Why Is Democratization of Technology Critical to Achieving Successful and Sustainable Supply Chains?

Matt Davis: I’m joined today by Teresa Carlson, President and Chief Commercial Officer from Flexport; John Sicard, President and CEO of Kinaxis; and Pervinder Johar, CEO and President of Blume Global, to talk about tech, supply chain, and all the ways that digitization is driving value across supply chain operations and being transformative for the planet.

Very excited to have you all here today. Kind of jealous of some of the glasses and the fashion being served. But why don’t we start by just getting a bit of your perspective about that question of the day, tech digitization, and supply chain – what’s your perspective on it, and how do you see your role playing out? I’m just going to go across the couch as we are and come to you, Teresa, first.

Teresa Carlson: Well, first of all, it’s so great to be on here with my panel members. I am Teresa Carlson. I’m President and Chief Commercial Officer at Flexport, and we are a global supply chain and trade company. We are really trying to bring technology digitization to this world, work backward from our customers, understand what they’re trying to achieve, and bring visibility to what they’re doing. It’s one thing to have it for yourself, but it’s another thing to make sure that the customer really has that visibility. I call it a common operating picture, where things are moving around the world, and it’s important. I’m excited, and I also believe we can bring a platform to small and medium businesses, making sure that they don’t always use the most expensive route and that they have visibility as well. So really, it’s access for all.

I run flexport.org as well, and we are looking at climate. We are trying to get supplies into places around the world that really need them, we just sent things to Turkey and Syria. It’s a really interesting topic, how important it is for the supply chain, and there’s a big transformation happening right now because customers and individuals want visibility; they want to understand what’s going on. My background is really in technology. I have 25 years of experience as a technology executive, and being able to apply technology to supply chain and logistics is just critical. We saw what happened during Covid.

From my perspective, the tools are out there. There’s availability in what can occur through technology and digitization. We just now have to make that a reality. I see a group of leaders here at Zero100 really trying to move the ball forward and being leaders not only in driving digitization but also in making sure that we’re thinking about the climate.

I can tell you the one thing that matters is integration. The ability to take advantage of what you have in terms of data, make real use of that, and merge that information. So I think technology itself is not the barrier, it’s the moving it forward through the people, the process, the leadership, to make it happen.

Matt Davis: 100%. I think there’s no shortage of community in supply chain anymore, but I think what’s been really cool at this event is being able to speak to the three of you as technology service providers and solution providers. You’re really an instrumental part of the integration that you’re talking about and how we move things forward. It feels like a community of people who are really trying to solve. Let me come over to you, John, and hear a little bit about your perspective on this topic.
 
John Sicard: I’ve come to appreciate a couple of things. First, I’m a technologist by trade; I’m a software engineer by training. I’ve always thought about technology first, and over the last two years, I’ve come to realize that all the pain that we’re experiencing is not a failure in technology, actually. It’s a failure in technique. It’s similar to what you were saying about an operating model. We’re living through what I might even call a renaissance here. But seriously, we’re seeing two things happen. One, we had this event occur. It literally affected every human on Earth, simultaneously. There are a lot of catastrophes that we have to experience or disruptions. Everyone suffered the same kind of challenge from a business perspective. Simultaneously, boards are taking responsibility for ESG. So these two narratives are colliding. One narrative is saying, clearly, we have to be more resilient. And if you think of the definition of resilience, it’s the capacity to avoid or recover from hardship. Obviously, we’ve encountered a lot of hardship in the last two years.

At the same time, I can’t think of another discipline that consumes the Earth’s natural resources at a greater pace than supply chain. So boards are saying, you need to become more resilient, but can you do less harm at the same time? Well, those two things are competing against each other because we saw a lot of hoarding going on in the form of, I’m going to absorb flexibility by carrying more inventory. That’s taxation on the planet. So these two things are happening simultaneously, and, at Kinaxis, we think about it in those terms first: techniques inform technologies. Otherwise, you can just end up having a lot of conversations about interesting technology but not necessarily valuable technology.

I think part of what we’re seeing here in this rebirth of supply chain as a governance model is people now thinking about not just the next three years but the next thirty.

Matt Davis: For sure.

John Sicard: They’re looking at it as, what will I leave behind for the next generation, because we’re pivoting.

Matt Davis: And making themselves publicly accountable for that as well.

John Sicard: 100%. It’s fascinating to see, more than ever, chief supply chain officers and supply chain practitioners as strategists, no longer operators. They’re at the table with the board, talking about how they’re going to build resilience while simultaneously doing less harm.
 
Matt Davis: The new role of the chief supply chain officer, the COO, is actually looking down the line at the camera at CNN. That didn’t exist five or ten years ago. So it’s about taking responsibility for the planet, but also responsibility for corporate brand, reputation, and trust, and that’s a whole new ballgame for supply chain as a profession. I love to hear you bring that up. Pervinder, why don’t I come to you and hear your perspective on this.

Pervinder Johar: Sure. Like John, I’ve been a software engineer. I’ve been in tech for a long time, all of my life. I won’t say the number of years. I’m the CEO of Blume and founded Blume in 2018 to look at three fundamental problems. They’re kind of related, and I think Covid brought them to the forefront. One of the problems was that we had a very large mass of businesses that were just left behind. There were a few people talking about making their digital supply chain digital, but the reality is that there are close to 100 million small businesses that do not have access to the smallest amount of technology in the world. So, when you talk about social responsibility and other components, that was the one fundamental problem we have been solving by giving technology to these small motor carriers in Thailand, China, Taiwan, and the US for free. Because that was a fundamental problem, you can’t talk about a supply chain being digital without looking at everyone and making technology available to every business in the world. We said we’re building a platform for the next 50 years; I think we’re still 20 years away until we’re in a place similar to how people have cell phones as individuals; people can go on Instagram and Facebook no matter what part of the world they are in, but that doesn’t exist in supply chain today. Large companies have money to invest, small companies don’t. That’s the one side that we can’t forget, our responsibility.

The second part, we still talk about software in supply chain. I think software is probably going to be dead over the next 20-30 years — the world has moved to platforms and ecosystems. Teresa, your point about integration and how we’re living in an age, at least on the consumer side, where it’s no longer about what piece of software you have, it’s about what the ecosystem is and how those multiple ecosystems collaborate with each other.

I’m thinking of something very simple that we built, and it took a fair amount of time. If you wanted to find out where every rail ramp is in the US, you couldn’t. We built this thing called Blume Maps. Anything that moves on rail is more carbon efficient than anything that moves on a truck, but we still have only 4 or 5% of the goods, even of the companies who are here in North America, moving on rail. A single train can have up to 160 double-stack containers, so the equivalent of 320 trucks. But that platform did not exist, and how do I even know what is available? So I think we live in this duality.

I live in the San Francisco Bay Area; I used to work for one of the largest tech companies, actually the largest tech company at the time. A lot of innovation going on. We were talking about ChatGPT; we were kind of invested in ChatGPT. I was involved back in the early days of it on that side, but on the other side, the supply chain side, small businesses don’t have the technology. We can’t figure out where our ports are, where our terminals are, where the others are, and I think in the next few years, there is going to be fair amount of transformation for this duality to move to the opposite side of the spectrum. We get the ChatGPT conversation on one side, and on another side, there’s a driver who doesn’t even have the mobile app which can tell you if I picked up or dropped off a load. These are two very different worlds. I grew up in India. As you guys know, India has had a lot of riches and a lot of poverty; supply chain is no different. It seems like we have a lot of riches and a lot of poverty from a technology perspective, and we are relying on these components to work together.

Matt Davis: Pervinder, you bring up the democratization of supply chain and how that gets applied across businesses. The focus on how tech enables that, how visibility can drive that, is making supply chain not just a big Global Fortune 500 conversation, it’s something that’s happening everywhere. With that in mind, I’m going to put a question out there, and you can jump in if you want. If you had a magic wand for supply chain, if you could just make anything happen overnight, what would you do? Mine is, every time I touch something that is a physical good, I could transport into the factory and watch the person who’s actually making that. It’s not very practical, but I’m always curious how it happens.
 
Teresa Carlson: I would say, more from a right now practical sense, small businesses being able to have the same access as very large enterprises and global companies to get their supplies where they need them in a way that helps them be a lot more profitable. I know they are concerned, so many are concerned about the climate. I was at Amazon for a very long time, and what we were able to do there was make sure that every small business really had that capacity because we are powered, as a world, by small businesses. Even if you look at all the large businesses, they exist even through their small resellers or chains of individuals that help them with product components. So I think for me, that’s where I’d like to see us go faster. But the beam me up thing is definitely where my mind is headed.

Matt Davis: John, Pervinder, any thoughts?

John Sicard: When I think about legacy, you used that term, and I think about it too, I think, well, what have we done while we are here? We’re here for such a short time. I like the term “democratize” because I think the world of supply chain has been almost reserved for the large and mighty, built on the premise that every supply chain is so unique that we’re going to customize the solution just for you and it was unaffordable. When I think about supply chain, I think of a couple of things. One, I think it’s the oldest discipline in the world. It started when humanity began. It was a trade of a sharp stick for maybe a handful of food. Somebody had to source the stick, sharpen it, somebody foraged the food.

Teresa Carlson: The Dutch Indies comes to mind. If you think about the trade, it’s the trade that’s been forever, right?

John Sicard: Forever.

Teresa Carlson: It’s what we all did.

John Sicard: It started, and I really appreciate the notion that supply chain makes the world go round, and it’s mostly not the Global 500. So I think if I had a magic wand, we would start to see even the smallest manufacturer harness exactly the same potential, expertise, and digitization as the largest company in the world. Cloud’s helping with that. It’s not like, oh, to get started, I have to buy a $200,000 piece of iron. No. I can just log in and gain access to the same intellect if you will. It does, though, presume that supply chain is ubiquitous, and that’s a huge leap for many people. I always think of supply chain as this simple formula. There’s volatile supply and or demand for things that are constrained. I don’t care if there are 100 billion things or 10. I would love to see the largest companies in the world sharing exactly the same intellect, the same capabilities, and ubiquitize the intellect and the power so that even the smallest manufacturers could participate because, in the end, we all win. As I said, supply chains are in service of humanity while simultaneously…well, actually, at the generosity of Mother Earth. So if you do it well, humanity thanks you, but so does Mother Earth. That’s where I would love to see the world going.

Matt Davis: The conversation that we’re having right now is interesting because we have a big mix of people. We have people not in the world of supply chain, we have startup entrepreneurs, and then we have our community of the Global Fortune 500. One of the biggest things they’re trying to solve right now is Scope 3. In order to solve Scope 3 decarbonization on the supply side, it has to be this partnership with an entire ecosystem, which is going to bring you into an ecosystem of suppliers who are small businesses. How do you get uniform around the targets, the metrics, and the measurement systems? All of that is a really hard problem, and when people talk about Scope 3, this democratization of information and how that drives collaboration, all of this is the only way to make it happen. So spot on.

John Sicard: Agree.

Matt Davis: Pervinder, what’s your magic wand?
 
Pervinder Johar: We have moved to a world in our personal lives again where we are all subscribers of data and providers of data. Think of Google Maps. The only reason it works is because we share our location when we are driving, and then others get that information. In supply chain, if I had a magic wand, I’d like to see large supply chains stop holding data and start sharing it with each other. I think that’s a mindset and a leadership issue more than a technology issue. That mindset change is probably the hardest change to come about and involves everyone in the ecosystem, whether it’s dealing with the democratization of technology or Scope 3. Every one of those things requires us to get away from this mentality that the larger companies have the data which is of value to them and that will be the differentiator for them. That data that you own is useless to you. You’re only interested in other peoples’ data. What it is telling you, you already know. You might get to know it a little bit better by applying AI and machine learning and other things, but you already know. It’s your data. Why do you keep on looking at your own house, trying to see how to improve it? If you’ve never looked at any other house, you don’t know what else exists. So that’s my magic wand, start sharing data. I don’t know how I can make it happen or if you can make it happen, but overall, it’s a mindset and a leadership issue.

Teresa Carlson: It’s funny listening to this too. If I could say one of the things that has come to mind, I’m newer to the supply chain and logistics world, and one of the things that’s also kind of struck me is how overly complicated it is. I actually think there are so many ways we can simplify it. I watched the bid season process. It seems much more complicated than it should be.

To your point, when you talk about technology in a cloud world, I wasn’t there in the early days before people really understood cloud. I built the AWS worldwide public sector business, and folks didn’t know. I’d go to Capitol Hill, and they would say, are you here to talk about books or taxes? I would say, no, cloud computing, and they’re like, what’s cloud? We’ve got to get folks on a path to realizing this is not that complicated. We’re making it a lot more complicated than it is.

Let’s really use technology for information, for data, and let’s share it and get these things moved, let’s understand. I’ll go back to the visualization. With all the technologies we have today, AI and machine learning, it’s all so possible if we share this information and data, and then we start understanding where and how things are moving. Where are the clog points? I’m very hopeful when I think of how far technology’s come; now we’ve just got to get individuals applying it here and think more innovatively, transform their ideas of how they make decisions on getting goods to places.

Matt Davis: I think it’s so spot on. Pervinder and John were in our board meeting yesterday, along with Dave Clark from Flexport as well, and we were having a conversation about talent and skills and what’s happening in supply chain. Teresa, as you know, Dave leaned forward and quietly told a joke that’s genius on the side. What he said was, the chief supply chain officer 10-15 years in the future doesn’t look like me. He was talking about technology, AI, communications. The world of supply chain is about to go through a massive transformation of skill sets. So I can’t think of a better group than you three to reflect. What’s the one skill or sets of skills that you think are most important for the profession today for supply chain to be thinking? How do we get into that tech mindset?
 
Pervinder Johar: We are getting to a point where systems are moving from decision-support systems to decision-making systems. Typically, the chief supply chain officer or those with supply chain skills have been saying, I will look at the information, and I will make the decision. There’s a human element. More and more of those decisions will get automated as you look at AI and machine learning. The understanding that sometimes you won’t understand every single thing that’s going on in your supply chain is a hard skill to come by. It’s about being comfortable with being uncomfortable about what’s going on in my supply chain and what the systems are doing. They may be doing something I don’t understand, but it is okay.

Then that skill identifies technologies. You learn how the technology works, but you don’t understand every single thing that happens when you apply reinforcement learning or when you apply some of these stochastic models because we all look at local optima, but the system may be looking at a global optima, which is hard to understand. That’s a big leap because today, chief supply chain officers want to understand exactly what is going on, see the data, and then make the decision.

John Sicard: I very much think the same way. We’re definitely going to see a change. But at the same time, there was recently a dialogue where people would say, oh, there’s no longer going to be specialists, we’re going to have network planners. Actually, I have stopped believing that. There was a time I thought, well, that’s intriguing, and then I thought, you know, I think supply chain’s still a team sport. There’s somebody who’s really good at net-minding, and then they’re the one to practice that skill. Now, teams win. Individuals don’t. I mean, I always say this, I’m a hockey fan, I’m Canadian, so I always say in every sport…

Matt Davis: It’s required.

Teresa Carlson: Go Capitals. Washington Capitals.

John Sicard: No one should celebrate a hat trick when you lose 4-3, and yet supply chains have been governed that way. We hit our inventory numbers! But then, on-time in full? Not so much. So the team’s losing, but individuals are winning, and it’s one of the side effects of the governance model that’s been in place.

Now in the future, you talked about machine learning and AI, which by the way, it’s just software, not magic or pixie dust. Humans write it. Powerful, but it has its limitations. I think we’re going to start to see machine learning and AI being used to automate the obvious so that human beings don’t have to do obvious things because it’s a waste of time. If you’re busy transacting obvious things, you’re not actually working on things that are not so obvious. So the skillset, Matt, that I see emerging in supply chain is an appreciation for data patterns. That’s not so much with transactions, transactions are easy. I read a screen, it says, go pull this, cancel this, split this order. Okay, I’m doing what I’m told.

I think future practitioners will still be specialists, but they will learn how to absorb data patterns for conditions that are not so obvious. The other key thing I think we’re going to start seeing is people starting to play more like a team. Instead of having opaque walls between all the silos, even if you have walls, they’ll be made of glass. If you have walls at all. So you’ll have a lot more collaboration between teammates. You’ll have empathy between teammates. If I do this, it’s good for me, but maybe bad for Teresa. So maybe we’ve not met, but I’m going to call Teresa because we recognize that I can’t celebrate if the team loses. I think that’s a new competence that’s going to emerge.

Matt Davis: Yeah, it’s the age-old case of squeezing the balloon, right? It’s supply chain’s responsibility to stop doing that.

John Sicard: That’s right.

Teresa Carlson: I think number one, we need individuals, believe it or not, who can talk to lawmakers and policymakers. I think it’s so important that we actually communicate what we’re trying to do in a new way to lawmakers, too, because we’ve got to get ahead of their thinking on making laws and regulating things. I don’t think we’re doing enough of that.

The second thing is that we need more software engineers who are applying their minds to the particular problems we face in this industry. Technology’s been around for a very long time. One of the things I loved about my role in technology and cloud is that we talked about tech, but I realized that if I couldn’t get people trained and certified in cloud computing, no one would use it.

But the other thing I’ve been thinking a lot about for this industry is selling capacity. Believe it or not, people who understand how to sell something are not easy to find anymore. That’s almost an industry itself, finding great sales individuals because sales is not for the faint of heart anymore. You have to understand technology, and you have to understand the model. I think in the sales world, for supply chain and logistics, we have to move to individuals who understand technology now. I’m seeing that with us. I’m trying to find these individuals that can have both.

The last thing I’ll say about skills is I love what we saw in the early session this morning, which kind of took the eight and talked about all the different areas. I thought that was really super cool, and it showed a lot of different skills that I thought would be meaningful. But the one that I personally got on board with so much was bringing the blue-collar to the white-collar. There are so many skills I don’t think you need to go to university for anymore. We could teach a lot of these skills. We should all put our heads together, create a small training, make it free, and then just have a hiring, like the Tinder of hiring. I think that could help us also move the market along much faster if we’re not worried about asking, do you actually qualify for this? Show up if you pass it. Let’s go. Let’s giddyup.

Matt Davis: I love that as a closing thought, as well as, perhaps, the whole radical reinvention on tech and digitization of ops coming from skills and new ways to think about it, creating those career paths. Absolutely an interesting thought. It was really great being here with Blume Global, Kinaxis, and Flexport. I want to thank you for some really interesting perspectives about how we move this forward. John, Pervinder, Teresa, thank you much for the time.
 
John Sicard: It was great.

Teresa Carlson: Thank you.

This episode of Radical Reinvention was produced by Brian Egan, Ursalaan Khan, Mike Silverman, Diane Hope, Nick Heinimann, Duda Rodrigues, and me, Victoria Marin. Ko Takasugi-Czernowin composed our theme music. To find out more about Zero100 and to check out our content library, go to Zero100.com. If you’re interested in joining our community of contributors, send us a note at hello@zero100.com.