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Agile Supply Chains And AI Insights With Paul Magel of CGS
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Hosted by the Interline’s Editor-In-Chief, Ben Hanson, this episode features a conversation with Paul Magel, President at Computer Generated Solutions, about the 10th Annual BlueCherry State of Supply Chain & Technology Report. Together, Ben and Paul talk through its findings, in the context of a decade that has seen e-commerce accelerate, disruption become the norm, and AI emerge as a tangible influence. They explore what's changed, what hasn't, and why so much of the future still comes down to the basics: reliable data, strong relationships, and the willingness to adapt.
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Transcript
Agile and Incremental Success
00:00:06
Speaker
Deliver in an agile way. So if you don't have all the data yet, or maybe you're not collecting yet, or maybe you haven't connected yet, find out what you can deliver to get you that much closer to where you want to get to. Don't devise a ah digitization strategy that has one goal line. And if you don't get to that goal line, you're a failure.
00:00:24
Speaker
There's got to be, you know, every yard line.
Introduction to Interline Podcast and Blue Cherry Report
00:00:28
Speaker
success that you've got to then build on from that standpoint and take those wins when you can take them vote wait for the end of the big ba Hey, and welcome to the Interline Podcast.
00:00:39
Speaker
Depending on how long you've been listening to these shows, you might be hearing a new voice or a very old one. I'm Ben, I'm the Interline's Editor-in-Chief, and I'm hosting this episode because it falls squarely in my wheelhouse, which is reports and analysis.
Key Topics in Supply Chain Technology
00:00:52
Speaker
Specifically, this show is focused on Blue Cherry's latest report into the state of supply chains and the technology that supports them. The company's run those reports for 10 years now, making this the 10th anniversary edition. And I spent a bunch of time talking to Paul Magel, who is the president of Computer Generated Solutions, Inc.,
00:01:11
Speaker
You'll hear Paul and I go through some of the biggest findings in the report in just a minute, but it probably won't come as a surprise that AI, economic uncertainty, reshoring, profitability, you know, four massive things that we've seen riding really high on fashion as priority list over the last year are high on the agenda for this discussion as well.
Evolution of Fashion and Retail
00:01:31
Speaker
I've known Paul for a long time. um Paul himself has spent a longer time evaluating how the fashion and retail industries work and then translating that understanding into briefs and directions for building real digital solutions.
00:01:45
Speaker
You'll hear both of those things come out in the conversation. The Interline's own AI report was published not too long before I talked to Paul as well. So you'll probably be able to identify some common trends between our coverage and the critical findings in the 10th annual Blue Cherry report. um I'd encourage you to download and read both of them, so we'll put links to them in the episode notes for ease.
00:02:04
Speaker
For now though, over to my conversation with Paul. Paul Nagel, welcome to the Interline podcast. It's been a while. It has been a while, so I'm glad to ah to be here and be back and look forward to our conversation.
00:02:16
Speaker
Absolutely. want to get straight into it, i think, because a couple months ago, you released the latest in the series of Blue Cherry's State of Supply Chain Technology Reports. And if I'm right, you've been doing those for a decade now.
00:02:30
Speaker
i was going to say this is actually our 10th anniversary edition. Wow. Okay. So 10 years of this. um In those 10 years, you've had a front row seat to see a lot of things change from a supply chain sourcing point of view and from a wider industry point of view as well.
00:02:44
Speaker
um What do you think are the biggest developments or the biggest things that stand out to you that you've seen in those 10 years? And on the flip side, is there anything that took you by surprise? Look, it's a yeah it's an interesting question. It's actually interesting to look back 10 years, you know, just looking back five years, it's, it's amazing to, to understand that that's, you know, the start of the pandemic and COVID, um, and, and how fast time is flying. 10 years is actually not that long ago, but in 10 years, a lot has happened and probably, you know, the biggest thing, and I'll say kind of the biggest three from my standpoint, one is what's going on with e-commerce.
00:03:22
Speaker
Um, is a big change, you know especially if you start looking at the survey, how people were looking to grow their businesses, what their issues with the supply chain were how they're trying to generate demand. E-com is a big is a big inflection point in that.
00:03:38
Speaker
Second one, i think I would say within the last 10 years is really just like almost supply chain disruption being the norm. you know Like I mentioned, you know you had the pandemic, then you had Suez Canal getting blocked and you had ships getting bombed.
00:03:53
Speaker
You know, now you've got tariff wars. You know, just the supply chain had been relatively stable, I think, ah prior to nothing like it is now. And now now it seems to be the norm that disruption is a norm.
Adapting to Supply Chain Disruptions
00:04:04
Speaker
And obviously, um the third biggest thing right now is an AI standpoint and how do we harness the power of that new technology um to really work on some of the things we've been talking about for the last 10 years, supply chain, transparency, visibility, real-time access, all those types of things. So to me, those are kind of the three the three biggest things and it's driving a lot of ah different things, right? We talked about the pandemic.
00:04:29
Speaker
You know, e-commerce has been, you asked me what was a surprise. E-com we saw coming. But when the pandemic hit, I wouldn't call it an innovation event, but it certainly became an acceleration event around e-com. All of a sudden, stuff that we thought would roll out over many years had to be rolled out over many days.
00:04:46
Speaker
So that created you know some technology challenges. but also create a number of opportunities. um Certainly around the disruption of supply chain, we're starting to see a lot more conversations around reassuring coming out of the survey, supply chain diversification ah coming out of that, and certainly supply chain digitization, which is you the technology that's required to do all those things that people want to do.
00:05:10
Speaker
I think it's really important that we kind of get to the bit that you just said around, you know, disruption effectively becoming the standard, becoming the norm. Because I think if this survey will have shown you anything, it's that that's the biggest challenge facing massive number of organisations of all shapes and sizes right now.
00:05:29
Speaker
Where do you think the supply side of the industry is at when it comes to kind of reckoning with that and adapting to that level of ongoing disruption? Are we kind of prepared for what's coming or is it more a case where the average brand, and the average retailer, the average supplier is just reacting to crises as they originate?
00:05:49
Speaker
but Look, you know, I'll give you my... I'll say my first frequent answer, it's it's probably it depends, right? So it depends on who you are, um who you're talking to, which brand you're talking to.
00:06:00
Speaker
It depends on the relationships that they've built with their suppliers. um Over the years and the types of relationships they have with their suppliers, it depends on how they look at their business and the KPIs and the metrics that they measure. Is it looking for the cheapest needle if you're in the yeah apparel trade or, you know, is it more demand driven and they need to do fast turnarounds and personalization? There's a whole host of things that come into business.
00:06:26
Speaker
that and then it drives how fast of an adoption that you have to have and then ah you know again it also depends on what on what that disruption is whether it's cotton prices doubling as i said you know the the canals backing up or or tariffs there's different things but i think at the end of the day and i actually uh posted something on linkedin yesterday it's kind of you know fool me once shame on you fool me twice shame on me we've gone through these things now whether it's pandemics you know, whether it's tariffs, I think everybody knows now this is going to continue and we've got to deploy technology so we can, you know, have better metrics and data.
00:07:08
Speaker
And again, it all starts with the data because if you don't have good data. You can't do anything of the things we we're going to speak about.
Challenges of Economic Uncertainty
00:07:15
Speaker
You know, we' we've got to get this done now so that what whatever the next thing is, we're in a much better position to be agile and react.
00:07:23
Speaker
Yeah, and I think that's the key, right? So it's not it's not necessarily about your ability to foresee the exact shape of what's coming so much as it is your ability to have that kind of flexibility and that sort of agility to cope with whatever it might be as it originates.
00:07:41
Speaker
um And I think looking at the survey, i think it was like 70 plus percent of people put that kind of uncertainty and their ability to respond to it at the top of their pile when it comes to kind of strategic challenges and so on. That was actually the the number one issue today.
00:07:55
Speaker
A lot it was economic uncertainty. So when we did the survey, you know, the threat of tariffs was there. I think if we did the survey post-Liberation Day, April 2nd, probably one no one would have answered because they were buried in trying to figure out how are they going to get goods in or if they could get goods in or if they could afford to get goods in, even if they could get them in.
00:08:17
Speaker
Timing everything in some of these answers. But again, I think that whole theme of disruption that we've been talking about, And whether it's economic disruption or geopolitical disruption or pandemic disruptions has been kind of at the top of the list for a while now.
00:08:32
Speaker
Yeah. um And in your experience, what have been some of the successful strategies that you've seen companies deploy to get ahead of challenges rather than just constantly be on the back foot?
Strategies for Successful Supply Chains
00:08:43
Speaker
Yeah, look, I will tell you that what people are doing, what I've been kind of suggesting, I think, is ways is is a couple of different areas. Certainly, you know, again, speaking from where I sit as a software provider and a supply chain solutions provider, certainly linking digitally all of the links of your supply chain and utilizing the technology platform that can help you do that is certainly an important piece that you need to do.
00:09:09
Speaker
But it's not the only piece, right? Because when you deploy technology, i always say it's you know If you automate a broken process, it just makes it break down that much faster. So it's also taking a look at all of your business practices, your business processes, your relationships with your suppliers. right I think we learned in the pandemic, people who got hold got stuck holding the bag and vendors who didn't get paid.
00:09:32
Speaker
You know, I said it earlier and I keep going back to it. um It's all about the data. So in order for us to be agile, in order us to link the supply chain, we've got to get data from our suppliers and from our partners. And if we don't have a mutually beneficial risk reward type contract or relationship, kind of the old way people would hide things. You know, the manufacturers didn't want their customers to know exactly how much things cost or exactly where things were. Right.
00:09:58
Speaker
because they wanted some control, but you can't be agile unless you have real-time access to all of those things. You can't make decisions unless you know all the things. So if you can tie yourselves and join at the hip and be be both successful at the same time or both you know share some of the risk, you can't digitize. So you know to your point, the ones who've been successful, one who are not afraid to invest in a technology platform and do that with a company who knows the industry space, who's got an open platform,
00:10:27
Speaker
who's got the ability ah to link all those links to supply chain. Those who are successful are the ones who have adapted their business processes and their business models to make it more of a shared risk reward type. And then the third one is those who have diversified their supply chain and not be in one location for everything, um but they spread it out across and they've done the analysis to know where to go when and in what situation.
00:10:53
Speaker
Yeah. And I think the other thing is like the that that level of kind of mutual benefit, mutual shared visibility and accountability that you talked about, that's also the driver and the unlock behind the degree of transparency that's needed for in order to comply with a lot of different regional regulations.
00:11:11
Speaker
Now, I know the the regulations themselves are pretty unpredictable in terms of how and when they're being enforced and where they're being rolled out. But there are examples, particularly in the US, of punitive enforcement when it comes to kind of transparency across the product journey.
00:11:27
Speaker
It's the same thing, that data that you're talking about, that visibility you're talking about, that mutual willingness to work together and share that you're talking about. It's not just an engine behind being flexible enough to succeed. it's It's about how much of that visibility can you share with stakeholders, whether they're consumers or legislators.
00:11:45
Speaker
yeah No, look, you bring up an actually and interesting point. It came up in the yeah actually our most recent report as well. right ESG and sustainability and all those things, if you go back a number of years, it was kind of high on the list of what people were ah working at from a strategic standpoint.
00:12:01
Speaker
and This latest report it kind of dropped kind of far down the list. and People were like, how can this be? There's more regulation, especially Europe and those types of things. and you know My interpretation of data is it's table stakes now. It's not a strategic asset where people are wanting to replicate what Panagonia did, and that's their brand identity, and they're going to be sustainable because that's going to sell more goods.
00:12:23
Speaker
it's It's got to be part and parcel your business. And the good news is those who have been concerned about the cost that it is to be able to report the types of things that the regulators want from a sustainability standpoint, once you build that infrastructure, all the other things we talked about,
00:12:38
Speaker
up being agile in your supply chain, being able to make better decisions. It's all the same infrastructure. So it's not a separate set of investments. It's one investment across digitizing supply chain that allows you to do all the things you just talked about, answer it to the regulators, answer to your customers, answer to your suppliers, and then be a much more efficient and effective organization, and then be able take a advantage of the new technologies that comes out, whether that's AI or blockchain or whatever it may be. I think that's a really great point. It's it's not doubling up on effort.
00:13:09
Speaker
It's one level of effort, one level of digitization that serves multiple different outcomes, all of which are things that the wider market is asking for or demanding or things that brands, retailers, suppliers can use to get ahead of what the market's going to be asking.
00:13:24
Speaker
um It's funny you mentioned kind of sustainability, ESG, CSR. kind of falling off the radar a little bit in this year's report. Because I think you've got a really good example of something that did the opposite, which was nearshoring as a sourcing strategy, um staging a big comeback. So surging from something like, I think you had it around 15% up to like 45% as a top priority this year.
00:13:44
Speaker
It's a big jump. um Do you think that's being driven by some of the near-term tariffs and trade policy and some of what are hopefully kind of shorter-lived disruptions?
00:13:57
Speaker
But do you think that's actually maybe a long-term change to sourcing strategies? Look, I think it will be a long-term change ultimately. What I will add to that is it's been talked about for a long time about being a change in strategies.
00:14:13
Speaker
To answer your question specifically, yes, I think it's being driven now as a risk mitigation strategy against certainly tariffs now. Certainly, you know five years ago in 2020, it was about pandemics.
00:14:26
Speaker
You know, there's a lot of geopolitical things going on. I think everybody's learning. And again, it's not a new lesson, right? You've got to diversify. lot of people look at it on the revenue side. I want to diversify. i don't want all my revenue coming from a Walmart or from you know, whatever it may be, Primark or something like that.
00:14:43
Speaker
But you've got to do that on the supply chain side. You've got to diversify there because, you know, if something happens, you've still got to be able to produce. um And again, everyone used to chase the lowest cost of the product.
00:14:58
Speaker
but you've got to have visibility so you really understand that total landed cost and also the cost of opportunity if you can't react as quickly enough. you know If you can't do a six month lead time and you you miss a demand curve, but you could do it because you're nearshoring and maybe it's the garment costs more, but you know maybe you can charge more for it.
00:15:17
Speaker
I will say that, you know As much as things have changed and we look at our reports over the last 10 years and and things have changed, it's always about the right product at the right price at the right time. Right. It's gotten much, much more complex to deliver that.
00:15:31
Speaker
and measure that and do it at a much more accelerated rate as could because that's what the consumers are demanding, not only faster, but more personalization and and and wanting more information about where things are coming from and those types of things.
00:15:45
Speaker
So it's more complicated to get the right product, the right price in the right time. But the good news is we've got the tool sets and we've got the capabilities and and companies are sophisticated enough to handle that going forward. it's just, as I said, everything is accelerating.
00:15:58
Speaker
Yeah, and that makes it much more complex if you are 100% wedded to the traditional sourcing paradigm, if you liked like. If you're unwilling to challenge some of that, then that complexity and that speed increase and everything is just going to continue to mount. So I guess it's probably right that companies are looking at variables like reshoring, nearshoring, things that historically they wouldn't have had to lean into wouldn't have had to move, and now sort of saying, well, the rest of the picture, all of these other variables are changing. We're going to have to look at pulling this one at the very least. We're going to have to evaluate it and we're going to have to evaluate it from beyond the point of view of unit cost and look at that bigger picture, like you said.
00:16:38
Speaker
Now, exactly right. And again, and then along but what comes along with that is the investment in the infrastructure, right? Because it's one thing about having the labor in the offshore, but if you still need the materials and you still need the raw materials and you still need mills and, you know, all of that has to come along with it, because if you know you don't wanna source in Asia, but that's where all your material's coming out of, you know you still got a little bit of a problem. So I think that's why it's been talked about a lot, but slow to come.
00:17:05
Speaker
But I think what we're starting to see now, and it's not just from the brands themselves, But the governments of these near shore locations are starting to invest in the infrastructure and attract um kind of a vertical type mindset.
00:17:19
Speaker
So everything is in whatever region it is that people are looking at. um So they truly are de-risking that supply chain because it doesn't help to have people ready, willing and able to sew if they have no raw materials. Right.
00:17:32
Speaker
A hundred percent. And particularly you know for for your audience in the US and for our audience here in Europe, you you have kind of North Africa in our case, for Europe and the UK. You have Central America, a bunch of different countries there that specialising in different areas and trying to get as much of that vertical slice within one place as they can.
00:17:51
Speaker
so that they can become more predictable and less risk-prone partners. so it is It's interesting to see that wider like geopolitical infrastructure and government support and everything being built out in recognition of the fact that people do want to be able to source not just sewing capacity and production capacity, but entire kind of end-to-end components and materials and everything else that they need.
00:18:15
Speaker
Absolutely. And again, I also want to share some things that just because you kind of brought it up and just make sure that, as you mentioned, your audience and and my audience, it's really our audience, right? Because again, as a company, we've been expanding globally over the last number of years.
00:18:30
Speaker
We've got a big investment going on in EMEA right now. We've got a number of customers there. We're localizing all of our products there. And we're growing across Europe, Middle East, Africa, Asia as well, the LATAM region, and so and certainly deeper and and wider into the United States and and Canada. So our audience is, there is no your audience or my audience. Our audience is our audience.
00:18:56
Speaker
Amazing. And the more I think about it, actually, the US is probably our biggest audience of readers these days as well. So it's ah it's a very it's a very global perspective. I think I'm thinking more from the point of view of me living in the UK as a shopper. and Yeah, no, I know. We're both sitting somewhere. But again, I want to make sure that the people listening know that we've really expanded our reach and our value proposition. And we've got people in each of those regions that can bring value to the folks in the industries that we target.
00:19:25
Speaker
Cool. That's a really good point. um Shifting gears slightly, um but talking about something else that's maybe kind of been simmering for a while, but is now suddenly become a key priority,
AI's Role in Supply Chains
00:19:36
Speaker
and that would be AI. um So looking into look at your report, I think 90 plus percent of people said that they consider AI insights to be a key priority.
00:19:45
Speaker
That mirrors what we've seen industry-wide and across a bunch of different kind of processes and job roles and functions and and everything else. What we're also seeing, particularly at the moment, because we're gearing up to publish our AI report about 10 days from the the date of this recording, um what we're seeing is that we're we're kind of moving from ai as a broad set of possibilities, just like general purpose capabilities, towards AI in products and in discrete applications.
00:20:17
Speaker
um Tell me what you think that looks like from the supply chain decision-making side. like Where are we on that transition from ai is coming and it's going to be it's going to have a significant impact to AI is here and it's manifested and expressed as specific products and discrete applications that you can go use and obtain value from today?
00:20:40
Speaker
Yeah, look, i think I think everything you said is is still true today, right? AI is still in its infancy. So it's still it's still coming and it's still being built out, but it's also being moved into production applications and getting specific use cases as well.
00:20:56
Speaker
And there's a tremendous tremendous amount more to come from an a AI standpoint. I will say that from where I sit, and again, being someone who's responsible for a software business, I always say that if I'm not saying AI every other word in a sentence, I have no credibility anymore. but you know, it's, it's a another power tool that's available for us that we've got to really learn and make sure we bring it into our platform and to everything we do in in a, in a manner that makes sense for us. Cause it's still evolving.
00:21:25
Speaker
It's right. It's still being commercialized in a lot of different ways. The major vendors are still bringing it into their tool sets. You know, so when I speak, um, about AI within my organization, kind of talk about the three P's of AI, productivity, process, and then product when it comes to our our supply chain platform.
00:21:43
Speaker
On the productivity side, you know to your point, there's use cases, it's already done. Microsoft has co-pilot. Every email people's people are writing, every task they have, every workflow, we should be looking at how AI can help us be more efficient as an organization, as a company, as an individual, right?
00:22:02
Speaker
Everybody needs to look at their job and and learn how to use AI to do more um with that. On the process side, same thing, right? We interact with with our organizations, with our customers, and we use tool sets around that. So make sure we understand the tools that we are utilizing, what AI capabilities you can put into those so we can adapt our process to use those to use those pieces.
00:22:25
Speaker
And then on the product side, certainly from our standpoint, we're looking at all the things that you spoke about when you asked about supply chain side, we've just come out with an AI-based planning tool inventory planning replenishment our new platform has ai inherently built in for intelligent search and making things more easy we build tool sets to create dashboards based on the data um and again as i mentioned data i say you can't do ai if you don't have clean data so it's also very important before you go down the ai path you go down a data strategy path within your organization
00:22:59
Speaker
make sure that one, you're collecting all of the appropriate data that you need to. Two, it's being validated on the way in to your organization and contextualized as well.
00:23:10
Speaker
And three, you're building KPIs and key performance indicators and metrics that you want to measure so you know how to bring that data out and you know how to utilize AI effectively and and appropriately. right And again, everyone's heard the term hallucinations and AI ai you know I always say if you ask AI the same question twice, you get the same answer twice.
00:23:31
Speaker
and If the answer is no, you know that means you've got to you've got to be smart enough to really know how to use that tool you know when you swing a hammer versus when you you know twist a screwdriver rather than swing the back end of the screwdriver.
00:23:45
Speaker
you know they most Both might be able to put a nail in. One's a little more efficient than the other. That might be the right way the wrong way. so all about the data, make sure you've got that data integrity in place, and then make sure you know what you want to measure and implement. And also, you know, things are changing on a daily basis. Five new companies today, five gone tomorrow.
00:24:08
Speaker
The prices are changing rapidly as people are building out these models. To your point, these agents are getting very specialized. Agents are going to start in the future talking amongst each other. um So, you know, not everyone has to be an LLM builder.
00:24:22
Speaker
You know, you've just got to make sure as you're deploying technology, because, you know that's kind of some of the things we've been talking about a lot. You've got platforms that are open, have APIs, know how to interact and move data back and forth.
00:24:33
Speaker
And again, you've got a set of data um that then AI can be trained on. Yeah, 100%. And one of the things that we we see, and I see just as as somebody observing tech a consumer level as well,
00:24:47
Speaker
People kind of point to the AI hallucination issue too often when the root cause of a lot of issues is that the data was incorrect to begin with or the tools that were used to scrape the data and then serve it up to the LLM were incorrect to begin with.
00:25:00
Speaker
there's only im I'm not saying that AI doesn't hallucinate. Large language models certainly have been known to. But in a lot of cases where it's returning kind of faulty results or less than optimal results,
00:25:13
Speaker
The root cause is the information that's being fed or the tools that it's being given or that people are using around it to obtain that. And I think you said something really smart, which is it's about learning whatever, whether you're in supply chain, whether you're in any other kind of discipline within fashion and retail.
00:25:29
Speaker
It's about learning when to use AI and how to use it. um And that means engaging with it in some capacity. And it means, especially from you know from your point of view, it means incorporating it into products in a way that's sensible and sensitive and logical and stands the greatest chance of delivering my accurate returns as well.
00:25:48
Speaker
And when we think about what that means for kind of skills development in the workforce in general in AI, would you align with that idea that it's not going to be an instant replacement for supply chain professionals and people who are tasked with material development and procurement and sourcing, but it's more likely to be an augment to those job roles, at least in the short term?
00:26:12
Speaker
Yeah, look, I think like anything else, and almost let's talk specifically around supply chain, right? it's it's ah That's a knowledge worker position, you know, from from my my perspective, right? So again, we're giving them a power tool now to get through their job much faster.
00:26:25
Speaker
Like any technology deployment over time, as people get more productive, you know, there's hiring avoidance as you grow. You know, they may be able to deploy somebody now that they're more productive and give them more skill sets or put them in a new role and everything else.
00:26:42
Speaker
I'm not one who thinks AI is going to replace every human being, you know, that has a job going forward. I think the human element is going to continue to be real, real important.
00:26:54
Speaker
But I think the same way email changed our world, you know, the internet changed our world, ah telephone the telephone, steam engine, all of those things changed our world. AI will change our world. And as I said earlier, we're in the infancy of,
00:27:07
Speaker
of it. um But I think at the end of the day, all of these things always made us more productive, more successful, um and has allowed the world to grow.
00:27:18
Speaker
That's a really good conclusion. Just thinking about what we said there about the validity of data and the importance of data, um your report kind of suggests that when we look upstream,
00:27:32
Speaker
there's reason to maybe be a little concerned at the moment about the accuracy and maybe not the accuracy, but the way that data is structured, the way it's consolidated and to the systems that are used to kind of communicate it, share it between manufacturers, suppliers and their brand customers.
Data Integrity and Technology Use
00:27:48
Speaker
I think in your report, something like a third of manufacturers still rely heavily on spreadsheets and manual data entry. and What impact do you think that kind of gap in maturity, if you want to call it that, that digital maturity is likely to have on how we frame the sourcing and the supply chain challenges that businesses are going through at the moment.
00:28:11
Speaker
And in particular, I guess, how that impacts what you can do with AI and anything else that you want to layer on top of that data. Yeah, look, at you know, You almost answered the question in the question, right? Without data, you can't do any of these things, right? Without trusted data.
00:28:27
Speaker
You know, let's take ESG for example, right? These brands are gonna be on the hook for ESG reporting. You know, when we talk about ESG, you know, I say as a technology guy, ESG is simple to me, it's just another field in the database, right? I just have to be able to collect the data and then tie it together to a PO, tie it together to, you know, what consumer board it, be able to publish it on a label, be able to publish it to a government. But the validation of that data that someone put in there, your point, if it's coming off a manual spreadsheet, how do we know?
00:28:58
Speaker
when we're reporting that that's the right data? Or if we don't have those relationships that we talked about earlier that have to be built with your supplier, that you've got shared risk and shared reward, how do we know that they're not just telling us what we want to hear um without some sort of validation?
00:29:12
Speaker
So again, to your point, supply chain leaders are or also looking to validate that data. So, you know, there are companies now that have satellites in the sky that are looking at factories and how many apartments in the other factory, how many trucks are there, where the trucks are coming from.
00:29:29
Speaker
And there they're starting to validate data saying, okay, they said this came from this region. Yeah, we can actually see and we can pull the documents from all these websites and see the the documents. So we know it was shipped. We know where it came from. We can validate all of that.
00:29:45
Speaker
So yes, it's all about the data. here There are some blind spots within the data. And yes, because of all the demands, again, government demands, consumer demands, stakeholder demands, that white space is being filled by vendors and things. And again, the more data you have, the faster have to get through it. And that's where AI comes in, right? Very efficient and effective um to rifle through the data.
00:30:08
Speaker
um Again, uses a lot of resources and and those things that we're finding about that about as well. So you'll see as the, AI models grow in things and things in the infrastructure that's required to continue ah to fuel that.
00:30:20
Speaker
um It's all gonna come into, and that's why i keep saying we're at the infancy. We'll see how how it grows, but it it you know it is one of those, the next inflection points, I think, from a technological standpoint.
00:30:33
Speaker
Yeah, I think I would agree with you on that one. um The other thing about your report as well, so it's not you have the um the survey portion of it. You also got some interesting case studies of companies um like LeBion Rose, Grey Matter Concepts, the kind of organisations who made big strategic bets on using technology to support the the next evolution, the next kind of inflection point of their own sourcing and supply chain strategies, whether that's near-shoring, some broad-spectrum digitalization, data, whatever it is. like These are companies that have walked the talk, as it were.
00:31:08
Speaker
um Based on your knowledge of those, um what do you think our listeners can learn from those kinds of case studies? Is there anything in common that those have, anything that they all did that was consistent, or anything that saturates them that you think that is a maybe a teachable moment for the people listening to this?
00:31:27
Speaker
Yeah, look, they're all... they're all different in terms of what they wanted to accomplish and how they deploy technology. But I think, you know, what's common among them all is a vision of what they want to accomplish by having that data, by having that connected supply chain and and really by having a mission, right? So whether it's Gray Matter, who's trying to build the most sustainable, ethical supply chain process within kind of you know basic goods, right?
00:31:57
Speaker
Socks and and undergarments and those things, but do it in a sustainable, ethical, you know vertical way. They knew technology deployment would be important for that. Levine Rose, large company bringing together a number of technological platforms, consulting them down from an efficiency and effectiveness and visibility standpoint.
00:32:17
Speaker
Confexa to drive efficiencies at their factory floor through connections to like industry 4.0, IoT t diet devices, and then being able to provide real-time data to their customers for a competitive edge.
00:32:34
Speaker
I think, like I said, they all had kind of different missions, but they all had a mission, which then meant we had a clear vision from the top of what they wanted to accomplish. permeated throughout the organization, which allowed them to be successful. And then everyone knew kind of where the where the goal line was, where the try line was.
00:32:52
Speaker
um So they knew when they would be successful and and what they were running after. and i say And then when you when you look at case studies, whenever anybody looks at case studies, it's it's easy to come away thinking, um okay, the technology is what I need to accomplish this. All I need is the right solution. I need the right application and and I'll be able to follow in these people's footsteps.
00:33:14
Speaker
I think to me, that feels like a bit of a misconception because there's there's a much bigger kind of process transformation and cultural transformation that would have happened at those companies and then a bunch of other ones as well.
00:33:26
Speaker
What's your take on that kind of continuum between and changing the way you operate and investing in tools? I know the two go hand in hand, but I also know from a lot of the Intel Alliance experience that people tend to see technology as the sole solution, that it's going to pull everything else forward with it.
Business Processes and Data Strategy
00:33:45
Speaker
Look, you know, if you go back through this entire conversation in the last 40 minutes or or so, you know, and you're interviewing a technology executive, we didn't talk about any specific technology at all.
00:33:58
Speaker
And we didn't bring up technology in terms of being solutions, right? We all talked about business process, supplier and vendor relationships, the ability to be able to have the right data and understand how you want to interpret it how you want to contextualize it.
00:34:13
Speaker
you know, and have business processes that are sound, right? And then you gotta start, and then you look at the enablers, right? Cause if you don't have any of that, you know you can't you can't deploy technology. you know Again, from where I sit, I'm biased, right? I think we have the the best purpose-built supply chain platform for this yeah know industries that we serve, the brands, the retailers, you know apparel, footwear and accessories type companies.
00:34:38
Speaker
um And I think we've built in a lot of things that are necessary to execute on business strategy that's required for these industries. But to your point, it's an enabler.
00:34:50
Speaker
It's a tool. And if you don't do that upfront, business side of it, I don't care whose tool you have, it's going to fail, right? So it's first and foremost, know what you you're chasing after, know what you want to accomplish.
00:35:03
Speaker
And then you can take that and then you can validate against the technology platforms. Okay, in order for me to accomplish this, I need an open platform that has APIs allow me to connect to everybody it's perfect fill for my industry so all of the data elements that i need are already there all of the processes and retailer compliance rules and all the different terminology um and even the people within the company know how to talk to my team and can bring best practices because they work with many companies in the same industry then you can vet all of that stuff out to make sure that the partner that you're picking, the vendor that you're picking, the platform has everything you need that you've already identified that you need.
00:35:39
Speaker
you know Don't buy technology without knowing what you're going after and then trying to figure it out after you have the technology platform. Okay, now how do I solve my problems with this platform? It needs to be the other way around. I know how to solve my problems. Can this platform facilitate that?
00:35:52
Speaker
Yeah, that's a really great way to frame it. um And it's probably spent a lot of time thinking about how strategy maps to solutions and specifically in that order.
00:36:03
Speaker
Now, in the in the report, um I think you've got a line in there about how the old playbook for sourcing supply chain is is obsolete. um If you think about what everything that you've just said and what that means for companies who need to identify solutions the moves in a new playbook and then go map those to specific solutions.
00:36:25
Speaker
What do you think is a kind of a first principle that companies should be looking at when they're thinking about that transition from an old way of working to a new way of working? Where do they start? Look, ah you know, at at the risk of being, you know, kind of repetitive, you know, if if you kind of look at everything we've been talking about, and when I keep saying kind of it's all about the data, no matter what you're doing,
00:36:49
Speaker
deploying, it's, you know, start with a data strategy, define the KPIs, you know, the key performance indicators, the business metrics um that you want to have and accomplish and you want to measure on.
00:37:03
Speaker
Make sure you understand all the links in your supply chain and you have no blind spots. and And again, think the most important thing to remember in all of this is deliver in an agile way. And again, coming from a software background, you know the old way we would deliver things was the waterfall method. you know You would finish something and then move on to the next and then deliver it when it was complete.
00:37:26
Speaker
you know With agile, as you're building and as pieces are working, you're you're deploying those and then you're building on it. Same thing here. you know, if you've got links in your supply chain that aren't digitized yet, and to your point earlier, they're still in a spreadsheet.
00:37:39
Speaker
Let's figure out a way how to get that spreadsheet data loaded, how to get it loaded, make sure it's validated, make sure it comes in and don't just keep it offline. Because a lot of these organizations we go into, they have all sorts of data, but it's offline.
00:37:52
Speaker
And, you know, they're not bringing it into a centralized location. So it's, you know, Deliver in an agile way. So if you don't have all the data yet, or maybe you're not collecting yet, or maybe you haven't connected it yet, find out what you can deliver to get you that much closer to where you want to get to.
00:38:10
Speaker
Don't devise a digitization strategy that has one goal line. And if you don't get to that goal line, you're a failure. There's gotta be, you know, every yard line it is a success that you've gotta then build on from that standpoint and take those wins when you can take them. Don't wait for the end for the big bang.
00:38:28
Speaker
um You know, if you've got data, provide share it, bring it in, learn from it, find out what other holes you may have or blind spots you may have, identify where that data exists, bring it in, understand how to validate it.
00:38:42
Speaker
And there's a whole host of ways to do that from platforms to data warehouse strategies to, data strategies to, you know, purpose-built modules that you can bolt onto to your ERP systems or to your p PLM um systems.
Agile Delivery and Community Importance
00:38:56
Speaker
So, you know, again, back to your type questions, having a clear-eyed view of what you want to accomplish and then deliver and identify what you need in an agile way so you can reap the benefits and continue on the journey.
00:39:12
Speaker
Yeah. Okay. And do you, that kind of data isolation that you're talking about where where people have a lot of information and it's not, it's not connected or it's kept closely guarded or it's not shared with the right people. Do you think that's the biggest roadblock to the industry? I'm using it as shorthand for fashion, retail, consumer products and so on.
00:39:29
Speaker
um Do you think that's the biggest roadblock standing in the way of having a fully connected supply chain or are there other barriers in there as well? Look, I think, you know, I hate to say what's the biggest roadblock, right? Because again, it goes back to my,
00:39:41
Speaker
My most common answer again, it depends, right? Some organizations, the biggest roadblock is that, you know, leadership is not convinced and they're not given the investment um that's required to build some of this infrastructure.
00:39:54
Speaker
Right. Some of it is, yes, things are are offline. So people don't even know what they have. um and and they don't know where to begin. So that's ah that's ah that's a ah piece, right?
00:40:06
Speaker
Others, to your point, you know they don't have the relationship so they can get out the data. So they gotta start working first on the relationships before they ever get to a technology deployment. So i think it's, I wanna say there's one thing that's gonna, the biggest thing or the one thing or the most important thing. I think it it's different from location location. It's just making sure that people have a clear-eyed view of what they wanna get to dig in to know where that white space is or where those blind spots are, and then devise a plan that you can then deliver in an agile method um to start your journey. Because at the end of the day, it's a journey with no destination, right?
00:40:42
Speaker
you know You're never going to be complete because something's going to change. There's going to be a different type of disruption that you didn't anticipate. There's going to be a different consumer demand that no one anticipated. you know Whatever. The human body is going to evolve and people are to have three arms and now you're going to design totally differently. i don't know what the answer is. But you know again, like I said, there's no desk we're never going to be finished. right There's always going to something to improve upon.
00:41:04
Speaker
So make sure that whether it's the business process you're building or not, are not putting you into a corner that you can't get out of so that you you've got platforms and technology and things that can grow with you as an organization, can change as you add a retail arm to your wholesale business or at an e-commerce arm to your retail business, or whatever it may be, you know, that can adapt as you acquire businesses and you can build on on the platform.
00:41:31
Speaker
So again, it's it's all about starting the journey. That's the most important thing. Make sure you you're you' starting that journey. Identify what you have to have to be successful on the journey and then make sure you're seeing success along the way.
00:41:44
Speaker
And just to bring us to a close, my final thing would be, you know in recognition of that kind of diversity of strategies and everyone's and kind of maturity is going to be different, and everybody's roadblocks are going to be different, everybody's opportunities are going to be different.
00:41:58
Speaker
What's one piece of advice that you would give supply chain leaders in general, like one action point to focus on right now, now being early June 2025 as we're recording this? Where would, what what's a good common thing for everybody to think about going after in the very near term?
00:42:16
Speaker
Look, surround yourself with people who are cooking in the same juices. So as you're looking for partners, and again, you know, specifically talking about software vendors and
00:42:29
Speaker
consulting organizations, you know speak to people who are in your industries, who have deep expertise, who can bring solutions that they've already solved before, or you can learn from on mistakes they've already made.
00:42:41
Speaker
before. You know, talking to a software vendor who has ERP solution that supports 150 industries, you probably won't get as much value if you're talking to somebody who's really focused in your industry and has hundreds of customers who they're talking to on a monthly basis and hearing what's working, what's not working, how people are doing things, and then are bringing that back into the R&D of their product, to the training of their consultants,
00:43:06
Speaker
You know, and just to the betterment and to the community that they that they serve. So I think it's, you know, the old adages, as always say, you know, as much as things change, remain the same. But surround yourself um with people who who who are.
00:43:22
Speaker
who are facing the same problems, who have solved the same problems. Some may be ahead of you, some may be behind you, um but communicate, don't try to don't try to do things on your own. um It's not necessary.
00:43:34
Speaker
And people are willing to help and and and work with you and and bring solutions. And then you put your own spin on it. which is what your competitive edge across your competitors of things.
00:43:45
Speaker
um But there's a lot of there's a lot of commonality that you don't have to people don't have to blaze new grounds. And even if it's AI, there's even commonality there at this point, even though it's in its... and infancy, you know, these tools are going to get more specialized by industry and the deeper they can go into your industry, the more valuable they will be to you than just a generic type, you know, invoice processing thing versus one that ties POs together through and it's very specific for your industry and what the reporting requirements are, et cetera, et cetera.
00:44:14
Speaker
but And, you know, to bring us to a close, your your final point there, It mirrors my experience. like Brands, retailers, suppliers, people are very well willing to share their experiences. They're very willing to talk about what's worked for them, what hasn't worked for them, like how they're approaching particular challenges, how they're going after particular opportunities.
00:44:33
Speaker
There's a lot of that business. conversations that you'll be able to have at events and things like that, talking to to um to colleagues and peers. And then the other thing is you have reports like yours, the Sourcing and Supply Chain Tech report, where people have divulged a lot of this information in surveys and case studies and so on.
00:44:49
Speaker
So from my point of view, that the report is a good read from that perspective. um and i think Yeah, look, that's why that's why we put that report out, right? So people can can learn from it for us to learn from it, what's what's on people's mind, what's important to them. So make sure we're continue to add value.
00:45:04
Speaker
You know, we hold user groups every year. We hold webinars. We have customer advisory councils. You know, we really from day one have tried to build a community and invest in the community.
00:45:16
Speaker
And more importantly than than our customers speaking with us, I believe, is customers speaking with each other and really making sure that um They're working together to be better. And that at the end of day will make us better because then they can speak in a collective the voice as the industry, which then fuels our R&D spend, fuels they the programs that we're bringing to the marketplace, and then allows us you know to give back to them too from an education standpoint. And again, doing things like this, speaking with you and talking about what's working in the industry, what we're seeing.
00:45:50
Speaker
And just again, we're all, world like I said, cooking in the same juices, fighting the same battles. you know, let's all get some success together as well. Amazing. Paul, thank you very much for joining to me. i really appreciate your time. Ben, appreciate it Enjoyed the conversation as always.
00:46:04
Speaker
Thanks for listening. um We covered a ton in this episode, but I think it's safe to say there's going to be plenty more to talk about in the back half of 2025. so Supply chains, sourcing strategies, technology, none of those things is going to stand still over the next five or six months.
00:46:19
Speaker
In the meantime, i keep an eye on the interline for regular editorials, news analysis, interviews, and much more. And remember that the Blue Cherry State of the Supply Chain Report is available to download through bluecherry.com.
00:46:31
Speaker
That's B-L-U-E-C-H-E-R-R-Y dot com.