In recent times, the logistics industry has moved to the forefront of everyone’s attention. This can be attributed to events like the COVID-19 pandemic, which had a significant impact on the transportation of goods, services, and people; and the Suez Canal incident, which became a hot topic for jokes and memes amongst younger generations on the internet.
This podcast is a deep dive into the state of the logistics industry, analyzing different perspectives on how professionals and the C-suite can help bring the global supply chain to its full potential with the dawn of the Fourth Industrial Revolution.
In the simplest words, logistics has always been described as the act of bringing something from point A to point B. However, there is plenty more to discover beneath the surface.
The increased number of nodes across the supply chain that contribute to the end product, the additional pressure to make transportation more efficient, and a world that continues to demand for more from international suppliers pressure the logistics industry to continuously reinvent. While it is inspirational to see that the pace of technological innovation is accommodating these concerns, our discussion dares to ask: does this pace make room for the human element?
The human element of tech innovation refers to whether we are capable of maximizing the potential of gadgets, processes, and standards. It’s a concern that consistently pops up for big data across different industries: the capacity of businesses to make the most out of these silos.
Adopting modern technologies can be difficult because of the initial learning curve. It will, inevitably, disrupt the way that certain processes and workflows have been carried out for decades. In some cases, entire occupations may be rendered obsolete. The reality is that there is still some resistance to making this transition because not many people see the importance of bearing this temporary disruption to get the long-term benefits.
“You can create new technologies but unless people choose to adopt it, it’s not going to do anything fantastic.” Alexander McCaig pointed out..
Ruben Huber mused over the possibility of careers in logistics taking on a more consultative aspect. This would be part of their efforts to bridge the gap between the dearth of knowledge offered by big data in the industry, and their clients.
“We need to be more than just transporters of cargo from A to B. I always see this in our industry as an opportunity to do a lot more,’ he explained, “It’s very true that we still do things like we used to do them instead of questioning it.”
Malcolm Mclean was a truck driver who was sitting at the port and started wondering why he had to wait ten hours for cargo to get offloaded from the ship. He eventually worked on developing this line of inquiry into a full-fledged business idea— one that is credited to have revolutionized the shipping industry.
To put this in the perspective of the Fourth Industrial Revolution, it’s not just about how labor is going to get disrupted by these technologies. It’s also a call for people to come together as a global community so that the technologies can be utilized to solve real world problems.
As the pandemic continues, we continue to be bombarded by new and exciting ways to restructure the way we work.
The globalized economy we are privileged to experience today is built on the foundations of a supply chain that stretches across multiple countries. Businesses and corporations source all their raw materials and labor from beyond their geopolitical borders, as part of their efforts to provide the end products and services that we enjoy on a regular basis.
With so much emphasis on delivering these goods to the communities that need them, it is safe to say that logistics and the supply chain are people-oriented industries. It will be important to continue optimizing technologies and making the most out of big data. In addition, everybody must be transparent and made to understand the process so that a mutual understanding is fostered towards that common goal of progress for humanity as a whole.
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Alexander McCaig (00:00:07):
Ladies and gentlemen, thank you very much for joining me here again on TARTLECAST. Mac had originally joined us, and we really enjoyed the episode. It actually took off pretty well online considering people are like, "Logistics? What the hell are we going to talk about when it comes to logistics?" Sounds like a nose bleed. Well, actually it's one of the most important things, and it's one of the oldest, what I would say, merchant services that have really happened on this planet since the onset of any major economy or civilization that was occurring, even in a historical fact, right?
Alexander McCaig (00:00:39):
Let's consider the fact of Alexandria in Egypt. After that port was truly established, we're talking about massive amounts of trade that were happening across the Mediterranean. This was like, and it's only... They weren't in any sort of industrial revolution, right? They just had very simple boats, throwing your pottery on there, and you're trying to get across the Mediterranean without getting killed, to deliver your product. Now, things have developed a lot since then.
Alexander McCaig (00:01:05):
We have massive 20,000 TEU ships that are carrying products back and forth for an absolutely enormous globalized economy. When there are any shifts or changes to this, what I would say frankly, sensitive system, if you are not ahead of the game in something that is so heavily commoditized, you're going to find yourself obsolete. Is that right? Am I close to that? I want to defer to you guys on this. If we were thinking about logistics service providers, how is it that they look to survive in the fourth industrial revolution with the onset of things that have happened from blocking of the Suez Canal, for the change of workforces, the lack of actual human bodies to come in and do work?
Alexander McCaig (00:02:00):
Then on top of that, the catalyst that occurred from the US/China trade war, so where should we start with this to frame out this picture for individuals that are listening to it, and understand how that this industry, one of the oldest industries is actually lagging behind on technological adaptation that could truly help it thrive, when it really needs it, especially when it's squeezed on pricing. Whoever wants to go first, please jump in.
Mac Sullivan (00:02:25):
Ruben, kicking to you, man.
Ruben Huber (00:02:27):
Yeah, okay. Thanks. Maybe I could start. Maybe we simplify a bit first. I have a friend who always had a good explanation of what we do for the six and seven years old out there. He said, "We just move stuff from A to B. That's what shipping and logistics is about." It has been done the same... It has been done for a very long time, so now we face a lot of challenges, and of course we are suddenly a very sexy industry and become a bit mainstream media, which is great. But actually we still do pretty much the same thing. Of course, technology is a bit behind, and that's also what we were focusing a bit on in our book.
Alexander McCaig (00:03:07):
Yeah, but let's think about something here. Not only for the Fortune 1,000 CEOs that listen to this podcast, but also the layman across the globe, when people get something that comes Amazon, or some sort of product, and it says, "Oh, this came from the United States, came from Indonesia, came from Australia." Where have you. They don't really know how it got there. They don't know everything that's involved, how many touch points have to occur, how many different parties come together to actually move one potato from one geography to the next.
Alexander McCaig (00:03:41):
Mind you, you have to deal that with weather and people don't even know that there are traffic systems in the ocean, all those things have to occur. Where is it within this industry, in this simplicity, when you say it's moving objects from point A to point B. Yeah, that sounds all well and good, but what is the actual reality of how that movement works, before we can get into how you technologically create a revolution within that? Can you frame it out for individuals at this moment? How we move any product right now, what's the process, the workflow from point A to point B,
Ruben Huber (00:04:12):
Of course, the whole value chain is very complex. You also may not forget that there is not only the product moving. The product consists of parts and consists of raw materials. First of all, there are raw materials moving somewhere. Then they're getting processed. Then there's some further processing. If you look at your usual t-shirt for example, there's cotton moving maybe from Uzbekistan via Iran to China. It is getting spun there. It is becoming fabric there. It's being shipped to Bangladesh.
Ruben Huber (00:04:40):
It's being turned into fabric there. It's being turned into your t-shirt at some stage, and it ends up in the US. It has probably moved in five, six different journeys before it even arrives on the US content. It's very different in the sense that things are moving and how complex these are, and they involve a lot of parties along the way, of course, as well.
Alexander McCaig (00:05:05):
Dyci Sfregola (00:05:05):
If I can jump in.
Alexander McCaig (00:05:06):
Yeah, go ahead. Jump in please by all means, shut me up.
Ruben Huber (00:05:08):
Dyci Sfregola (00:05:09):
I often approach, because I work in the technology space for supply chain logistics, and helping companies determine which technology they should use and how it should be used, etc. I think it's really important to really identify what you mentioned earlier in that, it is a ripe industry for technology innovation. There are a lot of startups in the space right now, but if you really think about, and I'm just thinking from like a consumer perspective. I have a phone that can allow me to talk to anybody in the entire world whenever I want.
Dyci Sfregola (00:05:49):
Right now, we are all sitting on a stream. We are all in different places. You would think that that is just how business works, but all of those pieces that Ruben just mentioned, all the different parties, it's still very much in the logistics industry, like people making phone calls and sending emails, like phone calls from landlines and sending emails and printing PDFs, and scanning PDFs, and sending PDFs and then manually writing down what's in the PDF. When my husband is like, "Oh, I don't understand why I can't get this, my Nintendo, whatever, whatever.
Dyci Sfregola (00:06:32):
People are working again." I'm like, "Yeah, but people weren't working for months and months and months, so think about all of those already slow manual processes that basically stopped." They didn't stop and then now I have a super cool iPhone or a smartphone that's going to send everything. They stopped and then started again with people making phone calls from their landline, and sending an email and hoping that I told you the right information in enough time for you to, like you mentioned, get ahead of it. How do you get ahead of it when your data and your information is always behind? You can't.
Alexander McCaig (00:07:09):
Dyci Sfregola (00:07:12):
It's definitely important to realize that we're still very manual.
Alexander McCaig (00:07:15):
Okay. Then if I'm trying to think about this in the most reasonable format possible, we are trying to move stuff around. It has five to six touchpoints on a completely open system. This is not a closed system. There is so much waste that is actually occurring, and we can have all the technology in the world for the majority of it. But you still have such a strong human element within logistics and supply chain that really needs to have a focus first. Before I can even implement new technologies, you also have to train people on the technology.
Dyci Sfregola (00:07:46):
Alexander McCaig (00:07:46):
They have to understand the workflows to institute that, which is conversations with them and understanding their business inside and out. It's like, how is it when we try to do this reasonably in some sort of consultative, reasonable, agile development, understanding these processes and workflows and understanding the people, is this the typical mapping process that we go through before we even look to the fourth industrial revolution and the technology that can really help once we have everything else settled in place? Do we still have to do those older refinement of processes and reducing those friction points to get there?
Ruben Huber (00:08:27):
On the first point, there's many more touch points than you mentioned. You just said there's five. I've seen funny graphs where there's 152 on one shipment, which in the end, where actually a shipment is moving through and where there's a gate in, where there's a gate out, where there's this, where there's that, so that is a large part of touch point. And as it was already said, we have this communication, of course, it might be landlines. Maybe let's say we're a bit more advanced and it's chatting and it's whatever, but it's a lot of knowledge that is being shared and communicated, and a lot of that is moving between the heads of human beings, of course, and it's still in there.
Ruben Huber (00:09:09):
Of course, part of it is in systems, but most of it is still in the head of people and experience, place and role. Of course, I think we will still talk about data because that's more your field than ours and I'm a bit intrigued on what can happen in that. But it's a lot of complexity that, of course I agree with you that you need to take out first. You need to simplify before you can think about automation and digitalization.
Alexander McCaig (00:09:35):
Yeah, and that's clear. If I understand with these paper processes, just merging the document, it's not like you need crazy new technologies to take two PDFs and put them together and create a single file. What you got to do...
Ruben Huber (00:09:49):
It's all there.
Dyci Sfregola (00:09:50):
Yeah, a lot of the technology is already there, but you [crosstalk 00:09:52].
Ruben Huber (00:09:56):
It's there. Technologies are there since 20 years. That's not the issue.
Dyci Sfregola (00:09:57):
Alexander McCaig (00:09:57):
That's not the issue.
Dyci Sfregola (00:09:57):
Ruben Huber (00:09:57):
[Crosstalk 00:09:57] hasn't been implemented.
Alexander McCaig (00:09:59):
Right. If we look at human beings, they are walking silos and so unless we have a good way to capture what's going on in their mind and what they've learned over the years and put that into some data, which we can find that insight and then come back to that business and say, "We've understood this from everyone in here, all of your talent, all of this human capital and these are where we are seeing the most pain points for us in terms of us lagging and doing these workflows." Before we even invest in something that could be complex and expensive it's like, you can't make a dog with two legs run any faster with some sort of a new technology. It's got two legs. You got to give it four legs first before the thing really takes off.
Dyci Sfregola (00:10:41):
You take bad old processes and put them in technology, you're maybe just going to do your bad processes faster which you were doing [crosstalk 00:10:49] before.
Ruben Huber (00:10:49):
Absolutely or not even, you're just going to mess them up entirely.
Alexander McCaig (00:10:53):
Right, so in [crosstalk 00:10:54].
Mac Sullivan (00:10:54):
You have to know your processes, all right.
Alexander McCaig (00:10:54):
You have to know your processes? Mac, explain that. If we're going to take an introspective look like you guys have done at your own firm, how is it that we get to know our own processes, so that you could even share that as an example for other logistics providers?
Mac Sullivan (00:11:10):
Yeah, I'm excited. I think Michael just joined us as well.
Alexander McCaig (00:11:12):
Hi there Mike.
Michael Teubenbacher (00:11:14):
Mac Sullivan (00:11:14):
Yeah, this goes back to like that concept of digitalization, right? Instead of having a paper based PO, where that goes from one manager to another, and then for us and having a centralized means to capture that, right? When we started putting POS into the system, we started noticing in mid-2020 a steep rise in POS for desktop printers. We saw, okay, so what are these people... Why are we in need so many more desktop printers?
Mac Sullivan (00:11:48):
The people were working from home and they needed their printers to print the documents, and physically pull them apart and then scan them back in to merge the files. By digitally capturing that PO and seeing that data point, we then realized nobody had been taught how to merge and split documents in Adobe Acrobat.
Alexander McCaig (00:12:14):
I do love how creative people are though. They're like, "I know exactly what to do. I'm going to get my new printer. I'm going to do it manually, and then I'm going to scan it in. I know I can scan things."
Mac Sullivan (00:12:24):
I read an interesting article goal on CNN yesterday. Hey, toy manufacturers are now looking to see how they can get smaller items into their containers. The container has a fixed amount of space, right? They're saying, "I don't want to sell the Tonka trucks because they're big, and their retail price is $14 and my margin is..." I'm making this up $4, right versus something smaller, like a USB maybe I can sell for 20 and my margin is $10, right? Their light bulbs are clicking, "Oh, we have a fixed amount of space and we have to maximize the use of that space."
Mac Sullivan (00:13:05):
I'll take that one step further, prior to 2020, the concept of a digital twin supply chain optimization suite wasn't on the non-Fortune 500 supply chain teams radar for probably the next decade. Recently I saw Google just roll out theirs, and once again, going back to your initial point, the catalysts of these dominoes that happened, the US/China trade war. Okay, people woke up and said, "Hey, I don't know my duty rates for this HS code." They started looking at that and they have started to say, "Okay, if duty rates change by 25 or 40%, how is that going to affect my landed cost?"
Mac Sullivan (00:13:51):
That was the first one, right? Then you had COVID-19 hit, how can we be more agile? China's completely locked down. We can't get our factories up and cranking. However, Turkey's still open, Indonesia's still open. We want to shift manufacturing there. How does my landed cost then adjust to those manufacturing origin shifts, right? That's sourcing, compliance are now involved.
Alexander McCaig (00:14:15):
Mac Sullivan (00:14:15):
Then you have the Evergreen ship get stuck in the Suez Canal. Once again, that's where we as logisticians come to play because, "Hey, how can I reroute my cargo on my phone, on my Google maps or on my Apple maps?" I can say, "Hey, let me see the different routes." I can almost retrospectively go and pick a different route logistics, right? We're seeing all these events wake up our customers to say, they need more control of their supply chain. They need it digitalized and available in a form that they can optimize and run different scenarios once again, from a monetary perspective, from a risk perspective. Yeeha.
Ruben Huber (00:15:03):
This is just a point. You have things that, when something is always cheap and always available, nobody cares. It's just there. Now suddenly of course it becomes a factor, and people have to think smart in order to optimize it. I think I find that always a very interesting anecdote if you look now at this whole CO2 discussion that's on, if things have a price suddenly, if things suddenly become a bit rarer, have to be smart about it, right?
Alexander McCaig (00:15:30):
Right. Guys, we don't need to even be naive about it. You have an increase in the human population, a higher demand for physical goods. Ships can only be built so quickly and they can only hold so much space, and a canal takes one ship at a time. It's engineered to be a bottleneck. If we're looking at this planning in a business that is so highly commoditized, and you want to push it into the fourth industrial revolution, which is extremely data driven to go back to regressive analysis and say, "This is probably a more appropriate route, probably more appropriate timing. Maybe we should shift the ports we're coming in and out of to save on costs."
Alexander McCaig (00:16:12):
How is it that we reasonably, really actually reasonably get to that point? How is it that you get these companies to spend money when they don't have money to spend? Do you go to the bank and say, "Listen, [crosstalk 00:16:27] I'm going to mortgage my ship and my cargo so that I can bring this money in and buy this new software and also train these individuals to do so?" It's very uncomfortable to get that change in place for very entrenched systems for people that frankly, this is how we've been doing it for a very long time. It's like, "Why should I do it any other way?" We know that these catalysts of events are only going to increase in frequency. How do we get ahead of that?
Dyci Sfregola (00:16:53):
I was actually going to say exactly something related to what you just said in that...
Alexander McCaig (00:16:59):
You're telepathic that's why. We do solve logistics and supply chain, everyone's telepathic.
Dyci Sfregola (00:17:05):
But we're talking about an industry where it is very much, this is what we've been doing for 20 years. Why do we need to change? It's not that I have found, at least in working with my clients, if you can communicate the value, the money is found. If you are talking to someone who understands the value of the investment in this technology, the value of the investment in truly mapping out your network and understanding where the risks are, where is the weak link?
Dyci Sfregola (00:17:40):
It takes a lot of time to do that, especially when we've got this tribal knowledge, people that have been at the company forever. One of the first things we do when we go into something is say, "Okay, you're doing this, but why?" 90% of the time they say, "Because that's what they told me to do when I started." No one knows what happens with the information downstream or upstream. No one knows what happens. If you really take the time to figure out how can we improve this as the process, and then what data do we need, what technologies do we need and what human capital do we need?
Dyci Sfregola (00:18:17):
A lot of that is quite frankly, I think just bringing in new blood, people who have not been in the industry for forever. But also I would say, I made a career into supply chain and logistics. It was never a sexy industry. It was never something where people were recruiting for and telling me how fun it could be, and how important it is to the world to keep everything moving. I think that with COVID and with everything being out there now and supply chains being this big thing, we will start to see more new blood become interested.
Dyci Sfregola (00:18:54):
As they start to get into more decision making positions, we will start to see this investment because they understand the value. I think a lot of it is just trying to change these mindsets of this is what's comfortable for me. This is what I've always done. We've always had problems and we've always figured it out, so what's different now?
Michael Teubenbacher (00:19:16):
There are companies.
Ruben Huber (00:19:17):
The pressure helps... The pressure of the current situation really helps. In China, we always say, "If there is no pressure, there is no motivation." That is what certainly accelerated a lot of stuff over the last year and a half or two years.
Michael Teubenbacher (00:19:34):
You talked about sexiness of logistics. There's some companies out there...
Alexander McCaig (00:19:38):
Yeah, are you kidding me?
Michael Teubenbacher (00:19:38):
There are some companies out there have realized in the meantime there also logistics can be a competitive advantage. I think this will also change in the future. I saw this with Huawei. I did a bit of business with Huawei supply chain manage and it's amazing. For them supply chain management is competitive advantage, because they link the supply chain up to the final customer and they provide full transparency and they do risk analysis. They work in scenarios and so on. I guess this will be a bit of a change also now triggered now by COVID and all the other happenings of the past couple of years,
Alexander McCaig (00:20:13):
That's really interesting because whether you think about Huawei, they're a technology company and you're looking at cell phones and the fact that they have to track when the lithium is getting mined in Argentina or Africa, wherever it's coming from, all the way to the battery manufacturing and then making sure that the Silicon way for chips, any sort of microprocesing units, they all come together and then you have the larger bag of items, which is essentially the phone itself, fantastic.
Alexander McCaig (00:20:39):
Now, I know in the full map of things that is going on, where each of these items comes from. When you have that mapping, that traceability that is occurring, you have the touch points with the data, but what we've missed a lot in the rest of the supply chain industry; it's all well and good that we can track where our cell phone came from, right? Or we can see that our cotton was ethically sourced, but there are still a monumental amount of individuals, human elements that come into place that are completely uncaptured in that process.
Alexander McCaig (00:21:11):
Most of the processes that are captured come from a third-party observation, which means some sort of system is going through and just capturing the data as that is actually moving. But what doesn't get captured with data, which is missed, is always the human element. When we look to things like the fourth industrial revolution, it's fantastic that we're throwing bigger engines on the boats; they're going to be wider. We're going to have more data to capture it.
Alexander McCaig (00:21:35):
Maybe the efficiency on these engines save on the diesel costs, how quickly you have in port all well and good. There's still a human being operating the crane. We still have a guy driving the boat, driving the truck. There's still going to be accidents on highways. We still have perspectives in the offices for even the culture. If people are unhappy at the work and you don't capture the data of people's emotional states, that in the total system of logistics and supply chain could slow down a truck getting to a client's front door.
Alexander McCaig (00:22:04):
If somebody's having a bad day and it doesn't end up at the dock, that 40% landing fee you incurred is now up around 60%, because you have such a delay. Then every truck after that, you're trying to catch back up to that point. When I look at this and if I understand the focus that you guys have on it, is when we look to the fourth industrial revolution and all these catalysts are in place, it's all well and good for advancing technology for technology's sake. But we have to focus on figuring out how to advance the human beings, and it's very difficult [inaudible 00:22:34].
Ruben Huber (00:22:34):
Or how to maybe...
Alexander McCaig (00:22:36):
Ruben Huber (00:22:37):
Or how to maybe even automate a few things. Maybe we have to... Let's even take the physical aspect out and the whole blue collar aspect out, because what we focused on at the beginning was also more the whole white collar label aspect inside logistics and supply chain. If we look at that, you always have this typical cycle. You have data, you have analysis, you have decision and then you have action.
Alexander McCaig (00:23:02):
Ruben Huber (00:23:05):
In our business between each of these segments, there is a human element. There is a decision that needs to be made. There is somebody looking at the analysis and so on, and there is very little automation of that cycle in quite a lot of the aspects in our industry, where actually the data should automatically be analyzed, should automatically suggest actions, decisions should automatically introduce action. Because even in exception management, you don't need to have a human element in each piece of the chain, and we have that in a lot of cycles within one supply chain.
Alexander McCaig (00:23:41):
Yeah. If you can automate that rote work, that actually reduces the cognitive load on that human capital that you have and allows the...
Dyci Sfregola (00:23:49):
Then they give you more strategic decision making.
Alexander McCaig (00:23:49):
Dyci Sfregola (00:23:49):
They can be more creative in the solutions, because I don't remember if it was Ruben or Mac who said it, but if I now have to, okay, I see that Evergreen is blocking the Suez Canal, in my brain I have to come up with, maybe there is an automated, "Hey, these are your options." But then as the human, I have to synthesize that data, think critically and make a decision. If I'm not doing these just repetitive manual task, then my cognitive load is now free to make these critical thinking, synthesizing decisions, because it's not weighed down by type in this number in Excel from the PDF.
Alexander McCaig (00:24:34):
Ruben Huber (00:24:34):
But that's exactly... This is at the moment also one of the focuses, which might be too much. There's a lot of focus on visibility at the moment. Now I have great visibility. I have my 35 containers that sit on the ship in the Suez Canal, but it doesn't solve my problem. I get attention and I get 35 alerts and it's red pinging my mailbox, but it doesn't solve my problem. How do we get from this data to really do something with it and to really make a decision, and now it's still human beings then starting to shuffle around, "Okay, what options do we have?
Ruben Huber (00:25:05):
What can we you do? When it opens again, we can unload the cargo maybe at an earlier port. We can try to track it from there to final destination, save two, three days or whatever," things like that. But that's all back down to exception management handled by humans and not really proactively solving the case.
Alexander McCaig (00:25:22):
Correct. Mac, I know he is going to about to jump into this, but at the end of the day, all the data that's captured, all it can do is suggest. It can only suggest the action for us to take, so we would hope...
Dyci Sfregola (00:25:37):
It could provide actionable insights for humans to make actions.
Alexander McCaig (00:25:41):
That's correct. If that human is distracted doing work, rote work, that should otherwise be automated, you're never going to feel the gains of the fourth industrial revolution until you actually encompass the human element that needs to be there. People just think, if I invest the cash, I don't really have to focus on... Things just fix themselves. They don't. It's a massive error that a lot of C-suite executives will make. They'll be like, "Oh, let's just put money into it. It'll fix itself.
Alexander McCaig (00:26:07):
Let's buy this technology and wrap it into our ERP systems," and nothing's actually changing. They've made it more confusing and it's now more ineffective. What you still find is that, people are still doing the same old processes, because they don't want to take the time to learn the new technologies anyway. They said, "This just works better for me." Go ahead, Mac.
Mac Sullivan (00:26:27):
For me I don't think they feel empowered.
Alexander McCaig (00:26:30):
Here we go. [crosstalk 00:26:31]
Mac Sullivan (00:26:31):
I think I showed you this last time. Over here is Malcolm McLean right? Malcolm McLean, he was a truck driver and he sat at the port and said, "Why am I waiting 10 hours for this cargo to get unloaded off the ship?" He was the father of the intermodal container.
Alexander McCaig (00:26:51):
Mac Sullivan (00:26:51):
This, right? It basically boosted globalization to what we know today, and we're still stuck in it. It epitomizes the state they're in that this massive ship is sitting in the middle of that canal, and everybody's like, "Oh, technology's going to solve it." No, it takes somebody to say, "Offload the freaking containers and blow up the ship, and let's get the cargo moving.
Alexander McCaig (00:27:15):
Mac Sullivan (00:27:16):
It takes somebody feeling empowered to make those decisions. In the context of fourth industrial revolution, Karl Schwab made a really interesting observation, and emphasis on fixing problems for the greater good. If you read his work, it's not just how labor is going to get disrupted by these technologies. How can we as a global community utilize these technologies to solve real world problems?
Alexander McCaig (00:27:43):
Mac Sullivan (00:27:46):
You said a third-party needs to observe the events that's happening, and that that's where I work for a freight forwarder and we're an interesting observer as we're like a travel agent freight, although I know Ruben hates that analogy. We see a lot of things that happen that maybe sometimes our customers don't even. You go to most of our customers, they don't even know their second tier suppliers, and sometimes they don't even know their actual first tier suppliers.
Mac Sullivan (00:28:14):
They don't have a list in one place to say, "Hey, here's my 27 suppliers outside of Albuquerque, New Mexico." Unless they're the companies that can hire a very sophisticated supply chain optimization company and do heat maps. I was looking at this book, because what they teach in schools is doing warehouse optimization for Walmart. How many supply chain students get to come out of school, and then go to supply chain optimization for Walmart? It's like-
Alexander McCaig (00:28:47):
Mac Sullivan (00:28:48):
... 0.00001%, right? I just want to make one last point Alex and I'll turn back to you. It was interesting when I started in this industry 10 years ago, in that I loved... People see me and they're like, "Oh, you have a lot of energy. You're always asking questions." I was like, "Yeah." I have managed to hold onto that in this industry, but I think these guys can attest to it, that's very rare. This industry grounds out the curiosity out of a lot of people, and then it was like, "Tell me what to do. Push this paper, check this box," and that's their job in a large majority of the cases.
Mac Sullivan (00:29:25):
Our customers aren't like, "Hey, here's all of our supplier information. Come optimize my supply team." The people we talk to, they don't even have the ability to do that. They're logistics managers at these big companies and that's done at either high level or it's done through pressure, I think to Ruben's point.
Ruben Huber (00:29:44):
Yeah. But I mean, this is maybe where we have to take a different role. We have to change from being this observer as a freight forwarder or logistician or whatever you want to call us, to become more the kind of a consultant that the customer needs. To actually throw his data back at him, you made the customer experience of these last three shipments from three different suppliers. You know how long it takes the supplier A until he gets the cargo finally loaded that actually was already paid for.
Ruben Huber (00:30:11):
You know what the landed costs are. You have that information, and we just need to be more than just transporters of cargo from A to B. I always see this in our industry all as an opportunity; we can do a lot more. To what Mac said about the people and the mindset, that's very true. We have still this kind of; we do things like we used to do them instead of actually questioning. If you look at our industry, we get a lot of young people into it all the time, and then we train them how it is supposed to be done, "This is the process, A, B, C, D, E," and we don't ask these digital natives say, "This is the challenge.
Ruben Huber (00:30:47):
How would you do it?" We don't have this kind of an innovative approach in this industry. As we said earlier, one of the things here is really that a lot of the technology that we use here is around since 20 plus years. Doing an online booking, handling a shipment digitally from A to B is possible since 20 plus years. It hasn't happened. It hasn't really taken off, because people have not adapted to what the technology actually enables.
Alexander McCaig (00:31:16):
Dyci Sfregola (00:31:16):
[crosstalk 00:31:16]. I don't think that companies are doing a good job of answering what's in it for me, because from my experience of being on the side of implementing technologies and trying to do what Ruben just said, let's take a consultative approach. Because very often the client comes in and says, "Okay, this is my process that I do in Excel. Can you just fix it?" Or not fix it, but just throw it in, lift and shift, throw into your technology. And very often they don't want to hear, why are you doing that?
Dyci Sfregola (00:31:49):
Why does this step need to go into the tool? It comes off, I think to them as like, "You're questioning my authority or you're questioning my knowledge." It's more so I want to understand why the technology and how it could be configured to do this piece of it, and then how are your users now going to interact with it? What happens up here when you're not the person that's actually interacting with the technology, it's a gross underestimation of the time and the energy that it takes to embrace this new process, and get all of the stakeholders on the same page, and to make sure that everyone understands what happens, but most importantly, why should I start doing this?
Dyci Sfregola (00:32:40):
Why is it important for me? A lot of what I've seen at the senior level up to exec level is just, they should just know. Like, obviously it's better. Ruben mentioned, like Coke is doing it, Apple's doing it, Walmart is doing it. If they're doing it, then obviously everyone should get on board, but no one's really taking the time to say, okay, it's really going to take people three to four months to be okay with letting go of what they have been doing for the last 10 years. Then it's going to take people really another six to nine month to truly master this next piece of it.
Dyci Sfregola (00:33:22):
We're at a year and people are like, "Oh no, 10 week..." I've heard my most recent "I'm going to laugh to keep from crying" estimate was a 10 week ERP implementation for $500,000, for a $200 million company. There's no way! You have 50 people that need to buy into this. There is no way it's going to cost $500,000, and there is no way that you're going to do it in 10 weeks. How? In what world does that make sense?
Alexander McCaig (00:33:57):
It doesn't happen. Look, all we have to do is look to the data of the past. When's the last time a culture changed overnight? It didn't.
Dyci Sfregola (00:34:02):
Alexander McCaig (00:34:03):
The only time cultures disappear is when the civilization burns to the ground, and then we're digging through the dirt to find out what they were possibly doing. But for most of us, we are just going about our processes with our constant daily habits. What we do at home, we typically actually end up bringing into work. That carries through in there. It's very difficult to incentivize people to do anything. People want to clock in, clock out, get the pay check, leave. You're saying, "Hey," to these C-suites, "I know it's all well and good that you want to implement all these things, and you think that there's going to be a cost savings, fourth industrial revolution, all this technology.
Alexander McCaig (00:34:41):
But in reality, you don't know the individuals within the culture of your own workplace. You don't understand how catalysts affect them personally, because when they're doing a job, everything's personal." If they've been doing it for 10 plus years, if you go to touch or even tiptoe into that process, there's a lot of ego baked into that, and not in a bad way. People are proud of what they do, even if it's moving paper from here to there. If you want to go about these processes properly, if you want to really maximize on data, fourth industrial revolution, all of these technologies, which have essentially been around for a while, but capture it, it's going to require conversations with the state holders that are within these individual enterprises, within these processes itself.
Alexander McCaig (00:35:27):
Unless you take the time, that consultative approach, whether it's in-house consultation or hiring an expert from the outside, to come in and say, "What is the narrative for each of you?" and then stitch that narrative together to really see where the friction, the pain points are and make something truly efficient. If that doesn't happen, you will dump money, you'll bleed it, every single day, into new technologies, new sales processes, whatever it might be that you think will solve it, but it won't, because there's a human being.
Ruben Huber (00:35:55):
It also has to do with the vision you give the people. I mean, the point is what is their role afterwards? You have to be clear on where things are heading. For me, take, take sales, for example. I mean, a lot of people I talk to, they always consider quotation sales. When I started in this industry some 23 years ago, I made 10 quotes a day by fax machine and I was busy. That was my job. Today you probably make 50 by email supported by a system or whatever, but quotation is not sales. Relationship management, relating to your customer, understanding their needs, telling them how to solve their problems better and so on, that's consulting.
Ruben Huber (00:36:34):
That's almost consulting. That's what actually sales is. Price is online. You can get it here anytime by API or whatever means. It's there for you. If you have an issue with it, and if it's not competitive, you come to me, but daily quotations is of absolutely no use. If you take your salespeople and embrace them and say, "Hey guys, quotation is not sales. You are managing the relation on behalf of the company." Then you're also upgrading them and you have a totally different dialogue. But if you tell them, "Hey, we have to get away with quotations and the bot is going to do that tomorrow," then you just lose everybody. That's not what it's about. I think we come back to the pressure point also that the industry faces at this very moment, is that everybody is at the edge.
Ruben Huber (00:37:17):
We're now in 18 months of supply chain hell, if you look at the beautiful headlines in the newspapers nowadays. The people are stressed out. They are at their limit and they would actually be happy to give part of that away. Things that don't add value, my god, take it off my back. It's also an opportunity in that sense, which accelerates this fourth industrial revolution in our part. If we come back to Schwab's book, Mac, then it's very simple. He mentions very clearly that the key problem in the technology side is the human being that's in between, that doesn't implement or that doesn't change, or that we have to convince the way around. I think in the consulting world of Dyci and everybody, and of Michael as well, it's the same thing every day. It's about people. Tech is easy, huh? Implementation with people, with human beings, that's the hard part.
Alexander McCaig (00:38:10):
Well, it's hard to empower someone just to speak up. People are always worried. "Shit. If I say anything, I mean, he or she, my boss, the head honcho, El Jefe is going to hold this against me for I don't know how long." Then it's story time in their head. They're just going to just wallow and wallow, and it's just going to become worse. Then efficiency just goes through the floor. How do you make those people feel comfortable?
Mac Sullivan (00:38:36):
The first thing you can do, Alex, is we've been doing a lot of personality tests and team leadership training. One of the first things we need to do is recognize our introverts and our extroverts. Because if you let the extroverts sit here and talk the whole time, maybe the introverts or the more risk averse people aren't going to say anything. With that note, Michael, I don't know you as an introvert. I was going to let you comment though, before I hop in, as the overbearing i-extrovert.
Michael Teubenbacher (00:39:04):
[inaudible 00:39:04]. I was chipping in a bit later today, sorry for that. I was just finding my way into the conversation. Highly engaged conversation [inaudible 00:39:13].
Mac Sullivan (00:39:12):
No problem. I do have a comment, though. What I hear from you, Alex, and more from Dyci, is the need for the gemba walk. To have the C-suite and the managers out there walking the floor. Now, that's harder to do during COVID, as we're not having as many in person meeting. I love the conversation about is quotation in the sales domain? What we've been doing here at NNR is we've been trying to use the concept that Microsoft rolled out called domain driven design. Putting things like address book and billing, and quotation on a table with our eight different domains and saying, where does it go? Where does it fit in? Because then we can hold those domain leaders accountable for the different functions within their domains.
Dyci Sfregola (00:40:11):
Mac Sullivan (00:40:11):
Yeah. But the reality is, is that there's no common data model in logistics. That quotation means different things to different companies. Once again, it's a very diverse sector. Shipping a large ISO container full of orange juice is very different than shipping a $2 million piece of semiconductor machinery. They're drastically different pieces that are involved, and that brings in some of the complexity, but it's a fine balance between abstracting away those details, like what's inside the box to, try to find the common process flows and just getting stuff done. Because at the end of the day, it's doing the gemba walk.
Mac Sullivan (00:41:05):
Ruben was talking about customers. What we did last week was actually, we sat down with some of our second tier trucking providers, the second party logistics companies, that maybe they own the fleet of trucks, or maybe they don't, and said, "Hey, our customers want better visibility, and right now you're the weakest link. How can you get me that POD, that proof of delivery faster?" He's like, "Well, if you can help me get the POD faster from my drivers, it's a win-win for both of us," because he's struggling the same way as we are. We're trying to get it from him and he's trying to get it from drivers, so...
Alexander McCaig (00:41:45):
Mac, let's be honest. I've driven across the United States an unfathomable amount of times than any normal human being should do. That's not a truck driver. Have you seen the pace at which the truck drivers move once they get out to get a meal, you're filling up your 150 gallon diesel tank. Oh, wait, I forgot the deaf. Oh, by the way, we don't have electronic logs. Oh, hold up. Like the Suez Canal, we got a block up because I'm moving in. I'm trying to get this freight New Mexico, but I got to get pulled off here because they got to check, make sure everything's in here. There's not the human trafficking element that's coming into it.
Alexander McCaig (00:42:22):
That is not the focus. The focus for the truck driver is the more miles I put on those tires, the more dollars I get. They're not really caring so much about the fact that the delivery gets to the door. They don't care about the end product. They just know, "I got my sleeper cab. I want to be comfortable. This is how I make my living and things happen throughout the day." How do you get people like that, even in the second tier part of the logistics, to care about the product at the end of the gate, to get the logs quicker so that somebody else down the line is going to find the benefit from it, when they don't see the benefit right here for them and now?
Mac Sullivan (00:42:57):
What we're trying to do is drive a pragmatic, digital transformation. Everything should be driven by pragmatic human driven problems. Once again, it's not just focused always on our external customers, it's focused on our internal customers and how can we reduce the friction for them to do the simple tasks that are clogging up the supply chain? We don't need any sophisticated digital twin to tell us that. It's, hey, it takes me seven clicks to get to print a bill of waiting.
Mac Sullivan (00:43:27):
How can we reduce that to three clicks? How can a driver, instead of having to download a new app to his phone to capture that POD, how can he just have a single URL that he goes to on a smartphone, take a picture, and then once again, it's customer agnostic that, hey, I'm putting this up there in a secure authorized means, and anybody, boss, hey, you can have a back office clerk at wherever sending that to the right person, but my job is done. My job was to capture and post, and then...
Dyci Sfregola (00:44:01):
What I'm hearing from Mac... oh, go ahead.
Ruben Huber (00:44:01):
He's just said, you still have to... Sorry. Go ahead. No, please. Ladies first.
Dyci Sfregola (00:44:06):
What I'm hearing from Mac a lot of though, and this is as the CEO of a company, I also do this, is personal introspection as a leader. I ask myself these questions about my employees. What I'm hearing from Mac is that they're doing that. They're doing personality tests. They're figuring out how the team works together. They're listening to say, hey, their people are saying seven clicks is too many. It's very collaborative in that I'm sure there's still a hierarchy. It's not this flat organization, but it's also not just the top pushing down, "This is what you must do and this is why it's going to happen." It's collaborative. Companies have to do that. But like you said, Alex, that's a cultural change.
Alexander McCaig (00:44:51):
Dyci Sfregola (00:44:51):
Something needs to... and to empower someone is to let them know, not just with words of saying, "If you get this wrong or if you speak up and it's not right, that you're not going to be shamed. People aren't going to think less of you." It's actually making sure that that doesn't happen. I remember when COVID first started, I was reading on LinkedIn that companies were blaming demand planners for not knowing [crosstalk 00:45:19]
Ruben Huber (00:45:19):
Not projecting rightly.
Dyci Sfregola (00:45:21):
... for that product.
Mac Sullivan (00:45:23):
Come on, Obama talked about it a year before COVID came-
Ruben Huber (00:45:26):
Mac Sullivan (00:45:26):
... that some epidemic was coming.
Ruben Huber (00:45:30):
I mean, you guys just brought up one very good point. I think the optimization issue is also that it still happens in silos. It happens in companies. Mac is optimizing for NNR for that part of the supply chain. This trucker is optimizing for himself. The customer is optimizing for himself. Give you some simple examples from back in the days where it was just about booking. The customer, when he makes a booking manually by email, it means somebody has to write it. Somebody else receives that email, and I'm always talking about this $3 email, well, to open an email, to read an email, to take an action costs you $3 minimum anywhere in the world.
Ruben Huber (00:46:08):
If somebody has to handle that, the guy writes it, the other guy receives it. If you can optimize that and say, okay, it happens by API, from his system directly to yours, the customer has an optimization and you have an optimization. Because on the next price discussion, you discuss about $5 a shipment and you throw away $3 here and $3 on that side on every bloody shipment. It has a lot to do with this looking at the end of things. Of course, one issue is we splitted the task a lot, the traditional forward of some 30 years ago, one guy was doing the whole job.
Ruben Huber (00:46:44):
He knew what happens in the beginning and what happens in the end. Now you have tasks diluted that every department is optimizing itself, but the end to end syncing is a bit disappearing. Some companies do it better, of course, but then you have the issue across companies. Do I talk to my trucker in that way, like what Mac did now last week with his trucker, that many people don't do. They just say, "Hey, we need this bloody proof of delivery. Why do you still not provide it?" Figure out a way to give it to us, otherwise we have to change the trucker, but it doesn't solve the problem.
Alexander McCaig (00:47:14):
No. I will state this right here. A lot of these things, they sound like an impossible task. They're not. They're just improbable if you don't take the appropriate steps with the people and the culture in place. For instance, we'll use this as an example, to just put some proof in the pudding, to say that this can happen in logistics and supply chain. If I'm moving a piece of paper, that's logistics and supply chain within my own company, hands down. If I'm thinking about that's the asset itself, document A, and getting it over here to the other side of the office, there's logistics and supply chain. I have to get everybody involved. Rocket mortgage understood this.
Alexander McCaig (00:47:56):
They understood that if I want to get a mortgage, there's typically 300 touch points that are occurring from starting that till the person signs it and they can get the keys to their house and go inside the bank funds, but they're like, if we can bring everybody together, understand all the points of that process, reduce the friction, capture all that data on the board, I don't care how you want to do it in any lean six Sigma approach, and we're there. Now we've captured the data. Now we can speak to the human element and we can work together collaboratively, and understand where we can all come together to alter the culture, to actually improve the balance of our work here, to make it more efficient, to move document A over to this point.
Alexander McCaig (00:48:37):
Whether I'm moving a cargo container, whether I'm moving potatoes, whether I'm moving people or whether I am moving pieces of paper, the process is always going to be the same. If it can happen with banks, which are some of the most entrenched things in history, slowest with a god awful amount of red tape, we can do it in logistics and supply chain. We can really feel the tangible benefits of the fourth industrial revolution and deal with the catalyst that will continue to be an onslaught on the global economy, if we can get people together and really empower them, understand the cultures and be effective in our decision-making and strategy on the data we received from these systems observing it. Does that make sense?
Michael Teubenbacher (00:49:24):
Get the focus on the customer.
Ruben Huber (00:49:24):
Yeah, of course.
Michael Teubenbacher (00:49:26):
Get the focus on the customer. [crosstalk 00:49:27]
Dyci Sfregola (00:49:29):
Yeah. That's right.
Ruben Huber (00:49:30):
I mean, in supply chain, there is an example for this. I mean, I'm always taking the same example. You use courier. You put your damaged iPhone into an envelope and you get a tracking number, and off it goes, and you trust that it arrives and the process is running relatively smooth. A container is just a big envelope, yet we have so many silos on the way that make it very complex. The problem is already solved. There is a solution for the issue. It's just, we don't get it over into the normal supply chain because it's too fragmented. It has too many different players, each of them optimizing their own little silo, some of them maybe making money up in transparency, and not really willing to share any kind of data.
Ruben Huber (00:50:17):
That's another problem we might touch on. Then of course, you have all these data points on the way. The terminal is capturing the temperature of the reefer, but it is not giving that data to anybody else. It just captures it to save its own back. You have these kinds of points where everybody optimizes for themselves and you have to somehow overcome that. Probably we need the data model for that, which is also monetizing in some way. You share this data with me. It gives me a benefit, so I pay for that, some micro amount or whatever.
Alexander McCaig (00:50:51):
That's tough. Sounds like the total marketplace. That sounds fantastic.
Ruben Huber (00:50:53):
Yeah. Exactly. That's why [inaudible 00:50:55].
Alexander McCaig (00:50:54):
Top notch! Congratulations. Here's the song.
Mac Sullivan (00:50:57):
But that's the problem with a lot of the [crosstalk 00:50:59].
Ruben Huber (00:50:59):
We push it over to you and you have to deal with the issue.
Alexander McCaig (00:51:01):
Yeah. Go ahead, Mac, Tell us what the issue is.
Mac Sullivan (00:51:07):
When I hear the new marketplace correlated to supply chain logistics, I turn off. It's unfathomable that... once again, IBM and Meris have teamed up to create this trade lens platform. If they can't do it, it's these small blockchain companies are creating this new frictionless trusting marketplace that, it's a lot of moving pieces. Once again, as Ruben was alluding to, there is that opacity that creates jobs. I mean, some of the providers in the logistics space have jobs because there isn't that frictionless handoff in a digital means.
Alexander McCaig (00:51:48):
Mac Sullivan (00:51:51):
I had one last point and that was I think it comes down with timing. A lot of the blockchain solutions of companies in supply chain logistics were too early. They already went bankrupt, unfortunately. They were blocked by the ability for these pieces and stakeholders throughout the supply chain to say, "No, we don't want to share that information." Until there is that customer driving and saying, "Hey, you have to share this information." Then lastly, it's how to share the information. Without standards, we're still going to be in the same place in two years, because there's so many options to digitally share information.
Mac Sullivan (00:52:38):
Is it, like Ruben was saying, from system to system via an API or EBI, which one thing EBI has been around for 40 years. I mean, APIs have been, too, if you actually look at the definition of what an application program interface is. There's so many different ways to trigger information. It's, hey, how do you want to send me your book? You can send it via email. You can text me, you can call me, you can send an API/EBI. There's so many different ways that it almost breeds more complexity with all those options. Until we have a standard to say, hey, we used to send an 856 via EBI. Here's the new API equivalent of that. Here's the data model with the required pieces of information, and that's it. We don't need to talk anymore. Just do that.
Alexander McCaig (00:53:25):
No. You're right. Listen...
Ruben Huber (00:53:27):
Yeah, but the crying for standards will not save us. I mean, I had this discussion last week in Bratislava. It was a very nice panel. There was also a blockchain friend involved, a few digital players. Same issue there. Everybody was saying, because we don't have standards, this doesn't happen. But on the other hand, a lot of people don't want standards because I have my standard and it works well, so why would I share it with other people?
Alexander McCaig (00:53:49):
Because [crosstalk 00:53:50] their own work.
Ruben Huber (00:53:53):
To bring it even back to the basics, Mac, I mean, Malcolm McLean didn't invent the container. The container was there before. He brought the standard in. Because he brought standards in and he standardized the corner posts and he was actually opening that kind of standard to other people, the box took off. It's more than that. The point is that-
Mac Sullivan (00:54:14):
Well, it's... Go ahead.
Michael Teubenbacher (00:54:16):
... normally, how do standards happen? There's either a market leader throwing them out and says, okay, this is it, and this de facto becomes the standard, or some kind of leading organization is pushing it. There's nobody pushing for it. There's DCSA around now since three years and they have not produced much. The UN [inaudible 00:54:36] approach is relatively cumbersome. There is a few approaches happening, but we're still not there.
Alexander McCaig (00:54:43):
Guys, and I just say that as a general term, because I know there's multiple sexes here in the room. Blockchain, I... Listen, the fiancé even says... she says "guys" and that's okay.
Dyci Sfregola (00:54:59):
I'm okay with guys. I don't know if I'm going to get pushback on that, but I'm okay.
Alexander McCaig (00:55:02):
No, you're good.
Dyci Sfregola (00:55:04):
I say guys to my team and we're all girls.
Alexander McCaig (00:55:07):
That's why... There we go. I'm saved. I'm saved. All right. Hear me out here. Blockchain's a buzzword, all well and good. Like I said before-
Dyci Sfregola (00:55:15):
Alexander McCaig (00:55:16):
... you can create new technologies, but unless people choose to adopt it, it's not going to do anything fantastic. There are phenomenal machine learning applications for non-standardized, non-defined information.
Dyci Sfregola (00:55:32):
Alexander McCaig (00:55:33):
Whether or not the whole industry has 1,000 different types of containers, the systems will naturally standardize on their own. The key is to get people to share their standards, and that's not really going to happen with blockchain itself. That's not the solve. It's the incentivization to say that, will you share with the market, your information about what you do? I don't really care how your standard's put together.
Alexander McCaig (00:56:00):
Somebody just has to share it, because if there is a lack of sharing occurring, we can't go anywhere. If knowledge can't naturally evolve, we will stagnate. I use our marketplace as an example because yes, it does involve a type of blockchain technology only to capture a record of the sharing, but that's not the key. The key is that humans come together to share information and they're incentivized to do so. I will pay you some amount of money for some information, and that's the trade, and in doing so-
Ruben Huber (00:56:34):
That's the key.
Alexander McCaig (00:56:34):
... we can ingest that information and analyze it through a body of scientific knowledge, applied to computer programming, to figure out how we look at this in some global format. You can say, "I need a standard." Well, you don't really need it that much anymore, when anything can analyze the mass amounts of information very quickly. We just have to open up the silos, and those are human beings coming together, sharing that information. Whether you want to use our marketplace to capture that information from the people internally within your own unit, or you want to use it to capture information from individuals in Japan, China, India, Australia, and the rest of the world, you can do so, but the incentive has to...
Ruben Huber (00:57:15):
You put the nail on the head. I mean, the point is really there. We don't have a data business model in logistics. There's no price on data. I think this thing, if you manage to put a price tag on data, come back to my simple terminal example. Today in a terminal, you normally, if you have high technology, you have a reefer run or whatever tech on your energy table that is more or less plucked in the reefer, in order to capture the temperature of your reefer container at the terminal. The terminal will source, the data in order to make sure at what temperature the thing came in at, what temperature it was sold, and what temperature goes out.
Ruben Huber (00:57:52):
The modern reefer container has its own sensors in there. If there were a QR code on the reefer where I just scan it in and I say, hey, I need to share this data from that reefer engine while the container is at my terminal, and I don't need to invest in a reefer run, I don't need somebody to check the temperature, then I already have it because the data is captured. But today it might be captured three, four times by different means because three, four parties have an interest and each of them is doing their own thing. It doesn't add any value. We have to somehow have a way of dealing with data.
Ruben Huber (00:58:24):
I agree with your other point, that actually automating it with AI is a big point. That's absolutely possible. A bill of lading has 42 data points. If you give me enough data, then a halfway decent machine learning algorithm can recognize which data is what data point. It's not rocket science. If the standard deviates a bit, it's not that complex.
Alexander McCaig (00:58:49):
Mac Sullivan (00:58:49):
But we've already lost our C-suite having that conversation. I mean, they're turned off.
Ruben Huber (00:58:53):
Yeah, of course, they're lost. They turned off on about 10 minutes in. That's it.
Alexander McCaig (00:58:59):
Yeah, I know. That's why you have to say, listen, C-suite, we need information. If you want to make a decision, you need information to do so, but the information we need, we have to pay for it. If we want to get it from people that otherwise aren't going to share it through the silos, you're going to have to incentivize them properly. The one thing that works globally is cash. People understand, "Pay me to tell me something." We can do that.
Mac Sullivan (00:59:25):
Now, Alex, I've got the perfect example.
Alexander McCaig (00:59:28):
Go ahead. You give me that example right now.
Mac Sullivan (00:59:31):
Going back to the terminal example. When Malcolm McLean, I mean, he launched his version of the [inaudible 00:59:37] container in the '40s and in the '50s, but it didn't take off until the Vietnam War, when he stole the American military organization on using it to send equipment to Vietnam. Now, then they had... okay, the ships are coming back empty with these containers. Japan first started manufacturing all these high tech components and they were filling the container with the goods going back. But then it was China in the early '80s, as it opened up, that they looked at their current terminal infrastructure and they said, "Hey, can we service these containers?" What do we need to service these containers? We need cranes. We need trucks that we can put it on." Yeah.
Dyci Sfregola (01:00:32):
Mac Sullivan (01:00:32):
If we broke down the problem to be that specific, hey, do you have the equipment to handle the information containers? Yes or no?
Alexander McCaig (01:00:44):
That's what I'm saying, the question.
Mac Sullivan (01:00:45):
The motivation, Alex, is look at the GDP increase that China was able to accomplish by investing in container terminal infrastructure. It's in the trillions because they made those strategic investments upfront, and they're still doing it today.
Alexander McCaig (01:01:06):
Mac Sullivan (01:01:06):
I don't know if we're even... That seems like a pretty good analogy.
Ruben Huber (01:01:09):
Yeah, of course. It's money that plays. Yeah, absolutely.
Alexander McCaig (01:01:13):
It's money that plays. Ladies and gentlemen, not guys, as we close this up, and we look to the fourth industrial revolution, what would be a final focus that you would leave for the individuals listening to this? What would be your actionable hope for them to start to be like, "We need to make a move on this?" What is the simplest, most effective thing they can do right now?
Dyci Sfregola (01:01:42):
I would really to see people diagram their processes and just have visibility into what people are actually doing and why they're doing it. Then to communicate with each person, add a note in the process of why what they're doing is important. Not just, hey, do this because X, Y, Z, or not just do this because someone told you to do it, but this is why it's actually important to what we do as a company, to help us remain open, to help us remain profitable. But it's just... We've talked about it.
Dyci Sfregola (01:02:17):
If you don't know what you're actually doing and why you're doing it, the technology isn't going to help. You're not going to get any return on investment from any of the technology. We can talk blockchain, we can talk standards, we can talk cloud based, whatever, but if the people don't know what they're doing, and if the people can't tell the technology vendors, if the business can't tell the technology vendors what to actually configure and why, then it's all obsolete.
Ruben Huber (01:02:43):
Yeah. Process is more important than tech. I think getting people to think end to end is the key to everything. They really have to think, hey, where is my space in this kind of chain? What do I contribute and what's the end to end game for the final customer in the end?
Alexander McCaig (01:02:59):
Michael Teubenbacher (01:02:59):
I would say very, very, very simple, spend a fraction of the money that you spend on IT and infrastructure on the people, a fraction, small fraction.
Alexander McCaig (01:03:11):
Yeah. Spend the money on people first.
Ruben Huber (01:03:11):
Michael Teubenbacher (01:03:11):
The second one, also, try to think it from the customer because that gives you an end to end view very naturally. Let's forget about silos.
Alexander McCaig (01:03:19):
Dyci Sfregola (01:03:23):
Ruben Huber (01:03:23):
Very good point. Yeah.
Mac Sullivan (01:03:24):
Yeah. I think for me, it's, well, to Dyci's point, Lucidchart is a big, highly used piece of software that we do at our company to process, map and optimize. For me, it's to the audience. This problem's still not solved. We are still living in a world where we need the next Malcolm McClain, the next sea chasing logistics innovation is still out there. Don't go work for a big company where your voice is not going to be heard, but don't do it all yourself. Find a company, like working for anybody on this call, where your voice is going to be heard, where you can process, map, look at current process, show the future optimization and then make it happen by bringing together culture, technology, people, and all of these things together. Because it's certainly ripe for further disruption and further optimization.
Alexander McCaig (01:04:18):
Absolutely agree. Listen, the four of you, thank you very much for joining us here today on TARTLE Cast. This will not fall on deaf ears. I'm excited about this, which is strange because it's logistics and supply chain, but I think it's because we had a strong focus on the human element. I get a little laugh.
Dyci Sfregola (01:04:36):
Logistics and supply chain is a people industry.
Alexander McCaig (01:04:40):
Michael Teubenbacher (01:04:40):
Dyci Sfregola (01:04:41):
Alexander McCaig (01:04:41):
Yeah. Very people-oriented. [crosstalk 01:04:43]-
Ruben Huber (01:04:43):
Exactly. Pretty cool. Yeah.
Alexander McCaig (01:04:45):
That's what it boils down to. Let's continue that focus. I do look forward to speaking with the four of you again in the future. Thank you for coming on.
Speaker 6 (01:05:00):
Thank you for listening to TARTLE Cast, with your hosts, Alexander McCaig and Jason Rigby, where humanity steps into the future and resource data defines the path. What's your data worth?