1 00:00:04,240 --> 00:00:07,240 Speaker 1: Welcome to tech Stuff, a production of I Heart Radios 2 00:00:07,320 --> 00:00:13,840 Speaker 1: How Stuff Works. Hey there, and welcome to tech Stuff. 3 00:00:13,840 --> 00:00:16,720 Speaker 1: I'm your host, Jonathan Strickland, an executive producer with How 4 00:00:16,760 --> 00:00:18,520 Speaker 1: Stuff Works in My Heart Radio and I love all 5 00:00:18,600 --> 00:00:22,279 Speaker 1: things tech, And you know, the world of technology can 6 00:00:22,320 --> 00:00:25,319 Speaker 1: be pretty complicated at times, which is part of the 7 00:00:25,320 --> 00:00:28,320 Speaker 1: reason why I think my colleagues at How Stuff Works 8 00:00:28,320 --> 00:00:31,160 Speaker 1: back in the old days weren't really eager to jump 9 00:00:31,240 --> 00:00:34,559 Speaker 1: on that particular category when we were figuring out who 10 00:00:34,600 --> 00:00:37,559 Speaker 1: should be the head writer for each channel of subject 11 00:00:37,560 --> 00:00:40,640 Speaker 1: matter on the website. But I argue that once you 12 00:00:40,680 --> 00:00:43,800 Speaker 1: get past certain thresholds, a lot of the basic principles 13 00:00:43,920 --> 00:00:47,280 Speaker 1: underlying technology become fairly easy to grasp, and it's really 14 00:00:47,280 --> 00:00:51,280 Speaker 1: easy to apply them to different areas. So really there's 15 00:00:51,560 --> 00:00:54,640 Speaker 1: a barrier. But once you get beyond that barrier, things 16 00:00:54,640 --> 00:01:00,640 Speaker 1: are relatively simple. But one thing that is deceptively implicated 17 00:01:01,080 --> 00:01:04,200 Speaker 1: is the supply chain. Now, you may have heard stories 18 00:01:04,240 --> 00:01:07,959 Speaker 1: of companies having to deal with issues involving supply chains, 19 00:01:08,440 --> 00:01:12,559 Speaker 1: but what does that actually mean. What is a supply chain. 20 00:01:13,080 --> 00:01:16,040 Speaker 1: It's not just something that's restricted to the world of technology. 21 00:01:16,240 --> 00:01:19,160 Speaker 1: Supply chains are in all sorts of businesses, but in 22 00:01:19,200 --> 00:01:22,160 Speaker 1: tech we see how these challenges in supply chains can 23 00:01:22,200 --> 00:01:25,600 Speaker 1: play out pretty easily, and it is frequently a matter 24 00:01:25,800 --> 00:01:29,160 Speaker 1: of headlines and tech news. So to answer these questions 25 00:01:29,200 --> 00:01:31,720 Speaker 1: you know, about what a supply chain is, I turned 26 00:01:31,720 --> 00:01:35,200 Speaker 1: to John Bermudez of trace Link. He's the general manager 27 00:01:35,280 --> 00:01:38,920 Speaker 1: of trace links digital network platform, and trace link provides 28 00:01:38,959 --> 00:01:42,119 Speaker 1: many services, including ways to manage a supply chain. So 29 00:01:42,200 --> 00:01:46,400 Speaker 1: here's our interview. John. Welcome to tech Stuff, and thank 30 00:01:46,440 --> 00:01:48,880 Speaker 1: you for joining us today. Very happy to be here, 31 00:01:48,880 --> 00:01:52,960 Speaker 1: thanks for inviting us. Absolutely. So the first question I 32 00:01:53,000 --> 00:01:57,200 Speaker 1: have for you is really a very high level question. Uh, 33 00:01:57,200 --> 00:02:00,600 Speaker 1: and it's simply because a lot of my listeners they 34 00:02:00,640 --> 00:02:03,360 Speaker 1: come at the world as you know, a user slash 35 00:02:03,400 --> 00:02:07,360 Speaker 1: consumer slash customer kind of approach, so they're not necessarily 36 00:02:07,400 --> 00:02:11,960 Speaker 1: thinking about all the moving parts that make business in 37 00:02:12,040 --> 00:02:15,880 Speaker 1: the twenty one century work. So if you had to 38 00:02:15,960 --> 00:02:20,520 Speaker 1: explain to somebody who was completely ignorant of that world 39 00:02:20,880 --> 00:02:25,200 Speaker 1: what supply chain actually means, how would you do that? Well, 40 00:02:25,200 --> 00:02:28,120 Speaker 1: it's a great question. So years ago, my three year 41 00:02:28,120 --> 00:02:30,079 Speaker 1: old son when I was trying to get him to bed, 42 00:02:31,280 --> 00:02:33,320 Speaker 1: which if you have kids, you know that they don't 43 00:02:33,320 --> 00:02:35,280 Speaker 1: really ask you any questions and until you're trying to 44 00:02:35,280 --> 00:02:38,600 Speaker 1: get to brush your teeth. So he asked me, because, Dad, 45 00:02:38,600 --> 00:02:40,240 Speaker 1: where are you going to Marston. I'm going to Cowboy 46 00:02:40,320 --> 00:02:42,720 Speaker 1: to speak about supply chain. He goes, what supply chain? 47 00:02:42,760 --> 00:02:46,120 Speaker 1: He said, well, Eric, this toothpaste tube is almost empty. 48 00:02:46,200 --> 00:02:50,240 Speaker 1: So when we go and buy another one at market basket, Uh, 49 00:02:50,360 --> 00:02:52,359 Speaker 1: the people at market basket need to have one, because 50 00:02:52,400 --> 00:02:55,840 Speaker 1: we bought one there last time. So the process of 51 00:02:55,880 --> 00:02:59,200 Speaker 1: getting that toothpaste to to market Basket from the manufacturer, 52 00:02:59,280 --> 00:03:02,680 Speaker 1: maybe through a ware house, is the process of supply chain, 53 00:03:03,480 --> 00:03:05,799 Speaker 1: of which my three year old looked at me and said, Dad, 54 00:03:06,280 --> 00:03:10,120 Speaker 1: and you grew up, you should be a fireman. Quite simply, 55 00:03:10,160 --> 00:03:13,880 Speaker 1: supply chain is about getting product from its raw materials 56 00:03:13,880 --> 00:03:17,920 Speaker 1: through the various manufactus to the ends to the end consumers. So, 57 00:03:17,960 --> 00:03:23,359 Speaker 1: whether it's a consumer good something relatively simple like m 58 00:03:23,880 --> 00:03:27,600 Speaker 1: bottle a can of coke zero which comes to a 59 00:03:27,600 --> 00:03:32,320 Speaker 1: bottling plant which receives the secret formula from the secret 60 00:03:32,320 --> 00:03:35,200 Speaker 1: coke manufacturing sites and then put in cans and deliver 61 00:03:35,240 --> 00:03:39,600 Speaker 1: it to comedian stores and supermarkets um, or whether it's 62 00:03:39,600 --> 00:03:41,960 Speaker 1: something much more complex like trace link is involved in 63 00:03:42,000 --> 00:03:47,000 Speaker 1: where you have pharmaceutical supply chains that have many participants 64 00:03:47,000 --> 00:03:51,080 Speaker 1: and obviously going to make sure that life saving drugs 65 00:03:51,120 --> 00:03:54,280 Speaker 1: get to the many different points at which they need 66 00:03:54,320 --> 00:03:58,200 Speaker 1: to be, whether it's pharmacies, hospitals, clinics, uh you know, 67 00:03:58,240 --> 00:04:03,520 Speaker 1: shift around the world to uh A deal with emergency situation. 68 00:04:03,600 --> 00:04:06,320 Speaker 1: So supply chain is the process of getting things where 69 00:04:06,320 --> 00:04:08,800 Speaker 1: they need to be. Yeah, and as I understand it, 70 00:04:08,800 --> 00:04:11,440 Speaker 1: it's it's one of those things that can be fairly 71 00:04:11,600 --> 00:04:16,719 Speaker 1: simple or incredibly complicated, depending upon the scale and the 72 00:04:16,760 --> 00:04:20,159 Speaker 1: necessities of any given products. So for example, in my 73 00:04:20,320 --> 00:04:24,160 Speaker 1: sphere in the technology world, when we talk about things 74 00:04:24,200 --> 00:04:27,480 Speaker 1: like personal computers are are a great example, or mobile phones. 75 00:04:28,160 --> 00:04:30,760 Speaker 1: These are things that we as consumers often think of 76 00:04:30,800 --> 00:04:33,320 Speaker 1: as coming from a single source. Right. You get an 77 00:04:33,320 --> 00:04:36,320 Speaker 1: iPhone from Apple, and that's where you go, and that's 78 00:04:36,320 --> 00:04:40,040 Speaker 1: where it comes from, and there's someplace a little Apple 79 00:04:40,080 --> 00:04:43,440 Speaker 1: manufacturing facility, and these come out fully formed after they 80 00:04:43,480 --> 00:04:45,960 Speaker 1: do whatever magical thing it is they do. But in reality, 81 00:04:46,279 --> 00:04:49,880 Speaker 1: what you're talking about is the combination of lots of 82 00:04:49,920 --> 00:04:53,359 Speaker 1: different elements, many of which are coming from different places 83 00:04:53,800 --> 00:04:56,760 Speaker 1: all around the world, that all have to come together 84 00:04:57,040 --> 00:04:59,800 Speaker 1: in order to be assembled into this final product that 85 00:04:59,839 --> 00:05:02,160 Speaker 1: we get our hands on. And that's just in the 86 00:05:02,200 --> 00:05:05,560 Speaker 1: world of technology. This is obviously something that applies across 87 00:05:05,600 --> 00:05:10,279 Speaker 1: the board to lots of different industries. And I would 88 00:05:10,320 --> 00:05:14,640 Speaker 1: imagine that today with the global economy, that we have 89 00:05:14,760 --> 00:05:17,839 Speaker 1: the fact that we have facilities all around the world 90 00:05:18,240 --> 00:05:22,679 Speaker 1: that participate in this economy, maybe they're providing one small 91 00:05:22,839 --> 00:05:27,200 Speaker 1: part of an overall large package that that can get 92 00:05:27,360 --> 00:05:33,360 Speaker 1: very very complex very quickly. Is that a fairly accurate assessment. Yeah, absolutely, 93 00:05:33,400 --> 00:05:36,800 Speaker 1: And your example of iPhone is a great example. Yet 94 00:05:36,960 --> 00:05:39,160 Speaker 1: there are hundreds of little parts in there. If you 95 00:05:39,160 --> 00:05:41,800 Speaker 1: wherever unfortunate to drop and break yours, you'll see that 96 00:05:41,800 --> 00:05:44,440 Speaker 1: there are lots of tiny, very sophisticated parts in there 97 00:05:44,960 --> 00:05:48,440 Speaker 1: that come from dozens of suppliers. And there's also a 98 00:05:48,480 --> 00:05:51,800 Speaker 1: timing element, because if you think about Apple and their 99 00:05:51,839 --> 00:05:55,040 Speaker 1: new iPhone launches, you know they plan these, uh and 100 00:05:55,160 --> 00:05:58,520 Speaker 1: our tract you know, by millions of people. If they're 101 00:05:58,520 --> 00:06:01,200 Speaker 1: gonna have a launch on September or ten, hundreds of 102 00:06:01,200 --> 00:06:04,160 Speaker 1: millions of people expecting product to be in stores around 103 00:06:04,200 --> 00:06:07,359 Speaker 1: the world on September ten. So not only do you 104 00:06:07,400 --> 00:06:09,760 Speaker 1: have to get hundreds of parts from lots of suppliers 105 00:06:09,800 --> 00:06:11,760 Speaker 1: in different parts of the world and then get them 106 00:06:11,760 --> 00:06:14,520 Speaker 1: to a factory. But on top of that, you have 107 00:06:14,600 --> 00:06:17,640 Speaker 1: to maybe make five or ten million of these iPhones 108 00:06:17,640 --> 00:06:21,320 Speaker 1: and then get them to thousands of distributions to stores 109 00:06:21,760 --> 00:06:23,960 Speaker 1: and do it all to make sure they're they're on 110 00:06:24,040 --> 00:06:28,719 Speaker 1: September tent. So there's a timing element which sometimes you 111 00:06:28,720 --> 00:06:32,040 Speaker 1: could say, what in the apple case, somewhat self imposed. 112 00:06:32,080 --> 00:06:35,520 Speaker 1: They like the drama of having people camping out outside 113 00:06:35,560 --> 00:06:39,480 Speaker 1: the stores. But another supply chains, which seems simple. They 114 00:06:39,520 --> 00:06:43,640 Speaker 1: think about, you know, fresh pineapple coming from Hawaii that 115 00:06:43,680 --> 00:06:46,360 Speaker 1: cannot stay on a ship for six months and get lost. 116 00:06:46,400 --> 00:06:49,640 Speaker 1: It needs to move very quickly through the supply chain, 117 00:06:49,920 --> 00:06:52,600 Speaker 1: through distribution centers and end up on a store shelf 118 00:06:53,400 --> 00:06:56,640 Speaker 1: in a relatively short uh segment of time. So even 119 00:06:56,680 --> 00:07:00,440 Speaker 1: the simplest supply chains are not as simple as a seem. 120 00:07:00,480 --> 00:07:04,200 Speaker 1: You know, I spend time in Asia with simple things 121 00:07:04,240 --> 00:07:07,760 Speaker 1: like fashion supply chain. You think, well, how complicated is 122 00:07:07,800 --> 00:07:10,760 Speaker 1: to make a pair of yoga pads? Well, um, you 123 00:07:10,800 --> 00:07:14,520 Speaker 1: know they're made in factories in Malaysia and China. They 124 00:07:14,560 --> 00:07:17,440 Speaker 1: have the many very different sizes and colors. They have 125 00:07:17,520 --> 00:07:22,000 Speaker 1: hang tags destined for hundreds of countries around the world 126 00:07:22,040 --> 00:07:25,440 Speaker 1: with different pricing and different languages on them. Uh and 127 00:07:25,480 --> 00:07:28,600 Speaker 1: then also the fashion industry has gone into a mode 128 00:07:28,640 --> 00:07:32,640 Speaker 1: where it wants to change fashions ten, fifteen, twenty times 129 00:07:32,680 --> 00:07:34,520 Speaker 1: a year. The state of the art in the fashion 130 00:07:34,560 --> 00:07:37,840 Speaker 1: industry as a company that's changing fashions almost fifty times 131 00:07:37,840 --> 00:07:40,800 Speaker 1: a year. So if that product is stuck in the 132 00:07:40,840 --> 00:07:44,720 Speaker 1: supply chain and UH and miss is the fashion window, 133 00:07:45,400 --> 00:07:48,600 Speaker 1: it goes from being a very valuable pair of of 134 00:07:49,040 --> 00:07:51,679 Speaker 1: workout gear that sells for a hundred dollars just something 135 00:07:51,720 --> 00:07:54,640 Speaker 1: that ends up at the discount rack for twenty dollars. 136 00:07:54,680 --> 00:07:57,840 Speaker 1: And obviously nobody makes any money at that. So even 137 00:07:57,880 --> 00:08:02,120 Speaker 1: simple products UM have can have pretty complex elements to 138 00:08:02,120 --> 00:08:04,720 Speaker 1: their supply chain. And then on top of that you 139 00:08:04,800 --> 00:08:09,240 Speaker 1: have all the added complications that come into things like 140 00:08:09,720 --> 00:08:13,800 Speaker 1: whether or not tariffs are a part of it. We 141 00:08:13,920 --> 00:08:17,760 Speaker 1: talk a little bit about pharmaceuticals. Obviously, with pharmaceuticals you 142 00:08:17,800 --> 00:08:23,400 Speaker 1: have very real concerns about validity and quality issues to 143 00:08:23,440 --> 00:08:26,800 Speaker 1: make certain that the the the various components that are 144 00:08:26,800 --> 00:08:30,480 Speaker 1: coming together to make drugs are safe for a consumption. 145 00:08:31,200 --> 00:08:35,640 Speaker 1: This sounds like it can very rapidly become a logistical 146 00:08:35,840 --> 00:08:39,559 Speaker 1: nightmare if you're trying to manage all of this. So 147 00:08:39,679 --> 00:08:43,000 Speaker 1: can you talk to me a little bit about the 148 00:08:43,080 --> 00:08:46,319 Speaker 1: approach to solving this where you're you've got this this 149 00:08:46,480 --> 00:08:50,520 Speaker 1: complex web that if everything is working great, it's fine, 150 00:08:50,640 --> 00:08:53,360 Speaker 1: every smooth sailing. But as we know in the real world, 151 00:08:54,200 --> 00:08:57,560 Speaker 1: it it rarely does everything work great all the time. 152 00:08:57,679 --> 00:09:00,560 Speaker 1: Usually there's going to be some issues somewhere along the line, 153 00:09:00,600 --> 00:09:03,280 Speaker 1: and it's important to know where that's happening and how 154 00:09:03,320 --> 00:09:06,200 Speaker 1: to respond to it in a timely way. So talk 155 00:09:06,240 --> 00:09:09,080 Speaker 1: a little a little bit about that sort of approach 156 00:09:09,120 --> 00:09:12,880 Speaker 1: to solving this very difficult challenge. Well, just providing a 157 00:09:12,920 --> 00:09:16,520 Speaker 1: little history that the approach up until recently had been 158 00:09:16,640 --> 00:09:21,599 Speaker 1: to try to run these problems through very large, complex 159 00:09:21,600 --> 00:09:25,080 Speaker 1: supply chain planning software that we kind of tell you 160 00:09:25,120 --> 00:09:28,080 Speaker 1: where everything needed to be, when to order things, when 161 00:09:28,120 --> 00:09:31,440 Speaker 1: to move things. But as you pointed out, it turned 162 00:09:31,440 --> 00:09:34,520 Speaker 1: out that model is just too complex and these problem 163 00:09:34,600 --> 00:09:38,160 Speaker 1: these solutions would run forever. So the trend now is 164 00:09:38,200 --> 00:09:41,600 Speaker 1: to put these uh and manage the execution these supply 165 00:09:41,679 --> 00:09:45,080 Speaker 1: chains across real time networks so that you can get 166 00:09:45,440 --> 00:09:50,240 Speaker 1: real time information. You know, a real time example is UH. 167 00:09:50,320 --> 00:09:53,240 Speaker 1: You know tariffs. You know, tariff can pop up in 168 00:09:53,280 --> 00:09:57,160 Speaker 1: a week. So a supply chain that was moving running 169 00:09:57,240 --> 00:10:01,400 Speaker 1: smoothly now is sitting waiting for tariff UH documentation to 170 00:10:01,440 --> 00:10:04,000 Speaker 1: get from through from one country to the next. So 171 00:10:04,760 --> 00:10:07,080 Speaker 1: it may add a week to that supply chain, and 172 00:10:07,160 --> 00:10:10,160 Speaker 1: maybe despite chain cannot afford a week. So what you 173 00:10:10,240 --> 00:10:12,120 Speaker 1: might end up doing with that if it was destined 174 00:10:12,120 --> 00:10:15,080 Speaker 1: to go in a container on a container ship. You 175 00:10:15,120 --> 00:10:18,000 Speaker 1: see this the the advantage of having your real time 176 00:10:18,040 --> 00:10:20,760 Speaker 1: network that can reach out and know where that product is. 177 00:10:21,920 --> 00:10:24,520 Speaker 1: You can then route it to UH to air cargo 178 00:10:24,600 --> 00:10:26,680 Speaker 1: and fly it. You can't do anything about the tariff, 179 00:10:26,720 --> 00:10:29,199 Speaker 1: you can't do anything about the time it takes forward 180 00:10:29,240 --> 00:10:33,480 Speaker 1: to get through the inspection center, but you can route 181 00:10:33,480 --> 00:10:36,520 Speaker 1: it to to air cargo and change the amount of 182 00:10:36,520 --> 00:10:39,280 Speaker 1: time and it's going to spend in transit. So it's 183 00:10:39,280 --> 00:10:43,120 Speaker 1: really you're seeing a trend in real time networks to 184 00:10:43,240 --> 00:10:47,760 Speaker 1: provide much more visibility. Because supply chains are complex, many 185 00:10:47,840 --> 00:10:52,280 Speaker 1: things can disrupt them. UH and you know we've leaned 186 00:10:52,280 --> 00:10:55,560 Speaker 1: out supply chains to a point. You know, part of 187 00:10:55,600 --> 00:11:02,040 Speaker 1: the just in time good inventory management practices of the eighties, nineties, 188 00:11:02,040 --> 00:11:06,160 Speaker 1: and two thousands have made for very streamline supply chains. 189 00:11:06,160 --> 00:11:10,800 Speaker 1: But then you know, they can be disrupted pretty easily. 190 00:11:11,240 --> 00:11:15,720 Speaker 1: Um and it can cost you know, millions of dollars 191 00:11:15,800 --> 00:11:20,480 Speaker 1: to a company that, um, just depending on something being 192 00:11:20,520 --> 00:11:23,360 Speaker 1: there what it's supposed to be. So the network allows 193 00:11:23,400 --> 00:11:26,719 Speaker 1: you to see where it is, provide real time collaboration 194 00:11:26,800 --> 00:11:29,160 Speaker 1: with the various parties to get it, you know, so 195 00:11:29,240 --> 00:11:31,439 Speaker 1: it's not just the supplier who made it and the 196 00:11:33,000 --> 00:11:35,640 Speaker 1: finished goods manufacturer or the consumer that wants it, but 197 00:11:35,720 --> 00:11:42,880 Speaker 1: the logistics providers people provide customs documentation or making sure 198 00:11:42,960 --> 00:11:47,320 Speaker 1: that the two countries have a training agreement. You know, 199 00:11:47,360 --> 00:11:50,559 Speaker 1: there are countries that will not take products sourced in 200 00:11:50,640 --> 00:11:55,079 Speaker 1: other countries, so, um, you need to make sure it's 201 00:11:55,080 --> 00:11:56,840 Speaker 1: not destined for a country that's going to block it 202 00:11:56,840 --> 00:12:00,000 Speaker 1: at the port. And real time networks are helping company 203 00:12:00,040 --> 00:12:03,200 Speaker 1: these deal with that. Yeah. I I've often I've done 204 00:12:03,280 --> 00:12:08,560 Speaker 1: episodes in the past about a lot of of like 205 00:12:09,600 --> 00:12:15,440 Speaker 1: crowdfunded campaigns for physical products and how I think a 206 00:12:15,480 --> 00:12:17,920 Speaker 1: lot of people who go into that they don't have 207 00:12:18,080 --> 00:12:22,559 Speaker 1: this background in the manufacturing world. They have a clear 208 00:12:22,640 --> 00:12:24,720 Speaker 1: idea of what it is they want to do. They've 209 00:12:24,720 --> 00:12:27,600 Speaker 1: built a prototype in the prototype works, but they don't 210 00:12:27,679 --> 00:12:31,640 Speaker 1: necessarily have a full appreciation of how complicated this can get, 211 00:12:32,360 --> 00:12:36,120 Speaker 1: and UH in inevitably these end up being some of 212 00:12:36,160 --> 00:12:38,800 Speaker 1: those stories that end up in the top ten lists 213 00:12:38,880 --> 00:12:43,080 Speaker 1: of failures and crowdfunding. Right like you see stories about 214 00:12:43,280 --> 00:12:46,600 Speaker 1: companies or or would be companies that crash and burn 215 00:12:47,080 --> 00:12:51,920 Speaker 1: because they encounter these these problems that U can quickly 216 00:12:52,640 --> 00:12:56,080 Speaker 1: throw off a timeline, and as we've seen in crowdfunding, 217 00:12:56,280 --> 00:12:59,760 Speaker 1: often people who back them are not the most forgiving 218 00:13:00,160 --> 00:13:04,240 Speaker 1: of of UH investors in a company. So to me, 219 00:13:04,360 --> 00:13:08,760 Speaker 1: it's it's having this understanding is key of how this 220 00:13:09,000 --> 00:13:11,800 Speaker 1: is UH something that people have to keep in mind 221 00:13:11,800 --> 00:13:15,200 Speaker 1: if they're getting involved in any sense in in manufacturing, 222 00:13:15,960 --> 00:13:19,559 Speaker 1: because it allows you to build in those buffers and 223 00:13:19,640 --> 00:13:22,680 Speaker 1: to also be able to communicate in a transparent way 224 00:13:23,000 --> 00:13:25,719 Speaker 1: to perhaps a group of investors in the case of 225 00:13:25,760 --> 00:13:29,079 Speaker 1: a crowdfunding campaign, about what is going on and why 226 00:13:29,360 --> 00:13:32,360 Speaker 1: it is UH something that is taking more time than 227 00:13:32,480 --> 00:13:37,480 Speaker 1: was anticipated. I'm also curious I know that there's been 228 00:13:37,480 --> 00:13:42,760 Speaker 1: a lot of talk about using blockchain technology in UH 229 00:13:42,760 --> 00:13:46,240 Speaker 1: in an effort to manage things like supply chains and 230 00:13:46,360 --> 00:13:49,800 Speaker 1: blockchain I think is one of those those words that 231 00:13:49,960 --> 00:13:52,960 Speaker 1: a lot of people have heard a great deal about, 232 00:13:53,600 --> 00:13:56,360 Speaker 1: but they don't have a very deep understanding of what 233 00:13:56,440 --> 00:13:59,440 Speaker 1: it means, and they it's hard to visualize how that 234 00:14:00,320 --> 00:14:04,559 Speaker 1: is useful in UH management of a supply chain, verifying 235 00:14:04,679 --> 00:14:08,880 Speaker 1: when and where UH products have left particular facilities. Can 236 00:14:08,920 --> 00:14:11,120 Speaker 1: you speak a little bit about the use of block 237 00:14:11,200 --> 00:14:15,600 Speaker 1: chain in supply chain management and why it is so promising? Yeah, 238 00:14:15,640 --> 00:14:17,160 Speaker 1: you're right. There's a lot of talk about it in 239 00:14:17,240 --> 00:14:19,440 Speaker 1: supply chain, and I spent a lot of time looking 240 00:14:19,480 --> 00:14:22,720 Speaker 1: at it, and you know, there's a lot of pilots 241 00:14:22,720 --> 00:14:25,040 Speaker 1: that I think will go nowhere because they don't really 242 00:14:25,080 --> 00:14:27,560 Speaker 1: have a value proposition that there is an easier way 243 00:14:27,600 --> 00:14:30,720 Speaker 1: to solve the same problem. You know, where blockchain does 244 00:14:30,760 --> 00:14:34,040 Speaker 1: apply and actually at trade Link we have a pilot 245 00:14:34,160 --> 00:14:37,680 Speaker 1: with a number of companies and also involves the FDA. 246 00:14:38,840 --> 00:14:42,000 Speaker 1: Is where train where supply chain makes sense or blockchain 247 00:14:42,040 --> 00:14:44,120 Speaker 1: makes sense in supply chain is where you need to 248 00:14:44,200 --> 00:14:48,600 Speaker 1: share um information between multiple parties, and you may not 249 00:14:48,960 --> 00:14:52,680 Speaker 1: want all parties to know where the information came from, 250 00:14:52,720 --> 00:14:55,200 Speaker 1: but you want to make sure that every party on 251 00:14:55,280 --> 00:14:59,200 Speaker 1: the who gets the information can trust it. So the 252 00:14:59,240 --> 00:15:02,520 Speaker 1: example UH is and I'm gonna have to get a 253 00:15:02,520 --> 00:15:06,200 Speaker 1: little technical here on the pharmaceutical supply chain, but about 254 00:15:06,320 --> 00:15:08,680 Speaker 1: seven eight years ago, there was a requirement that all 255 00:15:08,800 --> 00:15:12,160 Speaker 1: lots and and serial numbers be tracked throughout the supply 256 00:15:12,240 --> 00:15:17,360 Speaker 1: chain so that we could combat mostly counterfeit drugs, diverted drugs, 257 00:15:17,360 --> 00:15:20,960 Speaker 1: to make sure that the medicines everybody receives are what 258 00:15:21,000 --> 00:15:24,960 Speaker 1: they think they are. So there's actually legislation going in place, 259 00:15:25,240 --> 00:15:27,720 Speaker 1: UH in three in the United States and it will 260 00:15:27,760 --> 00:15:30,880 Speaker 1: fast follow throughout the rest of the world. So that 261 00:15:31,120 --> 00:15:34,119 Speaker 1: UM a pharmacy, if you go to UH your neighborhood 262 00:15:34,120 --> 00:15:39,480 Speaker 1: pharmacy and you're concerned about where that medicine you would 263 00:15:39,480 --> 00:15:41,760 Speaker 1: just received came from, they would be able to call 264 00:15:41,800 --> 00:15:46,000 Speaker 1: up a history of all the steps that it went through. 265 00:15:46,400 --> 00:15:49,800 Speaker 1: So UH, the pharmacutical supply chain, it is pretty complicated. 266 00:15:49,840 --> 00:15:51,760 Speaker 1: I won't get into the details of that, but it 267 00:15:51,760 --> 00:15:55,800 Speaker 1: goes through multiple parties, from where the original ingredients come from, 268 00:15:55,840 --> 00:16:00,720 Speaker 1: to the manufacturers, wholesalers and every in various part reeason between. 269 00:16:01,200 --> 00:16:06,200 Speaker 1: So blockchain is we're actually piloting a blockchain UH project 270 00:16:06,320 --> 00:16:11,520 Speaker 1: with about twenty other players in the pharmaceutical industry, you know, 271 00:16:11,560 --> 00:16:15,280 Speaker 1: to meet this FDA requirement that the pharmacy to be 272 00:16:15,320 --> 00:16:18,920 Speaker 1: able to tell you, uh, you know, when each stage 273 00:16:18,960 --> 00:16:22,640 Speaker 1: of the of the supply chain process happened, uh, and 274 00:16:22,720 --> 00:16:26,480 Speaker 1: that and validate the data that there was no um 275 00:16:27,640 --> 00:16:29,720 Speaker 1: that it can be traced back to an origin because 276 00:16:29,800 --> 00:16:35,160 Speaker 1: often with counterfeit drugs, even things that are serialized, when 277 00:16:35,200 --> 00:16:37,800 Speaker 1: you try to chase trace them back, you find that 278 00:16:37,840 --> 00:16:44,560 Speaker 1: they just magically appeared somewhere. So magically appearing is good 279 00:16:44,680 --> 00:16:48,680 Speaker 1: for lepre cons, but it's not it's not good for 280 00:16:48,720 --> 00:16:50,720 Speaker 1: anything you want to put in your body to help 281 00:16:50,760 --> 00:16:54,240 Speaker 1: you with the illness. So so that's a great example 282 00:16:54,280 --> 00:16:56,640 Speaker 1: how blockchain can be used in the supply chain because 283 00:16:56,640 --> 00:17:00,600 Speaker 1: it's it's shielding the information and I won't get into 284 00:17:00,640 --> 00:17:07,639 Speaker 1: the detail, but various parties don't necessarily want to be UM. 285 00:17:07,760 --> 00:17:09,320 Speaker 1: You want the fact that they're just part of the 286 00:17:09,359 --> 00:17:13,159 Speaker 1: supply chain disclosed for competitive reasons or other reasons. So 287 00:17:13,359 --> 00:17:17,879 Speaker 1: the blockchain will allow us to validate that this is 288 00:17:17,880 --> 00:17:21,240 Speaker 1: a legitimate product. And there's an entire chain of custody 289 00:17:21,320 --> 00:17:26,120 Speaker 1: history here that the blockchain application can validate without having 290 00:17:26,160 --> 00:17:32,679 Speaker 1: to disclose you know which distributor supplied the pharmacy, because 291 00:17:32,680 --> 00:17:37,680 Speaker 1: you might be uh, you know, Brand B distributor using 292 00:17:37,680 --> 00:17:40,680 Speaker 1: your local pharmacy, thinking Brand B is supplying this pharmacy, 293 00:17:40,720 --> 00:17:43,080 Speaker 1: only to find out that this product came from Brand 294 00:17:43,119 --> 00:17:48,439 Speaker 1: c UH wholesaler and you're questioning why that is. Well, 295 00:17:48,600 --> 00:17:52,080 Speaker 1: you you wouldn't know that, but you will know that 296 00:17:52,119 --> 00:17:54,760 Speaker 1: this is an an active product. So you'll see a 297 00:17:54,800 --> 00:17:58,720 Speaker 1: lot of the A lot of the successful blockchain projects 298 00:17:58,760 --> 00:18:02,600 Speaker 1: and supply chain I think will be oriented around the 299 00:18:02,680 --> 00:18:08,160 Speaker 1: chain of custody and being able to validate um from 300 00:18:08,280 --> 00:18:13,320 Speaker 1: source to consumption that this uh that the product has 301 00:18:13,400 --> 00:18:17,840 Speaker 1: pedigree without having to know, you know, without you having 302 00:18:17,840 --> 00:18:21,840 Speaker 1: to know where exactly it came from. Now, the you know, 303 00:18:21,880 --> 00:18:25,840 Speaker 1: the FDA currently requires the pharmacy to know where it 304 00:18:25,880 --> 00:18:29,040 Speaker 1: got it from, and they could tell you that, but 305 00:18:29,400 --> 00:18:34,400 Speaker 1: one step back, there's no current requirement that the pharmacy knows, say, 306 00:18:34,480 --> 00:18:37,560 Speaker 1: for example, where the wholesale about it from. And the 307 00:18:37,560 --> 00:18:40,240 Speaker 1: new law is not going to change that, but it 308 00:18:40,320 --> 00:18:43,480 Speaker 1: will require this pedigree history, so you'll see a lot 309 00:18:43,520 --> 00:18:46,720 Speaker 1: of that. You see uh IBM and MIRSK have been 310 00:18:47,640 --> 00:18:52,880 Speaker 1: working on a similar blockchain effort to uh provide chain 311 00:18:52,960 --> 00:18:58,400 Speaker 1: of custody of globally shifted items. UM, you know where 312 00:18:58,440 --> 00:19:01,040 Speaker 1: I don't see some of the other projects and supply 313 00:19:01,119 --> 00:19:07,359 Speaker 1: chain UM transfer big pieces of information like entire contents 314 00:19:07,359 --> 00:19:12,640 Speaker 1: of containers or bills of lading. Uh. That's a lot 315 00:19:12,680 --> 00:19:15,639 Speaker 1: of information to be replicated across many notes in the 316 00:19:15,680 --> 00:19:21,760 Speaker 1: supply chain. And um, those projects you know are that 317 00:19:21,880 --> 00:19:26,560 Speaker 1: they're out there, but their success is still people still 318 00:19:26,640 --> 00:19:33,080 Speaker 1: questioning storing that much information the story of bitcoin, information 319 00:19:33,080 --> 00:19:38,680 Speaker 1: which is actually very much tiny, is consuming our computer 320 00:19:38,800 --> 00:19:41,639 Speaker 1: power than anybody would like to admit. We're going to 321 00:19:41,680 --> 00:19:44,320 Speaker 1: take a quick break from the interview and come back 322 00:19:44,359 --> 00:19:47,040 Speaker 1: with the rest of it, uh in just a moment, 323 00:19:47,040 --> 00:19:59,040 Speaker 1: But first let's listen to this word from our sponsor. Okay, 324 00:19:59,119 --> 00:20:01,720 Speaker 1: let's get back to my interview with John bermudas of 325 00:20:01,800 --> 00:20:04,879 Speaker 1: trace Link. We're picking up with a quick overview of 326 00:20:04,920 --> 00:20:09,800 Speaker 1: blockchain technology and how it helps parties verify data. So 327 00:20:10,400 --> 00:20:14,520 Speaker 1: basically the whole process in case people out there are 328 00:20:14,560 --> 00:20:20,040 Speaker 1: wondering about this whole validation idea is that the block 329 00:20:20,119 --> 00:20:24,640 Speaker 1: chain technology stores information in what are called blocks, and 330 00:20:25,040 --> 00:20:27,240 Speaker 1: you can think of it as the name of the block. 331 00:20:27,560 --> 00:20:32,080 Speaker 1: Is the result of a mathematical process that's done on 332 00:20:32,480 --> 00:20:35,200 Speaker 1: all the information that has been inputed into that block, 333 00:20:35,520 --> 00:20:40,359 Speaker 1: and then the succeeding block has that name incorporated into 334 00:20:40,520 --> 00:20:44,800 Speaker 1: its process of generating its own name. So, in other words, 335 00:20:44,880 --> 00:20:47,199 Speaker 1: each block in the chain has a reference to a 336 00:20:47,240 --> 00:20:52,640 Speaker 1: previous block, meaning that making any alterations trying to change 337 00:20:52,760 --> 00:20:56,359 Speaker 1: the chain is incredibly difficult because not only do you 338 00:20:56,400 --> 00:20:58,160 Speaker 1: have to change the information in the block that you're 339 00:20:58,200 --> 00:21:02,080 Speaker 1: interested in, but every block that follows after. And because 340 00:21:02,160 --> 00:21:06,880 Speaker 1: the blockchain is a distributed ledger, not necessarily across as 341 00:21:06,960 --> 00:21:09,800 Speaker 1: large a network as say bitcoin, but is a distributed 342 00:21:09,880 --> 00:21:13,440 Speaker 1: ledger that multiple parties can see, it is very hard 343 00:21:13,480 --> 00:21:17,760 Speaker 1: to do that on enough uh machines where you can 344 00:21:17,800 --> 00:21:20,879 Speaker 1: alter that in a way that is undetectable. You have 345 00:21:20,920 --> 00:21:24,000 Speaker 1: to essentially have control of more than half of all 346 00:21:24,040 --> 00:21:26,200 Speaker 1: the machines on the system in order to do that, 347 00:21:27,000 --> 00:21:30,560 Speaker 1: and it's that's not an easy task. So that is 348 00:21:31,040 --> 00:21:33,639 Speaker 1: sort of the thought process. I agree with you. I 349 00:21:33,680 --> 00:21:38,040 Speaker 1: think that blockchain certainly has its usefulness in things like 350 00:21:38,440 --> 00:21:44,000 Speaker 1: the pharmaceutical field, perhaps in things like food chain supply also, 351 00:21:44,240 --> 00:21:47,959 Speaker 1: can you can see some applications there potentially. I do 352 00:21:48,119 --> 00:21:50,560 Speaker 1: think as well, that it is not going to be 353 00:21:51,200 --> 00:21:56,000 Speaker 1: the universal UH solution to all supply chain issues, but 354 00:21:56,080 --> 00:21:58,840 Speaker 1: I think that in a few cases it it certainly 355 00:21:58,960 --> 00:22:02,560 Speaker 1: will will meet the requirements that a lot of people 356 00:22:02,600 --> 00:22:06,439 Speaker 1: have in order to verify Yes, in fact, this is 357 00:22:06,560 --> 00:22:09,879 Speaker 1: exactly what it claims to be. This is an a counterfeit, 358 00:22:10,840 --> 00:22:15,080 Speaker 1: especially for something as important as medication. Obviously, we want 359 00:22:15,119 --> 00:22:19,320 Speaker 1: to be absolutely certain that that stuff is valid and 360 00:22:19,359 --> 00:22:23,560 Speaker 1: will do what it is uh it claims to do well. 361 00:22:23,600 --> 00:22:27,639 Speaker 1: This is really interesting to me because, again as someone 362 00:22:27,680 --> 00:22:30,119 Speaker 1: from the other side of it, where I get to 363 00:22:30,280 --> 00:22:35,040 Speaker 1: enjoy these various products that uh that I I don't 364 00:22:35,080 --> 00:22:36,600 Speaker 1: have to spend a whole lot of time thinking about 365 00:22:36,640 --> 00:22:38,960 Speaker 1: what actually was required to bring it to the point 366 00:22:38,960 --> 00:22:41,760 Speaker 1: where I could get my grubby little hands on it. 367 00:22:41,760 --> 00:22:44,199 Speaker 1: It is nice to be able to reflect for a 368 00:22:44,240 --> 00:22:49,280 Speaker 1: moment how complicated this process is and how much work 369 00:22:49,320 --> 00:22:52,200 Speaker 1: has to go in in order for me to enjoy 370 00:22:52,280 --> 00:22:56,359 Speaker 1: that amazing privilege. I get a deeper appreciation for it. 371 00:22:56,840 --> 00:23:00,320 Speaker 1: And it also really reinforces the idea that I am 372 00:23:00,359 --> 00:23:02,840 Speaker 1: never going to have a crowdfunded campaign to launch a 373 00:23:02,880 --> 00:23:05,960 Speaker 1: product ever, because I just can't deal with that level 374 00:23:05,960 --> 00:23:10,160 Speaker 1: of stress. UH John, thank you so much for joining 375 00:23:10,200 --> 00:23:14,199 Speaker 1: our show and and describing this process. I think it 376 00:23:14,320 --> 00:23:17,520 Speaker 1: really has helped open up my eyes and hopefully the 377 00:23:17,520 --> 00:23:20,800 Speaker 1: eyes of many of my listeners too. You know, the 378 00:23:20,840 --> 00:23:23,320 Speaker 1: work that you do and how you are able to 379 00:23:23,359 --> 00:23:30,359 Speaker 1: tackle this very large and and sometimes confusing issue of 380 00:23:31,200 --> 00:23:35,080 Speaker 1: managing these supply chains. It's been fascinating. You're quite welcome, 381 00:23:35,800 --> 00:23:39,800 Speaker 1: happy to participate. Thank you for inviting me. Now, at 382 00:23:39,800 --> 00:23:42,719 Speaker 1: this point the interview was technically over, but John had 383 00:23:42,760 --> 00:23:46,040 Speaker 1: a really good point about the food supply chain that 384 00:23:46,160 --> 00:23:49,160 Speaker 1: I wanted to share with you guys. So this little 385 00:23:49,200 --> 00:23:52,440 Speaker 1: bit came after our initial conversation, but I think it's 386 00:23:52,480 --> 00:23:56,320 Speaker 1: worthwhile including here. I have concerns over the fresh food 387 00:23:56,320 --> 00:23:58,720 Speaker 1: block chains that are out there. Oh yeah, because you know, 388 00:23:58,760 --> 00:24:01,800 Speaker 1: what one of the things think about is what makes 389 00:24:01,880 --> 00:24:04,840 Speaker 1: the pharmaceutical supply chain. Actually, what Tracer plays a big 390 00:24:04,880 --> 00:24:09,560 Speaker 1: part on is the serialization and digital you know, digitally 391 00:24:09,600 --> 00:24:13,679 Speaker 1: tracking each serial number through its entire life cycle. The 392 00:24:13,760 --> 00:24:17,160 Speaker 1: challenge that I see with you know, the the fresh 393 00:24:17,200 --> 00:24:23,680 Speaker 1: tomato example, is, um, we all hear about these I E. 394 00:24:23,800 --> 00:24:27,080 Speaker 1: Coli problems and all these other things, and quite often 395 00:24:27,080 --> 00:24:33,560 Speaker 1: they start in the field. So um, getting that digital 396 00:24:34,000 --> 00:24:37,760 Speaker 1: uh blockchain update that it came from this particular field. 397 00:24:38,720 --> 00:24:41,400 Speaker 1: You know, nobody has provided me with an idea how 398 00:24:41,440 --> 00:24:46,720 Speaker 1: that's going to happen. We're picking the tomatoes are hand picked, um, 399 00:24:46,760 --> 00:24:49,080 Speaker 1: and they go in boxes and then the boxes go 400 00:24:49,119 --> 00:24:52,639 Speaker 1: on trucks and they probably go to a packing center 401 00:24:53,119 --> 00:24:55,280 Speaker 1: and that's probably where they enter the blockchain. So what 402 00:24:55,320 --> 00:24:59,480 Speaker 1: happened between the field and the packing center um or 403 00:24:59,520 --> 00:25:01,199 Speaker 1: maybe you want to was loaded on the truck. It 404 00:25:01,240 --> 00:25:05,120 Speaker 1: was scared, but still UM. So that part I think. 405 00:25:05,480 --> 00:25:08,000 Speaker 1: One I think is that you'll see blockchain applications, blockchain 406 00:25:08,000 --> 00:25:11,760 Speaker 1: supply chain where we can. And this is why bitcoin 407 00:25:11,840 --> 00:25:15,320 Speaker 1: works so well because everything is digital, so there's no 408 00:25:15,359 --> 00:25:17,920 Speaker 1: way to fake it. There's no tomato growing on a 409 00:25:18,040 --> 00:25:21,280 Speaker 1: there's no bitcoin growing on a tomato bush. And Selina's 410 00:25:21,359 --> 00:25:24,760 Speaker 1: valley right. I want to thank John Bermudez again for 411 00:25:24,800 --> 00:25:27,040 Speaker 1: coming on the show and talking to me about supply 412 00:25:27,119 --> 00:25:29,919 Speaker 1: chain management, and he does make an excellent point for 413 00:25:30,000 --> 00:25:34,040 Speaker 1: blockchain technology to work effectively as part of a supply chain, 414 00:25:34,560 --> 00:25:36,560 Speaker 1: you really need it to be a part of the 415 00:25:36,600 --> 00:25:40,160 Speaker 1: whole system from the very beginning. If there is any 416 00:25:40,240 --> 00:25:44,440 Speaker 1: ambiguity about the origin for a specific component, such as 417 00:25:44,480 --> 00:25:48,440 Speaker 1: a particular piece of fruit in the food supply chain example, 418 00:25:48,920 --> 00:25:51,000 Speaker 1: then the best you can do is say, well, we 419 00:25:51,040 --> 00:25:55,040 Speaker 1: can trace this particular piece of fruit back to this 420 00:25:55,280 --> 00:25:59,560 Speaker 1: specific warehouse or distribution center. But you can't go back 421 00:25:59,760 --> 00:26:02,520 Speaker 1: for either if you didn't have a means of entering 422 00:26:02,520 --> 00:26:05,200 Speaker 1: in the information from the very beginning. So if you're 423 00:26:05,240 --> 00:26:08,639 Speaker 1: looking to identify the source of a particular outbreak in 424 00:26:08,760 --> 00:26:11,879 Speaker 1: something like E. Coli, that becomes a problem. So it 425 00:26:11,920 --> 00:26:14,520 Speaker 1: falls to supply chain and blockchain experts to figure out 426 00:26:14,520 --> 00:26:16,919 Speaker 1: a practical way to implement the technology so that it 427 00:26:16,960 --> 00:26:20,040 Speaker 1: actually accomplishes the goals set out for it. The same 428 00:26:20,080 --> 00:26:25,159 Speaker 1: thing can be said for counterfeit products, or whether or 429 00:26:25,200 --> 00:26:30,800 Speaker 1: not something is truly organic for whatever worth that word 430 00:26:30,880 --> 00:26:33,600 Speaker 1: happens to be in a case by case basis, or 431 00:26:33,600 --> 00:26:36,560 Speaker 1: even things like free range chicken or grass fed beef. 432 00:26:37,240 --> 00:26:40,920 Speaker 1: At some point you need some form of certification process 433 00:26:41,000 --> 00:26:45,000 Speaker 1: to verify that yes, the claim being made is in 434 00:26:45,080 --> 00:26:48,840 Speaker 1: fact verified and it is true, and then that goes 435 00:26:48,880 --> 00:26:52,800 Speaker 1: into the blockchain. Otherwise you could have a situation where 436 00:26:52,840 --> 00:26:57,119 Speaker 1: someone tells you that it's true, it gets entered into 437 00:26:57,320 --> 00:26:59,840 Speaker 1: the information that becomes part of the blockchain, and according 438 00:26:59,880 --> 00:27:02,679 Speaker 1: to the block chain, yes it is true, but if 439 00:27:02,720 --> 00:27:04,439 Speaker 1: you were to actually go and visit the site you 440 00:27:04,480 --> 00:27:07,280 Speaker 1: might find otherwise. These are issues that have to be 441 00:27:07,280 --> 00:27:10,399 Speaker 1: worked out for blockchain to truly be useful in those 442 00:27:10,400 --> 00:27:14,919 Speaker 1: supply chain implementations. Now, I thought to round out the 443 00:27:14,920 --> 00:27:17,040 Speaker 1: rest of this episode, we could talk a bit about 444 00:27:17,160 --> 00:27:21,040 Speaker 1: some stories of companies and products that encountered challenges due 445 00:27:21,080 --> 00:27:24,480 Speaker 1: to supply chain issues, and you may already have some 446 00:27:24,600 --> 00:27:28,040 Speaker 1: ideas about likely candidates. One of them which I was 447 00:27:28,200 --> 00:27:31,520 Speaker 1: thinking about specifically while I was talking with Mr Bermudez, 448 00:27:31,840 --> 00:27:35,200 Speaker 1: was The Coolest Cooler, and I've talked about this product 449 00:27:35,280 --> 00:27:39,400 Speaker 1: in episodes about crowdfunding before. I also have an upcoming 450 00:27:39,400 --> 00:27:42,159 Speaker 1: episode of The Brink about the Coolest Cooler, and I 451 00:27:42,200 --> 00:27:44,679 Speaker 1: don't want to harp on it too much because I 452 00:27:44,720 --> 00:27:47,080 Speaker 1: think that Ryan Grabber, who is the guy who came 453 00:27:47,160 --> 00:27:50,720 Speaker 1: up with this idea, was truly sincere about this project. 454 00:27:50,920 --> 00:27:54,000 Speaker 1: The issue was not with his desire to deliver upon 455 00:27:54,040 --> 00:27:57,440 Speaker 1: his promises. It's not like he was trying to suggest 456 00:27:57,560 --> 00:28:01,040 Speaker 1: a product with no intent on the of ring. Rather, 457 00:28:01,440 --> 00:28:04,919 Speaker 1: I think he just underestimated how hard and expensive it 458 00:28:04,960 --> 00:28:07,399 Speaker 1: was going to be to make the product he had 459 00:28:07,440 --> 00:28:10,960 Speaker 1: in mind. So, for those of you unfamiliar with this 460 00:28:11,040 --> 00:28:15,919 Speaker 1: particular product, the Coolest Cooler is a beverage cooler, you know, 461 00:28:15,920 --> 00:28:19,520 Speaker 1: an ice cooler with lots of bells and whistles. A 462 00:28:19,560 --> 00:28:23,840 Speaker 1: fully kitted out version of Grabber's design included a blender 463 00:28:23,880 --> 00:28:28,200 Speaker 1: for drinks, a Bluetooth speaker, a USB charger and LED 464 00:28:28,359 --> 00:28:31,760 Speaker 1: light built into the lid, cutting board, storage for plates 465 00:28:31,800 --> 00:28:35,760 Speaker 1: and cutlery, a bottle opener, and more. He launched his 466 00:28:35,760 --> 00:28:38,800 Speaker 1: project twice on Kickstarter, and the first time it failed 467 00:28:38,800 --> 00:28:42,480 Speaker 1: to get really any attention, but the second time, which 468 00:28:42,480 --> 00:28:45,400 Speaker 1: he launched in July two thousand fourteen, it got a 469 00:28:45,440 --> 00:28:47,959 Speaker 1: lot of attention. It became one of the best funded 470 00:28:48,040 --> 00:28:51,160 Speaker 1: Kickstarter campaigns of all time. His goal was initially to 471 00:28:51,240 --> 00:28:53,800 Speaker 1: raise fifty thou dollars, but by the end of that 472 00:28:53,880 --> 00:28:58,760 Speaker 1: campaign it had raised more than thirteen million bucks. And 473 00:28:58,800 --> 00:29:01,200 Speaker 1: if you were early enough, you could pledge at the 474 00:29:01,320 --> 00:29:04,240 Speaker 1: one d sixty five dollar level to qualify for a 475 00:29:04,320 --> 00:29:07,160 Speaker 1: Coolest Cooler of your very own, And even if you 476 00:29:07,200 --> 00:29:10,160 Speaker 1: didn't get one of those seventy spots, you could still 477 00:29:10,160 --> 00:29:13,600 Speaker 1: pledge at one eight five dollars plus fifteen dollars for 478 00:29:13,640 --> 00:29:17,440 Speaker 1: shipping and handling for that privilege. Now, Grepper estimated that 479 00:29:17,560 --> 00:29:20,040 Speaker 1: the final retail price of the cooler would be two 480 00:29:21,600 --> 00:29:24,400 Speaker 1: so you get it at a substantial discount. However, as 481 00:29:24,440 --> 00:29:27,680 Speaker 1: it would turn out, his estimation was actually a gross 482 00:29:27,840 --> 00:29:30,440 Speaker 1: underestimation of how much it would cost to produce those 483 00:29:30,440 --> 00:29:33,719 Speaker 1: coolers at scale and sell them at a profit. Grepper 484 00:29:33,800 --> 00:29:36,880 Speaker 1: ran into supply chain problems fairly early into the process. 485 00:29:37,360 --> 00:29:40,480 Speaker 1: At one point, workers at the Chinese factory that produced 486 00:29:40,480 --> 00:29:44,560 Speaker 1: the blender motor that Grepper needed for his coolest cooler 487 00:29:45,080 --> 00:29:48,320 Speaker 1: they went on strike, and as we heard in the interview, 488 00:29:48,640 --> 00:29:51,040 Speaker 1: when one piece of the supply chain goes wrong, it 489 00:29:51,040 --> 00:29:54,880 Speaker 1: can affect everything else with the coolest cooler. This cascaded 490 00:29:54,960 --> 00:29:58,160 Speaker 1: into a pr disaster for Grebber, who was trying hard 491 00:29:58,200 --> 00:30:01,400 Speaker 1: to fix things, but was then over his head. Currently, 492 00:30:01,640 --> 00:30:03,720 Speaker 1: because of a class action lawsuit, he is under a 493 00:30:03,760 --> 00:30:06,200 Speaker 1: mandate from the court system of the state of Oregon 494 00:30:06,360 --> 00:30:10,120 Speaker 1: to get backers their coolers by the middle of or 495 00:30:10,160 --> 00:30:12,720 Speaker 1: else he'll have to send each backer who has yet 496 00:30:12,720 --> 00:30:15,240 Speaker 1: to receive a cooler a certain amount of money. I 497 00:30:15,240 --> 00:30:18,840 Speaker 1: believe it's twenty dollars. He'll be obligated to do that 498 00:30:18,920 --> 00:30:21,680 Speaker 1: even if the company itself were to go into bankruptcy. 499 00:30:21,800 --> 00:30:26,840 Speaker 1: So even if the coolest Cooler company dissolved, he would 500 00:30:26,880 --> 00:30:29,880 Speaker 1: still be held liable for sending that money out to 501 00:30:30,040 --> 00:30:33,200 Speaker 1: each of those backers, and there are thousands of them. Again, 502 00:30:33,560 --> 00:30:36,760 Speaker 1: from everything I've read, it seems like Grebber has tried 503 00:30:36,800 --> 00:30:39,280 Speaker 1: to meet his obligations. It's just that the promises he 504 00:30:39,320 --> 00:30:42,160 Speaker 1: made were too grand and the process to achieve those 505 00:30:42,200 --> 00:30:46,080 Speaker 1: goals too arduous, and there were other problems besides the 506 00:30:46,120 --> 00:30:48,440 Speaker 1: supply chain itself that would come into play. But I 507 00:30:48,440 --> 00:30:50,600 Speaker 1: think that's one of the examples that really illustrates just 508 00:30:50,680 --> 00:30:54,800 Speaker 1: how hard this is. And it's not just small startup 509 00:30:54,800 --> 00:30:58,000 Speaker 1: businesses that can run into these issues. I evoked the 510 00:30:58,080 --> 00:31:00,840 Speaker 1: name of Apple in my talk with Mr Mudaz, and 511 00:31:00,960 --> 00:31:04,120 Speaker 1: that's for a reason. The company has had problems with 512 00:31:04,160 --> 00:31:08,040 Speaker 1: its supply chain a few times in its history. For example, 513 00:31:08,400 --> 00:31:12,520 Speaker 1: in Apple unveiled the Apple air Pods, and that's the 514 00:31:12,560 --> 00:31:16,960 Speaker 1: company's bluetooth connected wireless earbuds, and at the time, Apple 515 00:31:17,080 --> 00:31:19,360 Speaker 1: estimated that the product would be ready to ship by 516 00:31:19,440 --> 00:31:26,440 Speaker 1: late October. But even at the end of finding air 517 00:31:26,480 --> 00:31:30,719 Speaker 1: Pods was really really hard. Nobody had them in stock. 518 00:31:31,040 --> 00:31:35,200 Speaker 1: Apple stores would often receive fewer than a dozen boxes 519 00:31:35,280 --> 00:31:38,400 Speaker 1: of air pods, not crates of boxes, but actual just 520 00:31:39,840 --> 00:31:42,440 Speaker 1: samples of air pods. They would just get maybe twelve 521 00:31:42,520 --> 00:31:45,760 Speaker 1: or fewer at a time. There were a lots of 522 00:31:46,280 --> 00:31:49,320 Speaker 1: reasons and a lot of speculation as to why there 523 00:31:49,320 --> 00:31:52,720 Speaker 1: were so few units available, why the supply was so low. 524 00:31:52,920 --> 00:31:55,640 Speaker 1: The Wall Street Journal published a piece that stated that 525 00:31:55,760 --> 00:31:58,080 Speaker 1: was largely because of some technical issues with the air 526 00:31:58,080 --> 00:32:00,800 Speaker 1: pods themselves, that Apple needed to work out that that 527 00:32:00,880 --> 00:32:04,600 Speaker 1: they just weren't working properly, and so it was delaying shipments. 528 00:32:04,920 --> 00:32:07,680 Speaker 1: But John Gruber, who has written a lot about Apple, 529 00:32:08,040 --> 00:32:11,560 Speaker 1: wrote that based on his unnamed sources at Apple, the 530 00:32:11,600 --> 00:32:15,560 Speaker 1: real reason was that the company encountered an quote unexpected 531 00:32:15,640 --> 00:32:20,640 Speaker 1: manufacturing problem at scale end quote. Typically that points to 532 00:32:20,760 --> 00:32:24,280 Speaker 1: a supply chain issue. Now, when we come back, I'm 533 00:32:24,280 --> 00:32:27,440 Speaker 1: going to cover a couple of other stories with some 534 00:32:27,560 --> 00:32:38,040 Speaker 1: similar problems. But first let's take another quick break. So 535 00:32:38,080 --> 00:32:41,560 Speaker 1: I've talked about coolers and earbuds, but supply chain problems 536 00:32:41,560 --> 00:32:45,080 Speaker 1: can affect all sorts of things at different sizes, even 537 00:32:45,320 --> 00:32:49,120 Speaker 1: commercial jets. Back in the mid two thousand's the airline 538 00:32:49,160 --> 00:32:53,520 Speaker 1: industry was eagerly anticipating the arrival of Boeing's seven eight 539 00:32:53,680 --> 00:32:57,720 Speaker 1: seven aircraft a k a. The Dreamliner, and this was 540 00:32:57,760 --> 00:33:01,200 Speaker 1: a new approach to large commercial aircraft. The airframe was 541 00:33:01,280 --> 00:33:06,120 Speaker 1: made out of composite materials rather than the metal based materials. 542 00:33:06,240 --> 00:33:09,960 Speaker 1: This actually made the aircraft much lighter than earlier models 543 00:33:09,960 --> 00:33:13,120 Speaker 1: like the seven sixty seven, and that meant that the 544 00:33:13,160 --> 00:33:15,959 Speaker 1: seven eight seven had better fuel efficiency as a result. 545 00:33:16,040 --> 00:33:17,680 Speaker 1: It's not as heavy, you don't need as much fuel 546 00:33:17,720 --> 00:33:21,200 Speaker 1: to keep it in air. So Boeing estimated that they 547 00:33:21,200 --> 00:33:24,040 Speaker 1: would be able to deliver the seven eight sevens to 548 00:33:24,040 --> 00:33:27,680 Speaker 1: the various airlines by May two thousand eight, but in 549 00:33:27,760 --> 00:33:31,040 Speaker 1: reality the planes would not be ready to enter service 550 00:33:31,200 --> 00:33:35,520 Speaker 1: until October two thousand eleven, so you're talking about three 551 00:33:35,640 --> 00:33:39,280 Speaker 1: year delay three and a half year delay. Many factors 552 00:33:39,280 --> 00:33:43,280 Speaker 1: contributed to that delay, but the two big ones, according 553 00:33:43,320 --> 00:33:46,760 Speaker 1: to most analysts, was that Boeing had tried to overhaul 554 00:33:47,000 --> 00:33:51,800 Speaker 1: its supply chain and it's assembly process all at the 555 00:33:51,840 --> 00:33:56,600 Speaker 1: same time, and that this particular decision created complications that 556 00:33:56,640 --> 00:33:59,560 Speaker 1: took way longer to work out than the company had 557 00:33:59,600 --> 00:34:04,120 Speaker 1: and to a pated and every analyst or expert that 558 00:34:04,200 --> 00:34:08,000 Speaker 1: I read about or read their work while researching this. 559 00:34:08,760 --> 00:34:11,279 Speaker 1: They all essentially said the same thing, which is that 560 00:34:11,960 --> 00:34:14,120 Speaker 1: if you're going to make changes, it's good to make 561 00:34:14,200 --> 00:34:16,759 Speaker 1: changes to one system first before you make changes to 562 00:34:16,800 --> 00:34:20,600 Speaker 1: the other. Uh. If you're making changes to two integral 563 00:34:20,640 --> 00:34:24,920 Speaker 1: systems at the same time, you are essentially doubling the 564 00:34:25,040 --> 00:34:31,040 Speaker 1: risks you encounter for delays and losses. Sometimes supply chain 565 00:34:31,080 --> 00:34:35,520 Speaker 1: problems aren't centered around not being able to get the 566 00:34:35,600 --> 00:34:40,239 Speaker 1: components you'll need when and where you need them. Sometimes 567 00:34:40,480 --> 00:34:44,360 Speaker 1: supply chain problems manifest in a way where you receive 568 00:34:44,760 --> 00:34:48,319 Speaker 1: way too many of something then you actually need. You 569 00:34:48,400 --> 00:34:51,480 Speaker 1: end up with a surplus of stuff because the supply 570 00:34:51,640 --> 00:34:54,480 Speaker 1: chain is not keeping an accurate record of where things 571 00:34:54,560 --> 00:34:57,000 Speaker 1: need to go at any given time. This was the 572 00:34:57,040 --> 00:35:00,960 Speaker 1: case for Target with their stores that were in Canada. 573 00:35:01,120 --> 00:35:03,920 Speaker 1: In two thousand fifteen, the company announced it was going 574 00:35:03,960 --> 00:35:09,000 Speaker 1: to leave Canada entirely because this problem was so bad. 575 00:35:09,280 --> 00:35:12,239 Speaker 1: So what exactly was going on? Well, again, there were 576 00:35:12,320 --> 00:35:14,920 Speaker 1: many problems. Supply chain was just one of them, but 577 00:35:15,040 --> 00:35:18,960 Speaker 1: it was a big part of it. Targets distribution centers 578 00:35:19,040 --> 00:35:22,520 Speaker 1: in Canada, we're getting overwhelmed by more products than they 579 00:35:22,520 --> 00:35:26,080 Speaker 1: could handle. So a distribution center is sort of a 580 00:35:26,120 --> 00:35:30,920 Speaker 1: way point for a product. The companies will typically bring 581 00:35:30,920 --> 00:35:34,359 Speaker 1: in products into a distribution center. They're brought there, they're 582 00:35:34,480 --> 00:35:38,200 Speaker 1: ordered from vendors throughout the world, and those products go 583 00:35:38,239 --> 00:35:41,240 Speaker 1: into the distribution center, which then will send those products 584 00:35:41,239 --> 00:35:45,319 Speaker 1: out to specific stores based upon their inventory needs. So 585 00:35:45,640 --> 00:35:49,319 Speaker 1: if you have one target where their sprockets are getting low, 586 00:35:49,640 --> 00:35:52,720 Speaker 1: the distribution center should send more sprockets to that target 587 00:35:52,960 --> 00:35:55,400 Speaker 1: and keep track of how many sprockets are being sold 588 00:35:55,400 --> 00:35:58,600 Speaker 1: over a given amount of time so that the supply 589 00:35:59,320 --> 00:36:03,279 Speaker 1: better matches the demand. Well, that was not happening with 590 00:36:03,360 --> 00:36:08,160 Speaker 1: targets Canadian distribution centers. They were receiving tons of stuff 591 00:36:08,560 --> 00:36:11,359 Speaker 1: even before they could send anything else out, and so 592 00:36:11,640 --> 00:36:14,320 Speaker 1: things were getting very messy. It was coming in faster 593 00:36:14,440 --> 00:36:16,560 Speaker 1: than it was shipping out, and rather than keeping an 594 00:36:16,560 --> 00:36:19,279 Speaker 1: eye on demand and managing supply, the supply was coming 595 00:36:19,320 --> 00:36:22,319 Speaker 1: in like a fire hose on full blast, even if 596 00:36:22,320 --> 00:36:25,200 Speaker 1: the outgoing products to target stores were moving a little 597 00:36:25,200 --> 00:36:28,920 Speaker 1: more than a trickle. Reuters reported on this matter and 598 00:36:28,960 --> 00:36:33,200 Speaker 1: specified a particular product to illustrate the problem that made 599 00:36:33,200 --> 00:36:37,120 Speaker 1: it somewhat amusing. The product was a toddler sized pink 600 00:36:37,440 --> 00:36:42,920 Speaker 1: suv branded with Barbies trademark. Apparently the distribution centers were 601 00:36:42,920 --> 00:36:47,240 Speaker 1: getting overwhelmed by the pink toy vehicles among other products. 602 00:36:47,600 --> 00:36:50,040 Speaker 1: Reuters went on to say that the real issue was 603 00:36:50,080 --> 00:36:53,800 Speaker 1: that Target tried to launch a coast to coast launch 604 00:36:53,800 --> 00:36:58,919 Speaker 1: of stores throughout Canada, which created a monstrously complex supply chain. 605 00:36:59,320 --> 00:37:01,560 Speaker 1: They tried to go from zero to one hundred in 606 00:37:01,600 --> 00:37:04,960 Speaker 1: an instant rather than build out their presence gradually to 607 00:37:05,000 --> 00:37:08,560 Speaker 1: grow more organically and manage thing in state stages, you know, 608 00:37:08,680 --> 00:37:11,840 Speaker 1: trying to to grow province by province as opposed to 609 00:37:11,960 --> 00:37:16,000 Speaker 1: going nationwide in in one go. And as a result, 610 00:37:16,640 --> 00:37:19,560 Speaker 1: it became a massive headache and lead to Target pulling 611 00:37:19,560 --> 00:37:22,880 Speaker 1: out the country completely. So you could call that a 612 00:37:22,920 --> 00:37:27,520 Speaker 1: massive supply chain failure. Another cautionary tail is in the 613 00:37:27,560 --> 00:37:30,840 Speaker 1: form of Adidas, the shoe manufacturer, which had a major 614 00:37:30,920 --> 00:37:34,880 Speaker 1: problem with its distribution center in Spartanburg, South Carolina. In 615 00:37:36,760 --> 00:37:40,920 Speaker 1: the company wanted a new warehouse management system that in theory, 616 00:37:41,239 --> 00:37:45,239 Speaker 1: would streamline processes and make things run more efficiently when 617 00:37:45,280 --> 00:37:48,600 Speaker 1: processing shipments to various stores throughout the US. So again 618 00:37:48,640 --> 00:37:52,839 Speaker 1: another distribution center. Adidas partnered with a company called Integrated 619 00:37:52,880 --> 00:37:57,160 Speaker 1: Software Logistics Engineering to make the system, but Adidas also 620 00:37:57,400 --> 00:38:02,319 Speaker 1: insisted that this particular software package be made compatible with 621 00:38:02,440 --> 00:38:06,520 Speaker 1: the distribution centers existing computers, and that proved to be 622 00:38:06,719 --> 00:38:10,399 Speaker 1: very difficult to do. In fact, the software vendor would 623 00:38:10,440 --> 00:38:12,600 Speaker 1: go out of business in the middle of the project 624 00:38:12,719 --> 00:38:15,360 Speaker 1: while trying to get it to all work out because 625 00:38:15,880 --> 00:38:20,759 Speaker 1: they could never deliver a product that Adidas was satisfied with, 626 00:38:21,239 --> 00:38:24,120 Speaker 1: So without the money coming in from that project, because 627 00:38:24,120 --> 00:38:26,920 Speaker 1: they weren't able to deliver anything, the company went out 628 00:38:26,920 --> 00:38:29,960 Speaker 1: of business. Now, on top of that, the distribution center 629 00:38:30,000 --> 00:38:33,280 Speaker 1: itself had a lot of automated components that were worked 630 00:38:33,440 --> 00:38:36,160 Speaker 1: into the design, and all of those needed to be 631 00:38:36,200 --> 00:38:39,840 Speaker 1: fully integrated into the warehouse management system in order for 632 00:38:39,880 --> 00:38:42,399 Speaker 1: it to work properly. And before all of that could 633 00:38:42,400 --> 00:38:45,120 Speaker 1: be sorted out, Adida's decided to essentially flip the switch 634 00:38:45,160 --> 00:38:48,640 Speaker 1: and go into business before this warehouse management system was 635 00:38:48,680 --> 00:38:52,080 Speaker 1: actually ready, and as you might expect, that led to 636 00:38:52,120 --> 00:38:55,400 Speaker 1: the company encountering a ton of problems with processing and 637 00:38:55,400 --> 00:39:00,600 Speaker 1: shipping orders. It got so bad that the company was 638 00:39:00,640 --> 00:39:04,160 Speaker 1: only able to meet twenty percent of the fifty million 639 00:39:04,239 --> 00:39:07,920 Speaker 1: dollars in North American orders it had actually received. And 640 00:39:08,320 --> 00:39:10,960 Speaker 1: on top of that, most of that twenty percent didn't 641 00:39:11,000 --> 00:39:14,520 Speaker 1: come from the Spartanburg distribution center. It came from overseas 642 00:39:14,520 --> 00:39:18,040 Speaker 1: plants that were shipping their products directly two stores bypassing 643 00:39:18,080 --> 00:39:20,920 Speaker 1: the distribution center entirely. Because that's how big of a 644 00:39:21,000 --> 00:39:23,960 Speaker 1: mess it was, Adida saw its market share drop and 645 00:39:24,000 --> 00:39:26,839 Speaker 1: had to work super hard to regain lost ground, all 646 00:39:26,840 --> 00:39:30,200 Speaker 1: because of a faulty supply chain management system. One of 647 00:39:30,200 --> 00:39:33,239 Speaker 1: the biggest supply chain disasters I read about happened that 648 00:39:33,400 --> 00:39:37,719 Speaker 1: same year in this was with a company called fox Meyer. 649 00:39:38,000 --> 00:39:40,440 Speaker 1: Not at the time, fox Meyer was one of the 650 00:39:40,480 --> 00:39:44,680 Speaker 1: biggest wholesale drug distribution companies in the United States. It 651 00:39:44,719 --> 00:39:49,360 Speaker 1: posted sales revenues in the billions of dollars. This is 652 00:39:49,360 --> 00:39:51,359 Speaker 1: one of those companies you should think about when you 653 00:39:51,400 --> 00:39:54,520 Speaker 1: hear the phrase too big to fail and you wonder 654 00:39:54,560 --> 00:39:56,520 Speaker 1: if that's true. Well, at least in the case of 655 00:39:56,560 --> 00:40:00,200 Speaker 1: fox Meyer, it was not true. The company had had 656 00:40:00,239 --> 00:40:04,440 Speaker 1: an incredibly ambitious plan. It was overhauling its information technology 657 00:40:04,480 --> 00:40:09,080 Speaker 1: systems and installing tons of automated systems into its distribution centers, 658 00:40:09,400 --> 00:40:12,080 Speaker 1: including stuff like conveyors to move products to where they 659 00:40:12,120 --> 00:40:15,200 Speaker 1: needed to be within a facility, and carousels that would 660 00:40:15,200 --> 00:40:18,719 Speaker 1: make orders move around so that packers could grab the 661 00:40:18,800 --> 00:40:22,960 Speaker 1: orders easily. It all made sense from a theoretical standpoint, 662 00:40:23,400 --> 00:40:26,759 Speaker 1: and the company estimated that these improvements and efficiency would 663 00:40:26,800 --> 00:40:31,640 Speaker 1: mean much lower costs in production. And based upon that estimation, 664 00:40:31,960 --> 00:40:35,280 Speaker 1: they started to put in bids on contracts, and because 665 00:40:35,280 --> 00:40:37,200 Speaker 1: they thought, well, it's gonna cost a lot less, they 666 00:40:37,200 --> 00:40:40,680 Speaker 1: could be really aggressive with those those biddings. And they 667 00:40:40,719 --> 00:40:43,680 Speaker 1: just assumed that the estimates were entirely accurate. And you 668 00:40:43,719 --> 00:40:47,120 Speaker 1: can probably see where this is going. So on paper, 669 00:40:47,200 --> 00:40:50,480 Speaker 1: the automated systems worked like a dream. When the actual 670 00:40:50,600 --> 00:40:54,319 Speaker 1: high volume orders began to pour in, those systems could 671 00:40:54,400 --> 00:40:58,480 Speaker 1: not keep pace. There was no one system that was 672 00:40:58,520 --> 00:41:00,520 Speaker 1: performing at such a poor level that you could say 673 00:41:00,960 --> 00:41:04,399 Speaker 1: that's what caused doom for fox Meyer. But there were 674 00:41:04,440 --> 00:41:08,479 Speaker 1: problems throughout the entire management system. And these problems, even 675 00:41:08,480 --> 00:41:12,200 Speaker 1: if they were small, all started to add up and 676 00:41:12,239 --> 00:41:16,000 Speaker 1: all those automated systems weren't working properly either. In fact, 677 00:41:16,040 --> 00:41:19,880 Speaker 1: they were causing more work because when they weren't working 678 00:41:19,920 --> 00:41:23,040 Speaker 1: as designed, a human being had to step in and 679 00:41:23,360 --> 00:41:27,360 Speaker 1: bypass this. So fox Meyer actually had to dedicate more workers, 680 00:41:27,400 --> 00:41:30,320 Speaker 1: not fewer, to compensate for the problems that the automated 681 00:41:30,360 --> 00:41:33,719 Speaker 1: systems were causing. And as I'm sure you guys know, 682 00:41:34,239 --> 00:41:36,799 Speaker 1: that's kind of the opposite of what you want when 683 00:41:36,800 --> 00:41:39,360 Speaker 1: you start incorporating automated systems. I mean, the whole goal 684 00:41:39,560 --> 00:41:42,480 Speaker 1: is to reduce the workload on a human workforce, not 685 00:41:42,560 --> 00:41:45,920 Speaker 1: to increase it. On top of all that, the shipment 686 00:41:46,000 --> 00:41:50,560 Speaker 1: tracking system for the distribution center wasn't sufficient, So there 687 00:41:50,600 --> 00:41:53,640 Speaker 1: were a lot of cases where a customer places in 688 00:41:53,880 --> 00:41:58,480 Speaker 1: order and that order might involve a certain number of 689 00:41:59,040 --> 00:42:02,040 Speaker 1: doses of a drug or maybe a couple of different drugs, 690 00:42:02,480 --> 00:42:05,880 Speaker 1: and the distribution center, because of its problems, would ship 691 00:42:05,960 --> 00:42:09,560 Speaker 1: a partial order to the customer and the rest of 692 00:42:09,640 --> 00:42:12,560 Speaker 1: the order might go out in a slightly later shipment. 693 00:42:12,960 --> 00:42:14,600 Speaker 1: And this was just to try and get stuff out 694 00:42:14,600 --> 00:42:17,160 Speaker 1: of the distribution center to the customer's hands. But on 695 00:42:17,200 --> 00:42:20,880 Speaker 1: the customer side, the customer would receive a partial order 696 00:42:21,320 --> 00:42:23,520 Speaker 1: and look in and say, well, this isn't this is 697 00:42:23,560 --> 00:42:26,200 Speaker 1: only part of what I needed. And these customers might 698 00:42:26,200 --> 00:42:29,319 Speaker 1: be things like, you know, a drug store, so they 699 00:42:29,400 --> 00:42:31,080 Speaker 1: look at an order and say, well, this is like 700 00:42:31,200 --> 00:42:33,399 Speaker 1: half of what I was promised, And they would call 701 00:42:33,520 --> 00:42:36,680 Speaker 1: up a customer representative and say, well, what, where's the 702 00:42:36,680 --> 00:42:41,040 Speaker 1: rest of my order? The problem was that the management 703 00:42:41,080 --> 00:42:44,360 Speaker 1: system was not adequate. It did not actually show the 704 00:42:44,400 --> 00:42:47,880 Speaker 1: customer representatives that the rest of that order had already 705 00:42:47,880 --> 00:42:51,759 Speaker 1: been shipped out. So the customer representatives would do what 706 00:42:51,880 --> 00:42:54,000 Speaker 1: you would imagine they would do. They would place in 707 00:42:54,040 --> 00:42:58,000 Speaker 1: an order to send the rest of that to the customer. 708 00:42:58,360 --> 00:43:01,759 Speaker 1: So essentially that customer would get twice that part of 709 00:43:01,800 --> 00:43:05,600 Speaker 1: their order because the the later shipment would get to 710 00:43:05,680 --> 00:43:09,040 Speaker 1: them and then the reshipment would get to them, and 711 00:43:09,080 --> 00:43:12,799 Speaker 1: this would all be resulting in losses for fox Meyer 712 00:43:12,880 --> 00:43:15,239 Speaker 1: the company. In fact, the problems were so bad that 713 00:43:15,280 --> 00:43:20,040 Speaker 1: they totally destroyed fox Meyer. The company never bounced back, 714 00:43:20,400 --> 00:43:24,080 Speaker 1: and it ultimately had to file for bankruptcy. Then a 715 00:43:24,120 --> 00:43:28,080 Speaker 1: competitor called McKesson came in and purchased all the assets 716 00:43:28,120 --> 00:43:31,200 Speaker 1: of fox Meyer for eighty million dollars. Now that's a 717 00:43:31,200 --> 00:43:34,480 Speaker 1: lot of money, but it's a paltry sum compared to 718 00:43:34,520 --> 00:43:37,799 Speaker 1: the billions of dollars of business that fox Meyer had 719 00:43:37,840 --> 00:43:41,759 Speaker 1: been doing before it overhauled all these systems Now, the 720 00:43:41,800 --> 00:43:45,040 Speaker 1: reason I'm telling you all these stories is really to 721 00:43:45,160 --> 00:43:49,960 Speaker 1: frame how hard these supply chain challenges can be. I 722 00:43:50,000 --> 00:43:52,640 Speaker 1: think it gives us a deeper appreciation for the effort 723 00:43:52,800 --> 00:43:56,120 Speaker 1: that goes into bringing products to market. And that's not 724 00:43:56,160 --> 00:43:58,360 Speaker 1: to say that there aren't tried in true ways to 725 00:43:58,440 --> 00:44:01,480 Speaker 1: keep track of a supply chain and to manage it properly. 726 00:44:01,719 --> 00:44:06,759 Speaker 1: It's entirely possible, and more importantly, it's necessary. Also, I 727 00:44:06,800 --> 00:44:10,000 Speaker 1: think for the right person, supply chain management can be 728 00:44:10,080 --> 00:44:14,319 Speaker 1: a really lucrative career. It's a tech related job that 729 00:44:14,480 --> 00:44:17,280 Speaker 1: is in high demand, even in industries that you wouldn't 730 00:44:17,320 --> 00:44:21,239 Speaker 1: associate with technology. It itself is a tech job. I 731 00:44:21,320 --> 00:44:24,880 Speaker 1: frequently here that among the mani tech jobs out there, 732 00:44:25,120 --> 00:44:28,600 Speaker 1: it's one of the most sought after in the industry. 733 00:44:28,960 --> 00:44:32,359 Speaker 1: So if you're someone looking to be in demand and 734 00:44:32,400 --> 00:44:36,760 Speaker 1: you're incredibly detail oriented and you're really interested in solving 735 00:44:36,760 --> 00:44:39,640 Speaker 1: these kind of logistical problems, this could be a really 736 00:44:39,640 --> 00:44:42,280 Speaker 1: good path to look into. It's something that I would 737 00:44:42,600 --> 00:44:45,879 Speaker 1: really stress that young people who are wondering about where 738 00:44:45,880 --> 00:44:48,640 Speaker 1: they want to go into business, you know, where would 739 00:44:48,640 --> 00:44:51,440 Speaker 1: they fit in that world? It's a good one to 740 00:44:51,560 --> 00:44:55,239 Speaker 1: explore because there is a definite demand for that kind 741 00:44:55,239 --> 00:44:58,799 Speaker 1: of talent um. In fact, some people would argue that 742 00:44:58,840 --> 00:45:02,040 Speaker 1: there is a shortage of that talent right now. So 743 00:45:02,280 --> 00:45:04,600 Speaker 1: that wraps up this episode. I know this was a 744 00:45:04,680 --> 00:45:07,440 Speaker 1: little bit outside of what I usually cover on tech Stuff, 745 00:45:07,440 --> 00:45:12,840 Speaker 1: but because supply chain issues are so important in every industry, 746 00:45:12,880 --> 00:45:17,360 Speaker 1: but in technology in particular, I thought it warranted an episode. 747 00:45:17,560 --> 00:45:20,560 Speaker 1: Thanks again to John Bermudez of trace Link for joining 748 00:45:20,600 --> 00:45:24,160 Speaker 1: the episode and giving us his perspective on things. I 749 00:45:24,200 --> 00:45:27,200 Speaker 1: really appreciate him taking the time to talk with us. 750 00:45:27,680 --> 00:45:30,520 Speaker 1: And if you guys have any suggestions for future episodes 751 00:45:30,560 --> 00:45:33,840 Speaker 1: of tech Stuff, I invite you to send those ideas 752 00:45:33,880 --> 00:45:36,839 Speaker 1: to me. The email address is tech stuff at how 753 00:45:36,880 --> 00:45:39,319 Speaker 1: stuff works dot com, or pop on over to our 754 00:45:39,360 --> 00:45:43,439 Speaker 1: website that's tech stuff podcast dot com. You will find 755 00:45:43,480 --> 00:45:46,040 Speaker 1: links to where we are on social media. Over there, 756 00:45:46,280 --> 00:45:48,640 Speaker 1: you'll find an archive of all of our past episodes, 757 00:45:48,840 --> 00:45:51,200 Speaker 1: and you'll find a link to our online store, where 758 00:45:51,239 --> 00:45:53,360 Speaker 1: every purchase you make goes to help the show. And 759 00:45:53,400 --> 00:45:56,000 Speaker 1: we greatly appreciate it, and I'll talk to you again 760 00:45:56,800 --> 00:46:03,799 Speaker 1: really soon. Text Stuff is a production of I Heart 761 00:46:03,880 --> 00:46:07,280 Speaker 1: Radio's How Stuff Works. For more podcasts from I heart Radio, 762 00:46:07,600 --> 00:46:10,800 Speaker 1: visit the I heart Radio app, Apple podcasts, or wherever 763 00:46:10,880 --> 00:46:12,400 Speaker 1: you listen to your favorite shows.