optimize shipments based on sustainability, cost, and expediency. Data insights that enable shippers to learn from not just their own data and insights — but from each other. To achieve best in class performance, shippers need to be able to compare their KPIs to their industry peers. Additionally, brokers must be able to analyze shipment data and provide actionable data insights that drive operational improvement across the entire shipping function. Rate transparency that empowers the shipper to know exactly what they are paying for. As digital freight brokers automate and streamline the shipping process that was traditionally managed manually, the value added has changed. In the new model, freight brokers won't be rewarded financially for getting a big spread (cost of truck vs price to shipper). Instead, new pricing models and incentives have evolved that align the shipper and broker. Shift to digital means that freight brokers will need to find new ways to add value to both shippers and carriers. To deliver a superior customer experience, freight brokerages will need to provide the best of tech and the best of people. Learn More About What Will Tomorrow's Freight Broker Do Ben Buchanan LinkedIn Loadsmart homepage Enterprise Shipper Small Business Shipper Carrier Beyond Cost Per Load with Felipe Capella The Logistics of Logistics Podcast If you enjoy the podcast, please leave a positive review, subscribe, and share it with your friends and colleagues. The Logistics of Logistics Podcast: Google, Apple, Castbox, Spotify, Stitcher, PlayerFM, Tunein, Podbean, Owltail, Libsyn, Overcast Check out The Logistics of Logistics on Youtube

5 Trends Shaping Logistics with Ben Gordon Ben Gordon and Joe Lynch discuss 5 trends shaping logistics and supply chain. In the interview, Ben reviews and discussed trends and interesting companies in ecommerce, final mile, cold chain, reverse logistics, and fulfillment. About Ben Gordon Benjamin Gordon is the Founder and Managing Partner of Cambridge Capital. He draws on a career building, advising, and investing in supply chain companies. Benjamin has led investments in outstanding firms including XPO, Grand Junction, Bringg, Liftit, and others. As CEO of BGSA Holdings, Benjamin has spent his career investing in and helping to build supply chain and technology companies. Benjamin led the firm's efforts, advising on over $1 billion worth of supply chain transactions. Benjamin has worked with firms such as UPS, DHL, Kuehne & Nagel, Agility Logistics, NFI Logistics, GENCO, Nations Express, Raytrans, Echo Global, Dixie, Wilpak, and others. Prior to BGSA Holdings, Ben founded 3PLex, the Internet solution enabling third-party logistics companies to automate their business. Benjamin raised $28 million from blue-chip investors including Morgan Stanley, Goldman Sachs, BancBoston Ventures, CNF, and Ionian. 3PLex was then purchased by Maersk. Prior to 3PLex, Benjamin advised transportation and logistics clients at Mercer Management Consulting. Prior to Mercer, Benjamin worked in his family's transportation business, AMI, where he helped the company expand its logistics operations. Benjamin received a Master's in Business Administration from Harvard Business School and a Bachelor of Arts degree from Yale College. About Cambridge Capital Cambridge Capital is a private equity firm investing in the applied supply chain. The firm provides private equity to finance the expansion, recapitalization or acquisition of growth companies in our sectors. Our philosophy is to invest in companies where our operating expertise and in-depth supply chain knowledge can help our portfolio companies achieve outstanding value. Cambridge Capital was founded in 2009 as the investment affiliate of BG Strategic Advisors (www.bgsa.com), the advisor of choice for a large, growing number of supply chain CEOs. Cambridge Capital leverages BGSA's unique approach to strategy-led investment banking for the supply chain. BGSA is known for its work helping companies achieve outsized returns via targeted acquisitions and premium sales processes, and has worked with category leaders such as UPS, DHL, Agility Logistics, New Breed, NFI, Genco, Nations Express, Raytrans, and others. Our relationship with BGSA gives us deep market expertise, access to outstanding deal flow and people flow, transactional capabilities, additional resources, and a powerful core competency in the supply chain sector. The Partners and Advisory Board members of Cambridge Capital have diverse backgrounds with complementary technical, operating and financial expertise. The Cambridge Capital team has spent their careers building, growing, and advising outstanding companies in the supply chain sector. They include former leaders of UPS Logistics, Ryder Logistics, ATC Logistics, APL Logistics, Kuehne + Nagel, and other globally recognized firms. Cambridge Capital's professionals know what it takes to build great companies. Key Takeaways: 5 Trends Shaping Logistics with Ben Gordon In the podcast, Ben reviewed the following 5 trends shaping logistics: Ecommerce Ecommerce has not only reshaped logistics, but it is also has reshaped the entire economy. According to McKinsey, 10 years of e-commerce adoption was compressed into three months. Because of explosive growth of ecommerce, small parcel companies, UPS, FedEx and DHL experienced exceptional growth. The U.S. Postal Service and Amazon have also seen huge growth in shipments due to the growth of ecommerce. Returns and reverse logistics Traditional retailers experience 6-8% of sales to be returned. Ecommerce sellers have returns of approximately 30%. Returned items are a major pain point for both sellers and logistics providers because they are unplanned, very expensive, and difficult to manage. To address the returns and reverse logistics challenge, companies like ReverseLogix have created reverse logistics technology that reduces costs and enhances the customer's experience, while increasing inventory recovery and visibility into the reverse logistics life-cycle. Last mile Last mile or final mile is perhaps the most important and difficult part of direct-to-consumer (DTC) shipping. Last mile accounts for 41% of the cost of business-to-consumer shipping. Amazon has raised customer expectations with a superior DTC experience that many companies will fail to replicate. In response, firms like Bringg are helping their clients deliver a last-mile experience that is comparable to the Amazon experience. Delivery software and service companies like Delivery Circle are helping companies leverage technology to make local delivery service more efficient and profitable. Ecommerce fulfillment Ecommerce fulfillment is the backbone of the direct-to-consumer supply chain and to successful, fulfillment companies must excel at both technology and warehousing & logistics. Many companies entering the fulfillment space from a technology background struggle with warehousing, logistics, and operations, while traditional warehousing & logistics companies may initially lack the technical expertise. Medical logistics and cold chain During COVID, the importance of the medical logistics and supply chain was highlighted especially in the areas of the cold chain. The lack of adequate cold chain infrastructure is proving to be a problem in the developing world. Cold chain monitoring and compliance is an area primed for growth. Learn More About the 5 Trends Shaping Logistics Ben Gordon Cambridge Capital 2021 BGSA Holdings Supply Chain Conference 2021 BGSA Holdings Supply Chain Conference – Welcome Remarks from Ben Gordon Related Podcasts Faster, Better Freight Quotes with Dawn Salvucci-Favier Alternatives to UPS and FedEx The Logistics of Logistics Podcast If you enjoy the podcast, please leave a positive review, subscribe, and share it with your friends and colleagues. The Logistics of Logistics Podcast: Google, Apple, Castbox, Spotify, Stitcher, PlayerFM, Tunein, Podbean, Owltail, Libsyn, Overcast Check out The Logistics of Logistics on Youtube

The REFASHIOND Ventures Story with Brian Aoaeh Brian Aoaeh and Joe Lynch discuss the REFASHIOND Ventures story. Brian is the a Cofounder and General Partner of REFASHIOND Ventures, an emerging venture capital fund manager that invests in early stage supply chain technology. About Brian Aoaeh Brian Aoaeh is a Cofounder and General Partner of REFASHIOND Ventures, an emerging venture capital fund manager that invests in early stage supply chain technology. Prior to REFASHIOND, Brian acquired 10 years of experience in investment research and management, with 8 of those years spent building KEC Ventures from scratch. KEC Ventures is an early-stage technology venture capital firm with $98M of AUM across 2 funds, and 51 investments. Before KEC Ventures he joined KEC Holdings - a single family office, as the first member of its investing team. He joined KEC Holdings after serving as the statistical research and strategy analyst in Global Diversity and Inclusion at Lehman Brothers in New York, NY. Before his tenure at Lehman, he worked at UBS AG in Stamford, CT as the statistical research analyst in Group Diversity. Prior to UBS, he was a pension actuarial analyst at Watson Wyatt Worldwide (now Willis Towers Watson). He was a junior auditor at Issifu Ali & Co. Chartered Accountants, in Accra, Ghana between completing his secondary school education and commencing undergraduate study in the United States in 1997. Brian holds a BA with a double major in Mathematics and Physics from Connecticut College in New London, CT. During his undergraduate study he spent three years as a research assistant in the Tunable Diode Laser Spectroscopy Laboratory at the Connecticut College Physics Department - including multiple collaborative investigations at NASA Langley Research Center; He is a co-author of five articles that have been published in refereed journals. He earned an MBA, with a specialization in Financial Instruments and Markets, from the Leonard N. Stern School of Business at New York University in New York, NY. He is a CFA Institute charter holder. He is also an adjunct professor of supply chain and operations management in the Department of Technology Management and Key Takeaways: The Refashiond Ventures Brian Laung Aoaeh is the a Cofounder and General Partner of REFASHIOND Ventures, an emerging venture capital fund manager that invests in early stage supply chain technology. In the podcast interview, Brian describes his entrepreneurial journey and his own personal story as an immigrant to the USA. Refashiond champions companies refashioning supply chains. Refashiond Ventures is raising an early stage supply chain technology fund, sourcing deals from The Worldwide Supply Chain Federation's network of 33,000+ innovators, whilst leveraging their operating experience, and strong engagements with corporate limited partners as both investors and market-validating customers of their portfolio companies. The Refashioned team believes that supply chains are being refashioned for the following reasons: Unprecedented convergence is occurring due to digitization. Global trade and consumption are increasing. Sustainability Learn More About The Refashiond Ventures Brian's LinkedIn Brian's Twitter Brian's Personal Blog REFASHIOND Ventures LinkedIn REFASHIOND Ventures The Worldwide Supply Chain Federation Booklet - The World is a Supply Chain The Logistics of Logistics Podcast If you enjoy the podcast, please leave a positive review, subscribe, and share it with your friends and colleagues. The Logistics of Logistics Podcast: Google, Apple, Castbox, Spotify, Stitcher, PlayerFM, Tunein, Podbean, Owltail, Libsyn, Overcast Check out The Logistics of Logistics on Youtube

Rail 101 with Ian Jefferies Ian Jefferies and Joe Lynch discuss Rail 101. Ian is the President and Chief Executive Officer of the Association of American Railroads (AAR) which is the world's leading railroad policy, research, standard setting, and technology organization that focuses on the safety and productivity of the U.S. freight rail industry. About Ian Jefferies Ian Jefferies is the President and Chief Executive Officer of the Association of American Railroads. (AAR). Jefferies advocates for and works with member railroads to ensure the continued viability of America's railroad industry. Before joining the AAR, Jefferies cultivated more than a decade of experience working within government. From 2009 to 2013, Jefferies served as a senior policy advisor to the Chairman of the U.S. Senate Committee on Commerce, Science and Transportation. In this role, Jefferies provided policy guidance on a host of transportation issues, including railroad economic regulation, rail safety and passenger rail. Jefferies also led the successful development, negotiation and reauthorization of major infrastructure legislation and managed the successful conference of Committee legislation relating to the 2012 surface transportation reauthorization law, MAP 21. Jefferies began his career in government serving as a Senior Advisor to the Mayor of Lexington, Kentucky, before transitioning to the federal government. Prior to serving in the United States Senate, he worked for the U.S. Department of Transportation, Office of the Inspector General and the U.S. Government Accountability Office. In these roles, Jefferies led program reviews on a variety of issues including infrastructure development, international trade, major weapon systems acquisition and federal contracting. Education. Jefferies received his Master of Science in public policy and management from Carnegie Mellon University in Pittsburgh, PA and his Bachelor of Science in economics from the University of Kentucky in Lexington, KY. About Association of American Railroads America's freight railroads operate the safest, most efficient, cost-effective and environmentally sound freight transportation system in the world — and at the Association of American Railroads (AAR) we are committed to keeping it that way. Operating over a private, 140,000 mile network stretching across the far reaches of North America, AAR members include the major freight railroads in the United States, Canada and Mexico, as well as Amtrak. Working with elected officials and leaders in Washington, D.C. on critical transportation and related issues, AAR ensures that the freight rail industry will continue to meet America's transportation needs today and tomorrow. As the standard setting organization for North America's railroads, AAR is also focused on improving the safety and productivity of rail transportation. AAR helps advance these goals through its two subsidiaries, the Transportation Technology Center Inc.(TTCI) and the Railinc Corp. TTCI is the world's leading research, development and testing facility, and develops next-generation advancements in safety and operation efficiency. Railinc serves as the rail industry's leading resource for rail data, information technology and information services, and uses one of the world's largest data networks to track customer shipments. AAR also supports the Railroad Research Foundation (RRF), a world-class policy research organization dedicated to sustaining a safe, secure and technologically advanced rail network. Key Takeaways: Rail 101 Ian Jefferies is the President and CEO of the Association of American Railroads (AAR) which is the world's leading railroad policy, research, standard setting, and technology organization that focuses on the safety and productivity of the U.S. freight rail industry. In the podcast interview, Ian provides an overview of the railroad industry for people not familiar with the rail business – Rail 101. Investing in Tomorrow America's freight railroads are the most productive and cost-effective in the world — and they are getting even better through strategic investments. Railroads are evolving, providing customers a competitive edge in the global economy of the future. America's freight railroads are almost entirely privately owned and operated. Unlike trucks and barges, freight railroads operate overwhelmingly on infrastructure that they own, build, maintain and pay for themselves. Approximately 630 freight railroads operate across the nearly 140,000-mile U.S. freight rail network. The seven "Class I" railroads — railroads with 2019 revenue of at least $505 million — account for around 68% of freight rail mileage, 88% of employees, and 94% of revenue. Each Class I railroad operates in multiple states over thousands of miles of track. Non-Class I railroads (also known as short line and regional railroads) range in size from tiny operations handling a few carloads a month to multi-state operations close to Class I size. AAR represents the entirety of the rail industry – Class Is, short lines, suppliers and passenger railroads. AAR focuses primarily on freight rail. AAR ultimately serves their members and works to be their unified voice – particularly in Washington Learn More About Rail 101 Ian's LinkedIn AAR LinkedIn AAR website AAR Twitter The Logistics of Logistics Podcast If you enjoy the podcast, please leave a positive review, subscribe, and share it with your friends and colleagues. The Logistics of Logistics Podcast: Google, Apple, Castbox, Spotify, Stitcher, PlayerFM, Tunein, Podbean, Owltail, Libsyn, Overcast Check out The Logistics of Logistics on Youtube

Wine Logistics with Andrew Walleck Andrew Walleck and Joe Lynch discuss wine logistics. Andrew is the COO of Wine Access, the leading online direct-to-consumer wine platform offering the world's most coveted wines. About Andrew Walleck Andrew Walleck has 16 years of experience in Operations, Strategy, Merchandising, and eCommerce across a variety of industries. A Kellogg MBA grad, Andrew spent 8 years with McMaster-Carr, one of the country's foremost innovators in Operations, serving seven different senior leadership roles as well as a Merchandiser for a company in one of the largest product categories. Prior to that, he was a management consultant to Corning, Inc., Eaton, and others. Andrew has his WSET Level 3 and is currently studying for his WSET Level 4 Diploma. Andrew also developed his own wine label prior to joining Wine Access. About Wine Access Founded in 1996, Wine Access is the leading online direct-to-consumer wine platform offering the world's most coveted wines. As one of the earliest adopters of ecommerce and DTC offerings in the digital wine space, Wine Access curates high quality wines from every wine region around the globe, creating more accessible ways to enjoy wine that extend beyond the bottle. Wine Access' Master of Wine, Master Sommelier, and team of industry experts taste over 20,000 wines a year, offering only those that exceed the expectations defined by their prices. Through Wine Access' network of family-owned, legendary winemakers, and coveted marquees, customers have access to an inspiring curation of unique and often unattainable wines. To build a deeper understanding and connection to each bottle, every shipment includes original tasting notes, flavor profiles, pairing recommendations, and compelling original stories that capture the authentic personality, passion, and philosophy of the producer. Wine Access also offers a Wine Club membership that unlocks access to rare and highly coveted wine selections from every major wine-growing region around the globe four times a year. In 2021, Wine Access was named the official wine provider of the MICHELIN Guide. Key Takeaways: Wine Logistics Andrew Walleck is the COO of Wine Access, the leading online direct-to-consumer wine platform offering the world's most coveted wines. In the interview, Andrew and Joe discuss wine logistics and why it is so challenging. The biggest problems in regards to wine logistics and delivery are: Every state has their own laws regulating alcohol and it's delivery. Wine is an adult transaction so ensuring that the wine is received by an adult is critical. The quality and flavor of wine is potentially impacted by vibration, temperature, and other environmental conditions. Managing the uneven supply and demand is difficult. Wine makers take great pride in their products and they see themselves more as artisans as opposed to manufacturers – so they typically won't rush or send wine they are not proud of. Since wine delivery is so challenging, Wine Access has developed an online direct-to-consumer wine platform that incorporates the best practices for temperature control, security, visibility, and delivery. Wine Access makes it easy to discover and enjoy the world's most inspiring wines through expert curation, storytelling, and perfect provenance—satisfaction guaranteed. The Wine Access Teams is headquartered in Napa, California and includes a Master of Wine, a Master Sommelier, and a selective crew of industry experts who have made in-roads in every major corner of every wine region around the globe. The company's connections unlock access to the most exclusive wines, from first growth Bordeaux estates to Napa cult icons and exciting discoveries along the way. Learn More About Wine Logistics Andrew's LinkedIn Wine Access LinkedIn Wine Access The Logistics of Logistics Podcast If you enjoy the podcast, please leave a positive review, subscribe, and share it with your friends and colleagues. The Logistics of Logistics Podcast: Google, Apple, Castbox, Spotify, Stitcher, PlayerFM, Tunein, Podbean, Owltail, Libsyn, Overcast Check out The Logistics of Logistics on Youtube

The Diesel Laptops Story with Tyler Robertson Tyler Robertson and Joe Lynch discuss the Diesel Laptops story. Tyler is the Founder and CEO of Diesel Laptops, a company that provides commercial truck efficiency solutions for truck repair facilities. About Tyler Robertson Tyler Robertson is the Founder and CEO of Diesel Laptops, which provides commercial truck efficiency solutions for truck repair facilities. Prior to founding Diesel Laptops, Tyler worked at commercial truck dealerships his entire career and throughout those years, he saw commercial trucks become more and more complex, and more difficult to diagnose - which is exactly the problem that Tyler decided to fix. Diesel Laptops started small by selling diagnostic tools on eBay and working out of Tyler's garage. Today, Diesel Laptops has grown to over $65 million per year in revenue with 200 employees doing it the hard way - without raising any outside capital. In response to customer needs, Diesel Laptops now offers repair instructions, parts, training, and laptops. About Diesel Laptops Founded in 2015, Diesel Laptops originally set out to help clients with their diagnostic tool needs. As trucks and emission technology became more advanced, a demand was placed in the market for diagnostic tools to meet those needs. As the years went on, we found that customers needed more. Diesel Laptops has now expanded into 4 distinct divisions. 1.) Diesel Repair is a web and mobile based platform that puts repair information into the hands of the diesel technicians. Diesel Repair contains information on commercial truck diagnostic fault codes, wiring diagrams, component locators, labor time guides, recalls, technical service bulletins (TSBs), remove & replace instructions, and much more. 2.) Diesel Parts enables users a free platform where they can look up their own parts by exploded views, by cross reference, by measurements, or by application. 3.) Diesel Training is the division of the company that provides continuing education for diesel technicians. This includes in-classroom experiences, online learning, and field training where we visit your location. 4.) Diesel Laptops that provide diagnostic tools to customers. Every customer is unique, and Diesel Laptops represent the best brands on the planet. Diesel Laptops surround those tools, with our world class services and support. This ensures customers are fitted with the appropriate tools, while also giving them access to the data and information they need to truly be efficient at truck and equipment repair. Key Takeaways: The Diesel Laptops Story Tyler Robertson is the Founder and CEO of Diesel Laptops, a South Carolina based provider of commercial truck efficiency solutions for truck repair facilities. In the podcast interview Tyler shared his story of founding and growing Diesel Laptops. Tyler started Diesel Laptops by selling diagnostic tools on eBay and building the product in Tyler's garage. Today, Diesel Laptops has grown to over $65 million per year in revenue with over 200 employees. Diesel Laptops has now expanded into 4 distinct divisions: Diesel Repair Diesel Parts Diesel Training Diesel Laptops Learn More About The Diesel Laptops Story Tyler's LinkedIn Diesel Laptops LinkedIn Diesel Laptops 2022 Virtual Diesel Expo May 17th - May 19th The Logistics of Logistics Podcast If you enjoy the podcast, please leave a positive review, subscribe, and share it with your friends and colleagues. The Logistics of Logistics Podcast: Google, Apple, Castbox, Spotify, Stitcher, PlayerFM, Tunein, Podbean, Owltail, Libsyn, Overcast Check out The Logistics of Logistics on Youtube