Rodney Thomas and Stephanie Thomas on Topical Supply Chain Issues
12:09 COVID-19'S temporary and permanent impact on consumer behavior
20:40 Misconceptions around supply chain innovation and growth
23:50 Connection between supply chain logistics and customer centricity
31:00 Concerns around last mile delivery and where it is heading
40:15 How women are impacting supply chain
44:26 Optimism for future supply innovation and growth
Follow the host:
https://www.linkedin.com/in/andrewlmurray/
Follow the guests:
https://www.linkedin.com/in/rod-thomas-a409a41/
https://www.linkedin.com/in/stephaniethomasuark/
Follow the initiative:
https://www.linkedin.com/company/customer-centric-leadership-initiative-sam-m-walton-college-of-business/
Transcript
They need to be customer centric and think about how does a
Speaker:customer use this product?
Speaker:What are the service implications of not having this on the shelf?
Speaker:It's very different to be out of stock on potato chips, which sunflower oil is
Speaker:a key product and baby formula, right?
Speaker:To me, I think we need to think of our supply chains.
Speaker:We gotta look at the products and how customers use those.
Speaker:And we need to segment our supply chains and treat them differently based on how
Speaker:customers are impacted by those products.
Speaker:So for life saving and life sustaining products, medicine, food, water,
Speaker:I absolutely think we need to make sure resilience is top of mind.
Speaker:Hi, I'm Andy Murray.
Speaker:Welcome to it's a customer's world podcast.
Speaker:Now more than ever, retailers and brands are accelerating their
Speaker:quest to be more customer center.
Speaker:But to be truly customer-centric it requires both a shift in mindset and
Speaker:ways of working, not just in marketing, but in all parts of the organization.
Speaker:In this podcast series, I'll be talking with practitioners, thought leaders
Speaker:and scholars to hear their thoughts on what it takes to be a leader
Speaker:in today's customer centric world.
Speaker:In today's episode, I'm joined by professors, Rodney and Stephanie Thomas,
Speaker:Rodney received his PhD in supply chain and marketing from the university
Speaker:of Tennessee, and currently serves as the director of the undergraduate
Speaker:supply chain management program at the Walton college of business.
Speaker:Stephanie who earned her PhD in supply chain management.
Speaker:From Georgia.
Speaker:Southern is also a professor at the Walton college of business and
Speaker:is the executive director of women impacting supply chain excellence.
Speaker:In our conversation, we connect the dots between supply chain logistics and
Speaker:customer centricity, both Rodney and Stephanie have executive level experience
Speaker:in big retail, which gives them a unique perspective on the nuances of the supply
Speaker:chain issues challenging business today.
Speaker:We talked quite a bit about how a customer-centric mindset can lead to
Speaker:supply chain innovation that builds resiliency as well as efficiency.
Speaker:Hi Steph, hi Rod.
Speaker:Welcome to the show today.
Speaker:It's good to see you guys.
Speaker:Well, I'd like to hear more about your backgrounds and hear what brought you to
Speaker:this space of supply chain and logistics.
Speaker:And for each of you I'd love for you to take me to that moment when you said
Speaker:this is kind of what I want to focus on.
Speaker:I really, this is, this is important to me and I want to spend my time doing this.
Speaker:I was introduced, it was called logistics back then in the MBA program.
Speaker:And I had gone to go get my MBA at Tennessee thinking that I was gonna
Speaker:be a marketing or finance professional and fell in love with logistics,
Speaker:especially when I realized it was a lot more than just being a truck driver.
Speaker:And I've been doing it ever since, either in industry or now as a professor.
Speaker:Supply chains make the world a better place.
Speaker:It's the ultimate source of competitive advantage.
Speaker:And I love talking about it, teaching it, working with students and industry
Speaker:partners.
Speaker:Excellent.
Speaker:So I got into the field for a practical reason.
Speaker:I fell in into it kind of like Rod did in grad school and I wanted a job afterwards.
Speaker:And the university of Tennessee had a great program at the time.
Speaker:And my parents didn't want me to come back home and live in their basement.
Speaker:And so I thought maybe I should try this out.
Speaker:And then what I found is one, I really enjoyed the classes and the,
Speaker:as Rod mentioned, the complex problem solving and, and those pieces of it.
Speaker:But I, I fell in love with the relational piece of it.
Speaker:And some of those other things I went and did a summer internship, and
Speaker:that's where kind of the classroom pieces all kind of came together.
Speaker:And I said, you know, this is what I, I wanna do.
Speaker:This is where I can look and know that I'm making an impact on an organization.
Speaker:And that's kind of where the, the journey started for me.
Speaker:I
Speaker:love it.
Speaker:And you talked a little bit about relationship in there
Speaker:knowing your background.
Speaker:Uh, we'll get to that because I think there's so much about, uh, supply
Speaker:chain logistics is about relationship, but I wanna start with really
Speaker:something, maybe you mentioned Rod
Speaker:it was like, they think, I thought it was about driving trucks.
Speaker:One of the things I've learned from working with the Walton college and
Speaker:the esteemed faculty is the importance of definitions as you guys know.
Speaker:And so I'm gonna ask you straight up.
Speaker:Well, how would you define, uh, supply chain logistics if that's
Speaker:the right phrase, which I think it is as we're talking about today,
Speaker:from what I would've thought about it five years ago, ten years ago.
Speaker:What I think about today it's changed.
Speaker:And so I'd love to know how do you define it?
Speaker:And what's, what's in the scope.
Speaker:If you want an academic definition, it's three or more organizations
Speaker:connected by the upstream and downstream flows of products, services,
Speaker:information, and finances from point of origin to point of consumption.
Speaker:That's the academic stuff.
Speaker:Okay.
Speaker:If you ask me to explain it, like I explained to grandma, we're all
Speaker:about getting the right products at the right place at the right time.
Speaker:As far as scope, you know, there's a planning function, we source things,
Speaker:we make things and we move things and we've gotta integrate all those pieces.
Speaker:So when I first talked about.
Speaker:I thought, I, I thought it was originally just being a truck driver.
Speaker:That's just the move piece, but there's, there's transformational processes.
Speaker:There's sourcing, there's a plan to pull all that stuff together.
Speaker:Supply chains have been around since the beginning of time.
Speaker:We just didn't manage them very well.
Speaker:We didn't think about them as supply chains.
Speaker:We treated them as individual pieces.
Speaker:So it's through the integration over the last couple decades
Speaker:where we realize the true value of making that overall system better.
Speaker:Rather than just focusing on individual pieces.
Speaker:Well, and it's interesting you put it that way because if I didn't know better, it
Speaker:would almost sound like that's something totally within one company's control.
Speaker:And so Steph, you talked about relationships.
Speaker:Yeah.
Speaker:How does that definition of supply chain logistics?
Speaker:How do you look at it in the context of the larger ecosystem?
Speaker:So, as rod mentioned, when he did the academic definition, starting
Speaker:with three or more organizations that plants that seed of it is a connection
Speaker:of organizations working together.
Speaker:And his, he said like point of origin, that's where the raw materials come out
Speaker:of the ground however they are created.
Speaker:To the point where you and I go buy something off the shelf at the store,
Speaker:very few companies do all of that.
Speaker:You know, maybe a farmer has his own stand and sells his,
Speaker:his produce or, or something.
Speaker:But for the most part, we need a lot of companies to do that.
Speaker:And maybe a company does all a lot of the making or even selling.
Speaker:But they may need to get that something somewhere where there is a truck driver
Speaker:that needs to be in, in play there.
Speaker:So you mentioned the term logistics and where Rod was kind of talking about
Speaker:the, the supply chain side of things.
Speaker:A lot of what we think about with logistics is how do we day to day do the
Speaker:things that supply chains need us to do.
Speaker:And we'll say things like getting the right product to the right place at the
Speaker:right time, in the right quantity, in the right condition, those types of things.
Speaker:That's what logistics does.
Speaker:And what logistics is really doing is making the strategy that an entire
Speaker:supply chain has come together.
Speaker:And it's so all those different organizations work together.
Speaker:And sometimes I'll tell my students it's about managing relationships,
Speaker:managing risk, and managing trade offs to manage those trade
Speaker:offs and to manage those risks.
Speaker:You need to have relationships within your own organization and relationships
Speaker:across organizations as well.
Speaker:That's really helpful.
Speaker:And I, I guess one of the questions I have around a supply chain logistics
Speaker:and, and what's in the scope.
Speaker:Is in this area of forecasting because it, it would seem to me the old school way
Speaker:of thinking, perhaps that your starting point is you get a forecast of some
Speaker:sort, but as we've seen with COVID and we've seen with, um, in the last couple
Speaker:of months, actually, uh, as we record this, the ability to forecast change
Speaker:in consumer behavior and how that feeds the whole process is really fundamental.
Speaker:How much is the discipline of forecasting included in the way
Speaker:you look at supply chain logistics?
Speaker:It's huge.
Speaker:When I refer to the planning piece, it starts with some idea of what
Speaker:do we think demand's gonna be?
Speaker:Because then we build our supply chains around that in terms of
Speaker:capacity and capabilities with that said, every forecast is wrong.
Speaker:They're never gonna be right.
Speaker:If we had perfect forecasts, we wouldn't need supply chain managers, everything
Speaker:would just be a planning function.
Speaker:Right.
Speaker:Everybody put their orders in.
Speaker:A year in advance and everything would flow seamlessly and would work out it's
Speaker:these big fluctuations in demand that weren't predicted that have caused us so
Speaker:many problems, especially recently, right.
Speaker:COVID hit.
Speaker:So we had some structural problems with facilities shut down, but a lot
Speaker:of demand patterns changed overnight.
Speaker:And those changes really stressed supply change because they weren't
Speaker:built for those type of demand patterns.
Speaker:Is demand forecasting, something that's included in the scope academically of
Speaker:helping, uh, students develop a degree in a specialty in supply chain logistics.
Speaker:Absolutely.
Speaker:We have that on the books.
Speaker:They have a dedicated class that we call plan: forecasting
Speaker:and inventory management.
Speaker:Hmm.
Speaker:So we, we, that's a separate class.
Speaker:It's such a core function.
Speaker:It is fundamental to everything we do.
Speaker:But Andy bringing that up is, and Rod's alluded to this, what we've always
Speaker:done, doesn't work in this environment.
Speaker:And so COVID has kind of had everybody throw out the rule book and companies are
Speaker:struggling because they have access to more data than they've ever had before.
Speaker:Yet they're not necessarily incorporating that data in a meaningful way to
Speaker:create meaningful forecast that would allow them to adjust and make
Speaker:changes when something like nobody could see, like how, what, what's the
Speaker:change a global pandemic's gonna do?
Speaker:That's outside the scope of what might be a normal change, uh, you
Speaker:know, an ice storm or bad traffic in Atlanta or something causing a delay.
Speaker:Shouldn't be a big impact.
Speaker:We should be able to adjust some things on that.
Speaker:Our current models have been like, Hey, you know, we did this last year.
Speaker:We're gonna bump it up 10% and that's gonna be our forecast for next year.
Speaker:And we've got to become more, much more sophisticated and, and some
Speaker:companies are trying to get there, but there's a lot of opportunities
Speaker:in the realm of, of forecasting.
Speaker:To make some really interesting changes based on what's happened within, in COVID.
Speaker:We, we need some great talent to come in and kind of rethink how we've been
Speaker:evaluating, uh, demand forecasting.
Speaker:It, it sounds like a bit of an academic challenge too, because if you look at
Speaker:demand forecasting, nothing's really changed systemically with consumer
Speaker:buying patterns until COVID hit.
Speaker:And now all of a sudden, even your base data that you're using
Speaker:for historical is compromised.
Speaker:And so I don't think I've met yet a, uh, supplier working with retail
Speaker:that isn't struggling with trying to find their path on what's the right.
Speaker:You know, demand forecast.
Speaker:You try to use a two year stack and level out the, his, like,
Speaker:pretend nothing ever happened.
Speaker:Then look at, you know, what's happened in this spring of 2022
Speaker:where, you know, retailers were caught off guard on consumer
Speaker:buying patterns absolutely changed.
Speaker:You got earnings misses on almost every major retailer because of inflation.
Speaker:How do you factor in forecasting when you don't, you can't see.
Speaker:The impact of inflation and all the things that's changed consumers so fast.
Speaker:That's where we gotta be resilient and responsive.
Speaker:And historically we haven't had to do that because we relied
Speaker:on pretty good forecasts.
Speaker:The last two years of all the demand data it's garbage right
Speaker:now, you can't really trust it.
Speaker:Because COVID because consumer patterns shifted.
Speaker:One of the things we always hear about talking with suppliers
Speaker:is what was a permanent demand change and what was temporary.
Speaker:So for instance, consumers, we went and bought up and hoarded toilet paper.
Speaker:That was not a permanent change in buying patterns for that particular product.
Speaker:But you look at a Clorox whipe, they see the spike in demand,
Speaker:and now they're questioning.
Speaker:Is that gonna last forever or not?
Speaker:Maybe something like that probably will fundamentally change.
Speaker:I can see hand sanitizer being the same way.
Speaker:Are we gonna be more germ conscious?
Speaker:So some of these categories, it's a permanent change.
Speaker:Some of them it isn't.
Speaker:And then to your point, you throw inflation in there.
Speaker:So we're shifting buying patterns now just because of the money
Speaker:we do and don't have access to.
Speaker:So it's gonna be tough.
Speaker:It, our supply chains were designed over the last couple decades to be
Speaker:very efficient and drive down costs.
Speaker:We did not focus as much on resilience and risks, and then
Speaker:we got hit with a bunch of them.
Speaker:So we
Speaker:did you think resilience is the new efficiency?
Speaker:No.
Speaker:I think the supply chains we have in place were built to be efficient.
Speaker:We didn't think as much about resilience.
Speaker:We just assumed we were very agnostic to risk.
Speaker:If you will.
Speaker:A number of those things have hit now.
Speaker:I hope we keep resilience always in the back of our mind.
Speaker:At one point you said is resilience the new black.
Speaker:I, I don't know if it's the new black.
Speaker:I think efficiency always will be, but I hope it's a khaki or a charcoal gray
Speaker:that we always have in our closet.
Speaker:So we could always go back to, we can't look at the supply chains as
Speaker:just one dimension of performance.
Speaker:It really needs to be cost, service, and resilience.
Speaker:And, and you throw in sustainability in there too.
Speaker:And historically we've not designed our supply chains with all four
Speaker:of those dimensions in place.
Speaker:And there's an orientation too, for managers to do this.
Speaker:They need to think about supply chains differently.
Speaker:Look at sourcing professionals for decades.
Speaker:They've been incentivized to get the lowest cost per unit.
Speaker:Well, the easiest way to do that is get more and more volume
Speaker:to one supplier and economies.
Speaker:A scale say we'll get a lower price.
Speaker:Well, enough people do that over time.
Speaker:You see entire industries where critical components are sourced from one region
Speaker:of the world that drove down cost.
Speaker:It was very efficient to do.
Speaker:The problem is when a pandemic or something happens in that region.
Speaker:The whole world struggles with product availability, whether it's microchips,
Speaker:whether it's sunflower or oil right now in the Ukraine for baby formula.
Speaker:Right.
Speaker:We, we have we're, we're experiencing all the effects of
Speaker:sourcing more and more volume from fewer and fewer suppliers
Speaker:and fewer and fewer locations.
Speaker:So that trade off between cost and resilience comes into play and
Speaker:we're seeing it day in and day out.
Speaker:So structurally we have that in place, but even the orientation, we
Speaker:gotta re incentivize the way we push these sourcing managers to think
Speaker:it's not just about lowest cost.
Speaker:They need to think about revenue continuity.
Speaker:They need to be customer centric and think about how does a
Speaker:customer use this product.
Speaker:What are the service implications of not having this on the shelf?
Speaker:It's very different to be outta stock on, potato chips, which sunflower oil is
Speaker:a key product and baby formula, right?
Speaker:To me, I think we need to think of our supply chains.
Speaker:We gotta look at the products and how customers use those.
Speaker:And we need to segment our supply chains and treat them differently based on how
Speaker:customers are impacted by those products.
Speaker:So for life saving and life sustaining products, medicine, food, water,
Speaker:I absolutely think we need to make sure resilience is top of mind.
Speaker:How do you, um, I guess I'd look at this and say, what you're describing is really
Speaker:hard to solve for one company at a time.
Speaker:And we look maybe Steph at the relationships that are required between
Speaker:suppliers and retailers, but even, even more than that, perhaps even
Speaker:governments, you know what, who's the watchdog because it looks baby formula,
Speaker:you know, as an example.
Speaker:One could argue, there's been a great benefit to lowered cost
Speaker:by that focus on efficiency that many more people be able to afford
Speaker:baby formula than could have been.
Speaker:So is it all wrong to have been focused on efficiency or, you know, but how do
Speaker:you then protect the resiliency required?
Speaker:So you don't have this huge problem we're having and what kind of
Speaker:partnerships are gonna be required?
Speaker:Because it feels to me, that's bigger than just a retailer, or two treating
Speaker:their supplier differently and asking better questions on, is this gonna,
Speaker:is this ask, gonna put you into too much of a consolidated risk?
Speaker:Is there a government function that deals with supply chain vulnerabilities?
Speaker:I, I don't know if there is or isn't, that's what, I'm kind
Speaker:of curious what you think.
Speaker:It's a great question.
Speaker:And I think that's a, an issue there's been a lot of conversation about, of
Speaker:what role does government play in, in parts of supply chain to Rod's point,
Speaker:there are certain segments that we need to protect more than others for, for the
Speaker:health wellbeing of all across the globe.
Speaker:And then there's others that maybe we don't need to have, uh, influence.
Speaker:It it, you, the government piece is it's, that's a, that's a tough one
Speaker:that that's a tough one to, to solve.
Speaker:But as Rod mentioned earlier, supply chains are all about
Speaker:solving complex problems.
Speaker:So supply chain managers and the organizations working together
Speaker:have been solving complex problems.
Speaker:As long as they've been around.
Speaker:We just are more aware of them now than we ever have been before.
Speaker:And that we have felt the pain in ways that we never have before.
Speaker:You look at supply chain development.
Speaker:I don't see that as a short term problem.
Speaker:I mean, it, it, because of the capital investment required to build supply
Speaker:chains, these things don't these fluctuations in, in, uh, challenges should
Speaker:be something a bit more forecastable if that's a word, we should be able to see
Speaker:the, into the future a bit better, because we don't have, you know, you can't just,
Speaker:you know, switch things off and on.
Speaker:I was listening to a podcast this week around the shortage in mining of
Speaker:rare earth materials that are required for electrification of our, of the
Speaker:industries, with all kinds of things, from turbines to, you know, electric cars,
Speaker:EV ,you know the raw materials of that.
Speaker:Where's that mining being done?
Speaker:And how much of that mining's gonna be part of what's available
Speaker:in the us versus what's gonna be, you know, available in China?
Speaker:And what is that, what kind of vulnerabilities that put us in
Speaker:and is it an existential issue?
Speaker:Well, that's, you know, it would take years and year, decades
Speaker:maybe to work out the supply chain implications of solving that.
Speaker:So we have our own, uh, supply at a national level.
Speaker:Uh, so I, I guess my question is it feels like this, uh, supply chain has been
Speaker:pushed to the top of everyone's agenda yet these are decades in the making.
Speaker:So where is that?
Speaker:I guess, you know, is this what the conversation's happening in
Speaker:academia around the longer term things or how much of it is trying
Speaker:to help solve the short term?
Speaker:There, there's obviously a mix of, of both and that we're constantly having to kind
Speaker:of pivot back and forth, but you mentioned how many things could we actually are.
Speaker:Forecastable if you look at a lot of big box retailers and let's just take
Speaker:natural disasters like hurricanes.
Speaker:They have a ton of history on what happens when a big storm hits and they know
Speaker:down to the type of product, what people need pre-storm what people need during
Speaker:the storm, what people need post storm.
Speaker:They know when the insurance checks are gonna come in and
Speaker:then they know they can back up.
Speaker:This is the first part of the remodel that somebody's gonna do.
Speaker:This is the second part, right?
Speaker:That.
Speaker:But that's, they've been working on that for a long time.
Speaker:So they stage stuff around the Southeastern part of the United States,
Speaker:you know, there's generators and, and, and things sitting around waiting until
Speaker:they're they're needed there's history.
Speaker:So they have figured out how to adapt to that.
Speaker:We don't have the luxury of time of figuring that out, given what we've been
Speaker:through, but it, when you look at how much has moved through supply chains throughout
Speaker:COVID and especially the, the huge push to online shopping and at home delivery
Speaker:and stuff, supply chains have actually moved way more through them than what
Speaker:they ever had before, which is kind of amazing given all the other constraint.
Speaker:We just focus on what it wasn't able to do for us.
Speaker:Yeah.
Speaker:For me as an individual consumer, when I went to the store and couldn't
Speaker:buy X, that's where I felt the pain.
Speaker:And so that's what I focused on.
Speaker:Not all of the other stuff, you know, I'm still amazed at how many restaurants
Speaker:that all they had ever done were dine in, uh, you know, seating it and have people
Speaker:come into the restaurant and they pivoted and did, you know, take out, carry out
Speaker:online orders kind of almost overnight.
Speaker:They kind of rebuilt their business at the beginning of COVID.
Speaker:Because that was survival.
Speaker:And, and they do so companies are, are coming up with new and innovative ways.
Speaker:But when we look at it on a, on a grand scale, yes, there are big
Speaker:issues, but there are a lot of people doing some really great
Speaker:things and, and working together throughout the supply chain to try to
Speaker:have better conversations.
Speaker:And you mentioned earlier, like asking the right questions or,
Speaker:or sharing the right information.
Speaker:A lot of times we've wanted to hoard information so that we, we didn't
Speaker:want it to be used against us.
Speaker:And we found out a lot of times that we, when we open up these conversations,
Speaker:that gives us opportunities to create new ways to solve problems
Speaker:and new opportunities for value.
Speaker:Yeah, that that's a great perspective.
Speaker:Uh, one of the things I care a lot about is customer centric leadership,
Speaker:customer centricity, as an idea.
Speaker:And I think a lot of people probably, maybe underappreciate how much
Speaker:supply chain logistics has done.
Speaker:Even in the last couple of years of providing innovation,
Speaker:that is very customer centric.
Speaker:And you think about customer centricity, a lot of people think of call centers,
Speaker:just like Rod you said truck drivers to product supply, you know, uh, call
Speaker:centers is what or customer experience, but, but actually being customer centric
Speaker:that last mile delivery and all the pivoting, the QR codes for menus, you
Speaker:know, QR, code's been around a long time, but I mean, being able to innovate.
Speaker:Uh, to me it feels like most innovation toward being customer centric is
Speaker:coming from supply chain, logistics, thinkers, and doers, more so than
Speaker:marketing or you know, other components.
Speaker:And so when you talk about innovation, especially if
Speaker:I'm putting my retailer hat on.
Speaker:Um, you really do need partnerships through the supply
Speaker:community to pull that off.
Speaker:And so I'd love to hear your thoughts around innovation in this space, because
Speaker:capital's in is big capital investments a lot of times, and probably those
Speaker:restaurants, Stephanie, that were experimenting with takeout and pick up
Speaker:and were probably further along than those that haven't even got off the dime.
Speaker:Right.
Speaker:So how do you guys see innovation in this space?
Speaker:Let me go back to the customer centricity piece.
Speaker:That's why supply chains exist.
Speaker:We lose sight of that sometimes we think it's a cost center.
Speaker:We think it's a way to drive down prices.
Speaker:Supply chains have always existed to serve customer needs.
Speaker:And as long as we have that right orientation, we're gonna be customer
Speaker:centric to your point on innovation,
Speaker:um, nobody goes at it alone anymore.
Speaker:The unit of analysis, the, the strategic competitors out there.
Speaker:Are no longer individual companies.
Speaker:Walmart doesn't compete against Amazon.
Speaker:It's Walmart and 10,000 of their best friends and their supply chains
Speaker:competing against Amazon and all their suppliers and their supply chains.
Speaker:So it is supply chain against supply chain.
Speaker:That's really the dynamic.
Speaker:And that's where you're seeing a lot of the innovation occur.
Speaker:Yes, the retailers can drive some of that.
Speaker:Yes, they could push suppliers to be more innovative.
Speaker:Sometimes those suppliers are coming in with really innovative
Speaker:solutions to come help drive that.
Speaker:And it's a team effort and, you know, we use the term chain cuz every link matters.
Speaker:It's a team.
Speaker:It nobody's gonna deliver on that innovation promise.
Speaker:Nobody's gonna deliver on being customer centric unless they have key partners
Speaker:throughout that supply chain, all pulling together in the same direction.
Speaker:Are you guys seeing examples where collaboration between retailer suppliers?
Speaker:Um, in general, I'm just industrywide is, is taking bigger steps forward.
Speaker:Because I know sometimes these go through cycles and it's, you know,
Speaker:let's, let's build collaborativly together to solve problems.
Speaker:For example, R F I D, and when that first came through, I know the university
Speaker:of Arkansas played a key role in helping the industry sort that out.
Speaker:But where do you think collaboration is today and where do you see it going?
Speaker:I'd say it's not where it needs to be.
Speaker:I think there are pockets that are working together and are, are seeing the value
Speaker:and the benefit, but we're still as
Speaker:I mentioned kind of previously the, the trusting each other with sharing
Speaker:information and sharing data and sharing our ideas without the fear
Speaker:that it's going to be used against us, it is, is still kind of out there.
Speaker:Um, to me, and this is a little outside of the, the, the
Speaker:retail kind of side of things.
Speaker:If you look at something like what JB hunt has done with their 360,
Speaker:we're basically it, it's kind of an open source platform that any truck
Speaker:driver can use to, to pick up loads.
Speaker:I'm sure JB hunt has built in there that, that there's some benefit to them, but
Speaker:that's also opening up opportunity for other people that isn't for their drivers.
Speaker:That's a collaboration and that's a change that's going on in that industry
Speaker:that if they didn't kind of push that.
Speaker:Somebody else might have down the road, but they were the first ones to kind
Speaker:of say, you know, let's, let's try this app idea and see if we can actually meet
Speaker:the needs of all of our customers more than just our "core JB hunt customers".
Speaker:And I think we're gonna see more ideas and concepts like that, uh, within
Speaker:organizations, but we've gotta get past the old school mindset of if I give you
Speaker:information, you're gonna exploit me.
Speaker:Well, and I just, uh, heard an example this week of a particular retailer,
Speaker:not, not Walmart, not, not any of the big boxes, but a retailer that is
Speaker:really look at the supply chain cost of certain types of loads, getting to their
Speaker:DC, and then putting a cost analysis against that and charging back suppliers
Speaker:higher fees, if you will, for that.
Speaker:And to me, that fee, I understand it.
Speaker:And I, it, it kind of makes sense, but it doesn't sound like a, how
Speaker:could we drive mutual value creation and joint costs down together?
Speaker:That's a different idea, I think, than looking at your supply chain
Speaker:and saying, where can I move cost?
Speaker:Did it, do I have that right, or is that, am I just being naive?
Speaker:No, you, you have it exactly right.
Speaker:Of, are we reducing costs or just shifting costs?
Speaker:I think that's a, that's a fair question.
Speaker:Right, and a, a lot of times cost savings are really just cost
Speaker:shifting and it always seems to go back further up the supply chain.
Speaker:Um, with that said, it's really hard for a retailer to get product on the
Speaker:shelves for customers if their suppliers aren't shipping 'em on time and complete.
Speaker:And you, I get both sides of that debate.
Speaker:Right.
Speaker:If we're in a relationship, it shouldn't be punitive, but
Speaker:you're really penalizing me.
Speaker:If you're not shipping me on time and complete.
Speaker:So it's tough.
Speaker:I, I I've seen those where they work, where there's a little
Speaker:bit of give and take on that.
Speaker:I've seen that where that's part of the broader overall negotiation.
Speaker:You come to me in a line review and you're pitching new products,
Speaker:then let's bring up this, "can you ship them on time" type thing.
Speaker:I think you need to look at all those pieces holistically.
Speaker:And again, it all goes back to that shelf at the end of the day,
Speaker:that's where the suppliers and retailers have common interests.
Speaker:If it's not right for consumers, if it's not customer
Speaker:centric, why are you doing it?
Speaker:And you know, you might have different approaches from there, but as long as
Speaker:that final shelf availability, it's there when the customer needs it.
Speaker:Right quantity, right shape, right everything.
Speaker:That's what should drive what they're doing in these relationships.
Speaker:But Andy, what you're bringing up too about cost though, is a lot of times,
Speaker:um, we don't really always have the best grasp on all the costs involved
Speaker:somewhere in, in pricing structure.
Speaker:And, and there's a lot of, what ifs out there or things that we
Speaker:just don't know how to quantify.
Speaker:So that brings another kind of wrinkle into it.
Speaker:And then, you know, if we're gonna be this team throughout the supply chain,
Speaker:if any one part of that team gets really greedy on the financial side of it.
Speaker:Then maybe we don't sell as much at the end because we've,
Speaker:out-priced the customers and stuff.
Speaker:And so there's, there's kind of that whole, and people don't want, like to
Speaker:talk about the, the money side of it, but it it's everybody, you know, if a
Speaker:bottle of water costs me $10, unless I'm really dehydrated at a hot August
Speaker:football game, I'm not gonna pay that.
Speaker:But if everybody kind of has to keep in line too, with that whole costing
Speaker:structure, as it, it goes to Rod's point to be something that somebody is willing
Speaker:to pay when it gets to the retail shelf.
Speaker:Well, and that brings up a, a really interesting point because if we really
Speaker:priced out, per order the cost of last mile delivery versus that cost being
Speaker:absorbed into the company in some way, somehow, uh, whether it's through
Speaker:advertising spends or, you know, whatever you kind of wonder would the consumer.
Speaker:You know, what would their appetite be for that?
Speaker:I understand why no retailer would want to do that.
Speaker:But I mean, do you ever think, or do you see a world where those, the scaling of
Speaker:last mile delivery service would have a.
Speaker:Huge or, uh, impact on margin reduction of that cost.
Speaker:Cuz those cost structures to me seem hard to see scale benefits.
Speaker:I, I don't know.
Speaker:So I mean, where do you see that last mile delivery cost engineering
Speaker:supply chain ever really going?
Speaker:, I'm gonna give you an opinion here.
Speaker:And it's a strong one.
Speaker:Okay.
Speaker:That last mile eCommerce model, in my opinion is not sustainable.
Speaker:Right?
Speaker:You don't make money on it.
Speaker:The companies that do that right now are subsidizing it.
Speaker:Amazon, they made 33 billion last year 31 came from retail media networks.
Speaker:The other part came from Amazon web services target and
Speaker:Walmart took a hit last week.
Speaker:Earnings went down.
Speaker:Well, coincidentally, their online sales kept going up, up, up, up, up.
Speaker:It's a race to the bottom.
Speaker:If you continue to push higher sales in that channel, that's
Speaker:much more expensive to serve.
Speaker:I have sustainability concerns about that from an environmental perspective too.
Speaker:Well, I know rod, you've done some work in that space and I guess my question
Speaker:is how much room do you think there is for further cost to have significant
Speaker:cost optimization of that model, to where it does make more sense?
Speaker:Or is this one that you think for the next five to 10 years,
Speaker:it's gonna be where it is.
Speaker:And if consumers understood those costs in environmental impact, Do you think
Speaker:they might make a different choice?
Speaker:Yes.
Speaker:Maybe we have some research that shows that when we make them aware
Speaker:of that last mile shipment of, if you do it in a rush manner, if you
Speaker:wanna get it overnight, that has a much broader environmental impact.
Speaker:Then if you're willing to wait a week and we see that'll shift their
Speaker:behavior, because consumers are much more environmentally conscious collectively
Speaker:than what they have been in the past.
Speaker:I I'm not an engineer.
Speaker:And I can tell you, I, I don't know all the ins and outs of exact
Speaker:measures for carbon footprints.
Speaker:I think everybody's trying to come up with a way to do that.
Speaker:Cause then you could put that into your cost equations, figuring out different
Speaker:channels to deliver these things.
Speaker:Um, that's where we're showing a lot of the attempts at innovation
Speaker:come into place, whether it's with drone delivery, whether autonomous
Speaker:driving trucks, a lot of those things.
Speaker:Short of a technological breakthrough, in my opinion, again, we're gonna
Speaker:struggle with the math, the, the, the profitable delivery.
Speaker:It's not profitable to deliver every single day to your house, an Amazon
Speaker:box with deodorant and toothpaste.
Speaker:And you might as well take a $10 bill to every one of those product.
Speaker:When you do it that way.
Speaker:And again, I know that's a strong opinion, but I, we we're seeing it.
Speaker:Right.
Speaker:We're seeing it in front of us, in the financial statements
Speaker:that's buried in there.
Speaker:Yeah.
Speaker:Cause nobody's breaking it out very well, but it's just, that's a tough ask.
Speaker:Yeah.
Speaker:Well, you'd almost have to work inside some of these companies to
Speaker:understand the actual details of how it really works, which brings to a
Speaker:point of you both have very strong and, uh, senior level, uh, experience.
Speaker:In industry in retail merchandising before really launching head on into
Speaker:this academic chapter of your lives, how has that impacted the way you view
Speaker:your job today from an academic remit?
Speaker:And what would you be missing if you didn't have those experiences and came
Speaker:straight, you know, grad school into PhD, and now, you know, a faculty level
Speaker:professors in this space, how, how has that benefited or is it hindered or is
Speaker:it, did, did it put you behind a few grades that you had to catch up in to
Speaker:spend those extra years in industry?
Speaker:Or has it helped?
Speaker:Oh, I think it adds to the overall, um, my success as an academic is having
Speaker:that industry experience, especially, and I'll kind of go the classroom
Speaker:environment to be able to tell students, you know, talk about forecasting.
Speaker:Well, when I was at Lowe's as a merchandiser, this is how we did
Speaker:it, you know, instead of here's an archaic formula that I'm gonna
Speaker:show you how to do something.
Speaker:And that really helps the light bulbs go on and helps them visualize.
Speaker:This is something that I would do instead of having to guest speakers are great.
Speaker:But instead of having to bring in guest speakers to fill out that
Speaker:round out that knowledge and stuff, I think it's very beneficial.
Speaker:You know, in the classroom.
Speaker:I think Rod and I both on maybe a research side had to go through a little bit of,
Speaker:I won't say unlearning, but a shift in perspective because academic research
Speaker:is, is supposed to be very theoretical.
Speaker:But I, I also know for Rod and I it's been important to make sure that we felt
Speaker:like the research that we do does have industry relevancy, because we didn't
Speaker:feel like we could look at some of our friends prior to academia in the eye.
Speaker:If we didn't try to do something that we realized, this is something
Speaker:that would be of value back when I was sitting in that, in that role.
Speaker:Um, I, I don't, I think there's the only thing is time is, you know, how
Speaker:much time it takes to get through masters in PhD programs and stuff.
Speaker:And so you sacrificed some time in this career.
Speaker:I don't know that I would've made this career change.
Speaker:Had I not had the industry experience?
Speaker:Yeah.
Speaker:Because actually the industry and the experience kind of created the
Speaker:curiosity and interest to go down the academic path, and then also it
Speaker:enables me to help fuel the fire with students and that this is a career.
Speaker:This is somewhere that they can go in and be successful and speak to
Speaker:them in language that's going to help them down the road instead of
Speaker:teaching them terms and things and definitions that are gonna be archaic.
Speaker:Well, that's really interesting.
Speaker:And I guess from my perspective, uh, being more of an industry person, obviously,
Speaker:but, and now getting to work with the university more, really having a much
Speaker:higher appreciation for the freedom to take a longer view because the challenge
Speaker:we have on just trying to solve these within the product supply organization
Speaker:of company A or B is the short term ism and, you know, eventually focusing either
Speaker:on efficiency or some kind of change and not really being able to step back
Speaker:and look at the bigger picture, look at, you know, where are we gonna get the
Speaker:raw materials for evolving industries and what kind of theory should drive
Speaker:our decision making and framework.
Speaker:So I think that's the, the benefit that academia brings to these challenges.
Speaker:That probably if you're in the, in the grind of a retail job
Speaker:every day or a supplier's job, You don't really appreciate that.
Speaker:It's like, you just gotta survive this week and, um,
Speaker:You don't have the time cuz you're putting out the fires everywhere.
Speaker:It's a lot of fire fighting, right?
Speaker:And I think good managers, they fight the fires day in, day out.
Speaker:They also figure out how to prevent them within their own organizations.
Speaker:What we're fortunate we can do is we get to study fire prevention across multiple
Speaker:companies or multiple industries and find what's common across those or different.
Speaker:So, and you you're right.
Speaker:Andy, you get the time to.
Speaker:To look at it closely.
Speaker:I remember when I first got promoted to manager, my first VP said he is like,
Speaker:you're trying to be perfect on everything.
Speaker:He's like be 80% there, pull the trigger and go onto the next thing.
Speaker:Whereas academics are
Speaker:That doesn't work for you, right?
Speaker:I mean, if you submit something to a journal that's 80% right.
Speaker:And say, look, man, we're not trying to be perfect here.
Speaker:Would that fly?
Speaker:No, no, it's just the opposite.
Speaker:Right?
Speaker:We gotta be the 99% level of certainty, whereas an industry, how many industry
Speaker:problems, can you be that certain and take the time to be that certain?
Speaker:So it's an interesting trade off, but I love being on both sides of that fence.
Speaker:Yeah.
Speaker:That's exciting.
Speaker:Uh, so as you guys look to the future, ask both of you this question, uh, and
Speaker:you look at supply chain logistics, the craft you guys have developed
Speaker:and where the world is today.
Speaker:We're fighting wars over.
Speaker:Supply chains in some ways, what brings you hope?
Speaker:What, what are you most excited about when you look out into the future and
Speaker:think about the problems to be solved and, and how we might approach it?
Speaker:So , the cliche probably answer is the students that I get to work with.
Speaker:Is watching the light bulb go off and them like, wow.
Speaker:One, I really love the problem solving piece of it.
Speaker:I, I, I wanna make a difference in a company.
Speaker:I wanna work with other people and engage in stuff.
Speaker:So the future, in terms of who's coming into the workforce, there's some amazing
Speaker:bright, young minds who are excited about tackling these, these challenges.
Speaker:And, and we need that because there's a lot of people that have
Speaker:been doing this for a long time.
Speaker:And especially after the last few years, they are tired and worn out.
Speaker:Yeah.
Speaker:And so we need some fresh perspectives and fresh ideas and, and stuff.
Speaker:And so I'm, I'm gonna keep it with, with that side of it and let Rod do
Speaker:something much more, uh, intellectual.
Speaker:I I'm sure, but I love that.
Speaker:Um, and, and I connect with students beyond just the university of Arkansas.
Speaker:And we are really starting to attract top talent into the supply chain field.
Speaker:Yeah, you're really passionate about also, uh, getting female
Speaker:leaders into this space, uh, and have done a great job at that.
Speaker:Uh, tell me more about how you approach that and, and what's your
Speaker:message to, uh, which feels like has been a male dominated, uh, sector,
Speaker:um, to get, to get women more excited about the opportunity in this space.
Speaker:Well, ironically enough back when Rod was working on his PhD and I was took a
Speaker:few years off to stay home with my kids.
Speaker:He was the only male professor at the time in the department.
Speaker:And he would have female students that would want to ask him questions.
Speaker:And in some cases, There were questions they didn't feel comfortable asking.
Speaker:In some question cases, there were answers he didn't feel comfortable giving.
Speaker:And so he kind of did the, Hey, why don't you call my wife and have coffee with her?
Speaker:And cause one, it gets me out of the house and I got to have some great
Speaker:conversations, but two, it, it gave them an opportunity to talk to someone that
Speaker:they felt could relate to their questions and that kind of planted the seed.
Speaker:And then, I had some conversations where there were some students that said,
Speaker:and I've told this story to people, uh, so they probably get tired of it
Speaker:sometimes, but that female students would say going to supply chain classes
Speaker:was like going to a fraternity party.
Speaker:You were either hit on or ignored.
Speaker:And I thought.
Speaker:Ooh, this is, this is a problem.
Speaker:We wanna try to, to do something, um, about this.
Speaker:And one of the ways to do something about that is to get
Speaker:more women interested in it.
Speaker:I also had done some research that said by the time they graduated,
Speaker:female supply chain majors were less confident in their choice of
Speaker:major than their male counterparts.
Speaker:And as I was digging a little deeper.
Speaker:A lot of times that coincided with their upper division classes where they
Speaker:started looking around and going a lot of business schools are pretty 50, 50.
Speaker:So early on, you don't know there's a difference.
Speaker:It's not till you get later that you see, oh wait where did all the girls go?
Speaker:Kind of thing and then they'll go to a summer internship or two, and then
Speaker:they look around and go, wow, there are no women leaders or there's no other
Speaker:females on, on this team and stuff.
Speaker:And so there's kind of a lot of times a question of, am
Speaker:I making the right decision?
Speaker:Am I going into the right field?
Speaker:So part of my work here with the university has been through an
Speaker:organization called WISE which stands for women impacting supply chain excellence.
Speaker:And the whole premise behind it is to try to build up and create
Speaker:a network to encourage and empower young women that, yes, this is
Speaker:a, a great way to have a career.
Speaker:And by the way, we have young men that are part of it too, who are gonna be
Speaker:amazing allies when they get out there and work with their female colleagues
Speaker:and, and become managers and stuff.
Speaker:Because we do have a labor shortage in supply chain.
Speaker:So we need more people coming into the field.
Speaker:Um, we can't just try to bring on the dudes.
Speaker:We need to bring as as many people as we can in it.
Speaker:And I also believe that the more women you bring in those women
Speaker:are also gonna represent all other types of diversity as well.
Speaker:And so that while creating gender, trying to get to gender balance,
Speaker:you're also increasing all other types of diversity as well.
Speaker:Yeah, I think that's amazing and, and very helpful.
Speaker:And if you look at, um, most retail organizations that are at
Speaker:the tail end of some of the supply chain challenges, having a diverse
Speaker:perspective on what is this decision about stocks means to the consumer?
Speaker:And really understanding the different elements of it than just, you know, a
Speaker:single male perspective all down the chain, you know, it's, uh, It's it's
Speaker:you, you, I think you come up with different answers, you know, if you were
Speaker:to ask me what's the, um, importance of building supply chain around making sure
Speaker:we have toilet paper versus my wife.
Speaker:I'd say they're substitutes and, and, and she would see it differently.
Speaker:Uh, and so I think, you know, but you have to have that, that diversity of
Speaker:perspective, especially as supply chains that move through retail and touch
Speaker:consumers, you must have diversity in all aspects or you're gonna, so
Speaker:you're really gonna run into some real.
Speaker:Blind spots, but so good on you for doing that.
Speaker:I think that's a fantastic program and, uh, you're highly recognized
Speaker:one of the top 100, uh, female leaders in supply chain logistics.
Speaker:I've read.
Speaker:So, um, keep doing what you're doing.
Speaker:That's fantastic.
Speaker:Hey Rod what brings you hope?
Speaker:Throughout history, our standard of living comes and goes with supply chains, right?
Speaker:You, you look at anywhere in the world right now.
Speaker:You show me a region of the world that's struggling, I'll show you
Speaker:a region of the world that doesn't have good supply chains in place.
Speaker:So we have a long history and tradition of supply chain solve problems and
Speaker:increase the standard of living.
Speaker:We'll figure things out.
Speaker:We got a lot of people in this discipline that will move mountains.
Speaker:To put out the fire every day.
Speaker:And at the same time, we have more and more people taking the long view
Speaker:of it to study these problems and prevent them from ever happening.
Speaker:Um, I love the idea that it's multiple companies, multiple organizations,
Speaker:government, industry, key stakeholders throughout the world, coming together
Speaker:to solve these problems, to ultimately get us the products we need and
Speaker:want when and where we need them.
Speaker:So I have tremendous faith.
Speaker:I don't know the answers of how we're gonna do it, but, supply
Speaker:chain management at its core of leveraging those relationships and
Speaker:coming together to figure out trade offs and balance all that out.
Speaker:It's a proven recipe for success and we're getting well.
Speaker:I love the fact that the, um, university of Arkansas is number one supply chain
Speaker:school in the, in the country, but it also feels to me like that, that opportunity
Speaker:for longer term systemic change is a great place for universities to play a
Speaker:leadership role because, uh, and probably quite frankly, as you guys have pointed
Speaker:out a lot of supply chain people today in, in business have just been overwhelmed
Speaker:with the urgent last couple of years of solving impossible, short term problems
Speaker:and have done a great job at that.
Speaker:But that longer term view is one I think the university's starting to,
Speaker:to the university of Arkansas for sure, is, is leading the way in that.
Speaker:So, uh, hopefully we'll see more of that as we move into the future.
Speaker:Can I throw this in too Andy?
Speaker:Yeah.
Speaker:If companies are gonna be customer centric.
Speaker:They have to have that long term supply chain view, right?
Speaker:If, if you , if you're not just saying it, if you truly care about your customers
Speaker:and getting them what they need when and where they need it, you have to
Speaker:have that long term supply chain view.
Speaker:Um, to me that they're not, they're not different entities.
Speaker:They go hand in hand supply chain management to me is the tool
Speaker:to deliver on customer centric promises that marketing comes up.
Speaker:Yeah, well, I, you know, I had the benefit of spending four
Speaker:years in the UK where it's a very different culture in some ways.
Speaker:And, uh, the movement against plastics, uh, happened very quickly and we had
Speaker:a real shortage and from a supply chain standpoint of being able to get
Speaker:even fresh product, um, that's, wasn't packaged in plastic, uh, through the
Speaker:supply chains and, and being able to do that and the innovation, uh, didn't have
Speaker:the technology to solve the problems.
Speaker:And so, uh, I know at ASDA we put together some innovation funds with
Speaker:support suppliers, startup suppliers, to help solve the problem of how could
Speaker:we reduce plastic in packaging so that we could, you know, move that product
Speaker:through the systems and not create
Speaker:more food waste on the back end, uh, because that's a supply, you know,
Speaker:that's a, that's a problem as well.
Speaker:And so maybe perhaps on solving these bigger problems, we'll see even more
Speaker:innovation cuz some of the problems we should be taking on, we don't know
Speaker:the answers to yet and it's gonna take innovation to really solve it.
Speaker:Well, you mentioned the electrification of everything.
Speaker:We do not have supply chain capabilities in place right now for every one of us
Speaker:to be driving around an electric vehicle.
Speaker:But as we push more for that supply chain people will figure it out.
Speaker:We will find more sources of supply.
Speaker:We will find better and more efficient ways to refine that.
Speaker:We'll make it happen.
Speaker:It won't be instantaneously.
Speaker:There might be some pain points from time to time and COVID has shown us that,
Speaker:but it's been amazing what supply chains have done over the last couple of years.
Speaker:And that that's what brings me hope.
Speaker:If a supplier's listening to this and they've got some supply chain challenges,
Speaker:I mean, what do you say to industries that might be looking around or companies
Speaker:for who can help and specifically like the Walton college of business.
Speaker:Here's your sales pitch chance, uh, for future students and
Speaker:industry to partner with the Walton college in supply chain logistics.
Speaker:There's a shortage of talent in supply chains right now, if you want fresh new
Speaker:ideas and the most recently trained, developed partnerships with key
Speaker:universities, and yes, we have one of the top ranked programs in the world.
Speaker:And we're very proud of it.
Speaker:And we think we offer a great program.
Speaker:There's a lot of other good schools out there too.
Speaker:So.
Speaker:True partners in academia that help you and that'll help
Speaker:you with the talent piece.
Speaker:If you have mid-level people, we have a great Ms program.
Speaker:Now we can do a lot of executive training and things like that.
Speaker:So there are additional opportunities to refine that skill set and
Speaker:develop those capabilities.
Speaker:And then the big problems we, we like to do research, we have to do research.
Speaker:If you have a big problem.
Speaker:Seems to permeate across suppliers, reach out to the university and see if
Speaker:they have researchers that are willing to dedicate time and effort to that.
Speaker:I, I don't know of any researchers.
Speaker:If you come to them with data on something they're interested in,
Speaker:that would turn you down or turn you away, especially if you wanted.
Speaker:No, they don't exist.
Speaker:They don't exist.
Speaker:Exactly.
Speaker:That forecast I could tell you is 100%.
Speaker:That's a hundred percent accurate forecast.
Speaker:I love it.
Speaker:Well, thank you both.
Speaker:You guys have been wonderful and I can't wait to get this out
Speaker:and share it with folks and, uh, I really appreciate your time.
Speaker:It's been fantastic.
Speaker:It was a pleasure talking with professors Rodney and Stephanie Thomas today in a
Speaker:time when most discussions focus on the shortcomings of supply chains, it was
Speaker:refreshing to speak to experts who see hope for continued innovation and success.
Speaker:Thanks to both Rodney and Stephanie for sharing their time and passion
Speaker:for creating a brighter future and for their continued investment in the
Speaker:next generation of business leaders at the Walton college of business.
Speaker:That's it for this episode of it's a customer's.
Speaker:If you found this helpful and entertaining, I would be so grateful
Speaker:if you could share our show with your friends and I'd be super happy
Speaker:if you subscribe so you can be updated as we publish new episodes.
Speaker:And if you really want to help leave us a five star rating and a positive review
Speaker:on apple podcast or wherever you listen.
Speaker:It's a customer's world podcast is a product of the university of Arkansas's
Speaker:customer centric, leadership initiative, and a Walton college original production.
