DeRisking the Digital Supply Chain

Good morning, good afternoon, and good evening. Welcome to the Industry 4.0 Club on LinkedIn Live. Thanks for taking the time from your busy day to join us. This is Women in Manufacturing, a weekly conversation on topics around Industry 4.0 with a focus on tech and manufacturing. It's a space to discuss the perspectives and challenges of women at work and at home. Our topic of discussion today is de-risking the digital supply chain. I'm Kara Mitchell-Linn, an Industry 4.0 Club co-founder. For the last 5 years, I've been creating content for I4D adoption in manufacturing. When I'm not supporting my fellow co-founders, I'm a content marketing specialist at Raven AI. First, I'd like to introduce my co-host and fellow Industry 4.0 Club co-founder, Grace Donovan. Hi, Grace.

Good morning, good afternoon, depending on where you're joining us from. Uh, thank you, Carol. So as Carol mentioned, I'm Grace Donovan. I am also a founder of the Industry 4.0 Club, and when I am not here having interesting conversations with the club, I work for We're a startup in the digital technology space supporting manufacturers to connect workers on the shop floor.

Great, thanks for joining us today, Grace, and we're happy to be on LinkedIn Live. You can find us on Mondays on Clubhouse app, usually. Please feel free to join us then for Women in Manufacturing. Today we're pleased to have our special guest, Chrissa Klein, who is joining us. Where are you joining us from, Chrissa? I forgot to ask earlier.

I'm in Charlotte, North Carolina today.

Great, thank you so much. We appreciate you taking the time to be with us on Women in Manufacturing. And before we dive in, I'd like to know if you could tell us a little bit about yourself and maybe give us an idea of your journey through supply chain.

Sure. Well, I'm excited to be here. I'm excited that women in manufacturing is actually a topic for discussion. I think when I started more than 20 years ago, there were not a lot of women. I didn't have a lot of company either on the manufacturing floor or throughout supply chain. I think I fell into supply chain accidentally and then couldn't get out and decided I really liked it. I started my working career as an economist. I had a passion for all things global and got a master's in international affairs with the original intention to be a Foreign Service officer, and by accident ended up as a management consultant instead, focused consumer goods manufacturers and retailers and helping them to improve their strategy, their operations, and a heavy focus on technology and supply chain. And when I left consulting after over 10 years, my focus remained within supply chain in different sectors— financial services, consumer goods manufacturing, high-tech manufacturing, And currently I am the COO and SVP for PPT America, which is a sourcing and production agency primarily focused on the textile and apparel industry, serving North American brands and wholesalers. And the vast majority of our sourcing and production work is happening currently in Asia.

Thanks so much, Krista. I had a question. Did you select the fashion garment fashion industry, or is that something that you fell into as well?

Well, there's a family history there. I came from a family of retailers, so probably violated lots of child labor laws along the way, but learned how to do inventory at age 5 and naturally understood quite a bit about that industry from how I was brought up, but kind of fell into that, worked in cosmetics, worked in a number of different other consumer goods manufacturing sectors before I landed in apparel. And I think my passion is more for supply chain more broadly than it is for a particular sector of manufacturing.

Excellent. Well, it's good to know that the supply chain has certainly chosen you. Just to kind of level set with our audience, you know, we understand that supply chain is a vital part of manufacturing, and the digitization of the supply chain is inherently part of Industry 4.0. So could you give us a brief description of the digital supply chain, what it is?

Sure. I think probably first, before I do that, the best thing to do would be to talk about what the typical view of supply chain was pre-digital. And it was very much a flow of goods from product development through delivery, very linear, went through the procurement of the raw materials, the manufacturing, the arranging of logistics. And if anything broke down at any point throughout that, the whole chain came to a grinding halt. And because it was so linear, and certainly there are other factors depending on what type of manufacturing it is, everyone's got demand forecasting flowing into that and the intersections with marketing and sales. But because that approach was so linear pre-digital, if something went wrong, everything came to a grinding halt at that particular step. And everything was very reactive, limited visibility, limited capability to really do anything to change the trajectory. And it had such a significant impact once you discovered pretty much after the fact that maybe you had a raw materials issue or you had an issue with logistics and goods were not being delivered or materials weren't being delivered. And it typically resulted in a missed deadline, a missed shipment, unhappy customer. So digital supply chain, in contrast, is enabled to provide more visibility throughout the supply chain, typically through technology, and really to be able to see it at each stage of the supply chain consistently and in, if not real time, near real time, so that you have actionable items that you can change that trajectory and you can be more customer-centric in a digital supply chain where you're able to be more responsive and hit on the key pillars of speed, personalization, choice, things that really matter to consumers or customers in a B2B environment. But it also allows the supply chain owners to develop better relationships and more complex relationships with their partners in the supply chain and to work together as better partners to proactively plan, to address risks, and to avoid disruptions wherever possible, or to have a backup plan when disruptions do occur.

Excellent, thank you. So as a quick follow-up there, the pandemic was of course a huge disruption to the supply chain.

Ongoing.

And yes, very much ongoing. When I talk to manufacturers, you know, they're— you know, I occasionally will ask them around the delays that they're experiencing, and I think it's been consistent for quite some time, and they've adjusted to the new delays. But when it comes to the digital transformation that you have seen in the past 2 years, I did see an article that Like, and, you know, we've seen 10 years of advancement in the past 2 years. How have you seen companies go about adopting digital supply chains, and what are some of the barriers that people run up against, or businesses run up against, when they're looking to make the shift from a traditional supply chain to a digitally enhanced one?

I think one of the biggest challenges is speed to implementation, finding the right solution for your business and getting it in place, getting things implemented quickly is always a challenge. And certainly, as we've evolved from the age of ERPs to more cloud-based software, that certainly has helped things. But there are so many more options out there, and finding the right solution and finding something that's either a best fit for the part of the supply chain that you need to tackle or something that's all-encompassing to manage that end-to-end visibility. And I think that the marketplace is just rapidly evolving in terms of what's available in terms of technology tools. And there's just an appetite to address risk in the supply chain and to have that visibility that never existed before, the level of investment that companies are making into their supply chains that pre-COVID, it wasn't a high priority for many companies. And now being in the position post-pandemic or still in the midst of the pandemic, that we need to really address it. It's a critical— supply chain is top of mind for most companies now. It's in the news. It's It's nice to be recognized. It would be nice if it wasn't always bad news associated with the supply chain, but it's good that it's a topic of discussion finally. Awesome.

Thank you. Carol, I'll pass it over to you.

Yes, thanks, Krysta. I think your line of discussion actually will weave well into my next question I have for you. which is about mitigating risk and supplier risk and generally to stresses. And my question is, you know, what are some practical ways that the digital supply chain is helping manufacturers mitigate, manage, or manage risk?

So I think advanced supply chain visibility is probably in my mind the number one way that risk is being managed and/or de-risking. In the past, there was no visibility. 15, 20 years ago, goods would leave a manufacturing plant on a truck to go to a distribution center, and nobody had visibility until it arrived. Or goods were put on a ship coming over from Asia to North America, and And once it was in transit, nobody had visibility. Nobody had visibility at the port as to where goods were. It was like a big giant black box. So there are some fantastic platforms out there now that are linking manufacturers with their carriers, whether it's first mile, middle mile, last mile, that they're able to truly see where goods are in transit. That's huge, obviously, not just for finished goods but for raw materials. Where is everything? How do I plan for it so that I can manufacture to my forecast and my plan? But also, there's a lot more use of machine learning and predictive technology to be able to understand different scenarios and different risks I think that the risk environment is— the landscape is so much more complex than it used to be. When we looked at supplier risk years ago, the key focus was, I did a Dun& Bradstreet report on my supplier, they looked financially healthy, okay, we're good to go, let's go partner with them, let's give them a purchase order. Now you've got to look at environmental risk, you've got to look at financial risk, you've got to look at risk beyond just the supplier's immediate finances. But what happens if 50% of that supplier's customers go bankrupt, which we saw in COVID? They fell apart because it wasn't the supplier that had an issue, financial risk or issue, it was their customers. In addition, you've got geopolitical risk, We're looking at currently in Russia and Ukraine tremendous risk to a number of commodities, gas and oil obviously being one of them, but so many other areas, natural resources that are impacting wide range of industries. So being able to assess all of the risks and, and be smart about what those risks are being able to be proactive to continually update your risk management plans. I'm pretty sure that there are a number of companies out there that did a risk management plan for their supply base in 2010, 2020 at best, and COVID came and they looked at these risk management plans and they were stale. They weren't being consistently updated, certainly at a minimum annually, but I think things are moving at a much faster pace than that, that we've got to be much more proactive and be able to react much faster to changes in the supply chain. It also, you know, the hot topic as COVID lockdowns occurred, and first we saw Asia shut down and then we saw the rest of the world shut down, there was a lot of discussion about nearshoring, reshoring, I don't think the level of enthusiasm that was there for those topics at the start is still there at that same level. It's pretty challenging to pick up and move your supply chain in a lot of cases, and certain supply bases are very limited to certain parts of the world. But what we did see was the need for Backup supply bases, secondary supply bases, the need to be flexible and adaptable within your supply chain to have alternatives. If your main supplier of your key raw material goes down, what's your backup? Do you have a secondary source? Do you have a secondary source in another part of the world if there's port congestion, if there's— if the Suez Canal is blocked? All wonderful things to wake up to in the morning. So I think some of those, but also that true end-to-end supply chain visibility is so critical. You could do a fantastic job building partnerships with your raw material suppliers and making sure that you have a steady stream, that you have backup suppliers or secondary sources, and to try and reduce the distance between raw material suppliers and your main manufacturing facilities, but if you don't do a great job on the back end and don't have visibility to where your goods are in transit to your customers, then it was a lot of effort up front for a big problem in the end. So really having the full end-to-end visibility is critical too.

Yeah, one example, I think, of this, I think, really just to distill that is we're looking at, you know, how information flows so that we can react as close to real time as possible and, and, you know, take action on those backup plans. Something that you might have seen in the news recently was a ship crossing the Atlantic full of luxury cars that caught fire.

Mm-hmm.

And, you know, I was seeing tweets from folks who had pre-purchased a lot of those vehicles, being already notified from their dealers saying, hey, the vehicle that you purchased, like, we know precisely where it is and it's somewhere afloat in the Atlantic. But this is— I think this was a great example of, you know, what the digital supply chain is capable of, saying like, hey, you're about to experience a significant delay on the product that you ordered because of something that was beyond our control. So that was just something that popped up in the news that I, you know, felt it was a good example of what you're mentioning.

So I don't know if you had any reaction to that. Yeah, that's a great example, I think, and it shows just in the course of one year how quickly things have advanced. Roughly, I think a year ago, there was a ship that the containers went overboard in the Pacific near the Vancouver-Seattle line, and containers were floating, and folks knew that they had containers on that ship, but they were waiting and waiting and waiting to hear from their carrier of whether or not they were impacted. So the ability at this point to have those advanced visibility platforms and the ability to contact customers, whether it's B2B or B2C, and be able to tell them we have a problem, here's how we're going to address it, is remarkable how much— how far we've come in just a year. And same with the Suez Canal issue that So many folks were waiting and waiting and waiting to find out if they had goods on that ship and, or frankly, if they had goods that were still at port and were going to be blocked and unable to get into the canal and meet their delivery times.

Grace and I did a bit of a recap on 2021 and we, you know, we were so busy thinking about the effects of the COVID-19 on the supply chain, we had completely forgot about the Suez Canal. And I was impressed with how online you could have an idea of where all the ships backed up.

Mm-hmm.

And it had a real impact on the shipping lines all around Africa. And It was very interesting to see the information that was made available even for online for non-manufacturing people. I thought that was really interesting to see.

And that now we can see even at the ports, whether it's the Port of Los Angeles, the Port of Charleston, we can see all of them now in terms of how much more visibility there is to see the traffic and the backup and the average time that they're waiting to get into port. So it really helps you to build out as well your transit times and your forecast of when you can anticipate receiving goods.

Thanks, Krista. Grace, did you want to bring up— we'd like to bring up a stat during our rooms, and would you like to bring up a stat for us?

Sure. So, and this is something that, you know, we so that you have shared recently as well. So, it was last year alone, there was $11.3 billion invested in venture capital for supply chain management. So, we're 2 months into 2022, close to $2 billion has already been invested in supply chain companies and technology. There's certainly more to come. So, why so much when we've already known that this, you know, supply chain is certainly a critical part part of our economy. So why now? And then what are some of the, you know, major innovations that you're seeing come through?

So the former economist in me loves that there are stats and that they're my own stats being quoted back to me. You know, I think why now? Why so much? Supply chain was historically not invested in from a technology standpoint, everyone implemented their ERPs and figured they were good to go. And so this isn't a blanket statement that covers all companies, but a lot of manufacturers really didn't invest as they needed to in supply chain technology. And so we're seeing huge advancements from all sections, all parts of the supply chain, not just Some of the advanced visibility platforms we've talked about already, but risk software, automation, huge amount of warehouse automation, and now looking at where else can that automation be utilized, robotics. And so a lot of acquisitions happening to continue to build out some of those platforms. Some supply chain technology companies have become unicorns already within the last 2 years in terms of the funding they've gotten or raised. And they're really— I think that those who have raised the most or are spending the most are acquiring others to continue to build out their platforms or to continue to improve their technology, less so maybe that It's not that we're seeing in the last 5 years that there's so many more deals happening, but the deals are getting bigger in the level of investment.

I'm curious. So I've seen, you know, there's a number of, you know, startups and new entrants into the market, you know, on the technology side. There are, in kind of in my experience and knowledge, and please correct me if I'm wrong, you know, fewer on the actual transporter side, just from a barrier to entry standpoint. But where is, you know, I guess the question really goes to what are some of the innovative either suppliers on the physical or the technology side? I guess where's the innovation that's really getting you excited?

I'm trying to be technology agnostic in this, but I think there's a lot of disruption in the industry, especially on the shipping side. So Domestically on the shipping side, for last mile in particular, the space used to be US Parcel Service, US Postal Service, UPS, FedEx, DHL, pretty much it. Now that space has 30, 40 players in there and it's competitive. So there is a lot more and they're much more technology advanced.

Mm-hmm.

than, than we've seen in the past. So there's a lot more disruption in very traditional spaces. I think for me, one of the things that's exciting is something like Project 44's advanced visibility platform, where 95% of a company's carriers are already plugged into it when they sign up for the platform, so they really can see Almost truly end-to-end based on what kind of carriers they're using. I recently was on one of their webinars where they were highlighting some of the last mile functionality, and we probably all experienced the frustration of, where are my goods? Where are my goods? I can't find my goods as a consumer.

Mm-hmm.

With last mile, let alone as a business. So The ability for companies to now be able to see last mile where they're going to run into an issue across multiple carriers, not just on FedEx's site, not just on UPS's site, but across all of them, and be able to say these 100 shipments are going to be late and I'm going to proactively contact my consumers, my customers, and get ahead of it. We all remember the great customer service we get even when something went wrong and we buy from them again. So this is a way for companies to really utilize the technology and differentiate themselves and mitigate a potential supply chain disaster before it happens.

Yeah, I think it just goes to show that communication and building that trust with the end user, you know, with your— the many stakeholders along the chain is certainly critical. But yeah, it takes a lot of technology to be able to do that efficiently and effectively.

I think there's so many other advances, something like Veeva Systems, where they're looking at quality and regulatory and claims. And I think historically people were managing by spreadsheet and trading spreadsheets back and forth, and now to have everything in one cloud-based platform where you can identify where you had a quality problem in the past and what you did to rectify it instead of calling up Fred and Bob and Todd and Carol and Grace and trying to find out what happened in the past and how do we fix it, that there's so much more at our fingertips and so much more that we can collectively share between the manufacturer and the supplier is really a huge advance that sounds so simple but wasn't happening.

No, your mention of spreadsheets, I mean, that's something that I do every day. My day-to-day is to help you know, quality managers and production managers, like on the shop floor, say goodbye to their Excel spreadsheets so that they can get all the information in real time around, you know, how is our production going? Are we going to make it to shipment, which would then lead right into that digital supply chain? And, you know, spreadsheets are— they run deep. It's sometimes really hard to move past them. But I think it is looking at what are the statistics, like what are the benefits to my business of doing this? Again, how is it going to mitigate risk? I think people are now, you know, there's just so much more digital awareness, I think, because of this major disruption that we've gone into. So, you know, at least from where I stand, I see a lot of— see a lot more openness to adopting these new innovations. Of course, there's costs, and of course, there's barriers. But yeah, we're still very much in that transition— transitional phase, I think, moving there. But we see the promise, that's for sure.

I readily admit to still really liking my spreadsheets.

They're very satisfying. They're satisfying, but they do have their limits.

Exactly. And it's, it's a very static tool that is, um, used by the individual and can be shared back and forth, but it's not a truly interactive tool. And if we want to build better supplier relationships and better customer relationships, we need something that can be shared real time.

Absolutely, yes. Thank you.

Thanks, Chrissa. Before we close today, usually we do a short round of final— of our final thoughts and takeaways for our room. And maybe Grace, did you want to start?

Sure.

Takeaways?

So this has been certainly, you know, we really appreciate your time and knowledge. You know, as someone who admittedly didn't know much about supply chain kind of coming into the pandemic, I've certainly learned a lot over the past 2 years, but it's something we're continually kind of pulling the veil back on. I think, you know, you said it's, you know, you guys are getting your moment in the spotlight, and I think that's fantastic, and I appreciate you kind of helping us understand, you know, us and our audience understand more about, you know, the digital supply chain and really how it's different from the traditional supply chain. And my takeaway really is that it all comes down to speed of information sharing. And that while it sounds simple, in practice there is a lot of technology and challenges that go into making that possible. So, you know, looking— it's something that, you know, as a consumer makes my life a lot easier, but then also just from a business perspective can be helps you prioritize your own planning and use of materials and time efficiently. So I think there's multiple levels of where this communication and having that readily available can impact— it has a very large impact. So that's kind of my big takeaway, and thank you.

Thanks, Grace. Chris, I think my takeaway for today is the advancements and innovations specifically in shipping. I think you mentioned Project 44. So now, now I'm very curious about this, and I'm definitely going to be spending some time looking into that. And maybe I'll share a link in the comments for the event if anyone else's curiosity has been sparked by the shipping. Great. Krista, what are your final Thoughts for today?

So I think it's, you know, being in this supply chain, being in the spotlight is both— I think it's very exciting that we're finally shining a spotlight on supply chain and for better or worse that there are issues, but excited to see us tackling the issues finally, excited to see things like the U.S. government spending time and focus on investment to improve supply chain conditions. And I think we're just at the tip of the iceberg. There's a lot of technology to come. You know, bottom line, the technology is not going to do all of it for us, but to have better information and better tools to make good decisions, to mitigate risk, to identify new sources, to have the materials and the goods in the places they need to be at the right times is just such a huge leap forward. So I'm excited to be in supply chain.

Thank you. You know, Krista, I think your combination of economics and supply chain, I think, is invaluable experience, and we really appreciate you sharing it with us. And this way we can also share with others and maybe even inspire somebody today. So thanks very much. And For the audience, if you like having conversations like this, look out for more LinkedIn Live shows from the Industry 4.0 Club, or you can also listen to our shows live on the Clubhouse app. And our rooms start at 12:30 PM Monday to Thursday, and Wednesdays they start at 11:30 AM. And I wish you all a great rest of your day. And to you as well, Grace and Chrissa, have a wonderful day today. Thank you.

Yes, please go follow Chrissa for all the excellent content she posts on LinkedIn, um, and so you can stay up to date on the latest supply chain news. Thank you so much, Chrissa.

Thank you.

Thank you. Looking forward to your next Women in Manufacturing discussion.

Excellent. Thank you.

Bye-bye.