1 00:00:04,080 --> 00:00:07,110 Sean Aylmer: Welcome to the FEAR & GREED daily interview. I'm Sean Aylmer. 2 00:00:07,170 --> 00:00:10,350 Sean Aylmer: The last few years have seen an intense focus on 3 00:00:10,350 --> 00:00:14,280 Sean Aylmer: global supply chains. The pandemic put pressure on every link 4 00:00:14,370 --> 00:00:16,590 Sean Aylmer: of the chain from the supply of raw materials and 5 00:00:16,590 --> 00:00:20,910 Sean Aylmer: manufacturing to international shipping and last mile delivery, but as 6 00:00:20,910 --> 00:00:24,869 Sean Aylmer: we learnt during earnings season, supply chain pressures are easing, 7 00:00:24,870 --> 00:00:27,570 Sean Aylmer: so are we back to normal or just adapting to 8 00:00:27,570 --> 00:00:31,500 Sean Aylmer: a new way of operating? Andy Hiscox is the CEO 9 00:00:31,710 --> 00:00:34,860 Sean Aylmer: of Netstock Australia and the chief operating officer of the 10 00:00:34,860 --> 00:00:39,540 Sean Aylmer: global Netstock Group, a leader in supply chain planning. He's 11 00:00:39,540 --> 00:00:42,809 Sean Aylmer: also speaking at the Accounting Business Expo on the 14th and 15th 12 00:00:42,810 --> 00:00:44,909 Sean Aylmer: of March in Melbourne, which is a supporter of this 13 00:00:44,909 --> 00:00:47,790 Sean Aylmer: podcast. Andy Hiscox, welcome to FEAR & GREED. 14 00:00:48,120 --> 00:00:49,050 Andy Hiscox: Lovely to be here. 15 00:00:49,680 --> 00:00:52,110 Sean Aylmer: Who would've thought that supply chain could have become so 16 00:00:52,110 --> 00:00:53,790 Sean Aylmer: sexy in the last 12 months, Andy? 17 00:00:54,540 --> 00:00:56,010 Andy Hiscox: Well, I've always thought it was sexy. 18 00:00:57,120 --> 00:01:03,000 Sean Aylmer: Fair enough. But it really has become very central to 19 00:01:03,000 --> 00:01:05,819 Sean Aylmer: the economy during COVID and even post- COVID. 20 00:01:06,569 --> 00:01:11,069 Andy Hiscox: Yeah, absolutely. I think people have always underestimated how important 21 00:01:11,069 --> 00:01:13,890 Andy Hiscox: the supply chain is, and especially the planning aspect of 22 00:01:13,890 --> 00:01:18,510 Andy Hiscox: it. They've always undervalued that, but obviously the pandemic has 23 00:01:18,990 --> 00:01:23,009 Andy Hiscox: brought that to the forefront, and people have realized that 24 00:01:23,010 --> 00:01:27,120 Andy Hiscox: when supply chains become disrupted and they don't really have 25 00:01:27,120 --> 00:01:32,730 Andy Hiscox: the appropriate warning signals to guide them, that they find 26 00:01:32,730 --> 00:01:35,130 Andy Hiscox: themselves in a situation which is pretty difficult. 27 00:01:35,580 --> 00:01:38,280 Sean Aylmer: We talk about supply chain as if it's a generic 28 00:01:38,370 --> 00:01:41,760 Sean Aylmer: thing, but it's not. It's incredibly diverse, isn't it? 29 00:01:42,390 --> 00:01:46,350 Andy Hiscox: No, absolutely. There's many elements to the supply chain. My 30 00:01:46,500 --> 00:01:51,090 Andy Hiscox: kind of field of expertise is obviously the planning space, 31 00:01:51,090 --> 00:01:54,840 Andy Hiscox: but you have the logistics and the freight, and there's 32 00:01:54,840 --> 00:01:57,210 Andy Hiscox: a variety of different supply chains, of course. There's air 33 00:01:57,210 --> 00:02:00,990 Andy Hiscox: freight and there's sea and all sorts of chains in the link from 34 00:02:00,990 --> 00:02:06,210 Andy Hiscox: manufacturing to raw materials, to finished products, to distributions within 35 00:02:06,870 --> 00:02:10,290 Andy Hiscox: normal networks in a country or territory. 36 00:02:11,010 --> 00:02:14,100 Sean Aylmer: Okay, so before we get to where we are now, 37 00:02:14,130 --> 00:02:18,300 Sean Aylmer: the pandemic changed things. Are things back to normal or 38 00:02:18,300 --> 00:02:21,900 Sean Aylmer: did the pandemic change supply chains for good? 39 00:02:22,650 --> 00:02:26,669 Andy Hiscox: I think that supply chains have really been changed for 40 00:02:26,669 --> 00:02:31,139 Andy Hiscox: good. I think a confluence of both the pandemic and 41 00:02:31,139 --> 00:02:33,809 Andy Hiscox: the fact that we're now moving into the digital world 42 00:02:33,810 --> 00:02:36,630 Andy Hiscox: and so much stuff is in the cloud, that people 43 00:02:36,630 --> 00:02:40,860 Andy Hiscox: have realized that they need a different approach to how 44 00:02:40,860 --> 00:02:46,109 Andy Hiscox: they've been managing supply chain. I think those companies that 45 00:02:46,230 --> 00:02:49,650 Andy Hiscox: were quick to pivot during the supply chain, that were 46 00:02:49,650 --> 00:02:53,550 Andy Hiscox: able to identify problems early on and actually pivot, say 47 00:02:53,550 --> 00:02:56,010 Andy Hiscox: from a manufacturing or supply point of view, are the 48 00:02:56,010 --> 00:02:59,850 Andy Hiscox: ones that profited. And I think they've realized, those that 49 00:02:59,850 --> 00:03:02,250 Andy Hiscox: took the hit, that things are never going to be 50 00:03:02,250 --> 00:03:04,740 Andy Hiscox: the same, and they need to now become far more 51 00:03:04,740 --> 00:03:08,730 Andy Hiscox: nimble and adept at responding to disruptions in the chain. 52 00:03:09,210 --> 00:03:12,030 Sean Aylmer: Is that how it is? There are great examples of Mexico, for 53 00:03:12,030 --> 00:03:14,400 Sean Aylmer: example, as an economy has done very well, because many 54 00:03:14,400 --> 00:03:18,210 Sean Aylmer: US manufacturers have decided they want suppliers closer to home, 55 00:03:18,210 --> 00:03:21,900 Sean Aylmer: hence they've gone to Mexican companies. Kogan. com, an online 56 00:03:21,900 --> 00:03:25,829 Sean Aylmer: retailer here, has had some good and bad news around 57 00:03:25,889 --> 00:03:28,740 Sean Aylmer: the idea that they really wanted to keep stock up, 58 00:03:28,740 --> 00:03:32,520 Sean Aylmer: so they increased inventories as part of their supply chain 59 00:03:32,880 --> 00:03:37,680 Sean Aylmer: management. My point is it's not exactly an easy process 60 00:03:37,680 --> 00:03:39,180 Sean Aylmer: to work out what you need to do. 61 00:03:39,840 --> 00:03:42,750 Andy Hiscox: No, it's not, but from a planning perspective, there are 62 00:03:42,750 --> 00:03:46,470 Andy Hiscox: some things that you can do that don't necessarily mean 63 00:03:46,470 --> 00:03:50,070 Andy Hiscox: you have to change your whole physical supply chain. I 64 00:03:50,070 --> 00:03:54,750 Andy Hiscox: think the key issue is, and I think people are experiencing it now, during 65 00:03:54,780 --> 00:03:58,890 Andy Hiscox: the pandemic we had shortages of supply, so people placed 66 00:03:58,890 --> 00:04:01,590 Andy Hiscox: as many orders as they possibly could, and then as 67 00:04:01,590 --> 00:04:04,770 Andy Hiscox: vendors started to catch up and the impact of COVID COVID 68 00:04:04,770 --> 00:04:08,010 Andy Hiscox: started to drop off, now they're dealing with a reverse 69 00:04:08,010 --> 00:04:10,260 Andy Hiscox: scenario, which is too much stock and orders on the 70 00:04:10,260 --> 00:04:15,600 Andy Hiscox: way. If you don't have the appropriate information at your 71 00:04:15,600 --> 00:04:19,020 Andy Hiscox: fingertips as to when things are changing and where they're 72 00:04:19,020 --> 00:04:23,220 Andy Hiscox: changing, that's when you get yourself into trouble. I think 73 00:04:23,910 --> 00:04:27,659 Andy Hiscox: there's no question that the US is going to look 74 00:04:27,930 --> 00:04:33,120 Andy Hiscox: to try and manufacture more within the United States. Probably 75 00:04:33,120 --> 00:04:35,220 Andy Hiscox: a variety of other reasons as well, not only just 76 00:04:35,220 --> 00:04:38,460 Andy Hiscox: supply chain, but I think the whole COVID pandemic has 77 00:04:38,460 --> 00:04:44,190 Andy Hiscox: actually moved some manufacturing facilities much closer to home, as 78 00:04:44,190 --> 00:04:44,610 Andy Hiscox: you said. 79 00:04:44,970 --> 00:04:46,859 Sean Aylmer: Say it with me, Andy, we'll be back in a 80 00:04:46,860 --> 00:04:56,969 Sean Aylmer: minute. My guest this morning is Andy Hiscox, CEO of Netstock 81 00:04:57,029 --> 00:05:00,060 Sean Aylmer: Australia. When you were just talking then, it made me 82 00:05:00,060 --> 00:05:06,390 Sean Aylmer: realize that supply chain planning must be extremely technology- based now. 83 00:05:06,900 --> 00:05:11,940 Andy Hiscox: Absolutely. And one of the key movements, firstly, is to 84 00:05:12,210 --> 00:05:15,810 Andy Hiscox: get everything in the cloud. As a company, we were 85 00:05:15,810 --> 00:05:20,100 Andy Hiscox: uniquely positioned for that because we've been operating in the cloud 86 00:05:20,100 --> 00:05:23,820 Andy Hiscox: for probably the last 11, 12 years, but what people found 87 00:05:23,820 --> 00:05:27,120 Andy Hiscox: is when people couldn't come to work, you still have 88 00:05:27,120 --> 00:05:29,130 Andy Hiscox: to buy goods, you still have to distribute those goods, 89 00:05:29,130 --> 00:05:31,289 Andy Hiscox: so how do they plan for what they should buy? 90 00:05:32,190 --> 00:05:35,610 Andy Hiscox: The cloud and the digital transformation definitely one aspect, but 91 00:05:36,240 --> 00:05:40,859 Andy Hiscox: the other is to have the appropriate information to make 92 00:05:40,860 --> 00:05:45,510 Andy Hiscox: those key decisions. You might have 10, 000 products from a 93 00:05:45,510 --> 00:05:49,200 Andy Hiscox: variety of different vendors. They all have different lead times. 94 00:05:49,200 --> 00:05:53,279 Andy Hiscox: Some are more impacted than others. The ability to quickly 95 00:05:53,279 --> 00:05:57,450 Andy Hiscox: spot those changes, respond to them in an automated kind 96 00:05:57,450 --> 00:05:59,940 Andy Hiscox: of way makes a massive difference. 97 00:06:00,300 --> 00:06:04,589 Sean Aylmer: Which introduces the whole concept of predictive modeling, artificial intelligence. 98 00:06:04,890 --> 00:06:09,989 Sean Aylmer: Whereabouts is the supply chain business in terms of that 99 00:06:09,990 --> 00:06:10,530 Sean Aylmer: sort of thing? 100 00:06:10,950 --> 00:06:14,400 Andy Hiscox: Well, I think it's becoming more and more prevalent. We've 101 00:06:14,400 --> 00:06:18,719 Andy Hiscox: kind of always had the predictive and the ability to 102 00:06:18,750 --> 00:06:22,560 Andy Hiscox: compute and understand these trends, but as we move towards 103 00:06:22,560 --> 00:06:27,599 Andy Hiscox: AI and machine learning, I think they're starting to become 104 00:06:28,170 --> 00:06:32,460 Andy Hiscox: far more relevant in the planning process because of course, 105 00:06:32,970 --> 00:06:37,469 Andy Hiscox: by the very term machine learning, the algorithms learn and 106 00:06:37,470 --> 00:06:40,800 Andy Hiscox: they can process large amounts of data, not just data 107 00:06:41,220 --> 00:06:45,180 Andy Hiscox: in your environment, but big data as well. I think 108 00:06:45,600 --> 00:06:50,370 Andy Hiscox: machine learning, AI, predictive planning are going to be the 109 00:06:50,370 --> 00:06:55,020 Andy Hiscox: buzzwords going forward, but also key elements of a solid 110 00:06:55,020 --> 00:06:56,729 Andy Hiscox: planning foundation. 111 00:06:59,100 --> 00:07:03,660 Sean Aylmer: Okay. Do you think that businesses in Australia particularly are back to normal, whatever that is? 112 00:07:04,110 --> 00:07:07,740 Andy Hiscox: Yeah, it's a good question, what is normal? I don't 113 00:07:07,740 --> 00:07:09,810 Andy Hiscox: think they're back to normal. I think, as I said, 114 00:07:09,810 --> 00:07:14,760 Andy Hiscox: they're experiencing probably the reverse scenario where now they have 115 00:07:15,210 --> 00:07:18,480 Andy Hiscox: far too much inventory, and of course, depending on what 116 00:07:18,480 --> 00:07:20,340 Andy Hiscox: space you're in, if you're in the food space, some 117 00:07:20,340 --> 00:07:25,680 Andy Hiscox: of that has expiry and shelf life concerns, so I 118 00:07:25,680 --> 00:07:28,290 Andy Hiscox: don't think we're back to normal. I think one of 119 00:07:28,290 --> 00:07:33,030 Andy Hiscox: the things that's changed the environment is prior to the 120 00:07:33,030 --> 00:07:36,870 Andy Hiscox: pandemic, people were looking to develop relationships with a preferred 121 00:07:36,870 --> 00:07:41,070 Andy Hiscox: vendor. They would work with them, they'd get a preferential 122 00:07:41,100 --> 00:07:45,420 Andy Hiscox: pricing plan, they would give them long range forecasts, and 123 00:07:45,420 --> 00:07:49,080 Andy Hiscox: that worked pretty well, but obviously when the pandemic came 124 00:07:49,080 --> 00:07:52,320 Andy Hiscox: along, you had to look for alternative sources. And I 125 00:07:52,320 --> 00:07:56,430 Andy Hiscox: think that has now highlighted the fact that you probably 126 00:07:56,430 --> 00:07:58,470 Andy Hiscox: don't want to put all your eggs in one basket 127 00:07:58,950 --> 00:08:01,650 Andy Hiscox: when looking at your supply chain. You might want to 128 00:08:01,650 --> 00:08:04,680 Andy Hiscox: buy goods from a variety of different vendors, which then 129 00:08:04,680 --> 00:08:08,460 Andy Hiscox: gives you another whole level of complexity because each vendor 130 00:08:08,460 --> 00:08:11,489 Andy Hiscox: will have different reliability in terms of delivery. They might 131 00:08:11,490 --> 00:08:14,550 Andy Hiscox: have longer lead times, quality becomes an issue there and 132 00:08:14,550 --> 00:08:17,580 Andy Hiscox: so forth, so it now actually makes the situation more 133 00:08:17,580 --> 00:08:21,690 Andy Hiscox: complicated with more data inputs, so a key fundamental of 134 00:08:21,690 --> 00:08:24,420 Andy Hiscox: that is to be able to have a tool that 135 00:08:24,480 --> 00:08:27,060 Andy Hiscox: actually helps you to work your way through that in 136 00:08:27,060 --> 00:08:28,380 Andy Hiscox: an automated kind of fashion. 137 00:08:28,920 --> 00:08:33,000 Sean Aylmer: Okay, so tell me about Netstock. 2, 000 global customers, $ 25 138 00:08:33,000 --> 00:08:35,550 Sean Aylmer: billion in inventory, not a small company. 139 00:08:36,000 --> 00:08:40,200 Andy Hiscox: Yeah, so Netstock is a company, we have operations all 140 00:08:40,200 --> 00:08:44,040 Andy Hiscox: around the world, the US, the UK, Germany, South Africa, 141 00:08:44,040 --> 00:08:50,130 Andy Hiscox: and Australia. Australia supplies the Asia- Pacific region with quite 142 00:08:50,130 --> 00:08:54,690 Andy Hiscox: a big base in New Zealand, Singapore, Malaysia and so 143 00:08:54,690 --> 00:09:00,720 Andy Hiscox: forth. And our primary business is inventory optimization and planning. 144 00:09:00,720 --> 00:09:04,950 Andy Hiscox: We provide a SaaS solution that can be implemented remotely, 145 00:09:05,429 --> 00:09:08,370 Andy Hiscox: and I think that worked well for us during the 146 00:09:08,370 --> 00:09:11,190 Andy Hiscox: pandemic because you didn't have to go on- site, you 147 00:09:11,190 --> 00:09:14,850 Andy Hiscox: could implement online, we could train people online, and because 148 00:09:14,850 --> 00:09:16,950 Andy Hiscox: we have access to the data, we could support them 149 00:09:16,950 --> 00:09:22,140 Andy Hiscox: online. As a business, I think we're very nimble in 150 00:09:22,200 --> 00:09:24,809 Andy Hiscox: being able to respond to our customers' needs and to 151 00:09:24,809 --> 00:09:28,709 Andy Hiscox: support them. Because we have a global operation, we can 152 00:09:28,710 --> 00:09:32,219 Andy Hiscox: support them almost 24/ 6. Not on Sundays. 153 00:09:32,940 --> 00:09:38,370 Sean Aylmer: Not on Sundays. You'd say optimizations. Optimizing means that you're 154 00:09:38,370 --> 00:09:40,680 Sean Aylmer: going to end up with a better bottom line, presumably. 155 00:09:41,220 --> 00:09:44,820 Andy Hiscox: Exactly. It's easy, if you think about what are the 156 00:09:44,820 --> 00:09:48,239 Andy Hiscox: main drivers around inventory, right? One is the amount of 157 00:09:48,240 --> 00:09:50,400 Andy Hiscox: money you invest in it, so that obviously appears on 158 00:09:50,400 --> 00:09:52,860 Andy Hiscox: your balance sheet, and the other is the full rate 159 00:09:52,860 --> 00:09:55,770 Andy Hiscox: or service you offer to your customers. Now, it's very 160 00:09:55,770 --> 00:09:58,260 Andy Hiscox: easy to offer a high full rate, just keep tons 161 00:09:58,260 --> 00:10:00,540 Andy Hiscox: of inventory, but that's going to look bad on the 162 00:10:00,540 --> 00:10:03,030 Andy Hiscox: balance sheet and you're going to have excess and etc, 163 00:10:03,030 --> 00:10:06,929 Andy Hiscox: so the ability to be able to optimize and have 164 00:10:06,929 --> 00:10:10,140 Andy Hiscox: the optimum level of inventory to support a desired full 165 00:10:10,140 --> 00:10:14,580 Andy Hiscox: rate target is key to being able to get the 166 00:10:14,580 --> 00:10:17,579 Andy Hiscox: best value out of here, or return on your investment. 167 00:10:18,240 --> 00:10:20,220 Sean Aylmer: Andy, thank you for talking to FEAR & GREED. 168 00:10:20,880 --> 00:10:22,380 Andy Hiscox: A pleasure. Anytime. 169 00:10:22,710 --> 00:10:26,699 Sean Aylmer: That was Netstock Australia chief executive officer, Andy Hiscox. Andy 170 00:10:26,700 --> 00:10:29,670 Sean Aylmer: is speaking at the Accounting Business Expo in Melbourne on 171 00:10:29,670 --> 00:10:32,280 Sean Aylmer: March 14 and 15, which is a supporter of this 172 00:10:32,280 --> 00:10:36,300 Sean Aylmer: podcast. Just search Accounting Business Expo for more. This is 173 00:10:36,300 --> 00:10:38,610 Sean Aylmer: the FEAR & GREED daily interview. Join us every morning for 174 00:10:38,610 --> 00:10:42,300 Sean Aylmer: the full episode of FEAR & GREED, Australia's most popular business 175 00:10:42,300 --> 00:10:44,699 Sean Aylmer: podcast. I'm Sean Aylmer, enjoy your day.