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Solving The World’s Supply Chain Woes with Blue Yonder

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If you break down the supply chain in its simplest form, basically what you have is brands procuring products and then delivering them to customers where and when they need them. Sounds easy, right? But if you’ve listened to this show long enough, you know that’s not the case. We’ve heard countless guests tell us just how much the supply chain impacts their business, and they’ve described a number of challenges they have encountered thanks to supply chain disruptions. One thing they all had in common — they had no answers to the problems they were facing.

That changes now. 

On this episode of Up Next in Commerce, I was so excited to finally get some insight on the supply chain from a couple of guys from Blue YonderOmar Akilah, GVP of Product in the commerce suite, and Eugene Amigud, GVP of Product Management and Architecture. Blue Yonder is an end-to-end supply chain platform that enables companies to tackle all the problems in the supply chain, and little side note, it’s currently on track to be acquired by Panasonic for a measly $7.1B. From planning to execution, to transportation management, to commerce, to promising a customer when they’re going to get it and making sure that you fulfill those promises, these are just some of the things Eugene and Omar have insider knowledge of. They dug into all of those topics and more and they shared how they help brands solve issues at all stages of the supply and fulfillment process. Regardless of the issues at hand, Eugene and Omar have heard, seen, and solved for it all. They also see the trends evolving in real time, including how important same-day or next-day delivery will be in various verticals, how and where A.I. and ML are being implemented, and what kind of difference edge technology and data will have on the entire buying and shipping experience. Eugene and Omar explain it all in this awesome roundtable episode, enjoy!

Main Takeaways:

  • Stitched Together: The supply chain is made up of specific pillars that can be optimized in specific ways. The way to level up and personalize the supply chain experience for brands is to stitch together the pillars and tools to make each pillar more valuable. For example, using machine learning to help do more accurate real-time inventory and then incentivizing purchase through automated couponing will lead to more sales, and also more data to further input into an ML algorithm to keep making the system better.
  • Knowing the Needs: Supply chain optimization is all about understanding the unique needs of a company or an industry. For medicine and pharmaceuticals, speed of delivery is critical — people need their medicine now. For grocery, being able to schedule your food to arrive on the days you need it for the meals you’re cooking is most important. Once you identify what the major need is, solving for that becomes a bit easier.
  • Gaining an Edge: The use of edge technology and data, combined with other execution tools like sensors, A.I. and ML, can change the shopping experience for customers and the supply chain experience for businesses. By bringing everything to the edge and utilizing new technology, real-time freshness and weather and harvest data can be used by businesses to update their inventory or upcoming orders and to inform customers of critical product information.

For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.

Key Quotes:

“Typically, where we start is the problem points that companies have relative to the strategy they’re trying to implement and what stressors that have. So one could be, I need to expose how much inventory I have in the store and make it available to a customer. Another could be, you know what, I’m doing that, but I need to be able to optimize my inventory better, put it in the right place so that it doesn’t take so long to get Stephanie and Hilary their couches.” –Omar

“Now we find a lot customers work with us not just to buy products. They say, ‘Bring the best practices, the lessons learned, what’s the fastest way to implement that? We all know somebody else’s doing ship from store, but how do you roll it out? Do you roll it out across all stores immediately? Do you pick a market where you offer some competitive differentiation?’ et cetera.” -Eugene

“There are definitely key pillars of the supply chain that need to be aligned. And all of our customers, I would say, are actively working on all of those pillars. Whether it’s inventory planning, inventory, placement, network modeling, the commerce experience, speed and convenience to their customers. Those are all common pillars that every company is trying to figure out …Do I have the right products in the right place, fast enough to meet the demand that I have when I have it? And am I engaging my customers the way that they want to be engaged and am I promising them what they’re going to get when they’re going to get it? all that kind of good stuff. So I think at the end of the day, the pillars are common. What happens, the uniqueness in the sauces is how do you address it for each customer?” –Omar

“The application of A.I. and ML in retail or in manufacturing or in the different industries is relatively new and so are the solution providers. So, giving transparency was a problem. In some cases, they thought that look, they aren’t using my peers and even us to some degree. But that’s not the case with us. But if I show what’s happening, I’m potentially exposing my solution to you, which frankly, is what you have to do. Because in order for me to trust you, I have to understand what you’re doing, and why you’re doing it, so that you build confidence.” –Omar

“If you think of a supply chain, it historically tended to be more of a background job. So there’s something in the background that gets your box out, et cetera. Now, if you want to take all that and expose it front and center, it can no longer be in the background. I cannot say, ‘Well, customer, I’ll tell you where your order is in 30 minutes.’ I need to respond in five milliseconds, because it needs to show on your mobile phone within some low millisecond response time. So the technical challenges to do that is actually quite interesting. That’s what excites us and we talk about it a lot, the architecture. You can’t just take an old program that was written back in the day and say, look, now it’s exposed to the front end.” –Eugene

“Another trend that you’re seeing, you look at the product details page, guess what you’re seeing now, order now, get it tomorrow, order now, get it in 10 days — you’re seeing dates now. You’re not seeing date ranges anymore, five days, four days, you’re seeing July Wednesday, July 3rd. That now puts stress on the supply chain to make sure that that happens.” –Omar

“We talked about visibility, talked about machine learning, the part that is missing in all this equation and throughout the industry is the edge intelligence. So now if you can see when customers are walking into the store… and you can just scan the face and have an understanding of the mood of the customer, what recommendations and what offers are there, knowing where the items are in real time, not just saying that, yes, the PO is arriving 20 days from now, but actually having a sensor on that specific item and knowing that it’s going from China to maybe the west coast on the truck to Minneapolis somewhere. So with the edge data, machine learning and visibility and all this execution becomes on steroids.” –Eugene

“You’re going to see brands do everything they can to look at a customer’s lifetime value and pull out all the stops relative to engagement and how I engage with you, whether that’s relative to coupons, relative to loyalty programs, relative to same day delivery, time slots, all of those kinds of things, but being able to truly understand my customer lifetime value with a customer and be able to cater specific needs around them becomes a key trend that I believe you’re going to see all the companies moving to. And you’ve already seen some of it with loyalty programs and other things and differentiated benefits as a result.” –Omar

Bio:

Omar Akilah is the Senior Vice President & Head of Product at Blue Yonder. Prior to his role at Blue Yonder, Akilah held the same role at Yantriks. He also served as Vice President Of Product Development at GrandCanals Inc., and as Director of Fulfillment Experience Transformation – Inventory & Promising, Omni-Options, Order Mgmt at Target.

Eugene Amigud is the GVP, Product Management and Architecture at Blue Yonder. Prior to his role at Blue Yonder, Amigud was the Founder and Managing Partner at Yantriks, a software architect for IBM, and a principal software engineer for Sterling Commerce an AT&T company.

Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce

Transcript:

Stephanie:

Hello, and welcome back to up next in commerce. This is your host, Stephanie Postles, CEO at mission.org. Today, we have an epic round table with two men from Blue Yonder, Eugene and Omar. Guys, welcome to the show.

Omar:

Hello. Thank you.

Eugene:

Thank you.

Stephanie:

Yeah. I’m very excited to have you on. So today I’m very happy because we’re finally tackling something that so many of our guests have been saying is an issue. I mean, hundreds of episodes in, and almost all of them that said supply chain is one of the biggest issues in e-commerce, but no one has had to figure it out and they always say hi, can someone come and help us with this? So I’m really excited about the conversation today. To start maybe Omar, if you could give us an overview of what is Blue Yonder.

Omar:

So Blue Yonder, if you think about it is really an end-to-end supply chain platform that enables companies to tackle all the problems that you talked about in the supply chain. From planning to execution, to transportation management, to commerce, to orchestrating in order to where it needs to go, to promising a customer when they’re going to get it and making sure that you fulfill on those promises. So if you really think of all of the various components of the supply chain, we basically power that right from the bits and bytes that need to be in the warehouse during the time that they need to be there to planning the labor all the way to getting it to a customer.

Stephanie:

And what are some of the brands that you guys work with? Are they all just big brands or there some small ones in there too? What does that look like?

Eugene:

We work with various brands. Some of those include pretty well-known it’s going to be lululemon or CVS or the worked with the [calls], [Mesias], Urban Outfitters, and so on. So pretty well recognized brands.

Stephanie:

Yeah. [inaudible] small guy. It’s no big deal. That’s awesome. So I want to talk about the landscape today of where supply chain is, because like I said, we hear that there’s all these issues. There’s delays. We’re having a heated conversation earlier, before we were recording around our couches all being delayed. And it’s very sad. So I want to hear what’s going on today, or maybe what has been transforming over this past year to get us here.

Omar:

Yeah. And I think, again, if you take it a step back, Stephanie, I would think about it relative to every company is trying to offer a brand product value proposition. So I have my brand, I have my products and my assortments. I’m trying to price them the right way so that they resonate with you or create some differentiator in the market relative to either the quality or the price or the uniqueness of the offering. And then I’m trying to make sure I can get it to you when you need to get it. So if we think of supply chain, instead of this big, hairy monster. That’s essentially what I’m trying to do, if I’m trying to make products that you love and get them in your hand when you want them from a consumer perspective. Now, to support all of that, obviously there’s a element of either procuring this product from another source or I’m making it for you.

Omar:

That’s where the supply chain varies tremendously, depending on who you’re talking about in the automotive industry versus the pharma industry versus other industries. It’s all about the components are still there. I need to make something or I need to procure something. I need to be able to get it to where I need it to be. And place it in the right place relative to my demand. So I know you’re in Austin or I’m in California or Eugene’s in Boston. And I need to make sure that the inventory is where he needs it to be, or you need it to be in order to get it in time. I need to be able to promise you that, that inventory is there and I need to be able to deliver all my promises. So if we break it down to the essence, that’s what it is. Now, the complexity comes in each of the functions. If you look at each of these functions, they become domain centric functions where I need to go very deep, where I’m using machine learning.

Omar:

I’m using analytics to figure out, okay, how much of a product do I need to sell? During which seasons? Where are my best suppliers? Who can I get it from at the best cost? How does my network look for inbound? Am I going to get it from overseas? And then I need to go through an ocean in order to get it to a port and then truck it somewhere else? What does all of that look like? And that’s where the right tools and the right software solutions become key to helping you answer those questions. Does that help?

Stephanie:

Yes. That makes perfect sense. So when you come in, for some of these big brands will say, I don’t know, CVS or something, or anyone, where do you even start? How do you start the audit process? And maybe what are the biggest surprises? What are these brands missing, where they’re like, oh, if we only knew about that 10 years ago would have been way easier.

Omar:

I think you’ll see you Eugene and I we’re riffs a little bit. I think it’s a couple things Stephanie, first is the problem points that they have. We see a lot of… And everybody’s a little different. Number one is, with COVID and with the fact that we all have these, and I would say this came before COVID-

Stephanie:

[inaudible].

Omar:

People just forget about that. Folks, sorry. Yes. There’s a podcast, phones, phones, telephones. And more specifically the fact smartphones, where we now have a browser in our hand, and we want to understand a lot more than what we did in the past. In the past, it was more about, “Hey, you know what, J.Crew is a cool brand. I want to go into the store. I want to check it out. Now I want to browse their catalog. I want to see what’s available near me. I want to see whether or not I can get it today.” So typically where we start is the problem points that companies have relative to the strategy they’re trying to implement and what stressors that have. So one could be, I need to expose how much inventory I have in the store and make it available to a customer.

Omar:

Another could be, you know what, I’m doing that, but I need to be able to optimize my inventory better, put it in the right place so that it doesn’t take so long to get Stephanie and [inaudible] their couches. Those are the type of things that, depending on the problem point, and given the fact that Blue Yonder has such a robust portfolio, we start from wherever their pain point is in the supply chain. And we’re typically, revert to it as the supply chain experts in these areas.

Eugene:

Just to add to what Omar’s saying, me being in the industry for a quite long time, I took things for granted. But then if you talk to somebody outside of the industry, you always have to educate what is actual supply chain? How does it work? Everyone says, look, I just placed an order online and I get the box back. But then they partially because of COVID, what happened was government started talking about supply chain. Saying, look, if you cannot physically go into the stores, but you can come and do a pickup from the store where you order something online, you pick it up from the store has been there forever. I mean, that’s why I’ve been doing it probably 20 years ago or more. But somewhat not as spread out, general public might not have understood it well.

Eugene:

And now everyone has to do that. And I was fascinated literally the spot of the news coverage, where there will be COVID numbers and the other updates, it would say, okay, physical stores for non essential brands can be open for pickup or can be open for shipping. And the reverse was, let’s say stores are closed. And our customers cause that Eugene we’ve got we have seasonal merchandise and you have to get rid of it. What do we do? The customers are not coming into the store. What I do with that? The answer is you can ship from those stores. You can use your stores as a warehouses and again, old concept to a degree, but it just became so much spread out. And those are some of the difficulties we started ordering, discussing, helping customers to say, look, how do you handle these scenarios?

Stephanie:

Do you see these customers that you have actually being able to identify their problems? Because to me, if I’m a brand I’m like, I don’t know what I don’t know. So I don’t know what J. Crew’s doing versus Bombas versus these DTC companies who maybe are mainly and have always used their retail locations as fulfillment centers. Do they actually understand the problems they have?

Eugene:

Yeah-

Eugene:

Very often is a common. That’s where you start. They see a problem of saying my inventory is not moving. And we have them in some of the first questions they ask us saying, look, how other customers do this? Just because of how our product used across multiple verticals in different domain, [inaudible] people do ask us all the time saying what’s the best way to implement it? So now actually we find a lot is customers work with us. Not just to buy product. They say, look, bring the best practices. The lessons learned, what’s the fastest way to implement that? Yes. We all know somebody else’s doing ship from store, but how do you roll it out? Do you roll it out across all stores immediately? Do you pick a market where you offer some competitive differentiation, et cetera?

Omar:

Yeah. And I think, sorry, just to add there, I think Eugene’s point is a good one. I’d look at it in two categories, generally, they know what they want to impact from a strategy perspective, they might not know how. And that’s where trusted partners come into play, but Eugene’s point, you typically know, you know what, I want to make the customer experience better to my customers. I have an issue with stale inventory sitting in my warehouse. I have a cost problem with how much it costs me to fulfill orders. I need to bring that down. So the problem statements are typically known. To your point, the solutions may not be. So do I go and address order optimization to fix my shipping problem?

Omar:

To Eugene’s point, if you ship out of stores, hey, you’re shipping from a closer location. You’re going to get a benefit of potentially lowering your time to deliver to your customers. But your transportation costs may go up a little bit. So how do you cater for that? Do you look at other ways to do it? And that’s where we would suggest, well, have you done a network model where you’ve assessed your ins and your outs and make sure that they’re optimized accordingly? Do you need a micro fulfillment center? Do you need to ship directly from your sources? Those kinds of answers come out after that problem statement has been clearly identified. So the problem statements, I think, are very clear to your point. They may not know what the solution is to those, and that’s where we typically help.

Stephanie:

Yeah. So is there a shiny star client where you were like, ah, this one, every time we’re going to go with this playbook where we’re going to implement these 10 key pieces and maybe there’s a little customization based off their product. Is that a good way to think about how you guys work or is it custom every single time?

Omar:

I don’t think it’s custom every single time. I think to your point there are definitely key pillars of the supply chain that need to be aligned. And again, all of our customers, I would say are actively working on all of those pillars. Whether it’s inventory planning, inventory, placement, network modeling, the commerce experience, speed and convenience to their customers. Those are all common pillars that every company is trying to figure out whether they’re B2B or B2C. It really doesn’t matter if they’re common. Do I have the right products in the right place, fast enough to meet the demand that I have when I have it. And am I engaging my customers the way that they want to be engaged and am I promising them what they’re going to get when they’re going to get it, all that kind of good stuff.

Omar:

So I think at the end of the day, the pillars are common. What happens that uniqueness in the sauces? How do you address it for each customer?

Eugene:

So like Omar was saying, the pillars are common. I call them building blocks. I think what also makes us very different is the what is the absolute burning pain that the customer is experiencing. And you see different, there are some, let’s say retailers, their margins are absolutely through the roof and all they care about is how do I get this product to customer’s hands faster. They may not actually worry about extra three dollars and shipping just because I want to get customer to have a today or tomorrow one good example of some of these scenarios is not margins, but speed is a pharmacist. So if you think about pharmacy, if I want my order to arrive within an hour probably I need it. I need this medication. So that’s one example. So absolutely I have to find the closest location and try to fulfill their orchestrate my supply chain so that I can ship it within an hour.

Eugene:

And the flip side is some other retailers where a good example is grocery, where I may want to get my order delivered on Friday, just because that’s when I start cooking and so on. And so you can see the difference. One is immediacy. And another one is actually, I want to plan accordingly. And so you can think of supply chain being orchestrated very differently based on the customer. So from our perspective, so we have this pillar, some building blocks make them very flexible from technically to call the microservices, to make sure that you can use those and build within your whatever customer is looking to achieve. And again, those goals could be very, very different. Everyone is talking about everything going digital. The grocery going digital, this whole Omni channel scenarios. But if you look at every one of them in detail, they actually quite unique. Many of them are very unique and our job is to make sure that whatever customers are trying to achieve we enable them to do so.

Stephanie:

Yeah. Cool. What are some of the new trends that you all see popping up? Because I’m sure you have a lot of people coming to you and they’re like, we need to do this right now because we heard other brands are doing this, or this is the way of the future. What trends are you hearing that are maybe new and even just the past couple months or so?

Eugene:

I think [inaudible] that’s really hard this year to me is a same day or hourly delivery. That’s one. Everyone talks about it. It’s actually remains to be seen how hot it will remain going forward or not. And again, if I look at the Madison delivery, it’s there to stay, grocery maybe. And then some that probably it will come and go. Because we see many retailers they’ll enable same day delivery, but the margins are just not there or in that charging customer $20 for same day delivery of a shirt, it may not stay there. So that’s an interesting one. I think it will evolve over time, but the same day delivery is definitely a very hot, a common topic that customers ask us all the time.

Omar:

Well, we can riff on that for a bit Stephanie, because if you think of COVID and the COVID impact. So every company that offered goods to customers wanted to get it in their hands as soon as possible to replicate the in store experience. Because you’re browsing the aisle, you’re looking. So now I’m focusing on my e-commerce experience, I’m focusing on my digital experience to try to mirror that. So that you can actually get it. And what’s the other part of that is putting it in your basket and leaving and being able to have that item that day. So now, to Eugene’s point, if you look at it, a category by category perspective, is same day uptake going to be the same across all the different industries and all the different categories.

Omar:

I would agree with Eugene, probably not, because now that folks are getting mobile again, we may rely on it for pharmacy. We may rely on it for grocery. We may rely on it for essentials. And we want it when we want it, but now for non-essential goods, do I really need it same day? I may be willing to wait. So that becomes the balance and the dance from a customer engagement perspective where you want to offer them the options but they may not necessarily be the option that they we’ll take up every single time. And so there’s a balance to Eugene’s point on that cost to serve. I think the other cool trend or the other trend that I’m seeing in a Eugene and I reverse roles for a sec. You talked about the same day delivery, and I’m going to talk about the use of machine learning. So typically Stephanie, he’s the tech geek and I’ve done-

Stephanie:

Yeah. We just flop [inaudible].

Omar:

Yeah. We just totally flop. So what I would say is like super cool that I’m seeing quite a bit in industry is the usage of machine learning to solve the problems that people cannot easily. So let’s look at grocery for a second, or let’s look at any other industry where products are very volatile as they’re in the store because you got a lot of people coming in and out, but yet you want to promise against that store potentially because you don’t want to have a distribution center that fulfilled a product to a customer to Eugene’s point, if I want to deliver same day, I want to get it out of your local Safeway or Lucky’s or whatever it may be. You can get it straight into your hands. So how do I factor for whether or not something’s in stock or not?

Omar:

So that’s where things like using machine learning and understanding how often they get replenished to how often a product is being demanded, how often a product is actually there, when it says it’s going to be there using a brain to determine all of that probabilistically, high probability that it’s there becomes easier than to do the traditional path of, I have five units at the end of the start of the day, and I sold three units in it now two. So being able to use applied machine learning and artificial intelligence in the supply chain, and I just use inventory as one, but you can think of it relative to planning. You can think of it relative to assortment residents during different seasons. Should I offer a pink jacket because of this type of season where it’s going to be cold, but it’s bright. So people are actually going to like the color pink more, or those kinds of things become super, super to me, exciting in terms of trends.

Omar:

And we’re seeing it more, more, and more of the conversations are, how are you tying machine learning and artificial intelligence into your planning tools, into your commerce tools? And then we’re being asked, how are you tying planning into execution? How are you bringing those two things together? So that to me is super, super exciting. I know it’s exciting to you, Eugene too. We just flipped roles. We’re excited about the same stuff. We’re brothers from other mothers-

Stephanie:

[inaudible] get of my territory [inaudible].

Eugene:

No that’s-

Omar:

Yeah, yeah. Exactly.

Eugene:

And to me to continue right to what Omar’s mentioned is, to me that’s almost like evolvement on visibility. So before many talks about control towers. So that’s another kind of topic and now expectations are changing to say, look, from control tower and visibility I need to make it actionable. And how do you make actionable for all this visibility you actually apply in machine learning. And then if you make it actually can make it urgent and relevant to the current customer. So that’s another trend that we see quite a lot now is saying, look, we have the control tower. We have this ability now, how do you make it actionable? My PO is not a writing for now another two months.

Eugene:

The couch discussion we had a little earlier, before we started would be good to practice practical notify customers saying that you probably do not get the couch and maybe recommend another couch or provide a different date. So of just showing this ability because of the supply chain now is being so rapidly changing, how do you react that the speed that consumer or businesses expect?

Stephanie:

So I have two thoughts there. First, I’m going to go with the training piece. Whenever people talk on machine learning, I obviously think it’s going to blow everything out of the water. It’s going to help a lot. But then I also think the people on the ground have a lot of that local knowledge where they know what’s in style based off the people that come in. So how do we think about training the models where people can actually help with that and influence the outcome. So it’s not just a computer guessing and applying the same algorithm to Austin versus Washington state. And then whereas people they’re picking inventory, I’m thinking of these consignments jobs here who pick this awesome inventory and they’re so close to what people in Austin want versus what someone in DC would want very different or San Jose. Omar, no one would want something that’s here. Probably. How do you [inaudible] all that?

Omar:

We’re weird too. We’re weird [inaudible].

Stephanie:

We’re all weird in our own way.

Omar:

Yeah, yeah. Come on, [inaudible].

Stephanie:

Very different kinds of weird. Yeah, how do you think about that customization piece and training so that people on the ground floor can help influence the outcome of those models?

Eugene:

Yeah. So a couple of things. So in general, and it lists in the industry, we work with people just don’t trust machine learning to begin with. Part of the job security part of it is uncertainty. My favorite comment was one customer and we were trying to talk about machine learning and he said, look, Eugene, would you put your child in a school bus that’s driven by machine learning? And that was a fair question-

Stephanie:

I would. I drive a Tesla, I’m all about it.

Eugene:

No. But he didn’t ask about the car, he asked about school bus. A little bit more complex. So it was a tricky question, but a fair question. And I think the takeaway there is you need to build a system that users can trust. And there are various ways of doing it. One is training. So how much data you need? So very common question. I said, look, we don’t have the data. You’ll ask us for two years for some data, we don’t have two years worth of data. And now it’s actually worse because the last year of COVID data is very often useless.

Stephanie:

Yeah. We talked about this actually with Stitch Fix where she’s like, we had the VP of data science come on. And it’s just like, if we use this last year of data, we would have all the wrong models because everyone wants athleisure and yoga pants. And she’s like, and that will not be the trend in the next year or two-

Omar:

In the next year.

Eugene:

[crosstalk] where they had stores closed all 2000 or 3000, whatever stores, the physical walls. So you can learn too much from that. So to your point, training, I couldn’t think of more relevant than more right time question than now, about training. So you have to be very careful of what data use, what is [inaudible] they’re used to train that, but also the way we think about that, we actually give users manual controls together with machine learning and a lot of insights onto machine. So we don’t just spit out the data and say, well, trust us, that’s the best way. But whenever we make a decision, we try to capture all the decision criteria that was used during the time. And it’s almost like degenerated audit for it.

Eugene:

So that is the best way you found to build trust to people who use it try to business owners of those components to say, look, you made the decision because of that, or can I change few levers manually because I don’t have the enough historical data. So then you are playing with some levers to begin with while you collecting historical data, and then you start trusting more and more the machine learning and you are adjusting those levers and say, look, now it’s less manual and more automatic. So the rollout, the transition, the insights, all super important. And again, many of these are very urgent. We’re talking about customers can say, look, in two months, I want this up and running. I may not have historical data.

Eugene:

So, there’s always a combination. Enough historical data to train. So you say, look, we’ll start training, you will start collecting the data, doing cleansing and whatever, but you have some manual ways to control it while you’re building more and more trust to your machine learning data. Omar you want to add?

Omar:

No, no. I was just going to say, I mean, you hit the nail on the head and I think Stephanie, one of the issues again is, I think now the application of AI and ML in retail or in manufacturing or in the different industries, is relatively new and so are the solution providers [inaudible]. So to Eugene’s point, giving transparency was a problem. In some cases, they thought that look, they aren’t using my peers and even us to some degree. But that’s not the case with us. But if I show what’s happening on potentially exposing my solution to you, which frankly, is what you have to do. Because in order for me to trust you, to Eugene’s point, I have to understand what you’re doing, and why you’re doing it, so that you build what Eugene highlighted which is confidence.

Omar:

And being able to say, hey, look, if you’re not confident above 90% in this decision and I would argue your point on self-driving. If you can’t drive this thing 99.9% to the rules of the road, I’m not going to trust you. I’m going to grab it. But if you can, and you prove to me that you can, and that you have, over the past year, you have, then you know what, yeah. I trust you. So the ability to actually understand and have the control of what it’s doing, and be able to have the control of, yes, I want to accept you or no I don’t, becomes critical to machine learning [inaudible] Yeah. Absolutely critical. And-

Stephanie:

Yes. And what I love about that it’s leveling everyone up in the industry because then everyone is like a data scientist. Everyone is understanding the weighting of the different variables and how to play with it and put their own human element into it. I guess we’re really leveling everyone up in the industry.

Omar:

And it’s not creating it and the thing that I think is interesting is everybody says, hey, you know what, This is my secret vow, but the point is you get to innovate on top of it. You get to use data science to really create unique experiences for your target segment which could be different than your competitors target segment. That’s how you get to differentiate as well. So the ability to truly understand your market, truly understand your supply chain, truly understand what you can improve within it becomes… Again, to me, I geek out with Eugene on that quite a bit. Because I just think it’s super, super cool. That and same day delivery of course.

Stephanie:

I love that. I mean, it seems like transparency and visibility are the way forward in this industry. I’m even thinking about same day delivery. Does it matter? Does it not? Maybe depends on the industry but probably what matters most is the messaging behind that, of where is my package. It can be 20 days out in the future as long as I actually can go and look into that. Are you guys seeing some trends around companies really try to put everything forward when it comes to being very transparent around where things are, what the process looks like? So customers are like fully in the loop?

Eugene:

Yeah. I didn’t. At some degree you summarized by Blue Yonder bought Yon tricks right in the company we founded. At the core of it is you have supply chain and when we got together, we said, look, if you take the supply chain and you bring up, which could be scary because it puts a lot of pressure on supply but if you bring it up, front and center, and make it transparent and visible, that’s where the power is. So that the core that’s really why we came together with Blue Yonder and Yon tricks to try to achieve that. It’s also the technical side of me. That’s where the complexities are because when you show this transparency, if you think of a supply chain, it historically tend to be more of a background jobs. So there’s something in the background that gets your box out, et cetera.

Eugene:

Now, if you want to take all that and expose it front and center, it can no longer be a background. I cannot say, well, customer, I’ll tell you where your order is in 30 minutes. I need to respond in five milliseconds maybe, because it needs to show on your mobile phone within some low millisecond response times. So the technical challenges to do that is actually quite interesting network excites us and we talk about it a lot is the architecture. You can’t just take an old program that was written back in the day and say, look, now it’s exposed to the front end. Now it’s about sides. Now you can compete with Amazon. It doesn’t form the plan. All my talks, quite a lot about some of those vertical integrated supply chain in the industry. So you may want to touch on that, but that’s really irrelevant to what you said.

Stephanie:

[inaudible].

Omar:

Yeah. Yeah. I would start first, maybe Stephanie, with of what you said and I’m going to go back to machine learning for a second. In understanding customer behaviors, there is definitely a balance between what you’re willing to deal with in terms of time and speed, and what you’re willing to pay for depending on the product assortment, and what it is, and when it is, when you’re buying it. So number one to your point, accuracy in reliability is absolutely tantamount to any kind of promises that I’m engaging in. And I think you’re just seeing that across every retailer that’s now trying to build it. Every reseller now, every retailer now, again another trend that you’re seeing, you look at the product details page, guess what you’re seeing now, order now get it tomorrow, order now, get it in 10 days, you’re seeing dates now.

Omar:

You’re not seeing date ranges anymore, five days, four days, you’re seeing July Wednesday, July 3rd. To Eugene’s point that now puts stress on the supply chain to make sure that that happens. But you’re no longer seeing three to five business days. And if you are, they are actively looking at how do they make that a different proposition. And then to your point, there’s analysis being done on the backend branching. Will Stephanie still buy this thing if the lead time is greater than this or not? Right from analyzing trends, do they know? For these type of products, I really need the offers same day delivery. I need to make sure that it’s available within 24 hours and get it in our hands in three days. If it’s more than three days or four days, or five days, she doesn’t buy for abandonment and analyzing what that does to your shopping cart and behavior.

Omar:

So that’s one, the second use to what Eugene was talking about is now, these different pillars of the supply chain, the power of being able to go deep within them to surface those promises, but then stitch them together. To actually provide a unique value proposition to you, and I’m going to say a word that people aren’t going to like and influence your behavior to what I want you to do, becomes super powerful. As an example, I’m in the shopping cart, you have three items in your shopping cart. Those three, I understand that they’re actually going to be expensive for me to fulfill, I can incent you and you’ve seen this with colds and others to go and pick up in store, and I’ll give you a coupon. And I know that when you walk into the store, you attach more. But now I’ve actually connected two things that are typically not connected, which is, pricing and promotion, with delivery execution. Typically those are separate.

Omar:

And in the old world they were completely separate. Now I’m tying them together. So the ability to actually create these domain centric microservices, that are loosely coupled, that can work on their own, but then once I integrate them together they work seamlessly in the response times required, at the scale required because we’re not talking about that yet. We haven’t talked about that but one of the big things is build the internet, the website has an SLA of how quick things need to come back. And how high it needs to scale with execution systems, were not necessarily built for that. So being able to actually scale to those kinds of volumes while providing very deep intelligence on the supply chain, is not an easy problem. It is a problem we solve, we’re very proud of the fact that we solved that, but it’s not an easy problem to address.

Omar:

So the power of the domain centric microservices that can be a single call, regardless of who’s calling it, the integration and the stitching between the two, coupled with the intelligence on top of it to understand what behavior you want, and what behavior I want from you becomes truly, in my opinion the secret to success.

Stephanie:

Yeah. I love the idea of stitching things together. It have made a perfect little model in my mind around what’s happening. What are some of the… Maybe like one or two case studies of a company like Kohl’s, or whoever you want to highlight coming in, getting all of this working together, and then being like, well, here’s the results that happened in however long it took.

Omar:

Sure. So I think there’s a couple of things here and Eugene, I’ll rely on you. So one, industry examples, obviously Amazon. You see it all the time. As you think of… And again from a Blue Yonder customer perspective, you think of grocery, you think of all of the different, retail clients that we had at Yon tricks. They’re all on this journey to connect and I use Petco as one of my key examples. You look at their ability to deliver. Not only commitments to their customers, but they’ve actually been able to make them things like, free same day delivery in certain markets and free one to two day delivery. It really helped them turn the corner where they rapidly added capabilities. So time to value becomes a very, very important on anything that’s doing, because these transformation projects are huge, and they take a very long period of time.

Omar:

But if you think of what Petco has been able to do in a short period of time to highlight Petco in a minute, or again, we can talk industry wise about what Amazon has been able to do with whole foods and delivery, you can see Albertsons and Safeway and what they’re doing right in terms of innovation there. But if I highlight Petco for a second, you look at the ability that they were able to turn on 1500 stores into ship from stores. They were able to, without going into all the detail but being able to do all of that and surface them into customer value at the time that customers needed it, and be able to pivot and even pivot strategies along the way as they were understanding customer behaviors, that becomes what makes me smile because that’s exactly what we want these platforms to be able to do. And hopefully that answers a couple of key points. We can go deep on each but, yeah.

Stephanie:

That’s great. I mean, pivoting is definitely seems like, you have to be able to do that in this day and age you got to be able to go quickly, move where your customers are going, because you never know what’s coming next. When it comes to what’s coming next I want to hear what do you guys think are the biggest disruptions coming into supply chain? What are you thinking around blockchain, or what other crazy ideas are you thinking, or like, this is going to come and impact everything. And Eugene, maybe this is your-

Eugene:

I’ll start and then I’m not going to have it. Well, one part of [inaudible] is as it’s known the Panasonic intense to acquire a Blue Yonder. And one interesting part of that, and that’s primarily an industry. But somewhat related to that is edge. So you can do a lot with… So we talked about visibility, we talked about machine learning. The part is missing in all this equation and throughout the industry, is the edge intelligence. So now if you can see when customers walking into the store, and again, they’re point solutions here and there. I don’t think it’s been as broad as we would like let’s say, customer walks into the store. And you can just scan the face. And have understanding of the mood of the customer, what recommendations and what offers are there. On inventoring, again, knowing where the items are in real time, not just saying that, yes, the [inaudible] is arriving 20 days from now.

Eugene:

But actually have a sensor on that specific item and knowing that it’s going from China to maybe west coast on the truck to Minneapolis somewhere. So with the edge data, you can machine learning and visibility and all this execution becomes on steroids. That’s one trend that I think we’ll evolve quite a bit machine learning in general. We’ll just spread out. On top of the execution side, automation is a big one, again, we think about it in the context of an edge. So you come to the store to pickup and you have this bag automatically available to you. It’s rolled out on a robot. So those few Omar, you want to add a few more?

Omar:

No, no. I think you spot-on. I mean, even if I expand what Eugene just said, think about freshness as well where I actually can use the edge technology via temperature sensors to actually tell you how fresh a particular product is. And if somebody takes it off of a shelf, I’m automatically replenishing either from my back room or creating an order because you know what, my plan of what I was going to be replenished has now spiked given the demand because it was hotter in a given area. So using weather and different spikes that may occur. So when you think of edge, and when you think of applying other intelligence in like sensors, robotics, those kind of things, automation process efficiency become key. On the other side of that when you think about the customer engagement and being able to truly reach the customer, to me, what becomes super, super exciting is you think of getting people products and we’re already seeing it which was interesting is that, a couple of years ago, being able to see delivery day was a big deal.

Omar:

Now, you’re able to select time, “Hey, I want it between this time and this time.” And I don’t think that going to go away. I think that you’re going to see brands do everything they can to look at a customer’s lifetime value and pull out all the stops relative to engagement. And how I engage with you, whether it’s the stuff that I talked about relative to coupons, relative to loyalty programs, relative to same day delivery, time slots, all of those kinds of things, but being able to truly understand my customer lifetime value with a customer and be able to cater specific needs around them. Also, becomes a second key trend that I believe you’re going to see all the companies moving to, and you’ve already seen some of it with loyalty programs and other things and differentiated benefits as a result. So I think those two, I mean, I think we’re very excited and obviously I’ve already told you, I’m super excited about how things stitch together.

Omar:

And we’re actively building those stitch components. Real time demand, into planning, into the internet of things, to understand and edge, to understand what’s actually happening collaboration with suppliers in real time, so that you can actually order and adjust plans dynamically, extend your assortment as needed, their little like I could geek out for a very long time, but there’s a lot I think that is going to come in this supply chain that you’ll see over time. And it’s all catered around making Stephanie’s life easier when she’s buying her couch. Right?

Stephanie:

All right. So the one thing I also want to bring up, you mentioned earlier about an acquisition and I wanted to touch on that because you guys are interesting. You worked at Yon tricks before you had the company Yon tricks before you got acquired by Blue Yonder. And now Panasonic is looking to acquire Blue Yonder for, I think it was $7.1 billion with a B. I want to hear about that journey because that’s very fun. And I haven’t had many companies on the show. You can talk about that.

Eugene:

Yes. That’s quite interesting, with a year ago, exactly a year ago, because it was in July, Yon tricks was acquired by Blue Yonder. And this was an interesting transition exciting a little bit nervous, et cetera. But we were able… The acquisition was the strategy was of investment and growth. It was very well understood the supply chain needs to have this transparency to the customer, bring it to the front end, et cetera, from commerce perspective. And that was pretty much investment going forward. And I guess we are little bit fortunate within the Blue Yonder because other parts of the Blue Yonder obviously didn’t go through that acquisition, but we just did. And so we understand the process maybe a little bit better. It’s a little bit fresh in our minds. I’m very excited actually about Panasonic, because to me that looks very similar trend, but like you said, on a much bigger scale.

Eugene:

It’s a investment strategy clearly, it’s a growth strategy, and bringing the supply chain with the edge, arrived with the sound of the automation, bringing it all together. It’s very exciting. So to me, we were the micro experiment within the Blue Yonder and now that becomes a macro experiment between Panasonic and Blue Yonder. So again, you’ll find me as one of the most optimistic people. Whenever there’s acquisition, people are always a little bit nervous and concerned. But because we just went through the journey and whatever we were able to achieve in one year, it would be absolutely impossible to achieve the same without the acquisition because when we were a startup, we were self-funded and we could grow organically, et cetera, but just with this acquisition It accelerated up. And now I see that. And I’m imagining you are assuming everything goes as planned as announced the possibility there is quite exciting.

Stephanie:

Omar, anything to add?

Omar:

think it’s very, very exciting. I would say we were that micro spark into a rich strategy that I think the region leadership team at Blue Yonder had in terms of where they see the industry going and I think it’s a testament to their vision. So, I mean, again, a Panasonic acquisition, if you think about it, traditionally, it would be like a supply chain company coming together with Panasonic. How does that make sense? But then when you think about the application opportunities within manufacturing, the ports importation within the four walls of a retail facility or store, warehousing, robotics, all of that kind of thing. It makes a lot of sense. So I think I’m very excited about it.

Omar:

I think again, to your point and to Eugene’s point we’ve written a wave that’s been tremendously fun for us. Eugene and I worked together at target and Yon tricks and beyond. So being able and the greater Yon tricks’ team which was a family coming into the Blue Yonder family and being welcomed as well as we were. And then now being a part of this new chapter in this new journey and being able to help write those stories. Yeah. It’s very humbling and it’s a very fun thing to be part of, to be honest. It’s pretty cool.

Eugene:

And that ties back to [inaudible] again, what you’re talking about, the edge With Panasonic financial, the other part of it, you asked, what are the new trends? The other trend and I forgot to mention last time is B2C moving to B2B in terms of expectations. So now when we in a B2B if I’m in a manufacturing facility and I’m ordering PLS. I’m in the IT department, I’m ordering servers, et cetera, the expectations of those consumer shops so much on the retail websites, which are putting all new capabilities, we don’t expect any more to… We are shopping at some against some ERP system. We just blue screens or whatever else.

Eugene:

So this whole digital revolution It’s capturing B2B now. And that’s, we really see it accelerating whether it’s direct to consumer from the manufacturer. So whether it’s a B2B or all these other flavors. The three PLS, et cetera, this digital revolution is taking over from what we’ve seen in B2C, what we all as people just used to and spreading around there. And I think that’s also quite exciting. And with Panasonic empowering some of that makes it even more powerful.

Stephanie:

Yes. I love that. And you definitely see that in all the industries too are trying to approach B2B in the same way they’re doing B2C and some industries that’s perfect. And some maybe not, but awesome. Well, it’s been a pleasure having you both on such a fun round table, such a good vibe, where can people hear more or learn more about Blue Yonder and you guys?

Eugene:

Thank you Stephanie for your time.

Omar:

Yeah. So Stephanie, obviously through our website Eugene and I, of course are all over. So, also LinkedIn, people can feel free to ping us there. As well as through again our Blue Yonder website and the different category pages of the different solutions that they need. So that’s definitely available, but this has been a lot of fun. Thank you very, very much for your time.

Stephanie:

Of course, thank you guys.

Episode 130