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CPG Supplier Implications with Pete Silvestri
Episode 518th May 2022 • Supply Chain LEAD Podcast • Supply Chain LEAD Podcast
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Pete Silvestri has a discussion with Mike about the CPG Supplier implications of on-shelf availability and out of stocks.  

Pete spent his entire career with Procter & Gamble in both Sales and Operations.  As he finishes his incredible career with P&G in retail operations, Pete spends time with Mike to discuss the CPG supplier implications of OSA including: What role does a CPG supplier like P&G have in delivering OSA to their company?  What are the major causes of Retail OSA issues and what can a CPG supplier do about it? What is the importance of data to deliver alerting for 3rd party coverage?

Transcripts

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

m Florida State University in:

Pete Silvestri 1:45

Thanks, Mike. Great to be here.

Mike Graen 1:47

Man, you and I have worked together for a long, long time at Procter and Gamble. And you are a retail expert. You understand retail, you understand the CPG supplier community. I'm really excited to have you on here because the reality is we've had to had a lot of conversations with retailers and solution providers, we get now an opportunity to understand from one of the biggest companies if not the biggest CPG company out there Procter and Gamble, and you personally, with your years in the service, so I'm really excited to spend some time with you. Before we do get jump into the actual content. I've asked everybody kind of the same question because yes, we are professionals in this industry, but we're also shoppers and we buy things from stores, etc. So looking for any kind of a personal example where you've actually ordered something online and the order was not fulfilled. Tell us about your experience, not as a executive at Procter and Gamble, but a personal consumer consumer of this or shopper of this. What happened? And how did that make you feel?

Pete Silvestri 2:56

Wow. So I am an early adopter, even though I may be a more mature, experienced person in the world and love it. So you know, with that early adoption, there were a couple of things that came to mind where I knew it wasn't designed that way, but it was going to have to improve the one thing that I would think about a really what was the aha moment for me, and especially as it related to my work, which I didn't expect it to was I love to golf. And so one of the things I want to do when I golf is when the weather's nice, or when it's really cold, I want to be able to walk so I was going to order a pushcart or what they call a pushcart. And you just throw your your bag and your stuff in it, you got a bunch of goodies, because you're out there by yourself pushing this cart, you want to be able to have special things and then I researched it. So I did all the customer reviews I did. And I really looked at it and it you know, it's not a cheap proposition. This is not a $10 bottle of Tide. It's a little bit more expensive than that. So once I landed on what I wanted to do, I found a place to order it. So I ordered what I wanted, and I was very excited about getting it and then using it for my my fun time, my golf time. So I ordered a branded golf walking cart. And what was sent to me was a private label of this company's golf cart. So I went back and I looked at my receipts, I'm checking everything because I go gosh, I can make mistakes. And I thought maybe I did make a mistake. Needless to say, I was disappointed. And now I had to do the worst thing that everybody hates to do. It's like now we're gonna have to get on the telephone the old way and talk to customer service and track them down because no one's responding to anything in email, because it asks you robotic questions. So it took a while for me to finally get someone I think we did trade some emails to find out when we could talk. And once I got him they said oh, okay, we'll send you what you ordered and we're gonna charge you for it. So now,

Mike Graen 5:03

But you had already paid already,

Pete Silvestri 5:05

I had already paid and they were gonna, they told me to keep what I keep the one they sent me that I didn't want, and then they were gonna just still charge me not give me a discount for inconvenience. And I just said, You know what? I'm never ordering another product from this company and I don't think I have. Because I'm like, What am I going to do with two golf carts? So I ended up being disappointed, I ended up long term disappointed, because, you know, I didn't need two golf carts. And so that's what happened. So they could have told me but again, it was early on, they could have told me, we thought we had your product when we told you we you ordered it, we did not. So we substituted it. And this is the item that we're going to send you would you want to wait another week until we get it. This is pre COVID too. So they have a little bit better sightline of their supply chain in that economy pre COVID. But they didn't. And so they kind of lost a customer now for forever. You know, so that's, that's the bad experience. And I've had other good experiences. Because like I said, I was an early adopter, I still do it. You know, I find myself shopping that way. Because I I just like, what we'll talk about this frictionless world that we're in where I can figure out what I want, I don't have to figure out where it is. And I can go get it. And I can have it brought to me in hours or in a week. And so I love that about where we are from an economic standpoint, in this frictionless world,

Mike Graen 6:41

but But I heard you say a couple of things here, at least, this is what I heard from you. Number one, you are an avid golfer, everybody who knows you knows you are a avid golfer, you've had a bad experience, and you will never buy from that company again. Guess what, you're also going to go back and tell all of the folks that you golf with or have an interest in golf, the exact same story, which potentially could negatively impact their ability. So one little bad experience by a company and failing to do the right thing or failing to meet that promise, if you will, creates a pretty big issue I heard I heard the other day, somebody said, I never thought about this, and Pete, we'll get into this here in a second. But if I go in, and I'm looking for a product on a shelf, and it's not there, I'm disappointed. And that makes sense. I'm frustrated, I'm disappointed, I gotta go find it somewhere else. If I ordered it online, and then go pick it up, you've taken my money, then I go to get it. I'm not just disappointed. I feel like I've been lied to. You took my money saying you had it, and now you don't. That is a different experience. That's kind of what you're saying right here. And there may be opportunity or somebody goes, I'm just not gonna buy from you guys anymore. I had a really bad experience, and I'm not going back. So that's, that's really interesting. So let's transition a little bit in terms of that. So help us understand from a supplier point of view, P&G is obviously a great big supplier, you sit your entire career with them. This concept of on-shelf availability, why is it important? And when you think about the all the SKUs that you guys cover? Is every SKU important from an on shelf availability or certain SKUs more important than others?

Pete Silvestri 8:30

Well, so let me let me start with, there's a number of things that I can answer this, and they're all sound, they sound really, really easy. They might even sound trite. They're not and so you need to think of what's involved from a organization standpoint, and within those organizations, departments, etc. all built on previous economies that we've we've created. So I don't want to and at any point, I may just stop and say hey, I bet that sounds easy. And you're gonna go yeah it does, well, here's why it's not. But on the OSA front. First of all, you're first, I'll answer that in a second. But the point is, is that we do have key items that are just like, cannot cannot afford to be out on these items. Those are the there are those items. And they're not a ton of percentage of us. But they're the ones that that really from a brand standpoint, establish everything in our shopper or our consumers mind. So yes, we do have those. But let me give you the overall for OSA, OSA hasn't changed. It comes down to this if it's not available for a trip for a traditional shopper, or a picker from an online retailer. It's not available can't sell it. And so it's so important, especially for us, so that that gets into if we can't sell it. What does that do? It backlogs, our entire manufacturing process, our supply chains, our acquisition of materials, everything. So it's critical that the product flows as we expect it, and it's available for for sale to a traditional shopper or to a picker.

Mike Graen:

Okay, awesome and is that, I mean, I know you've had some experience outside the United States and and most of your career has been in the United States, but you haven't you've worked outside the US as well. Is this transferable opportunities outside of the United States? Or is just primarily a US phenomenon?

Pete Silvestri:

Yeah, it really is. And so, you know, it's, it's got some different challenges being international. You know, things like, is it surface shipments, because you're, you're shipping it from one, one point to another across the ocean? Is there time planning, all those things, customs, taxes, those are, those are unique things you need to consider. You still need to have excellent forecasting. And it may be a whole other podcast that just talk International and what really needs to take place there. But you know, where the alignment is between domestic and foreign OSA? You know, if you just think about the journey of what we've been on, this hasn't changed. You know, we had an economy many years ago, Mike, when you and I probably started in the business together was manufacturing economy, we shifted a lot of costs into the system. And then we went into this consumption economy as the internet took off, and data became more available and we could use the data to optimize the supply chain. We optimized it with things like continuous replenishment, which was just in time, you know, and that's where we were trying to match up our raw material acquisition to the finished product. And in that world, it was a bunch of handoffs, so we just hand it off. In both the manufacturing and even in the consumption economy, we just handed things off. Whereas today, I've said this before, you know, what is a friction, frictionless economy? The frictionless economy is one that we have the product available within hours, or a relatively short period of time, for our convenience, to meet our needs quicker to meet our desires quicker and in this economy that we're in now, back to the point of buying a golf pull cart. If our inventory accuracy, and the location of the inventory are not accurate, you're gonna fail. It is it is what we used to call in the CRP world, a death spiral, death spiral in the CRP world was you had bad data, continue to operate with bad data, eventually, you ran yourself out of business, because you're using bad data, the same concept in this frictionless economy, when we're when we're, you know, wanting OSA for traditional shoppers, and for pickers in these fulfillment centers that we used to call retail stores. It's the same thing, if you don't know where the inventory is, by item, by fulfillment center, you're not going to be able to recover from that. And that's what we've been working on. And that gets to the onhand accuracy, which that says, hey, on hand accuracy, oh, that's simple. We'll just do this. Well, it's not. There's a number of factors that involve on hand accuracy, and the OSA, you know, when we looked at what cause what's the root cause of most of the OSA that it landed in three buckets. And you know this, because we've talked it, and we've we've proven it out with data. There's a forecasting issue. Why on hand accuracy, there's a system issue. We're moving inventory around in the system where we we're not really sure where it is. And there are store issues, whether it's labor or process following, but all of those cause OSA. But the on hand accuracy really lands in the first two areas where we have forecasting, or where we have system issues. And it's about 75% of the problem, close to 80. So that's where we need to get better at really knowing not that the inventory is in the system, but where is it in the system? And that's what we'll need to do. And so as we, you know, talk domestic and now you ask the question about international. Well, what I just said goes for both, but in international, there's just a number of other things that you have to consider that really increase your lead times, and the handoffs that you have in the system are much greater and more frequent. That cause a bigger problem. So let's get it solved here. Let's get people's mindsets changed that inventory goes to the final destination for a picker or a traditional shopper. And that's what we need to understand. Not that it's somewhere, that it's where it is.

Mike Graen:

Yeah

Pete Silvestri:

Sorry, I went a little rant there. But you know me, I never do that.

Mike Graen:

No, but I think it's extremely helpful. Because you and I have been in this industry a long time. It used to be that retailers just got frustrated, because, hey, I've ordered product from you and you didn't deliver it to me when I expected i.e. on time. And you didn't order you didn't deliver what I expected, which is the right items and the right assortment, etc. What I heard you just say, is a supplier like P&G used to be thinking about I just am responsible for that first handoff to the retailer, and then I'm done. My work's done. But what I'm hearing you saying now is we actually own the all the way till it gets onto the shelf, talk about that transition. That's a huge mindset for most of the suppliers out there saying, No, I don't just own delivery into a distribution center. I own it until all the way till it gets on the shelf so a customer or somebody who is picking can order it. Respond to that, because that's a huge trans, transformation.

Pete Silvestri:

Yeah, so again, I'm going to share things that you're gonna go boy, that's obvious. That's simple. That's true. But the thing is, is that we're talking about organizations, people, systems. And so all these need to change cause they've all been built in a consumption economy or a manufacturing economy. And the requirement today in a frictionless economy is no one cares about that. We just want it and we want it now. We don't want to have to look for it. So the big move has been this, I call it from the back door to the floor, I like to get something that maybe is a little bit sticky, so people can understand it before they dig into it. What I mean, we used to say, our job is done once the truck arrives at the distribution center for a retailer.

Mike Graen:

Right

Pete Silvestri:

And then allow the distribution center to run that inventory where we thought it was going to go. Now, here's the difference. In a continuous replenishment world, what we do is we look at by store by item to build orders, and we build those orders and we add them all up to a DC. So we know that store one needs to get 10 of these, store two gets 20, etc, etc. So we build that order, we deliver it to DC and our assumption is that's the way it's it's going to flow. And that's where organizations, people, business dynamics come into play, doesn't work that way. So what we think is where it is, is not where it is. So again, we need to know, where's the inventory? How much is the inventory? And know it accurately. That's what we needed to have in our hands and ready to go. So it's really, you know, thinking about it, it's the mindset change from the back door, no, no, no, I will always all the way to the selling floor, I want to know where this is. You know, we can't just hope that inventory makes it because that's how we operate in the past, not today. You know, I'll add this, like COVID, many things happened in COVID. COVID changed the landscape in many different ways. And I'm not here to say it was good or bad. It's just what happened. And you and I coming from 40 years of experience in this business, we know there's change that's gonna happen and you you adapt or you adopt, or you get out. But it really exposed the differences between the past economy, you know, like we had inventory that was constrained, we have transportation that was constrained, we had labor, that was constrained. So in order to keep the business going, because at the end of the day, no one cares whether we had a COVID issue or not, they still want productivity. That's why you're in business and you're up for the challenge, that's why you're in the business. So what we needed to do is really make a change with with our partners, fulfillment centers, our partners with third parties, and create a partnership where we could figure out where were the highest need areas so we could deploy transportation that we can deploy labor that most importantly, we can deploy inventory. And so we had to create these partnerships. And that's one of the things that happened. COVID exposed the issue, which was we weren't all working together. But what COVID did is force us to all work together because we all had the same end in mind, which is we wanted to continue to grow our businesses and deliver for consumers. So we did that. And it wouldn't have been possible unless we really took on this like Hey, it's from the back door of the DC to the fulfillment center floor. And when we did that our on shelf availability for the traditional shopper and for that picker went up, it improved. Unbelievable. Everybody rowing in the same direction. And there was there was a, you know that it was wonderful. And so you know you think, Okay, we got that. Now the other thing that happened is like in this frictionless world, and I mentioned I want it now and I want it all, quickly. You know, if you think about what I'm saying is from the back door to the floor, we need to know by item where everything is and it's accurate. In the consumption world, you know, what people found out, and I talked it earlier, with my experience with adoption of online is, I never needed to figure out like, what store to go to, I never figure out like, which store can I count on? Where will the inventory be? You know, the consumption economy, you know, we would buy new, you wouldn't fix things. But in this frictionless world, what I want to be able to do is just give me a chance to just get online and say, hey, I want this item. And it tells me where it is and it's anywhere in the globe, like that when I was ordering the golf cart, I didn't care whether it came from my zip code, or it came from some international place. I didn't care, I just wanted it. I ordered something just as recently as Sunday, and it came from Dubai. And so my only thinking was, hey, I've never had anything shipped from Dubai that I knew about. So this will be fun. It was a it's a it's a fly fan. It's not called that. But we have a pool. And so we like to take you know chips and dips outside and you know flies where we live, show up like seagulls as soon as we cut a fish, here comes a seagull, same thing with flies. So we have this this new contraption that we'll see if it just shoo flies, to keep the flies away from the food. So we're not putting bowls over and all these other. Okay, I digress, I'm sorry, you know, I can, I can do that. But ya no, it's just for the back door to the floor. Huge concept meaning, people are gonna have to take on new responsibilities, new partnerships, and they're gonna have to change processes. And we saw that.

Mike Graen:

So you have led that trans, transformation within the retail for P&G, and again, not just not just for one customer, but number of customers. So if you're going to own it beyond when you do the first delivery, and if you're going to own playing a role in on shelf availability, what exactly is that supplier role look like? What what is it? Is it people? Is it third party resources? Is it technology? Is it data? I mean exactly how do you figure out because P&G has a lot of items, and they have a lot of customers that seems really, really complicated. What exactly, and don't give any specific information, which would be which be confidential. But how do you think that helped help somebody who's brand new going, my company is moving from first point of delivery is all we need to do to now I have to own on shelf availability? Where do I even start?

Pete Silvestri:

Yeah, so I hear a couple of things. And I saw how you keep me honest, so I do not go on another rant. Because I am very passionate about this. It's just, it's, it's crazy that what I see and how we haven't made the moves faster. But let me start from one area because I can talk about what our responsibilities are and all that. But we've talked kind of the vision, you know, back door to the floor and what that means. But in order for anything to really take in order for, you know, organizations, or companies or people to make changes, you really need to have some metrics that everybody can align on. And so we started out with some metrics. And I'll give you the background on each one of them. So on shelf availability. Like this is a standard measure, I'm sure, at most fulfillment center retailers, as well as CPGs 95% on shelf availability. We can debate through through data later whether that's the right number, or it should be higher. But that's built on just a 5% error rate.

Mike Graen:

So let me introduce let me interrupt you just a second. On shelf availability means your product is on the shelf at that particular store. How do you measure that? I mean, I don't even know how you go about measuring whether your products actually on the store or on the shelf or not.

Pete Silvestri:

So there are a couple of ways to do it. There's the old fashioned way, which is an audit, an audit goes at some point in time. I like to be a smart aleck and say when it's convenient for the auditor to walk into a store, and tell us, hey, this is what we saw, and and you use a sample set of stores, which then is not much help with, Hey, good to know that the weather today is rainy, I can walk outside and see that you're telling me I'm at 90% OSA on this item. How do I fix that? So that was that was the key thing. A measure that still use today, it's the best possible point in time on it. But not very actionable. What we have done is leverage leverage data, I'll use the word AI, because eventually it all ends up into some type of AI. Because you're going to you're going to create an action behind it. But we use a calculated on shelf availability, does a couple of different things from that, and I was going to talk some of those measures because this is kind of tying into it. So we calculate by item by store of a frequency, which is better than anything we ever had with data that's 24 hours old. Some data's 24 hours old. Other data starts at 48. And that's still best available, we would like to get better. But I'll digress for one second, I talked about companies with different departments, organizations that built their systems in a manufacturing or consumption economy. So why is the data different if point of sale data is point of sale data, okay, that's what we get 24 hours old, because that's how they can deliver it to us because of the size of the data. So we get yesterday's data on that item, at the point of sale in the register. The inventory information can be 48 hours old or more, because that's an independent system that needs to be connected to a POS system. They're not all connected, they have to do some you know old days called batching, they ought to overnight batch because they don't have a lot of data, they have to start connecting these pipes. So the data is not as fresh. Okay, I said I digress. Here's the point. Today, what we use is an is a calculated OSA metric, which gives us really, really good direction on where are you know, what is the on shelf availability? We also now use a alert system. So what is the alert system? There's a sales anomaly of some sort. The sales anomaly tells us we need to send somebody in to to investigate and find out. Why is this not selling? So we use that as well when we tie those together. Well, so anyway, that's where we got to the root causes that I talked about system, forecasting, store, whatever the correction is. We also know that when we go in and do something, either the store, the system, or the third party has made some intervention, because we record it, we can see recovered sales. So if we have our volume declining, declining, ah alert, go find out what's going on something's not right. We now know we went in, we reported what was what we did, or what happened, what we found, we can now see the sales recover to the normal level. So that dip is gone. That's real business. At the same time, we can see from our alerts, our OSA and recovered sales, how they're all interrelated, it's amazing like the products there, if you can sell it, so your sales, go up your OSA goes up and all people are happy. So that does happen. And so that's just a general overview of of kind of how we're using it. You know where we went. Now, here's another thing that we do like so I talk about metrics. We want to match labor and inventory. That's the key thing. And so I prefer if some way our alerts can come from the retailers and using their systems because we get faster data. And it's more actionable. And it's we're able to prove ROIs on this model versus the audit model of collecting data or proof of performance studies that displays up or try to do an installation on something. But matching labor with inventory is a key thing with our alerts, what we try to do is get about 80% We still get 99% coverage with most of our third parties when we want them to be somewhere. But if we get to 80% that's, that's, that's a nice area to be why? Because we know 75% of the problem is something else. But 25% of it usually has a store labor process or they are you know they're out of labor or whatever. So if we get to that 80, we're able to cover the part that really needs help. So we're that's why we try to go 80 there. And then we also asked for sales anomalies at 70%. Why is that so? Well, because it's just been very, very hard to get the data coming from multiple places on multiple times, basically different data cubes, to all sync together, so that we can get, you know, accurate alerts to be able to send people. So we've gotten to 70%, we can get higher, and we will, but that's where it's realistic. Because if you, if you put the if you put the number at where it should be 95% accurate, you're gonna have people disappointed, they're not going to be motivated. So if you have a glide path that says, wanna be 70 this year, 80 next year, 90, something to that effect and allow change to happen. That will, that will keep everybody engaged. And we'll get there. And by the way, I'll take 50%. Why. Because in the old model, pre COVID, what we did was what I love to refer to as the three W's, we would send people in to walk in and walk around and walk out, discover stuff, they had no idea if there was anything really going to happen in that store. Versus if we had accuracy of alerts of 50% 50% of the time we're sending somebody to somewhere where there's, they need to help. So that's not a bad deal. So we're not really I'm not really ashamed of saying 70% I'm really kind of happy. And we're gonna get to where we need to get to. And then the final thing is back to 95, you're gonna get to 95, if you stay focused on three areas of root cause, and that is the system, the fulfillment center, which is the store, labor, and your forecasting. How are they all tied together and the forecasting, the on hand accuracy where the inventory is, is critically important when you move from the back door to the floor. I know I just said a lot. I felt like I got in another rant. But you asked a huge question. There's so many ways I could go. There are some things that I probably need to connect on. But I'll stop here before I talk about suppliers. And you know, what, what, what else can they do that I didn't cover? I think that was one of your other questions in there?

Mike Graen:

Well I'm gonna I'm gonna, I'm gonna do a little bit of a shift here, because you just laid out a strategy that says two things. Number one, I just don't own delivering product or DC I own it until it gets to the shelf. That's a huge perspective. The second is you just talked about a bunch of investments that CPG companies should be making to make sure it's on the products on the shelf data, algorithms, KPIs or being able to measure on shelf availability, to be able to see alerts, potentially spending money on on resources to go in and fix the work, measuring the results and all that kind of stuff. Let me and I fully support everything you're saying. But let me say let me ask you a question, which a lot of people would ask who's probably listened to this? Yeah but Pete aren't you doing the retailer's job for him? Isn't it their job to put it on the shelf? Why are you investing all of this money? That's their job, isn't it? And I'm 100% aligned to where you are. But you know, give us a reaction to that, because I'm sure people are out there going. That sounds like an awful lot of work to make sure it's on the shelf. That's not your job. That's really the retailer's job react to that.

Pete Silvestri:

Yeah. So I mean, the simple answer is, yes. Here's what I'm, here's what I know is in the manufacturing and consumption economy, we did a lot of throw it over the wall, it's in your court. And then we hoped things happened. And then we built our forecasts to include all the way back upstream to buy raw materials to invest in plants, which is what we do as manufacturers, that we were hoping that they they got to where they needed to. And as I said, with COVID, it, it exposed a lot of things, but it also created this need to have a partnership. And the reality is, is that we ultimately want to sell our product and delight our consumer, with our product. And today, the way we do it is through these different distribution channels. So we need to move all the way to the end of the, the supply chain with that. And so there's so many different things that play out in that, but like it, Mike it's back to the future. Like don't, don't think about this, you know, like, in any other way. Everything's pretty simple, but we make it more complex. We also think we're going to drive cost out of the system in the wrong areas. So we focus on the wrong stuff. Like, let's let's spend thousands of dollars on stuff to go into a store that maybe not be the same impact in a frictionless economy as it was in a consumption economy. And we want it stalled or we want it put off or whatever. But the reality is back to the future is this, self serve is really what Walmart was known for, self serve retailing. And we've moved back to where you, this is before you and I, probably our moms even, they would write down what they want. They went to the general store and handed it to the storekeeper to say, here are the products I want, and they picked it and they brought it to them. That's where we are today.

Mike Graen:

Right

Pete Silvestri:

With with with an app. And so, you know, that's why it goes back to the future. I mean, that's where we are. And then back to your point, are we doing the customer's job? Yes, we are. But guess what, when I started in this company, I went from really cool kid, to you're gonna go work in a grocery store again, and you're going to work in the backroom, you're going to find the product, you're going to dig around with a tie and a white pinpoint oxford shirt to get it out on the shelf to build a display and like we owned those stores. To the point if we had management that happened to be coming through I was in Florida. So guess what, I got a lot of management that walk in my stores, I would I would get notes because back then we had no other way to communicate other than the phone, I would get a note I was in your store. Very rarely I get a note like I was in your store and it looked great, You're unbelievable. It was usually they found something. I remember getting one note from a executive from P&G, and took the time read the note, good note. Grammatically correct, didn't write and read. I was glad. Wrong store wasn't my store. It was somebody elses store. Okay, so anyway, P&G are consumer product companies. They invested in having people that were in the store to take care of their products at the last week on the first moment of truth at the last point, making sure everything was there. And so I think we're back to that. Now. The key thing is, is that while we go back there, I want to work on payouts. And so we know alerts pay out, because we're sending someone in with a you know 70% accuracy, to fix something that's going to improve recovered sales. So we know that it's going to improve OSA. So yeah, we are and I don't want to be ashamed of it. Because guess what, when we threw it across the wall to them and let them manage it, they they did a good job, but not like we would want to do so the partnership is, has paid out.

Mike Graen:

That's awesome. Awesome. Well, Pete, we're going to need to wrap this up, because we're kind of at time, but I guess a couple things. And you'll probably tell me later that I shouldn't have done this, but I'm gonna do it. You and I have known each other for 15 or 20 years, you spent the last 40 years with P&G focusing on really the whole operations, functions, etc. to our audience P is about to announce and has announced his retirement from Procter and Gamble. Actually, by the time this actually plays, he will probably be on some golf course in Florida at some point in time, not even worried about any of the stuff that he just talked about. But on behalf of the of the of the retail supply chain, we just appreciate your leadership, you have been an industry leader to help us figure out and think through these things. I've enjoyed working with you, you've made a huge, huge difference. And I'm just proud of the work that you've done. And I just appreciate all of the work that you did. But I do have one question for you before I leave, which is leave us with some parting words, what did we not talk about? That's really on your mind that if you were going to be with P&G for 20 more years would be kind of your focus area, because part of the value of bringing folks like you on who've been doing this for so long, and been so successful, is leaving a legacy for those people who are coming behind us. What did I not ask you that I probably should have?

Pete Silvestri:

I don't know you've you've covered a lot. I think we've probably left a lot on the table. But I mean, if you really want to think about what do we need to do in the future. It boils down to three things in my mind. And this may be over the next three years. So I mean, the first thing is, is that whatever the customer experiences, we started off with a bad customer experience. While I have many, many good ones, we need to think about the customer experience and that needs and that's part of any of our fulfillment center retailers, that is really part of what they want to accomplish. And I don't care how they word it. They want to make sure that their consumer has the best possible experience. So I think number one, think about that, in this world of operations going forward. Number two, we have to get we talked back to the back door to the floor I've tried to show you or talk to you about how difficult that is. I think we need to make sure our visibility of by on and by fulfillment center is really, really crystal clear and when we do that our customer experience scores are gonna go up. When we do that our optimization of the supply chain is going to go up. When we do that people are going to be in stock, and they're going to sell more product, and they're going to make money. And then finally, for all of my CPG friends, including my company, you know, we gotta join the consumption economy. And we have to put everything we have online available online. Because we don't do that we're not committed to that. And I think those three things are really going to set the table for many, many years to come, because I don't see the consumption economy you know at least in my lifetime, making another change because we are back to the future. And so history is repeating itself, and we can just do a better job with that. So, you know, own the OSA process, for your company, for your for you. That's critical, because if it ain't there, it can't sell it.

Mike Graen:

Great perspective. Well, Pete, on behalf of the entire audience, I personally thank you for the 20 years you and I have worked together, it's been incredible. I look forward to continuing to engage with you on opportunities in the future. I know your company thanks you for all the hard work and dedication you've done. And frankly, I think the industry thanks you because you've you've made an indelible mark to stop thinking about this thing is I just own it until I ship it to a DC to out and all the way until it gets to the store shelf. So your leadership has been impeccable. And I just appreciate you taking time out of your busy schedule to spend some time with us today.

Pete Silvestri:

Thanks, Mike. I'm humbled by your request but really passionate about it. So thank you very much and thanks for the recognition of these many years of work. We'll see what happens in the next chapter

Mike Graen:

Take care.

Pete Silvestri:

Alright, see ya.

Donnie Williams:

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

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