Supply Chain Now Episode 345
On this episode of Supply Chain Now, Scott and Greg cover the top news in supply chain for the week of April 27th.
Intro – Amanda Luton (00:05):
It’s time for supply chain. Now broadcasting live from the supply chain capital of the country, Atlanta, Georgia, heard around the world supply chain now spotlights the best in all things, supply chain, the people, the technologies, the best practices, and the critical issues of the day. And now here are your hosts.
Scott Luton (00:29):
All right, good morning, Scott Luton here with you live on supply chain now along with my cohort and cohost and supply chain guru Greg white. Good morning Greg. How are you doing?
Greg White (00:39):
Hey, good, Scott, how are you?
Scott Luton (00:41):
Doing fantastic. And welcome to our audience for today’s live stream. Of course, it’s our supply chain buzz, which takes place every Monday morning, 9:00 AM Eastern daylight time and Greg and I really tackle the leading developments in the global supply chain industry. So no shortage of developments to keep your finger on the pulse up here lately. Um, stay tuned for what should be a very informative conversation where we’re going to be tackling, I think four stories here today and a few of developments. So quick programming. Before we get started, Greg, can you share with our audience who we featured on today’s published podcast?
Greg White (01:18):
Yeah. Today we featured a Diego [inaudible], a good friend from Oracle, founder of, um, log fire, uh, uh, cloud WMS system that got acquired by Oracle and now he is the spokes person, I’m gonna call him spokesmodel, uh, for the folks that at Oracle in regard to a warehouse management traveling was traveling all over the world. Um, you know, to talk about that and to share that with companies
Scott Luton (01:48):
one heck of an intriguing conversation with a, um, a supply chain visionary, truly. So check that out wherever you get your podcasts from. It was recorded from MODEC 2020. Uh, and, uh, we really enjoyed, uh, Diego’s camaraderie and his perspective on especially cloud some of the, uh, cloud developments and technologies that’s taken place, uh, in the WMS, uh, portion of, uh, the in the end supply chain industry. Yeah. All right. We’ve already jumped the gun and welcome to my cohost, Greg white, of course, as everyone knows, is a serial supply chain, tech entrepreneur and trusted advisor. Um, so let’s move right along to today. Let’s talk about what today’s significance is in the grand scheme of things. So today is April 27th, 2020 on this date, Greg, in 1667, just a few years ago, John Milton, who was broke and struggling at the time, sold paradise, lost to a printer for 10 British pounds.
Scott Luton (02:48):
Do you know what 10 British pounds equates to in us dollars, at least in 2020, no idea. 12, $12 and 37 cents and 20 $20. Have no idea what it was, what that was worth, uh, you know, 400 years ago. However, I think it’s pretty safe to say that printer got a deal on this pate in 1981, Xerox, uh, sorry, Xerox Monday morning, Xerox park, uh, which stands for Palo Alto research center, which is, was a part of the, the Xerox family, uh, back then introduced the computer mouse, which led to a series of bad puns ever since, right, Greg?
Greg White (03:37):
Yes, that’s right. Yes. And that, and that was not Xerox’s biggest contribution really in Palo Alto. It was some stuff they had laying around the basement that they let a young man named bill Gates get eyes on. That’s right. Right.
Scott Luton (03:57):
I want to, uh, let’s say let’s say low to a couple folks are already tuned in here. We’ve got John McCarthy, uh, while seam we’ve got, uh, let’s see here. Blahs. My DV. I think I’m close. My eyes aren’t quite working and as a small screen up to my left, but regardless. Good morning everybody. Glad to have you here. As part of the supply chain buzz on this date in 1992, Betty Boothroyd booth Roy becomes the first woman to be elected speaker of the British house of commons, which at the time had a 700 year history. How about that?
Greg White (04:38):
Wow. 700 years we think we thought growth in our country was slug
Scott Luton (04:46):
on this date and this is this irrelevant to some of the things we’ll be talking about on today’s bus. On this date in 2005, the Airbus a three 80 aircraft made its maiden flight. So over 240, two of these planes have been made. It was considered to be one of the first real competitors to the long dominant prestigious Boeing seven 47
Greg White (05:06):
Scott Luton (05:08):
Well, you know, the 83 80 will stop being produced. They’ve announced in 2021 about that and also found, well, you know, over 1500, seven 40 sevens have been produced. So while the 83 80 competed against the seven 47 and by some analysts accounts decently competed, well. Uh, 242 planes have been made. So 242 versus 1500. Uh, I think there’s a clear cut winner there, Greg. I don’t know.
Greg White (05:38):
Well, w you know, we’ve changed, air travel has changed a lot, right? We don’t send as many people to a single point to be dispersed around the world. You can go to those various points around the world. So those big heavy haulers just aren’t as necessary. Yeah. Remember the L 10 11 you want to talk about, I mean, that’s even the precursor to the seven 47 11. Okay. Yeah. Beautiful. Big gigantic aircraft. Haven’t flown on one of those in a while and won’t
Scott Luton (06:11):
a quick shout out to Susan Moody. Good morning. Welcome to today’s supply chain bus. Alright, just a couple of quick notes before we dive right in. Uh, today is celebrated as the day of Russian parliament, terrorism in Russia. Big parties are certainly going to be in suing tonight. Greg.
Greg White (06:31):
Well this is a big party week in Russia because Mayday is Friday. So that’s always been a big, um, holiday in, in well not always in recent history. Relatively recent history has been a a big day and continues even after communism fell there. So, um, it’s, you know, it’s, it’s going to be a big week. Lots of vodka drinking.
Scott Luton (06:58):
Uh, and Moldova. It is flag day in South Africa is freedom day, really important holiday there. Uh, and in Finland, national veteran’s day. Uh, so with all that said, Greg, I think we’re going to be diving head first into the buzz this morning. And, uh, just prior to, uh, tackling our first story, we’re going to share an opening remarks, something old that is new. Once again, something that is, that we’re seeing with a new found sense of relevance, maybe in a broader sense, tell them more.
Greg White (07:33):
Well, so you know, as we have, as we monitor social media and we talk to people out there, we seem to be in this state where there are a lot of people sort of in despair and you can see where people thought this was going to be relatively short lived and relatively low impact and the reality of the length of time that it’s going to occur and the impact that it’s going to have, which is going to be substantial and for neon half a decade, um, it is starting to sink in. So it made me think of, uh, the consulting project cycle diagram or this, this is the technology hype cycle. So the terms aren’t, uh, the terms aren’t as important as the shape of the curve. And if you think about it, the trigger that we experienced was this seismic societal disruption. Obviously the pandemic has had a big influence on that.
Greg White (08:30):
But really what we did was in very short order, we ceased operating, um, as an integrated society. And everyone went home. That includes home from work, home from shopping home from restaurants home from various and sundry other things. And that has had a big impact. And, and people’s expectations or optimism was inflated as you see in the first peak here. Their optimism inflated to think, okay, this is gonna, this is going to solve the problem. It’s going to be quick and it’s going to be over. Not knowing of course, you know, what, what really was going to happen, but people, I think many people are eternally optimistic and I think we can all appreciate that. Then then as the reality of the length and depth of this, uh, starts to come out, people are getting disillusioned. They’re a little bit down and depressed and concerned and now they’re wondering will it ever be over and when it is over, will life ever go back to what it was or maybe even as good as it was.
Greg White (09:35):
Um, but what I, what I see happening now is we’re starting to get, we’re starting to see some, um, hints of this slope of enlightenment where more and more data and, and rational and reasonable and plentiful information is coming out that is starting to help us identify, um, how companies have operated during this time. We’re starting to see some countries, um, who have not shut down like Sweden, see some successes and not as much damage as they expected from the virus itself. We’re starting to see more and more data and more and more anecdotal evidence of what’s going on. And, and if you, if you seek that out and you find that, I think then you will start to see that we’re learning more and more and that will enable us as we go into this next phase. I’m not going to call it a plateau of, of, um, of productivity, but really to getting into operating in, in life after the pandemic, um, that sort of plateau of knowledge and expertise and that sort of thing. So that is what I believe we’re starting to see now. And it just struck me this hype cycle, which I’ve seen obviously being a tech guy, I’ve seen this over and over again, so, well you got some, I just thought I would surface that.
Scott Luton (11:03):
Yes. Well, I think it’s, it’s highly relevant, especially during these times and I appreciate you sharing and you’ve got some, some big folks in agreement with you. Just like Vicki, Vicki, good morning. Very, very important people. Oh, very important people. Um, real quick, shout out to some of the other folks that we’re seeing log in here. Um, Joseph who was a fierce competitor in the trivia game. Good morning Joseph. Great to have you with us here. Keith Singleton, who, if you remember Greg just two ago, he was dropping some serious quotable quotes on all things leadership and the continuous improvement. Keith, good morning and William Lynch, um, uh, apex colleague, apex instructor. Great to have you here. Look forward to your insight. Uh, Casiano good morning Fred Tolbert. Good. Fred on the heels of our, our podcast last Friday with some really bright students over at UGA. Yeah. Okay, so a lot to get to, right? Um,
Greg White (12:03):
look, I think we’re moving to a stage of being able to manage through this and manage beyond this. And I would just encourage people to look for that information that helps you understand what’s coming and more, it’s becoming more and more reliable as we learn more. What we’re going to talk a little bit about more about that shit.
Scott Luton (12:22):
Absolutely. Uh, so one last note on the, on the former, on the, on the opening remarks there, Joseph says, hope becomes fragile. When your vision is obstructed, the process is open ended and your progress isn’t obvious. Yeah. Excellent insights there. Joseph. Uh, Joseph Maretta. Okay, so let’s talk about the first story comes to us from Bloomberg and Yahoo finance, all about keeping really, uh, a constant theme here, keeping the supply chain workforce healthy and protected, uh, which we’ve been talking about
Greg White (12:56):
story, hasn’t it?
Scott Luton (12:56):
It really has. And hopefully our efforts that really beat that dead horse is, is reaching more people that it might be in their blind spot. We all know about the importance of keeping the healthcare front lines and first responders, and, and really all of the, the key components of life as we know it and the people that have to be in their roles. For us to feel like we can be as normal as possible and protect our psyche. But, you know, the supply chain workforce has been the blind spot for a lot of folks. Uh, I think we’ve all been guilty of that. So, um, new developments in this article published April 26 by Bloomberg and Yahoo finance or covert 19, just like everything else has been impacting, uh, food processing plants and slaughterhouses. Uh, so here’s where we at and, and we’ll, we’ll lead, lead off with the tough news and then we’ll give you some good news.
Scott Luton (13:46):
So, port capacity in the U S at least is, is about data is down about one third. So not yet. Accounting for the big closure announced Friday, which was another of Smithfield foods operation. This one in Illinois, right? The first big poultry plants, uh, shut down last Friday. And in addition to that is if that’s not enough, uh, Brazil, which happens to be the world’s number one shipper of beef and chicken had its first major closure, uh, last week. So as JBS S a shut down one of its poultry plants there and the hits keep on coming. Canada is not immune. Canada shut down a large poultry plant as well. So what, what does that, what does that, who cares? Right? The U S Brazil and Canada, who cares? Well, here’s the challenge. All together, those three countries make up 65% of the world’s meat trade.
Scott Luton (14:41):
Some experts are warning that domestic shortages are a weeks away. So check out this portion. What really got my attention? We’ve seen lots of doom and gloom and we try to cut through the noise and really get to the things that the signals that we should be paying attention to, right? That more of the experts agree on versus some of the one offs. This got my attention. So, uh, Smithfield foods, the world’s number one pork producer released a statement of Friday, which included quote during this pandemic, our entire industry is faced with an impossible choice, continue to operate to sustain our nation’s food supply or shutter in an attempt to entirely insulate our employees from risk. It’s an awful choice. It’s not one we wish on anyone in quote. If that doesn’t get your attention, Greg, uh, I’m not sure what will that mean? What’s your quick tip before we finish up the story? Quick take on that quote and, and kind of the current state.
Greg White (15:43):
Yeah, it does get my attention because it seems like there ought to be a third option. I mean they’re, you know, we’ve seen companies on the front line who are protecting their employees and still being somewhat if less productive. I mean retailers, essential retailers, pharmacies and groceries all over the world literally are still doing that. So I’m a bit surprised that the extreme end there. Um, and, and you know, it hearkens back to some of the numbers we talked about last week. I think it was on the buzz as well, that though plants are shuttered and though we’re talking about big portions of the production of meat around the world. I wonder now what these numbers mean as far as production capacity reductions overall because there’s relatively small with the plants that shuttered last week, if I’m recalling correctly.
Scott Luton (16:39):
Yeah. I th I think from what I am understanding here, one of the challenges because there’s over 800 facilities in the States that support the meat industry. I think what we’re seeing is some of the really larger mega sites get exposed and, and uh, but we’ll see. We’ll, let’s see how the, you know, we’ll see how this plays out, but of course, and as the chart there that we’ve got on the graphic there that comes from the article as demand rate, uh, uh, remains high and supplies decrease, of course prices are going to surge. Um, but here’s some good news. Some plants that were shut down a month or so ago, I’ve come back online as they put countermeasures in place. That’s good news, a nurse, but not been any big shutdowns in Europe yet. And the EU, by the way, represents one fifth of the global meat trade.
Scott Luton (17:26):
So that’s good news. And perhaps the best news is that Cobra 19 to date at least, has not been shown to be a foodborne illness. So that lessens our concerns maybe of what might come out of the slaughter houses and processing facilities into the, you know, in our homes, uh, as a consumer. So that’s good news, but still for many long time food industry, uh, uh, leaders and veterans, folks that have been there and done that and seen a lot of different scenarios play out. This is very concerned. It’s concerning as per, uh, Brett Stewart who is president of global AgriTrends, uh, AgriTrends echoed what we’ve heard time and time again in recent weeks and months. Uh, quote, it’s absolutely unprecedented in quote. And then we’ve heard that in different ways, shapes and forms 19 times in the last seven.
Greg White (18:20):
If we didn’t say unprecedented,
Scott Luton (18:22):
that’s true. Unfortunately that is true and that’s where we are. Um, but really important. Hopefully, one of the things we can all do here if you’re listening to this or catching the recording, is just be aware of the need to protect folks in supply chain. Not only because it’s the right thing to do, but, but because of how it can impact each of our lives. Uh, whether it is the folks that put things on that make the stuff, move the stuff, put it on shelves, sell the stuff to you that hopefully are behind a lot of those plastic shields these days. There’s so many good people working hard when they don’t have to, to, to ensure life continues as, as you know, as normal as it can for so many of the rest of us. Right?
Greg White (19:06):
Well, they do have to actually, because I just read an article. They don’t have to have to write, but I just read an article that said, you cannot get unemployment because you don’t feel comfortable working because of coronavirus. So in a way, they do have to. But I think what’s really important about that is I continue to see people who are working on the front lines having an incredibly uplifting spirit. And I’ve talked about that for weeks now, but you know, the smiles on faces of people who are working, um, at this time when they could, you know, they could be in that trough of disillusionment. I think they have more eyes on the future, more eyes on, on coming out of this. Um, and maybe our, our eyes, you know, out of this crisis. So it’s really impressive what they’re doing continues to be. Can I just make a quick personal note?
Scott Luton (20:04):
Nope. Nope, no personal notes. It
Greg White (20:07):
help. But think about this as we, as we talk about this, look, we don’t have to have provocative headlines, um, but as we have, and this is our third week of doing this together as we have effectively created somewhat of a news show here. Um, I can see where, um, I can see where this sort of creeps in. We don’t need provocative headlines to get clicks. And it’s a shame that, that a lot of media does do that these days. And it seems like you have to take an extreme position to get people to respond. Um, but I would encourage people to, regardless of what you see in the headline, read the article because it is so much different often. Yeah. And Scott, you did a particularly good job, um, identifying the underlying conditions that might mitigate this provocative headline. Um, and particularly with, you know, doing your own research to figure out what the actual statistics are behind provocative headlines and even the data that is presented in the story. Right. Because there, there are other sides to the story. Last week we had a story similar to this and I think we found that it only impacted about 17% of the meat production in the country. So I’m interested to see what this impact is. I have a feeling it is probably substantially higher. Yeah. Maybe not as catastrophic as, as this would lead you to believe. Right?
Scott Luton (21:38):
Yeah. Dig deeper for sure. Um, you know, look, get your data and information and perspective from a variety of sources. And always look for as Greg put it in the mitigating factors that they’re typically even the skylights. Uh, even if the sky is falling, the grass is green and the flowers still smell, smell nice. So, uh, you know, look for well rounded perspective. Okay. Real quick before we move onto the next story here and we’re gonna circle back to the food industry. I think the story number three, uh, Michael Irving agrees with your earlier your, your opening salvo there. Greg and Russ thorn, a good friend, uh, apex colleague, former president of apex Atlanta, uh, says our asks. So is it time to invest in spam yet? And, and he is trying to be funny, so I has always, so he is, uh, Russ, great to have you. Hope you’re doing well. You and your family and great to have you here. Part of the supply chain buzz. Okay. So let’s move right along.
Greg White (22:38):
That’s the point. That’s the question to me.
Scott Luton (22:42):
So we’re going to move over to aviation aerospace in story number two. And Greg, tell us what’s going on.
Greg White (22:47):
This is a really complex story. Um, Boeing and Embraer had a deal wherein, uh, Boeing was going to buy Embraer, which is, um, which is a producer of regional jets and, and a mid propeller aircraft but predominantly now have moved to regional jets. Boeing is backing out of that deal as of midnight Friday. Either party could have, could back out for essentially any reason. Um, they had a four point $2 billion offer on the table, but since Corona virus has hit Embry, EHRs, valuation has plummeted to about 1.1 billion. Um, part of the issue was that this market was condensed, was consolidating any way regional jets, um, because of some conditions I’ll talk about in a second have come under pressure. Bombardia has already effectively sold to a combination of Airbus and a Mitsubishi heavy and Embraer in an effort to try to, I think survive and Boeing to try and capture this regional market and some engineering talent, some substantial engineering talent that Embraer has wanted to buy them, but not at 4.2 billion.
Greg White (24:04):
Now Boeing themselves needs about, I’m reading my research here about $30 billion of external funding themselves so far. So to quote Richard Aboulafia from a teal group and, and aerospace analytics from 4 billion means much more to Boeing than it did back then when they started these discussions. So, uh, it’s, it’s a substantial hit for both parties. Embraer, obviously not happy, and it is claiming that the Boeing delayed decision-making to get to this point where they could get out of the deal without, um, you know, without penalty. Although they will pay $75 million to terminate the deal. That’s little help to Embry air. But, um, what’s really put pressure on, um, these reasons, regional jets is that pilots unions have a scope clause that limits the use of regional jets and the size of those jets and Embraer. His most recent model is just over that size limit, which means it can be used even less.
Greg White (25:13):
Um, additionally, what, uh, what is recognized around the industry is that airlines are gonna lose around $314 billion in 2020 and it’ll take three to five years for the airline industry to come back. So the prospect of, um, building more and more of those planes and selling more and more of those planes is, is off, right? Uh, Airbus has already cut production by 30%. And, and uh, Boeing is looking at cutting production in layoffs. Airbus of course is a government entity that can’t lay off people. They’re based in Europe. Um, but Boeing is, is starting to look at that as well. So it’s both companies.
Scott Luton (25:56):
It is. And if you have never been paying attention or if you don’t have to because of your role to the aerospace industry, the, so what here is pretty big Boeing is the countries, at least the U S is number one exporter and its supply chain upstream and downstream impacts thousands of companies, tens of thousands of, if not hundreds of thousands of, of workers and professionals and folks who depend on income. So we were, we’re closely monitoring what happens to Boeing and no one hopes that they get things turned around such as the seven 37 max as quickly as possible, even in this vacuum that is a lack of demand for passenger travel and, and new new aircraft. So we’ll see what happens there. Good stuff. Uh, Greg, uh, and uh, man, Embraer, $75 million to walk away or to as a, as a, um, as a, a parting gift. I guess. I don’t know. That doesn’t sound like a bad deal to me.
Greg White (26:58):
Well, I guess except that they’re, you know, they’re already struggling to survive. So if I were them when things come back around, you know, figure out a way to limp through possibly is what they’ll do and take the lower a lower offer when, when it comes back around. But I think we’re going to have to, we’re going to have to start to see that uplift before any offers going to come back from Boeing.
Scott Luton (27:22):
Great point. Alright, so I’m gonna, uh, on story number three here, we’re going to dive into the article that was written by one of our favorites here at supply chain. Now it’s Jennifer Smith with the wall street journal. If you’re not following her on social or all of her great stuff, the wall street journal logistics report, uh, do yourself a favor, become more informed and, and check out her, her content. Uh, but, but this is gonna. This is gonna be like, I’m already know this stuff too. A lot of our followers. So, you know, I would encourage our folks that are listening to today’s supply chain buzz realtime comment. Tell us what you think is in the blind spot of consumers and, and other folks that don’t understand why the pivot that we’re seeing supply chain industry make is so challenging.
Greg White (28:07):
Well, and if you can share this information with friends who aren’t in supply chain, this is really, really valuable information for them as well. Right?
Scott Luton (28:17):
So as you see the tile there divided supply chains are challenging producers and retailers. So again, if you’re, if you’re a supply chain leader professional, you’re going to be thinking, okay, yeah, I already knew that. And that’s probably true for many folks, but many consumers and folks that aren’t in supply chain are seeing empty supermarket shelves. They’re seeing stories of, of milk and crops and livestock being destroyed and, and they don’t understand that the disconnect and the gap between those things that we’re seeing, uh, and own his face at may not make most, uh, much sense, so many people. Uh, but when you start to think about the multitude of channels that are stood up within global supply chain, uh, and we’re going to highlight some of this, I think it will start to make sense. We’ll start to make some of the connections here. So think about certain products, whether it is industrial rolls or toilet paper, uh, that won’t fit into our home bathroom. Greg, I’m not sure if the industrial size fits in the white household bathroom, um, milk that’s mint and packaged for, uh, food manufacturers and industrial production. Or when’s the last time you bought a 50 pound bag of rice? Greg? Any anytime lately
Greg White (29:33):
I haven’t, but I know people who have,
Scott Luton (29:36):
yup. So you know, your average consumer of course doesn’t buy any of those things, right? Um, but there are channels to S to, to get that, uh, those products that are, that are produced a certain way and packaged a certain way to, to meet certain industrial, uh, consumers or, or, uh, customers. So it’s very difficult to push all of that, those channels, those production processes, the distribution strategies and channels shift all that over to meet the consumer demand, especially in a way, because it’s, we’re not talking about, uh, making the shift for seven years of production. We’re probably talking about more of a, of a measurement in months, right? Yeah. Yeah. So that’s, that’s just not going to happen as quoted by, you know, Joe Vernon as part of this article, he’s a supply chain analytics analytics leader at cap Gemini. North America says it’s really quote a nonstarter.
Scott Luton (30:34):
Uh, he goes on to say, quote, we’re not seeing any kind of mass retooling. It doesn’t make any sense from a capital or expense perspective. And we talked about that as we were talking about toilet paper in the last month or so. You know, that the toilet paper industry, this is extremely unprecedented. It’s not how is, it’s not pandemics don’t really factor into a toilet paper planning more than anything else. It’s population, right? The steady rise in the population. They find ways to bolster what is usually a pretty steady industry. It’s very difficult to up in an entire industry and all of these, these hundreds of channels for what may well be, you know, even 12 months, maybe 18 months of a new normal. And that’s what Joe Vernon speaks to here. So think about the meat industry that we spoke about earlier. So products sent to restaurants, which of course by and large on across the board, but by and large, a lot of restaurants of course are shut down, um, products from the meat industry look like and are packaged a lot differently than what we find in our, in our grocery stores.
Scott Luton (31:39):
Of course. So consider this from or Sola marks, a special project manager for specialty meat distributor, Mark’s companies. She says, quote, this is a good one. The changes have been like riding a tiger. Retail is busy, but it is all the cheaper cuts. The last mile of our supply chain has completely pivoted in quote. And that reminds me of a real popular series on Netflix right now. But what a great quote because it’s, it is dangerous. It is uh, unpredictable. Uh, it’s unprecedented. When’s the last time you hopped at a tiger? I thought that was a really good, uh, uh, comparison of what we’re facing right now and what these producers are facing, right, Greg?
Greg White (32:23):
Yeah, it is. And you know, I mean if you think about it in its simplest terms, toilet paper is not the same product in commercial, right? Or public facilities as it is in your home. Um, so it, it’s, it’s an E it’s a very heavy lift for those people who are saying, why can’t we just, right. It is a heavy lift because the, the, um, product is completely different and the tooling that works in a commercial or in a commercial environment won’t work for the consumer product.
Scott Luton (33:00):
That’s right. So, so one, a quick, quick departure here. Good stuff, Greg. I want to say hello to Michelle, who’s part of the team logged in on Facebook today and hope white who is also a fierce competitor in our trivia challenge last week. Hope. Good morning. A couple of comments from LinkedIn. Let’s see here. Um, uh, William Lynch says exactly talks about he completely grieves the multi channel distribution that exists and how difficult it is to change that. He also says, um, he saw this morning that beer is going stale and innumerable restaurants right now. That is, that’s great for shadowing for a point we’re about to make. Um, and let’s see, Michael, let’s see. Michael says, the quote, this question and topic reminds me of how many breweries are pivoting from beer to producing sanitizers. Very smart pivot in my mind. Great point, Michael. Um,
Greg White (33:59):
although our favorites that granddaddy Mims
Scott Luton (34:03):
make us right, jumping into fight and making help, helping them make hand sanitizer, even though someone told us last week that they’ve always made his hand sanitizer, especially
Greg White (34:13):
moonshine is always, that’s true,
Scott Luton (34:15):
especially with their 140 proof good stuff. Um, all right, so to re, to round out this story number three here, the pivot that um, or Sonya is talking about or soya marks where she says the changes have been have been like riding a tiger. She’s talking about, you know, one that global supply chains are facing from moving business to business, to business, to consumer operations. Um, it is extremely difficult. Other other gaps that the food industry, uh, that some may not be aware of within the food industry. Farmers with product have no real vetted visibility into new sources of demand. It’s not like they can log on to an a reverse Amazon and say, okay, who needs pigs today or who needs a milk today that doesn’t work like that. Um, donations of product that otherwise otherwise must be destroyed requires new logistics problems, right?
Scott Luton (35:14):
Uh, if, if in the event you do identify, uh, someone that can take, uh, uh, hundreds of gallons of milk that otherwise will spoil you, you still got to figure out how to get it there. Wow. You’re still trying to firefight all the other problems that is related to this pivot. And, and, and the general challenges we have in this pandemic environment. So all of that stuff, uh, as we wrap up here, all that stuff doesn’t happen easily. And I like how Jennifer Smith, author of this article puts it quote rerouting goods to consumers that we, uh, that were produced at industrial scale involves more than a phone call or a quick email.
Greg White (35:58):
Yeah, I read that in the article. That’s pretty impressive because that’s what I think people think it takes. Right? And, and outside of knowing the intricacies of it, it does seem like everything, it seems really simple from the outside. Looking in a couple couple other points there. Um, someone named Amanda did say that they bought a 50 pound bag of bread flour recently. Oh, Amanda, on Facebook. You’ll note that she made good, good use of it, didn’t she? Delicious.
Scott Luton (36:32):
It’s been tough to find bread flour here lately. I think everybody is. Everybody’s making their own bread.
Greg White (36:37):
Uh, another quick note, Publix, um, has pledged to help by taking excess produce from farmers and buying it and then donating it to, uh, philanthropic, uh, entities. So that’s a great move. And no, as you said earlier, no small tasks. So not only the cost of buying the goods, but also changing your supply chain to ship them to, to new facilities. Publix is a grocery store chain in the Southeast for those who don’t know.
Scott Luton (37:06):
That’s right. Uh, one of the good, good news convoy, which is an incredible, uh, innovative transportation technology from our base on the West coast, but it has an operation here in the Atlanta area, um, is standing up a new marketplace for donated food supplies. Uh, can’t remember their partner, uh, in that, uh, that venture. But hopefully that will help us. You know, no one wants to waste food. No one likes to see milk being destroyed or anything else. Right? Right. But the lack of the, um, lack of process and, and a lack of, of crystal ball working really is one of the biggest things making that happen. I mean, if there’s not a, unfortunately we’re seeing livestock gets slaughtered because as these processing plants go down, there’s nowhere to put them and no one likes trust. But no one likes to see that happening. So we’ve got some smart people across supply chain industry working to prevent the waste, prevent waste in all of its forms and hopefully we’ll see some breakthroughs and some, uh, some new creative ways of making that happen in the weeks ahead.
Scott Luton (38:12):
But, you know, instant gratification is prevalent everywhere else these days, but it hasn’t quite overtaken. Global supply chain things don’t happen because we want today a lot, a lot, a lot of things do, but some things are a little bit tougher to work through and execute on than others. All right, one last comment here, and this is related to of course the bullwhip effect. I bet if any consumer, uh, that didn’t know the, uh, if there’s anything that the consumer wasn’t aware of two months ago that they’ve probably heard more about today, bull effects, part one of them. Uh, Mary who’s joined us on LinkedIn says, read the bullwhip effect in my texts for operations and supply chain management. Any change in consumer demand makes a huge change through the supply chain to suppliers. Great point there, Mary.
Greg White (39:02):
Yeah, the weight. And that’s what we’re starting to see, right? We’re starting to see the bullwhip crack right now. Absolutely. I mean, the milk that we’re spilling now was in production six weeks ago. Wheat, tomatoes, all of those things, they don’t come out of the ground instantaneously. Right. It takes months. So, um, all of that was in motion prior to this seismic, societal disruption,
Scott Luton (39:27):
seismic, societal disruption, say that five times in a row and that stuff slowly. All right, quick side note here. So, uh, I had a little learning moment over the weekend. Um, I recently subscribed to the wall street journals, uh, weekend edition, which I really enjoyed the mix of news and, and, and some, some, uh, features and lifestyle stuff. And, and you name it. Well, evidently, so we have three children here, uh, 10, eight and seven. And as my wife and I, Amanda sat down to think about it, I guess we haven’t had a regular newspaper since they’ve been babies. So as I was sitting down to read this weekend edition, uh, been w my youngest, uh, my son was very, he was like perplex, he couldn’t believe newspapers still existed, which I got a lot out of. Um, but then Gracie, my middle child asked me, why are you reading the newspaper?
Scott Luton (40:29):
That’s an old paper thing. Old people think. So, you know, I really blew their minds with this. But you know, all that to say there are still some outstanding publications that are in print. And of course, well the wall street journal is making the digital transformation like every other businesses these days. But they still put out a great newspaper and a w we’re not covered today, but as a, I believe William mentioned earlier, the billion dollar problem that’s brewing in the beer industry because of what sitting in close restaurants and the overproduction of kegs and other lots and lots of beers for a lot of the events that aren’t gonna take place in 2020. So huge problem. We’ll see how that shakes out. But Hey, check out the wall street journal, the weekend edition. My kids may not like it, but you might
Greg White (41:21):
makes you wish you were 23 again and you can help with that beer thing.
Scott Luton (41:25):
That’s all right. All right. So Greg, I think story number four, we’re going to kind of share some more good news and we can’t get enough of that. So do tell. Yeah.
Greg White (41:34):
So, uh, this is actually a story about the UK who they’re in their afternoon if they’re joining us, um, just after lunch and depending on, on, uh, where you’re from possibly right between tea or right, right before or right after T, uh, depending on, on your personal tradition in the UK. But, um, the British retail consortium has issued new guidance on, uh, how to get back to standard retail for non essential retailers that being non-grocery and pharmacy in the like. Right? Um, and actually this is a bit of that, um, that, um, curve enlightenment, right? That we’re able to leverage the knowledge and the expertise and anecdotal evidence and experience of, uh, both government advice and lessons from these essential retailers and how they’ve, uh, you know, how they’ve operated during this time. And of course it’s been an evolution for them, but it can be a catalyst for starting up new retail for regular retailers.
Greg White (42:42):
So, just a quick, a few points. And these will probably be familiar with folks, but, um, essential retailers have provided hand sanitizer. They’ve encouraged shoppers to visit alone. Uh, I have to admit, for some reason I felt compelled to at least go to the store with Vicky, my wife, whenever we go, if not go in. And I’m not sure why that is. It’s not like I can stop her from getting Corona virus. I stop there. Um, uh, limiting entry. So limiting the number of shoppers that are allowed in maintaining six feet or two meters distance in, in the UK screens and, and um, whatnot at registers or as they call them in the UK tills, uh, extra cleaning, which, um, Publix again has, has been doing closing early during this time to clean and stock shelves, uh, during that time. And then encouraging cashless payment and cashless payment was already prominent in Europe and the UK.
Greg White (43:54):
But you know, that made me think it will become even more so in the States. They are way, way ahead of us in Europe in terms of how you use cashless payment, that waiving your card thing that we’re so enamored of here in the States has been around for nearly a decade in Europe. So I can see those sorts of advancements occurring. Love it. Oh, sorry. Go ahead. Go right ahead. I was just going to say, Helen Dickinson, who’s the CEO of the BRC said among other things, retail businesses can start trading against slowly and safely and customers can feel confident they can be safe to return to shops. So the goal is to take the learnings that they’ve got and apply them to these retailers that are just about to open, um, do so in a prudent fashion and do so with all these cautions in place. So, uh, hope and I think this is a good learning experience for us here in the States as things start to reopen.
Scott Luton (44:56):
Yep. That’s great point. Um, one want to go back a second to, we’re talking about the beer challenges and, and really the glut of product and Fred Tolbert on LinkedIn says that he did his part during the trivia game last week, helping to alleviate that glut. I love that Fred. Love, we’re getting some apex humor and, and droves here today. I’ll tell you between Fred and Russ and William, uh, it’s good to see. Alright, so new supply chain could be funny, but it’s so boring, Greg. Yes. Tongue in cheek, tongue in cheek as far as our good friend Chris Barnes. Okay. So good to wrap up on story for that. Good news. Uh, seemingly lots of lessons and best practices that we can apply here in the States that, uh, that Europe and specifically the UK is putting in place. So, you know, um, it goes without saying, but our best wishes and, and, uh, best thoughts and you name it to our friends across the pond is as hopefully they break into the net new, new, uh, new normal, as healthy and safely as they can. Alright. So we’re going to wrap up on a couple of points here and we want to offer some high fives, right, Greg?
Greg White (46:16):
Scott Luton (46:17):
So watch, let’s, I’ll set the table. Yes. I’m going to set the table and then I want you to talk about the fierce competition. That was, so last Friday we had our first supply chain trivia night here at supply chain now. Now it was fun. It was rewarding. We had a blast and we had a great competition. However it came with some unforeseen challenges. Some things that we’re going to fix as we roll out our second supply chain tribute night, which is slated for May 13th at 4:00 PM. And that’s the delay between the live stream and the game and the platform itself we were using, but we’re going to fix that. Um, so Greg, talk, talk to the competition. That was supply train trivia night.
Greg White (47:07):
Well, first of all it was broadly international, um, including the keel who was up at two 30 in the morning India time. I’m trying to compete and compete and it that, that particular, Nikki’s particular experience gave us a lot of insight to that and delay.
Scott Luton (47:27):
Greg White (47:28):
Scott Luton (47:30):
Scott said, we’re gonna we’re going to address that. But Chris Gaffney jumped out to a big lead, uh, chief machining officer. Well, I guess we can’t, I like to call him chief supply chain officer, but you can see his title right there. Uh, vice president of global strategic supply chain at Coca-Cola jumped out to a big lead fast start, obviously highly educated, um, and a slew of people in second, third, fourth, fifth place. Um, Angie Reno was right there. Um, Peter Heflin, Cathy Moore, Robertson, Sarah Barnes, Humphrey. Um, Oh, Jonathan Townsley until he had kid duty. He had to drop out in the last few questions for kids who, and then mr. Inventory, the, the, um, anachronistic. Mr. Inventory unnamed started moving up the board and ultimately in the last two questions took over and then revealed himself to be Demetrius. Uh, Carlos, um, from boss.
Scott Luton (48:31):
Very impressive comeback. I, I was communicating with Chris over the weekend and said, I feel like you were the Kansas city chiefs in the 2018 AFC championship. Hadn’t been for D for jumping off sides. You would have beat the Patriots and gone last year. Next year is your year. Next man is Christmas Savannah. Well, to be fair, it came down to the second to last question bled from the get go. And it came down to the last question we had and folks, look, we weren’t asking about how do you spell SNOP? It has some pretty tough questions. Um, and so what great competition between Demetrius and Chris Gaffney and Angie Reno, by the way, I loved her nickname Reno nine one, which if you’re a comedy central fan, you’ll get a kick out of that first. Go ahead.
Greg White (49:22):
Really impressive the knowledge that people had. I mean, these, these were really, really tough questions. It would have been hard to follow for somebody if you weren’t a supply chain pro. And even if you were, um, you could see some really talented folks struggling with some of those questions, including Chris and Dimitrios. On a couple, right.
Scott Luton (49:40):
Well, I just confirmed with my boss. Uh, Amanda has said that the gift cards will be going out, uh, today. And, and that’s to, to our audience, you know, w Hey, these folks won money from us. Uh, Dimitrios at first place, one a $200 gift card. Chris Gaffney, a $75 gift card and Angie won a $25 gift card at even the $25 gift card. We’ll buy you at least two coffees at Starbucks, right? Maybe more. Well, congratulations. That’s right. Congratulations to everybody that played the game. Look forward. Again, this is open to anybody that enjoys trivia and wants to, uh, I would, I would argue more importantly, as much as trivia is neat and it’s great to win or compete, the camaraderie between all these folks that are in different places around the world, different places in industry, I think that’s what we all crave, especially in these, in these days of isolation and quarantine. So, uh, May 13th, 4:00 PM we’ll have the registration link on the website, supply chain, outrigger.com, and we hope that you will consider joining us for the next go round.
Greg White (50:46):
When you think about the little difficulty we went through in synchronizing this, it makes something I saw last night post Malone did a tribute to you watch the grand old Opry. I was blown doing a tribute to Nirvana, um, with remote musicians playing at the same time on the internet there. I mean, you know, they’re obviously using some, I’m sure really expensive technology to synchronize and time everything together. But you learn a lot about the internet trying to do this live. I mean, the various platforms are on different timings and then of course, the distance the keel, was it a bit of a disadvantage? We’re going to try and close that gap because his answers were right. They were just delayed. Right? We’re going to fix that for sure. I can’t promise you. And they’ll go around and back strong. And this next breath.
Scott Luton (51:35):
That’s right. Hey, uh, quick insight. You know, we’re talking about the United Kingdom, uh, retail environment. Uh, one of our listeners here, uh, blahs. Um, and if I’m getting that wrong, I apologize. Blogs on LinkedIn is saying, uh, quote have been experiencing the enormous change in the UK during my weekly shopping products are now fully stocked up. Cashiers have a protective window and my hands always end up being dried up from the sanitizer they use on the shopping carts. A better safe than, sorry, bloods. Uh, best wishes to you and your family and all of your, uh, fellow citizens there in the United Kingdom. Okay. Uh, let’s see here. I think we’ve got one more announcement and Vicki is weighing in on supply chain trivia night. Yes, we did have a great time and uh, appreciate the team behind the effort here. Okay, one final. So we’ve got a webinar coming up May 27th.
Scott Luton (52:37):
The registration will be open soon. So if you’ve, if you’ve listened to, if you’ve been a regular listener here at splotchy, now you probably aware that we’re big fans of not only Gardener’s work, but specifically the top 25 supply chain rankings and top 15 supply chain rankings that they put out for the us and Europe respectively. It always provides such a, um, interesting discussion on best practices and gaps and what companies are doing to move forward, uh, public companies. That is so on May 27th, which is probably just a week or two after the top 25 supply chain rankings are released by Gartner in their revised programming, which everyone has revived programming these days. Uh, we’re gonna be featuring our friend and ongoing collaborator, Mike Griswold, VP analyst with Gartner to share some of his key takeaways from the newly published at, by that time, top 25 supply chain rankings here in the States. Greg, if you listen, if you tune into any of our ongoing programming, Mike is not one to miss, right?
Greg White (53:41):
You know, Mike is a practitioner before an analyst, so he worked in grocery and retail even before becoming an analyst. So he knows of what he speaks and he brings that to every analysis that he does. And he is the arbiter of, of the top 25 supply chains. I think what’s particularly inspiring about what they’re doing, this is a big topic for us, is they’ve included corporate responsibility in their writings, um, for, for supply chain as well as economic and operational factors. So they are encouraging and highlighting and rewarding sustainability and ethicality and fair trade in, um, in supply chain for these companies. And, uh, you know, there’s going to be, I’m certain there’s going to be a bit of a shift at the top. That’s all right. So it’ll be interesting to see how that they always do such a good job of, of keeping it secret. I don’t know how, but it’s going to be interesting to see who comes out on top.
Scott Luton (54:43):
It really will be. It really will be. And, um, you know, CSR, corporate social responsibility, uh, as is reflected in the top 25 rankings has, has, uh, you know, more respect and more of a way to impact than ever before. And of course, we’re, uh, this week we’ve got AI, AGS, right? That’s right. And we’re looking forward to that, that we’ve seen so many best practices and thought leadership in this space that the consumers demand that companies account for. And you’ll see that reflected in the top 25 rankings undoubtedly that will be released. So tune in. We’ll have registration open this week for this webinar. Uh, it’s not quite open yet. Uh, May 27th, 12 noon, and I promise you it’ll be an hour well spent, uh, here with Mike and Greg and supply chain now. Yeah. All right. I think Greg, that just about wraps up. Let’s, let’s, let’s, um, I want to give you an opportunity to give us your patented hot takes, your key takeaway or two from today’s supply chain buzz.
Greg White (55:52):
You know, I think, look, I think the biggest thing that I’m starting to see is we’re starting to shift from that. You know, if you think about it, stages of grief or whatever you want to call it, we’re starting to shift into recovery mode. And I would encourage people to start to look for indicators that tell you, that, give you some idea where things are could be going. Um, because it looked, we may be at the bottom, we may be approaching or we may be coming up from the bottom of how this happens. And we want to be careful not to cause a relapse. But I got to tell you, I see a ton of diligence out there in the marketplace, people coming back into commerce safely and prudently and um, and yet boldly in a way to press things forward, inform yourself, use real data, get past the headline, right. And, and, um, trust yourself and trust yourself to get past even your own bias. Look at all sides of the spectrum and think about, uh, what makes sense as you, as you, um, press on.
Scott Luton (57:07):
Yep, great point. I couldn’t think of a better way to close out today’s supply chain buzz, so I appreciate that Greg. Um, one will remind all of our listeners. Uh, on that note, you can check out a wide variety of industry thought email@example.com. Fondas and subscribe wherever you get your podcasts from, including today’s session with Diego, with Oracle, which you’ll enjoy his perspective on all things cloud and all things, uh, warehouse management systems. Uh, and be sure to join us next Monday at 9:00 AM Eastern daylight time for the next version of the supply chain buzz. Of course, you’ll be able to get this, the audio version of today’s supply chain buzz in the next couple of days, wherever you get your podcasts from. So, on behalf of the entire team here at supply chain, now, Greg white and Amanda and clay and Michelle and, and Vicky, you name it, all the folks that make supply chain now happen. Please stay safe. We wish you nothing but the best. Listen to the precautions from your local healthcare experts and providers and remember this brighter days. Absolutely lie ahead. And with that said, we’ll see you next time here on splotch now. Thanks everybody.
Prefer to watch the podcast in action rather than just listen? Watch Scott and Greg as share the top stories in supply chain in the Supply Chain Buzz.
Greg White serves as Principle & Host at Supply Chain Now. Greg is a founder, CEO, board director and advisor in B2B technology with multiple successful exits. He recently joined Trefoil Advisory as a Partner to further their vision of stronger companies by delivering practical solutions to the highest-stakes challenges. Prior to Trefoil, Greg served as CEO at Curo, a field service management solution most notably used by Amazon to direct their fulfillment center deployment workforce. Greg is most known for founding Blue Ridge Solutions and served as President & CEO for the Gartner Magic Quadrant Leader of cloud-native supply chain applications that balance inventory with customer demand. Greg has also held leadership roles with Servigistics, and E3 Corporation, where he pioneered their cloud supply chain offering in 1998. In addition to his work at Supply Chain Now and Trefoil, rapidly-growing companies leverage Greg as an independent board director and advisor for his experience building disruptive B2B technology and supply chain companies widely recognized as industry leaders. He’s an insightful visionary who helps companies rapidly align vision, team, market, messaging, product, and intellectual property to accelerate value creation. Greg guides founders, investors and leadership teams to create breakthroughs that gain market exposure and momentum, and increase company esteem and valuation. Learn more about Trefoil Advisory: www.trefoiladvisory.com
Scott W. Luton is the founder & CEO of Supply Chain Now. He has worked extensively in the end-to-end Supply Chain industry for more than 15 years, appearing in publications such as The Wall Street Journal, Dice and Quality Progress Magazine. Scott was named a 2019 Pro to Know in Supply Chain by Supply & Demand Executive and a 2019 “Top 15 Supply Chain & Logistics Experts to Follow” by RateLinx. He founded the 2019 Atlanta Supply Chain Awards and also served on the 2018 Georgia Logistics Summit Executive Committee. He is a certified Lean Six Sigma Green Belt and holds the APICS Certified Supply Chain Professional (CSCP) credential. A Veteran of the United States Air Force, Scott volunteers on the Business Pillar for VETLANTA and has served on the boards for APICS Atlanta and the Georgia Manufacturing Alliance. Follow Scott Luton on Twitter at @ScottWLuton and learn more about Supply Chain Now here: https://supplychainnowradio.com/
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