Episode 114: A New Era in Productivity: The Connected Workflow with Catherine Graham

Welcome to Skucast, the podcast for entrepreneurs in the promotional products industry. Skucast shines a light on our industry's best work, features maverick personalities, and discusses what's really involved in running a modern promotional products business. Skucast is the official podcast of Common Skew.

You think about kind of, you know, where disruption happens within industries is when you get people that come in with a different perspective on how things could be. And we, we are so mired in how things are and how things have always been. And even though, you know, as an industry, I think we've been able to accomplish some, some pretty amazing growth and transformation over the past 10, 15 years that I've been involved in. And you think about all the way from camera-ready artwork to being able to turn orders in 24 hours, like it's remarkable, but we can't stop there. And what technology has enabled us to do that was not possible 10 years ago in the same way is to be able to get this friction out. And so, how do we just get more efficient and how do we get better?

For every order in this business, there are on average 8 manual follow-up interactions between distributors and suppliers. Multiply that times the number of orders you process in a year, and the inefficiency is staggering. What's more, 66% of all orders received by suppliers from distributors are either missing information or have incorrect information. That's why this latest development in promo standards integration has an unprecedented impact on productivity for the supply chain. In today's episode, Commenscue CEO Catherine Graham joins us to talk about the new connected workflow. And how EPOs, electronic purchase orders, the strongest link in the connected workflow chain, allow for the effortless transfer of accurate live data from ideation to orders to production to invoicing without compromising the accuracy on any order. Catherine shares with us how this development will impact supplier speed and how this will result in a dramatic overhaul of a distributor's infrastructure due to less oversight on orders, freeing up time and resources to focus on selling. Hi friends, I'm Bobby LeHew, the Chief Content Officer at Commonsku, reminding you that if you have any question about sales, operation, commissions, landing new business, whatever the topic, email me bobby@commonsku.com and we'll answer your question here on the program. This episode is brought to you by Commonsku, the platform that powers your connected workflow, enabling you to process more orders and dramatically grow your sales. Begin your free trial now at commonsku.com. And on to my conversation with Katherine.

Let's catch up the community on the progress made with promo standards integration thus far. Where are we at, at this present moment, and what progress has been made?

So this has been a remarkable journey that has been spanning kind of 2 years and has involved an extraordinary amount of work on the part of several kind of key suppliers and some large distributor groups as well that have been contributing to the development around this, this standard. And initially, kind of where things began from an implementation perspective is with the basic things like being able to pull live inventory, and we've had that in place for some time now, and last year rolling out order status and ship notifications. And what that means is that being able to click a button inside Common Skew and being able to directly get an answer back from the supplier's systems as to exactly where your order is at within, either it's in artwork or it's in production or it's being shipped, and then being able to pull back the tracking ID as well. So this is a dramatic shift in terms of what the current day looked like for the distributor-supplier relationship previously, where an order went in and you had to call and say, did you get my PO? Right. Is— when am I going to get the proof? Has it shipped? What's the tracking ID? The 8 manual interactions that currently have been happening between supplier and distributor. And this is now eliminating kind of all of those things and being able to get answers in real time. Yeah. So that's been really exciting to have kind of roll out over the past, you know, at least 8 months ago we rolled that out and we've been adding suppliers as we go that get those services available. This next stage that we are super excited about is being able to pull product data directly from the supplier. And what this means for the distributor is that they have real-time live information coming directly from the supplier's database. So with their own pricing, you know, the inventory kind of layered on top of that, and ultimately being able to create the order directly from that data. So there's a lot of interesting implications for this in terms of speed that it takes a distributor to be able to create an order, accuracy as far as how it is that they know what the different decoration methods are, and therefore the appropriate run charges and setups, which kind of requires more digging currently. And ultimately being able to ensure that they are passing an order with correct information, with available inventory that can go directly into the supplier system and therefore straight to the production floor.

Right. The astounding number of mistakes that this can minimize just from even just, just from simple data entry alone, much less interpreting the information that you're getting in front of you from what would be the catalog or the website is astounding.

I mean, you've got so many facets to this that are so interesting on both sides of the equation. So as you say, the distributor trying to interpret kind of what the different run charges or trying to figure out, you know, if I layer on a second location, what does that mean? And trying to, you know, dig through either, you know, what's available in the industry databases or dig through the supplier's website. And 66% of the time they're making those guesses either incorrectly or they are submitting an incorrect purchase order. So those are the stats right now. 66% of the time. 66% of the POs the suppliers receive are either missing information or incorrect information.

Wow.

So think about what that means on on the supplier end of the equation. So they receive a PO and they then have to get in touch with the distributor to either tell them the information is missing or the pricing's incorrect, or they don't have, you know, some key piece that's holding up production. So that PO gets put into a pile that gets set aside, and ultimately that has to wait until they have an answer. And as that 66% of the POs kind of going into that pile start to pile up and the supplier doesn't know, you know, when they're going to be able to schedule production on those orders? Are they going to— in-hand date starts to be jeopardized.

With deadlines that are always hot, they're so vulnerable.

Exactly. And you've got, you know, distributor salespeople that are moving on to the next sale, hopefully, and then the supplier is trying to get a hold of them and playing voicemail tag, and the clock is ticking. So there's tremendous cost kind of on both sides of the equation kind of to that incorrect information.

On the distributor side then, this is going to mean so much in terms of the day-to-day activities that a supportive production team is going to be doing. It's going to dramatically shift and shape the structure of these teams. But on the supplier side, what does this mean for suppliers now going forward?

The key pieces for the supplier is that the— they're ensuring kind of that the orders coming to them are correct because they're built from their own data directly. It also means that orders can't be submitted for inventory that doesn't exist. Which is a key piece as well. And especially, you know, when we hit busy times of the year and, you know, inventory is really challenging, that being able to have that secondary check happen as the distributor is creating the order will prevent that problem happening. So you've got kind of just the accuracy of the PO data as kind of the initial key impact kind of on the supplier's operations. You then have the fact that it can go straight to the production floor and not have to be manually rekeyed, which is obviously a a critical kind of second piece of potential error.

We forget how many times an order in this business is rekeyed, not just from the distributor side, but the supplier side too.

Exactly. And so every opportunity that every time that is rekeyed is an opportunity for error. And people are human. Like, ultimately, that's going to, that's going to happen. So by eliminating that step and having that go directly into the supplier systems, that you're reducing kind of a secondary potential place for inaccuracy. And then the fact that it can go straight to scheduling for production means that there's far more predictability around kind of what the production floor looks like, how they can know capacity, how they can forecast around that, and ultimately ensure that they're meeting the enhanced dates.

There's so many things here with this process that's going to be eliminated for suppliers in terms of responding quickly to that demand. I can see even production times maybe even getting tighter and better and closer and able to respond in real time to so much.

And it's just, it's being able to smooth that whole process out. 'Cause if you think about this visual, this picture of what it looks like to have this stack of purchase orders that you're waiting on answers that cannot go into production yet versus being able to— and you're potentially, you know, holding slots if it's a rush or you're holding slots to meet an enhanced date and being able to smooth out kind of that piece, I think has got, you know, significant implications. And we haven't even touched on kind of the other element of this as far as the accounting piece is concerned, is that think about the amount of time wasted currently around Pricing discrepancies, credit memos, kind of all this back and forth that happens at that end of the equation. And what all of this does is it means that because it's a fully configured, accurate PO that goes all the way through the system straight through to accounting, that the invoice comes back and matches kind of the PO perfectly. So the supplier's not having to have, you know, the potential problems there of sending an invoice back that does not match what the distributor thought they were sending. The distributor's not having to rekey that invoice kind of into their system and be able to, you know, to post it. So there's there's just, there's so much opportunity for overall kind of efficiency within on every step of this equation, which ultimately the objective in all of this is that, you know, how do we as an industry be able to get out and sell more? And if we can free up that time so that the distributor can be out selling more and not having to be doing all these manual processes, then ultimately we can be more successful overall.

When you mention the accounting piece, I think we tend to forget it because we're so used to the process that we have. But this is what you've meant by connected workflow. You have seen this, you have seen this, the dissected parts working in disharmony for so long, and we've all gotten used to it that we can't even fathom this single conduit that is going to allow us to process more, better, faster, easier than ever before. But it's truly connected now as opposed to being all these disparate pieces.

Yeah. And I think that the piece that we don't kind of think about enough is is how much friction exists across every step of that process now. And it's because, you know, we just think that that's the way business is done because that's the way we've always done it. We're not aware there's a better way to do it. And, you know, all of a sudden, if someone comes along and puts a button inside your application that says you don't have to call the supplier anymore, you can just click this and get all the information you need. It's like, whoa, I didn't even know that was possible. So, there's just, there's an element, I think, of of really kind of, you know, blue skying around kind of where this can take us and what it means and what it means in terms of the overhead costs that are kind of baked into everything within this industry. And if we can get some of that, you know, those overhead costs out and enable, you know, suppliers to be able to spend more time kind of, you know, working strategically with distributors, allow distributors to spend more time working strategically with their clients, that what does that mean for us kind of overall and where, you know, where could we take things if that's how we were spending our time versus calling for a track meeting?

Yeah. Can you explain some of the technical details? I think folks will find this interesting, actually. Can you explain some of the technical details and processes going on behind the scenes that make this possible? I've had a bird's-eye view watching you and the development team work on this, and it's, uh, it's intense.

All right, let's get geeky.

So I'll see if I, I'll see if I can hang with you, but go ahead.

So let's back it up to kind of what the initial challenge is to begin with, with promo standards, that you have all these different types of products, all these different types of decoration methods, all these different ways of kind of storing that information, naming that information, communicating that information. You think about, you know, what it is that you can do with a pen versus what it is that you do with a water bottle, you know, versus a journal. And all of those things mean different things to every supplier and are, you know, are kind of named and stored differently within their systems. And all their systems are different. There's very little kind of continuity across the systems that are used within this industry. So, you know, Challenge number one was just creating a common language around how do we kind of create all these disparate names and all these disparate products and decoration methods and be able to kind of streamline that into a way that allow us all to communicate kind of using the same language. So that was kind of the base level work that had to be done first. And then ultimately, once that language was created, that is what, you know, the Promo Standards Web Service is, is being able to have suppliers kind of map their information into that common language and therefore have that common language be able to be consumed by by, you know, a company like Commonsku, you know, as an example.

So the promo standard sets is like a translator of sorts?

That's exactly it. That's exactly what it is. Yeah. And so that, that web service kind of layer is ultimately what's translating what, what resides in the supplier's database and being able to kind of pull that into what the distributor sees within Commonsku. So coming up with a common language is extremely difficult kind of to begin with, and then ultimately it's the interpretation of those specs that is the second kind of layer in the challenge. So that's what we've been living through over the past 6 months is saying, well, that's interesting, you interpreted that a run charge means this and you interpreted that it means that. And, you know, and so trying to kind of, you know, surface this information in a way that a distributor can actually understand it and be able to, to be able to ensure that they're selecting kind of the right, you know, things in this wizard basically that enables them to, to configure the product. So that's kind of the back and forth piece that's been going on with the, the suppliers that we are initially kind of working with on, on getting this launched. And unfortunately, they've all been, you know, really responsive willing to kind of work at this so we can get to this end result because it's really exciting.

What will suppliers need to do to ensure this reality happens for their lines and for their distributor customers?

I think the challenge is around prioritization. I mean, ultimately there are so many different ways in which suppliers get pulled, you know, so many different demands kind of on their IT departments. And the key piece in terms of ensuring success with this overall is around adoption. Prioritization. And obviously, you know, if we have the backing of, you know, $650 million in spend, kind of this going through the Commski network, that can be— could demonstrate that there's, you know, velocity with this, that people want to be using this service, they want to be working more strategically with their suppliers, they want to make it easier to do business, then those kinds of things hopefully start to, you know, influence the prioritization. So that is really the biggest challenge. And obviously ensuring kind of that the technical capability is there in-house, which not all suppliers kind of have currently.

Right. Can distributors do anything to help accelerate the steps needed for suppliers to comply with promo standards?

Yeah, I mean, a key piece of this is for the distributor to understand kind of what this means for their business. And so knowing kind of that this is going to save enormous time in terms of for your sales team kind of creating presentations and creating orders, and it's going to save enormous time for the production team as far as not having to manually follow up. It's going to save enormous time for the accounting team. And And ultimately, all those things are going to make you far more likely to want to do business with a supplier that is fully connected and is going to make it really easy and friction-free to do business with them versus someone where you're going to have to kind of muddle your way through their product information and key in the costing and have to call them 8 times to get your order out and then post the invoice at the end that might not match your PO. So, the key piece for the distributor is kind of understanding what connected workflow means and therefore being able to go to the supplier and say, you know, this is how I want to work with you. Like, this is going to make a significant difference in terms of me being able to get out and sell your product more. Yeah. And to be able to make sure that we can, you know, send things in error-free and be able to kind of save time for all of us.

Yeah. Being a distributor for so many years, I realized that one of the problems that we have is when the economy is good, we just tend to throw more people at the problem and just deal with the productive nightmare or the lack of productivity that we have or the lack of streamlined workflow that we have. So we just throw people at the problem. Even, even if you could do that, even if you could sustain it that way for a while, here's where it's still hugely problematic. And that is that it's always been astounding to me that you can be working with a $500,000 customer, $1 million customer, a $5 million customer, and the risk of that relationship can set on a few orders going awry. Now, we know that that is not— that typically that's not going to happen. But you know that the reality sits there, that I always used to joke that, that we could have problems. We just can't have them in lumps of threes, folks. You can't have 3 orders go wrong at the right time, and one of them can't be for the CEO's sales summit that he's doing, you know. So even if you're somewhat, you know, here, promo standards, or maybe you're fatigued by the whole technology thing and you're just throwing people solve the problem. What we need to really understand is this is eliminating one of the biggest parts of risk in losing a client. You've worked so hard to land a client, you work so hard to maintain and keep that client, and the fact that you can now eliminate that risk because of simple things like typos or deadlines or missed deadlines or something like that is huge.

Yeah, there's massive implications to that.

One more thing too is that what What I can clearly see, because I was always one that threw people at the problems, is that what this is going to change in the infrastructure of a distributorship is the focus. Our focus, instead of being, say, just throwing out a number, 60% to 70% ops-focused, or where your payroll might be shifted in terms of maybe number of people or something like that toward administrative tasks or oversight tasks, can now be focused on sales tasks. You can truly— the larger percentage of the organization can become more sales-focused.

For sure. And, you know, what is the implication of that in terms of how you can better support the customer, how you can better grow the customer, how you can do kind of, you know, more thoughtful touches, or what are all the other things kind of that you could be spending time on, you know, if you're not calling and calling to get the tracking ID. And I think that, you know, one of the key things to remember when the economy is good is that that is arguably the most important time to be looking at efficiency because it's when cash flow is good. And so as opposed to saying, you know, I'm going to throw a person at the problem and saying, well, you know, how can we invest in better, you know, technology or better kind of— we have better, you know, efficiencies so that as we continue to grow that we're not having to, you know, throw another body at it in order to be able to meet the demand.

That's a great point. So let me get real personal for I have been privileged to watch this process inside Commonsku now for a while. What does this mean for you as the CEO of Commonsku? You know, I've seen the amount of energy it's taken to get to this point. This represents a new era of productivity in our industry. Now, someone like you who is incredibly passionate about productivity, which, by the way, a little sidebar, Kathryn's often telling me, just ship it, Bobby, just ship it because I obsess.

But you're one of the most passionate people I know about productivity.

How important is this breakthrough for you?

I think, I mean, this is a realization of what we've been trying to achieve with this connected workflow vision for so many years. All the time and energy and investment that we made at the upfront part of the equation, the ideation part of the equation with the things that we've built into the platform around collaborating community and all the ways that we're trying to connect kind of suppliers and distributors more closely together at that upfront part of the equation, that that's been a huge piece of the vision. For years. And now, the operational piece, the reality of being able to connect kind of that latter part of the equation is just, it's going to be utterly transformational. And for me, who's like such a process nerd, that ultimately being able to kind of see, like, inefficiency drives me bananas. And so, being able to kind of see those types of things finally, being able to get that friction out of the system, that overhead burden, that waste to be able to have people freed up to spend time on on, you know, better things. That the— ultimately, I think that that's just so, so exciting.

What does this mean for the industry as a whole?

We as an industry can't continue kind of with the amount of additional kind of, you know, overhead that's baked into the system right now and continue to be profitable and continue to grow. And the— you think about kind of, you know, where disruption happens within industries is when you get kind of people that come in with a different perspective on how things could be. And we are so mired in how things are and how things have always been. And even though, you know, as an industry, I think we've been able to accomplish some pretty amazing, you know, growth and transformation over the past, you know, 10, 15 years that I've been involved in. And you think about, you know, all the way from camera-ready artwork to being able to turn orders in 24 hours, like it's remarkable, but we can't stop there. And what technology has enabled us to do that was not possible, you know, 10 years ago in the same way, um, is to be able to get this friction out. And so, you know, how do we just get more efficient and how do we get better, you know, as a supply chain? As far as we, we are, we are dependent upon the fact that we are a supply chain. There are 3 different points to, you know, the triangle, as we call it. You know, you got suppliers, distributor, you got— you have the end user. And ultimately, communication, information, and, and all of that has to flow across all those 3 pieces seamlessly. And so we have to do everything that we can to make sure that that that is accurate, that is efficient, and ultimately that enables kind of us to be better as an industry overall. I think, you know, one other piece that we haven't touched on that I think is really interesting kind of in this equation is that the more transparency there is in terms of information flow between supplier, distributor, and customer, the more trust exists. And if you can kind of, whether it's whether it's, you know, knowing what's going on with an order in production, whether it's being able to kind of, you know, demonstrate that through the, you know, that we send out, we have the project portal links that go out to clients where they can see in real time what's going on with an order, you know, the Domino's pizza effect. But ultimately, you know, all of that transparency I think has the potential to really just elevate the relationships kind of in this industry and to elevate the industry as a whole. And that ends up being a really interesting byproduct of technological transformation And that's just worth kind of thinking about.

You know, I was talking to Holly recently about her showing project portals with her clients, and I was really impressed by how her clients saw that and then wanted to know more. So much so that Holly said, we're going to start showing these project portals in all of our client presentations because the client wanted to know what is your communication strategy. I think many of them know that the communication in this industry is really bad in terms of how we inundate our clients with unnecessary updates, unnecessary details, because the technology could take that away. We tend to forget what could exist if we fix that problem. We tend to forget how much more fruitful, profitable, sales-focused, sales-forward conversations we can have with our customers. And then you just mentioned the fact that the customer has that kind of trust. They can rely on that system. They're already used to it in their daily Yeah.

And this just, I mean, removes the clogging out of their inboxes of, you know, all the back and forth emails and just being able to give them the information they want at their fingertips. And it's exactly the same for the distributor. They want that information at their fingertips of what is going on with the order from the supplier. And if they're having to, this is why distributors call and email so much, which I'm sure is super annoying for the supplier. They're just looking at their system going, yeah, it's still in production. If there was transparency around that. They wouldn't be bothering them.

You know, I'm laughing at my own, you know what I used to do, my antiquated ways. I used to run that open order report and I used to look for any order that was over X number of dollars, right? I think it was about $5,000 or so. And I'd look for every order and I would bug the hell out of my team. You know, did you call it? Did you call it? Yes, I've called on that.

We call like 20 times. When's it invoicing? When's it shipping? Right.

You checking on how we doing on that? You know? All right.

Can it ship sooner so we can make this quarter's numbers? Right.

Exactly. That That was the main reason why.

Awesome.

Well, Kathryn, thanks for coming on SQCast to talk about this. We're so excited. There's so much work to be done still, but so excited about the progress that's been made. This is a, this is a time that many of us have been waiting for. And so it's great to see that it's finally here.

Yeah, we're— we could not be more excited. And, you know, we are here to support kind of in the process and as we go through this. This and hopefully looking to continue to add kind of lots more suppliers to the roster as, as things evolve and more suppliers implement this. So here's to connected workflow and making our lives easier and everyone being able to get out and sell more. That's right.

Thanks, Catherine.

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