Host Mike Graen sits down with Jeff Clapper – President and CEO of 8th & Walton - to discuss OSA capability and its impact on the Retail Supply chain.  

8th and Walton plays an important role helping Walmart suppliers work collaboratively with the retail giant and understand how to get their products to the shelf.

I am very excited to be with my good friend Jeff

Clapper. Jeff is a CEO and President at 8th and Walton. It

was founded in 2006, Jeff that's a long time ago. But it's an

Arkansas based Walmart supplier development company that helps

thousands of organizations and their efforts to do business

better with the world's largest retailer. And I love this quote,

Jeff, we believe in helping suppliers become better partners

to Walmart. We educate, help people advance their careers,

suppliers perform their best and Walmart reduce their costs. We

deliver premium classes, rich media and expert services. I

want to welcome my good friend, Jeff Clapper to the podcast.

Thanks, Mike. I'm glad to be here. Thank you very

much.

So I'm not sure when you wrote that up, but I'm sure

like most of us, we write up our LinkedIn profiles, and we save

them and we never go back and really look at them. But as I

read through that, it felt as relevant today as it did

probably five years ago when you wrote it up. So tell us a little

bit about 8th and Walton and their mission and vision for

helping people work more effectively with Walmart.

Absolutely. Well, yeah, I mean, the mission is, it

continues to be relevant. Walmart, I say, often to their

credit is a dynamic company that continues to evolve and improve

and just push to to grow. And along with that, expectations of

suppliers continue to evolve and grow and change. And so the

relevance remains in terms of being informed and educated and

up to the latest knowledge to be successful, and a great

collaborative partner with Walmart. So you know, the

relevance, we're fortunate that that keeps the relevance there

for everything we do, as you said, in terms of providing

education, we do that in a online classroom setting. People

from a bunch of different companies might get together for

a topic like RFID, or maybe retailing insights, or supply

chain across a variety of topics, we teach those classes.

We also do that in a dedicated session, so maybe a team of

three, four, five people from one company would get together,

and it would be them and one of our teachers or experts in that

session for several hours or a day or two. So that's kind of

the teaching part. And again, when there are teams ready to do

the work, and they just need to get the latest, most relevant

and helpful information with Walmart, that works really well.

And then the other end of the spectrum, and kind of just in

the last five or so years, what we've also recognized is some

teams, some businesses strategically, are in a place

today where they they might, they might have a VP of sales

who manages all retail accounts, maybe even the president of the

company who manages all their retail business, and of course,

wears many other hats. If it's the president, they're doing

financing, and sourcing and staffing and all aspects of

running the business. If it's a head of sales, they're managing

a bunch of a bunch of retail accounts, but maybe they don't

have the breadth and depth of Walmart experience. And they're

they're, you know, strategically it makes sense to say, hey, can

we get, can we get some extra support in here. And so our team

is either ready to teach your team today, or do some of that

work alongside behind the scenes for that, that sales lead until

you get to a point where you say we're gonna go build out a sales

analyst and a supply chain analyst, maybe accounting and

ecommerce and all that other support. And then when your

business is you know gets to the point where you say, Hey, we're

ready to do this ourselves, we flip into being teachers and

educators again. So really, we want to support whatever

solution makes the most sense. And throughout all of that, of

course, Walmart gets the benefit of having well informed people

on the supplier side taking, you know, taking care of the

business.

Well, that's outstanding. You guys have been

around for 2006 is when you first formed, which I think is

pretty interesting. It's been around for a long time and a lot

of people have discussed and said, Yeah, that's really

Walmart's job to train them, but you're actually training people

that are actually working with Walmart, and frankly, you're

getting a lot of Walmart folks who are recommending people to

come to 8th and Walton because of the subject matter expertise

that you guys provide.

Yeah, that's exactly right. And, you know,

Walmart provides a lot of really good content to help suppliers

and and we direct suppliers to that, you know, hey, there are

good opportunities to learn some of this from Walmart. Sometimes,

you know, a couple of factors just quickly that come into play

there, one is, if I hand you the phone book, and I say like the

answer you need is in here, and you don't know how to use the

phone book, like it could take you a long time to get the

answers you need. And so we want to try to boil that down into

something that's really immediately helpful and useful

to the supplier. So that's one piece. And then the other piece

is we play a really important sort of middle ground here where

a lot of suppliers are reluctant to say, hey, there's some stuff

we really don't know about working with Walmart, and

they're not going to necessarily feel comfortable going to their

buyer and saying, I don't really know what I'm doing. And so

there's kind of in the back of everyone's mind, there's this

fear of like, hey, we want to keep a little bit of separation

in terms of where we need help, where we need knowledge and

education, let's not get that directly from Walmart because we

want to be able to have a candid dialogue about where we, where

we have opportunity to improve and so we can play a really good

middle ground there. And then we also bring that feedback to

Walmart to say, hey, you know, here are areas where where

suppliers, you know, may have opportunity to improve and it

creates, again, kind of an important middle space there

that we get to support.

That's awesome. Well, as you know, we're doing

this as part of the University of Arkansas Supply Chain

Management Research Center, SCMRC, and one of the things

that we're trying to do is focus on retail and on shelf

availability. So before we get into the actual on shelf

availability opportunity, just a personal question for you from

from a personal perspective, have you had a situation in the

last call it six months or so where you ordered something

online and went to pick it up and the item wasn't there? And

as a customer, how did that make you feel? If that's a example

that you could share with us.

Sure, sure. Absolutely. I mean, I think

maybe the the somewhat obvious answer is that can be

frustrating when that happens. I actually, most recently, we

were, I mentioned to you a little while ago, we were our

family was traveling a little bit and we got back we had to

restock on some things and and we were out of peanut butter at

the house. And then

Oh no, that's a horrible thing to be out of.

I know, I know. And, and in fact, I went to do

our Walmart pickup and the brand that my kids like was not

available. And and so the the option that was available that

seemed like, hey, this will be a close match. Here's where my you

know, my answer might differ from some people, I love to try

new things. And so I'm like, Hey, this is exciting. This is

an opportunity to try something new. And and you know, and I

think that's the the supplier opportunity is like, Hey, if you

are not in stock, consumers are going to try other brands, and

you may end up losing share because of that. At the same,

especially if it's someone who's enthusiastic to try new things

like hey, maybe I maybe I discovered something I like

better. You know, at the same time, my kids, of course, I've

tried putting this peanut butter on one sandwich. And they said,

I don't like that. So now I have, you know, 98% of a jar of

peanut butter that's not going to go anywhere. So anyway,

hopefully that answers your question.

That's a great example. So you weren't

disappointed, but your kids were.

Bingo.

Oh, I love it. I love it. Well, it's interesting

that, you know, one of the things that you guys had had

done for years and years and years was retail link training,

and then item file training, etc. And I don't know the answer

to this, but my suspicion would be, you started to get a lot of

interest when Walmart decided that suppliers had to be held

accountable for delivering things on time and in full, and

other compliance charges from Walmart. I don't think Walmart

necessarily wants to make a lot of money on that, but they got

to have the products to actually deliver to the shelf. So, you

created a whole focus on on time and in full and other changes.

What does that look like? And how do you how effective do you

think it is helping the suppliers get through that?

Yeah, I mean, you're absolutely right. It was

about five years ago now. It's just amazing to recognize on

time, in full has been out there. And we were fortunate to

bring, bring team members in at that point who were really

instrumental in the development of that program, and others, you

know, related to supply chain and merchandise operations. So

we really got to build all that at a critical juncture and how

Walmart was addressing their priorities with suppliers. And

for the first several years, buyers really did consistently

say, hey, you know, if you're if you're on time and full score is

below a certain threshold that really will determine where we

can go in these conversations around more stores, more skus.

And so it really kind of became for the work we were doing in

education and some of the the guidance and service that we're

providing to suppliers, it became an operations

conversation. I think, on time, in full as the program was

really effective. Most of the people we hear from in our

especially well for many years, they were in a sales role on a

supplier team, and they might have heard prior to OTIF, they

might have heard from Walmart, hey, please fill orders. And

they would say okay, I want to but that's a little bit outside

of my purview in the company. Well, when OTIF came out, and we

saw this with our education program, those salespeople said,

now I have, now I have a stick to take back and I'm getting

I've got the the CFO asking me about these fines. I've got the

COO on the line, like basically that cross functional team came

together to address what was going on with Walmart as a

result of OTIF. And so and that that really changed the dynamics

of who we were working with, how we were working with them in a

favorable way. Because then our the work we do really starts

with are we filling orders, shipping them on time, kind of

just operational excellence with suppliers. That's good for them.

It's good for Walmart. And then we move into insights and

analysis that can build the business beyond that, but it's

really worked well.

That's awesome. A great story, great story too.

And clearly this is work that you're never done because you're

always onboarding the new supplier, onboarding the new

people to the new supplier. The industry turns pretty often in

terms of hey, you finally got it right now we're going to promote

you and do this and I got a brand new person to bring in the

space. I think the challenge that I have is, it seems like

and this may be a little bit controversial, it seems like

when OTIF kinds of fines come in place, things like shipping on

time and in full become much more relevant to the suppliers.

Because it is sort of the carrot and the stick piece, and this

happens to be the stick. You either do it right, or we're

gonna fine you for it. There's another big opportunity that we

are, we've been talking about for the last six months, which

is okay, great. I'm shipping everything you want in full when

you want it, but at the end of the day, my stuff is not on the

shelf.

Right.

If it's not on the shelf, two things happen. Number

one, Jeff's kids get disappointed because their

favorite peanut butter is not there, and they get to hear

about it. Secondly, the reality is the sales of that product are

lagging what they could be. And therefore we start having

conversations with merchants that says, you know, we're

thinking about discontinuing your item, because it's not

selling very well. That's not the time to go, well it's not on

the shelf, hang on, you can't blame me for that, that's, you

know, whatever. So so my question becomes on shelf

availability is become a pivot to some suppliers, probably

bigger suppliers and more strategic suppliers. How do you

get everybody to care about not only what did I deliver to

Walmart, but how do you actually make sure your stuff shows up on

the shelf? And what's the supplier role in that? That's a

big loaded question. But to me, it's a big opportunity and we

may have an opportunity to to help figure out working with

suppliers. How does 8th and Walton play a role in helping

facilitate getting their product actually on the shelf?

Yeah, yeah, for sure. You know, you kind of

touched on a couple of really good points, many good points.

One of the things that I've seen over many years now building the

business here is there are initiatives that are out of

Walmart, or, you know, strategic initiatives with Walmart that

are highly relevant initially, to people inside Walmart, then

it rolls out to sort of top tier suppliers, as you mentioned, and

they have the strategic, they have the bandwidth and the

resource to really collaborate with Walmart on addressing those

opportunities. And there's a lag between point, the first point I

mentioned, and then those large suppliers getting engaged, and

then even more lag before that becomes something that small and

medium suppliers can support and engage in a meaningful and

helpful way. And so, you know, I think that OSA conversation is

probably in the earlier stages today where the the largest and

best resource suppliers are probably the ones who are

addressing that or thinking about it but it's a tremendous

opportunity. Actually, for the small supplier who could have,

you know, for the big supplier who has a reason to be off

shelf, if they've had a glitch in their production or their

supply chain, a small supplier has a really significant

opportunity to jump in there if they can, if they can figure out

how do I make sure that my product is not the one being

missed on the mod. And so, you know, then it does become and

you kind of touched on this too, I think it becomes a tricky

conversation. It's a nuanced conversation in terms of working

with Walmart to say, you know, hey, we've we've done everything

in our power and that's what our business is always talking

about. Let's address the things we have control over and not

stress over the things we can't control. So for many suppliers

perspective, it's like, did we ship everything? Did we ship it

when we were supposed to? Do we know it, you know, did we check

all the boxes that are in our power? Now, what else and so

trying to expand the scope of what's in their power. I think

that's what makes this a complicated conversation or

problem to solve, but the prize will be big for the suppliers

that can help figure out the solution to it.

Got it. So So we've done some initial discussions on

on shelf availability with 8th and Walton. We haven't really

substantially built anything yet, but we've had a couple of

podcasts to talk about what the opportunity is out there. Have

you heard back from any suppliers about how they react

to that, or is that just quote not on their radar at this point

in time?

You know, to be honest, it's not that it's not

on their radar. I think the feedback I've gotten and we've

gotten is it's on our radar. Trying to think of the best way

to say this, it's on our radar, but we for various reasons it's

not it's not our priority right now.

Got it.

And and I think some of that just comes to

engagement with their Merchant team and where that focus lies.

And where, you know, I mean, again, it's kind of a tricky

conversation, because it's it's like, Hey, man, we've done

everything we can, balls in your court. What can we do together?

And and everybody's got different priorities.

Everybody's got different sort of metrics and objectives. And

so to engage in that collaborative conversation, I

think it's going to require everyone sort of getting lined

up around the importance of it. And it's not to say that people

don't see the importance of it, it's just we're not all lined up

on now this is what we're gonna go after.

Yeah. Would be interesting. We, it'd be

interesting, because I think the last piece on the vent, we call

it the vendor scorecard or the supplier scorecard, there's

sales, there's profitability, there's ROI, there's inventory

turns, and there's a bunch of logistics things. One of them, I

think the last one in the supply chain, is on time and in full.

Did you ship it to me when I expected it. And then it stops.

It would be interesting for me is if you had the courage to be

able to say, courage is probably a bad word, if you had the

capability to be able to say, what is my on shelf

availability? And well, how are we both working towards that to

do that. Because I think suppliers do have tools at their

disposal. They have algorithms, they have audit capability, they

potentially have third party resources like our Acostas or

Anderson's, or etc, that can go in and do work on behalf of the

supplier where it makes sense. But you can't do that unless you

can measure what is our OSA goal and how are we tracking towards

that. So it is going to continue to grow and evolve. I know folks

at Walmart are very interested in it. I do believe it's more of

a Walmart strategy rather than a supplier strategy. But some of

the big suppliers are saying, Look, I'm doing everything I can

from an OTIF standpoint and my stuff's not on the shelf, my

business is hurting just like your peanut butter example. I

just got switched to another brand because your stuff wasn't

there. How do I help to invest in and make sure that that's in

fact happening?

Yeah, and you know, again, you and I were

talking earlier, sort of add to that complication, just the, you

know, the term you use the bullwhip coming out of the

pandemic, where there's this glut of inventory, potentially

clogging back rooms, and whatever else I mean. So someone

who has made, let's say that there was a situation with the

peanut butter, we'll stick with that. And they said, Hey, we've

pushed everything through. It's it's sitting somewhere in your

supply chain. How do I help get it through now? How do I get it

out to the floor? Yeah, I mean, I think getting, OTIF was really

good for creating transparency and clarity and that really lead

to action. You know, you're a PNG, former PNG guy, like what

gets measured, gets improved attitude and approach to the

business. And I think the same thing here, like you were just

saying, if we can get clarity around, what is OSA and can we

all start to work on it. That'd be a really good start.

So you've been around since 2006 really helping

guide supplier activity and frankly, Walmart activity to

education, etc. So so you look into your crystal ball, what's

the future of retail look like in your mind, specifically in

Northwest Arkansas, with the suppliers and Walmart that are

working up against this business?

Yeah, terrific terrific question. I, you know,

I think suppliers are trying to, of course, continue to make the

most of their business with Walmart. Walmart has continued

to, as I said earlier, raise expectations, you know, be

innovative and dynamic, trying to build the business for

everyone. I think right now, there's a bit of an inflection

around how buyers are looking at the business. Who the buyer, you

know, how Walmart is staffing those merchant roles. And, you

know, I think in the near term, it's, frankly, the perspective

I'm getting from all the suppliers we talk with is the

relationships have become a little bit more transactional,

and a little bit less relational, as you might see

with other large retailers that Walmart, you know, studies a

lot. And it's not to say that's good or bad. I think that's just

the perspective we're getting is it's a it's more of a, you know,

we'll talk when we need to talk, but otherwise, do what you got

to do, and I'll do what I've got to do. And that may not be a

long term situation either, I don't know. But I think from the

suppliers perspective, again, going back to what's in our

control, it becomes a lot more about what what, you know, let's

play, let's play the hand we've got here. What can we do with

these cards, and let's make the most of that. So I think that's

that's kind of how I see that right now.

So here's here's a question for you. What should I

have asked you that I didn't? What's on your mind, what's

going through your mind right now say, I wish this would have

been a topic on the podcast, but he didn't ask it. So this is

your opportunity to kind of take us wherever you think is where

your your mind's going.

Oh, man, I enjoy our conversations so that could

go anywhere. Like, I want to see more pictures from your last

trip but you know. Yeah, you know, I think what's going on

with the business right now I think it's going to, as we've

Yeah. And I think of it in fairness, it's tough on Walmart

touched on a couple times here, it's going to be a lot about

what can suppliers do to have a positive impact on the business

and the relationship with Walmart. You know, again,

there's sort of this inflection point of what are Walmart's

objectives, how can we best support them? A sense of, you

know, the profitability of the business with Walmart, that

might be a topic we didn't talk a lot about, but you did touch

on compliance and fines and programs that it's it's

understandable, we, you know, a lot of the feedback we get from

suppliers is, Walmart is just adding cost all over our

business, and what happened to a simple EDLC, EDLP model. It's

easy to understand how they would look at that as money

grab. I'm not saying it's right or wrong, but I'm just

recognizing that is, is an understandable perspective for

suppliers to be adopting. And so again, you know, I think the

profitability of the business and the relational the

opportunities there are for suppliers to improve the

profitability with Walmart. That's a focus right now. And

where can we build relationships so that we can come up with

as well. I mean, Walmart when you think about running a store

outcomes that are good for everybody. I think that's the

had labor as their number one challenge. Well, it's

Oh, yeah

those are probably the two big areas people are focused on

really hard to get people to work in a Walmart store, or any

focusing on and in a broad sense, obviously, a lot more

store for that environment. You see that happen all the time.

specific and detail to that, but in a broad sense, that's what

we're talking about.

And I used to pay people to unload trucks and put stuff on

the shelf, and then take the customers money at point of

sale. Well, I have this whole nother third bucket of cost now,

which is pulling stuff off the shelf, putting it into customers

basket, driving it to the customer's home, stocking into

the refrigerator, or using drones to fly things. I mean,

all kinds of that last, that last mile delivery focus is huge

at Walmart. That's a cost they didn't have five years ago. And

so they've got to figure out a way and I've heard Doug say this

before, you know, we've got to think of other outside the ways

to be able to compensate for that. Some is we'll we'll have

to accept, you know, cost increases or profit reductions

because we have to absorb some of that, we're always going to

ask the suppliers to figure out how to drive costs out of the

supply chain and give us back some of that. The other part is

we got to come up with new business models, and certainly

things like Luminate, and things like that are out there as

opportunities where they can sell data that they would not

have sold before. So I think everybody's trying to come up

with a creative way saying there's this whole new bucket of

work to get the product actually to somebody's house that

somebody has to figure out how we're going to go collaborate

for pay for it. I think that will always be I mean, since

I've been working with Walmart since 1989, that buyer and

seller confriction around costs, and how do we how do we figure

out how to who's going to make money on this thing will be and

always be part of the front and center but with the buyers and

merchandisers do with the suppliers.

So much good stuff that you just said there. You

know, I mean, you're really recognizing such a massive shift

in how retail works operationally in those stores.

And like you said, the tremendous change in in cost and

investments to support that so how does that P&L change for

everyone involved in that ecosystem, right. You know, and

kind of from an entrepreneurial, entrepreneurial perspective, I

think about the the line pioneering is expensive, right?

You know, I mean, pioneering in any sense, right. And so when

you're pioneering something, which is still isn't really

relatively new, all of the people the entire way that

online shopping and pick up online, you know, online pickup

and everything else works, it's expensive to figure that out.

And we're not really through all the learning that can happen to

make that a much more efficient model. And so just to get

through that is a big process. Throw in supply, global supply

chain, pandemic, all the other, you know, inflation, all these

other macro factors, that just complicates the learning that

has to happen to make the pioneering go away and become a

more efficient way to operate. So I think that's a terrific

point. And then the additional revenue source idea, I mean,

yeah, Walmart has all these great assets beyond the, beyond

the business that we think of and we know today. I think the

real opportunity there will be you know, many months ago now

when they announced the partnership or the the

collaborative opportunity with Home Depot. How do we open up a

revenue stream with someone who isn't already in a financial

relationship with us? When we talk about opening a financial

relationship with a supplier to say we're going to charge you

for things that we were already doing? We're kind of just

shifting dollars from one pocket to the other in some ways in my

mind, but how can we find new sources from new outside

parties? I think that's really exciting. Leverage the asset

base that you have to open up new revenue streams outside

where we have financial relationships already. That's

the way to make the whole pie grow.

100%. I love that idea too, love that idea. And

we'll close with this, I think the one thing that popped into

my mind when you were talking through that is it goes back to

one of the quotes that Sam Walton said, and I won't, I

won't quote quote it exactly the way he did, but he says, the

customer has the power to hire us or fire us every single day

because they get to spend their money wherever they want to. So

they can spend it somewhere else and they basically fired us. And

I comment on that, because in the environment, if I go back

all the way to your peanut butter, you're standing at the

shelf and let's just say it's JIF peanut butter is not there,

you had the power to whip out your phone and go ahead and buy

JIF peanut butter on Amazon and have it delivered the next two

days.

Absolutely

and you had the choice, because the customer has

the ultimate power, in that case, your priority was I want

that product. I'm not willing to substitute for whatever this

other option is because I don't want to hear from kids again,

and you have that capability. Well guess what? All customers

do. So I think it's ironic how much Walmart Wi Fi is being used

to order stuff on other competitors activity. But the

bottom line is we want what we want and we will look at other

alternatives if it's not there. So I believe OSA will be a

continued focus area, not only for Walmart, but other retailers

as well and the ability to be able to use this what I call

bopis, the buy online pick up in store kind of capability. In

order to be able to do that you have to have a very high degree

of accuracy of what you have and where it's located. So, Jeff,

it's going to be interesting. I'll tell you one thing we have,

we are not lacking enough things to continue to explore working

with suppliers and Walmart in Northwest Arkansas. So I want to

thank you for your time. Appreciate it as always. And I

continue to look forward to work with 8th and Walton as they they

help both suppliers and Walmart win in the future.

Well, we're grateful to be working with you

too, Mike. Thanks for your time.

All right. Take care.