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2017

I interviewed Dave Malenfant who discussed Bridging the Supply Chain Talent Gap.

 

 

 

 

 

 

It's great to speak with you today, Dave. This is going to be an interesting topic on Bridging the Supply-Chain-Talent Gap. But before we start, could you provide a brief background of yourself?

 

Great. Thanks, Dustin. Thanks for the opportunity. I sent over 40 years in the industry in various positions in supply chain, starting right from the bottom all the way to retiring as a senior VP in supply chain for Alcon. Then I now am working for TCU, Texas Christian University, as the direct for the Center for Supply Chain and Innovation, where my job is to do outreach and try to look at what kind of students that we can bring into the program, coupled with reaching out to industry to see what the industry needs are, and then helping to come up with a curriculum to try and fill those gaps.So with my industry experience, I think it's a great opportunity to come in and really look at how can we develop the talent for the future by working with a university such as Texas Christian University. So in our supply chain program, which right now is rated number 13 in the world.

 

What is the supply talent gap, particularly in terms of the digital supply chain?

 

Well, the digital supply chain is requiring, has changed the way we're looking at supply chain because what we're doing now, our traditional supply chains have been very, very focused on pushing product through our supply chain and then being able to push it into the consumer. So now what's happening is that we're seeing the demand where the consumer is really pulling it through. We call that demand driven. Now how that relates to digitization is that now with the millennial behavior, that Millennials want and [inaudible 00:01:59] for. So if you notice on the iPhone, you've got all these apps. So the Millennial and the consumer buying stuff would like to press an app which would order something and instantaneously want it. That data gets transmitted across the supply chain and it's expected that the shipper responds immediately to that demand. So as you have all these digital points of collecting the data, it gets put into the cloud as a huge data cloud, for lack of better term, big data.

 

So now what happens from a supply chain perspective, as people are ordering and using that, is how do we pull that down to really analyze the demands?So now the whole skillset has changed from the traditional looking at MRP, MPS, looking at forecasting, to where now we have to go out into the cloud, pull the data down, making it meaningful to do the analytics, to really understand what the demand is and being able to bring it all the way back in the supply chain to the supply or supplier and being able to put all the triggers in each link of the supply chain in order to meet that constant demand.

 

Is there more you could say about why it's important to bridge this gap?

 

Partially because the talent does not exist right now, or I should say, not that it does not exist, but the talent is... There is a gap in people understanding how to mine data and how to analyze the data to make it meaningful. So we're just not producing the talent that will fill the gap. The number one skill set that's being required by companies is supply chain analytics. And we're not producing enough people in our university program or in our certification programs that have that data set, to have that skillset in order to fulfill the demand that's out there. The demand is almost two to three times greater than what the supply is to fill that.

 

So what's happening is that either the companies are going without the data, without this skill set, and therefore, it's causing a huge problem for the companies, or we have to now try to retrain some of our current employees that are in supply chain to see whether or not they can pick up that skill set. Sometimes, what we're finding is that it's just not a skill set that a lot of the existing supply chain professionals can gravitate to very quickly.

 

So we have a real problem of trying to fill the demand that's being requested in order to meet all the requests that are coming in for this digital supply chain. Does that make sense?

 

Yes. And how do you fill this gap?

 

Well, I think right now, by working with higher education, we're trying to develop a lot more curriculum that is going to concentrate on data analytics and data intelligence, trying to continually reaching out to our high schools to try to recruit more and more students in the higher education. At the same time working with some of the big organizations such as Apex, CSCMP, ISM on trying to come up with programs and certifications that will help to put more emphasis on the data analytics, as well as trying to emphasize more and more webinars put on by various organizations that will help to try to educate people on blockchain, educate people on big data, the Internet of things.So it's going to be a constant effort to try and do that.

 

I've spent a lot of time, for example, organizing conferences or speaking at conferences or chairing conferences where our focus now is on the blockchain, the intelligent supply chain, digital supply chain, where we're not getting executives of organizations coming in to really learn about it. And at the same time, doing a partnership with companies in universities to say, "Okay. I've got this gap. How can we partner together to try to fill the gap through some of the talent that's coming through the universities?" Or, "Can you help us retain our employees to really understand what's going on?" So we're able to provide some certificate programs, provide some education from our professors that can actually work with companies to try to re-educate their workforce.

 

Thanks, Dave. Do you have any final recommendations?

 

Well, my recommendation is that if you have not yet looked at what you need and you've not completed your skill assessment, I think you have to. I think every company that's around, whether it be retail, whether it be business to consumer, or the consumer to consumer, you really have to do a skillset analysis. There are two things I think are happening in our supply chain.And we the uberization of our supply chain, which means that pinpoint data and data accuracy is becoming more and more in the now atmosphere, the Amazon effect, which is that, "I want it now, within hours." That has a great impact on our supply chain. So instead of saying, "It's not going to work," or, "I don't want to look at it," it's coming. It's coming very quickly. And those companies that ignore it and don't do this skill assessment to understand what my gaps are and how I'm going to fill those gaps are companies that I'm afraid are not going to be around in the next few years.

 

Those companies that are proactive and say that I'm doing my skillset. I'm going to partner with the university or college or with some of these organizations to really help to try to re-educate my workforce and try to bring up new talent within my workforce and coming up with a professional development program that's going to help to develop the skillsets that are necessary to meet the new supply chain are the ones that are going to be the most successful.And I encourage everyone to really, really work ******* trying to understand that talent, the people, are the number one priority. Having the right talent at the right time is very important. And having a strategy of how I'm going to bridge that gap is going to be critical for success.

 

Thanks, Dave.

 

 

About Dave Malenfant

 

 

 

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Dave Malenfant

 

 

Global Supply Chain & Operations Executive | Procurement | Distribution & Transportation |CIP | Risk Management | S&OP

 

LinkedIn Profile

 

I interviewed Long Wong who discussed Omni Channel Supply Chain in China.

 

 

 

 

 

Can you provide a brief background of yourself?

 

 

It's nice to speak to you again. So my name is Long Wang, and I'm currently the COO for Uco.com. We are the leading distributor retailers for online cosmetics. We work with major brands to set up their online distribution.

 

 

Previously, I also had experience in offline apparel retail, and I used to work for Amazon in China as the head of operations. I also hold an MBA from MIT.

 

 

Can you talk about omnichannel in China? What is the current status?

 

 

A lot of attention is placed on offline shops. In China that means franchisees for distribution or distributors. With e-commerce coming along it has brought disruption to the offline model because in the past sales through distributors was broken off by region. They used a lot of franchisees and distributors which means that the branch would separate the sales into many different regions. now with e-commerce, the geographic separation has been eliminated and we are dealing with customers directly. As e-commerce grows into a significant part of a brand's retail pie, there are new channel conflicts.

 

 

The idea of new retail is that retail is no longer separated by channels, meaning offline or online, but rather as a whole. This brings a new dimension of challenges to the supply chain.

 

 

First of all, in terms of inventory ownership because as I said many of the brands used to work with distributors and franchisees. They did not have total visibility into their inventory. When attempting to integrated it is difficult because you don't know where your inventory is. You don't have exact data of where exactly your end customers are.

 

 

With that in mind, how do you integrate the service? How do you split the incentive schemes and profits. This requires new business models and new thinking.

 

 

The new retail is not a thing that can be easily set up and pushed forward.

 

 

What kind of business models or new ways of approaching supply chain are needed?

 

 

There are two ways. From the top line point of view how do you bring in sales and market share. China today is very different from 10 years ago when retail and the economy as a whole were growing fast. Now with the overall economy slowdown, the growth has slowed.

 

 

Now with that in mind, it is a lot harder to try to understand the model. You have some brand working on the top line how to bring in the growth with the omnichannel and it has become a more marketing play, which we need to be aware of because we need to know how does that marketing bring you marketshare?

 

 

Now on the supply chain on the other hand, do you know where your products are? Knowing your consumers, having that information with a lot of the big data with the information you get more direct from the online channel. A lot of brands can be much better and more efficient integrating your with the consumer more directly to vendors.

 

 

I think the supply chain needs to build a system and process around them. There's always the pressure of being faster, being better than your competitors. And how to balance the investment.

 

 

Do have any recommendations then for supply chain managers or executives?

 

 

I think the supply chain managers in China, the challenge is always how do you change fast enough. At the same time, how do you be risk averse enough to be, to protect the bottom line. How to use some of the outsource partners to solve some of the supply chain. Again, there's no good answers. There's always a balance to mitigate the risk and at the same time to try to leverage a lot of solutions. To use in-house and outsourcing strategies.

 

 

Do you have any success examples you might be able to share about some outsourcing partners that were working or that could be a good way to go?

 

 

I will use Uco as an example. Many of you may know that the cosmetic industry has been quite late, much later than apparel and other categories to enter e-commerce. Big cosmetic companies value their brand and marketing channels. And they do business online. They face the challenge of how to maintain the brand image and not to hurt any of those.

 

 

There are also a lot of finance, accounting and corporate governance issues that need to be managed. That is how Uco has helped a lot of companies maintain their brands and image and at the same time absorb some of the visibilities in terms of sales, marketing and execution. Dealing with local platforms like JD and Tmall to achieve sales growth and their e-commerce ambitions.

 

 

Moving forward, for the past years, we have been moving on a lot of the omnichannel initiatives working with the brands offline to provide a service offering. Alibaba and Tmall have been pushing a lot of the online and offline integration. And we provide the technology and project solutions as well as the brand image.

 

 

I always say that there's two kinds of partners. One is a quality long term player that is a strategic match for your strategic initiative. And the other kind is more a low-cost, small, a play on saving money. So when companies or supply chain managers look for partners, we need to understand first thing about what are they looking for. So if they are looking for cost, be prepared for the risk that may come along.

 

 

If you want a partner tha can help you solve the problem, then it's really important to understand the partners, understand the capabilities and, I would say, also bring a level of trush because sometimes trust goes a long way in terms of a successful partnership.

 

 

Trust in terms of how to execute. In terms of spending time to communicate, to communicate your requirements, your bottom line, communicate the strategic goal, so that the strategic partner you choose is capable and sustainable to help form a strategic partnership to help you to achieve your strategic goals.

 

 

Thank you for sharing today, Long.

 

 

You're welcome. It's great to talk to you again.

 

 

About Long Wong

 

 

 

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Long Wong

 

China eCommerce, Supply Chain & Operations Expert

 

LinkedIn Profile

I interviewed Maryanne Steidinger who discussed Intelligent Pattern Recognition for Operations Efficiency.

 

 

 

 

 

 

In the past we have done interviews on the cloud and mobile applications, and now you're with a new company called Falkonry. Can you talk about why you made the change?

 

Sure, Dustin. Thank you. And thanks for having me on again. I've been in industrial operations a very long time, and I've been in software and advanced applications for a long time. And I came across this company called Falkonry. They're a semi-startup. So they've been around for about four years, but they really just started ramping up activities for the past couple of months. And so I joined them not too long ago as their vice president of marketing. One of my big initiatives here is to really get Falkonry known within the industrial automation market because what they offer is something that mostly data scientists may have seen in the past but not regularly used for industrial control or operations control. So I thought this would be a great challenge to come on and be able to use my existing network and provide some education and hopefully some new knowledge about a technology that can help them to gain more efficiencies in operations.

 

What are some of the benefits to the end user?

 

Let me go through a little bit of what pattern recognition means. In the world of industrial automation and in doing process control, an enterprise is always going to be generating real-time data. So data is going to be coming from PLCs. It's going to be coming from motors and drives. It's going to coming from sensors. It could be coming from operations that a person does themselves, like take a reading on a motor that's maybe not connected, like a disconnected asset. So all of that data has value, and it has value on much more than just doing alarm and event management.

 

What Falkonry does is it applies — and this is a term I've had to learn what it means — but multivariate temporal analysis. And what that means in layman's terms is that you have different streams of data that's coming from the process. It could be coming, again, from a piece of equipment. It could be coming from a data historian. But all of that data has a time and data stamp on it. And so what Falkonry does is it uses that real time data, and looks for patterns in the data. It looks for logical groupings of events at a specific time, and it uses that pattern in order to uncover opportunities for optimizing operations or understanding what contingencies may happen for an unexpected downtime.

 

Our customers are using this temporal analysis or time-based pattern recognition to help them to anticipate when a downtime condition is going to occur or when an unexpected event could possibly happen because it has predictors. And they can understand kind of the if-then behavior of these patterns.

 

It's been used in the past with data scientists, like people that are really doing heavy-duty data crunching, but that link into real time operations management has never happened in the past. And so as far as I know, Falkonry is one of the very first companies that's coming into the industrial automation market working with existing vendors of both the equipment as well as software. For example, OSIsoft who does data historian, probably the leader, is one of our very strong partners. So we're coming into the market and partnering with these vendors in order to provide this pattern analytics to end users. And one of the really nice things about it is that it's an overlay technology. So to use pattern recognition, it doesn't require an end user to rip out any existing process control software or hardware, but rather it comes in and it lays on top of everything, does all of that data acquisition — they call it data "streams," so a stream is from a particular device or entity — and then it does that pattern recognition.

 

It's very, very different, frankly, to anything I've ever done. I've talked with other friends in the industry, and they all think that it's pretty special and pretty new. And so that's really what we're doing now, and that's what I wanted to talk about because I just thought that companies may look at this as an additional means for process control that they may not have considered before.

 

Do you have any recommendations for someone who might be interested in looking into this further and making this kind of change?

 

We have a number of use cases that have been published on our website. And probably that's the easiest way for someone to understand what this is and would it benefit them is by going to our website. That way nobody has to bother you. You can browse at your convenience. And that website is Falkonry.com. F-a-l-k-o-n-r-y.com. So like the bird — because it's sharp, it's accurate, it's pointed — but with a K instead of a C. So that would be... And of course, if people know me, they can contact me directly. Maryanne.Steidinger@Falkonry.com.

 

Thanks for sharing today.

 

Thank you, Dustin. Thanks for asking.

 

 

About Maryanne Steidinger

 

 

 

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Maryanne Steidinger

 

 

High Tech/Industrial Marketing

 

LinkedIn Profile

I interviewed Natasa Cikac who discussed Continuous Improvement in Procurement.

 

 

 

 

 

 

Can you first provide a brief background of yourself?

 

Sure, Dustin. Thank you very much for your call and for your interview. Well, my name is Nataša Cikač.  I have worked for more than 20 years in procurement in Croatia. Varying from different branches food industry, rubber industry and metal industry. [inaudible 00:00:31]. Moreover, three years ago, I decided to start my own business, company Cronata. Well, I am very passionate about procurement, and I wanted to involve all my experience I have had and all my knowledge to help others to improve their procurement processes in the companies.

 

How is procurement being accepted in your country, Croatia?

 

Well, I have made some research last year. First, procurement is present in every company [inaudible 00:01:11] for sure. This is the process. The companies without it cannot function. However, the position of the procurement is still not so strategic. Bigger companies, they know and they notice the value of the procurement and they started to transform it from operational and tactical procurement to strategic and now we can find CPO as members of the boards and part of the top management. Nevertheless, some companies still do not recognize the value of this function. This is one of reasonswhy I launched a Procurement Academy Cronata in three models and try to make awareness of how procurement function is an important for a companies, how their employees could help to achieve strategic goals of companies and how to create value added.

 

Can you talk about continuous improvement tools and strategies?

 

Well, of course. It is not enough now to implement strategic procurement. You have to improve this process and the people, of course, on an everyday basis. Some tools could help even procurement to become better and to achieve the goals of the company as well. Continuous improvement, its rules are from Kaizen, which means Change for the better. Moreover, small changes could be done for better procurement processes. Well, we could implement some tools and strategies, which could help even the boards to achieve better saving, better relationship with suppliers, to find value-added... Moreover, the concept of continuous improvement is oriented to the final customer, not to internal stakeholders but to the final customers and clients. If we look at that way, then procurement could be a very important part of the organization and it could achieve much more for the company and customers. [inaudible 00:04:06].

 

Of course, it is not enough just too continuously improve procurement. It is also important continuously improve the whole organization. This is the concept. It has to involve all the employees and all the parts of companies. Nevertheless, the procurement is a very good field, and a very good space in the company and function, where small steps could achieve very good results.

 

Can you share some of your experience regarding continuous improvement?

 

Well, continuous improvement as a concept in Croatia it is not maybe so largely present. However, some parts of continuous improvement techniques are found in companies where I worked and who my clients became in the last three years, such as Lean, 5S, PDCA, KPI,…Improvements in procurement could be done through supplier relationship management or category management or the very important part of continuous improvement is risk management. Usually we improve processes, working place, communication, quality, depends on companies goals and priorities. However, clients how recognize the importance of improvement and decide to start using approved tools and techniques, could achieve, with our help, measurable results.

 

Well, thank you, Nataša, for sharing today in this topic.

 

Thank you very much, Dustin. It was my pleasure.

 

About Natasa Cikac

 

 

 

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Natasa Cikac

 

Procurement and SCM Expert, helping companies to achieve excellence in Procurement ąnd Inventory Management

 

LinkedIn Profile

I interviewed David McPhetrige who discussed Predictive Analytics for Inventory Optimization.

 

 

 

 

 

 

David, you have told me that you are passionate about predictive analytics for inventory optimization. Why?

 

In the supply-chain world, “predictive analytics” is already in use:

 

  • It enables optimizing supply-chain networking design, structure, and what-ifs
  • It’s fundamental to improved forecasting, such as demand sensing

 

There are already plenty of great solutions on the market for supply-chain network design and forecasting. These are important high-level pieces of the supply-chain-optimization puzzle.

 

Years ago, I began pursuing predictive analytics for a critical, but overlooked, piece of the puzzle.

 

It sounds like you have already listed all general supply-chain categories. What’s missing?

 

Understandably, supply-chain professionals focus on what a supply chain’s future state could be – “we can get this improvement if we re-structure our network like this,” or “we need a forecasting tool that will provide X improvement.” To use predictive-analytics in these areas requires changes, and changes always take time.

 

But in the meantime, their businesses are running on their existing supply chain. I wanted to develop a solution that can provide big improvements – simply by changing one or two values in each inventory item’s Item Master record. These are values that don’t require changes to the supply chain – no negotiations, no improvement projects, no brick and mortar. NOW, not in the future.

 

I knew that the key to this was to use the power of predictive analytics to determine and truly optimize these one or two values.

 

First, what are these values would you change?

 

The values that trigger and quantify replenishment: Safety stock if MRP, quantity per card and number of cards if multi-card Kanban, red zone buffer if DDMRP, min and max if min-max, etc.

 

How do you use predictive analytics to do this?

 

Here’s an example:

 

  • Let’s say an inventory item’s target fill rate is 98%
  • Last quarter, we achieved that fill-rate targetwith an average of 100 on hand
  • Does this mean that 100 is the item’soptimal level for next quarter?
  • Clearly, no – because next quarter’s demand and supply values will be different – even if nothing changes in the item’s supply chain
  • But if 100 isn’t optimal for this item, what is?

 

First, everyone knows that constantly changing an item’s one or two inventory policies that drive its inventory level doesn’t work – in fact, it usually makes things worse. And everyone knows that formulas don’t work.

 

Predictive analyticsdoes work:

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  • Let’s say a business measures its actual service-level, or fill-rate, for a quarter – 3 months. Perhaps its target fill rate is 98%
  • First, predictive analytics correctly represents all relevant factors – about 12 – for any inventory item’s actual supply chain
  • Second, it performs thousands of independent, random simulations of an item’s actual demand-and-supply process for, in this example, a quarter
  • For each simulated quarter, it finds the optimal inventory level that achieves the item’s target service level – without expediting
  • Predictive analytics now has thousands of optimal inventory levels
  • Finally, from these thousands of optimal inventory levels, predictive analytics selects the level that provides the desired confidence level of achieving the target fill rate in any quarter

 

That inventory level may support, say, achieving a 98% targetservice level for, say, 7 quarters out of 8, or 11 months out of 12, or other confidence level. The target service level, service-level cycle, confidence level and many other inputs, of course, are variables

 

How did you ever figure out the formula for this?

 

Well – I realized that modern computing speeds now enable a probabilistic simulation – what some call Monte Carlo simulation. So over the course of many years, I developed, perfected, patented and marketed my predictive-analytics solution.

 

It optimizes any and every inventory item – in any and every location.

 

This seems like a very narrow scope for a solution. Why?

 

As I said earlier, I see plenty of great predictive-analytics solutions for high-level supply-chain optimization. Rather than competing with them, or with big ERP, my goal is to enhance any solution by providing a big business improvement that can be implemented immediately.

 

And finally, where might I learn more about is your predictive-analytics solution?

 

Yes. It’s software-as-a-service, and it’s w-w-w dot right-sized-inventory dot com.

 

 

 

About David McPhetrige

 

 

 

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David McPhetrige

 

 

Business Partner at Right Sized Inventory

 

LinkedIn Profile

I interviewed Dave Chopra who discussed Globalization of IT Services and Impact of Digital and Automation.

 

 

 

 

 

 

Today we're speaking with Dave Chopra who is the vice president of Infrastructure Services at Wipro, and the topic for today is the globalization of IT services and the impact of digital and automation. So, Dave, can you first provide a brief background of yourself?

 

Hi, Dustin, and nice to speak with you today. Firstly, thank you for having me on your conversation. As you know, my name is Dave. I've been in the industry for long. I recently joined Wipro about two years ago, and I head up a significant part of their infrastructure business. I'm based out of the United States in New Jersey.

 

Thanks. The issue of IT, the infrastructure business, it's not new, but can you talk about some of the growth drivers, whether it's continuing to grow and what has been changing and hasn’t been changing?

 

I think that's a deep question for it to be the first one. But if you really look at the history of infrastructure services, I think this has been one of the oldest businesses that has existed in the IT business community. It started all the way back when mainframes and punch cards were still alive. And I think that the real change, and I think that the important part of the discussion is globalization, which essentially started to happen after the dot com burst, which is in the year 2000. And that essentially was because the birth of the internet and connectivity. In earlier days, it was very difficult to support, maintain anything that was mission critical because the connectivity across the world was just not as robust and as consistent as it became after that.

 

So I think if you really dial back around 17 years, you would see that infrastructure services, and to that extent, the support services across infrastructure and applications and, even to a large extent, business processes started to bubble up in different parts of the world. And as things would have it, India started to emerge on the global map as a credible source of this support framework. And the reason why that happened was obviously skill in abundance, education in abundance, and the cultural and the sociological system of India was built on a very strong foundation of education. And it started then.Also what started was the other such economies of the world — mostly like the Philippines, Costa Rica in Latin America. And what started to happen was as education was getting more and more important in these geographies, so was the availability of talent pool that was coming out of the door of engineering colleges and graduate colleges and was available for these new age companies to take leverage of and provide such support services. And that is when these companies started to come to life and was the birth of globalization.

 

Now if you really fast forward, and if you take jumps of five years each at a time, from 2000 to 2005, I think the Western world just started to look at the Western world, started to experiment with the cost structures and the socioeconomic situations that were not really known to them and started to indulge with these economies and these cultures to see if that fits into their mindset of how they wanted to provide support and operations to their businesses.

 

By 2005, it was fairly established that this would work. So from 2005 to 2010, you saw a rapid, rapid growth of globalization in the IT context with application development, maintenance, support, infrastructure support, and even mission critical processes both on the application, business processes on the infrastructure side, started to become more and more globalized. And what people also realized in that timeframe was that you need to spread out your operations to cater to the risk of a disaster, which the world, unfortunately, experienced at some point in some geographies. And then the globalization truly started to take shape, and businesses, large businesses, started to really leverage a...either follow the sun or a typical onsite/offshore model to be able to provide a radically lower cost structure and a definitive quality in how they wanted to support their businesses. So this happened in 2010, and that was the birth of efficiency in the context of IT.

 

So 2010 to 2015 became the age of the newer thought process of trying to do things much faster, much cheaper, and with a lot more better quality. And that is where automation was born. And if you look at automation, those were the days when RPA, which is the robotic process automation just became relevant. And from then to now, it's really kind of taken a paradigm shift, And

today we all talk about either Watson of IBM or Wipro where these are much more advanced and cognitive in that sense. So 2010 to 2015 was a time when people started to experiment with the fact that can a machine do a lot more than it used to do before, and can that provide a better cost structure, a better quality of service and a better-globalized state of operation. Now, not only in the physical world but also in the virtual world all so that the businesses can take advantage of that.

 

I think now we are in this, and of 2015 to 2020 where, because of digital, because of the five forces of SMACK, as you call them, and as IOT become more and more relevant and real in our lives, the data is just, in some sense, founding the planet. And if you really look at some statistics, it's said that there will be an excess of 15 billion devices that will come online by 2020. And if you would just think about the amount of storage imbued, even raw electricity of power that would be required to sustain these devices that would take the current world 2 times over.

 

So we are promising now, I think globalization became established in 2005 and then saw rapid growth from 2005 to 2010. In 20015 information and social media became established. Now we are seeing massive extension and massive explosion in application of these technologies. For people like us in all of that has to be supported, and that can only be supported if the operation is seamless, is 24/7, is globalized, and not only in the real world but also in the virtual world. And there is a constant need to improve the quality of service every day.

 

So kind of a long answer to a very short but deep question that you asked. What is globalization, and what does it mean to the world of IT and how has the last 20 years been in terms of growth and what does it mean in terms of IT. The growth has just started again.

 

What about the next 20 years. Do you see what might be happening in the next 20 years that organizations need to adapt to?

 

I will say, for lack of better words, I would fool myself if I talk anything beyond three years, because who knew 20 years ago that there would be a Steve Jobs and a company called Apple that would own enough money to by the world 2 times over. But I think the next three years we will see a lot of change in this world.Data centers will be powered by the sun or the wind completely. The data will be stored in a biometric secure format. So we would not have keys and identity management. It would be our fingerprints and our eyes or the retina which would contain or DNA information that would unlock things. Everything that we touch with be digitally identifiable, and most of what we would do will be more and more in the virtual world than in the physical world. That interaction with the virtual world will become much more significant, much more deeper and we're already starting to see that with autonomouAnd today, between Google and Apple, they can figure out which part of the world I am and where my car is respective, or which flight I take. They know where I park and where I have to be. So it's changing really rapidly, and I think and the next three years, we'll get more and more dependent of these technologies and to a point, businesses will not be able to run with these technologies. And I think the retail business in the Western world is starting to see that impact and this year, if we closely looked at these reports of the last quarter, most of the brick and mortar shops are going out of business and Amazon continues to grow.

 

It's the virtual world that is taking over. And for the next three years, that will continue to happen. And all of those will be...The experience of the next three years will be defined by clicks and likes.. Therefore, a lot of data will be generated and all of that data will be stored, analyzed, reacted upon. And at sometimes, it will be vulnerable for attacks. And therefore, the IT spend will need to get very focused on how to maintain this data, how to secure this data, and how to make meaningful sense from this data.

 

Thanks for sharing today, Dave. Did we cover all the points you wanted to make?

 

Yes. I think so.

 

 

 

About Dave Chopra

 

 

 

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Dave Chopra

 

Vice President, Global Infrastructure Services

 

LinkedIn Profile

I interviewed Romeo Elias who discussed Quality Control and Management of Suppliers.

 

 

 

 

 

 

Today we're speaking with Romeo Elias, the founder and CEO of Intellect. Today's topic is going to be related to business process management and how it can help ensure that your suppliers meet your standards. And my question, Romeo, is can you describe the concept of supplier management and what does it mean in this context.

 

Thank you, Dustin. It's good talking to you again. I appreciate the opportunity to speak more with you about this topic. Definitely, I mean, supplier management is a very critical area of expertise for a lot of companies in different sectors, like specifically manufacturing, in pharma, even in environmental companies and food production, because today we live in a global world and everything is really interconnected. If you look at your typical product today, it's made up of hundreds, if not thousands of supplier. And there's a whole field of focus here. How do you ensure that as you [inaudible 00:01:07] product and as you maintain that and you go to market, how do you ensure that your supplier are meeting the standards that you need to meet for your clients. Ultimately, at the end of the day, if something was to happen to your product, if you were to have a safety with your drug or your medical device or with your — whatever it is — your phone, and it's caused by a supplier, ultimately, you're accountable, not your supplier. So a lot of companies spend a lot of money, a lot of time, a lot of effort into understanding, into tracking and managing the processes around how they select, how they qualify, and how they continue to monitor and manage their relationships with their suppliers. Does that help?

 

Can you talk about some of the challenges that you face when making sure your suppliers are meeting standards?

 

So essentially, it starts with understanding, first of all, the selection process. How do you select your supplier? And what kind of products are they going to be providing or service they'll be providing for you? And then you go into the next level of how do you ensure between the various companies that you find, how do you qualify them? How do you ensure that you pick this vendor versus another? And at every step in the process, you need to have quality processes and procedures in place to meet. And by the way, this is not simply for your own purposes internally to ensure that you maintain a quality product, but also it oftentimes is to ensure that you meet your certification and your standards like ISO or FDA or USDA. There are countless standards out there that you have to abide by.

 

And so you have to have those processes in place. You have to document them. You have to enforce them. You have to ensure that you're maintaining that internal process internally as you select these suppliers and you continue to monitor on a regular basis that they are following those procedures.

 

So it's a very broad area. For example, if you look at it from the perspective of the sticky case of quality management... So, for example, we have a whole suite of software that we've created specifically around the quality management area.And when you look at that, there is a specific module all around supplier management. In that module, what you're doing is you are doing regular audits with your suppliers. The [00:03:30] are there to identify are they meeting the various standards that you've put in place. Are they maintaining their own certification? They have to show you that they have completed. And are you identifying any incidents or nonconformance, and if so, then how do you track those? How do you make sure that the supplier corrects those? Sometimes you may find that a particular supplier is underperforming, so you need to be able to have data, information that will let you determine that so you can replace a supplier or really make sure that they change their process internally.

 

So the challenges are across the board. And they can be anywhere from the most micro-level in terms of how you manage from day to day to even the highest level in terms of how you select and your overall process that you have in place with the managing and getting your suppliers.

 

What do you do when a company, a supplier is not meeting the standards?

 

Well, there's many process, obviously, many ways you can analyze it. Obviously, as a company, you have to choose,first of all, is this a recurring issue? Is this something that can be resolved quickly? Is it a major issue? So this is the whole process of what they call nonconformance and how you manage that, and then you have to have internal process to determine, based on the nonconformance identified, how do you deal with it. Is it something a one-off thing that happens every so often and it can be managed and the risk is manageable?Or is it really a severe situation? And then you have to determine is the supplier somebody that you continue to work with, or do you need to replace? Because it really depends on a case-by-case situation.

 

I think the key, really, is that you as an organization, as a company, you have to have that discipline. You have to have this awareness that your suppliers are part of your ecosystem, and you need to treat them as almost an extension to your employee workforce. But obviously, they are external to you, so there are some parameters, and there's contracts in place, and you have to be able to take all that into consideration.

 

Now from a perspective of when you look at business process management and quality management systems, what they try to do is bring actual process and standardization to this relationship with your suppliers. So now it's no longer just simply conversations and discussion. It's really systematized. So your suppliers have to fill out information on a regular basis and to specific forms and documents that you request of them. They have to show you traceability and accountability to any issues that you've identified. You have transparency and reporting. They have that same information available to them, so they can be aware of it. They can correct these things themselves, so it's no longer... It's not a reactive thing. It's a proactive process.

 

In addition, there are situations where you need to be able to source out where their suppliers are coming from, because if you're taking a situation where it's a food product, they may be giving you a portion for that food, but may need to know also where they got their ingredients from. So really, there are so many areas here that it could be evolved in. So having systems in place will help you determine and put in place where your processes that you're tracking as an organization begin and end. It ensures that you're enforcing that process with all your suppliers. It gives you visibility, again, accountability to them and to your own team that they are following those processes and they're ensuring and enforcing them and there is a full trail of decisions made, audit histories of what happened, when, why it was made, and ultimately, all this helps mitigate and manage your risk. And the more, obviously, you document, the more you automate, the better you're able to ensure the standard is high for your suppliers. If anything, once you have any kind of transparency into any process, the quality and the standards of the [inaudible 00:07:33] improve across the board. And that's really ultimately what you're doing here, is you're bringing focus and attention to an area of your supply chain that's very critical. It's the relationship with the suppliers and understanding how that affects your product line.

 

Is there any more you could share about the good results you'll get by following business process management?

 

Essentially, then you look at... Business process management in general applies to any discipline in your organization. Supply chain and supplier management is, obviously, a very critical one. In this particular case, really it applies to quality. And I think there are so many cases out there of where... I think specifically, most recently, if we look at Samsung phone and the problems they had with the actual battery, it boiled down to a supplier issue. So that's an example where not having good quality systems in place and procedures in how you deal with your suppliers, how they maintain their processes and certification, where you can cause huge damage to your reputation, to your revenues. I mean, it can be massive to your organization.

 

So really, BPM helps really mitigate all that and quality management as a specific set of processes that could be running on BPM will help you also ensure that you're not only managing your risk, you're managing your nonconformance. You're managing your corrective actions. You're managing your audits. And all this data is transparent. If you have to make changes, all of these processes are tracked and managed in the system, and you will be able to tailor them to your exact business process needs.

 

Thank you, Romeo, for sharing today.

 

Absolutely, Dustin.My pleasure. Look forward to talking again. Hopefully this was helpful to your audience.

 

 

 

About Romeo Elias

 

 

 

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Romeo Elias

 

Quality Control and Management of Suppliers

 

LinkedIn Profile

I interviewed Alessandro Menezes who discussed The Future of the Shipping Industry.

 

 

 

 

 

 

It's great speaking with you again, Alessandro. Today's interview, the topic is the Future of the Shipping Industry. Can you first provide a brief background of yourself?

 

Definitely, Dustin.Nice to be back and talking to you. I am the global head of transportation for a major global petrochemical marketing distributor and projecting group. We have a worldwide infrastructure and currently looking to a very good expansion with our global reach and capabilities across the continent. I joined this company in 2016 last year in July to hold this global ownership of the transportation sources and operations for thousands of TEUs moved across the globe.

 

I have 16 years of experience bringing different kinds of values in different managerial roles within the liner container service industry. Since 2012, I decided to move from the carrier side to the shipper side. I have been leading some projects related to safety, cost-to-serve projects and global chemical and petrochemical manufacturers and distributors, including the world's largest exporter of natural soda ash and also a global leader in petro additives. Currently, our headquarters is in Houston where I'm talking to you right now.

 

What are the key trends you see happening in the shipping industry?

 

That's a good question. One trend that has been discussed during the last conference relating to world container trade growth. The global conainer volume is, during the last two years, '15 and '16... For the first time in history, they grew less than the GDP has grown historically. Since World War II, the GDP has been always in a lower growth level. And this brings some concern. However, in the last quarter of 2016, with the newest to date available officially, there was a little bit of container growth rebounding in the fourth quarter where the volume growth soared a little bit compared to the previous year. But if you're overall looking from a more extended period of time, the trend is low in terms of global trade.

 

So in the near term, the container shipping and liner industry is, in my opinion, very unlikely to see the same rapid growth rate that they saw in the past. There will be also a very important test, in my opinion, for the shipping lines — how they will be undertaking mergers, whether they are willing to pay and scrap the ships or how will be the consequence of any consolidation in the industry.

 

Who will be most affected by these changes?

 

I would say all players in the supply chain will be impacted because basically, there will be, I would say, three big challenges that will play different roles, depending on the trade lane and the location and the commodity involved. So the first one, it's about equipment availability. Every time you have a change in terms of global trade, it's not even, as I mentioned, in some opportunists are there in the market. For example, here in Houston, we will already see a very significant increase of export volume driven by the production of the petrochemicals of polyethylene and the plants that they are already in the final phase of construction, beginning for the production here in the US Gulf. As you have this competitive environment of the resins I'm talking about which is a commodity in a situation that you have to deal with equipment repositioning costs, the equipment availability is this first challenge that I mentioned.

 

The other challenge, number two, we have seen already is in regards to the field options that we see in the market. This is a challenge not only involving the shipper where I'm playing right now, but also the ports, the terminals that will most likely be squeezed in terms of losing leverage when sitting at the table and discuss with that global carrier.

 

Since the year '92, '92 till now, less than half of the large shipping lines remain. We have now more than 80% of the worldwide fleet capacity under alliances. So there are few options. They bring risks of price fixing, marked allocation, even if not permitted by law. But it becomes a very realistic risk.

 

The number three challenge, because of all these situations and uneven balance is the freight volatility. As I mentioned here, the gulf ports are trying to take advantage of this surge in exports, especially to Asia. After suffering for five straight quarters of financial losses in the global operations, according to the latest results, of course, the ocean carriers will attempt everything to try to negotiate higher service contract rates in 2017. But then you'll have also a lot of uncertainties. The new administration in the United States, the potential for a war among the two biggest economies, the US and China, if that happens. So it can create a very interesting scenario, very unstable. And this freight volatility is my third challenge that will impact the supply chain, Dustin.

 

How should supply chain professionals address these issues, these trends?

 

I would say that it's all about risk management. There are some mechanisms that we shippers can do as well as the other players in the supply chain. So first of all, day to day to day, we need to get everybody working with the same goals in the supply chain. Build your analytics. We most really know what the potential opportunity in the whole chain and not look just for the next level.

 

Ports should sit, in my opinion, with shippers, with trade managers from the major shipping lines, with importers from alternative markets and try to see a common ground. There has to be also among the organizations themselves all the supply chains, they have to pursue internal alignment, getting closer to their sales and marketing department.Especially because it's going to become more critical than ever the demanding forecasts so that there is a mutual benefit in terms of commitment of volume, signature of the contract, but also, a show of the bookings and a volume that the shipping lines keeps overbooking the ships as most do today, and then rolling cargos, that they are really major problems for most shippers.So these, of course, requires a strategic carrier relationship focus. Shippers also will have to get their mind, what is the right balance between long-term fixed rates, balancing contracts versus the spot rate, and analyzing the risks, and last by not least, based on the day-to-day that I mentioned in the beginning, they will have to look together and bring to this carrier relationship management with the carriers with the shipping line are kind of a optimization. That meaning looking really strategically where are the opportunists, the players, and kind of really implementing joint corroborative structures to achieve mutual benefits to both bodies.

 

Thank you, Alessandro for sharing your insights today on the future of the shipping industry.

 

You're welcome, Dustin.

 

 

 

About Alessandro Menezes

 

 

 

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Alessandro Menezes

 

Global Head Transportation Sourcing | Logistics & Customer Service | Product Management Ocean Freight | Supply Chain

 

LinkedIn Profile

 

I interviewed Richard Sherman who discussed Automation and Robotics.

 

 

 

 

 

 

Rich, this is another follow-up interview on our previous interviews where we last time were going deeper into the digital forces of change that are driving new competitive strategies and business models. Today we're going to explore robotics and automation. So can you introduce this topic and share your views on this topic?

 

We have been talking about the digital forces. We've been talking about analytics and big data. We've been talking about the changes to ecosystems thinking. You almost don't even have to talk about mobility or the cloud anymore because it's become so pervasive that people are recognizing the value of mobility. I don't think anybody goes to bed at night without having their mobile phone within arm’s reach.

 

So we're seeing the impact of digitalization and the digital forces of change. At TCS, we like to refer to them as the digital [inaudible 00:01:12] forces, but the reality is that the advances in digital technology combined with cloud computing, combined basically with pervasive computing, are creating what I called in my book “aconnected age.”It's the fourth wave of change, if you will, from Alvin Toffler. So we're moving out of the information age and information workers and into the connected age and connected collaborative workers. And driving a lot of that change is advances in robotics and automation technologies. And it's not like Robby the Robot anymore. And it's not like a lot of the highly automated, automotive assembly lines where we had these big cranes and spot-welding tools and painting tools that had to be caged and kept in secure areas because they were insensitive to human presence.

 

And we're moving into an era of autonomous collaborative robots, robots that have, first of all, they've got heavy artificial intelligence capabilities that are leveraging cognitive analytics and machine learning. And we're combining that with sensors that enable us to sense the surroundings, sense vibrations, sense people. And a lot of those sensors, what's really kind of cool out there today is the rise in optical recognition sensors. And so that combined with the pervasiveness of the internet with the pervasiveness of the wireless communications gives us the capability now to untether those robots. It used to be I had to lay a lot of wire in the floors of a warehouse in order to implement automated guided vehicles. Now those vehicles are guided by vision technology. We have an emergence of autonomous robots that are coming out of places like Rethink Robotics and Locus Robotics. And of course, we know about the Amazon robotics with their acquisition of Kiva a few years ago.

 

These robots basically have the freedom to move around the warehouse and intermingle with the human beings. So what I think is going to be an interesting change is it's going to change the whole network design and location of facilities across the network because now, low-cost labor is nice, but I can get low-cost labor anywhere through the deployment of robots. And now transportation and logistics costs, supply chain costs, come into play. So I think we're going to see a lot more nearshoring, a lot more reshoring of manufacturing facilities based on the fact that I no longer need the number of high-cost labor people that I've had in the past. I can basically replace low-cost labor that I'm getting overseas with lower-cost robots, and I can begin to improve and enhance the productivity of my more skilled worker in my assembly plants, my warehouses, my facilities.

 

So we don't see robots necessarily replacing jobs. The jobs that a robot would replace have already been lost. They're already being sourced in low-labor areas and geographies. What we're going to see now is that we're going to have low-cost labor available to us and now to leverage transportation and logistics cost factors for manufacturing closer to the customer and, by the way, in also to meet the proximity needs that are required by last-mile delivery and significantly reduce lead times in the marketplace.

 

We'll see robots coming into play to supplement the worker. And so in the warehouse, for example, we'll see robots like Baxter from Rethink, like Locus Robotics, we'll see them going to pick locations where, in the past, a picker would have to go and either do a pick wave or pick orders, but then they would have walk time. They would have travel time through the facility to take those orders to the packing stations.

 

Today, we can bring the bin to the picker, have them pick the order very rapidly, drop it back into the robot. The robot then takes it to the packing station, and the picker goes on to the next order. So it changes. We may not need to do as much wave picking. We may be able to do more order picking that is human order picking supplemented by robotic transport time throughout the warehouse. Does that make sense to you?

 

Yeah. This makes sense. I'm thinking about supply chain professionals.What would they need to do to prepare for this change?

 

I think the key is — and I think the new term that's being bantered about is robotics process automation. So what we have to look at is, once again, it goes all the way back to Michael Hammer. Re-engineer your process. Don't automate, obliterate. So we have to rethink all of our processes. And we have to do it within the context of what tasks within those processes are routine. Which are high volume? Which are monotonous?Which can easily be accommodated by an automation, whether it's conveyance, whether it's guided vehicle, whether it's an autonomous robot?But we have to rethink, again, all of those obliterated processes from the '80s and '90s and now go into more how do we automate those processes again. It's going to cause, I think, kind of a resurgence in automation.

 

Of course, today, we've got agile technologies. So we're going to see a lot more scrums. We're going to see a lot more failure to succeed. But the supply chain professional has to look at their work, at their operations, and say, "What things are being done that could be better done by autonomous robot versus a person?"

 

The other thing is, just like we had to make the change from unskilled manual labor in the past, what we've emerged is the information worker, we're going to see more knowledge and decision workers. We're going to see more orchestration workers and more collaboration workers. We're going to see more workers that are collaborating with robots to enhance the customer experience and lower the cost of retail. So think of a retail store. Retail staffing is an issue. It's hard to find labor at that cost. It's often undependable labor. The constant turnover brings inexperienced people into the staffing.

 

Now think about the fact that now I have robots deployed throughout the store that are capable of doing item checks, price checks, helping customers find product through location management, helping a shopper with an automated, robotic cart so that they can load their products into the cart, and as they load their products in the cart, they're scanned and facilitate automatic check out.Delivering more personalized services.So robots can serve as shopping assistants.

 

We're seeing robots being deployed and sourced today to observe consumer behavior to support data analytics for better planogramming, placement of product, and selection and assortment of product. Those same robots that are sensing and processing this consumer behavior can also recognize, maybe based on color schemes that the person is wearing, color of hair, facial expressions as this grow, so they can more personalize the shopping experience by basically suggesting purchases. They can offer more value-added services. So they can be used to provide gift-wrapping, price comparison, dispensing loyalty coupons. They can help in faster deployment and restocking of shelves. They can help in minimizing out-of-shelf scenarios by constantly cruising the store to identify an out-of-shelf opportunity. They can mitigate shrinkage and theft by surveillance techniques.

 

So again, the robots can reduce the number of humans in the store without eliminating the need for humans because there will obviously be exceptions. There will obviously have to be decisions to be made. There will have to sales to be made and managed and schedules to be adhered to. But we'll see an increase of robotic supplements to retail labor to offset some of the issues that retailers are facing with labor costs and labor staffing in their stores. And we'll see the same thing in warehouses. We'll see the same thing in manufacturing facilities because as we move to more and more robots that have more flexibility, more machine-learning capabilities, more capability to do machine tending, kitting operations, assembly operations and things of those nature, again, the skill requirements and work within the manufacturing facility begins to change and we start seeing a mix of robots and humans in the factory.

 

So companies have really got to take a look at their processes and say, "What can I automate? What can I obliterate? What can I digitize? How can I change my operating model to accommodate the new business models that we're seeing emerge in this digital economy?" Make sense?

 

Do you see any changes that we will see within this year?

 

You know what?Certainly, I think we're obviously going to see more and more robotic deployment and more and more robotic automation. I'll give a plug to my good friends at the material handling industry or MHI. Bi-annually, every other year, they have a large material handling show called ProMag. This year it's going to be April 3rd through the 6th in Chicago at McCormick Place. And it is robotics-material-handling-automation Disney World. In conjunction with it is also a manufacturing show where you can also see all the robotics and automation and technologies that are being introduced from a factory of the future and manufacturing Disney World.

 

So for people in the supply chain that are really looking at the new technologies that are available today, that are available right now, ProMag is the place to be. And it's free to attend. So you just have to take care of your travel.

 

The other key thing that I think people have to keep in mind is competitively, we're going to see the leaders moving very rapidly in this spacebecause the cost of robots has come down dramatically. We're seeing autonomous robots in warehouses, retail stores, in facilities that are in that $20- to $30,000 range. So that puts them right at that $9, $10/hour retail labor rate range, and they never take coffee breaks. They never miss work. They only require four to six hours every 24 hours to recharge their batteries. So it is going to happen more rapidly than a lot of people think. And I think we're also going to see, for once, I think we're going to see a lot of 3PLs leading the way from a warehousing automation and robotics perspective because they stand probably the most to gain in this environment.

 

Thanks for sharing today, Rich.

 

Hey, thank you, Dustin. It's a real pleasure, and I look forward to speaking with you on all of this again in the future.

 

 

About Richard Sherman

 

 

 

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Richard Sherman

 

Senior Fellow, Supply Chain Centre of Excellence at Tata Consultancy Services

 

LinkedIn Profile

 

I interviewed Chris Maresca who discussed Bridging the Gap Between Silicon Valley Technology and Business in the Real World.

 

 

 

 

 

 

Can you first provide a brief background of yourself?

 

Sure. My name is Chris Maresca. I'm the chief operating officer of Project Inertia. We build project management systems for very large construction projects. We currently have seven projects that we're working with, all of which are more than a billion dollars in size. I have been in technology and in Silicon Valley for almost 20 years now. This is actually my 9th startup. I've had four successful exits, including one IPO. And in a previous life, I started an import-export company in Europe and started my first business when I was a teenager. I'm half American, half French. I actually grew up most of my childhood in Europe, but I finally wound up in Silicon Valley. I've been here ever since, and it's been a wild ride.

 

Can you talk about what's happening in the Industry, the Technology Industry in Silicon Valley?

 

Sure. It's interesting. We've... I've, at this point, been through two technology revolutions. The first one was the internet in the '90s and the advent of global interconnectivity. And that was fascinating and exciting. And we all know what happened in early 2000 when the whole thing blew up as a giant bubble.

 

In the last few years, we've had some [inaudible 00:01:45] with mobile and social networks and the, sort of, the democratization of internet tools. And it's been really, really fascinating. I think it's very interesting. The other side of this equation is that technology, the falling prices of technology, enables vastly more automation across the rest of the commercial businesses and industry. And that's been really, really interesting.

 

In the last year or so, there's been somewhat of a slowdown in funding for startups in Silicon Valley. It's gotten harder than it used to be to get funding, especially with mobile consumer applications. The focus has shifted now in the last, I would say, 18 months from mobile consumer sort of enterprise business applications and evaluations of consumer-centric companies have followed that trend as well.

 

On the other hand, we just had the SnapChat IPO, which has given everybody a boost, and now everybody wants to invest in the next SnapChat, probably an unrealistic goal, but still very interesting.

 

So there's a gap between the technology in Silicon Valley and the real world business. Can you talk about how this gap can be bridged?

 

Silicon Valley exists in its own universe. And if you live around theis area, you get very, very used to very advanced technology that appears in your life extremely quickly. In the last few years, people have discovered things like Uber and Airbnb, but those things have existed here for more than five years, and people here are just used to that and used to having all this technology available to them. And that has an impact in the way people think. You exist in this very tech-centric, hyper-connected universe, but when you go somewhere else — whether it's somewhere just outside of Silicon Valley like Las Vegas, or someplace further like Chicago, or someplace even further like Singapore or Cape Town, South Africa — you find that that connectivity and that expectation of technology consumption that you have in Silicon Valley just doesn't exist.And that applies not only to consumers, but also to businesses.

 

And Silicon Valley is somewhat blind to this fact, and it has a tendency to create technologies that are irrelevant for much of the world or are so extremely disruptive that they cause a lot of social dislocation in very unexpected ways.

 

One example is Uber, classic example. There are some places where taxi drivers' incomes are down 60-some odd percent. And that doesn't really help society at large, but this is an unintended consequence of Silicon Valley's technology-centric view.

 

You could also look at things like Amazon disrupting traditional supply chains and also traditional businesses in a tremendous fashion. And I think there's other areas where this is going to happen — 3D printing, for example, is going to have an enormous impact on manufacturing, especially because it will allow companies to move their manufacturing much closer to their customers. UPS here in Silicon Valley, it'salerady talked about putting 3D printers on their delivery trucks so that instead of delivering something that was shipped from far away, it would be printed in the truck outside of a customer's door, almost literally.

 

All of that has tremendous implications, not just on businesses but I think also on the fabrics of various societies where manufacturing is a very big component of the workforce. And these are things that people here are thinking about and are pushing to implement without, sort of, regard to what the impact might be in any way whatsoever. Whether that’sgood or bad is really largely a political question. But it is a reality.

 

And a lot of the stuff that is created here is just completely irrelevant to most people in the world.

 

Do you have any experiences or stories you can share from your life and your work that you've done?

 

Absolutely. I think that there's... I think that you have a wide variety... I remember I worked for a very large, very well-known company here in Silicon Valley that had created a pile of new technology but because of the way their business was structured, they were valued, the company was valued as an e-commerce, physical-goods retailer. They had created a bunch of interesting technology, and they thought that if they released it out to the world, then everybody would look at them as a software company instead of a retailer of stuff, and that that would push up their valuation tremendously.Of course, that isn’t really how the world works, but this is how people in Silicon Valley [inaudible 00:08:00]. Needless to say, this didn't actually work.

 

And we've seen other businesses that have tried to transition, for example, from hardware or software, and that has been a disastrous transition for quite a lot of those. Silicon Valley has a saying, which is that software is eating the world because Silicon Valley is not really about silicon anymore. It's mostly about software.

 

To a certain extent, quite a lot of hardware now is expressed as software rather than having to be designed as specific hardware. So you get a very interesting inflection of all of these different trendsnd then people trying to harness them, especially people in older industries that are getting disrupted.That is often not a very good recipe for a future for a company.

 

On the other hand, you have some very big Silicon Valley giants, brand names that people believe are world leaders who have internally accepted that they are no longer in leadership positions in terms of innovation because they are now mature companies, and they are madly trying to buy their way into new areas. That's the other side of the equation here.

 

So it's very interesting living here. We have a tremendous amount of startups. I think 4,000 was the last number I heard. And most of them will die an early death because they are working in market that are not relevant. I think when I was a consultant, we worked on, I want to say, probably well over 100 different startups. I would say out of those, maybe 20 or 30 are still around. Some of them have been bought, but most of them are just market failures in various ways. And that's just a reality. That's the risk component of working in the startup ecosystem.

 

Well, thank you for sharing today, Chris, on bridging the gap between Silicon Valley technology and business in the real world.

 

You're very welcome. Any time.

 

 

About Chris Maresca

 

 

 

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Chris Maresca

 

 

Founder, COO/CTO & Board Member

 

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