Brent Williams - Associate Dean for Executive Education and Outreach, and Garrison Endowed Chair in Supply Chain Management in the Sam M. Walton College of Business at the University of Arkansas - sits down with Mike to share his perspective of the role that supply chain plays in retail OSA.

Donnie Williams 0:04

Welcome to Season Two of the SCMRC lead podcast featuring epic supply chain lessons from our industry partners. My name is Donnie Williams and I am the Executive Director of the Supply Chain Management Research Center in the Walton College at the University of Arkansas. Season two of the podcast will be hosted by Mike Graen. Mike is the director of the retail supply chain initiative, and this is a strategic partnership within the SCMRC. The goal of this initiative is to surface the challenges and opportunities of on-shelf availability or OSA, focusing on the concepts tools and technologies driving retail OSA. Season two will feature a dynamic guest list of retailers, CPG suppliers, solution providers and industry leaders to drive collaborative efforts and advance learning within the industry. Thank you for joining and enjoy the podcast.

Mike Graen 1:02

In previous podcasts, we've talked about the importance of the supply chain to on shelf availability. I am extremely excited to welcome my good friend, Dr. Brent Williams to the podcast. Dr. Williams is the Associate Dean for Executive Education and Outreach and Garrison Endowed Chair in supply chain management in the Sam M Walton College of Business at the University of Arkansas. In his role as Associate Dean, he leads the Walton College units that connect to the business community. These units include executive education, several outreach centers, he led founding and the development of the Mcmillon Innovation Studio on the University of Arkansas campus, and the Walton College at second and main in downtown Little Rock. He previously chaired the department of the supply chain management at the U of A. Dr. Williams received his PhD in Business Administration from the University of Arkansas, where he concentrated in supply chain management. He held previous faculty positions at Texas Christian University and Auburn University. His research program focuses on how retail supply chains can develop and redesign planning and execution processes to meet the demands of today's changing marketplace. He has published more than 25 articles in leading business journals, such as the Journal of Operations Management, Production and Operations Management Decision Sciences and the Journal of Business Logistics, that is quite a resume. Dr. Williams, welcome to the podcast.

Brent Williams 2:35

Hey, Mike, thank you for having me.

Mike Graen 2:38

Wow, you have quite the bio, I think I gotta get a drink of water after I've read that bio, that's a long bio. You've done a lot of stuff. It looks like you went to the University of Arkansas, you got your degree in supply chain, then went to a couple of other universities, including our friends down at Auburn University were there for a while. And somehow the University of Arkansas was fortunate enough to get you back. What what what brought you back to the University of Arkansas?

Brent Williams 3:02

Well, maybe a couple of things. One, I am an Arkansan. And so that was quite helpful, you know, but really, from a professional standpoint. All of my work as most of my work as a researcher, and what I teach has really been about retail supply chains. And where else would you know, an academic like me, rather be than Northwest Arkansas, it's a tremendous laboratory, if you will, for, for learning, you know, and that's I just, I just I found that retail supply chain was all around me almost all the time when I was out in professional settings. And so it was a place for me.

Mike Graen 3:42

Awesome. Well it's really, really good to talk to you about this. And I've I've talked in pretty previous context of all of this is about the retail supply chain. This is the Retail Supply Chain Leadership Initiative. And really, I try to simplify things probably too much. But I'm thinking there's three reasons why products aren't on the shelf, either the on hand is inaccurate and we have ghost inventory, we had Justin Patton on a few weeks ago talking about the challenges of on-hand accuracy. We had Jack Buller a couple of weeks ago talk about the problem of store operations and labor and getting product out of the backroom and getting it on the sales floor, etc. And then there's this big mystery word that nobody knew what it was a year ago. And now everybody's talking about supply chain. It's the supply chain. So before we get into the supply chain, I would love to hear directly from you about you have take off your supply chain hat for a second. Do you have a personal example where you ordered something online or you went to buy something in the store, and it wasn't there and how did that make you feel from a customer perspective?

Brent Williams 4:49

Well, probably have many of those kinds of stories like probably all of us do in multiple kinds of setting you know, my family and I are truly omni channel shoppers, you know, so from buying in the store to ordering fully online having it delivered to buying online and picking up in store, you know, and I'd say we've had successes and failures and all of those different omni channel fulfillment options, but just just over Christmas, you know, going to buy my daughter an electronics, piece of electronics for Christmas, I did check on, you know, with electronics, I'm kind of, I don't know, kind of a hands on want to be in the store for whatever reason, and probably more comfortable taking it and taking it home and having it delivered. You know, and I looked on this retailers website and found my local store and know enough to know to look for Do they have any of these of what I'm looking for, said it was there, and ultimately, it wasn't there. Or at least the store associate or the store employee couldn't find it. And, and so I don't know which of those are true, to be honest with you. But I know as a customer, I didn't walk out with what I want. And now I was offered many different opportunities by that store employee, well, hey, you know, we've got another store 20 miles up the road, I can check on that. Or we could order it and have it, you know, and all and what I'm thinking all the time when I hear those options is well, hey, I could just order it myself and have it sent to my house. And so, you know, I think there's probably many of us out there that have experienced that. That disappointment one way or the other.

Mike Graen 6:40

Yeah, it's always amazing to me, they think people don't have access to the internet, and that you haven't already done your three days of research and the Internet to figure out which electronics item you want, what model number you want, et cetera. So you walk into the store and they go, Well, we don't have that Vizio model. But we got this LG model. No, I'm not switching, I've done the three days of research. I know what I want. I'm not switching just because you don't have it. And so that's that's a great example of that. So well, there's a lot of questions about the supply chain. And obviously, as I said mentioned before, a year ago, they they nobody knew what the supply chain was, now everybody's talking about the supply chain. And every time I hear it, it's like well, breads not in stock, because they haven't unloaded the containers out in the middle of Pacific Ocean, which for us, we just laugh that go now those are not connected. But hey, everybody's blaming that kind of stuff. So tell me about the importance of the retail of the supply chain, when it comes to the importance of a future of what retail is going to look like?

Brent Williams 7:38

Well, I think it's going to become it is already of absolute critical importance. What I think is the complexity only increases. I mean, you know, I gave that story of being disappointed. But I could probably, you know, we think about the times we're disappointed there were probably 99 other times, you know, where I walked into the retailer, and I got what I wanted, and I left and and they satisfied. You know, and I think retailers have an increasingly complex world to operate in, of course, right. I mean, we just name multiple fulfillment options for getting the cut, getting me the customer, the product that I would like, operationally, that's really, really challenging to, to operate in those with those multiple kind of fulfillment options, you know, but ultimately, right, you know, the supply chains job is to get it to the retailer, you know, to that spot in the store, or from whatever fulfillment point that they're going to get it to me so that I can be happy. And, you know, and I think I think what the pandemic did from the supply chain standpoint, at least for all of us, as consumers, you know, I think it really highlighted Wow, hang on, there's a lot of magic that goes on, before I actually pick up my box of cereal or the computer that I wanted, or the piece of apparel that I wanted, you know, and so actually, in some ways, I think it's good for us to have that awareness as consumers, but again, this gets increasingly complex, and consumer expectations growing increasingly, you know, I mean, you know, you and I, we want the product when we want it where we want it, and are probably increasingly impatient for it. So it's a tough job for retailers, but it's critical that the supply chain functions quite well.

Mike Graen 9:37

Yeah, and I think the other piece of that is because there's nothing that was normal. I mean, on a normal basis, you probably sell about the same amount every single day or whatever. Maybe there's a little bit of seasonality variation if it's sunscreen or something like that, but it's pretty predictable, etcetera. Nobody predicted the incredible increase in demand when COVID hit and the hoard you know, hoard shopping kind of thing, etc. And it took, it seemed like it took a pretty short period of time to let the supply chain recover and stuff started coming back in. But now we're still seeing out of stocks and paper towels, and bread, and meats, etc. And I think as a consumer, they're going nobody's panic buying anymore for the most part, except for our snowstorm that we're having right now. Nobody's panic buying, why in the world in the world isn't stuff on the on the on the shelf for the customer? I understand the panic buying that happened for COVID. But what's going on now? What do you tell somebody?

Well, you know, I mean, I don't know that I fully got all the answers to that. But I think there's a couple of things going on is that, you know, I think one thing we learned during the pandemic, or that got highlighted is, you know, I mean, we think about process and technology all the time in supply chain. And oh, yeah, we think about people too. But boy, didn't this highlight the critical nature of people in the supply chain, you know, and so some of the pandemic has been, you know, not only just the difficulty to hire people, and to have them in positions, no, but just lost productivity in this time, how do you how do you juggle around that? And then, you know, once you once you have a, you know, once you have an issue, a disruption in the supply chain, it ripples, right. We all know, now we probably almost all of us have heard about the bullwhip effect. And it just takes time to recover. Well, we're not experiencing just one disruption, it's multiple types of disruption hitting at different points in time. So, you know, so you're right, we saw tremendous spikes in daily demand for certain products, you know, but early on, right? I mean, you know, there were probably lots of products that saw real slumps in demand, at first, and then demand came back, you know, for some it was there was panic or hoarding, you know, panic buying or hoarding. And then that creates a ripple through the supply chain. So we've just got multiple of those things hitting, you know, all at the same time.

Yeah, that's a great point. I mean, I mean, I don't think you can look at a store like a Walmart store and go, Oh, the reason we're not having product on the shelf is this, because in the in some of that, it's truckers that'll transport product, we don't have enough truckers, in some stuff like, you know, stuff that's coming over from Asia, it could be on a ship on a container that's sitting out in the ocean that can't be unloaded. For some, it's just hey, guess what, it's paper towels. When that pandemic hit, and the hoard buying happen, it sucked all of the excess capacity out of the supply chain, I gotta go back and cut down trees and ramp, ramp up my manufacturing because nobody anticipated that. So that ripple effect and that bullwhip effect. And I'll put a copy of that picture on the screen for people to be able to see, that's a real phenomena, where if point of sales just kind of cruising around, by definition, you're gonna have ripples of the supply chain. Well, there was nothing normal about the panic buying that occurred when COVID happened. And I think frankly, we're just still trying to recover, I think it's gonna take a while for us still to recover just from a supply chain perspective.

You know, my one thing that I've focused on a good bit during my career was forecasting, you know, and, you know, one thing about, you know, typical types of forecasting, is that you want data that represents is somewhat representative of what the future looks like, in order to use models to properly predict, you know, what future demand is going to be. Well, the datafeeds, you know, are, you know, have all kinds of noise in them now. And then also, you know, one of the other causes of bullwhip is probably the buying patterns, not only of consumers, but now, as a retailer, as a supplier how I have to react, how I feel like I have to try to game the system to get maybe more than my share of an allocation of a product that short, right. And all of those things now create distortions in the demand signals that are think they're just going to take what we're seeing, right, it's going to take a while for us to sort of let that noise get out of the system.

So how accurate if I'm sitting at December of 2019 before the pandemic ever happened? And we played out the next six months of forecasts for paper towels or meat or eggs or cheese? How accurate were those forecasts?

You know I don't know that I can exactly answer that. But I can say for the products that you just said, really predictable buying power. We can predict those pretty well, right, you know, we can take the we can take the time series data, we know when we might do a promotion, and we know what the lift has been off of previous promotions, we can get pretty close. Now, there are products, right, that sell much more slowly, or, you know, that are much more seasonal, you know, that can be more difficult. But for those staples, you know, that was pretty easy, relatively easy to predict what demand would be. But, you know, once you get into 2020, that's not the case, right? And then, you know, but then also, you don't know what's real either upstream. And what I mean by that is, you know, I may have had two retailers, if I'm a supplier for one of those products, and Mike is thinking Brent is not going to give me my share, I'm going to crease my order. 1,000% just hoping he gives me 100, you know, like a 10th of that, you know, and so both, not only the sales history, the order histories, those got a lot of noise in them. Yeah.

So what are some of the important metrics? If I'm either a retailer, a brick and mortar retailer, or if I'm a supplier? What are the some of the metrics from a supply chain perspective that I absolutely, positively have to focus on? Because it's kind of like you're driving a car, or you're flying an airplane? What are the three or four gauges, you're going to be watching to make sure we're in good shape to keep moving forward? What are those when it comes to the supply chain?

You know, well, of course, you're always looking at sales, right? First of all, you know, and then you're also looking at some measure of inventory. You know, whether that's raw inventory levels, or inventories as a percentage of sales, etc. You know, critically important forecast accuracy is one of the really important metrics that both retailers and suppliers are paying attention to. You know, and then I would say, lead time, both from a total length of time, but then also the variability associated with those lead times. All of those things. So if you think about, if you think about the forecast accuracy, the amount of lead time, the lead time variability and the total sales rate, you know, that that you have, that you're dealing with, all of those things are inputs into how much inventory do I need to carry to try to meet the service levels, you know, that that I've historically wanted to achieve. So all of those, at least from a supply chain standpoint, are really important. I don't know if I don't think I said on hand accuracy. But in a retail environment, of course, that's really important, right? Because if my on hand inventory information is not accurate, multiple things right, I gave you the personal story of well, it said it was there, and I couldn't find it. But now all of a sudden, if it's not accurate, you know, my ordering system doesn't have accurate inputs to place orders to the suppliers, at the appropriate time or in the appropriate quantities. So all of those are really important gauges, if you will, for the health of the supply chain.

Yeah, that's a that's, that's a great perspective. I've often I've often had this conversation with people of you know, why is the supply chain so hard? And part of it is the demand signal that you get from the endpoint, which is probably most likely the store. You start thinking about when does the store need to know when When do they know, I need to order another case of this for whatever, whatever the product happens to be? And there's really three metrics, right? This, how much do I have? That's the on hand accuracy. And we've already studied that that's anywhere between 50 and 60% accurate. How much do I think I'm going to sell? Which is the sales forecast. What's your experience on you know, something like a Blu ray player? What's the range of accuracy of a sales forecast from your perspective?

Well, you know on something like a Blu ray player. I don't know. You know, I mean, that's the hard actually, the hard thing about forecasting, and I'm probably going to give you an independence kind of answer. Right, you know, but it also depends on what level you're trying to forecast at. You know, it's really hard to forecast accurately. At the daily or weekly level at the store times a couple 100,000 skews maybe or 100,000 or 50,000, you name it, you can quickly realize Oh, my goodness, we're talking about a huge, huge, huge number of forecasts. Backup in the supply chain, and I say you know, how many blu rays am I going to sell over my 1000 stores in the month of December or in the month of November? I can do a pretty good job at that.

Yeah. Yeah, I think you're right. It is It's more complicated when you add more factors. But let me go back to my original example, if my on hand accuracy how many I have is 50%. And let's just sell the sales, the sales forecast for an item for a store is even 75%. And I think that's being generous. And the lead time, which is if I order today, how long before I get it, that's probably pretty good, right? Two out of the three factors that determine when I say I need more product, are off, I mean way off. Now you multiply it by all of the stores and all the items and all the categories. Honestly, it's kind of an amazing fact that we're as in stock as we are, when you think about it. There's a lot of things that have have reasons. And I think that's why this is so important. So So literally a part of this is in your sponsorship and your leadership, has has thought through the entire retail supply chain, like you said, both of us have spent our entire careers probably in different ways, trying to make make sure that we are making a difference in the retail supply chain. We're going to be starting as part of this podcast as the first step is a retail supply chain Leadership Initiative, to hopefully identify some of the supply chain, what are you hoping to get out of that you're, you're sponsoring this work, and Dr. Williams is sponsoring his work and Dr. Waller, etc. What do you what's your vision for what this particular initiative can do for retailers and suppliers who are listening to this podcast?

You know, I think it is I think it's multi fold. One, one thing that I like about what we're hearing from this kind of conversation is we're sort of presenting both sides of the coin both perspective. And I think being able to learn from a retailer, learn from a supplier, you know, learn from a technology company, and the various perspectives on this podcast. And quite honestly, whatever we do, will be a real value. I also think that you're probably going to uncover some key things that that companies can take away that maybe they can make changes in, you know, you mentioned, you meant this isn't new, but it is one thing to call out. You mentioned trucking. You know, you mentioned the lack of drivers as a constraint in our supply chain. Absolutely. Understand that agree. You know, but when I when I think about, you know, a given truck drivers time, and they've got X number of hours in the day, the question I started asking myself is how much of that time is actually productive? Right, you know, so if that if that truck driver can get into the dock and turned around faster, you know, and we just gained an hour of productivity in the system for that driver, you know, we didn't have to add a driver to get that productivity right now processes had to improve. Maybe technology had to be invested in differently. You know, so I think there'll be some of the I hope that there's some of those kinds of conversations that don't just say, Well, here's the problem. Here's some potential ways that as a supply chain set of partners, which is a pretty large number of firms usually involved in getting, you know, even you know, I've got my I've got my trusty notebook in front of me just getting that, to me, involves a lot of players that have to connect and collaborate, and, and jointly create new solutions and new ideas. And I hope this spurs that, you know, and then finally, for me at the University of Arkansas, a really important audience, for me is, is our students. You know, we're fortunate at the University of Arkansas, to have the number one supply chain program in North America.

I know, we've seen it, we've seen the sign, we've seen the sign.

I can't take no credit for the sign. That's Brian Fugate. know what's, you know, what's cool about it Mike, end of the day, what's really cool about it, is that, you know, I think I hope employers, you know, look and say, You know what, there's a bunch of students at the University of Arkansas that, that hopefully are getting a great education, they're getting a good internship or two, you know, with a great company, either in Northwest Arkansas or somewhere else, they can help, they can help build my supply chain in the future. You know, and so and I know you've worked really hard to make sure that this content is getting into our classrooms, and hey, it's not just us that can benefit. You know, if you're at another supply chain program across the country, why not incorporate this into into a module or a class that you have? You know, and so I really think these learnings will make a real difference for industry partners and for students.

Well, you started off with that this is a hub of retailer expertise obviously, you've got the biggest retailer out there with Walmart, you have the biggest trans one of the biggest transport transportation companies with JB Hunt, you got Tyson. And last time I checked, we got about 12 or 1300 suppliers that have co located offices in Northwest Arkansas. My vision is really to bring technology and logistics companies into it. My vision is also connecting them with students. I don't think you have to necessarily, t's great if you want to do an internship. But I think just as good as an internship, doing a special project with a supplier and retailer while we allocate students to do a study or, or to to figure out a problem and figure out some solutions to that problem. Giving them real life experience without necessarily even have to allocate to do an internship. But just doing it as part of the work as part of the supply chain is exciting. My vision is pretty simple. I want the qualified and ready to go people who graduated the University of Arkansas in supply chain degree to have a job lined up six months before they graduate. They shouldn't have to go out and try and find a job afterwards. And I want them just have people literally begging and trying to get them to come to their company's six months before they get the degree, why not? Why shouldn't we expect that because you got brilliant students here. It's really connecting them to the industry. So people know what they can do they're bringing both academic as well as practical experience. And they're always looking for great new talent, why wouldn't they go to UofA to look to find it.

When it well, you know, I'm maybe a bit biased, but I think I think it's a great place. I think it's it's a great place educationally. But as you just said, right, being in this area offers lots of opportunities, whether that's an internship, whether that's a project, and we have lots of classes and instructors that are engaging with industry on those projects or Hey, you know, if you're a student, and you're working in the retail environment right now, while you're going to school, what a great set of experiences, as long as you're bringing those two things together. You know, I was in a classroom a couple of weeks ago, and we're introducing ourselves and young lady was talking about the work that she's been doing for the last three years in a customer facing role. And we just talked about what a huge advantage you're going to have in your supply chain career. So I see all of these experiences coming alongside the education, making our students ready to hopefully help your company not only operate efficiently and effectively, but hopefully also innovate in the future as well.

That's awesome. Well Brent, I've got one last question for you.

All right.

What questions should I have asked you that I didn't? And what would your answer be.

That is always the toughest, isn't it, Mike? You know, I think that you We didn't talk much about the role of technology in this particular podcast. I know, you probably have already and probably will in the future. You know, but but I think really, our retail retailers, our suppliers, working effectively with technology companies to solve some of these problems, we know is going to be critically important. And, you know, so I've kind of it's almost like a triad or it's more than that, right? It's the it's the retailers, buyers, the technology companies, its transportation companies all coming together to create a better supply chain in the future. That's what's pretty exciting.

Wow. Man, you couldn't have closed that one any better. That's exactly right. There is a lot of technology out there. I do believe in some cases, some of the biggest opportunity is getting the technology people to understand the business because they'll come to you and go, Hey, my widget can do this. And they go, I don't need that. It's really cool, but I don't need that. I don't see how that's going to help me. Yeah, but it's really cool. And yeah, it's really cool. But why don't you help and help me stock the shelves, why don't you help me change prices? Let me help you take customers, let me help you have you unload trucks with me. So you can see what the work is like, then go back and build solutions that model what we're trying to get done, or reinvent it, one or the other. But they don't do that typically the technology people are just developing technology and they do it because it's cool. Not necessarily because there's a business need. So I think that's the exciting opportunity of this as well.

Yeah, and Mike and I think specifically in Northwest Arkansas. One of the real opportunities as companies think about this not only as a supply chain and logistics hub, as a hub for supply chain and logistics innovation. You know, there's a lot of opportunity if you're a technology company, or you're a founder or you're a product manager and you can live anywhere you want, you know and you're developing technology in the retail space. You You can interact with retail CPG, transportation, you name it right here. So you get to sort of embed yourself in the environment. In my mind, at least, that's why I actually think that this region is, is going to be become increasingly known for innovation in supply chain.

Awesome. Brent, I can't thank you enough. I believe supply chain is one of the key contributors to getting stuff on the shelf, I believe retailers who don't figure out how to get product on the shelf and know what they have and know where it's located. For the future of both online shopping and brick and mortar shopping and combination shopping, buy online, pick up in store, they may not be around 10 years from now, they may finally end up being being replaced by solutions that do that. And so I'm excited to be part of this. I'm excited to partner with the University of Arkansas and the supply chain department. We're gonna have you back and we're gonna have you with us every step of the way. Because we have a lot of work to do. And we need folks like you to help us to, to make all this happen. So thank you very much for taking time out of your busy schedule.

It's been fantastic. Thanks for all the work you're doing. Take care Mike.

Alright. Bye bye.

Thank you for taking the time for this epic discussion. A special thanks to Mike Graen for leading the retail supply chain initiative. On behalf of the Walton SCMRC, we are delighted to lead with you as we learn, engage, address and develop all things supply chain to lead the world of commerce from Northwest Arkansas. Have a great day.

Transcribed by https://otter.ai