EP01: A Deep Dive into the Evolving Consumer Goods Industry with John Buckley from SAP

John Buckley discusses planning for supply chain disruptions, the sometimes contentious dynamic between retailers and consumer brands, and how to stay closer to consumer demand.


Logan Ensign: John Buckley, welcome to Shelf Life Great so it's a pleasure to be here. It's great to have you. We're really excited to have this conversation. John, you have a really compelling background for us here because you've had the luxury of working at the consumer brands I know you were at Maytag Kraft Tyson but also you've had the chance to work on the technology side for those companies that support them, currently at SAP. I think the first question for you is how did you get into this space and what gets you excited about it?

John Buckley: I started off in consumer products goods and have basically remained. They're all 35 plus years of my experience. As you said, we're starting to work with Maytag Appliances, which was in the hometown where I grew up at I set my stage and then I met people throughout the organization that moved and go to other companies. Some of them had asked me to come work for them, so I left Maytag to go to Jacuzzi. But then, as I started going through that, I had an opportunity to switch from more of the durable goods into the fast-moving consumer goods industry where I was working with Sarah Lee. Although it's similar with consumer goods, the difference between durables to fast-moving consumer goods the way that they plan and the way they deliver products and how they interact with consumers happens to be a little bit different. But it was at Sarah Lee where I really started to realize how technology plays a part in. I'm a business process person, so I think about things from a process. I came to learn how solutions, how that technology aspect, can add value and bring added results to your business process and to how you're doing your day-to-day work. So that led me to SAP and so then I started working with SAP and then started dealing with global customers around the world, mostly on supply chain topics. But then after I worked there for a couple years, I had the itch to get back into consumer products again. Then I went back and worked for Kraft Heinz and returned back into at that time. Now it was Tyson who acquired Sarah Lee Hillshire brands earlier on and then I stayed there and then I had that itch to say you know what I want to get back into, what I really enjoyed my time at SAP before. I really enjoyed sharing some of my experience and my knowledge with others and I really could see how the value of technology added in it. So I decided to leave and come back into SAP where currently I'm an industry product advisor for all of consumer goods with responsibility in the Midwest, but I do stretch out beyond that.

Joel Beal: John you mentioned you've been in the space for 35 years and I love the fact that you sounds like you even started at Maytag kind of the hometown business, if you will. I'm sure you've seen massive changes over that time, probably some that are pretty remarkable. Maybe some changes haven't happened that you would have expected. I'm just curious as you look at that you know relatively long time period, where have you seen the most evolution? What's been the most surprising, maybe both in terms of where there has been change and where there hasn't?

John Buckley: You know, working in consumer products, and whether it is durable goods or fast-moving consumer goods, or sitting on this side of the table looking back, one thing that we all need to focus on and need to be aware of is the consumers. That's you, that's me. The consumers have changed greatly If we think back 35 years and for some of us we don't even need to think back that far, we can just think back five or six years. Think about how we did things, how we worked, how we played, how we interacted, how we shop. All of that is constantly changing. So one of the things that I've learned over my career is that, even though the consumers we've gotten older, we've gotten wiser, but there are things that make us change our activities the changes of how we shop, how we interact. Most recently, if we look at what's happened with COVID, you go back five years. If you just think back about how we shop, how we engage, how we bought our groceries, how we bought our appliances. Today has changed as consumers. And so you know, 35 years ago, when I got into my first role as a demand planner and I was trying to guess what people would buy, fast forward 35 years and I'm still talking to customers or still trying to figure out what consumers are going to buy. We need to stay closer to that consumer to find out what they're doing and what are they thinking and what are they going to buy. And now you gotta put it into that. How are they going?

Joel Beal: John, you spoke about what people are gonna buy Most people, when you think about demand planning, that's what it's about. How much are they gonna buy, Maybe? Where are they gonna buy it? You said that's a more important thing post COVID, that's something. Certainly we've seen. A lot of you know buy online, pick up in store. Obviously, the growth of pure e-commerce how is that changing planning from your perspective?

John Buckley: You know, if you look back again at how we've changed and let's just take the fast moving consumer goods in the grocery store experience that we had Prior to this, we'd always go into the grocery store and we'd go in with a list or generally you'd start picking things off of the shelf If they wasn't there. Then you'd have to make a choice. You know, do I wait for that particular product to come back in or do I find something else? And so we'd make that choice right there. And as a consumer product, good company, we do never. You never wanna see someone change your brand. You wanna keep that product that's on the shelf. So you fast forward. Then, all of a sudden, covid hit and now we're interacting where we're not going into the grocery stores, and now we're having to do it online and we have to put our grocery list in or we have to do different things. And then, if they didn't have the product, sometimes the retailer would make those decisions for us. They would give us some product as a replacement. It might the value might have been greater than what it was that we wanted to order, but they would make a change for us. It gets back to the basis of making sure that you have the product on the shelf when us, as consumers, want to have it. Because, as a consumer product company that is branded and there are some consumer products companies out there that are private label but they play in this same sense as well that making sure that your product is on the shelf, available to the consumer when they want to buy it. And now how they want to buy it. Again, us as consumers, we've changed the way that we've shopped. It's nothing for us to make a decision that I wanna go on and buy an appliance and if it's not there at this retailer, that I'll switch and I'll move to somewhere else. Now, granted for the CPG company. If you stay within that brand, that's good, but the retailer, on that standpoint, doesn't like that when you switch from one of the stores to another store.

Joel Beal: You talk a little bit there around, you know that on shelf availability, which I think people have been talking about for decades at this point right Availability of product you obviously don't want someone substituting. Do you think with the change to more e-commerce, does that benefit more the brands or the retailers when it comes to switching? Because before, if I was in that grocery store, I'm a captive audience. It's unlikely I'm gonna go to a different grocery store because I can't find the exact product I like, or at least it's a little more difficult, and so as a grocery store I'm still going to be able to pick up that purchase. It just might be a different brand that I sell. But now I mean I can just open up a new tab on my browser and maybe buy from a different grocery store and get that same brand somewhere else. So I'm curious how is that dynamic playing out?

John Buckley: This is going to kind of sound like a consulting answer. So this gets into the other side of things. It kind of depends. And what do I mean by how it depends is that when you think of consumer goods and when I told you in my background, we talked about durable goods and we talked about fast-moving consumer goods. But you have to realize that there's other types of durable or there are other types of consumer products, such as fashion, home and personal care. All of those things have different and unique ways of going about it. So the example, joel, that you just gave there where you go in and you look for a washing machine, the chance of you switching to another brand of washing machine may be a little bit less likely. You're going to go find a new retailer that has what you're looking for Fast-moving consumer goods. You're shopping at a retailer, the product's not there, you're going to switch to another product. So the dynamics that happens in between the sub-industries is all different and, as consumer products good companies and retailers there's that dynamic that goes on about who owns the consumer, who has the information to the consumer. How can we share information back and forth between each other so that the consumer can make sure that they get what they want when they want it and where they want it as well.

Logan Ensign: I'm curious as you talk about these shifts that are happening, or really trying to keep up with the consumer demand and understanding that, do you notice consistent strains on supply chains that come out of this? And so what we see with some of our customers we work with is a lot more emphasis, for example, on different fulfillment methods through retail channels buy online, pick up in store, direct ship. Are there sort of consistencies in terms of just where people are focused from a supply chain perspective with these changes?

John Buckley: Yeah. So I mean, disruption in supply chain is getting to be a norm. It's not uncommon for us to turn on the news and hear about some kind of a supply chain disruption whether that's going to be a ship that's stuck in the Suez Canal to a bird flu or something like that we're seeing every time you go into the store. At least we are surprised at what we're out of. I mean, there was an aluminum shortage. That happened when COVID started. It was trouble getting aluminum, and so the manufacturers like Pepsi and Coke and some of the other were having trouble getting their products due to a supply chain issue. Recently, eggs have shot up in price. I mean, it's just I'm trying to find them. That's because there was a bird flu out there and so the limited. So it's that old economic supply and demand that goes into there, and those disruptions are hard to plan. I just recently read where every 3.1 years there's going to be a disruption in the magnitude of two to three months. So if you think about that and when I say a disruption that's one that's just not a glitch where you don't get a truck in this is something that's majorly impacting the industry for two to three months and anytime you get that disruption or that impact, that's going to create chaos, and it creates chaos for the suppliers, creates chaos for the consumer, products, good companies and it creates chaos for the retailers, because all of us again I get back to it we want to make sure we keep the product on the shelf for the consumers. And it's those disruptions that you can't plan for. You just have to make sure that you can react to it as best as you can.

Joel Beal: So, john, I guess that brings up the big question. You can't plan for these. As you mentioned, they happen unexpectedly, as you said, they've been in the news a lot the last couple of years, although they've always happened. So how do you respond? You know quickly this, you've been on both sides of this. You know how do you advise your customers, your clients, on how they get better at reacting to these things. They can't even anticipate.

Speaker 1: 14:05Yeah. So there's two things that I advise to the customers that I work with. Number one is have the ability to create different scenarios in your planning systems. We're never going to get away from planning. I mean, that's just, that's in consumer products. Good, that's always going to be there, and we need to do that for a lot of outside reasons. You need to make sure that you do your planning and then you create different scenarios. So what happens if supply would go down? What happens if demand would increase by 10%? How would I solve those things? Because what happens is you need to make decisions so quickly in order to make sure that you keep that flow of product going that you have to think through and then, when you start to see the pendulum start to swing where your plan which never, hardly ever, occurs the way that you want it to occur, once it starts to swing one way or the other, you've already thought through the process. You've already said this is what we're going to do, so that helps you get into that execution mode faster. The second thing that we have to do and I tell our customers and our potential customers that you have to do is, again, we are named consumer products. You have to stay closer to the consumer. You have to start seeing what are they talking about, what are they buying, where are they buying it, how are they buying it the more you know about that consumer although we've just talked about that we're changing every day the closer that you can get to that consumer and learn more about how they're changing, when they're changing and why they're changing. That's going to help you in the planning and as well as the execution to make sure that you can keep those flows of goods coming to the customers. I guess where I was trying to lead to with this is, you know that the emerging technologies that come around and that connection between the retailer and the CPG company and I said this to your team meeting when I was there to talk to them you guys offer a great solution with great opportunity to tie those two parts of the supply chain together. The ability to take that point of sale information and that inventory information that is generally maybe not readily received on a timely manner and given to consumer products, goods companies, is a great win because that does bring us that much closer to the consumer. It kind of opens up the window and that wall that exists in between us, for us to look through and actually see what the consumer is doing.

Logan Ensign: John, in our conversations that consistently comes up, I think you have a unique passion for making sure you don't lose sight of the consumer through all of this. Circling back a little bit to this interesting dynamic that brands have in, of course they need a strong relationship with retailers these are the primary channels which a lot of brands sell through but also this idea of who owns the customer and who owns the customer information. To some degree, retailers and brands are cooperating competitors, and so I'm curious how you view balancing this and how folks balance this dynamic effectively.

John Buckley: Yeah, that is an age old question and I wish it was a silver bullet for it because, again, like I said, 35 years ago, we were trying to figure this out and fast forward, and here we are today still trying to figure it out. So that is an interesting dynamic that happens between the retailers and the consumers. Again, I get the opportunity and it doesn't happen that often where I get the retailer and a consumer product good company in the same room together and we talk about this. But I try to get them to focus on is that we both have the same end goal in mind. We want to make sure that we keep the consumer happy, that they come back to your store, that they continually buy product from your store. But when they come to your store they buy my product is because that's what they want. So I need to make sure that I have my product in your stores. You need to make sure that you don't have it in the back room. You have it on to the store so that the consumer can get it, or on your website with your inventory updated to the correct amount so that they can place that order online and then come and pick it up. So that dynamic of we always find about who owns the consumer. You know, a brand company would say that's my customer, that's my consumer. And the retailer says, well, they shop at my place. What we need to do is we need to get past that and look out what's good for us, for those of us that are listening on the podcast today, or the three of us that are sitting here talking together. What is it that we want? And if we can focus our setup by sharing information what's going on in your world and what's going on in my world we can then better plan to handle maybe some of those disruptions from a CPG company. If I know that my manufacturing facility isn't going to be able to produce much, be open, tell the retailer that this is going to happen. How can we work around this? Again, keeping the consumer in the end, mine? I learned very early on, once I started working at Maytag Appliances fresh out of college, and one of my executives that I used as a mentor told me that the consumer is king or queen in that standpoint, because in our place at Maytag Appliances is actually a female that bought the appliances. They made the decision up there. So the consumer is king or queen. We need to keep that mentality today, keep the consumer in the mind and, rather than making it an adversarial relationship, we need to share information better than what we do today and then work together with the ultimate purpose in mind of both increasing revenues and profitability.

Logan Ensign: So, if I'm hearing you right, john, it sounds like focusing on the joint objective, which is we want the product to be on the shelf and we want the consumer to have a good experience buying. That and everything else can get complicated, but as long as you stay focused on, we have a shared goal, that can help a lot in that relationship.

John Buckley: That is the ultimate goal and it's tough and we're still talking through it and we have a long way to go, but I have seen some retailers and consumer products companies solve this and when I see how they're working together, I see nothing but improved benefit from both sides and there is truly a win-win relationship.

Joel Beal: I'm curious as, again, you've got the 35 years of experience. You've seen the change you talked about, just all the focus in the last couple years, the disruptions, the changing consumer trends that were happening before but seem like they've been accelerated or accentuated as you look forward the next couple years. What do you see changing?

John Buckley: Yeah. So again, if I had my crystal ball and I could look into it and tell you what was going to happen, that I wouldn't be sitting there talking to two of you guys today. But the one thing that I can't say is that if we do learn is that change is constant. It is going to change as we look ahead and we say what's going to happen. What I generally tell consumer products companies is to stay really close to their own employees, to stay really close to themselves, to their families, because the same thoughts of what's going through your mind as you're seeing some of this disruption come in how you're shopping, and that you're not alone. Everybody else is doing that. So there is going to be more disruption. I just told you before, every 3.1 years, there's going to be at least a two month. That's not even counting the small disruptions that we have throughout that process. If we go into it with a mindset that, yes, there's going to be disruptions, there is going to be, if you want to say it, a new normal I don't know where everyone be to a normal state again. But if we do a better job of planning through all the what if scenarios that we can think about. We're going to have a better job of then executing, and if we do a better job of executing and adapting to those changes that are presented to us, better off we're going to be in servicing the end consumer. So I wish I had more than that of what I see in the future. I know technology is going to continue to change. I know technology is going to help business processes more automate. We're going to learn more. We're going to use emerging technologies like AI and ML and robotics to help us continually do better. But I would almost guarantee you that if we had this podcast 35 years from now which I know I would be really super old we'd probably be talking about the same stuff all over again.

Joel Beal: Yeah, I think I think you're right. You know, what I'm certainly getting from this is just that idea that it's. It's all about that consumer right, the, the aligned goals. There's a lot of different companies involved in that complex supply chain, but as long as everyone understands what that ultimate goal is treating that, you know, queen or king, that you know and consumer then everyone's going to win in that process. And so I imagine that's going to stay pretty constant here too, even if a lot of the the details around it change and again it again.

John Buckley: we don't have to go very far to look at the industry that we play in consumer goods. So I mean it's it's a reminder to those of us that are in enroll similar to myself or that are in their manufacturing products. It's just just look at the industry that you're in and remind yourself that the consumer should be our main focus.

Logan Ensign: Well, John, thank you so much for joining us today. It's really been great having this conversation with you.

John Buckley: I've enjoyed it as well.