EP 112 – The answer? Data sharing & collaboration
Alloy was founded 4 years ago when Joel and his co-founders realized there was a huge lag between supply chain and the retail industryListen
There are plenty of technology platforms available that, while they do serve a user or business need, they solve it so poorly that users have to be dragged kicking and screaming to the login screen. Logan Ensign, VP Client Solutions at Alloy, wanted to be a part of designing and rolling out a platform that would solve problems so well people would want to log in and get to work.
He found that opportunity at Alloy, a solution that makes it easier to succeed in industries where consumer demand is regularly shifting and changing. By helping companies respond more quickly to shifting signals in the supply chain, he makes it easier and more cost effective for them to get their products to market.
In this episode, Logan describes for Supply Chain Now co-hosts Greg White and Scott Luton:
Scott W. Luton
Founder, CEO, & Host
Supply Chain Now
Scott has worked extensively in the end-to-end Supply Chain industry for more than 15 years, appearing in publications such as The Wall Street Journal, Dice and Quality Progress Magazine. Scott was recently named a 2019 Pro to Know in Supply Chain by Supply & Demand Executive. He founded the 2019 Atlanta Supply Chain Awards and also served on the 2018 Georgia Logistics Summit Executive Committee. He is a certified Lean Six Sigma Green Belt and holds the APICS Certified Supply Chain Professional (CSCP) credential. A Veteran of the United States Air Force, Scott volunteers on the Business Pillar for VETLANTA and serves on the advisory board for the Georgia Manufacturing Alliance. He also serves as an advisor with TalentStream, a leading recruiting & staffing firm based in the Southeast. Connect with Scott Luton on LinkedIn and follow him on Twitter at @ScottWLuton.
Principal & Host
Supply Chain Now
Greg is a founder, CEO, board director and advisor in B2B technology with multiple successful exits. He recently joined Trefoil Advisory as a Partner to further their vision of stronger companies by delivering practical solutions to the highest-stakes challenges. Prior to Trefoil, Greg served as CEO at Curo, a field service management solution most notably used by Amazon to direct their fulfillment center deployment workforce. Greg is most known for founding Blue Ridge Solutions and served as President & CEO for the Gartner Magic Quadrant Leader of cloud-native supply chain applications that balance inventory with customer demand. Greg has also held leadership roles with Servigistics, and E3 Corporation, where he pioneered their cloud supply chain offering in 1998.
In addition to his work at Supply Chain Now and Trefoil, rapidly-growing companies leverage Greg as an independent board director and advisor for his experience building disruptive B2B technology and supply chain companies widely recognized as industry leaders. He’s an insightful visionary who helps companies rapidly align vision, team, market, messaging, product, and intellectual property to accelerate value creation. Greg guides founders, investors and leadership teams to create breakthroughs that gain market exposure and momentum, and increase company esteem and valuation. Learn more about Trefoil Advisory: www.trefoiladvisory.com
Scott: Good morning, Scott Luton and Greg White with you here on Supply Chain Now. Welcome to today’s show, Greg, how are you doing?
Greg: I’m doing very, very well. We’ve talked to some really interesting folks today and I’m looking forward to this.
Scott: This will definitely. So we’ve done our homework here. We’ve had some pre-show conversations. This is going to continue in that trend. No doubt.
On today’s show, we’re talking with a business leader from an industry dynamo that is empowering companies to successfully bridge that gap between plans and reality. And that gap for some companies is huge and massive, for others they’re getting a lot better at building that bridge. So we’re going to dive into that a lot more of that here momentarily, stay tuned for a great conversation.
Want to welcome in our featured guest here today. We’ve enjoyed our conversations thus far, this promises to be another great one. Logan Ensign, Vice President Client Solutions with Alloy. Logan, how are you doing?
Logan: Really well, doing really well, excited to be on with you guys.
Scott: We are too. I feel like as we talked about in the pre show and talking with you and your team, I feel like I’m an honorary technologist. I’ve soaked up so much knowledge and we’ve had a little fun as well, along the way. So excited to share you with our community here at Supply Chain Now.
If we’re all buckled in, let’s dive right in because on the front end, we’re gonna get to know Logan a little bit and he’s got some really cool stories and some things that you may just not know about one Logan Ensign. So let’s start Logan, where are you from? Tell us about that.
Logan: I grew up here in the San Francisco Bay Area, out here in California. First 12 years of my life, I was in the East Bay in a town called Castro Valley, like 15 minutes from the Oakland Coliseum. Grew up going to Raiders games, Wednesday afternoon summers at the Coliseum, you get your whole section for an A’s game. And then for high school moved up to Santa Rosa, so Sonoma County wine country up there. And then I went to school in Palo Alto in the South Bay. So all I’ve done is just, I dunno, 20 miles. And I’m actually back in the East Bay, live out here in Concord
Greg: Everywhere but Sausalito, basically, right?
Logan: Yeah, we’ve got to get more cash for that.
Scott: When you talk about the Raiders back, Bo Jackson instantly comes to mind. Now that may be a little bit before your time, Logan, because if it’s not, you’ve got excellent genes by the way, Bo was unstoppable until he went down with a hip displaced or something, right?
Logan: Yeah, yeah. Playing for the Royals too. He was a monster. A little before my time, but he grew up a Raiders fan, the nineties aren’t too memorable. You kind of learn about when we used to be good. Marcus Allen, Bo Jackson, Al Davis, right? I don’t think I fit the stereotypical Raider fan, you know how people view us, but just love them.
Greg: Because I don’t feel that it’s eminently to happen that you will try to kill me so you don’t fit the stereotype.
Logan: Nah, it’s safe. It’s all in fun. My four year old daughter – I don’t know if you guys know there’s a famous sort of NFL films poem and theme song for the Raiders called The Autumn Wind – and my four year old daughter has memorized it, which is pretty fun. She likes to get her game face on and it’s like the Pope.
Scott: So is spiked shoulder pads on her holiday wishlist?
Logan: I think she had fun dressing up. As a kid, I remember my uncle would come in from, he lives on the East coast, but is a Raiders fan and he’d rent a Mustang convertible and we had this big flag with like a skull and crossbones on the top and driving through downtown Oakland. We really, we did it right. It was sad to see them go, but it was really a fun community to kind of grow up in.
Scott: That’s awesome. All right. So now that we have uncovered some of your favorite memories from your formative years, let’s talk about one other interesting aspect that you’re passionate about. We got to know a lot more about these geckos Logan.
Logan: Yeah, so when COVID hit, working from home and we do a lot of video calls, and this became sort of my backdrop. Early on in March or April, on with a customer and they said, “Logan, do you grow weed?” So it is good to kind of get in the open. No, it’s not my pot farm back here. These are Crested Geckos.
When I was in high school, I got one of these as a pet. They were thought to be extinct until 1994, so they’re an endangered species and not a super common pet. And then, I started to realize like, “Hey, these are $200, $300 a piece.” I got looking into like “Oh, maybe I could breed these and make some real money,” especially as a high schooler. So I went out and I bought a female Crested gecko, and a few months later, I remembered it was Christmas Eve. I came up to my room and she died. She choked on a cricket and that was sort of the end of the start-up there.
When I married my wife, she knew this about me, that this was sort of part of my youth. I don’t even know how we came across it, but we were on Craigslist and I found this listing. Someone was selling 15 Crested Geckos, and all these enclosures and all this. I texted it over to her and I said, “Hey, Kate, like, let’s do it,” and she’s spontaneous and fun and she’s like, “Yeah, let’s do it!” So we kinda talked ourselves into it and just bought 15 of these geckos and started kind of a hobby together.
At its heyday, we got probably a hundred or 150 geckos at a time in our little apartment. We shipped them 35, 40 different states all over the country and it was sort of this thing.
But fast forward, once we had kids, it was just too much to do and so we got rid of all of them. But kind of coming back to my four year old daughter, she is super into animals and we were looking for things to do so we’ve kicked it off again this year. I think if we meet again next year, maybe it’ll be twice as big behind me as we scale. It’s an odd hobby, but it’s pretty fun.
Scott: I gotta ask you Logan. When it comes to forecasting gecko demand, how challenging is that?
Logan: We can’t keep up. I’m always sold out. I’ve got pre-orders. Maybe a similar problem with some of the folks listening here. It’s hard to keep up.
Scott: All right. Well, I appreciate you sharing, there’s so much more there in what you shared about your upbringing and some of your cool passions, we’re going to have to have you back and take a deeper dive on some of those passions.
But today, Greg, today, we’re talking about supply chain leadership. We’re talking about retail, we’re talking about some really cool his journey and some cutting edge technology right now, right?
Greg: Yeah. Direct to consumer. And imagine the lead time on replenishing geckos, right? I mean, you have to take lead time into consideration, right?
Greg: Not that you have much choice on the yield, yield is sort of up to the product, isn’t it? But before we dive too deep into what you’re doing today, Logan, let’s hear a bit – first of all, I forgive you for being a Raiders fan. I just want to say that. Lifelong Chiefs fan.
Scott: Worlds collide
Logan: Well we still have three Super Bowls, so we’ll see how…
Greg: He’s a real Raiders fan, throwing it down, first thing. Okay.
Greg: Let’s talk about your professional journey a little bit before you landed at Alloy. Tell us a little bit about some of the positions that you held that maybe helped get you to where you are today. And if there were, and of course there always are, sort of these epiphanal “aha” moments in your life and maybe a mentor or two that kind of helped shape your worldview or get you to where you are.
Logan: Yeah. Growing up, my dad was an R&D Engineer at Medtronic in their cardiovascular division, so a pure engineer. But he gave me some career advice early on saying, “Hey Logan, whether you like it or not, any job you take is sales. That skillset – you know, as an engineer or a research scientist, all the way up to, you know, true sales – it’s a skillset that is just critical to be successful professionally. So straight out of college, I wanted to get that experience and took a job in commercial insurance sales.
My first job was full immersion. It was okay, you’re going to cold call and it’s 50, 60, 70 calls a day. You just got to go and hit the phones and you’re measured on the outcome of that.
I think as you go through that process, and I don’t know, I think you learn a lot just early in your career anyway, so I think maybe more epiphanies come earlier in your career than later, but you get into this motion of, “Oh, maybe I can get a little more strategic, a little more thoughtful in how I approach these conversations.” And there’s always improvements you can make, but there’s no getting around the fact that you just gotta do the work, right. You just gotta sit down and make the calls. That’s how you’re going to get better from a skillset perspective, but it’s also just a critical input in being successful there. So that was a bit of a grind, but you learn a lot about yourself as you get to interact with lots of people.
Moving out of that, I stayed in sales at the same company, but I moved more into the field, into a closer role, again in commercial insurance. I think for that, when you’re in a pure sales role, it can be really, really maddening sometimes because you can do the best job you can do, and then ultimately it’s up to the other person to decide, are they going to make that decision or not? At the time, I was reading Stephen R. Covey and just became enamored with this idea, and it’s become a mantra of me kind of moving forward on like, “Hey, you’re going to be most effective when you are focused on your area of influence.” If you are focused on things outside of your area of influence or area of control, that’s when you can start to spin and you can drive yourself nuts. So just focus on what you can control, you’re going to be effective in what you do and the rest will work out because why worry about things that you can’t control?
I also learned in that job, I didn’t want to be in pure sales, but you also learn you want to be working with people, the relationship components there, you can really start to kind of suss out what’s important for you professionally. I don’t know if those are revolutionary ideas – work hard and focus on what you can control – but I think those are important skills or insights to kind of learn yourself. Kind of getting your feet wet and getting into that a little bit.
Greg: Well, you had me at Stephen Covey. I mean, there’s so much that can be learned there. And particularly, if you think about our world today – we don’t want to go that broad, but if you think about our world today, I think more people would be more satisfied if they focused on their circle of influence.
It’s funny because I think of all the usual suspects – begin with the end in mind and that sort of thing – but that circle of influence is a very, very important concept. So very good, and to have learned that at a really young age is, that’s a gift, frankly. That sets you up for your journey really strongly. Right?
Logan: Absolutely. I don’t know if it’s in a lot of people’s nature to take that approach, so I think it’s a good one to have on the forefront, like remind yourself, “Why am I worried about this? This is not something I control. What are the elements of this that I can do today to feel a little bit different about it?
Greg: How did you land at Alloy? Tell us a little bit about that story. Cause you have an impressive past, an impressive resume. Tell us a little bit about how you landed at Alloy.
Logan: Yeah. I jumped into SaaS, I’ve been in SaaS – software as a service – for a while now. In my last role, about three years ago, I was living down in Southern California with my wife. She was seven months pregnant at the time, we had a two year old, she was about to defend her dissertation in neuroscience down there. We just were not looking to move. I was happy where I was.
But I think, you kind of develop in your mind sometimes “What do I want in my next role? What do I need that to look like?” And I’d really determined that a key component of my next role, I needed to find a company that had a strategy really squarely in product first. There are a lot of great ways to build a software company, but I think philosophically, I wanted to be really confident that the organization was over-investing in development, design, and really the primary objective of the company was, we’re going to build a really usable, intuitive value-adding product for the user.
The reason that was important to me is my job could look a lot of different ways depending on the product. Sometimes people in my position have to spend all their time just trying to convince people like, “please just log in, please just use the tool,” and dragging them along. What I wanted to make sure was the dynamic is “OK, the tool speaks for itself. How can we take this to the next level?” Help me understand your business processes, help me understand your pain points, and let’s collaboratively work on that sort of problem solving. That was super important to me.
I got put in touch with Joel, who is our CEO, and he comes from a product background. He sat with me for an hour, maybe two, and we just talked the product. He showed it to me and I was just blown away with how ahead of schedule it felt. Then learning that the company at that time was maybe 80% engineers, just kind of checked that box for me. That was a big one.
I think the other two pieces that were really compelling as I started to get to know Alloy and what we were about: I just started getting excited about supply chain. I don’t know if I’d admit that to just anyone, but I feel like this is a safe space.
Greg: Before 2020, you probably could have admitted it and nobody would have known what you were excited about.
Logan: Yeah, exactly. But as we really started to think about this, it’s like, this is a space that’s just ripe for technology. It’s a great place to apply technology, it’s a place full of people interested in data and it’s this big, big, complicated optimization problem. So kind of that data nerd, it just really appealed to me as a space that’s just right for it. It’s a great place to build a software company.
Scott: Can I butt in for a second, Logan? Do you believe that, especially with the types of sales you were involved in earlier in your career, graduating into being that closer, were you already a data nerd that used that to close deals? Or did you have an epiphany? You got to tell us. As a fellow nerd, I got to know?
Logan: It’s a great question. I was probably always a little bit of – not to say that salespeople can’t be data nerds, but it’s not necessarily what you associate – but I, even super early, in like how many calls does it take me to get a second call, to what’s the average deal size? All those sorts of inputs have always been interesting to me. Even as a kid, with going back to the sports thing, like Moneyball and all that statistics appeal, I think it’s always been part of me.
But it’s really fun to apply it professionally because there is just a lot of value often in coming back to the numbers and understanding like, what causes what and how do I better make decisions on how to spend my time?
Greg: Yeah. I think that that’s a really interesting sort of crossover. On Moneyball real quick, is anyone excited about the possibility that Billy Bean and his organization buy the Boston Red Sox who wouldn’t pay him enough that he would take the job. How about that? That’s a way to get yourself a job is to buy the company.
Logan: It’s a fun saga, right? I think he’s a fun one to follow.
Greg: So you talked a little bit about your role. We know what your title is, but often that belies what your day-to-day is. So tell us a little bit about Alloy and then do tell us a little bit about how you spend your day, because I would think that somebody with your sales gifts and your awareness of the role that data and the various points of view play in the sales process, I bet you get pretty engaged the sales process. But I want to hear it from you first.
Logan: Should we start with the role or Alloy? It might feel a little backwards, but start with the role maybe first, then Alloy. From a role perspective, as the VP of Client Solutions, my organization’s responsible for the second a customer becomes a customer on. Once a customer becomes a customer, we’ve got to go and get in the weeds of data implementation and project management, but also training, enablement programs, support. Then on top of that is, how do we create a really vibrant user community? How do we think about best practices and making sure that we’re providing that value for customers? That’s sort of the broad brush strokes of the team.
I’ll say, you’re right, I do still stay really involved with a good number of specific projects. I think that that’s just a super gratifying part of the job and you never want to lose touch of the actual customer or user experience with Alloy and how we can improve. I’ll also say just selfishly, my last role – and not to disparage it, I love my last company – but oftentimes we were selling software to other software companies. You’re implementing software at a software company and there were days when you just feel like, “man, I’m pretty removed from the real economy here.” We are on top of something on top of something. What’s really cool about being able to be involved with our customers is, our customers make things. They make things that I buy, that my friends know about. That’s super gratifying because we find a lot of people are really passionate about it. One of our customers is Ferrero Rocher. They make Nutella and Crunch Bars and Tic Tacs. You may look at that and say, “Oh, well, is that really earth shattering to get chocolate to people?” But yeah, actually.
Scott: And Butterfingers, by the way. Important supply chain, putting that on the shelves, getting us through the pandemic.
Greg: I don’t think that you can overestimate the importance of chocolate, particularly in this day and age. I appreciate your contribution to the goodness of society through supply chain.
Logan: Nutella is a different level for a lot of people too. That’s not just a nice commodity, that’s a must have.
Greg: In Europe, that’s a basic breakfast food. You can hardly eat anything without Nutella in Europe.
Logan: Exactly. So staying involved in the day to day, being able to see those customer problems. Then we’re also making sure we’re operating at scale. That’s part of the day to day as well, but it’s a little bit of everything which keeps it, I think, pretty exciting. Pretty fun.
Greg: Very good. I’m curious about, as you go through your day, what’s the kind of favorite or most energizing thing that you do in a day?
Logan: That’s a good question. I still just love, and I know I’ve already sort of mentioned this, but getting on directly with supply chain operators, oftentimes for the first or second time. Being able to kind of introduce them to Alloy and customize it with them because – I know this is going to seem promotional, but it’s also true – the feedback is always, “wow, this is awesome.”
It’s really gratifying to be able to come in and make people’s lives a little bit easier because I do feel for the current supply chain tech stack. There’s a lot of old systems, there’s a lot of old process, it’s not built to be consumer-facing, really. Moving from maybe really monolithic ERP systems into this is just a really fun experience. It’s easy for me because all I have to do is hit “sign up” and they can jump in and get that experience. I think that’s really energizing for me.
I also have the chance to get into pre-sales conversations. Those are pretty fun, when prospects are asking about Alloy and we’re kind of doing discovery. That’s a pretty fun process as well as you kind of get things kicked off.
Greg: I love your passion for the product and the value that it delivers. That it is so important, particularly with what you all do, to get so much joy and gratification out of the benefit that your customers get out of your product. So we probably ought to get to that at some point.
Greg: Do tell us a little bit about how the marketplace uses your product and what it does, the main benefit that it offers.
Logan: Absolutely. At the highest level, Alloy is a platform that’s designed to be a central nervous system for supply chains.
Scott: Hang on. Central nervous system for supply chain.
Greg: I was drinking that in, Scott.
Logan: A little neuro neuroscience influence there.
Scott: I love that, I really do.
Greg: He’s a Stanford grad, Scott. We are outclassed. He’s way smarter than we are.
Logan: It’s that end to end supply chain visibility, right? Supply chains are complicated and being able to stitch that together is really critical. Then on top of that, we recognize that organizations just need to be able to respond to change in as near real-time as possible. The key to us is, how can we avoid the bullwhip effect? How can we make sure that we are really staying on top of a dynamic sort of consumer behavior and just drive that decision making as a result.
Broader context, we all know that there’s been a big shift in commerce, right? Markets are super global. There’s a lot of sort of non-traditional competitors. I mean, Amazon’s the really big disruptor, but there’s a lot more going on that’s driving change in consumer behavior.
Then COVID has just accelerated a lot of this and added uncertainty and change. We have a lot of conversations with our customers around, are these new consumer preferences going to stick? What magnitude are they going to stick at? To me, I don’t think we know. We could take our educated guess, but I think it’s much more maybe area of concern, area of influence. It’s much more important to keep a close watch on that point of sale and make sure you’ve got that infrastructure to respond accordingly.
Scott: Along these lines, I think it’s really interesting, coming out of NRF where we had several breakout sessions. There’s a lot of research that points to some of the different generations and their preferences and just how sustainable they’re going to be post-pandemic when we really break into that in a very meaningful and widespread way.
I saw one article by a robotics firm that pointed to research specifically around BOPIS, Buy Online Pickup In Store, and there’s still plenty of companies, unfortunately, that just haven’t gotten that right. It pointed to, companies are going to leave based off one, maybe two experiences. But as the discussions were putting out there into the feed, a lot of folks were saying, “well, if company A doesn’t get it right, they’re just going to go find company B or company C that does get that particular method right.” And they’re going to cultivate that loyalty. It really is, from a consumer behavioral standpoint and preferences standpoint, and how sustainable these preferences are going to be, it’s a fascinating time right now to study retail, Logan.
Logan: Absolutely. Talking to a consumer electronics brand, the Head of Sales there thinks this is going to be a really consistent, drastic shift in consumer behavior for his vertical because, are people going to go back to Best Buy and put on the headset? I mean, there’s some really real shifts in behavior that’s just hard to predict, but I think we have to acknowledge that there’s going to be shifts and we gotta make sure we get in front of that.
Scott: My hunch would be, one other thing that clearly stood out in a lot of our recent conversations is that pace of digital transformation. Just how we’ve seen that great quote, Greg, on one live stream where the gentleman talked about what businesses were thinking about doing in 2025, thinking about doing, is being implemented in a year like 2020 or 2021. For a model like Alloy, and please let’s make sure folks know exactly what that does, I bet y’all just can’t deploy the armies and the platform fast enough.
Logan: Yeah, I do think, especially the last six, nine months, there’s just been a lot more focus or urgency around real digital transformation of the supply chain. It’s just not, to your point Scott, it’s not acceptable to be able to say, “Oh, well, things are going okay.” Maybe service levels are where they need to be, maybe on shelf availability is where it needs to be, but the world’s changing. Retailers are providing way more data and they do that with an expectation. The expectation is you’re going to use it. So with all this data and transparency, brands have a lot more on them to go and execute and compete. I absolutely agree that there’s a lot of acceleration happening in this context.
The bottom line, from my experience and perspective, is just supply chains aren’t responsive enough. You’ve got lost sales from out-of-stock, maybe you’ve got some channels that are overstocked, your service levels are suffering. And that retailer expectation of, “Hey, you got to go and deliver at a higher level.”
To come back to central nervous system, that’s all good and well. In a bit more specificity, where Alloy fits, we’re all about connecting data and teams to make sure products where it needs to be. How that works is, we started from building a really impressive data platform because from our perspective, that’s the hardest piece to solve. You’ve got potentially, dozens if not a hundred plus retail channels, you’ve got your distributors, you’ve got your own networks, you’ve got your own product identifiers. Being able to bring all of this data into one place and allowing it to kind of talk with each other, that’s a hard problem to solve. That’s where we start. We know you need all of these data inputs to make meaningful data-driven decisions, and the reason you aren’t in most cases is because your ERP uses your own product identifier and maybe talks about it in cases. And then your retailers have thousands of stores and their own identifiers and fiscal calendars. It’s just a daunting task to say, how do we get all this to come together?
Once we have all that data in place and it’s coming in real-time and it’s harmonized, then it’s just the sky’s the limit, right? Oftentimes we have supply chain operators leading us along, like “Whoa, now I can do this, now I can do that!” Once it’s all in one place, now we’re all about, how do we sense opportunities throughout the network? How do we prioritize those based on purchase orders at risk or lost sales from out-of-stock or service levels. Then, how do we diagnose the issue and solve it ‘cause that’s what it’s got to get to. We’ve got to go up to the highest value issues. We gotta be able to diagnose why it’s an issue, and we have to be able to go and solve it.
Greg: So Logan, if I’m walking down the hallway in my company and I’m scratching my head, what’s the scratching my head moment or the painful issue that’s going through my head that makes me go, I need to call those folks at alloy. What is that thing What is the pain I’m running away from?
Logan: I think everybody knows, and maybe it’s a little presumptuous, but I think everybody knows academically that this is all fueled by what’s happening at the cash register, at the point-of-sale. So much pain in supply chain is caused because I don’t have a grip on really what’s going on at the point-of-sale.
Hey, why didn’t we know about this sooner, it took us a month to adjust forecast, or why are we cutting this order and not that order? Fundamentally, I think that there’s an understanding that at the point-of-sale, that’s what matters and what people are doing. I think that when you look at the common way supply chains approach managing their network is around sell-in. What am I shipping in? What are my fill rates? How do I minimize transportation costs, carrying costs, but ultimately those are all sort of secondary measures.
I think that supply chain leaders who want to be more responsive based on consumer demand and not be blindsided by supply chain firefighting, that’s really what you’re solving. If you’re spending so much of your time, just fighting fires, trying to get answers. If the argument is, “does Walmart have an on-shelf availability issue or not?” and not, “hey, Walmart does have an on shelf available ability issue and we need to solve it.” That I think is a pain that you can get past by bringing Alloy in.
Scott: You’re speaking to the folks that put product on the shelves at Walmart, just to be clear, right?
Logan: Kind of both. An example here, coming back to Ferrero, they launched a new product, the Kinder Joy egg. It is a fun story because that’s been around for years globally. One of our founders is from Italy and grew up with this, but it’s the Kinder egg, a chocolate egg with a toy inside of it, but the US FDA doesn’t want toys in food. Ferrero worked to get this product launched and it was a massive product launch. Product launches just exaggerate these issues even more because it’s so much harder to forecast and predict what it’s going to look like. You’re going to do your best, but there’s always going to be that need in real-time to manage that.
What happened an executive meeting, and what came up with a broader executive audience was, “Hey, a major retailer just placed a massive order for Kinder Joy.” Massive order that everybody felt like, this is not what we expected the load-in to look like. What do we do? At that point, Ferrero had Alloy and the VP of Supply Chain, in the call, was able to say, “I know what’s going on at the retailer. I see their order forecast. I see their POS forecast. I see their inventory position. This is a load-in, but it’s going to go back to normal.” Because I can see the weeks of supply right away, dynamically in real-time.
Greg: You know they’re piling up 90 days supply so they’re not going to have to order for the next 90 days or whatever.
Logan: Exactly. You think about another reality, it’s like, “Oh, let’s get off the call. Let me go back to this team. Let’s collate the data. Let’s debate the weeks of supply methodology and let’s come back.” In the meantime, we’re all panicked because, do we need to go and adjust production? Do we need to go and expedite freight?
Scott: All these different levers.
Greg: Not to mention it probably takes two to three weeks to do what you just described in a lot of scenarios. Using spreadsheets or whatever the other mechanism, planning mechanism may be.
Logan: And you don’t know what it’s going to be, so the flexibility to come in and investigate is super important. It’s that second question that again, typically results in another week or two cycle. I got you your answer from the data, but now I have that follow-up question. I gotta go back to the drawing board with a team of analysts to get to that next step. Really trying to just massively accelerate, those iteration cycles to get to the right answer.
Scott: That week or two can be deadly. I mean, that week or two could mean empty shelves in hundreds of locations, perhaps. Huge lost sales opportunities amongst them.
Greg: It could destroy the launch, frankly. When you’re launching a new product, you can’t afford to be out-of-stock because it could literally kill the product. It happens all the time.
Scott: I want to shift gears here for a second, if that’s alright with you. I want to talk about relationships. As many learned, perhaps more painfully than others, relationships mattered in droves in the year 2020. Especially when it was so challenging to really vet potential new relationships. Not that you were stuck with who brought you to the dance, but in many ways you kind of were. Those long standing relationships proved, in so many cases, to be incredibly valuable.
I want to talk about, we’re talking about bridge-building, right? We’ve been a part of so many conversations around, to generalize a bit, the supply chain side and the sales side. There’s plenty of other shareholders around the table, but we’ve had a lot of fun with this type of conversation going back years and years from our earliest days in one particular industry association. In the spirit of building bridges, let’s talk about building bridges between sales and supply chain. But first, Logan, set the table a bit because these two different shareholders are looking for different things. They have different motivations, and there’s some differences. Speak to that first.
Logan: Yeah, I think we run into this pretty often. Probably starting with, “hey, these groups have different incentives, different motivations.” It’s not all bad to not be completely aligned, you get checks and balances built in there. But starting with that sales side, their job is really fundamentally to drive that sell-in and manage those retailer relationships. I just can’t imagine – I sold insurance, but I can relate to how hard it is to source and negotiate and close a deal. I can’t imagine how maddening it would be at the end of that to turn around and just not have product to complete the sale. You’ve got this strong entity and organizations with a really justified goal of, “Hey, we got to go hit sell-in and have high and have high fill rates.”
But then on the flip side, you’ve got supply chain. They want to have high service levels, absolutely. But there’s also other factors, right? Minimizing those transportation costs, minimizing carrying costs. Some organizations there’s freshness, avoiding spoils, returns that they take into account here. This is often where a lot of the disagreements happen.
We had kind of an interesting project we did with a Fortune 50 company that I think is a pretty good example of how these incentive mismatches play out. This Fortune 50 company, they brought us into their hair care division. The project was a little different, we went upstream. We’re the hair care division, we manufacture the product. We have a raw materials supplier, and we’re not collaborating like we should. So what we want to do is, as the brand manufacturer, we want to give access to the data of our usage forecast and our inventory levels. Then what we want in return from this raw material supplier is their inventory levels, their allocation and their plans. As we got to the individual contributors, everybody’s terrified, right? Because, well, I don’t want to show my cards.
If you really boil it down, what does the brand manufacturer really want? The brand manufacturer wants: whenever I order a product, whenever I want a product, I want it there. I want it there on the day that I want it. That’s what they want! Similar to that sales mentality. On the supplier mentality, it’s I’ve got other customers. I can’t carry too much inventory, that costs me money. I can’t be expediting freight every other day.
You have these two entities and what we found is: We brought the data together, everybody’s a little uncomfortable and that’s okay because what you introduce to the equation now is an objective referee. What is the objective referee? Well, I know where you’re at, you know where I’m at. Now, instead of arguing about that or spinning that, we can all be on the same page and get to the next conversation, which is what do we do about it? I think it’s helpful to acknowledge that difference of incentives from a supply chain and a sales perspective, and then using that understanding where people are coming from, it’s a good first step to start thinking through how we can better collaborate or more effectively collaborate.
Scott: Perfect. I just thought you were going to say that they were going to be part of the same central nervous system. It was a perfect opportunity there, Logan. I’m going to stick with that because in my mind, that’s a wonderful visual. I love the neuroscience connection there to Kate.
Let’s go back to bridging the gap. I love that phrase right now because we need bridge builders in so many different ways, across not just industry, but civilization. So let’s talk about what bridges some of the gaps that you’ve just illustrated.
Logan: I think the first thing is, admit you got a problem. We talked a little bit about this, but status quo or just okay in this regard isn’t going to cut it. You can always improve, bring it down. OTIF fines are such a big topic with a lot of our customers.
Scott: What was that?
Greg: On time in full. So delivering the entire order when it’s expected, completely filled.
Logan: A lot of retailer relationships will fine you, as an organization, if you’re consistently cutting their orders or you’re late. This has become a really big piece for a lot of supply chains. So you’ve got that headwind, but then you’ve got this expectation you’re going to use the data, and just lots of your competitors now taking more and more advantage of this.
To me, organizations probably already are spending a lot of time and resources to try and solve this. It’s not just about improving business results, but it’s also just saving, becoming more efficient. A month long S&OP process just costs a lot of money in terms of time, effort, energy.
Maybe I’ll share a story because I think it’s an interesting one that sets the stage a little more here. When we were first building out our more supply chain oriented use cases and functionality, part of that process was we did general discovery. You want to go and meet people, learn more about what they do, learn more about their pain points.
I remember a conversation we had with a demand planner who was walking us through their S&OP process. It’s week one, we bring the data together. Week two, we kind of come up with some initial insights of what to do. Week three, we bring in stakeholders and we all argue. Then week four, maybe we go and take action. It’s a big process, lots of investment. Someone on my team asked, “that sounds great, how good is this process? How often do you have to change the plan after you’ve made it?”
He said, “I changed the plan in month every single day. Every single day I change it.”
Then the follow-up question, kind of these naive, “hey, let’s start to get a feel for the space” ones, was “why do you spend so much time trying to predict the future in this monolithic process when you know you’re going to be wrong?”
He said, “I’ve been asking that my whole career. Good question.”
Not to minimize, S&OP processes are critical. You should be looking to get better at forecasting, predicting the future, collaborating together, but you’re never gonna predict the future perfectly. We find that organizations aren’t investing enough time in the other piece of this, which is: knowing that our plans aren’t going to go according to plan, are we ready?
Coming back to that original question, I like to think about it across three dimensions, how do we better help sales and supply chain collaborate effectively towards a common goal. The first we’ve kind of already talked about, but it is data. We’re all looking at different numbers, different sources of truth and only part of the picture. Supply chain teams are looking at ERPs, planning tools, forecasting tools. The retail teams and the sales teams are looking at their spreadsheets and their portals. Whenever one has a question or wants to have a conversation, there’s this really cumbersome and sometimes sort of impossible process to enable that to happen.
I think the other piece to this, because we’ve talked a fair amount about the data component, is around incentives, but then also around, team structure and process. Another example that was really fun to see as a vendor was another one of our customers, a consumer electronics company. I don’t want to intimidate, people who are listening because you don’t have to be as radical as this brand to really make an impact, but I thought it was a really cool way of approaching this problem. First they brought Alloy in to just bring it all together. Now we’ve got common data, we’ve solved that data problem. But then the next step that the Sales leader took, because this was a sales-driven sort of transformation, was “hey, let’s change our comp structure.” In the past, the sales team had been comped on sell-in. Let’s change it, because we can now. Let’s actually comp our salespeople on sell-through. What that did right away was really align the organization on, now we’re only interested in the point of sale. That just helps get everybody a little bit more aligned.
This wasn’t just a change on paper. I can remember, as we were going through this, we’ve been working with this customer for six, nine months. They’re going through this change on the comp plan and I got an email. I was CC’d on it, and the subject line, from the Head of Sales, all it said in the subject line was “worst in the world.” That was it. Then in the body of the email, it had a screenshot from Alloy, which was lost sales from out-of-stock – at the point of sale, each retailer. The email was to the number one out-of-stock violator retail team. I never met these guys. It’s not a great way to be introduced to people, CC’d on this email where my boss is saying worst in the world. But it was like, “hey, we’re going to buy into this.” We’re going to shift incentives a little bit and we’re gonna be focused collectively at the point-of-sale.
Then the last shift they made after this took root was, we’ve got a bunch of retailers that we sell through, but we only have maybe 10 or 15 that represent 80% of our business. They restructured their organization to have retailer specific task force teams where now they were a lot more aligned organizationally. The major retail team had someone from supply chain, someone from sales, someone from finance. It was, I think, really transformational. We saw in-stock rates go up considerably. We saw forecast accuracy go up. A lot of efficiencies gained narrowing that in terms of the process and the teams that were involved.
Scott: I want to get Greg involved here for a second because Greg, we’ve talked about it through almost 560 something episodes, your retail background, your automotive industry background, I bet Logan is bringing some memories based on your time there, especially earlier in your career. As Logan’s talking about some different ways to bridge these gaps, what’s a couple of things that really stick out, that maybe folks need to really wrap their heads around?
Greg: I think that what they need to understand is that it is a very penalizing culture right now in the retail world. I was in retail more than two decades ago. If you’re a community member, you know what that means. I remember doing that exact thing. One thing Logan said was “spinning” – spinning a problem rather than addressing and resolving the problem, or sometimes even actually trying to hide the problem. I’ve seen vendors do that. I can’t tell you the number of times I had to get on a plane and fly to somewhere, to meet with the vendor in person to get to the bottom of the issue.
What we tried was, we tried the carrot first and if someone didn’t respond, then we tried the stick. What we’d never really tried and admittedly, this was a lot of years ago in retail, but we never tried really very often – we did a few times – to get together and collaborate. There were a few vendors. We were the biggest customer of a number of our vendors, so there were a number of vendors where we did that. But what I think this technology does and the approach, particularly the approach that Logan and his team take, is to open up the data flows, to open up the information other than data flows, and to start the more collaborative relationship.
In fact, back in the nineties, there was this thing called CPFR, collaborative planning, forecasting and replenishment. It was an incredible flop. It only worked for the company that started it, Walmart, and only because they were Walmart. But other than that, it was an incredible flop. Why? Because Walmart could spend $400 million a year supporting it and no one else could.
Now we have effectively democratized collaboration among enterprises with technologies like Alloy and others out there that connect their data, that connect their people, that identify the initiatives and allow resolution. Sometimes even on the platform.
Scott: Love that. I appreciate your perspective there. I think that brings it home for many folks that may still be wrapping their head around Logan and Alloy and the platform and some of the needs and the application. So I love that.
Logan, I know that it’s tough to do what you do and Alloy justice in an hour long conversation. Before we talk about there’s a couple of things we’ve got coming up, I want to make sure, is there any other anecdote that you’d like to share before we move on to what really cool thing y’all got coming up on February 18th?
Logan: Well, it kind of dovetails into that. I don’t know if I’ve mentioned Valvoline yet and I’d be remiss. They’re a lot of fun. During COVID, I grew out my beard, believe it or not, and I got on a call with those guys and they gave me the nickname Joe Dirt.
Greg: I was the oil buyer at one time at the auto parts chain I worked for and Valvoline was by far our best vendor. I can’t say anything about where they are now, but they were always so much more aware of what we didn’t even call supply chain, just replenishment, whatever. They were so much more aware of that than any of the other vendors. And we carried all of the usual suspects in terms of oil.
Scott: Logan, you earned a nickname, which is always a great sign, term of endearment. Give us some backdrop for this February 18th event.
Logan: Valvoline has been a customer for a while and I would just echo that, Greg, they kept the momentum going. They’re just super well run. I think great collaboration across sales and supply chain. We’ve done some really cool work with them, more fundamentally on how do we best manage at the retailer level. Some cool stories there.
One example where a retailer came in, ordered a bunch of inventory. That same day, the whole organization was on the same page, we can’t fill this order. The sales team was able to go back to the retailer and say, “Hey, you don’t need this order. Look, you’ve got plenty of coverage. Can we bring this down?” It’s just great sorts of collaboration.
It’s an exciting event. They’ve taken us to the next level, where we do a lot around “hey, show me where I’m hurting in the supply chain more generally.” Their Director of Supply Chain Eric Rossi, great thought partner and that’s really how he’s taking advantage of Alloy. We’re helping him in VMI relationships. We’re helping him do a lot more projection into the future – simulate for me when I’m going to have a problem three weeks from now, six weeks from now, 12 weeks from now. Cause I don’t want to spend my time with issues that have already happened. I want to prevent those issues into the future. We’ll unpack that more with Eric, but it’s a really cool, next gen way you can take advantage of a tool like Alloy as you bring in your ERP data, your forecast and your point-of-sale. Very much endorse joining with Eric.
We’re going to be doing that, let’s see. I think we have the date on that.
Scott: February 18th.
Logan: Thank you. You’ve got it there for us, Scott. I think we shared the link here or can share the link here to that webinar. Really excited to hear more about it. It’s just I think a good story and a good industry thought leader to be able to hear more about how they’re taking advantage of Alloy, but just more generally how they’re managing in a unique time. With a seasonal product that is maybe less predictable than it’s been in the past, and he can walk us through how they manage that.
Scott: Love it. As a brand, any car driver will instantly know. It’s always been cool, for the 15, 20 years I’ve been in supply chain, uncovering the supply chain and the operations and the leadership behind these brands that you’ve had their products in your hands so many times in your lifetime. Logan, going back to the thing you love, working with companies that make stuff. Keep the economy moving. That make consumers happy. I think it’s fascinating.
So February 18th at 12 noon Eastern time. We’re going to have the link in the show notes, make it easy for folks. One click to check it out and then register. Check that out and they can bring their questions to the event, I’m sure Logan, right?
Logan: Exactly. I’m just moderating, so you don’t have to hear me talk anymore. It’s going to be Eric. Absolutely there’ll be a Q&A, and you’ll be able to have more of an interactive dynamic with Eric there.
Scott: Awesome. Love checking back in with what the Alloy team has been doing. They’ve been on the move. You may not remember this, Logan. Joel was on a webinar way back when, in our earliest days. In fact, I think before we even were podcasting. It’s neat to have put our finger on the pulse as you all have continued to grow and innovate and help more organizations.
We’ve got some things moving forward, beyond your webinar. A live stream around the corner and other things. It’s really neat to be able to share what you are doing and join in the conversations we’re having in our community. Greg, if we’ve enjoyed this conversation as much, wait before we put them on stage live. It is going to be great fun.
Final question, trillion dollar question. Beyond the webinar, beyond all the cool stuff you shared, beyond the geckos, how can folks connect with you and the Alloy team?
Logan: It’s been fun to get to know you guys and jump more into your community. Feel free to reach out to me on LinkedIn. Alloy is at alloy.ai so you can get a better feel for the company and where we’re at. Like we said, the webinar is going to be a good place for Q&A and a good place to continue the conversation.
Scott: Awesome. Logan, again, so much more I’m sure you could share. I’d love to get y’all two over an adult beverage talking retail and exchanging some other stories, including some nicknames, but we’ll save that for a later time.
Really have enjoyed talking with Logan Ensign, Vice President Client Solutions with Alloy. Logan, thanks so much for joining.
Logan: Thanks a bunch. It’s been a pleasure.
Scott: Greg, great conversation, really enjoyed this. I know that this really gets your juices going because retail and forecasting and supply chain leadership and especially technology, cause you’re our resident technologist of the bunch. A wide ranging conversation we’ve had here today, huh?
Greg: This is the segment of supply chain that I came up in, first of all. Retail and direct to consumer and brand relationships and that sort of thing. Then of course, what we did at Blue Ridge was this sort of product for retailers and distributors. It’s a great problem solving solution and I love the inter-enterprise operability, a word we both learned today, Scott, operability, is that right? Did I say that right?
Scott: I think you nailed it.
Greg: We’ve said it a half dozen times today, haven’t we? But that inter-enterprise operability, that inter-enterprise engagement is really critical in this day and age. You guys both alluded to it, not just the relationships as they are from management to management standpoint, but the relationships in terms of data and information and collaboration throughout the organization that help companies recognize that they have to engage their partners to meet the requirements of who ultimately we are all serving, and that’s the consumer. Because the consumer owns and is the beginning and the end of the supply chain.
Scott: Love that. I love this notion of bridging gaps and doing so with the central nervous system. I love that, such a powerful visual. I’m gonna be talking to my kids later on about that. Thanks so much for that lesson, Logan.
To our audience, hopefully you enjoyed this conversation as much as I have. It’s fascinating to see how the retail world has navigated through a year like 2020 and into 2021 with so many lingering things, challenges that have just followed us into this new year. But it’s fascinating to see how retailers are using, and consumer good manufacturers are using, technologies like Alloy to serve, as Greg said, the consumer. The start and the finish to global supply chains.
If you enjoyed this conversation as much as we have, be sure you check out similar conversations on supplychainnow.com. Be sure to subscribe for free so you don’t miss conversations just like this. We offer a money back guarantee, Greg.
Greg: That’s right.
Scott: On that note, a big thanks for joining us here today. A big thanks to the Alloy team, of course, Logan. On behalf of Greg White, our whole team here at Supply Chain Now, Scott Luton signing off for now.
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