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The Next Big Thing in Supply Chain with Graham Parker
145 Plays2 years ago
In this episode, Graham Parker, CEO and Founder of Gravity Supply Chain, joins Host Brian Glick, CEO of Chain.io, to discuss:
- Why he founded Gravity Supply Chain
- The key factors that impact forwarder and shipper business
- How third-parties help you sell to your customers
- The importance of 'team' in logistics
- What forwarders and carriers miss when it comes to supply chain
Graham is an experienced founder and leader with a comprehensive and proven track record in the logistics and supply chain industry. He founded Gravity Supply Chain in 2014 to support the world's leading shippers and freight forwarders in streamlining operations, gaining better visibility, and making more informed decisions.
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Transcript
The Importance of Teamwork in Business
00:00:05
Speaker
If you get that right skill set in the business, you can form it. It doesn't have to be a massive department. You've got one or two people that understand and you don't try and sell it by yourself. You go in as a team. No one person ever wins everything all the time anyway. It's pointless. You have technical sales people that understand the supply chain. You go in because it's still about relationships. The relationship is never going to change. The relationship you have with that original sales guy,
00:00:28
Speaker
We bring in a broader team that helps you sell a much broader suite of services. The sticking issue gets to be a customer. You show that you care about them more and it's not just about 18 cents or $25 on a container. You get so much more and you're getting to understand their business. You live and breathe as if you are the customer.
Introducing Graham Parker
00:00:48
Speaker
Welcome to Supply Chain Connections. I'm Brian Glick, founder and CEO at Chain.io. On today's episode, we have Graham Parker of Gravity Supply Chain. Graham
00:00:58
Speaker
is one of those lucky people who has had the opportunity to work on sort of all aspects of the industry from the retailer side and the service provider side and now the software side. And so we're going to talk a lot about what happens in the first mile and what happens in the upstream part of supply chain before the logistics processes. So I hope you enjoy the episode. Graham, welcome to the show. Wow. Thank you. Thanks for having me. Why don't we start
Graham Parker's Journey in Supply Chain
00:01:26
Speaker
By just giving the audience a little bit of your background and how your journey through the industry evolved. Yeah, sure. I've been in the industry now for the best part of 40 years. I only ever actually worked for four companies, two of which I started myself. Quite loyal to the industry, quite loyal to my previous employees, but I started out in
00:01:47
Speaker
logistics supply chain working for a rather large logistics 3PL company in the UK that were acquired by large Asian organizations. I did about 17 years there. Worked my way up through air freight, ocean freight and then the last 10 years was doing pretty much looking after their blue chip SCM clients.
Shift to Design-Led Supply Chains
00:02:04
Speaker
I'm looking on the technology side that they were quite well advanced in the early nineties on technology anyway so i got into the understanding of understanding that true and supply chain then work for a rather large uk retailer.
00:02:19
Speaker
was tasks were setting up the whole of their import department and then taking it to a supply chain level and then looking after the supply end as well. So it looks end to end supply chain. B2C was really becoming quite prominent at that point. So just essentially they moved from being a landed product led business to buying FOB design led business. And with that, obviously they had to transform their entire supply chain. And then set about setting up a couple of supply chain companies and the latter one being Gravity. So explain
00:02:49
Speaker
for me and for the audience.
Landed vs. FOB Supply Chains
00:02:51
Speaker
What you were just saying about the difference between a landed supply chain and an FOB supply chain.
00:02:57
Speaker
Explain that to me like I'm six. Okay. Right. So basically the difference is someone just delivers a load of product to your door. You've kind of bought it, but you have no say in it. You're buying off of a landed supplier. So they are responsible for managing a supplier chain. You're only responsible for bringing that into the DC, right? There's specific timelines that has to be met to meet the consumer demand.
00:03:19
Speaker
Basically, you just go around looking at catalogs, meeting companies, and buying products. Then you become a design-led product. So you start designing it in-house, you become more attached to what your clients really, really want, and you're driving essentially the new trends.
00:03:34
Speaker
All the things that you really want that business to go to, so you're then in control of your supply chain, obviously you're reducing a huge amount of costs that will come out because you're cutting out middlemen essentially. But then you've got the added pressure, so you've got to get your manufacturing base right, you've got to get your factories right, you've got to get your sourcing right, and then obviously you've got the supply chain on the back end of that. We were doing the best part of 20, 25,000 teas a year when we started, and that grew to about 60,000 teas. When you started gravity,
00:04:04
Speaker
You sort of doubled down on companies that are at that phase, right? And this idea of managing your entire supply chain instead of just delivering things to your customers. Yeah, essentially. It was more around bringing the technology into the client, into the BCO with very much as a user-based led approach, but with a customer focus. So look at the customer, look at your demands, and then bring that all the way back into the supply chain. So kind of get into the order management
00:04:33
Speaker
and execute change at the order level rather than just giving some kind of visibility. That was my goal when I set Gravity up, purely because I'd done that at New Look, right? So that was the UK retail I was working for. So we were able to just really redefine, re-engineer or create a new supply chain. But that gave me so much knowledge on the buying floor about how these guys really operate. And that's what I wanted to bring into the technology side of Gravity.
00:04:57
Speaker
So what's the impact that really owning that early stage PO management and the factory relationship, what kind of impact does that have for businesses?
Impact of Early-Stage Purchase Order Management
00:05:08
Speaker
Yeah, I'm in the collaboration piece between the purchase order, the buyers, there's a buying house, there's a vendor, there's the factories.
00:05:15
Speaker
retailers or BCO shippers typically work in a very low level. So understanding at the earliest opportunity if something's going to go wrong, even if the raw materials are late, you typically don't get to hear that until it's too late. You have a plan, you have a range, you have a series of dates.
00:05:31
Speaker
And they move. The purchase order moves many, many times. It's not just one PO is raised and it doesn't change. There's dates change, quantities change, price. All kinds of things mitigate into that purchase order that has significant impact on the intake plan date. So the earlier you understand that something's going to go wrong and inside that first mile, typically that's the...
00:05:52
Speaker
A, it's the easiest place to fix, it's certainly the cheapest place to fix, but you've got a significant amount of time between that purchase order being manufactured and coming out. And if it's going to be late, fix it at the first mile, rather than trying to get to the last 15 or 16 days before you realize you've got a problem to meet customer expectations. That's always kind of an interesting thing for me as we look at, for instance, people looking at the inside the port visibility at the destination port.
00:06:20
Speaker
And you say, well, by that point in the process, you know, no pun intended, but the ship has already sailed. Yeah, absolutely. Right? There's very, very little that can be done besides apologizing to your customer.
00:06:34
Speaker
at that point, right? And you think most of these BTOs, Brian, they work on ranges and plans. They work on seasons. This stuff's been engineered 180, 200 days in advance, right? So your optimizers, your merchandisers, people on that buying floor, when it's only two weeks out, there's little they can do. They've got commitments on stores. They've got commitments and promotions, all kinds of stuff going on. Even just sold merchandise, right?
00:06:58
Speaker
It's better to fix it when you know there's a problem, especially if that problem was late coming out of the factory. That was some 900 days ago, so fix it at that point. Or understand there's a problem at that point so you can change, right? For me, it was more around giving everybody the same set of data, the same access to the data, and making plans more visible throughout the entire business units rather than just the import guys or the supply chain guys looking at it in a consolidated view and saying,
00:07:24
Speaker
Inside what is inside there is some skews or some parts and styles give them the data in the world that they work in not in a conservative you where you have to take in front of someone else. So when i was much younger i worked at a folder in customs broker who spun out a company very similar to gravity right and we were doing order management and. Helping companies see their production schedules and their carton labeling and all of these things upstream and that
00:07:55
Speaker
Well, I think when we started down that path as a forwarder and broker, we sort of said, oh, well, we'll build a website and the rest of this will be easy. What is it that forwarders and even now carriers who want to be supply chain management companies, what do they miss? What do they not understand about what makes this hard?
Challenges for Forwarders and Carriers
00:08:15
Speaker
I don't think they understand necessarily the inner workings of the company, so the people that they're serving. So you've got to get very close to the customer. Work like your customer does. And managing it from port to port or ex-factory to arrival DC, that's one thing. But you've got to get into the lowest level of detail. And I think that's what they miss. They don't understand what happens inside the factories. The work in progress piece, the QA, the QC, all of these things has an impact or potential impact on risk and delay. So I don't think they understand the true risk of
00:08:44
Speaker
managing the supply chain down into the lowest level, which is what you and I buy. You buy a shirt, you're not buying the whole container's worth of shirts, you're buying a shirt. Certain shirts and certain colors will sell quicker than others. That's where these import departments, they can see it at a high level. We give them down to that lowest level, back into the way that the buyers, the optimizers, the merchandisers, these guys need to work. We need to deliver data at the same level that they work at.
00:09:09
Speaker
I think that's what a lot of people miss. It's not that they can't do it, they just miss that because it's not part of their core. So I'm going to try to trigger you to say something controversial here but we'll see what happens. Do you think that
00:09:22
Speaker
logistics providers should try to become supply chain companies? Or is this an industry headed down the wrong path? It's an interesting one,
Evolution of Logistics Providers
00:09:32
Speaker
right? Because there's no reason why they shouldn't. I mean, the customer has two options, right? Be agnostic, but you still need the logistics companies. So why not encourage the logistics company to be the true... And there are a lot of good three and four people providers out there. There really are.
00:09:45
Speaker
But there's nothing to stop, you know, a freight forward and wanting to move up, right? If you're happy, just making four, five, 6%. Well, I guess it's not even as much as that two or 3% on a box and live like that for the rest of your life. But I'm sure there's, and they've been around for centuries. So it's probably wrong with me to say that they might not be around forever. But I think, you know, the consumer wants more, therefore the customer demands more from the providers that give them the services right. So I think you should always look to get closer, get sickier with your customer. So yeah, why shouldn't they be?
00:10:14
Speaker
What kind of skills or what do they need to do with their staff if they want to participate better in this larger ecosystem? Yeah, you've got to stop setting freight and freight. You don't go into certain boxes if you want to be a supply chain, if you want to manage the supply chain management rights. Again, it's understanding your customer, understanding what the role of technology can play in evolving those companies up.
00:10:34
Speaker
they just need to understand or get to understand supply chain management more than anything else. Understanding that it's a purchase order and understanding a connected view across that entire stakeholder base, internal and external, what that delivers. So the value of giving
00:10:50
Speaker
an end to end supply chain versus the value of just trying to nick 50 bucks on a container or five cents on a kilo of air freight or whatever. It's wildly different. There is an upsell in that, and I think from the freight forwarders themselves, the CIOs or the tech departments, they just need to look at becoming more familiar with the API world and talking. They have to understand that you're not designing something or trying to incorporate something that looks at a master airway, but you're looking at into an ERP solution. I think once they understand that,
00:11:19
Speaker
It's relatively straightforward. And then they use people like Chain.io because you understand it. Don't try and build it. Use the third parties that are able there and already do this for them. It's just a mindset change. Fundamentally, they're still doing the same thing. There's a position of movement from A to B or A to B, C, D and E, but it's the technology that enables a lot more stickiness with that customer because you're giving them an environment that they work in themselves internally every day. So one of the things that
00:11:49
Speaker
I saw across my career with this is, you know, if we were in a freight company and, you know, across several of them, that you'd always have like one or two salespeople who could sell this and everyone else who just wanted to show up and quote another 40 from Shanghai to LA. And that is really a different skill set in a salesperson who's going to help a customer.
00:12:13
Speaker
build a proposal for their CFO about how they're going to take the company, the BCO in a better direction versus I am 18 cents cheaper per kilo than
00:12:24
Speaker
than the guy down the street. It's wildly different and you're not wrong. But if you get that right skill set in the business, it doesn't have to be a massive department. You just got one or two people that understand and you don't try and sell it by itself. You go in as a team. No one person ever wins everything all the time anyway. It's pointless. You have technical sales people that understand the supply chain. You go in because it's still about relationships. The relationship is never going to change. The relationship you have with that original sales guy,
00:12:52
Speaker
we bring in a broader team that help you sell a much broader suite of services. The sticking issue gets to be a customer. You show that you care about them more and it's not just about 18 cents or $25 on a container. You get so much more and you're getting to understand their business. You live and breathe as if you are the customer. So let me change gears on here for a second. Why start a company? Yeah, that was a really good question. It's the worst question.
00:13:20
Speaker
And I took it my age, right, as I was like mid 40s. I didn't say it. I just couldn't see. And I've worked in the environment when I was in the retail days where I was bringing technology on, bringing technology not only into the retail that I was working for, but
00:13:37
Speaker
I was put in this company on our buying floor and said what if you want to understand the same don't work this is what they do every day this is the lowest i want to work down so you know for the last twenty years i still haven't seen that you both so i decided to set gravity up to try and enable that for for more people because you know the role of the freight for the logistics provider three pill four pill is never gonna go away you just need to offer a bigger and deeper sweetest services i hadn't seen anything out there.
00:14:05
Speaker
nothing compelling that really went into the detail that I really want to go into with Gravity where I'm taking Gravity as part of the vision. So, yeah, set the company up to try and bring some more technical and platform-led businesses into the environment where I think the world needs to be, which is down at the order level. So one of the things, Graham, that I experienced as a freight forwarder was sometimes we would have to participate with
00:14:30
Speaker
BCOs were using systems like Gravity, where oftentimes we were trying to sell them something competing, and there might be internal frustration or a company that, oh, why are they using this third-party tool? And in the long term, what we learned was being a good participant with your customer's ecosystem is important. But what advice might you have for forwarders who have to work with third-party systems? And how would they best
Collaboration with Third-Party Systems
00:14:56
Speaker
be a good partner to the BCOs?
00:14:58
Speaker
Yeah, I would not hesitate to. Data is essential in any else in supply chain. We have to give your customer the action. They're looking for insights. They're looking for actionable insights. Data is the only way you can truly get that. You shouldn't be frightened to participate into another. Even if you've got your own platform, share the data with the platform of choices. There really is no issues there. We've actually got a 4PL solution built into gravity.
00:15:24
Speaker
And we've got quite a few scenarios where we're working with one customer, one client, one VCO end user, and we're working with six, seven, eight different logistics providers. And at the beginning, it's relatively tough for them to accept. But at the end of the day, you've got to keep providing for your customer. You've got to serve the customer. You've got to get the data. So yeah, don't be frightened of it. And also, it's a great sales story. You've got a solution.
00:15:47
Speaker
where you can go to a customer, any customer, a new customer, go and try and win the customer, you've got the solution. They might only give you or award you 30% or 40% of the physical movement or the logistics part. Having the ability to go in with a system-led solution is a lot more powerful than just trying to manage freight. I agree.
00:16:06
Speaker
So I posted like a week or two ago on LinkedIn about an opinion that I have that your culture is defined as much by how you act with your competitors in front of the customer as how you treat the customer themselves. And, you know, kind of curious as to, you know, since you see this situation of six or seven or eight freight providers who have to interact and participate in this platform and may be doing different roles, even on the same shipment, you know,
00:16:32
Speaker
Does that ring true to you? Am I full of it? No, I think you're spot on and you're right. You do see, I saw it in my previous life as well. One of my retail days when I had three, four, five different LSPs coming in and they've all got this ego around them and they all think they can do something bigger and different. At the end of the day, your customer is key and the customer serves the consumer. So you've got to do what's right by them.
00:16:54
Speaker
It's frightening and i read your post and you're absolutely right but it shouldn't be in this whole standoff work as one the more you get sticky because the more you give your customer the more they're gonna want to give you more future further down the line if you stop putting up resistance the quickest way to lose your customer so do you think the next big things are for the industry you've been through a corner down cycle now and you've been through ups and downs right as of i kind of what do you think are some of the things you have your eye on this interesting.
00:17:24
Speaker
The most immediate thing is the data is still in certain aspects of the end-to-end, especially on the ports and some of the carrier data you get in, it's getting better. And I think the immediate thing is this will continue to improve. So I think the port owners and that infrastructure, they are
00:17:41
Speaker
They're able to give more and more. So I think that side of things will improve significantly. Carriers are talking about putting smart containers in. So you have to assume that data will get better. I think IoT is becoming a lot more affordable. It's becoming a lot smarter and you can do cellularly. You can do GPS. You can do Bluetooth all on a label now. So when that gets down to a certain price point,
00:18:01
Speaker
I'm talking sense really you know that's gonna change the industry quite dramatically just from the visibility of the tracking of the data side of things i'm obviously i had to check the checkbox and suffer coming out now so there's a huge amount.
Enhancements in Port Data and IoT
00:18:13
Speaker
Look forward to be just we gotta get into that role of accepting data trusting data and then getting in.
00:18:20
Speaker
and allowing it to be part of your day job and allowing you to make decisions and using the actionable insights that come from that data and drive that into the business. And then marry that up to demand patterns. BCOs and shippers are really good at looking at what their customer portfolio, et cetera. And they're really good at understanding the demand cycles and patterns that say, okay, we need to buy X, Y, and Z.
00:18:42
Speaker
move that to the supply chain but what I'm not good at is linking that or having enough insights to link the actual physical supply chain back into those demand forecasts. I can see a lot of clever stuff coming around in that. I mean there's a lot more but I'm trying to stick to the stuff I can see on the immediate horizon right here. What do you think is maybe something that we're not paying attention to or not doing well as an industry that's frustrating to you?
00:19:06
Speaker
There's many things that are frustrating to me. I think the true understanding of what visibility truly is. I see some people with some huge marketing spends talking about end-to-end.
00:19:17
Speaker
The word real-time really annoys me somewhat. But yeah, there's a lot of things that frustrate me in that world. One of the biggest frustrations for me, Brian, is why would you not want to give your customer and all of the internal stakeholders and external stakeholders visibility at a level they work to? That's hugely frustrating. And then seeing some of the RTV guys talking about they deliver end-to-end solutions and it's real-time and it's down at the order level. No, it's not.
00:19:43
Speaker
When the frustration is people buy and then they get frustrated because they haven't got what they thought they were sold. That frustrates the hell out of me, right? Because the devil's in the details. I just, if you ask the pertinent questions, you will probably find out that it's not actually what you want. Assuming, of course, you know what it is your business needs. That's an interesting point. And I think there's a huge gulf between say the top 5% of BCOs and everyone else. You go into the Walmarts and the Nestle's of the world.
00:20:14
Speaker
They know what they want and they know, just give me the data and I'll do something with it. And I've got an army of data scientists. You drop out of that top few percent and
00:20:23
Speaker
Frankly, most of them are just looking for a glorified spreadsheet and there's a lot of market education that has to happen as you walk down that long tail, teach them what they want. When you put it on a post and you said, if you've got minus 1,000 containers, you can probably manage it on the spreadsheet, right? And then there's that between 1,001 and maybe say up to 50,000 containers, I can't remember the exact number you put. And that's the sweet spot, right? These are the guys that can do so much more.
00:20:48
Speaker
And the opportunity is there. It's rife. It's massive. And you're right. In that top 5%, I've already got it. I've got an army of data scientists like you say. So it's just making sure that people understand that there is a huge amount of data that you really can access and really analyze. Not only make decisions on to correct risk in the supply chain, but then look further into where you run the business and look at the demand, look at the supply chain, look at the factories, and how you're going to source
00:21:16
Speaker
And then bring that back to working capital. It's one of the things I'm really trying to push on on gravity is we've got a view that shows you the committed dollar spend of that PO throughout the entire lifecycle of that PO from creation all the way through to delivered. And then if you can... CFO is looking at how can I save 1% of my working capital and get into the data, get into the supply chain visibility, and then bring financing into this. There's a huge amount, so much more that you can do, but it's just frustrating that people can't even start with the basics.
00:21:45
Speaker
It gets back to that salesperson question of like who's selling it. So we had a, this is actually a true story from inside of chain IO. We went into a relatively large BCO, but they were a commodity BCO. They weren't in retail. They didn't do all of this kind of stuff. And their IT department could not understand why spending, you know, it was, I think it was a hundred thousand dollars with us to integrate better to their freight providers.
00:22:12
Speaker
mattered because they did a time study of what their employees were spending to send these God awful spreadsheets out to the free providers. And it was like, Oh, we're saving, you know, 10 minutes a day. Like, why would we spend a hundred thousand dollars a year to save 10 minutes a day? And so we'll go back and ask your CFO what it would mean to him if he could sell the product that you are producing five days earlier on average, because you're selling it at
00:22:42
Speaker
departure of the vessel and you're burning time with these freight forwarders where they're doing all this work to collect paperwork and it's costing you five days per shipment. Absolutely. Right. And ask him what the value is of those five days. And the next day we got a phone call, Oh yeah, we're signing the contract today. That framing, right? Working capital. And it's something that I don't know that a lot of people in our industry understand is how to talk to a CFO.
00:23:07
Speaker
about that knock on impact of what we do and how it really impacts everyone. No, you're absolutely right. And margin, right? And protecting markdowns, if you could lose your mark on by say five or 6% on a per season basis. I mean, people ask me, where's my ROI? I said, I don't know. You go back and ask your CFO. If you're like, to your point, you've been selling this five days earlier, you've got 5% less markdown and 1% on your working capital.
ROI in Supply Chain for CFOs
00:23:29
Speaker
I mean, you tell me what your ROI is. And if you still can't sign for a hundred grand, you've got a problem, right?
00:23:33
Speaker
Yeah. You're not the right profile for us. Well, on that note, you know, I think we're getting up on time here. So I really appreciate, you know, you joining us today and can you just let everyone know where they can find you, how they can get in touch? Yeah, absolutely. So again, Brian, thanks for the opportunity. My name is Graham Parker. We're at gravity supply chain.com. We do work a hell of a lot with freight forwarders, LSPs, 3PLs, 4PLs and BCOs as well. So we got the opportunity. We're not scared. We're there to help.
00:24:03
Speaker
Thanks so much for joining us. Thanks, Brian. Take care. Well, thanks so much to Graham for all of those insights. One of the things that I particularly enjoyed that we spoke about in that interview was the connection of the value you're bringing to the financial metrics and what matters to a CFO and how to get
00:24:27
Speaker
that value translated into real progress. If you want to learn more about that, if you visit the Chain.io blog, we have a great article called Buy versus Build, How Logistics Service Writers Maximize Tech or OI, where we talk about exactly that, how to think about whether you're building tech or buying tech and the value it's going to create and the financial incentives to either buy or build. So check that out, blog.chain.io, and we'll catch up next time. Thank you.