[00:00:00] Logan Ensign: From Alloy AI, this is Shelf Life.
[00:00:06] Joel Beal: How can suppliers better collaborate with retailers to drive sales?
[00:00:23] Logan Ensign: What are some of the impediments to data sharing within a company and with external partners?
[00:00:28] Joel Beal: What are the things you must know to be an effective supply chain leader today?
[00:00:33] Logan Ensign: On every episode of Shelf Life, we answer questions like these and more with the help of leaders across the consumer goods industry.
[00:00:41] Joel Beal: Today, we're happy to welcome Peter Smith. Peter was formerly Executive Vice President of Global Supply Chain for children's clothing brand, Carter's, and former Chief Operating Officer City. During his 37 year career, he has held leadership roles in supply chain at PVH, London Fog, and the VF Corporation. I'm your co host, Joel Beal, CEO of Alloy AI.
[00:01:03] Logan Ensign: And I'm your co host, Logan Ensign, Chief Customer Officer at Alloy AI.
[00:01:08] Joel Beal: We'll be back with Peter right after this.
All right, Peter, welcome. We're so happy to have you today.
[00:01:53] Peter Smith: Thank you very much for the opportunity to talk about these interesting things.
[00:01:57] Joel Beal: Well, you have a wealth of experience and many topics that we're passionate about. So very excited for this conversation, but before we kick things off or as a first question, you know, you've had a career that has A lot of different well known companies, companies that many of us have worn or used, you know, the products for. and I'd love to just have you in your own words, describe kind of your journey of, how you made your way into supply chain and, got to where you are today,
[00:02:28] Peter Smith: Yeah, thank you. it has been an interesting journey in the, the apparel and footwear space, and retail in general has evolved pretty dramatically. from the start when I went to work for PVH, I was a little bit unconventional at the time in that I, I went to work for one of the largest wholesale, uh, Brands in the world. but I actually went to work in the retail half of the organization or part of the organization. It was a tiny speck at that time. but then later grew to 1000 stores. When I joined, we had 30 stores. When I left, we had 350 to 400 stores and all the consumer brands apparel and footwear brands that I have worked for in the course of my career, have all embraced retail and then later e com, so they've all become Omni channel consumer brands and frankly, the retail companies that we supplied, the Macy's of the world and such, they stepped up their game on the private label side.
so the 2 worlds sort of converged, and stepped on each others and became frenemies in the space in pursuit of, a share of wallet. Thank you very much. So it's been quite interesting.
[00:03:38] Logan Ensign: well, Peter, one thing, you know, I've known you for a while at this point, and one of the things I really, appreciate about you because we come from a, data company, is just how you think about data, the importance of data and being so enthusiastic about, the role of data in supply chain.
and so excited to kind of have this conversation and, maybe to kind of dive in on that front. what kind of data on the supply chain side do you see as. Must have today. do you view is sort of the must have him piece of information supply chain leaders need to be able to do their jobs effectively
[00:04:11] Peter Smith: So top of mind for me, I guess are probably two arenas of data. is internal data, all related to the supply and demand of your inventory. for every company out there, the single largest asset on their books is the carried inventory. And as a supply chain leader, operations leader, you really need to have a full line of sight to everything that I currently own, everything that I have on order. What is its status in the acquisition and or manufacture the logistics or my distribution or at my retail? And what's the status of all that relative to what my future order book is and what have to meet that demand that's 1 arena just because the dollars are so large with today's interest rates, costly to carry all that inventory. The other arena of data that is critical is what's going on in my supply chain. is the manufacturing process, and or the sourcing process? Are those things happening on time? Did those containers get on the vessel on time? Are they going to dock and the vessels on time? Or is the truck going to come across the country on time? what capacity am I running in my distribution centers? What's my turn time in the distribution center or cost per unit in the distribution center? what's my click to consumer time when a consumer places an order on an ecom site and she typically clicks the mouse saying, boom, I've now ordered from that click to the time that we knock on the door and leave the package at the, front door.
that C to C timing. There are a ton of KPIs. in that, but they probably fall into those two big arenas.
[00:05:52] Logan Ensign: in both those domains given sort of your experience 30 plus years in the industry has your line of sight. Changed radically over time. And I am curious, just sort of that transparency, visibility, pressure on data, how that sort of evolved through your career. different now today than, you know, 15, 20, 30 years ago in the space?
[00:06:15] Peter Smith: So, Logan, it is radically different, I'm old enough to say that the world was barely in spreadsheets. when I started my career, thank God, it wasn't in paper, but, it has progressed dramatically both in the depth and breadth of the data that is available and the sources that we can now ingest into our models.
it's a. Completely different landscape and playing field than it was at the beginning of my career. All to the betterment of us having ultimately the right product in the right place at the right moment in order to fulfill the demand, again, whether it's directly from a consumer or one of our significant retail partners.
[00:06:56] Joel Beal: And Peter has the biggest transformation over those past decades. Has that really been the takeoff of e commerce or have there been other significant events that you'd say, Hey, these really were catalysts for changing kind of the data that we're collecting and the way we need
to work. Yeah,
[00:07:14] Peter Smith: Yeah, certainly, um, modern technology has had a lot to do with the ability of corporations to share data. So the availability of point of sale data. So, from a wholesale supplier perspective, the data that is available in the partnerships with significant retailers. That's an explosion of data. you know, EECOM and all the data that we get directly as a brand, operating an EECOM site and having a direct relationship with customers. That's an explosion of data. and for better or for worse, maybe a tiny silver lining to. What happened with COVID is that the world realized how bad most organizations were in terms of granular knowledge as to where is my production?
What's going on? Did it get on a ship? Did it get off a ship? What's going on at the port and all the rest? that was a catalyst to an explosion of data as well. Joel.
[00:08:08] Joel Beal: no, COVID is a great example. You're right. I think just exposing, they've always been messy, but it kind of exposing a little more probably to the world of, Hey, supply chains, while they're incredible and how they operate have been for a long time, there's, they're a lot less, uh, automated and maybe intelligent than probably sometimes we think, so you mentioned earlier, and this is something we think a lot about of I guess merging of you've got your brands, consumer brands, where you've traditionally worked, and then you've got the retailers and those lines have become more and more blurry over time, as you said, as brands have said, Hey, I'm going to, first of all, maybe open my own stores and then obviously now, Most of them are going to sell direct to consumer, at least on their own website. And you also have retailers that are introducing private label and saying, Hey, we can get higher margins, you know, selling our own brands. let's talk about how that works and kind of relate it to this data transparency and data sharing. So it seems as though there's been a long term trend of people, at least Understanding the value of sharing more data with their partners on the flip side.
They're also probably competing more with those same partners than they ever have before. and so we'd love to hear your thoughts on how these dynamics are playing out. What are kind of the incentives for people to share more information and the impediments as
well.
[00:09:40] Peter Smith: Sure. Well, you know, having been an econ major in college, love the notion of a free market where knowledge as to the market dynamics, who's winning, who's losing. It's all up on the big scoreboard, you know, and that we can all see it. And that really then just invokes. game on kind of effort, like I'm gonna win this game and all that data is telling me how I'm doing in the performance of that.
So the more data I can get, whether it's, data in, contrast to a store's own private label, whatever the data is, I think that's rich and I think that's beneficial because it allows me to modify my game, to test, learn and adjust as to how we go to market as a branded products company, in the marketplace to see what resonates with the consumer. That is dramatically better having data that tells you what's going on with your product and your competitors in the marketplace is so much better than, earlier days where you wandered and you wondered about, well, why are things not selling? You know, did we choose the wrong color palette this year?
what's the other brand doing? I mean, are the days. I hope of the wander and wonder as to why things aren't selling. Selling because when they're selling really well, you don't think about it. You just celebrate. so when sales slow down, data is absolutely the key to unlocking what the adjustment is that we as a company supplying consumers, what do we need to do to adjust in order to do better?
[00:11:11] Logan Ensign: it sounds very, you know, mutually beneficial. Hey, let's all understand what's going on. So we can evaluate winners, losers, how we can maximize sell through and be collaborating effectively. are there times you've seen, or maybe you could unpack a little bit more why we haven't reached that utopia, right?
And, maybe some of those impediments, or maybe when it doesn't make sense to be fully transparent, and collaborative. Yeah.
[00:11:35] Peter Smith: Sure. I mean, at the end of the day, it is a competitive marketplace there is a long and rich history, in consumer sales, of people, essentially Wanting your data, but not offering you their data back, you know, sort of the one way street, like, oh, sure. I'd love to know what's going on.
And I'd love to have your insights from your data, but I don't necessarily want to tell you about how my private label brand is doing or how your competitors are doing. I think people have tried it's not a pursuit that I would endorse. but tried to, throttle forward and pull back the flow of data, thinking that they could craft, an advantage through that.
To me, that's just a distortion of the marketplace by mucking around with the data in order to gain a short term advantage, I'd rather have that open and transparent playing field, where we can all see it, And we live or die by the virtues of decisions we made versus someone tilting the data 1 way or another, but it certainly goes on a lot. even today, there are, partners in that equation, that, don't want to share, some of their data because they think they will lose a bit of the competitive advantage that they perceive that they have. happen to disagree with them. but that certainly goes on.
[00:12:51] Joel Beal: So, Peter, can you elaborate why, I mean, you've already talked about it at a high level, but why wouldn't somebody share data? Like, what's a time where it would say, Oh, it's in my best interest to keep this
for myself.
[00:13:04] Peter Smith: Sure. I sat in enough meetings, as a supplier and the company you're supplying to, where the buyer's saying, well, your sell throughs really aren't great. And I think we should talk about an additional discount and all the rest. And what I really would like to pull up and said, well, my sell through data from the point of sale information you show is that we're quite robust.
I'd be surprised and interested to hear, that our competitors are actually doing better. And so, frankly, by sharing that sell through data, they do lose some of the cloak and dagger techniques of days gone by in order to get a discount on the next order, because the, data is the data. some of the gamesmanship, that goes on. I mean, I'm sure have any of us ever bought an automobile? And there are vendors out there selling automobiles that it's one price and this is our price and there's no gamesmanship at all. And there are others that you need to dedicate 5 and 6 hours at the dealership because dealership Representative needs to go talk to their manager. They're having a cigarette out back. It's there's no talk. It's just a game in order to get to what they want. I'm an advocate of transparency and a straight up model. I think it leads to more efficient decision making a better outcome in the long run for all of us.
[00:14:19] Joel Beal: a lot of the conversation, has been focused more on retailers, giving more information to their suppliers so that you can have really good partnerships good strategic conversations. I'm curious on the other side of the, of the coin, you'd mentioned this really benefits from a bi directional.
[00:14:36] Logan Ensign: Hey, I'll show you my information and data and be open and transparent, and you'll be transparent back and we're all going to benefit. Together, could you speak a little bit more to on the supplier side? how you can be more transparent, maybe some blockers there and how that ultimately can still benefit both parties.
[00:14:55] Peter Smith: Sure, Logan, I come from the school where, I do believe in bidirectional data transparency. and I would like to say to all of my retail partners as a wholesaler. Most of my career. I'd like to say to all of them. I'd like to give you a line of sight to the inventory that I own. That is uncommitted. and so in our weekly review. Typical what's hot and what's not. you're selling through something at a rate more than jointly forecasted or more than you anticipated, I'd like you to be, have a line of sight to what might be sitting in my distribution center, because the more that we can do cooperatively to get merchandise where it needs to be and where it is selling, that's the benefit to the retail partner me both.
I have very few. Reluctances inhibitions about sharing the data that we have. I do think there are probably some exceptions. You know, frankly, during cobit as we all remember, there was a lovely container ship. The evergreen. that was stuck in the Suez Canal and frankly, it's super uncomfortable from a supplier perspective that when you hear about something like that, comes across your desk or you wake up in the morning and there's an email saying, Oh, my God, this has happened. and then you spend maybe a couple of hours trying to figure out, okay, what do we have on that vessel? which of the retailers that we're servicing is that their product tied up? And then, frankly, you have to engage cross functionally in your organization to say to your sales organization. retailer A and B has goods on that. We cannot tell them when those goods are going to actually arrive. Now. We had a forecasted date. We know that forecasted date is no longer valid, but frankly, it's a dynamic situation. And we don't know when those goods are going to be in. I've been in conversations within an organization where the sales organization doesn't want to communicate that forward to the retailer.
Because they're frankly concerned that the retailer wants to turn around and might turn around and cancel those units. And then that's excess inventory for us. and that's, you know, a fear that might keep us from being transparent with the retailer. I think that requires a cross functional partnership within your own organization.
It probably also requires an assessment of what your relationship with the party that you're supplying to. Again, a major retailer. in that instance, we had product on that vessel, from two of the largest retailers in the country. and frankly, one of them was sympathetic and understanding of what was going on in the world, maybe because they might have also had product on that same vessel.
they were understanding of it and they were going to work with us. Within reasonable bounds. another retailer had pretty much like, I don't care. Go pound salt. If you are a day late, I will, put you in the dog house and you'll be there and I'll, punish you financially, start taking discounts on a daily basis off of what I'm going to pay you for that product.
I would have to defer to my colleagues in sales as to how to handle each of those situations. They own those relationships firsthand. they're gonna have to make a judgment call as to what To communicate when, but I would hope that that's far more of the exception than the rule.
[00:18:17] Joel Beal: have you seen a shift in that desire to be collaborative versus punitive? Over time. clearly it's going to vary by organization, probably person within those organizations. You can get somebody that's more understanding than another. But, you know, have you seen over the decades just a greater desire not just to share information, but then to jointly problem solve?
Or is it, okay, we're sharing a little bit more data, but at the end of the day, it's still can be pretty tense.
[00:18:47] Peter Smith: I have seen Joel to your question. I have seen an improvement in the lines of communications and the number of touch points between organizations over the years as we have had to collaborate on. More issues than just what's the product you're selling me and what price is it at? And what's the availability?
Now? It's a relationship where the consumer, the end consumer wants to know about your sustainability efforts. to try to minimize waste in the supply chain you know, that is a aspect of their decision making criteria. So, as a supplier to a retailer, we need to communicate that forward. when situations arise, like in China with the Uyghur forced labor, consumers want to know about that. And maybe rightfully so in the world that we live in. so the number of points of contact between. wholesale supplier, and retailer circumstances have forced those to increase. So, typically organizations are talking to each other on a multitude of levels. and the best is if the relationship can be at a top to top, the CEOs decide exactly. How they want to handle each of these situations, there certainly are more points of contact.
And I think it's healthy for both organizations to have greater transparency and understanding as to how they each do that. I do offer that answer from the perspective of. I've had the good fortune of working for leading national brands. And to some extent that bar being raised that not only do you have to supply me great product at a great price with great availability.
I want to know that you're doing you're manufacturing your product and running your operation in a sustainable way and in a legal way as with regards to foreign corruption practices and with labor practices around the world. The raising of that bar. knocks out a lot of players that suppliers that I don't want to have to compete against with those. Less reputable operators. I want the bar personally. I want the bar to be raised high because the brands like the North face on my chest here I know they're going to do the right thing. And I think that differentiates and separates us in the marketplace. to drive behaviors that we can all be proud of.
when we talk to our kids about the way that the company that I work for operates, we can do that with pride, and transparency, rather than, um, a shady operation or a cloak and dagger.
[00:21:11] Joel Beal: I love that answer. And that's really interesting to me. I hadn't thought as much about the sustainability piece. And you're right. Probably you both have consumers that are putting pressure to say, I want to make sure these supply chains are ethical and obviously some regulatory elements as well. And forces supply chains to be more collaborative. And hopefully that bleeds over into other things as well of just, Hey, let's operate more efficiently and, you know, more ethically
and more responsibly.
[00:21:37] Peter Smith: I've always been open, you know, when, when a retailer has come and said, hey, let's have a top to top in the supply chain. And if there are things that we are doing that are costing you as a supplier money, and don't add value to what you're doing, let's collaboratively work together to drive costs out, not just your cost or my cost, but systemically, let's drive costs out Or, maybe a more uplifting note, do you have any production in this hemisphere?
Or do you have any made in the USA capability? Because we'd like to promote that. And we'd like to partner with you. We know the product is going to come out of the factory a little bit more expensive because wages in this side of the world are just more expensive. But let's collaborate and see if we can bring of those jobs and some of that production. Home again, another aspect of where a and productive relationship with a retailer from a wholesaler perspective can be a win win.
[00:22:32] Joel Beal: So let me drill in a little bit here. I know this is a bit off script, but you mentioned how, you know, you've worked for obviously leading kind of global brands, right, that have a lot of resources and the ability to do this. And these higher barriers actually kind of help to insulate you against competition.
Yeah. So do you think that's going to be, more challenging than to start a new brand because there are more barriers. And then I'm also wondering about all of these Chinese brands in particular, but foreign brands that are trying to break into the U S market, do you see that as being a big barrier for them?
If they're not going to have the weight, as you said, a VF corporation, for example, to be able to do
all of these things.
[00:23:14] Peter Smith: the raised bar of operational practices that are now demanded of companies by consumers and by the regulatory environment, both a blessing and a burden. the startup company. has the most hospitable access to high quality product. Overseas that they've ever had before and, you know, once upon a time, the sort of running joke of private label suppliers was all they needed is a fax machine and a contact in China. the reality is, though, today that, just through email correspondence and trading back and forth, there are very, very high quality manufacturers around the world. you're. A startup brand, you want to produce a product, the factories, you're likely going to take them to require dramatically less education about how to make a world class product.
Frankly, your factory might be saying, listen, we have a few design changes that we think based on who else we make for, that this would make the product superior and all the factories. No, you're going to ask about their environmental footprint. and their corporate social responsibility stuff. So, to some extent, there's never been an easier or more accessible time to be a startup brand. And you get to write all of your standard operating procedure about sustainability You know, workplace issues and such, you get to write all that. Whereas a large entrenched organization might have to undo some of the practices and or just moving things and changing things in a large, complex organization that inertia is hard to change or to get distance on and, To some extent, sort of nice to start with the clean sheet for the startup brands because they'll write it once and they'll do it in the modern tone as opposed to some larger and more established companies might have to unwind some of the past practices that they've operated with.
[00:25:13] Logan Ensign: So I'm hearing, Hey, although it might seem like these are high barriers to entry, the reality is those best practices are quite accessible by smaller brands and sort of across the board improvements are being seen rather than just, you know, Oh, this is a high barrier to entry and impossible to, kind of go
compete.
[00:25:33] Peter Smith: say there's probably never been a more accessible time to be a startup brand and right out of the gate produce high quality footwear and apparel and get it into consumers hands. then there is today. and whether that's a reflection of the world that has shrunk. or the technology that we all have access to, or just frankly, the sophistication of offshore production and all the rest, there's just never been more, a more conducive time, for the startup brands, to get themselves into business.
[00:26:03] Joel Beal: So Peter, know with maybe the exception of party city, most of your career has been in apparel and footwear. Where do you see the industry going then?
[00:26:12] Peter Smith: I think it's going to be harder and harder. For a large monolithic brand to hold on to the kind of market share, that they might've had in days gone by. frankly, a long time ago when I was a kid, going to high school, you know, you walked into your local army, Navy store and there were probably two, maybe three brands of jeans. We all know them, their name brands, right? They just don't have the market share that they had. Back in that day. and frankly, neither does General Motors or Ford Motor Company. and people in California are buying automobiles from a company called VinFast. I see that trend continuing where more and more of the share of wallet is going to come away from a well known Brand name and people will experiment, with brands they've never heard, but they've read about or someone referred them to or tried.
So I think it is a golden age of, brand development and brand creation. but many of them will get to 80, 90, 100 million and sort of plateau at that point. But there's going to be a, a much larger cadre in my humble opinion, of that size brands and the large monoliths that we might've grown up with, will have a hard time holding share.
[00:27:34] Joel Beal: Yeah, I think the, the plateau, it certainly feels like the way that it's playing out, you know, you're closer to it than I am, but that plateau that many of these new brands hit where they get that kind of explosive early growth, they can come out with a great product. And. Spend a bunch of money on online advertising and those CACs start to get higher they hit kind of a ceiling and it's, interesting just how you have these, conglomerates, you know, are they going to buy up those brands?
And is that going to be the way it works? They can allow basically outsource their product development. Hey, go try things in the market. We'll buy you up as, we see success, but. feels like it's been hard for a lot of brands to kind of really break out
beyond that.
[00:28:17] Peter Smith: Yeah, I mean, you know, frankly, Allbirds is probably the poster child of what you just described. amazing. Just another reflection of the time we live in. the amount of time that it takes from a brand splashing into the marketplace, becoming the, oh, my God, I have to have that product, running to the moon and, the men and women, you know, Of that organization working their tails off in order to get production to meet that demand.
And then they wake up 1 morning and they're no longer the favorite thing on Twitter any longer. the rise and fall happens in a remarkably short amount of time. Unlike it did. Decades ago. that it's just really tough and knowing have we hit the peak or is there yet another peak beyond it is almost impossible.
I think for anyone to tell.
[00:29:05] Joel Beal: I think there's a lot of venture capital investors that have learned this lesson over the last couple years looking at that Exponential growth curve and as you said not often realizing they were right at the top. It's just a different type of market getting back a little bit to data sharing.
So we talked about sharing between the suppliers and retailers and some of the challenges there, the impediments and also benefits, obviously. What about internally within an organization? So you've been at a lot of big companies, they're complicated, lots of different functions, lots of different incentives. We'd love to hear what you've seen within organizations that are really good at sharing, say, between sales and supply chain, right? Or marketing and finance where that's gone well, and where there can also be challenges with even sharing the data within an organization itself.
[00:29:58] Peter Smith: Sure. similar to number of the conversations we have had There's been a pretty significant evolution. Even within the 4 walls of an organization about data availability, and line of sight. I mean, the best organizations now have almost anybody in the organization to pull up a dashboard whatever your favorite. Tool is power bi, Sigma, Tableau, whatever your favorite tool is, and get a very, very wide understanding about what's going on in an organization, everywhere from future sales and forecasting through what's going on with this week's delivery, or even beyond that, to what's going on at point of sale with our retail partners.
I'm an advocate of that. I think. we all spend a tremendous amount of time in the places we work, and oftentimes we're emotionally tied to the success or failure of our employer. And I think that makes it incumbent upon those of us that have the opportunity to be amongst leadership teams to be as transparent as we possibly can about what's going on with the organization.
The good, the bad, and the ugly, because, you know, over time you're going to. Live through all of it. So I'm a, I'm an advocate of data transparency within the four walls of an organization because we're all adults and we all have decisions to make and an informed decision is better than anything less than fully informed
[00:31:21] Logan Ensign: you know, maybe if you're earlier. In this process, what steps have you been able to take to kind of build that trust? You know, whether it's between supply chain and sales or, more generally, if some of our listeners are in an environment where maybe there isn't that level of transparency and collaboration, how do you foster that?
and how do you kind of build those, bridges,
uh, internally?
[00:31:42] Peter Smith: you know, the old adage, never eat lunch alone, applies to this Logan in that, it has always served me well to sort of reach across the aisle, you know, if you're manufacturing and sourcing and all the rest, reach across the aisle to your friends in marketing and sales, business development, get to know them on a personal level. and try to walk in their shoes, understand the challenges they're up against. Because although I might think like at Carter's, I might think producing 600, 000, 000 pieces of baby clothing every year and getting it to an ultimate consumer is a magical feat. The men and women that run the sales and organization and business development or run the e com have their own challenges.
and I, and I guess I just rarely met someone that given an opportunity to have lunch or a cup of coffee and just say, Hey, what are the three or four things that are your greatest challenges? Oftentimes as they describe their challenges, there are nuggets in that. That in my supply chain, I can influence and maybe improve and I think if you know the sincerity that I come to that interaction with, I think they get it.
actually and I've said to a lot of sales and marketing leaders. My job is to make you a wild success in having the right product in the right place at the right time. Everything that I can do to facilitate that and make that happen. Is to the good of both of us, I hope it's not overly corny, but a bit of the 3 musketeers all for 1 and 1 for all.
We're all in this together. We all work for the brand. Let me help you. You help me and I think 1 plus 1 can be 3 or 4 at least. that has been my approach to the role in the job. and the vast majority of times that has served, the company. and the individual as well.
[00:33:33] Joel Beal: It struck me, Peter, as you were talking, how much of the lessons. Internally can also be used externally with 3rd parties. we're talking about obviously trust and hey, does somebody feel like me as a partner? Whether it's different teams within an organization or you working with a retailer? Am I there to help you solve?
A problem, or am I there to get you in trouble or to blame you for something? So there's clearly some universal truths. I also, as you were speaking, talking about reaching across the aisle, I wanted to start chanting, you know, Peter Smith, 2024 it, uh, I think we can use a little bit of that more in general.
So that was great. okay, we're going to end with. One other thing, just cause it's top of mind. So I recently got back from the Gartner supply chain symposium. the talk of the conference, surprise, surprise was all about AI. And I know we've talked a little bit about this Peter, but. You know, AI is everywhere right now. there's a lot of marketing going in explaining, you know, what it can do and how it's going to change the world. So I'd love to get your thoughts as someone who, has seen a lot of evolution and supply chains over the years. On practically speaking, like what is the state of AI and supply chain right now?
What are you skeptical of? And what are you
excited about?
[00:34:58] Peter Smith: So when, I engage in a conversation about AI, I just assume that we're talking about ML and AI, because think in the near term, at least for supply chain operators, Most of what exists under that umbrella mostly, um, I think over time, the, true stuff will start to manifest more. but we do, as we've discussed, we do live in an era where there is a mushroom cloud of data available to us. No organization can get through all that data. I mean, a party city, 700 retail stores, 20, 000 SKUs per store. every 1 of those geographies and store locations are unique. 1 of them is sitting in the back in the backyard of Notre Dame, and 1 of them is sitting in the backyard of the University of Alabama. going to guess that they sell more crimson, and then more gold in South Bend, Indiana, and more crimson color at the University of Alabama. just to those kinds of things with all the explosion of data, the only way you can either have an army of individuals. Which is not economic, or you can employ the compute power that is now available to us and let the machine grind through it all and see things that none of us are certainly not me, you know, the pattern recognition. 1 of the benefits that the ML tools and the AI engines can bring. It will see things and it should, if used properly, bring those to your attention, bubble them up to the top and present the human with the opportunity to make a decision to do something differently next year. so that, you know, simple example again, Alabama, let's find out what the homecoming weekend is. It probably moves around on the calendar a little bit, but again, the ML tool, we'll see that and it should bring it to your attention. I get that the greatest merchant minds in the world, have always internalized all those things and distilled them down. and then came up with, way to get the right product in the right place. But not everybody is Mickey Drexler and have his mind. And so, frankly, the compute power available to us allows everyone to raise their game. As to what can you see in all that data? Where are the patterns? Where's the insight? where's the early warning indicator that is coming from it? To me, that is the benefit of the compute power again, targeted towards ML or AI, that is available to the supply chain world. Folks in marketing and product, they probably have more of an opportunity to really tap in to the AI side of it.
the really creative and interesting, you know, write me a product description or, help me combine these three attributes of a product and a new product. the AI might be more tailored to the front end of the business. The ML side is we're in nascent days of leveraging all of the data that we now have.
At our fingertips to benefit that on time in full, requirement that we have with the retailers that we operate with. there will be an explosion leveraging all of that data to make sharper, faster, more correct answers.
[00:38:15] Joel Beal: Thank you for that answer. And as you mentioned there's a big umbrella that falls under AI, a lot of different pieces and what's going to be most. Useful insert in some areas, you know, whether it's, yeah, machine learning and using that more in forecasting models, another place is going to be more generative AI.
So it's going to be, it's already fascinating and it'll be interesting over the coming years. what I could tell being at Gartner was everybody's thinking about AI everyone's earlier, or at least the vast majority of companies, then I think they would like to be. And so they want to appear as though they're further down, what really got people's attention was it was like, show me very practical, even if they're simple applications of AI, just so I can get started and feel like I'm getting out of the marketing speak.
So, we're getting there. There's definitely been. Some interesting progress
in the last year or two.
[00:39:04] Peter Smith: By the way, happen to think that guess I've drawn this analogy to wrap my head around it. do think what machine learning Genitive AI can do it is really what the human brain does in intuition. I mean, I think intuition is your own internal AI engine connecting a couple of dots mentally and saying, okay, I think. My intuition says we're going here. You don't have quite enough yet to get to an answer. I think what the compute power is doing is really replicating what intuition has done for all of us in the past and people's intuition and their skills with tapping into their own intuition. Very dramatically. So you really did get the savants, the retail savants and the merchant savants. well, that's just because their intuition was that much more developed. We are leveling the playing field because the machine intuition engine will make many of us. Dramatically better at guessing what's coming next.
So it's to me, that's. Going to be fun to watch.
[00:40:10] Logan Ensign: Peter, we're gonna have to bring you back for an hour on that concept. Uh, super fascinating, and I think, yeah, a lot to unpack there potentially.
[00:40:18] Peter Smith: Perfect. I,
[00:40:20] Joel Beal: Well, Peter, thank you for your time. Really appreciate it. Tons of insights. we appreciate you. You spending a little time with
us this afternoon.
[00:40:27] Peter Smith: and I appreciate the conversation with. You gentlemen, it's a fun and dynamic world that we live in right now. have a lot of energy and passion around running towards the opportunities that are in front of us. I do appreciate what alloy brings to the table and additional data because the more data we can feed into the model, the smarter the model will be.
so thank you for what you guys do and the contribution you make to that. open and transparent data flowing world that should just lead to less product being sold at discount or, dumped into the marketplace. so I appreciate what Alloy does and the contribution you make to, uh, making the supply chains of the world more efficient.
[00:41:07] Joel Beal: Love that. Thanks, Peter.
[00:41:08] Logan Ensign: Thanks again, Peter. Well, you've been listening to Peter Smith. That's all for this week. See you next time on Shelf Life.