The DCPerform Podcast: The Evolution of Supply Chain & Boomer to Next Gen Transition
EPISODE 7:
During this episode, Wonil Gregg, DCPerform’s VP of Customer Engagement and Experience, explores the history of supply chain with guests Jeff Waller, President & CEO of Waller & Associates, and Helgi Thor Leja, DCPerform’s Senior Customer Engagement Director. They provide historical context of supply chain, dating back to the 1800’s, share how it has evolved into what it is today, and discuss what the future looks like as the Next Generation is creeping into power.
Thanks for listening to the DCPerform Podcast!
EPISODE TRANSCRIPTION:
00;00;01;12 – 00;00;21;13
Hello and welcome back to the DCPerform podcast. My name is Rachael Weber and I’m Wonil Greg and you know, on the last episode we talked about all my generation and our experience in the industry. So I thought it’d be really interesting to get the perspective from that older generation content. They took it away today when Al flew solo.
00;00;21;13 – 00;00;43;26
Why don’t you tell the audience all about that episode? The key takeaway from this is that the supply chain is in good hands. The next generation has a skill sets, the desire, the capabilities, and it’s up to us now to hand that over in a great place. So they can take it to the next level. Thanks for tuning in to episode number seven of the DCPerform podcast.
00;00;43;27 – 00;01;12;11
Let’s start with some introductions. Jeff Waller from Waller and Associates tell us a little bit about yourself. I have I’m an old distribution guy, right? So as in the last punk podcast where you had your team, that was between kind of that Gen R Millennium Gen Z group, we are in that baby boomer and and Gen X group, right?
00;01;12;11 – 00;01;40;03
So I am right on the cusp of, of Gen X my background. I love supply chain. I’ve been in supply chain since I got out of college, so I got a job in transportation. I then went into distribution, always operations and distribution, and it led me into the consulting role I’m in now at kind of the later years of my career, he’ll through Alijah I in the recession of 92 is when I graduated from university and it was a challenging time to find a job.
00;01;40;21 – 00;02;00;12
Although I had a degree in finance and international finance, the only job I could actually get was in supply chain 30 something years later, I’m still here. It’s just an exciting place to be. Well, let’s get into it. The anticipation has been high. We’ve been talking about this for several weeks now. So I think we get to tell the joke on the right, which is the younger generation.
00;02;00;12 – 00;02;22;08
Last last podcast shared a lot of their great thoughts. But we’re here actually bring the right thoughts, the correct thoughts, the real thoughts, right? Yeah. Yeah. What I actually wanted to do was bring props. So I wanted to bring dial face telephones, you know? Yeah. Because Stuart was talking about how great his flip phone was. Right? And I’m like, okay, yeah.
00;02;22;08 – 00;02;38;25
It’s a long way from the dial up telephone that we wait for that. When you dial the zero, wait for it to come. All right. We’re going to get into the historical context of the supply chain. And Jeff, what are some of your thoughts about how when you think around the triggers, your fate is valley area and the start of civilization?
00;02;39;01 – 00;03;02;29
How do you see the supply chain? Imagine that for us. So imagine. Right, you’re you’re back in a time where you’re just trying to survive. What are the basics? Water first, food second, shelter third. So how are you going to get that water? How are you going to get that food? You came from a group of hunters and gatherers and now you’re starting to trade with other tribes.
00;03;02;29 – 00;03;26;19
How are you going to get there? The long distance to the next tribe? Well, if you have a small boat and a waterway and a boat that can carry some of what you grow, that they don’t grow, then you can trade supply chains today bring us anything we want. And it’s really not that much different than what the folks on the Euphrates and the Tigris were doing when they were trading with people up and down the river.
00;03;26;19 – 00;03;49;06
Since people have been living in a population together and not nomadic, they have been trading the essence of that period of time as you’re getting the source of production to the source of consumption. And that’s what we’re doing today. We’re just doing in a much faster, much different, much broader, different levels of experience and expectations. So if we keep it simple, it’s still the same thing.
00;03;49;06 – 00;04;16;23
It’s just so much different. Absolutely. And then all of a sudden, the whole idea of, wait, we can get something more than what we’re giving. Yes. Where we’re going to start commoditized and trade for something better and return than what we have. And you start thinking of that some of the valuable elements that start coming in as far as copper, steel or is and things that we’re not necessarily survival anymore but more a way of evolving society and making your communities better.
00;04;16;23 – 00;04;43;09
Touch on that a little bit. If you think of of the discovery of metal, for the most part, it’s a specialty item. So now you have a region that can do mining and metallurgy. Then you have other regions that were purely agricultural. So they started to expand their agricultural piece of it so that they could trade that agricultural piece for the metallurgy piece.
00;04;43;09 – 00;05;19;23
Right. But you had to go longer distances. In order to do that, you needed to develop things that were could carry heavier payloads, whether they be canal vehicles, wagons that were pulled by teams of oxen that evolved into a 53 foot trailer. Think about why all of that happened and how all of that happened and where it’s evolved to today is another really interesting piece of it to me, because most of it comes out of necessity feeding people, giving them tools to to progress their their lives or whether it’s, you know, things like war.
00;05;19;23 – 00;05;41;27
I mean, you know, logistics is a term that comes out of out of the military. So there’s a lot of supply chain advancements that came out of of even wars. You know, the the Greeks and the Romans and all of that has happened a lot. Genghis Khan. Exactly. Yeah. And you think about Michael Porter’s book, American Intervention, Harvard professor.
00;05;42;06 – 00;06;00;29
What Jeff just described, and it was probably the basis of his book because they were looking at competitive advantage and what can you do better than others. So you can actually help the entire ecosystem of basically business and opportunity. And so you think about all the current things that we see. The foundation was built then and of course it just changed.
00;06;01;06 – 00;06;23;15
All right, so, you know, and we think then how after the Renaissance start and then you think about how America and the Americas were discovered and how all of that was brought over here. Yeah. Yeah. Okay. You spend a few minutes about talking about how that happened along the East Coast and then eventually moved west and how we’re still living that experience today.
00;06;23;15 – 00;06;47;09
Still, right? Yeah, without a doubt. Yeah. And it’s always fun to me to talk about port cities right in the U.S. because it’s where it all started. The the the building of the ports, you know, whether it be Savannah or Charleston, you know, those early ports that the the ships came in from from Europe and really all over the world with that those trade items.
00;06;47;09 – 00;07;10;07
Right. And and those ports are still there today. And now they look different, right. And container ships show up today. But the idea is the same. Those early sailing ships that brought all of the goods to the US that that kept the US alive. Right. It kept the the people of the US alive. Right. They had not expanded westward yet.
00;07;10;10 – 00;07;49;23
They couldn’t produce everything that they had in Europe and in the more developed societies over there. So they imported that and those ports were key to keeping people alive in the 14, 15, 1600s and of course, of the 1800s came industrialization. Yes. And that’s really where we can say that the roots of modern supply chain started. And when we think about the Civil War, the communication between the telegraph and then the building of the rail systems and how that became a competitive advantage.
00;07;50;00 – 00;08;10;23
Let’s spend some time on that. The Industrial Revolution brought the railroads right. The railroads enabled that because you could move tons and tons of of product from one coast to the other. Right. And you could supply towns and cities all along the way and be able to take people and cargo across the country changed the supply chain of America forever.
00;08;10;23 – 00;08;37;10
And you think about it today. Now, in 2023, the train system is still essential for moving heavy loads across the country. Absolutely. It’s a core to our supply chain. Now, then happens World War One, World War Two, and how logistics started and be able to supply the front lines and clothing and materials. The soldiers needed. That not only was a tipping point in the war, but also set up our future of commerce as we know it today.
00;08;37;29 – 00;09;05;12
I think World War One was a a great experience. There were a lot of breakdowns in supply chain and World War One that got fixed for World War Two. That that really were the catalyst after World War Two to where what our modern supply chain, global supply chains look like. Now, if you tie that today to the Russia Ukraine crisis, for example, the thought I think by most people was this was going to be a one week to a one month war and Russia would take over.
00;09;05;29 – 00;09;28;27
But Putin failed to hire with supply chain leaders and supply chain logisticians because their biggest challenge is doing exactly that. They can’t get weapon. They can’t get, you know, any kind of recommitting other resources to help the people that are on the front line. And we heard a story at a recent conference where one of the people was a Russian expert and he talked about it and he said the Russians were sending, let’s just say, 300 people to an area.
00;09;29;10 – 00;09;46;16
Only 100 had guns. Right. And the theory was the other 200 would pick up the guns when the first hundred got killed. And that just shows you from a supply chain perspective. You know, if we think about war, Putin failed miserably. Right? Right. Had he hired you, Jeff, they might. Yeah, right. Yeah. It probably was a job I wouldn’t take.
00;09;46;17 – 00;10;18;29
No. The failure to plan out your supply chain, whether it’s in war, military or retail, oil, wholesale food, the failure to plan out your supply chain and have redundancy and backup plans is is typically the demise to someone who thought that their company depends or their people depend or their army depends on those supplies to be able to to perform their their job.
00;10;18;29 – 00;10;43;05
Right. Let’s talk about that impact on the civilian population, how the manufacturers and the factories had to basically reconfigure their manufacturing for a wartime type of economy. And then afterwards, when it’s over, then what? And you think of the depression that happened and how with a new deal and the TVA happened and how that was used to infuse that time to try and get it back.
00;10;43;20 – 00;11;09;13
Then World War Two happened and it’s almost like we learned from World War II because after World War Two, they were anticipating the same type of issues. Yeah, but the pivot to commercialism and consumerism and feeding not only through the the GI plans and the job opportunities that were given to them, but also that turned us into a consumer society and our manufacturing and our businesses modified it.
00;11;09;14 – 00;11;30;29
Right. Talk about that, how we converted from tanks to refrigerators. I think when we’re looking at acceleration of trends or change, I think that was probably the biggest. Totally agree because you think about pre-World War people, you know, women were still buying dresses and getting them right. There was still a consumer mentality. But I think the the growth was such a tremendous growth as we’re seeing growth and change every two years, every three years.
00;11;31;10 – 00;11;53;26
It was like that over a long period of time. But that was really, I think, the escalation, like you said, to consumerism, privatization of certain things. And obviously consumers drive demand. And so I think that kind of enhances that that much. So think of between World War One, World War Two, World War One. We got into because we were urged very heavily by our allies to get in it.
00;11;54;07 – 00;12;20;02
World War Two, we got in because we were attacked on our own soil. Right? And so the people that were coming out of the Great Depression were we’re now forced into World War Two. It was a different kind of war than World War One. It needed a lot more supplies, whether it be planes, tanks, fuel, rubber, food, clothing, whatever it was, they needed more of everything.
00;12;20;02 – 00;12;48;16
Women came into the workforce where they were historically homemakers. Now they’re now they’re building planes. Right? They are becoming a major influence on the war effort. And and they’re even soldiers. Right. And so that that was the transition like that was the catalyst that you were speaking of. Right. And so our society changed and and those that weren’t fighting were back home working, supplying the war effort.
00;12;48;25 – 00;13;11;29
That was where things in the supply chain accelerated faster than than we’ve ever seen before. You have to think about, especially for folks who aren’t from in a warehouse and they’re processing orders back when everything was paper pick tickets. Right. And now how that is automated, what the technology is doing to enable that ability now to deliver the next day.
00;13;12;02 – 00;13;39;10
You spent some time on that? Yeah. Yeah. So the evolution inside the four walls of the distribution center has changed so much. I mean, I remember I have been in warehouses back early on where they were multi floor and they had a freight elevator that would go up and down in between multiple floors and systems that that can totally automate bringing anything in that distribution center to one person standing in one place.
00;13;39;13 – 00;14;03;22
When I first started distribution, working in the freezer as a freezer supervisor, we had an old AC 400 system. So we’re talking about old systems. It was a tank in the back of the room and the IT room where they would print labels, you would actually have to stick on the boxes that you picked. So imagine that process of how inefficient, nonproductive, you know, the challenges that come with trying to pull a sticker off in a freezer and apply it to a carton.
00;14;03;22 – 00;14;21;02
It might be a little bit wet and it doesn’t stick. And then a couple of years later, we brought in Gagnon, which was a labor standards company. But that changed our business because we actually brought in technology, we brought in standard operating processes, procedures. Then we were able to actually coach and counsel people better because we had processes and we had data.
00;14;21;03 – 00;14;42;07
And then you look at today, 2023. So one of our ecosystem partners, they have a system that sits on top of the OMS, the ERP, the order management, the inventory, and it will give you recommendations during the course of the shift when to move people, where to move people, what’s your what’s coming down by what zone? And then it gets better every day because it’s learning.
00;14;42;13 – 00;15;11;20
It’s got the AI and machine learning. So as it builds more data, it actually gets better. So it just goes to show you how effective technology is. And you mentioned the speed of light of technology. I mean, this is something that was even around three years ago. Oh, absolutely right. And when you think of pre-COVID to post-COVID, as far as what the tolerance was for inventory levels, um, is it better to have less margin and more inventory or is it better to have more margin?
00;15;11;21 – 00;15;40;20
Less inventory but have the risk of being out of stock and losing a sale? Yeah. And then that data that supports that help us through that all all of this fantastic brand new technology that we’ve gotten in the last five years or so isn’t necessarily for everyone. Right. In every operation and every warehouse, everywhere. Right. We have that discussion with our clients all the time when we’re doing a design project for them or an optimization project for them, we have to look at the different technologies that are out there.
00;15;40;20 – 00;16;00;28
A lot of the conversations we have is how do you get from where you are today to where you want to be and what does that investment look like? There’s not many companies that we work with that are pure manual today and they want to be lights out automation tomorrow right there. Steps in between that are logical investment, steps to get you where you want to be.
00;16;01;06 – 00;16;25;28
You know, this is a good chance for us to stick our toe in the water. That may not be our turf considering the next Gen Z. I talked about it. Right. The future is they look like. Yeah, you know, I think our perspective might be a little different from theirs they’re going to look at they’ve their context was from a this is what the customer experience is like and how why they buy and the things that motivate them to support another brand.
00;16;26;05 – 00;16;45;24
I think the money is going to shift and then it probably will shift. Not so supply chain wise, but how do we get passive income? How do we do certain things to keep us in our retirement days taken care of? Um, but when I think of the younger generation like Harris and Stuart and Rachel from Last the last podcast, right, what they’ve grown up with the access, they’ve had the visibility, they’ve had the things they learned.
00;16;45;24 – 00;17;07;23
For example, when we get that speech to was the earlier we talked a lot about you know CSG, ESG diversity, equity inclusion, those types of things and how the younger consumer, they want that corporate social responsibility, whereas we just cared about do we get the right product at the right time, at the right price? I think in 15 years, who knows what the next level of expectation is going to be on supply chain?
00;17;07;24 – 00;17;32;20
Right. We spent a lot of time talking about the differences between generations and there, and there’s plenty. But the thing I like most right now, where we are today and especially thinking about, you know, Stuart and Rachel and ours, we have some of the very same ideas. Right. I like to see how the the past gets in cooperated into the future for positive.
00;17;32;20 – 00;17;57;02
That’s what I like about what’s going on in supply chain right now and especially the current generation that’s coming up as they they give a darn about leaving the planet in a better place than they than they found it. Supply chain strategy has evolved tremendously as well. And we actually talk about this. It was the and the unique thing that we’ve seen is it was always about freight, how do we reduce our freight costs?
00;17;57;12 – 00;18;13;22
And it became how do we get one day service to day service through this service? Then it became inventory considerations. As we have facilities, our inventory explodes. How do we handle that? Right then it came down to the operating expense. Are we in the right part of the city for the labor, for the utilities, for the access to highways, etc.?
00;18;14;05 – 00;18;32;14
And now it’s being added to that study is what is your corporate social responsibility platform and how do you enhance that by where you move? MM And so I thought that was very interesting that the strategic people are now incorporating a lot of the younger generation thoughts around that corporate social responsibility and tying it to the strategy of their supply chain.
00;18;32;21 – 00;19;07;26
Great context. Thank you for being here and joining us on this and adding your insights, your career experience, your PowerPoint. Could you leave us on a note of inspiration? As a borderline baby boomer Gen X, I would say make sure you continue to learn. Don’t accept mediocrity. Make sure that you do something in your career that takes you to the next level, not only by title or by salary, but by your inner person.
00;19;08;03 – 00;19;23;08
Treat people the way you want to be treated, be genuine, and continue that learning process until the day you retire and maybe a little bit after. Thank you, guys. Thank you. Thank you again. That was awesome.