from rf smart this is taking inventory a podcast all about better controlling your supply chain and improving inventory management and now your host sarah archer hi everyone it's sarah this month we are bringing you something a little bit different we recently teamed up with our fellow netsuite partner source day and our customers sth and echelon fitness to discuss supply chain description and how technology has helped these companies overcome this and other challenges the content is so great we wanted to make sure you had a chance to hear it so if you have any questions make sure you look at the show notes or email info at rfswork.com thanks for listening and i hope you enjoy the discussion welcome everybody i'm really excited for you to be joining us we have a really great panel discussion we'll be focusing on overcoming disruption with first mile technology so some quick introductions of the great panel that we have today my name is colby young i'm the vp of our netsuite business unit here at source day just a little bit about source day we are a built for net suite technology partner and we are purpose built to extend netsuite's purchasing capabilities to the supplier network for product organization so instead of email spreadsheets and phone calls to manage all the important data on your purchase orders and supplier collaboration source state extends netsuite's capabilities to those vendors to make sure you're always in lockstep and netsuite has all the information it needs from a supplier collaboration standpoint that's me i'm your co-host for today our other coast is ruth rosenstock from rsmart hey ruth hey colby thanks so much mentioned my name is ruth rosenstock and i am a partner manager here at our smart and basically what i do is i look after the partner network when it comes to rf smart and our smart is also a built for netsuite solution it focuses around warehouse management solutions so focusing with all product based companies when they're moving inventory whether that's in a warehouse or manufacturing it we really help bring the mobility to that capability within netsuite and fun factors were built right onto the netsuite platform so it interacts very well with the solution and so that's it for me and i'll move it over to jd well thank you all very much for having me yes i'm the cfo for sth also fractional cfo for cougar usa same business structure they're just based out of houston we're based out of maryland a little bit on me my background i actually grew up in a cpa firm working focused on small businesses and getting the best bang for the buck while consulting while also doing the taxes and then i've been with sth for the last 10 years in the pump industry so thanks jb and our other panelists is greg dalstrom with echelon vp of supply chain welcome greg thank you hi i'm greg dalstrom vp of supply chain so i manage distribution logistics demand planning warehousing for echelon fitness and we are the up up-and-coming great connected fitness solutions we sell bikes growers treadmills connected fitness equipments with live on-demand classes and other fitness equipment also thank you greg we'll really appreciate you both ruth and i are excited to have you on and really excited to have the perspective of both jd from really cfo finance perspective and greg from an ops supply chain perspective for the discussion today so just to recap the main four talking points we're going to be going over is first evolution of supply chain in the last decade i will talk then about the effects of the pandemic on first mile and last mile delivery and how that's related and really companies are looking at first month supply chain differently and then lastly how first mile technology can really help you out to manage all this disruption so those are going to be the four themes and let's dive right in so first and foremost both are well into your careers and have great experience both in finance and ops and in different areas of industries looking back a decade or so you know what are some of the major supply chain challenges that you were dealing with then and what did that look like and how did that affect your strategy of running your business looking back a decade ago i'll go first that's right greg so for us a lot of our products are engineered right their engineer product that our spec you have to meet the requirements and 10 years ago there were maybe some foundry issues or some occasional small part or piece but the first mile for us was really making sure that we were just educating our customers and knowing that we had build time right because we were building a spec where that's not the case today as much but that was our major issue was just making sure that our customers knew the products we had for them the factories were going to be able to get it out pretty much here's our window right we can tell you every time this is pretty much what it was and having things on the shelf and available at your fingertips was not anywhere near as big a problem 10 years ago and from my perspective being more on the retail side of the business for most of my career you think about a decade ago first mile was never uh an area much concern most businesses expect a certain percentage of your first mile cost in your financials so it wasn't a huge concern it was more just making sure you have goods and the focus 10 years goes more especially in retail i mean that's really the emergency amazon that's when really amazon was getting large and so everybody's focus is on the last one last mile getting close to the customers your service you shorten the lead time to customers and in from the procurement aspect of the last mile carrier shipping logistics all was much easier back in that time frame i think back 10 years and that was coming out of that the housing crisis recession that we had it and that was the heyday from a shipping and logistics perspective in terms of procurement you had deflated rates and people are claiming clamoring for your business and willing to do whatever it takes to get your business and at that time it was easy from a procurement standpoint to focus on last mile was really where things were focused that time yeah so definitely much more of a focus on last mile 10 years ago and first smile we hear a lot is it was just tactical you know you got it done and the strategy wasn't there so it sounds like 10 years ago the strategy was much more focused on the last mile so back to 10 years ago or so what were some of the financial or operational impacts that you know you're dealing with then right that then we'll talk about some of things you're dealing with now that maybe put strain on your business or you were really rolling up your sleeves to figure out back a decade ago i mean just like greg said we would look at freight we would look at some of the other areas but it wasn't near as much of the focus that it has to be now and today you always have a competition issue right getting the right personnel right to the right places making sure they're educated i don't think that on the products and not what you need them to have knowledge in so i don't think that's really changed much but it's almost hard to think about this as going right what compared to today or at least the last 18 months it's like wow we worried we had an issue in the first mile it was still for us we're more of a representative and then a final service it was more of just okay what's the new product what are we going to take to market next and what are we hoping that we're going to get our engineers to look at for next year and from my perspective from the cfo side of things it was really more just all right do we have enough in the budget based on what the next the preceding two years were for my numbers and acquisitions right and or in my inventory if i have enough what i need projected it wasn't getting it it wasn't what's that first mile it really wasn't 10 years ago it's a lot of just how do i sell more and one other thing i'll add about a decade ago at the same time there's a lot more focus on lean just time strategies for a lot of businesses right and those were hot topics a decade ago a lot of companies adopting that methodology i mean it's been around for a longer period of time but it was still a pretty hot topic then and now there are important concepts but those that found themselves being very lean really just in time really struggling with the last couple years really struggling there so there's been a shift there in terms of how much of a focus and importance to put on true just in time from inventory yeah that's the really great point and we hear that a lot in speaking with customers just like y'all in the field that it was all about just in time and how do we have the best inventory turns possible and now we'll talk about some of those changes we hear allocations all the time now and there's no lien there's no just in time it's we need to buy as much as we can so that is a big difference ruth i know you wanted to talk a little bit about the last couple years of transitioning from a decade ago to mention 18 months ago yeah i did and it's funny greg that you touched on that just in time piece of it because you're right like working previously i forgot to mention i worked for netsuite before our smart and there were certain things that i really heard a lot in the field and that just in time was a big one and that it's interesting to look at the last couple years and that being one of the effects but when we look back at those last couple years and we can all admit that it's been a crazy two years and that there's been multiple supply chain challenges during that time for both of you what what new challenges came up over the last years that were different from before so i'll build off a little bit off of what greg was saying earlier was because everybody in the manufacturers were all doing a lot more than just in time they were forecasting forward with us we didn't have to worry about near as much warehouse space i wasn't worried about what do i have space rented what do i have shelf space to carry stuff and that one is something that has a small business we whether or not we were going to have inventory on hand wasn't anywhere near as big a deal but in the last two years especially it's been do you have it because if you're the one that has it you get to sell it and so that was not something i didn't 10 years ago i wasn't doing near the cash forecasting for inventory worrying about what i had available on hand or if i had the occasional old pump sitting around here and there i was okay with having it for parts and pieces well now that old inventory knowing i have it where it is is valuable because that older model might still work for somebody else and how do i make sure i have it how do i make sure that my team can get their hands on it and then i can get that bill out and get it back in so i can get the new stuff in where before we we could keep a minimum and we were okay but now it's probably the biggest one for us is how do we know what they have the factory has in that first mile what struggles are they facing and greg on your end any kind of new challenges that you're dealing with yeah of course there is i mean jd mentioned it on cash cash flow is so much more focused and important right now because you have been forced to buffer different areas within the supply chain right between securing raw materials to the production and production capacity and we've had to build in production buffers due to just covet lockdowns so most of our sources from china and we had our main city where we do manufacturing shut down an entire month i couldn't produce anything so there's variability that you have to plan for but then there's the unknown variability that you're even having to plan for in addition to right so and this is tying up your cash and you and our suppliers therapy with everything they possibly can to get you to pay them before you should and we can get into that a little bit more and that's how technology such as the source date comes in in terms of trying to hold it accountable to timelines between committing the timelines of production committing the timelines of shipping and when you truly should be paying them for the products that are getting produced if you have that buffer just from a manufacturing standpoint then of course do you bring it overseas and then congestion of the ports the the warehousing congestion domestically but previously you never really worry about warehousing space because abundant it's all over the place it's pretty cheap now i i never really expected to be in a time where people in just general rousing don't want your business they've got enough they're fine we can't handle anymore and so you're approaching things different with people especially how you work with your partners and it's different nowadays it's really you have to be a partnership with people and not just a transactional relationship because if you're approaching it as a transactional relationship you're going to get burnt so just that process of how we approach the business and the relationships with the partners has been different the last several weeks greg just out of curiosity any different priorities that you have today rather than what you had three years ago yeah and that is be easy to do business with so the more and this goes not just for the customers but your vendors the partners you're working with the better you can be at a business partner that's how you're gonna be able to get the results you need when the times are difficult so it's hard but i try to make sure we're communicating better so be a good partner i'll build off that being a good partner a little bit like greg said with us because we're a rep firm there are other people in the country that rep similar lines to we rep to and before where even if we might have butted up lines a little bit or states or however our locations were separated we might not have played as nice none of this was ever make or break stuff one of these deals but you didn't really let the other person know what you might have going on or what product you might have available well now we've all learned that working together and finding like i stated earlier finding where who's got the old pump who's got the old piece of equipment control or something that you might need so that person can help you out so being a good partner with them and i was actually telling ruthless the other day just on a check-in that rf smart for us has allowed us to be able to have the visibility to help partners that we wouldn't have had before we probably wouldn't have had time to even go in there and say all right what do i have left in inventory especially some of the older stuff that didn't get scanned in or might not have been sitting around when we did our implementation or might have got moved between locations as we've had to acquire more space but having a product and a tool that you can have for yourself and then using the netsuite customer portal maybe to allow people to see in it allows them a little more of a glimpse of what you have on hand as well where they might not have had to do it before or might take a couple of days to get it back and having those tools at our hand is way more important than it was even three years ago you never want to overpay you never want to have money sitting on a shelf somewhere but when you could get stuff pretty quick and you weren't as worried about replacing it it wasn't anywhere near as important as now yeah that's all really great insights and and it it really leads them perfect to the next scheme which is the first mile is to be able to deliver on the last mile all right we've been talking all about making sure the inventory levels are there paying more if you have to to make sure you can deliver on customer commitments and we're all striving to meet customer demand and that first mile is now so difficult so the strategy certainly has shifted and it's been such a great discussion i'm curious from both the else point of views what are some of those operational kpis that you're looking at every day greg to try to keep your pulse on this first mile the focus right now is the the costs and cash that gets tied up so cash flow and our cost frankly it's crazy that i i never shifted there's more focus on the first mile but there's a lot of spot right because of the impact that the first mile is having on the rest of the business and so we know there's inflation things that are going on from raw materials to logistics costs warehousing costs they've all been more difficult to maintain and so we just are watching that because we have to change our strategy with our customers on how we price our products agreements that we have with them are all based upon those inputs the first one before they don't worry about it okay here's the price we'll agree to a lot of stuff yeah okay fine as long as you sell it buy a stop from us five right now it's okay either the payment terms the other terms that typically just come along within the contracts are now being a little more scrutinized with our customers to ensure that we have a healthy cash flow and our sales teams have to keep them in check because the costs are changing all the time so they like to try it look at three months ago that cost three months ago are now what they are now and they're not what they're going to be three months from now so if you're looking at some kind of a long-term deal we need to have a little discussion about that because that's going to impact part of the business so it's the cause right costs bring things in how it's going to impact our cash or business healthy healthy business right yeah so it sounds like in that regard greg with so much change pricing changes it's paramount for your sales team the rest of the organization to have all that data accurately right to have all your item skus pricing updated and understand what tier discounting is can you talk a little bit about that as far as a data perspective with so much change and how y'all are approaching that well data is the king it's difficult every business you're in everybody has data chat everybody talks about supply chain visibility right but how you get there how much you invest in that visibility is it's a challenge because everybody all the solutions out there promote the visibility that you have but at the end of the day you need to have the partners that can give you easy visibility to your data and that's part of the reason source day are smart the technology nowadays it's shifted right you look at 10 years ago and this is something we didn't mention to get in technology so when when i look at technology partners it's like who can connect our data the best and display the data connected that's that's what's we're certainly in a data age right now and netsuite is certainly built to be highly intelligent with the right real-time data so that's great insights jd it's got to be music to your years that the vp of supply chain is all about cash right so curious if it's all in alignment with your business or if there's any other kpis that you're looking at specifically in first mile from that cfo lens well i think it's less of in that first mile as much as the first mile got pulled in right to the same metrics that we always wanted to use and see before and i'm smiling just because that's what i was saying earlier about getting out from behind the desk and working with your operations people right one little thing today makes a difference and one of the first ones for me was hey we got to get more warehouse base and then i get a hand raised wait a minute that's all well and good but how am i going to manage it right who's going to be there in front of it and so i literally had to go out there and work with them and look at time sheets and go how long is the pickpack ship process taking us how are we making sure that when we get something that's been allocated that we're not promising it to three or four different people that's definitely happened in the past where you think you've got something on the shelf and two or three different people try to sell it and it's only one you know down on the shelf but i think that's the biggest thing i know there's been this whole data there's been the big communication piece but it really is the communication inside it's not just oh this is my department and that's your department and we just wait on reports to come and the executives might sit down once a week and go well what's your report say oh this mine says this now and your says this no this is an everyday what's your data telling you but if you're not in lockstep with your operations team when you're making these decisions you're setting yourself up for failure if you don't give that visibility to everyone that needs it it's amazing how things have changed so much with both of you what are you doing to improve your first mile so this is where source state comes in and the reason why we engaged in a partnership with source day so when we're working with all of these overseas suppliers and as i mentioned before their incentive is to get you to pay them before you should that's their incentive at least with our partners right so when you have all these purchase orders that are just out there you have all these purchase orders process new purchase orders purchasers are shipped knowing where each of them are in the life cycle is critically important because we've had situations where they'd come and say oh hey ship today here's the document well it actually didn't chip it's not going to for another month for example or we've had situations where surprisingly there's a few suppliers where they actually ship stuff to us we get it and we didn't even notice it and you just can't run when when you have when the first mile has become so important you can't have that kind of disorganization to what's going on because what's going to happen is if i don't realize certain things are shipping i'm going to think i'm going to be running out of inventory and i'm going to be placing another purchase order and then i'm going to be spending more cash on that so that has to be organized and so that technology that that collaborative part of source data is what we want to be able to have with our suppliers and hold up account because before we submit a purchase order they never wanted to commit to a date so now they have to go in we submit this purchase order and this collaborative portal forces them to acknowledge and put date that drives that accountability and that understanding between you and your suppliers what's going to happen so that collaborative technology is important in the first line yeah so i think for us a lot of times the first mile really starts for us because we rep it's making sure that we have that two-way communication with our factories that this is what i have left on my shelf this is what i'm turning for you it's actually easier for us as smaller reps and it's for them you think they're most of them are these global multi-millionaire organizations well they're going to be struggling just to know themselves sometimes what's their last mile to us or they're so caught up now what's in their first mile because it's that's the other part of this discussion is sometimes the first one that we're worried about maybe they're not putting as much attention into their last mile like they used to and so making sure that we're well aware like greg was saying what's the status of the shipment where's it at did they meet the deadline they gave us and then that puts us in the position of them to go well look so we say we have an order with you if you're not meeting it we may have to cancel that because another group can meet it and you can't and so having the visibility to know what the status are getting the communication back and forth yeah and it's amazing because i mean you both brought up the visibility the technology the speed how you looked at inventory and both obviously talked about the technology and that sort of source of truth whether that's our smartest source date netsuite everything combined can really get that ultimate look at what's going on yeah there's one one more thing i'll try yeah related to the superheroes right and and how technology plays into that because it's harder to keep good employees now it's harder to find good employees so when you find them you want to keep and you want to make the training easy so technology and this is what i look for in the technologies in the past software and technology solutions were very bloated applications that have a lot of features functions do a lot of things but the training's like right i want things that people can basically look at and understand what they need to do as quickly as possible and having solutions that makes it easy on your people is extremely valuable excellent point thank you for adding that absolutely it's learning any new system change can be hard so making it simple providing the necessary training and handholding it's it's not your core competency greg or jd to teach your people technology that should be the vendor's core competency and it is so being able to make sure you partner with technologies that provide simplicity like you mentioned and hands-on white glove training is absolutely important very good well really great insights from both of you thank you both so much really great discussion you guys brought some interesting insights from your companies your past in your profession as well as your specific roles at your organizations all right everybody take care thanks for joining us today [Music]
2022-05-27