Podcast: Gartner Supply Chain Analyst Stan Aronow

Highlights from the Conversation

Welcome, Stan!

• Yeah, thanks so much. Great to be here, Richard.

Very cool. And today you are in, if I remember correctly, Colorado?

• Yes, I’m currently in Fort Collins, Colorado.

You grew up in the Midwest, and then found yourself a Universalist. Tell everyone a little bit about the startup where you came from, and how you got into what you’re doing.

• Most of my formative years were spent in Michigan, in the Detroit area.
• There’s a couple of really good state schools in Michigan, the University of Michigan and Michigan State. Both are great at supply chain; I think State probably ranks a little bit better, actually.
• But I decided at the time that I was going to go to business school, and I was going to do finance and accounting. I always liked math and had a fascination with the investment community and what it did. And so that was what steered me to pursue that at University of Michigan, initially.

So you originally went down the financial path, maybe started thinking of getting an MBA and working on Wall Street. Was supply chain even a concept in your head?

• I graduated in the early 1990s, when supply chain wasn’t a term.
• Interestingly enough, when I went to business school you could take electives and I used to like taking eclectic types of courses. I took anatomy and physiology in the medical school, and I took astronomy.
• I’m an analyst by nature, so to draw a thread, those are actually domains that require systems thinking. And I think that’s where supply chain is rich, so I was probably destined to go down some path that had some sort of systems thinking in it.
• You mentioned the investment thing. Fun fact: I actually interviewed with Bear Stearns in New York City, but I felt that culturally I didn’t want to work there. And oh, my God, thankfully I didn’t, because we know the rest of the story and what happened with the whole meltdown.

After you graduated, you ended up at this little company people might have heard of called Intel, and had a pretty good run there too. And from what I gather that point was your transition from finance into the supply chain.

• Maybe supply chain has had a big magnet attached to it for me, because I actually interviewed with both finance and supply chain coming out of grad school in Arizona.
• The finance one was a better offer at the time, and so I ended up entering the company that way, but interestingly enough I was doing finance for supply chain.

So what did that role mean at the time?

• Some of it was just your standard financial planning and analysis, and making sure everyone was staying on budget and things like that. But I started branching into projects.
• It was interesting that the late 1990s and early 2000s, for those who were in the workforce, was the Dot Com Era. There was this thing called e-business everyone was talking about. It was the biggest thing and lots of money was flowing to it.
• I was doing a lot of financial analysis to figure out, “do we want to go invest in this”? And apparently, I gave the program manager, who was leading that transformation program, such a hard time that he decided either that I had some potential or that maybe he wanted to take me out his way.
• He said, “Hey, would you like a job”? And I thought that sounded really interesting—the supplier types of capabilities and procurement.

There are certain companies that I think inherently have amazing supply chains. And I think Intel’s one of them. You were there at a time when they may or may not have known that they had an amazing supply chain. Can you speak to that a little bit? Were there moments where you thought that supply chain was bigger than finance for you?

• From the perspective of someone who’s deciding to go into a career, I think finance is a great place to start because you come in at a very senior level relative to where you’re supporting, and you get an end-to-end view of the business.
• You figure out how stuff gets funded—that’s a good skill to have, especially if you become head of supply chain or COO, and are going to the board asking for significant sums to transform. So for me, I think that was great.
• That’s the starting point, these types of transformation programs that I talked about, where you need to completely rethink how you source and connect with your suppliers.
• Because back then in the late 90s, everything was fairly siloed and the exchange of information, even transactionally between companies, was done over email. We were using SharePoint I think at the time, and I thought that was really advanced. Then RosettaNet standards came out, and things like that.
• What was interesting about moving into the supply chain areas, as I started drilling into the process and really understanding how it worked, was how complex all the interplays are between the different parties.
• It’s not just your company, but how important it is to plan in a coordinated way with your partners.
• I found that fascinating—that goes back to the whole system thinking: I was thinking, OK, this is just a complex ecosystem, there’s a lot of potential there.
• I don’t know if I realized at first how advanced Intel was, because a lot of times you just sort of live in a bubble. But Intel has an engineering culture company with lots of really smart people there.
• I think the thing about high tech companies is they tend to look at problems, like supply chain problems, as though it’s just yet another engineering problem. So they bring in some really advanced math to figure out how to optimize everything, and you get really interesting things as a result.

After 2010 there was a big transformation that started happening, not just in the Internet, but in Intel’s position. Concurrently, supply chain began to take on more prominence. What were your observations during that period?

• I worked at Intel for a decade plus prior to that and continued covering them as an analyst, so I think I can talk about that objectively.
• Intel, as one of the pioneers in Silicon Valley, had a lot of market power. Basically, it could not only dictate terms to suppliers, but in many ways to customers.
• In the period that I lived in at Intel it became much more important for supply chain to be really high performing, because the customer’s voice started mattering more and more.
• It wasn’t just “if we build it, they will come” it was, “we need to get to yes, much faster”. We needed to figure out how to do things in a really effective way.

I was at eBay at that time, and like many high tech companies we started buying more and more servers, which meant more and more chips. Eventually, companies like Google, Microsoft, and Amazon started diving into the supply chain thinking that they were going to build their own servers, then their own routers, and even their own chips. I remember this because I was in meetings with Intel reps when I was at eBay, and we were designing chips. We were way past buying whatever Intel wanted to give us. So that’s an interesting pressure that forced Intel to look at the supply chain and be more adaptive, like you couldn’t drive that market anymore. The market started driving Intel.

• Yes. And it happened over several years, because of all of the customization that customers were doing that you described. That even accelerated post-2010, because customer requirements from the Dells, HPs, and Lenovos accelerated.
• They didn’t even want our full stack, they wanted something hybrid, or wanted other IP outside of ours and other manufacturing technologies.
• For Intel, the amazing thing was just how vertically integrated it all was. The technology, the factories—everything was owned internally, and that was the secret sauce.
• Now they have to be really disaggregated to be able to run a bunch of different models.

So, as the Internet and all the technologies it was built on completed its first hype cycle, you made the jump from Intel to Gartner. That was a pretty big leap from a practitioner at a big name company, to doing the research that sits on top of the industry. And if I’m not mistaken, you started in supply chain right away, correct?

• In my earlier years, I was mostly with a sourcing function, then I started supporting planning, and then I moved to transformation programs that were end-to-end across all of the supply chain.
• Right around the end of my tenure with Intel in 2007-2008, I ran into this company called AMR Research. Basically it was a predecessor to the group of supply chain analysts that are now at Gartner.
• I was instantly smitten! I felt that this was just the coolest thing, being able to go out and be part of a larger community and share best practices and learn. So I took it on my own as a hobby to take over the contract to work the relationship between all these analysts in the community and those who were across all the different parts of the supply chain at Intel.
• I was enthusiastic, so they liked having me as a customer. They really liked the connections that I was making, what we did and what Intel was doing.
• As you said, Intel had lots to share with the community because it had a fairly advanced supply chain.
• At some point, the high tech supply chain role came open at AMR, and they said, “Well, you know, we obviously don’t poach from customers. But if you know anyone who’s interested, wink wink, let them know to apply”.
• That’s how I started: coming in as an industry analyst covering high tech more broadly.

I didn’t realize that Gartner went out and acquired AMR, and that was what we see in their supply chain group today.

• I was part of a team of about 15 to 20 analysts, but we’ve added to the group—now it’s about 100 to 150 analysts in the supply chain division. We’ve also added CEB analysts.

Was Gartner strategically building that supply chain practice back then? If so, that was pretty amazing, ahead-of-the-curve thinking. What was the thinking at that point? And what were the early days like with that group, and how you were looking at supply chain?

• Yes, I think it was a strategic purchase. You have to look at it almost like a whale swallowed a minnow. But that minnow grew and grew. And supply chain is one of the fastest growing businesses within Gartner today.
• What I can tell you, looking at the numbers: they’re crazy good right now. It’s really grown. And I think it’s viewed as not only a strategic part of the business, but as a best practice for what we can do with the rest of the business.
• As you know, Gartner’s ticker symbol is “IT”, and it’s focused on the CIO, and everyone who works for the CIO.
• But I think what we do really well, which ties to what I mentioned before, is the relationships and community and the learning across that. I think there is a lot coming out of that.

You’ve been at Gartner for close to 12 or 13 years. If I’m not mistaken, it looks like your function has stayed pretty similar. You’ve stayed in this role that keeps you connected to a Fortune 500 client base, and you’re interacting with them about what’s going on in supply chain. Is that an accurate reflection of what you’ve been doing, or has your role changed over the years?

• When I started with Gartner, my primary focus was high tech, but you know, you can take the guy out of finance, but you can’t take the finance out of the guy. So I covered other topics, like cost-to-serve which is very popular, especially nowadays with inflation.
• But there was this other thing called the Supply Chain Top 25, which I know many are familiar with. That’s our leadership research to determine who’s really pushing the envelope, as far as being advanced at running supply chain, a broader value chain, and really advanced digital capabilities.
• I was always fascinated with that, going back to my Intel days, where I was actually one of the ones who was beating a drum within the company to say, “We need to pay attention to this, we want to actually get on top of it, because this will attract and retain talent”. And that’s the way a lot of companies look at it.
• So I’ve been involved with that program since those days and that is a great program to provide visibility into what’s going on in all these larger Fortune 500 companies who were and are totally advanced.

Going back 10 years, what were people talking about with respect to supply chain versus what they’re talking about now? Because it has evolved a lot, and you’ve got such an interesting perspective on that evolution.

• There’s so much to say here. The reason why the Top 25 was originally created was that we wanted to elevate the role of the profession.
• It used to be that supply chain was about “kicking boxes and slapping labels” somewhere deep in the bowels of operations. There was a lot of, “Just do your job over there”, right?
• Now we’ve seen it come to fruition. Even before the pandemic, the head of supply chain was reporting to the CEO at many of these companies and was becoming a partner for growth.
• Since the pandemic happened, for good and bad reasons, everyone now knows what supply chain is; it’s on everyone’s lips. It’s pretty much part of the zeitgeist of our community.
• But we basically have achieved what we originally set out to do: if you go back to those early days.
• Gartner likes maturity models, and if you talk about the five-stage maturity model for the objective of the supply chain and how it operates, you go through this evolution where it starts off really siloed. Then it becomes more integrated across the enterprise, and then eventually becomes integrated with the value chain and a broader ecosystem.
• For these larger companies, they orchestrate what happens in those ecosystems in terms of the products, and now, in terms of pushing for greater sustainability, ethical sourcing and things like that.
• That really was a big part of what we were trying to accomplish, and actually, the Top 25 was a big vehicle.
• So I stayed attached to that program and ended up running it for five years, and I’m still involved with it as part of the advisory board that runs the program.

Has the Supply Chain Top 25 changed? Is it a very similar cohort as it was 10 years ago, or have you seen a lot of people move in and out of the list?

• As far as qualifying for it, it’s always been larger companies. There’s a fair amount of stability in some cases, for example with Johnson & Johnson and P&G; these are companies that are consistently on the top list for the last decade.
• But the way we evaluate leadership has changed. One of the things that I did back around 2015 was that I said, “We need to add corporate social responsibility”, which is what we were calling it at the time. Now it’s what’s referred to as environmental, social and governance or ESG.
• We needed a way to show in a quantitative way what these different companies were doing. This was becoming more and more important for supply chain, whereas prior to that we were just looking at financial performance.
• So that’s actually driven the conversation. If you’re talking about what’s going on in supply chain now, ESG is right up front, and of course digital transformation obviously continues.

I’m going to go back to a concept you talked about very early on: system-level thinking. Somewhere during your time at Gartner there was a move from disaggregated pieces of supply chain, for example procurement, asset management, disposition, etc. to supply chain being considered as one entity. That’s a new system-level view of supply chain. When did that change happen?

• When I started in 2010 it was still a mix, but it was definitely a mix that was more skewed toward a lower-level of reporting for that head of supply chain.
• If you asked a company, “Who’s your head of supply chain and what do they own?”, they’d say “It’s so and so, and they own planning and logistics”. They were using the same term, but it was still fairly narrow into the 20-teen years.
• I would say that’s where we started really seeing companies say, “You know what, we need to optimize the overall end-to-end for our supply response, and we’re going to put everything under one leader”. And because of the scope and the importance of that role, it was elevated up, in some cases, to the C-suite.
• I support the community of CEOs and global chief supply chain officers, and what I’m seeing now is what I call the expansionist CSCO role. This person not only owns the plan, source, make, deliver and service flow, they also likely own sustainability, or have a really strong influence on what happens there, including broader ESG.
• As we know ESG includes things like diversity and equity inclusion, because supply chain often employs most of the people in these companies.
• We’re also seeing the CSCO owning the digitization aspect of supply chain, sometimes jointly with CIOs or at a minimum, they own the supply chain IT function.
• Some of our members are actually in charge of product design, or a component of product launch.
• In the old days, if you were to ask if getting into supply chain was a potential path to the corner office, the answer that would have come back would be “maybe”. But it didn’t really happen that often. We’ve seen Tim Cook become CEO of Apple, and he came through an operations type of background. But it was more of the exception versus the rule.
• I think we’re going to see more and more CEOs with supply chain backgrounds moving forward.

If someone comes to you and says, “Okay, I’m in the Fortune 2000, what elements should I have in my supply chain”, how would you answer them? Would it include an aspect of circularity?

• Like I said, there are varying definitions that we see across different companies, but there’s a correlation between being a more mature company and the tendency to have a broader purview.
• So you might have a group that’s more facing demand, creation, and even the demand planning function. And we are seeing some supply chains play a larger role in customer experience.
• It’s interesting that you do see a lot of engineering types of people who go into supply chain. There are also data scientists, and that’s a great skill set to have, if you want to analyze what’s going on using structured and unstructured data types. What does your customer want in terms of your products, what the demand profile looks like currently, and what it might be projected to look like.
• And so if you ask the question, “Who’s better to actually do your forecasting?” Is it your commercial team, or your supply chain team? Well, your commercial team, of course, is a huge player and has a lot of say in it, but it’s the supply chain that might actually have the core underlying skills.
• So on the demand side, there’s a role that supply chain plays there. Traditionally, supply has been the big part of the supply chain, but I think it actually extended beyond that.
• I also think, to your point, it also extends into the product, as well. There’s lots of discussions we’re having now about designing for supply chain, and for many outcomes. The question is, “How do we actually design products so that we can get the most out of the capacity that we have?” Because companies are often really, really constrained, whether it’s in terms of facilities or what they’re getting in as supply.
• But then there’s also the piece that you mentioned, which I think will grow, around the whole circular model. People are starting to ask, “How do we design this thing so that it’s not cradle to grave, but cradle to cradle?” in which you can actually bring some of the resources back in. Obviously that’s got to be more sustainable for how we run our businesses moving forward, not just good for the planet.

Everyone focuses on purchasing: you’ve got huge procurement teams and elaborate RFPs and RFQs, and a lot of demand planning. But then we get to disposition, and for me, that’s where things fall off the cliff. The Fortune 2000 buys $12 trillion worth of stuff per year, but there’s no emphasis on the disposition side, that’s still a new kind of topic. But that’s a lot of free cash for companies and CFOs—even forgetting the sustainability recycling aspect of it, that’s free money.

• Yes, but it requires some effort to unlock it—you’re talking about something that really needs to be designed to unlock components, or even minerals.
• A couple years ago, Dell won a Gartner Power of the Profession award for their sustainability work. They are taking gold out of old motherboards. It turns out that there’s actually more gold by weight in a motherboard than there is in the gold ore that you would see in nature.
• If you were to design something where, for example, 60% of it is not the latest technology, it could be worthwhile to figure out how to cycle those components from the old product back into the new product. But you have to start at the very beginning of the line to say, let’s actually make a system that includes the reverse logistics and the quality management on the inbound side to be able to bring that back in as supply.

Designing a product so that it is circular is actually forward thinking—I’d give a lot of credit to an organization that’s thinking along those terms. From your end, do you see a lot of companies starting to wake up to circularity and the potential value in disposition of their unused assets? Because they have a lot of stuff—the Fortune 2000 companies are sitting on, based on book value, $187 trillion worth of assets. I mean, it’s a ridiculous amount of stuff.

• Yeah, and I think the motivations come from different places. An asset that is gathering dust might actually have some residual value to it, and it’s just sitting there waiting to be monetized.
• As they figure out a way to do that, then they can raise the flag on the fact that it’s good for the environment as well.
• There are other situations where I think it’s driven by more pure environmental concerns.
• If you look at the community that I currently support, there’s a lot of consumer packaged goods companies in there. So with that model you think about plastic that gets thrown out, and the fact that there’s more plastic in the ocean now than fish by weight, which is incredible and gross at the same time. And so there’s pressure to figure out how to not use plastic in the first place for packaging, but only where it really makes sense, because it’s a great solution, in some ways.
• Another example is in cooling, with refrigerants that work well but also harm the environment: how do we actually try to recreate this thing? The discussions are starting to go toward, “How do we reach common standards, as a community?”
• It actually sounds boring when you start talking about standards. But where this is critical is that once you have a standard, everyone can use it, and you can actually get economies of scale.
• If you look at the economics today for the plastic that would, for instance, go into packaging, it actually is less expensive to use new materials. I don’t know based on the current price of oil, but generally speaking, it’s less expensive to create virgin plastic than to go through the whole recycling process.
• So going back to the concept of a system or an ecosystem, you need everyone involved. You need all the consumers of that to agree and say, we’re all going to use the same thing for this type of packaging, or the same platform ingredient.
• To achieve this we may need the chemical companies to participate, and we need to pull in the recycling companies needed to create these markets jointly together, so that we flip the economics to make it work. What I’m seeing right now are these types of discussions in the community. And it’s encouraging, but it’s also hard to do.

You and I talked about that National Geographic article which shows the world’s supply chain, and the 106 gigatons of materials that we pull out of the ground every year. About 80% to 90% of the stuff that we use today comes from about two dozen materials. If most of those materials were recycled we could begin to reduce the amount of stuff we pull out of the ground. But again, that takes system wide thinking.

• Yes. The other thing I would say that sometimes can be a barrier is geopolitics.
• That’s another reason why I think that heads of supply chain are well suited to move into CEO types of roles, because in supply chain you’re dealing with the influence of governments and governmental policy.
• Look at what’s going on in high tech and pharma right now: there are lots of discussions around building national-specific supply chains, where there’s traceability for the products and so on.
• I branched off into this one when I was thinking about rare earths, the majority of which are refined in China right now. And right now, there is lots of talk about decoupling our economies, between the West and China. Not that it’s happening, but it is on a lot of people’s minds right now in terms of where we go from here.

That’s a fascinating point about how supply chain practitioners, especially at the global multinational level, are also diplomats because they’re going in and negotiating and changing policies within countries. Their knowledge base isn’t just optimization or constraints theory. It also has to include the current geopolitical landscape that they’re walking into, and how they can negotiate something that’s compatible not only with their corporate goals, but now our sustainability goals, and the country’s geopolitical situation.

• Yes, there’s just so much. It’s like 3D chess.
• A lot of our members have said they’re not available to meet in the early November timeframe, because they’re going to be at the COP26 talks going on in Scotland. They’re right in the thick of it.
• And it’s actually important that they shape the language that gets written because they don’t want to have bureaucrats create some language that’s not executable. So it’s a big part of the leader’s role.

Let’s switch gears and talk technology. 10 or 15 years ago there wasn’t any purpose-built supply chain software—just the financial tools that people were trying to use for supply chain. But in the last few years, I think we’ve seen an onslaught of new technologies that are actually what I would call supply chain technologies. Can you talk about your perspective on that evolution?

• Oh, yeah, it’s been huge over the last decade.
• If I go back to the early 2010s, it’s been exactly as you said, and this actually has direct parallels to the maturity model in supply chains that I was talking about. You start off in a really siloed way; you’re siloed off from your product organization, from your commercial organization, and even within your supply chain. So at that time everyone was in their own slice trying to optimize what they did. They would each go off and say, “Well, if I need to optimize procurement/sourcing, or I need to optimize manufacturing or optimize logistics, then I need my own tool”. And again, all that was within its own ecosystem.
• Right around that time, we started opening up around data analytics, and because of hyperscale computing capabilities it became possible to solve and optimize across end-to-end.
• Technologies allowed you to get visibility to assets in the field, whether that was a shipment or a piece of equipment, or whatever —that type of telemetry started becoming possible, affordable, and technologically feasible at that time. And so the foundational pieces started coming together to manage that.
  I still believe that you have to have the functional and process maturity to be able to pull that off; it won’t work if you’re still acting in silos, even if you have the most advanced tool, you just bastardize it.
• The more advanced companies have gotten there and crossed the chasm. If you look at what happened when the pandemic hit in 2020, those are the companies that were able to actually really be surgical in their responses and be successful. And no one could have predicted all the stuff that happened.
• I remember a story from one of our members that’s in the auto industry, and he was talking about having visibility to key components at a tier two supplier just as the border was closing on one of these countries. As we saw the movement of the virus from place to place, they got in and got a special dispensation to go grab a bunch of components, which really helped them. That’s a really tactical example.
• But there’s no way they would have had the ability to be that precise in what they did, if they didn’t have a record that gave them that level of visibility. And that’s not just four walls—that’s now going out two tiers in the supply chain. So I think that’s the big thing.
• I also see digital as being an enabler for a bunch of things like sustainability and the circular economy. I think you need digital to enable that: you would need to have a system that says, I have so much of the new component that I’m making, I also have half of what I’m going to put into your product that’s being recycled coming in from a bunch of disparate sources from existing customers.

It seems like there’s a new symbiotic relationship developing between innovative startups, and the behemoths of industry—the top 50 or top 100, companies to achieve what they’re looking for. I get asked, “What is a supply chain solution? What does that look like?” Oftentimes, I say, “Well, it’s the digital twinning of your entire supply chain right now, to the extent that you want to see it. It could go all the way to where the materials are actually pulled out of the earth, and then refined and manufactured and brought to you and then acquired and then recycled”. I mean, that’s kind of the end game. But let me ask you, how are these discussions happening between these giants in industry and how they’re viewing their requirements for supply chain solutions, or are they designing their own? Are they looking outside and opening up to the world of startups and innovation?

• I see more openness to working with startups and innovators that are more bleeding edge from the advanced, larger players than I see in the general community.
• That speaks to the risk profile of the companies they’re bringing forward. I would also tie that to the search for a broader, agile, adaptive type of culture, because if you don’t have that today, you’d better get it soon, because I don’t think it’s gonna get any less disruptive!
• Those large companies are willing to place bets, and some of them actually have a side budget that you could put under the banner of general R&D. They’re out talking to the university-affiliated organizations and other startups that are in these innovation hubs to ask what’s new, what’s the next thing that we should be focused on?
• Then, they use almost a venture capital type of approach to say, “Let’s figure out, in a controlled way, what the winners are and what the losers are”.
• It’s only when they get to that final stage that they figure out if a pilot project is something they would want to scale across their entire enterprise. That’s where the big money would come in, as part of their planning process.
• But those planning processes are becoming much more adaptive nowadays. If you think about something like this: we just ran an event with a really large home improvement store that went through a dramatic transformation. They needed to execute a roadmap that they had planned for two to three years, in one. There’s no way you can short-circuit that unless you can turn the crank faster.

Historically, enterprises have been notorious for buying software, and then turning it into something that does not resemble what they originally purchased. That’s, that’s an age old enterprise practice.

• I’ve definitely been there and done that!

We’ve all seen it! A Frankenstein emerges and you can’t kill it, and it ends up being the backbone of the organization. But now it’s moving into this whole platform world—we’ve had Geoff Parker on the show, and we’ve talked about Platform Revolution. It’s almost like the whole world of enterprises is shifting their IT strategy from retained or owned software to platforms. They may use the Salesforce platform to run the sales and marketing team or Workday to run HR. But this trend is really counter to one of the big fears of enterprises: if they use a shared system, their data is going to get lost or corrupted and security is going to be a problem. So my question is, how do those fears affect supply chain in particular as they’re looking at solutions, and really at platforms versus owning software? Does that even come up with your group? What are your thoughts?

• I think we’re in the middle of the journey, right now. There’s still some organizations that I hear from that have concerns about security, reliability, and of moving most of their critical capabilities to that type of platform.
• I think ultimately, though, we will get there.
• This is drawing on a concept that other people have talked about, but ultimately it’s not going to be companies competing against one another, it’s going to be ecosystems competing against one another.
• I’ll pull my hippie card up for a minute and say that I hope someday that it’s less competitive and more cooperative than we are right now. I think that’s going to be part of our next evolution.
• But we are expanding out. And if you were to compete as an ecosystem, you need the ability to connect through platforms and platforms of platforms. Otherwise, it’s too point-to-point to do it quickly.
• That’s the capability that we’re seeing now in companies is the ability to get the information, the ability to sense what’s going on at a more granular level, and then to do some quick calculations on it or run the algorithms to find out if there is anything different that we need to do as a result, whether that’s demand side or the supply side.
• That’s sort of a stair step on the way to having an autonomous type of supply chain.
• We haven’t even talked about talent. That’s just a huge area of discussion today around automation, augmentation. What types of skills are required? Are we replacing people? What’s our endgame there?

So now we’re into data, robotics and IoT, and supply chain people have to go well beyond things like constraints theory. They’re running a fully global business, including the technological and innovation aspects and there’s no handbook for this. A lot of it is being innovated on the fly, which is the whole point of innovation. So you’ve got to have a particular mindset to be able to live in that world. Historic supply chain practitioners, with all due respect, weren’t conditioned to take on that risk. But that’s changing too. So let’s talk about talent: is a supply chain person an entirely different person today?

• Yes. I mean, think about what we were talking about earlier: you need to be a systems thinker, you need to have adaptability because things are changing more quickly now in the general environment.
• I think an understanding of data and analytics are essential, and how to contextualize what’s going on in a business with those skills. Those are some of the critical ones I would point to as essential as far as talent.
• I think the companies that do this well frame their digital transformation in the context of something that they’re doing because their customers’ requirements continuing to escalate. They continue to run into these constraints from a supply perspective, and it’s just becoming more complex. So they can’t get there from where they’re at today, so they need to make their team members into bionic supply chain people. They need to use people’s time and intelligence in ways that are uniquely human.
• If you’re a customer service rep, all that drudgery that you would do, like mining data and moving it from system to system and all that, well, we’ll do that with RPA. You will do a lot of the stuff that you typically would do in a more automated way. Then you can actually work on that relationship with the customer and add value that way. I think that’s where we’re headed more and more.

Another thing I’ve noticed is the shift from privacy and secrecy to more openness, transparency, and collaboration—even in the role of running a supply chain organization. I’m sure you see this even in your groups.

• Yeah.

You can share best practices with your counterparts across what are historically called competitor organizations. But all of you achieve a lot of advantages that benefit everybody in an equal fashion. The example I’d like to draw on is from our high tech backgrounds, where you saw that in the infrastructure space. Unbeknownst to most people, massive companies like Google and Microsoft are highly collaborative in the background. I think supply chain practitioners can learn from that: you don’t need to do it on your own, you can actually still retain your competitive nature, but share what you’re doing at a supply chain best practice level.

• Absolutely.
• There’s always going to be some line where people consider something to be a competitive advantage. But I think that line is being pushed further and further along, just because of the problems that we’re needing to solve as individual companies.
• I’m thinking especially of some of these larger sustainability issues in which we will not get there unless we all collaborate.
• The example I was giving before about standards, is a direct parallel to what you described in the high tech design of a data center. That’s a big part of the conversations that I’m having with the community today.

Let’s take a look forward. What are you seeing happening over these next few years for you and for supply chain in general? I mean, we’ve touched on a bunch of topics: obviously, sustainability is big, carbon accounting is going to come into play, and digital twins are still a big deal. But what are you seeing as the big themes over the next few years within supply chain?

• The major underlying drivers will continue.
• There’s the customer requirements on the B2C side, at least for the short term: “I want it sooner, I want it reliably and sooner”.
  If you’re looking on the B2B side it’s, “I want things tailored just the way I want them”. You mentioned some of the high tech examples around that before, as far as the products: I may want to buy what you sell as a subscription and not even buy actual physical products. That will drive a tremendous amount of change, because you have to run your supply chain in a much different way to do that.
• Sustainability—that just keeps on a path.
• In the digital space the most common applications that we hear from people are around AI and machine learning, and where’s that going to embed itself further into what we do, whether that’s our planning or sourcing—there’s just interesting applications.
• I think the other thing is, what’s the future of work look like? How are we going to run our supply chains in this hybrid type world? That’s a whole other thing that needs to be worked through by our organizations.

One thing that I’m keenly watching, because it’s an extension of supply chain, is the space-based supply chain. I’m looking at SpaceX, I’m looking at Astra. The CEO of Astra, Chris Kemp, says that he’s building a supply chain company. And I don’t think we talk about that a lot because it’s still early. But honestly, that is exactly what it is: an extension of the human species supply chain to enable us to go to a space station, to the moon, or eventually to Mars and beyond. Has that even come up yet? Because that’s a whole new realm of supply chain thinking that we’re just beginning to develop.

• It’s come up sometimes with our community members, behind closed doors with security clearances attached.
• What I will tell you is I don’t hear that as much in your standard Fortune 500 companies right now.
• But I think, yeah, that’s definitely a thing there. If I look at it from the perspective of the minerals that could be mined, rare earth metals for instance, there’s been articles about it’s worth like quadrillions of dollars.
• But I think more broadly in terms of the advancement of humankind that’s the next thing that we need to do, and I think our technology will take us there.

This has been just an incredible conversation! Your insights are just so uniquely positioned both in what you’ve done in your career and what you’ve been exposed to. I think that’s just an awesome interpretation of what’s going on. It’s been a great pleasure to speak with you, and a lot of fun, and hopefully we can do it again.

• It’s been a pleasure!
• For the audience, if you don’t work in supply chain, and you’re just watching this because you’re curious, come join us while we’re here running the world and trying to save it at the same time.
• And if you do, I guess just a big thank you because it’s been a pretty tough slog over the last several years. But it’s great work and I’m honored to be part of this community.
• So I appreciate you having me on to share some of that with you and your listeners.

Awesome – really appreciate it. Thanks so much!

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