This week on the podcast, Brent sits down with two Walton College colleagues, Dr. Mary Lacity, David D. Glass Chair and Distinguished Professor of Information Systems and Dr. Remko Van Hoek, Professor of Practice in Supply Chain Management to discuss their co-authored recent work on research that is working in real-time with industry partners. During the episode they discuss their collaborative research exploring emerging technologies like artificial intelligence and blockchain, much of which is conducted in partnership with industry. In particular, Mary and Remko highlight a recent study that was done in partnership with Walmart analyzing AI applications in supply chain management. Their paper on the topic was also featured in the Harvard Business Review. They also share how they integrate learnings from collaborations directly into the classroom by bringing in industry partners to share experiences.

Remko Van Hoek: A phrase that Michael Lewis from Walmart

taught me is, what's different about the 1990s versus now is

that the future is here, the future is not the future it

we're in it. We're living it today.

Welcome to the be epic podcast, brought to you

by the Sam Walton, the College of Business at the University of

Arkansas. I'm your host, Brett Williams. Together, we'll

explore the dynamic landscape of business, and uncover the

strategies, insights and stories that drive business today.

Today, I have two colleagues with me, I have Dr. Remko Van

Hoek, from the Department of Supply Chain Management. And I

have Dr. Mary Lacity from the Department of Information

Systems. Mary, Remko, thank you for joining me today.

Remko Van Hoek: Thanks so much for having us.

Yes, we're delighted to be here.

Well, one reason why I asked you to be on the

podcast was about some of the really interesting research that

you two have been doing together. So I want to spend

most of our time there. But before we do that, I'd love for

everyone in our audience to get to know you a little bit. And

you both have really interesting backgrounds, and how we're

making really large contributions to the Walton

College and maybe Remko, could I start with you, just if you'd

introduce yourself, love to hear about your background? Because

it's an interesting one of this mix of academics and industry.

Remko Van Hoek: That's correct. Yeah, I started teaching and

researching in Europe, and then stayed involved with the

Cranfield School of Management as a visiting professor. Over

the years while I went into industry to practice blockchain

in procurement held a number of roles in a number of industries

and was grateful for the opportunity that the Walton

College provided to come back to academia on a more full time

basis to help develop leaders of the future while staying

involved in industry as an advisor and as an educator.

Yeah, primarily the, your, your teaching

procurements, probably a little more broad than that. But that's

really kind of the primary expertise that you're bringing

to that department and curriculum.

Remko Van Hoek: Yep, that's correct. across all levels

undergrad, graduate. We're teaching our masters in supply

chain this semester, great program, and executive ed as

well.

Yeah. And Executive MBA. Right?

Remko Van Hoek: Correct. Yeah.

So yeah across all of those. Well and Mary how

about you?

Well I have been in with the Walton College now for

five and a half years, I can't believe how fast it goes. And I

was initially brought here to be the Director of the Blockchain

Center of Excellence. And in as an information system scholar,

I've studied for a very long time how enterprises adopt

emerging technologies, blockchain, just being one of

them, have also studied artificial intelligence for

about the last 10 years looking at organizational adoption. And

so then I was really excited to meet Remko, because he was

studying blockchain when I first got here and supply chains. And

then he brought me in on this project of how enterprises are

using artificial intelligence.

Well, the you all in your own right, are

fantastic researchers. And then I've just seen this synergy that

you two have created. That's made you even more productive. I

think, Mary, you told me nine papers that you either have

published together, I believe. And what's really interesting

about those, some of those where your publishing, three in the

Harvard Business Review, two in the Sloan Management Review, and

those are read and consumed not only by academics, but also an

industry audience. So why the you two are clearly attracted to

that industry and academic audience? What makes that? I

don't know such a fit for you, too.

Remko Van Hoek: I think so first of all, procurement and supply

chain is a very applied field, one of the many things I love

about our field is you can turn things really, really concrete

in a business setting. If you think of desire to become a more

sustainable business. Well, if you turn to procurement, you can

make it very very concrete quickly. That's number one. And

then number two, it's a young field, you know, there's so much

in so much potential so much to innovate. And what's been

really, really exciting about engaging with the companies that

have partnered with us in our research is to travel to very

much the frontier of knowledge and practice, to try and learn

from those, but learn from those in a way that others can benefit

from it as well, so that you can make modest contributions

towards progressing both the thinking to science as well as

to practice.

Yeah,

Remko Van Hoek: of supply chains.

Yeah. Well, you know, Mary, I remember I don't

know if it was five years ago, it's probably close to that.

Maybe one of the first conversations you and I had

about the blockchain center was, you said Brent, technology is

moving fast and If we're successful, we're gonna move

through this technology fast, and then we're gonna move to the

next one. And that's sort of that's really played out in a

fairly short period of time.

Oh, yes, absolutely. So I I've now I'm

researching and teaching metaverse, right. And in

addition to AI, so that's, I think one of the reasons why I

love being a scholar and a teacher, and doing this practice

based research because I get to learn along with everybody else.

And I'm never bored, something's always new. And the other thing,

just to piggyback on what Remko was saying, because we study

early adopters who are successful, I think our research

has a lot of impact, because the first question everybody asks

about new technology is, who else is doing it?

Yeah,

What kind of business benefits are they

getting? And so we come up with what we call action principles

on how you can leverage these technologies to get business value.

And in one of these articles, and Remko, you

were the lead author on this. It's one thing that stuck out to

me it was it was the article, how Walmart automated supplier

negotiations in the Harvard Business Review. And the piece

of it that really stuck in my mind. I mean, there's a great

story there. But you had, I don't remember if it was four or

five points that like, you know, if you're thinking about this,

do these things. And it just took the research and the story

and made it very actionable. So we're talking about this

research, and I'm gonna get you all and Remko might start with

you. As I look across it, it's this intersection of AI

automation, a procurement focus that broadens the supply chain

and certain of the papers that you've written. Am I anywhere

close to describing it correctly?

Remko Van Hoek: I think you're spot on. I think it's a really,

really fast moving field building on Mary's point from a

few years ago, there's so much interest in in in AI. And

there's so many questions being asked by researchers about what

is the potential in supply chain? And what is it going to

do? What's it going to do for the future of work? What is it

going to mean for our students that are going into this field

in terms of what their day to day will will look like? And,

you know, it's it's a very, very bright future. It's, it's

really, really incredible what potential it can bring for

procurement specifically to grow its business contributions and

to grow the coverage of spend the impact on supplier relations

on business resilience, there's a ton of potential there. And

what's really, really cool is that we've been privileged to be

able to work with a few innovators that are really

pushing the thinking into practice, who have generously

shared with us to let us learn from them and let us together

with them. Because that piece, your reference is co authored

with Walmart executives, in fact, to share that, to advance

the thinking and help others as well.

Yeah, that piece co authored by the two of you,

but Michael DeWitt, he's a co author from Walmart and Travis Johnson.

Remko Van Hoek: Correct

It is a is a co author. Tell us a little bit

about that study, if you don't mind, because I, you know, I'm a

supply chain professor so I found it pretty interesting.

Remko Van Hoek: So it the technology in there is it's an

AI chatbot that will over chat, negotiate terms and conditions

with existing suppliers of Walmart. And that's very

counterintuitive, right? Because when people think of a

procurement professional, you think of something that somebody

that can do a lot and probably is really good at negotiating.

Well, here's an example of don't let the buyer do that. Let the

bot do it. And you can get incremental savings and business

value. That was the counterintuitive element to

that, if you dig into the story, part of why this is augmentation

of procurement rather than replacement of buyers, is that

the bot is able to target suppliers that buyers don't

necessarily have sufficient time to properly negotiate with. So

the truth of the matter is that when you look at a procurement

organization, typically you have 1000s of suppliers, and quite a

large number of those falling with so called tail spend. So

they are relatively small when you look when you look at the

amount of money you spend with them the number of transactions

you have with them. And so they're not necessarily an area

where professional buyers can spend a lot of time developing

relationships and negotiating terms and conditions. What this

technology does is let the bots take care of it Yeah, let the

bot take care of it so that you can negotiate with those that

you normally don't have time to negotiate with.

Allowing the buyer to spend more time on the

things that are most important to that business

Remko Van Hoek: Exactly. There's two elements to what does it

mean for the buyer, number one, you can focus on more on

strategy and you can focus more on critical, most critical

relationships number one, but number two, the bot doesn't it's

controlled AI. So the bot doesn't just come up with what

am I going to negotiate with whom, the buyer has a key role

into selecting the suppliers to target, providing data on who to

approach in what way and developing the negotiation

scenarios, as well. So the bot can then execute. So it is true,

a perfect example of procurement augmentation to make the buyer

more impactful, and to help procurement grow to value at

generating in key relationships as well as in the business.

You know, one thing that interested me in the

article was, I don't know if you use the term adoption rate from

the suppliers. But that term I'm using, and it was really high

the number of suppliers in the in the pilot

Remko Van Hoek: Yep,

that that adopted. So clearly, they're

seeing benefit, What benefit do you think the supplier is

getting from this?

Remko Van Hoek: So there's a couple of benefits. First of

all, they are in a negotiation with Walmart. So rather than

just having to accept the terms and conditions that Walmart

normally applies, there's an opportunity to discuss those,

and there's an opportunity to make decisions which they

previously might not have had. So that's one benefit. Number

two, the technology which is pactem, that they use allows the

supplier to think to go back into so there's lots of

flexibility in the hands of the supplier to put control over the

negotiation in their hands. And that's that's a real, a real

benefit. The other thing that it has to do with how Walmart

approaches negotiations, if you have a deal with Walmart, you

have to deal with Walmart. So the follow through on those

agreements, is very high as well, which is a real benefit to

suppliers, like a pitfall in procurement is I negotiated with

you yesterday. But today, I want to talk to you a little bit

further. And that's highly frustrating and can be

borderline, you know, unethical in terms of how you approach

suppliers. There's none of that in this. There's none of that is

that negotiation ends with an agreement with a commitment, a

contract, crystal clear, super transparent, I'll let you add on

those are just some of the points.

Well, they're they're, they're pretty much all

of them.

Well, you know, you you all have focused in

procurement. But then the about a year later, you published a

paper about the use of AI to prevent supply chain

disruptions. And what a what a timely topic, you know, and it's

been timely for probably forever, right? We've

experienced supply chain disruptions forever. But we all

were hyper aware of the disruptions in COVID. But, you

know, as we as we sit now, you know, we're seeing severe

disruptions in shipping lanes across the world, and, you know,

driving costs. So while AI doesn't solve that, exactly.

Tell us a little bit about, you know, just kind of where this research.

Let me tell you, can I just share where we were

this research actually started?

Yeah,

and where it ended up. So Remko has incredible

context, also with the Harvard Business Review, and after we've

had a couple of successes now he's getting asked to, you know,

basically commission articles. And so he was asked to what is

the role of small to mid size suppliers in helping derisk

supply chains? So he called me so do you want to partner on

this? And I said, yes, so we spent the summer focusing on the

role of small to midsize enterprises. And it was almost

like trying to fit a square peg in a round hole. Because the

interesting stories that kept coming up, were related to these

new tools of artificial intelligence. And so we decided,

let's just write the article we want to write. And the editor

was very pleased with it. So that's the background story on

that one. And this one, I thought was really interesting,

because we also look at other adopters of pactum. So Remko,

just explained how Walmart is using it. But we also have a

smaller company that has used it and also Maersk. So we have that

story in there. And then we have two other tools that are doing

different things. So maybe you want to talk about one of the

some of the other things that we're looking at

Remko Van Hoek: Yeah, absolutely. So Scout Visa

technology that's featured in there. And you're right, by the

way on Pactum. I'm helping several companies explore how

can I potentially use it, which is just great in terms of how

research leads to research and opportunity?

Would you tell us a little bit about Pactum?

Remko Van Hoek: Yeah, so it's a it's a really cool young tech

company, that the article that you referenced features one of

the several use cases that they have and journey of adoption has

progressed including in Walmart into other into other use cases

and they're squarely focused on using AI to drive supplier

interaction so that the buyer doesn't have to do it so and but

there is applications in logistics, different industries,

different markets. I'm helping several companies kind of think

through how could that work for me. And so there's a lot more

innovation to have there. It's really kind of cool. The other

one you mentioned was Scout B. Scout B is service that can help

you identify supply options faster using AI, then a buyer

might if they didn't use the technology, and that has real

premium value if you think of supply chain disruptions, right,

because what happens when a supply chain disrupts? Well,

you're not the only company suffering from it. Your

competitors are probably facing very similar issues. And what

happens, we start scrambling for is there any spare inventory? Is

there any spare capacity, can I call on somebody else? Everybody

goes through that scramble. But you're, you're all after a tiny

bit of incremental capacity that may be left. And so the value of

using AI is dead, it can put intelligence in the hands of

buyers faster, you'll know about those options faster than your

competitor. And that gives you an edge when you're all rushing

to the last little bit of capacity that's left in the market.

And for and for now. Because what this is why

you have to constantly innovate, right? So the early adopters are

going to have that strategic advantage. And then it's going

to become a level playing field when everybody starts adopting

it. And they'll have to go to another innovation.

Yeah, but but also it could, I'm thinking out

loud here. But while it could give you that competitive

advantage and getting the capacity, there is an advantage

in alright, maybe you found out you didn't get it, you know, but

you found it out faster, right and increased your efficiency of

what's the next solution?

Remko Van Hoek: Correct, correct. There's two added

points, if I may. The first one is, we also feature an example

of Unilever, who actually uses that technology to support its

efforts to grow supplier diversity and inclusion. So what

Supplier Diversity and Inclusion teams in a procurement

organization typically do, and I had a team like this, when I ran

procurement at Disney, they help buyers find options that are

with diverse suppliers that they could consider in their sourcing

efforts. And so Unilever has used is to very rapidly grow the

pool of supply options as inputs to buying decision. So it has a

use case that is more in the ESG space, as well. So AI can help

you drive progress in ESG, as well. And a second point, we

also spoke to Arkestro, which is a predictive procurement

technology. And one of the things that they shared on was

that sometimes when they go through the existing supplier

master data and all the transactions, you think of the

massive data lake that companies typically have, they very often

can uncover supply options within existing suppliers that

have that are untapped. Right. So I'm scrambling for product A,

but I didn't realize that, you know, the supplier of product B

could also provide product A, I just never have asked him. And

so that's another area where you could improve resilience, if you

put AI in and so buyers.

The other really cool thing about that tool is it

scrapes details right down to I think the SKU level, it'll

generate a request for proposal based on historical data, email

it to the supplier, and the supplier says yes, bang they go

or the if the supplier counteracts it iterates. So it's

more than just here's a list of potential people to look at.

Yeah. When when you all have worked with

companies, as they implemented such technology. Talk a little

bit about the people side of it. Because you know, you're right,

you think about like,

Remko Van Hoek: Thanks for bringing it up

data technology, process people. And people

always a really big part of the change management.

Remko Van Hoek: No, You know, Mary was the one that taught me

a lot about blockchain. And the main thing that she taught me

that technology is the easy part. It's about considering it

wisely. And being able to approach potential adoption of

mindfully as well. And that very much applies to these like these

technologies. Yes, buyers get savvy in them, but they don't

have to. They don't have the code. They don't have the

development. They've got very capable, you know, solutions

providers for that. The MIT Sloan article, actually features

a very old technology that you'll remember from the 90s.

It's called E auctions.

Yeah.

Remko Van Hoek: And it was actually it was Michael Lewis

from Walmart international that brought this up because he

actually works for one of the original e auction companies in

the 90s. And brought that technology many many years later

into Walmart when he when he started running procurement

internationally there. And so a lot of the article is not only

about on how to adopt new technologies, but also are there

further opportunities to benefit from proven tried and tested

existing technologies. And that's all about people and

change and, and leadership?

Well, if you're listening to this, we will put a

link these articles in in the notes so that you can find them.

Because I think, I think after listening, you're going to want

to read these. Let me let me switch gears with you for just a

moment. So you know, one thing that is really interesting in

listening to all of these stories, think about the number

of companies you all have just mentioned to me. So industry,

you are deeply engaged with all kinds of companies in your

research. And when I think about the Walton College out, you

know, I will say, I think our single biggest competitive

advantage is our relationships and connectedness to industry. I

think it is, it's pervasive in the classroom, you know, in the

events that we're doing, but it's also pervasive,

particularly in your research. So well, I guess, maybe, you

know, talk a little bit about how you develop those

relationships. And companies need to get value out of doing

this. And clearly they are because they've been doing it

with you multiple times.

Remko Van Hoek: Yeah, I mean, I'm very grateful for all the

the research that we're able to do with with really cool

companies, I think you've referenced a Walmart example,

that's just a really cool relationship that I'm very

continue to be very grateful for, which is larger than just

the research. Because we actually do executive ed, for

that organization. We do some coaching and out of that has

grown the opportunity to also learn with them at the frontier

of practice. What's cool about Walmart and the executives that

are working with in particular is that they're really motivated

to innovate and to think forward and do it collaboratively as

well, which I think is very rare. Plus being able to willing

to share learnings so that together we can drive a little

bit of progress. Obviously, they're increasingly recognized

for the innovator and a leader in the space that they that they

are, and they're asked to talk a lot about some of the things

that we research together in industry and good for them and

good for the field.

Absolutely. You know, Mary, you've been working

with industry, I think your whole career.

30 years. Yeah, yeah, people talk about a

virtuous cycle between your research aligning with your

teacher, but I like to think of it as a cyclone, because it's

that much more impactful. Probably a recent example is,

you know, when I was the director of the Blockchain

Center of Excellence for five years, we had 12 Executive

Advisory Board member firms, including including, Walmart,

and JB Hunt, and Tyson. And we did research in those companies

as well as others. And then we had blockchain curriculum. And I

noticed we there is no such thing as a blockchain textbook.

So I went and wrote it. And it's mostly based on all of the case

study work that we have done. And now that textbook is used at

14 other universities around the world. And I do want to say I

get no royalties, because I didn't. I just like to say that

I always waived my royalties, because I don't want to make

students let be lining my pockets. But I think that's a

good example. And now that I'm teaching this Metaverse, I don't

have a book out yet. But some of the early papers that we've done

that those are readings in our classroom, and we also bring

those, we also bring those executives into the classroom.

They love to guest lecture. And our students want to know well,

what kind of careers can I get in metaverse? So we brought in

Accenture and, and what their career paths look like. So our

cyclone, our virtuous cyclone.

I mean, the teacher scholar model, you know,

where, where you're it's synergy is really happening amongst

everything you're doing. And I particularly love how I think

this is I think I'm catching the phrase right that you said that

you're learning with these companies at the frontier of

practice. And what's interesting Remko, Mary, as you do that,

let's say, you know, you're writing papers all week and

working on this research. Well, next Monday or next Tuesday. You

can't help but talk about that in the classroom. Right? It's

just it's what's on your mind. And so students are actually

seeing that well, in some ways before it's published. It's

because you're researching and teaching at the same time.

Remko Van Hoek: That's correct. I know you do this I do. They

say also bring, you know, my industry partners into the

classroom as guest lectures to tell what wasn't in the paper,

but they should also know one cool thing that we're going to

do both in my master's in supply chain as well as in my EMBA

class this semester. We're going to actually have the CEO and

founder of Pactum come in for a session where he'll open up

about to technology, or we're going to have our master

students negotiate against a bot in the classroom. So we're going

to really bring that technology to life and have them live it

through. And I can't wait for that session.

I hope you invite me.

Well, you've mentioned Metaverse, but I just

kind of mentioned I was thinking for the two of you kind of

what's next what, what's got you interested and the curiosity of

research questions that you're thinking about for the future.

I still think AI has a lot of legs. And I started

studying this technology in 2014, primarily with IBM's

Watson, which at the time would cost an enterprise I mean, 10s

of millions of dollars. And the price point of these

technologies combined with the massive amount of computing

power, I think we finally reached that tipping point of AI

adoption in enterprises. I mean, we've been saying this since the

1950s. You know, AI is coming AI is coming, AI is here. So that's

I think we'll we'll continue to do research on that.

Remko Van Hoek: Yeah, I agree. I mean, there's a paper just

published by some prominent European scholars about AI and

supply chain, and they kind of looked at the inventory. And

they only found one paper, you know, on AI and procurement. And

it's the one you just brought up. So clearly, we have a lot

more to learn, we have a lot more to learn. And it's moving

really, really quickly. phrase that Michael Lewis from Walmart

taught me is, what's different about the 1990s versus now is

that the future is here, the future is not the future. It we

are in it. We're living it today. And, and this is one of

the many things I love about working with Mary, like she's an

incredibly accomplished scholar. And despite being distinguished

and endowed, she is still very curious. And she's always

interested in learning, learning more and, and great and engaging

with industry to do just that. And so what what I'm interested

in doing more work with the really cool companies we get to

work with and hopefully doing more work with Mary.

Well, when I think about you two, and I'm

thinking about our vision as a college, you know, I always just

boil it down to we want to be thought leaders in business and

catalysts for transforming the lives of our students and, and

clearly you're doing both. So thank you for the amazing work

you're doing pushing the boundaries of knowledge working

with companies and impacting students every single week in

the Walton College. I appreciate both of you. Thanks for joining me.

Thanks, Brent.

On behalf of the Walton College thank you for

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