Host Mike Graen sits down with Glenn Richey from Auburn University about supply chian implications to on-shelf availability. In this part 2 episode, Mike and Glenn discuss topics including:

• Supply chain visibility and data-sharing.
• Setting measurable goals.
• Potentail disruptions from regulation.

Well, so. So in some respects we are, we're at least

more aware of them that we do what we need to do the work is

probably not finished yet.

Yeah, yeah. And I think I think some of the move

towards domestic manufacturing and the United States has

helped; you know, we have we've seen some growth, you know, I,

I'd rather see more of the physical buildings than the

numbers that are reported by the media. But, but but the idea is

there, whether you're talking about pharmaceuticals or chips,

or what have you, the intention to make sure that there's a

guaranteed source of supply, somewhere nearby is is very

important. So I don't feel like we're, I feel like we're better.

But I know, we still have a lot of issues.

So what product - this is a broad question - but

what product categories are we most at risk that we import,

either from China or Latin America, or Europe, etc, versus

what we have control over here, just here in the US?

Yeah, I think that's, that's a good question.

I mean, I think that when you think about high tech that we

don't produce, we're at risk, they are component parts, those

types of things that go into high tech, especially with

maintenance. When we think about the supply chain, and, and

trucks and that type of thing, those things fit into that

category as well, right, the sensors and all of that stuff.

So so that's a, that's a pretty important issue, I think

something that we definitely need to be concerned about. The

food supply chains come from all over the place, depending on the

year. And we've seen some fluctuations with that, even out

of Ukraine with the issues they've had there. Now, a number

of our Latin American suppliers don't have the fertilizers that

they usually would buy, which is always an interesting phone call

to get when you're a professor, and they're asking you Do you

know where we can get a fill in for our furniture, or for our

fertilizer supplier? You look at the Ukraine and you go well, I

can theoretically tell you something. But that's kind of a

specialty area. So I think that the food supply chain is also

not that it's completely in trouble. But But I do think it's

at risk. But we tried to do things to make make those things

resilient. Those are two that come to mind. Obviously,

Pharmaceuticals is one that's been on the tongues of a lot of

people because of the amount of manufacturing that happens,

happens in Asia. So those are those are, you know, major areas

that make me think we should be concerned about that. But you

know, we could also have a hurricane in the Gulf of Mexico,

and customers could buy up all the toilet paper tomorrow.

Well, I think those are a couple of areas you're

late, you're talking about, it's not necessarily an on shelf

availability issue. But I know the area that I spent a lot of

time for the last 20 years is RFID and RFID for

pharmaceuticals and RFID for food is an explosion.It is

absolutely growing, because people want to know exactly for

number one, I need to know exactly what I have and

where's it located in real time to the degree I can; number two,

I've got to have things to put safety measures in to make sure

hey, is this product always been in coaching and compliance? Or

did you get above a certain level? Or is this really a a

manufactured pharmaceutical? Or is it a product rip off? Or I

don't know if dedication issue. So how do you do that? Part of

the way you do that, as you get down below the UPC level, you

get to a serialized information to say, these are all unique

ones, that Merrick bill, I don't know who else is saying this.

But if it's not these serial numbers, it's not legitimate

product. And that's, that's a big part of what Pharmaceuticals

is trying to do. And RFID is actually playing a pretty poor

role to make sure that they authenticate that. Absolutely.

So let's let's let's flip a little bit because I, again, you

You and I have probably been in this business about the same

amount of time. But what I have seen is we are really good at

sharing data within the companies, right? So if I'm a

raw material supplier, let's just take, I don't know, let's

just take diapers or paper towels that you use your home.

There's a set of raw material suppliers who are cutting down

trees, I'm sure I just made a whole bunch of people mad Yeah,

we cut down trees to make paper, right? They got their systems

really, really well that knows what they've cut down and where

it isn't cetera. Then there's this big wall. And then we've

got suppliers, like Procter and Gamble, who take that raw

material and actually turn it into a diaper or paper towel.

They've got their systems that track things inside their walls

pretty well. And then you got retailers like a Walmart who've

got good systems that are against their retail but we got

these big buckets. Were outside these companies. We don't do a

really good job of sharing certainly systemically. Now,

people say, Well, yeah, we do purchase orders and invoices.

And that's all electronic data. And that Yeah, but that's,

that's transactional. I'm talking about really sharing

data. What's your vision of what the data sharing needs look

like? Where how far we've come? And what are the opportunities?

Do you think that will help some of the supply chain visibility

we need for the future?

Yeah, that's a great question. And it's an area

that we've been looking at here and our our research team at

Auburn for, for some time, I mean, this thing started,

probably 12, 13 years ago, talking about big data around

the world and seeing how these people were they sharing what's

the interconnection? And, and we were, you know, I wouldn't say

flabbergasted, but surprised in a number of areas, you know, you

would talk to us executives, they would say we share

everything, which you know, is not true, we talk to Chinese

executives, and they would say we get nothing but you also know

it's not true. You know, we talked to a Turkish executive,

who says we don't share our data with our strategic business

units, because we're afraid one of them might get bought by a

competitor. And then we would lose that data, you asked on one

side, it's this, this bridge for complete transparency on

everything. And on maybe on the other side, it's, we're afraid

of regulation. And so let's be very careful as to what we share

at all. I mean, I think that the unfortunate thing with this

blockchain technology, which has been, you know, has a lot of a

really positive benefits still has a ways to go before it can

be used appropriately, you know, past has shown that we're not as

comfortable as we think we are with sharing a lot of data. And,

you know, for me, when I look at the blockchain tech related to

what's on the shelf in the store, I mean, that is a great

opportunity to to be able to see transparently through what's

going on, you can look and trace, not only visually see

where it is, but you can trace where it's been. And so

combining RFID with the blockchain is is would be

brilliant, right? It would get us a lot of opportunities, but

there is fear. And it's legitimate fear that, you know,

your data could be viewed by someone that could use it

against you. And I think, you know, major players get

concerned that maybe it's not that, you know, supplier that

that you've worked with all these years, or even the new

supplier that you've worked with, for a couple of months,

but it's their suppliers. And are there suppliers, looking in

to see what's going on with your information? And who else are

they connected with? Right, so, so I think there's some reason

for concern there. And I mean, I think there's also backdoor

security issues, right? Can we get him through the block. But

ultimately, if you can't get all of this stuff, digitally

digitalized, and you can't get it into some accessible format,

then the dreams of AI that we're talking about today, will never

come true, right? Because without the data in an

actionable form, then the AI technology is, you know, telling

telling you silly things like, at one point, I looked up my

name and AI last year, and it said I was an expert in dance

sport when she could Intel. I'm not a big dance sport person,

but ...

I would think dancing and goalie it's the

same, it's the same thing. I mean, you're watching the ball

go around the field, and you just kind of doing a little

dance and you only get excited when it's coming your way.

Yeah, yeah, that's right. That's right. Yeah,

you're down there doing handstands until ... now the

night yeah, I think that's it's it's an interesting world we

live in but but the problems make it make it fun in our

Well, now I'm gonna put you on the spot, because I

business.

don't know how actively you were involved. But Auburn University

and please everybody in a phone, please do not call this the

University of Auburn. I know that, hey, I that drives me nuts

when people say that. Auburn University and specifically the

Auburn RFID lab. And I was involved with this study, I

thought it was a fascinating study. But they saw it, I want

to say it was 2018. They did this project called the chain

integration pilots. And the idea was, if we really shared data

from raw material all the way to the shopper, that's the supply

chain flow, but we share that data backwards, what the cost

opportunities would be from a better in stock and better on

shelf availability and reduce it and claims and product

authentication, and then all that kind of good stuff. And we

really got charged up to go Yeah, we got to figure out how

to do this and there was blockchain components and there

was only one you've heard of EPCIS, which is how do you share

serialized data across a blockchain? I'm gonna be real

transparent. I have not heard any progress that we've made as

an industry towards that vision of ultimately sharing that data

across a supply chain. Why? It seems like a lot magical number

one, serialized data, which I think is the future, in sharing

this data across the supply chain. And whether it's

blockchain or EPS, I don't care about the technology. I really

don't. But we haven't broken that, I've not seen anybody

break that cycle. And I don't know what what it's going to

take to do that. What are your thoughts on that? Because that's

the data share.

The place where, of course, I see I see a lot of

this research blockchains, an area where in the supply chain

arena, I run one of the top logistics journals in the world.

So this stuff comes in to me, and I have to, I have to read

through it. I got a bunch of them to look at later on today.

But when I when I see the blockchain in place, I see it

being used kind of throughout Europe, within companies, like

you talked about, really, yes, we're vertical. Yeah, yeah.

What I call the Nike model where they manufacture

distributed and sell it at retail, but it's easier to do,

because you've got a single organization. Right?

Right. You see that a little bit, you see that

with some of the military operations, maybe that have

suppliers that they really have control over, right, and so

they're I tightly connected. But until you've got that, that web

opened up, you lose that governance component, which is

the thing that, that also adds a lot of value, I mean, that

transparency, vision is great. But also being in a position

where you don't have to audit these things as often they get

automatically audited by other partners, those, those are the

kinds of things that that I think are being missed out on.

And, you know, you've mentioned earlier in our discussion you've

mentioned, you know, working with EDI, and and these things,

and we're gonna, what's sad is, we always seem to come to that

that same point where this company has this tech, this

Has, since Auburn RFID lab kind of sponsored that

company has that tech, they're similar, or they're even off the

shelf the same, but they've adjusted them, and we can't get

the data to combine. And it doesn't matter if it's the age

old EDI stuff that we're sending through a dummy computer, or

this high tech stuff that we're trying to do today. So that kind

of the integration of the tech is still a big issue. And then

the risk and fear, you know, of what your partners might do

those supply chain relationships still really lead the way in the

adoption of all of these different texts and the

implementation of the machine set.

work, that chip project, has the supply chain organization at

Auburn actually done taking that to the next level or is it was

really just a pretty really cool piece of work, we'll put a bow

on that put it on the shelf. And so I'm not trying to be cynical,

but we haven't doesn't seem like we've moved the needle in terms

of actually doing any of that work. And I'm I'd really like to

see that happen. I'd actually like to volunteer my time to

help that happen. Because I think it's a critical part of

the next level level of integration.

Well, that's something we should talk about

for sure. Because I think it's definitely an important area.

They've done some other projects over there, like Project zipper,

you look at at similar type issues. And yeah, it just seems

to always come down to those relationships between companies,

which is an area that I work, but also the technical

interconnections. Yeah, like I said, it's frustrating, because

it's the same problem. It, you know, shows up and you go alive

to seen this before. Up, right.

Yeah. And I'm gonna, I'm gonna dismiss the tech part

Yes, yeah. That definitely changed the way we look at data

of that. Because yeah, there are technical challenges to that.

But let me give you an example. When we talk about RFID; RFID,

on a pair of jeans is pretty straightforward. RFID, because

of the water and the content are really difficult on bottles of

antifreeze and bottles of, you know, insect repellent, etc. But

when big retailers like WalMart said, No, we're gonna go this

way. There's a lot of creative people that figured out how to

do put tags on that and be very successful. So I think the tech,

if we can get the business to drive this as a direction, the

tech folks will figure out how to make this work as though this

is not, we can put a man in the middle, we can figure out how to

share data. I agree. There's two issues. Number one, there's not

a driving force. So why to do that today. Oh, we've got our

own data. We're good. Number two, and this is a little bit of

a sensitive topic. But But retailers specifically have gone

from, hey, we're gonna make all this data free of available,

take it and do whatever you want to Oh, no, wait, and we're gonna

monetize that we're gonna charge for it. Because it's a way of

generating revenue to offset some of other costs, well, now

becomes a cost of doing business. And then you got to

decide whether I'd invest in that or not. That's a that's a

difficult thing that makes it more difficult

too.

So, I'm gonna switch gears to a couple of things. The first is

just your focus area. You've mentioned you've got you know,

some things that you're working on. Obviously, this this work

that you're doing is from Africa, etc. What are your

current focus areas as an expert in the supply chain right now?

years now all through different types that

type of thing. More into the implementation area than than -

and that's, that's been, I guess a big thing over the course of

the back half of my career is attention to doing over over

saying, you know, I was having a conversation with a number of

researchers that look into supply chain sustainability.

And, you know, I, I like to remind them, we, you know, we

kind of know, we need to do this, it's always better to do

things cleaner, if we can, you can take the political position

that you want. But we probably talked enough about that, we

need to do it. And it's probably time to talk about how, and so I

just took a group of executives to to South Africa, on this

trip, and one of the places we went really, you know, amazing

business that does, recycling across the board. And so they

have a food facility that does food recycling, that does 100%,

and zero landfill, which is amazing. But the way they do it

is they use manual labor. So if you can picture some people down

there, pulling napkins out of food, it's something that would

be very difficult to do in Western Europe or the United

States. But they got to see kind of the how, right, and they

tried to recycle hospital gowns, and you name it, anything

brought into the facility. And and that how part is what we

need to know more about. And of course we did, we'd have the

same thing in the technological realm, where you know, the CEO,

or the or one of the vice presidents runs out and buys the

tech, and none of the employees are ready to use it or even

willing to implement it. And I was one of those executives that

did something like that. So I'm a bit sensitive to those issues.

So, so focusing on the implementation of technology,

sustainability, that type of stuff, but also this move the

strategic mindset, to move away from optimization all the time,

and try to think categorically about how you can build a more

resilient supply chain. And I believe Mike, the way you do

that, one is structurally, right. So being able to look at

the structure, figure out how you change that structure, and

adapt it to use a specific word, so that it's healthier, right,

it's more resilient. Another thing is that processes, right,

we have all these processes in the facility, there different

ways we can handle product, we can areas, we can put it in

store. And over that type of thing, relationships and our

contracts, we can be more flexible in that area. And look

for areas to be flexible. With policy and with processes,

right. So you think about structure policy process. And

then in the supply chain business, as well as the retail

business, we know even when we have all of those things in

line, something's going to screw up. So you got to be ready to

improvise, just like the old jazz artists to be ready to do

something on the fly that you know, helps you save the sale

or, or opens up an opportunity for you or defends against one

of those disruptions. The point is to try to limit those right

as those happen, identify them and try to make them something

that's part of the structure, the process, or the policy. And

I think in business, people will will turn and think in that

direction, that the optimization will come afterwards, right. And

the optimization works within those categories. So I've been

preaching this, I've been talking about this. And I'd like

to be doing more transformative work in the area of nearshoring.

But it's taken us a long time to get the nearshoring going. So

yeah, I'll continue to preach and press and hope that there

will be more movement in that area.

Fascinating. You know, you can use some of your

sport, work in the industry had, what I found is when people get

really elaborate and have these big grandiose plans, you almost

gotta get it back to: what are you trying to get done? Right,

and they were another five minute dissertation about what

they want to get done, and you got no offense, I don't

understand what you're talking about. I said, if I'm a football

coach, in the college arena, I have a goal. I want to be

national champions. I want to win my division. I mean,

whatever those goals are, they are clear, there are measurable,

whether they are obtainable that's a whole different beast.

But to me, if you throw out a goal that doesn't have a number

to support it to track to see if I was up against that. We're

just talking about stuff. And from my perspective, you know,

you you growing up in sports, and being invovled in all the

sports, there's a lot of parallels to the business world.

Because when somebody goes, I really want to do this and well,

you know, what does that look like? I want to improve 5%. And

I said, Okay, is that enough? Well, what do you mean? Because

I believe a number by itself is meaningless unless you compare

it to something they go What do you mean? 5% I go, what's your

competition growing in that area? Yeah, I don't know. Let me

get back to you. They're growing 20% Then is 5% enough? No,

probably not. Okay, so right. So it's like, give me a meaningful

number that I can go after. And then to your point about, you

know, we have to have flexibility; flexibility to me

again, I hate to use a football analogy, I gotta play, I'm gonna

run to score a touchdown, every single play is designed to score

a touchdown, you can talk to any coach. But there's these things

where you lined up and you're about to hike the ball, it's

called a audible, this play is not going to work, given the

defense, we've been saying, we are going to call it audible,

that we're going to run a little bit different variation of that,

because we think it'll be more successful. I don't think we

have those in the supply chain. I really, I don't think we

necessarily measure things I don't think we have. I have a I

have in my mind at the retail shelf. Somebody says, What's

your goal for on shelf availability, and I said, 98%.

Now, why not 100? I said, because you can't afford 100%

The amount of money it would take to be 100% on the shelf you

couldn't afford. Right. So I think that's the future. And I

think then I think a lot of this data sharing comes out of that,

which is well, we can't do that unless we share data, there's no

way we can get there by just worrying working in our own

little silo. So I'm gonna, I'm gonna let you react to that. And

then just ask you, for one more follow up question after that.

Go ahead.

I mean, I'm totally with you. I like the

audible example. I mean, we call it adjustment theory. Right? So

that's what that's what we're doing from our sources.

Got it, it's got to have the word theory in it.

You know, I had to say that at least once to turn

it. But no, I mean, they had this whole thing about

responsiveness. What I just said fits into exactly what you're

saying. And so, you know, people that have gone through business

school and and dealt with Porter's Five Forces and SWOT

analyses and these types of type thing, it's just trying to take

a step back and look at the full network and make decisions

around those items. The other thing you said, though, was

about measurement to not the, you know, the old cliche about

what gets measured gets done is absolutely true. In this field,

top to bottom. The problem is, is we really still don't have

good metrics. I mean, people can wave the score model around and

you can go, How many is that 102 variables or something like

that. And I was talking with a major parcel delivery company

from overseas a couple of weeks ago. And I think they said they

have four different dashboards they're looking at right now.

And he basically turns to the monitors off in the morning when

he comes into the office, because those are dashboards

that headquarters says they need to use that they don't use in

the operation. So one day, someday, maybe the two of us

will come up with million dollar outcome variable, which is

really what we what we need to know, right? Something that's to

each stage in the supply chain, and they all have to live up to,

but we still haven't got there, maybe maybe some of the use of

generative AI. And those algorithms talking to each other

will be able to define what the most important variables are,

right what the least important variables are. And we can trim

those things down. I mean, I think all of our books on

forecasting and and these types of analyses, say, seven to 12

variables is probably what you need. So if that's the number,

I'm not sure what we're going to do with 102, right, so read the

data, get to the bottom on that eventually in this field and

partnership with industry, to make sure we know what those

variables are. And of course, you've got retailers out there

that would say, Well, I'm in this business. So my variables

are different than theirs. And that's absolutely true as well.

You know, not to go full circle on this, but I

can't, I can't resist, I get a chance based upon all the

different retailers I work with, I'm not going to name them by

name, because all I'll probably get in trouble for it. But my

first question to them is exactly the question I said,

which is, is on shelf availability important to you?

And your customers? Will? Absolutely and they'll give me

the 15 reasons why. And then my follow up question is, what is

your on shelf availability? In 90% of the time, Glenn, what

they'll answer is 'well are in stock is 98.2%.' And in all due

respect, I didn't ask you that your in-stock was I asked you

what your on shelf availability is? It's the same thing. No,

it's not the same thing. Just because you have five cases in

the back, you're in stock, but you're not on shelf. So let me

ask you another question. All right, well, so what is your on

shelf availability? We don't know. Well, don't you think if

it's important to customers that'd be something you'd

measure? And they go, Okay, well, we'll measure that. Okay.

How are you going to measure it? Well, we don't know. I mean,

it's, it's fascinating, because I used to ask a bunch of

questions. And well, how would you do it? And then I kind of

walk them briefly through how I would do it. Yeah, we want to do

that. We want to definitely want to do that, because they realize

that is an important metric and then want to figure out how to

do that. Anyway, I digress. So we have had a great

conversation. I really do appreciate it. I have one follow

up question for you. And I love to ask this one because you know

Never know where it's gonna go. But what did I not ask you that

I should have what's hot on your mind that's like, oh, man, I

really wanted to talk about this. But I didn't get a chance

and the questions that Mike asked what's on your mind that

you'd really like to make sure that you you stress to the folks

about the importance of the supply chain for our industry?

Well, I think one of the things to watch out for

is regulation. And that's something that we didn't talk

about, you know, we'd gone through a time period where

talking about globalization and that type of thing was, you

know, you'd ask 100 people, and 99 of them would say, it's

positive, right, we want to do open trade and this type of

thing worldwide. And of course, the United States had had been

very strong, North America had been strong, Western Europe had

been strong China, and some Asian countries had been strong

as well. But now, it seems to be kind of a time period where

there's going to be more regulation, they're going to be

more protection of customers, they're going to be more

protection of national businesses specifically. And

that's part of the reason why we need to see more sourcing that's

closer to the customer in these different locations. You know,

I've done some work, and then we have the beer supply chain,

which is always an interesting place to learn.

I love that game, once you get a bunch of college

students, the beer supply chain game, great idea. Go ahead.

But the reality is, is that what that game

doesn't pick up is that every state in the United States has a

different regulation for beer and liquor distribution. Some

states require a three tier system where a wholesaler

distributor has to be at play, some don't, some won't let

certain varieties be sold. I am you know, this is talking about

one highly regulated area. But you can see those types of

things start to creep into other areas: food products,

technology, those types of issues. But I also think you'll

see, I mean, I think Donald Trump made that made the

comments it's been now seven, seven years ago, probably that

he didn't think it was a level playing field in some of these

countries where we were trying to sell product. And I know

those countries to think the same thing and other areas,

right that you talked to managers and we can sell here,

we can't sell there. So I think that's an area where disruption

will rear its ugly head, unfortunately, some of it to

protect national interests, some of it to protect the customer.

And so hopefully written for positive reasons, right, that

will do good things for us, but sometimes just kind of get in

the way of us trying to do business. And so that's, that's,

that's a pretty big and important area to watch out.

Trade adjusts in this era of how do we say this; I don't want to

say anti-globalization, but but less globalization. Right.

Right. Well, that's, that's fantastic. That's

fantastic. And I love that, by the way, Matt Waller, Dr.

Waller, from the University of Arkansas, actually just stepped

down as the Dean of the business school there. And you know, you

know, Matt very well as well. And he was going to say, I'm

gonna go and connect with a bunch of freshmen and talk about

them about supply chain, what should I talk about? And my

first comment, before he even kind of send it out, I feel like

I responded back, don't talk about anything, make them

experience the beer game, go through that. Don't teach them

anything, just let them experience. I think we do too

much talking at people and we don't give them an experience.

Because when you come out of that game, you come out of that

game going, 'Man, that was hard, I thought this would be an easy

game. That was a hard game, because I didn't have all the

data.' And then when you go through the second round, where

you're actually able to communicate a little bit, it

becomes substantially easier. Well, that's really what we're

talking about this data sharing thing that we don't do very well

today. So fascinating, fascinating.

You're 100% right.

I told him, I told Justin Patton, who's the

director of the Auburn lab, and you know that he's probably he's

going to be building a much bigger lab here in the very near

future, like three to four times, I said, do me a favor,

what we tried to do at the University of Arkansas, have a

tree and went into the lab and somebody's buying diapers on the

other end of the lab, and let the supply chain go through and

show how these various technologies and process of

sharing data across the supply chain could be something that

would be advantageous. I'm still working on it. Maybe you could

help him; all the listeners can go, Justin I'm not going to give

his email out. But I think getting people to experience the

challenges of the supply chain by going in and go wow, this is

really hard. We'll get them because if I am a supplier, I

never spend any time as a retailer. If I'm a wholesaler,

either spending time as a retailer, or a CPG. And if I'm

just cutting down trees, no offense, I have no idea how

people are using the product in the stores or in the home. So

Dr. Richey, I can't thank you enough for your time. It was a

pleasure talking to you. And I looked at my watch a second ago.

Oh my gosh, we've been talking for an hour already, which

doesn't seem like it's been more than 10 minutes. So thank you so

much for your time. Hopefully this won't be the last time we

pull you into this conversation. But thanks for spending our time

our leaders, the supply chain is a critically important thing.

And you've really helped us really give provide a lot more

direction on what some of the challenges are.

Well, thank you very much. You know, I think

that you made some comments about experience and I think

that being practical is very important for our students and

for our researchers. And we need to stay engaged with with you

guys, you folks, that keeps us out of the ivory tower, right.

So please have me back anytime, Mike. I really enjoyed it. And

if I could do anything for any of the listeners as well, pretty

easy to look up richey@auburn.edu.

All right, good. Thank you so much.

Already. Take care.

Bye bye.