Podcast: Mary Kate Love on Supply Chain Technology

Highlights from the Conversation

Welcome to Supply Chain Next! I have Mary Kate Love here with me today and this is a bit of a special episode. Why, you ask? Well, Mary Kate is pregnant and that’s a first for one of our guests here on the podcast! Thanks so much for joining me today.

Mary Kate, who are you and how did you get to where you are now?

• I’m from the south side of Chicago and my career has been a bit of a roller coaster ride. I went to the University of Illinois, which is about two hours south of Chicago.
• After university I joined a really cool startup that was formed under President Obama. The focus of the startup was on digital manufacturing and supply chain. From there I jumped over to Georgia Pacific (GP).
• I was really enamoured by the startup world and wanted to get onboard with another startup, but ended up joining GP which is a huge privately-held company owned by Koch.
• I joined them to start an innovation initiative in supply chain, and from there I moved over to KDT which is venture capital team.

I’d like to give a shout out to the University of Illinois and the programs they have there. That university is a real hidden gem in the country, a place where one can study engineering, business, and innovation: one of the top universities in the country.

• I totally agree with you. The locals know it’s a really great school but everybody else might not be aware of that.
• I didn’t study tech or supply chain; it wasn’t even on my radar. I actually studied political science. My teacher told me, during junior year, that congress is only comprised of 16% women. I was really confused by that statistic.
• So political science seemed like a good choice for me. I like the idea of connected communities and how they interact via shared leadership.
• During this time I still felt a strong pull toward technology and innovation and found ways to be involved with them on campus.

How did you go from political science to startups?

• I graduated in 2011. I ended up working for about a year at the high school I attended. We were the first all-girls school in the nation to implement Project Lead The Way, an engineering program.
• Many of the students joined and followed through with this, and many of the students were women.
• Through this project I met people who were into the startup world. They were waiting to see where President Obama would implement a certain startup and if he chose Chicago it would mean that we would be able to be a part of it. We got it.
• The startup was funded in part by the U.S. Department of Defense alongside other major companies such as Siemens, Caterpillar, and John Deere.
• The idea behind this startup was to “rise the tide” within US manufacturing through collaboration, which would lead to innovation.
• I was the fifth or sixth person on that team, which grew to about 50 people.
• The company is still in Chicago today. It’s called MxD which means “manufacturing times digital”.
• They are a really unique innovation center whose main purpose is to drive new technologies across manufacturing, including supply chain, and other areas of industry such as workforce development.

Interesting. So that opened the doors for you that led to supply chain? What made you transition from a startup to a giant like GP?

• I was at the startup for about four years. I got to the point where I was asking myself what’s next.
• GP came in for a meeting and a tour. They were one of my accounts that I had worked closely with so I was the one who took them on the tour. They liked what I had to say and invited me to work with them.
• I helped them to build out a kind of internal innovation capability which allowed them to find companies and startups to partner with on pilot projects.
• My extensive experience in the startup world made me the perfect choice to help GP navigate the smaller world of startup companies. Our focus was on pilot projects within supply chain.

Can you tell us how GP sold you on the idea of joining a big company while retaining your spark for innovation? We all know that big companies often squelch innovation pretty quickly…

• They admitted that they were really good at what they do but that they needed some inspiration to help them innovate. They wanted to get some help in understanding what the future will bring for them.
• I was attracted to that humility from such a big company. I was also attracted to how much they value their own supply chain.
• There are some big numbers in there too. They spend $2B per year on transportation. Some of our facilities have 1,800 trucks per day coming and going. We have 30,000 suppliers.
• They told me that if I could guide a pilot project that brought any efficiency at all to this operation that I could make a really big impact.
• I liked that they were a company who understood supply chain and the impact that much-needed innovations could bring to their entire operation.

GP had been around for a long time before they were acquired by Koch. Do you think that it was Koch’s acquisition of them that brought humility to GP?

• That’s a great question. I’ve spoken to employees who were there before the acquisition and asked them how have things changed since Koch stepped in. They said it used to be a top-down kind of place—the people in the fancy suits up top watching “those below”—until Koch brought in a bottom-up type of culture where everybody’s voice counts.
• The company’s values are really important to the point where the path of your career is governed by your adherence to the values.

This reminds me of something called “confident humility”. You must be confident in what you do but you also must know what it is that you can’t do well. This has a strengthening effect…

• I love that. One of our values is knowledge and it’s all about seeking the best knowledge. This means that we need the humility to learn from those who have more experience, to ask the right people the right questions.
• Being confident enough to admit what you don’t know is important.

You have to be humble when you’re seeking to innovate at the startup level. You will make unavoidable mistakes along the way and this must be admitted upfront before you start. This is the value of humility.

The opposite end of this spectrum is the big 100-year old company. A kind of hubris can set in when you’re that big and have been around for a long time.

You have to break this barrier down if you’re going to initiate change.

• I totally agree. There’s a stat about the average lifespan of a company. In the 1960s is was 60 years, and in the present day it is 20 years. That stat drives a lot of what we do daily.

And that’s getting shorter too. Companies are not lasting as long as they used to. Getting back to GP, I don’t think that people realize just how many industries GP permeates. Can you give us some examples on this?

• Well, there’s toilet paper. That’s the one we all know. And paper products, corrugated materials, cellulose, etc. Also, when you’re building a house, pretty much everything that goes into building that house has been touched by GP.
• We have a large breadth of products. Some of it is straight to consumer but most of it is B2B.
• I don’t think people realize that we’re in the background of many products that touch their lives but that aren’t necessarily associated with any brand names they are familiar with.
• If you drive by construction sites you will probably see GP a lot of the time.

GP produces a lot of products. They only source a handful of things but they turn those materials into an infinite amount of products.

• That’s a great way to summarize it.

There’s timber, that’s a big one. An incredible amount of products come from trees.

• Yes! And we don’t waste any of it. We are very careful with how we utilize our source materials.
• I have been to our processing facilities in the south and have witnessed firsthand the effort to ensure nothing goes to waste. We reuse, or we sell it, or we use it to produce energy for ourselves.
• It really comes down to a science, our efficacy in maximizing every resource to its fullest usability.
• We also plant two trees for every one we source. Sustainability is very important to us.

GP has 1000s of SKUs in their product line but if we look at the input there’s only like two or three things… it’s very impressive.

They have optimized every resource to the Nth degree and they are very good at it. This includes recycling all of their source materials which means that they are not extracting new materials as often.

• It’s really cool. These processes have been around for a long time and so there’s not a ton of room to innovate on them.
• But there are always things we can do to make ourselves more sustainable and to increase the efficiency of our supply chain.

This leads me to an important question: does GP measure its circularity?

• The circular economy has been a big focus for GP for a long time but I do not have an exact number on the percentage of material that is put back into processing although it is quite high, especially compared to some other industries.
• Koch takes circularity very seriously. They have been watching their supply chains across the various industries and have created a group that processes the numbers on gaining efficiency within their massive network of suppliers.

Transparency is the path to global circularity. If we can get all enterprise to publish their data on their circular practices we can forge ahead worldwide to achieve the goal of 50% circularity across the world.

Once we start doing that everybody will jump in. Then we’ll get the numbers, then the numbers will start to drastically improve.

• I love that. People think it’s so far away and it’s not. It doesn’t have to be.

So how did Koch get you into their fold from GP?

• Their humility. They admitted that they needed somebody with innovation experience to help scout the future for their company and their investments going forward.
• Something that really got me about Koch is that you can move around. You are considered an internal employee. This means you don’t ever feel like you’re stuck anywhere, you can move on to another part of the company when you feel it’s time for a change.
• Koch Disruptive Technologies (KDT) started right around the time when I joined Koch. KDT was already working fairly closely with us on supply chain initiatives. We were good at scouting startups that specialized in this.
• I’ve always had my eyes on venture capital. It was a natural choice for me because it combines my startup experience and my time in such a big company, with my eye for finding innovation that helps us first, then helps others.
• We wanted to improve our networks everywhere, with our suppliers and with our Koch startups.
• Something I love about KDT—that may be different from other venture capital firms—is that we are not just about making money (even though we do want to make money) but we also want to transform Koch Industries.
• Being on this team gives me the opportunity to let KDT in on great opportunities as they arise.
• We want to be in a mutually beneficial relationship with the companies that we invest in.

Is KDT the only venture arm of Koch?

• There’s about five or six teams that fall under Koch investment groups. They are not all venture teams but they are all investment teams. Growth equity, venture, etc.
• It’s great that we have many different capabilities that we can offer our partners throughout the lifespan of their companies.
• We can’t underestimate the power of being a privately held company.
• We are a true partner for the long haul to the new companies we invest in.

I don’t think most people know Koch’s history. It’s one of the top two or three privately held companies in the world. It’s up there with Cargill, Bechtel, Koch… those are the three that I normally think of…

Koch also employs over 120,000 people. That’s a massive organization! Especially one to harbor that humility…

• Right. When I found out that GP was owned by Koch the first thing I thought of was the Koch Brothers. And that Koch was often confused with Coke…
• It’s this massive company and we’ve got so many different businesses from software to glass to fibers to fertilizers. We’ve got a gamut of companies.
• When I learned of the Koch history, how one acquisition led us to others—we’re very capability-based. Once we build up capabilities in one industry that gives us the ability to cross over into other industries.
• Even though many of the companies are disparate it has given us the opportunity to install the right culture in all of our acquisitions.

Let’s go back to you. So Koch, GP… you now find yourself in this big company with experience ranging from startups to being a part of the largest privately held company in the US—in their disruption division.

How do you summarize the type of disruptives that you are going for?

• We just went through an exercise to determine what themes we want to focus on and how this lines up with our portfolio.
• We have a life sciences and healthcare theme—and this obviously has grown during the COVID pandemic.
• We consider ourselves “stage agnostic”. Our goal is to help any company we can even though we aren’t involved with every single type of industry out there.
• If you’re looking to gain customers we are a really good partner. We’ll take you through Koch labs which is a fantastic testing ground. We’ll introduce you to the right people.
• We’re also looking to find companies that will help Koch develop into something greater.
• We also consider the long term for our investments.

Let’s zero in on supply chain. Where does supply chain fit into your pursuit of “themes”?

• Supply chain is something we consider as a theme of various levels.
• We have some companies in our portfolio who specialize in supply chain issues such as innovation, visibility, and management.
• One such company, Trackonomy, is supply chain focused. The name says it all: tracking your supply chain to increase visibility, measure your sustainability, manage your suppliers, and more.
• Another company, Percepto, helps to increase physical visibility by the use of drones for inspections which can then send the collected data to a central source. This has an incredible amount of applications.
• And there are more.

Can we get your own perspective on what you see as up and coming in supply chain?

• Number one—and I hear this a lot—is visibility.
• We’ve seen stats on this. In a report I saw last year only 6% of firms feel like they have full visibility within their supply chains.
• Without visibility how can you become more sustainable?
• COVID really made people realize how connected we all are and how our supply chains unite us all.
• It’s something like 65% of total costs are supply chain related. People are realizing that real change is possible.

You can’t do anything without transparency and visibility. You can’t do anything without knowing what’s going on.

Technology has evolved to the point where it’s now possible to track everything.

Let’s think of Amazon here for a moment. I can order something and track its every step from warehouse to my front door. Then I go to work at my enterprise and I don’t know where anything is in my supply chain!

There are new emerging tools, platforms and such, that are ready to take on the role of bringing transparency and visibility into supply chain. Tools such as enterprise resource planning (ERP) were never meant for supply chain.

From your point of view, what are you seeing in that new realm of emerging supply chain solutions?

• We just implemented a new ERP solution to cut down on the number of systems we have. That was more for process optimization.
• Supply chain now has all of these new tools available and I’m looking forward to the next couple of years to see where these developments are headed.
• The last thing you want to do is disrupt your own supply chain. What we need to do is get several companies to start small, collaborate, and then go from there. Once the waters have been tested we can start to make investments.
• That’s the road that Koch and other large companies will take. Start small, build trust, and move forward.

There’s a great infographic in an article written by Robert Kunzig for National Geographic.

It’s the first attempt to show the world’s entire aggregate supply chain. It shows that we pull 107 gigatons of stuff from the ground, split between food and materials. It shows how the extracted materials cascade through the whole system from extraction to their final state.

This is the whole point of transparency and visibility. We all want to see the supply chains of the world working together for sustainability and efficiency.

So, with GP for example, I would like to see the whole supply chain from extraction to recycling. This measurability is how we begin the process of improvement. Once something is measurable it’s possible to improve it. If we could get to the point where we no longer need to extract materials…

Can we determine the recyclability of a material? If so, it would be possible to avoid extracting materials that have low recyclability.

• If we can measure recyclability and sustainability we can set goals year after year too. This would give everybody a real metric to improve upon.

Random question: How do you and your company view the emerging supply chain routes in space, in our solar system?

• It’s funny that you ask that. We have just started to think about space in general.
• We’re seeing more and more companies who want to move into that area, which means more investments will be required.

Elon Musk has spoken a lot about populating Mars, and the necessary supply chain infrastructure to do so, with his SpaceX. Another company, Astra Space, has been looking at operations in space too.

• Supply chain is the world. Space is the next step.
• It’s really cool because at Koch we can find subject matter experts and dive right in to new areas of research and potential investment.
• I’m really excited to see what happens in that emerging industry over the next five years.

Let’s bring it back to you.

How do you view your colleagues or peers coming into supply chain now? How are they viewing supply chain? From a tech point of view? A sustainability point of view? What are the themes that attracted them?

• I didn’t think I’d have a career in supply chain so probably the first thing that I realized is how vast supply chain is. There is an enormous amount of components to a supply chain.
• You need people with a lot of different capabilities to come and work in the supply chain.
• My capability is partnerships and managing networks on top of my penchant for new technology.
• I have managed people who went to school for supply chain and sustainability and what’s really cool about this is that it merges their passion to their career path.

There’s another industry that I’m a part of, the aviation industry, and right now there’s a big pilot shortage. You can the aviation programs available now to try and fill that gap.

Supply chain programs are also emerging everywhere due to the incredible rise in popularity as a career choice, but more so because of what the world needs. We need supply chain people.

• It’s awesome that people are getting direct training in supply chain.

More About Mary Kate Love

After university Mary Kate was hired by a technology startup, then to Georgia Pacific (GP). She received an invitation to bring her skills to Koch Industries to help guide them into the future as she hunts for new tech startups. She joined Koch Disruptive Technologies (KDT), a group within KI that specializes in emerging technology designed to invest in startups ready to make big changes in the world.

You can reach out to Mary Kate on LinkedIn.