Episode 320: Navigating a Global Transparent Supply Chain (Tim Andrews, CEO, ASI)

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.

Our guest today is a luminary in our industry. Tim Andrews is the CEO of the Advertising Specialty Institute, known as ASI, whose 350 employees serve a network of 25,000 suppliers, distributors, and decorators in the $26 billion industry. Now, Tim joined ASI in 2003 And under his guidance, they've become a critical voice in the industry, notably a global voice, as our international world has become much more connected. As many of you know, CommerceQ partners with ASI through an ESP integration for product search. But Tim's role expands beyond tech. He also serves as the president of ASI Show, which hosts 15,000+ distributor attendees at trade shows and events across North America, including the ASI Chicago Show, July 23rd through the 25th, and he serves as vice chairman of ASI Computer Systems Inc. Now, Tim has an illustrious background, which includes serving as the CEO of PreMedia Business Magazines, $400 million media division, and he served in a variety of roles at Dow Jones and Company, publisher of The Wall Street Journal. He also serves on the advisory council of ProPublica, an independent nonprofit investigative newsroom founded by the former managing editor of The Wall Street Journal and the general counsel of Dow Jones. Now, there's so much more to Tim, but to give you a glimpse into his passion for positive change, he's a highly respected alum of Ball State University, and through their foundation in 2021, he endowed a Multicultural Center graduate assistantship focused on LGBTQ+ community studies at Ball State. Today, we dig into a variety of topics, including the geopolitical ramifications of intensifying US and China relations and its impact on our industry. How tariffs could affect our supply chain, and one of the most trending topics emerging between suppliers, distributors, and end clients: the demand for more sourcing transparency. Hi, friends. I'm Bobby LeHew, Chief Content Officer at Commonsku. If you haven't checked out our brand new community forum, I highly encourage you to do so. As many of you know, community has always been a hallmark of our innovation in the industry, but we've now fine-tuned that mission by creating easier and deeper ways to share. Because this new forum allows you to hyperfocus on niche communities and topics. So for example, if you're in sales, we've made it easy to connect and share with other salespeople across the Commerce Queue distributor network. Or if you're in a production role, we've created channels for you. If you're a CEO or leader, likewise. We're already seeing really deep engagement from early participants on topics like financing, how to structure your support team, international sourcing. And just like our ordering platform, our new community provides hyperrelevance to your challenges and opportunities now. A tremendous boost to real-time idea sharing. Oh, and our new community forum features permission controls for CommsCue customers for your teams, as well as a very highly requested feature, a global search bar to easily search through your posts and ideas. This community forum is available for all CommsCue distributor customers to join. Just log into your CommsCue account and visit community.commscue.com. And if you're not a CommerceHQ customer and the community forum sounds intriguing to you, visit commercehq.com/demo for a quick chat with our team. You'll get two amazing experiences for the price of one: the work-from-anywhere platform that powers your connected workflow, resulting in easier and faster growth, and a direct connect to a community of the fastest-growing distributors in the industry. And now on to our chat. With ASI's Tim Andrews.

Tim, you just crossed the 21-year threshold with ASI. Congrats, my friend. You have witnessed and helped usher in a sea of changes in this industry and in that time. But instead of asking you about like the biggest changes looking back, what I'd rather ask you about, because you're really good about thinking of the future, what do you see as the biggest changes we need to face in the future as an industry? But we are reluctant to do so?

Oh, the reluctance to do so. So you threw in a little, uh, you threw in a little wrench, right? Uh, you know, I think, uh, one thing that I've been talking about, and many of us have for, for decades now, is to embrace and to not just embrace but really help diversity in our industry really happen. And I think we've made some progress there, but for whatever reason, this has been a difficult hill for us to climb, I think, as an industry. And I'm not speaking about racial diversity only. Obviously, that's incredibly important. But we have to think about diversity overall. We have to think about who are the recipients of our products. And so do we have people in our organizations that reflect the recipients of the products that we are selling and marketing to people so that we can really understand their needs? And if someone says to us, as a distributor, for instance, I want to reach people that are between 15 and 18 years old that are a certain demographic, can really a 40 or 45-year-old understand that, especially when you get into racial diversity? So I think we need to really— work on that diversity piece. You didn't ask for more than one, but that's one. Please do.

Yeah, go ahead.

I'll say the other thing is I think we've got a real coming here of internationalization. And I think that that spans a lot of different ways we look at the business, both in the supply chain and internationalization there, but also internationalization from a distributor perspective. And certainly, there are some distributors that are working outside the borders of North America. But those are two things that I would mention. I've got a lot of others, but I don't want to, you know, focus only on this question.

Those are so significant. I remember as a distributor once, the Hispanic Association reached out to me and said, we need Hispanic representation that understands Latino community as a distributor. So you're so right, and it's happening so much. Let's talk a little bit about transparency, because ASI has been really a crucial link in understanding worldwide supply chain. Your team is amazing and help us understand big topics and how they impact or will impact our business in the future. Theresa Hagel reported on Scope 3 emissions, for example, and the downstream effects of indirect emissions. Customers are considering far more when selecting their promo items than in the past, like end of life product lifecycle. One great example you just reported on is Jim Line introduced product-level carbon footprint data, which was amazing. But then that's one thing, but how can we as an industry offer better transparency? Well, we have to get over, first of all, our paranoia.

You know, the industry has been built really over decades on lack of information to buyers and to recipients, and that has preserved sort of the status quo in some ways of the, of the industry. But that transparency you're talking about is something that we have to embrace now. So we have to work, I think, both suppliers with manufacturers, suppliers with distributors, distributors with their buyers, to really get comfortable with the fact that we're going to have much more transparency in this industry going forward because it's going to be required by the recipients, required by the buyers, and probably required by some very important governmental agencies. We're already seeing this in the EU where there's significant effort there about transparency in every single product, whether that's a consumer product or a B2B product. And we have to really, I think, embrace that and get comfortable with the fact that we're going to be sharing information we might not have shared previously.

That is so true. Distributors have carefully, in the past, carefully guarded sources, but now we're being asked to reveal sources to many of our buyers, which is what you're saying. It's going to be a real critical juncture we cross here as we preserve the strength of our supply chain while being open with our customers, our end customers and our end buyers, about where product is being sourced.

Absolutely. I mean, right now there's an effort in the EU that I'm sure will come to California and then to the rest of the United States and eventually North America, where a a person will be able to scan a QR code on a product, on a piece of apparel, for instance, and see the entire supply chain. Yeah. You know, where was this cotton grown? Where was it processed? You know, that entire process. We have to get ahead of this and get more comfortable with it. And also, of course, that means suppliers are going to have to put a lot of pieces in place to be able to understand from a manufacturing perspective, a shipping perspective, a processing perspective. The decorator is very important in this. And obviously, there's an extra step in that decoration for most of the apparel industry. So this is going to be a very important undertaking. You know, I would put it akin to— the Prop 65 work that suppliers did with distributors a few years ago, the whole safe product initiative that we really have embraced and made sure that all of our products are safe. So I think this is going to be something we've got to really get our arms around.

So true. Jim Line, again, is making real great strides with that. As worldwide uncertainty continues to escalate, I want to ask you about supply chain in China. There are issues at port. That dreaded phrase supply chain is starting to make front page headlines again, this time from The New York Times. I want to quote from an article. It's all happening again. The supply chain is under strain. That's the title. Here's the quote. Since October, the cost of moving a 40-foot shipping container from China to Europe has increased to $7,000 from an average of $1,200. It's still well below the $15K during the pandemic, but still 5 times as high, end quote.

But it's not just the expense, but getting containers has become difficult. It's become difficult for ships to pass the Suez, which sounds like it's oceans away from us.

And what does that matter if I'm a distributor in Dallas, Texas? But half of the world's global container traffic goes through that canal. And I'm sorry for the rambly context, but are you beginning to hear from suppliers on this topic of supply chain once again?

You know, interestingly, not as much as one might think from the headlines that are there. I think we are a bit isolated in North America. We have different routes. We don't have to go through the Suez. So I think there are issues going on that we probably should be more concerned about than we are. I think the resiliency we showed, you know, during the pandemic allows us to be a little bit more comfortable that we'll figure it out, that suppliers will figure it out. And I think, you know, the nearshoring that we've seen, you know, there's a lot more going on in terms of nearshoring and, you know, and inventory building among suppliers. And so I think some of those things have really helped us. And obviously we've also, while it doesn't reduce the shipping, we've also had suppliers, you know, we've really seen suppliers, you know, really move some of their manufacturing or sourcing to other places outside of China. So I think all that's being helpful and we just learned a lot. You know, once you go through something once, you can sort of understand how to get through it again. And of course, Going from $1,200 to $7,000 is a big jump. However, a container holds a lot of product. And so an extra $5,000 spread across, you know, thousands or tens of thousands of product items doesn't particularly increase the cost on a per-item basis. Great point.

As we're recording, we're in the middle of election season. There are continual rising tensions in China. Words like decoupling and what you said, nearshoring and friendshoring, are in the news. In Kounselor's State of the Industry, you reported that 29% of global manufacturing output is by China. For our industry, it's 88%.

8%.

Um, what concerns you most about the current eco-political situation regarding our industry specifically?

Well, I think first of all, it's been very interesting. You know, we've got two very different political leaders that are both appear to be the people that will be running against each other in the presidential election. And in reality, while they're very different in so many ways, they both are sort of doubling down on China and ensuring that China, you know, is, is, is properly being, you know, is paying the right price or whatever one would say in terms of its, of its use of products, etc. And so these tariffs, of course, which went on 5 years ago or 6 years ago, you know, weren't taken off by Biden. In fact, he's talking about more tariffs, and of course Trump is as well. So I think this, this concern that I have would be the fact that, that dependence has not really dramatically changed from what it was 5 or 10 years ago. Certainly there's been a lot of progress in Vietnam and other places around the around the world. And I think we'll see more of that. My biggest concern, frankly, is just the uncertainty. You know, people like to know what's going to happen, and especially business people, buyers, all of us like to think, you know, generally speaking, I know what's going to happen in the next 30, 60, 90 days, the next year. I think that uncertainty is the biggest worry that I have in terms of what it could do, because we certainly don't want to have people so uncertain that they stop making business decisions, that they stop promoting their own businesses, that they, you know, do things that are detrimental really to them and, and their business, but also to the industry that, that is dependent on that kind of business flow.

Yeah, I love how we started this conversation talking about how global this, this industry has become. Michelle just reported in on Turkey's revenue in the promo business, something like $7 billion, which is absolutely amazing.

And speaking of switching topics a little bit, 70 years of Counselor magazine.

Now, Tim, I have a special place in my heart for Counselor magazine because as a kid, it's what I cut my teeth on trying to learn this industry. So what are you most proud of in regards to Counselor Magazine, having steered the industry's publication through so many award-winning seasons? A lot of folks don't know how many awards that you and your team have won, along with, of course, amazing editor Michelle Bell. What are you most proud of?

You know, I think that we've lived up to our motto, which is on the COVID of every issue, which is the voice of the industry. I think that Counselor Magazine, since its founding 70 years ago, has tried to be something that's educational, that is informative, that challenges us to think in different ways, that sets the tone, that sets the agenda. And I think all of that really comes into play. And I'm super proud that we've actually done that. It's not just a history book. So many magazines are sort of the history, what happened. I think we're a little history, but we also try to think of it as a bit of a crystal ball. And so I'm really proud of the fact that we've lived up, I think, to that motto.

I think you've also navigated— you and Michelle have both navigated a worldwide voice perspective on the industry that I always found refreshing.

Well, that's very nice to hear. You know, we have been in some ways a US-centric, and then we sort of expanded to be more North American-centric to include, you know, our sisters and brothers, you know, that are not in the US border, and now globally. You know, I think the industry, as I said at the very beginning of this, you know, the industry is much more global, needs to be more global, needs to think about internationalization. And I think it started with us going to Asia for the first time. You know, there were certainly suppliers were going there, But a few of us from ASI went there, and we were some of the first people to go from the industry organizations. I feel great about that, and now Europe. And so I think as these things connect, we need to help connect them. We need to be talking about that. We need to be spotlighting people that are connecting and doing great things. We have at the Counselor Awards every year at our ASI Chicago show, we spotlight an International Person of the Year. We'll be doing that again this year, someone who's really doing a lot of work in the world. And so I think we need to increasingly do that on a global scale and be the voice across the globe of promo.

Yeah. Speaking of, the ASI Show is right around the corner, July 23rd through the 25th. What are you looking forward to most this year?

Oh my gosh, I love, uh, I love every aspect of it. I mean, we've got almost all the top 40 suppliers there, which is great. I mentioned the Counselor Awards, which I really, uh, love the Counselor Awards, and it brings together, you know, I think we had probably 350 or 400 of the top people in the industry. There last year, and we invite others to please come this year. We honor the individuals that are running the top 40 distributors and the top 40 suppliers based on revenue, and also a number of individuals who have contributed so much over the course of time— the Person of the Year, the International Person of the Year, the, you know, a number of other people that we honor. And so it's a great coming together. And so that's one of the highlights for the— for me, for the— for the Chicago show every year.

Tim, you and I, through our careers in the industry, I feel like we're in a period of time where the branded merch item has reached a status we've never imagined. Like, did you see—

do you see that from your perspective? It's amazing, honestly. I mean, when I, when I was first talking to the Cohen family about joining ASI over 20 years ago, you know, I certainly didn't know there was an industry before I started talking to them and some other people. And, and who would really have imagined it, you know? And when, when I when I first was talking to them about this multibillion-dollar industry, we've been a little hidden. I think we've done a great job as an industry getting the word out and explaining our industry. And I think we've made a lot of progress there in recent years. I think we still have progress to make. And we also need to make sure that the products that we're offering fit the need of the marketplace so that we don't end up in places like trash dumps that people— we don't want our products to be there. I think we've done a good job of transitioning this industry from some of the words that were used back then to other words that sometimes are controversial among some people in the industry, but merch and all sorts of other words that we use, you know, I think really the industry has grown and matured in a dramatically great way.

Speaking of changes and growing and maturing, ASI, for those that don't know, acquired Printing United Alliance, which I— it seems like that's a direct result of this increasing convergence we're seeing across media, from promo to decorating to print. We see end clients driving this change. I was seeing this even before I left my distributorship and CommonsQ, I was seeing this change because we ended up evolving to doing half print, half promo. Is this a direct response to buyers, the end buyers that are actually consolidating their spend with the distributors?

Are you—

is that part of the play here?

I think it's part of the play. And just to sort of clarify, we didn't buy the entire Printing United, we bought certain assets from them. Okay, so we bought the, the print and promo assets that Printing United has, you know. And really, it's, it's really two fronts. One is we looked and said, you know, you know, among our distributors and the potential distributors in the marketplace that ASI serves, what else are they doing besides promo? And, you know, print is a huge part of the business for many, many people. Something like 20% of the ASI distributor members are selling print products as well, and many others want to sell print. They want to learn more about it. And then 20% of our, of our members are also decorating product themselves. And so bringing those two things together is really important. So we're seeing this convergence across those three elements and, and this relationship we have with them, we bought some assets from them. We're in the promo space, but, but broadly we've got a really long-term agreement for us to be able to explain to their members how they can add promotional products to what they do every day. Yeah. And, and allow the organization there, Printing United, to help us explain to existing distributors, how can you grow your business by adding print and by adding decoration? And if you don't wanna add decoration, and a lot of people don't on the distributor side, but if you don't wanna add it, We can explain, explain it to you so you can see the new technology. So when you're meeting with a client, you can talk about the excitement of all the new technologies, even if you aren't applying them yourselves, you're depending on a trusted decorator or trusted supplier. So that convergence of all those pieces, I think, has been happening for quite a long time. But I think we're looking to sort of how can we help distributors that are in the industry now sell more print, sell more decorating services, or understand those decorating services and then help those individuals that are in those spaces also know how they can add promo to what they offer. So I think that convergence is really an important trend that we're seeing that I think is going to be much more dramatic in the next 10 years than it has been in the last 10.

Yeah, totally agree. Is the Printing United Expo a part of that acquisition?

It is not. We acquired some hosted buyer events from them, but certainly ASI suppliers and shippers will be welcome to go to the Printing United Expo. We'll be promoting that among our members and, and explain to people why they should go, you know, suppliers especially. 3,000 suppliers in our industry, a handful go to the Printing United event every year. Yet it's a huge trade show. It's over a million square feet trade show, and it has all the new technologies that suppliers need to be learning about and understanding so they can add them to what they do and how they decorate products. So it's a great opportunity for suppliers and a great opportunity for distributors who want to go and learn about decorating techniques that are available that they can either do themselves or, or source from other people. So I think it's a great opportunity for people to come together in that fall event in Las Vegas.

Yeah, fantastic crossover education opportunity there for both print and promo. I can see that. Let's talk a little bit to wrap up here, Tim, about the future. What are you most excited about as you look at the future of this industry?

I am most excited about, I think, the fact that promo is so prominent. You know, you see, you know, a concert tour and lines for a day before the concert's going to open to buy merchandise, you know. The fact that people love their Stanley Cups or whatever kind of product they have from our industry, and they really keep it and they really share it with others. And I think that is super exciting. We have really grown from an industry where we were a one-trick pony or something that people maybe didn't think as highly of to something that is valued by people. And we're thanked for giving them advertising material that happens to be on a product that they will keep every day for a year, 2 years, 3 years, maybe their life. We all have lots of t-shirts and other kinds of products around that, that are things we cherish because we remember that event that, you know, that was the cause for us to get it. So I think that's really super exciting to me.

Yeah, very cool. Tim, thank you for taking the time to join us on this QCast today. I really appreciate you, my friend, and congrats again on what a journey you've had. And thank you for helping steer this industry through a lot of tough storms and a lot of great opportunities.

Well, thank you very much. I really appreciate being here, and it's always great to see you too.

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Until next time, friends, thanks so much for listening.