Navigating Disruption in the Rice Supply Chain

Episode Transcript
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Blythe Brumleve (00:05):
Welcome into another episode of Everything Is
Logistics, a podcast for thethinkers in freight.
We are proudly presented by SBILogistics and I am your host,
Blythe Brumleve.
On today's show, we got PawanJoshi he is the senior vice
president of products andstrategy over e2open and we're
going to be talking about a lotof really I mean not necessarily

(00:26):
cool things, but interestingthings that are going on in the
global supply chain of rice, thestaple in many households all
across the world, how it's made,how it ends up, how it goes
from the source to your porch,and then also how India's ban on
non-Bazmati rice exports willaffect more than 40% of global

(00:48):
rice trade, and how the marketis trying to fill that 10
million metric ton gap, which isa huge accomplishment that has
to be tackled.
So, Pawan, welcome into theshow, super excited to get your
perspective on this issue.

Pawan Joshi (01:04):
Thank you, Blythe.
It's great to be here.
Appreciate the opportunity.

Absolutely Now.
From what I understand, yo uhave been at e2open for 20 years
now.
I'm curious, before we get intoyour experience at e2open, were
you interested in supply chainlogistics beforehand or did you
just fall into it, like a lot offolks within logistics and
supply chain?

Yeah, I know that's a great question.
I never thought about it.
I was ever interested in thator not, but somehow my career
path led me there.
I started my journey back inIndia.
I was born in India, raised inIndia, I did my undergrad in
engineering in India.
My engineering was focused onmanufacturing systems, which is
how you produce things insidethe four walls on the shop floor

(01:48):
designing products, makingproducts and all that and came
to the US to do my masters andjoined a University of
Wisconsin's manufacturingsystems and engineering program,
thought I'd be spending maybenine months or a year here and
going back to India, but then Igot immersed into the University

(02:08):
.
We had an outreach programwhere you actually had to do a
semester worth of project withan actual manufacturing company
in the area in the neighborhoodwithin 100 or 200 mile radius.
So I got really I mean, thatwas one of the capstone projects
that we did and that got meinterested and took my
manufacturing background,expanded that out and very
quickly realized that there isaction inside the four walls of

(02:30):
a company, whether you look at amanufacturing floor or a
warehouse or a transportationdepartment or a crosstalk.
But that just represents 10 to15 to 20% of the action, because
most of the stuff happensoutside the four walls.
It's your critical componentsthat come in, the ingredients
that have to be brought in, andit's not just one tier, it's
across multiple tiers as theyprocess through before they come

(02:52):
to the factory.
The factory is doing the finalassembly and even when you bring
them in, you're relying onlogistics of his partners, right
?
You don't have your owntransportation department and
your own trucks and your bargesand rails and ocean carriers, so
you have it's all outsourced.
And then, finally, when youproduce something, then you look
to sell that particular productand even there, you're
outsourcing it.

(03:12):
Right?
Very few brands have their ownshops and they're selling
through their own brick andmortar online stores.
A lot of them rely ondistributors, retailers,
value-added resellers before itactually makes into our homes or
before we actually go buy themat a retail store.
So when you put that alltogether, that was a pretty
eye-opening experience for methat you tend to focus on.

(03:33):
Let's optimize this step in themachining process.
Let's optimize this step in theproduction process of an
assembly line and very quicklyrealize that you're focused on a
very small part of a very, very, very large problem that you
rely on so many outsourcedpartners to do on your behalf.
So that kind of got me goingand I finished.
I stuck around my advisor and Idecided we agreed that he'd

(03:57):
take me on as a doctoral student, finish my PhD and came and
joined a company called I2Technologies, which again
exposed me to the world ofsoftware, which is how you solve
these problems.
And then from there the last 20years I spent about two to three
years there and then the last20 years have been a deed to
open Really in my mind, reallytrying to solve or at least

(04:17):
provide a technology platform tosolve that exact problem I
described, which is when you'rea brand and you own your product
and you own the distribution,you own the brand and how your
product is brought to market.
How do you actually rely onpartners to help you make your
products, to help you move yourproducts and help you sell your
products, if you want to thinkabout it that way.

(04:37):
So that's kind of been myjourney and that's how it kind
of stumbled on supply chain, soyou can say whether I was always
interested in it or not.
But somehow through thatjourney the bits and bytes got
added to get me to this pointwhere we're doing what we're
doing here at e2open.

And especially from the software perspective,
that you've been involved insort of these cloud-based
solutions with e2open andthey've been kind of at the
forefront, I think, of a lot ofdifferent, just the fact of that
simple approach beingcloud-based, being data-backed,
trying to break down some ofthese silos that still exist
today.
Before we get into the topic ofthe global supply chain of rice

(05:17):
, tell me a little bit aboute2open and how they've evolved
over the years since you firstjoined and the solutions that
they're providing.

Yeah.
So if you take a step backabout 23-ish years ago, e2open
was formed as a consortium.
A group of high-tech companiesled by IBM came together and
created a consortium and theproblem that they were trying to
solve was what happens when youactually sell your factories
and create this concept ofcontract manufacturing right and

(05:47):
IBM was at the peak of that anda lot of the high-tech
companies back then starteddoing that and what really
happened was, as a company, as abrand, you own the demand, you
own the customers, you own theproducts.
You're helping others help youdesign it, but at the end of the
day, it's you got your logo andyour reputation and you're the
one selling it right in the eyesof the end customer.

(06:09):
But when you actually losevisibility into the
manufacturing process, when youlose visibility into the shop
floor and what's happening, youhave no idea what materials are
coming in, you have no ideawhere your true constraints are.
Am I short on hard drive?
Am I short on ASICs that gointo my hard drive, because of
which I can't produce harddrives, because of which I can't
ship my thinkpads and mylaptops?

(06:29):
How was the problem that wewere kind of founded to solve?
And the idea really was thatevery company in that multi-tier
supply chain has to do thatdemand supply balancing, has to
manage, inventory, run theirshop floors and run their
operations.
But what is really missing ishow do these things, how do
these entities work together tobring products and services to

(06:51):
market right?
Companies, the brand owners,are successful not because
they're successful brand owners,they're successful because
their supply chains aresuccessful right.
So we were basically founded todo that and there were two very
important, three very importantprinciples that we had to do to
recognize that One was we couldnot be sitting inside
everybody's four walls trying tosolve this problem right, you

(07:14):
had to be above so that youcould orchestrate this
end-to-end supply chain.
So, naturally, you could notdeploy infrastructure inside you
know, a computer inside any oneof those entities.
So we basically bought compute,put it in a room and we started
hosting our own applications,and that was the birth of cloud,
even before there was cloud,right.
So that was, we were pioneersthere.

(07:35):
That was a critical ingredientfor us, because we were born in
the cloud is what we like to say, and you know, first 10 years
of our existence, all we wereconvincing our customers was
don't worry about it.
That is a viable way to do itright.
Nobody now thinks about ittwice, right?
So that was one fundamentalthing that we innovated on.
The second thing we innovated onwas recognizing the fact that

(07:57):
step one of orchestrating thatsupply chain is to provide
information on what is reallyhappening inside the four walls
of all these tiers in that noderight, or entities in that node.
So data was really importantand we recognized the fact that
we cannot prescribe a standardto get data.
We should be conforming towhatever data, whoever can
provide data in whatever format.
So we created this approachcalled come as you are in terms

(08:20):
of acquisition of data.
So we would not prescribe astandard.
Whatever format you can providethe data, however you can send
that data to us, we'll consumeit.
So we created a platform in thecloud that was network oriented
right, which was, if I connectthis partner once, whether
customer one is using it orcustomer two is using it, that
data flow can be reused rightand we would make sure that

(08:41):
there's privacy and securitythere.
So that was the second part,and we have, 23 years later, we
run, one of the largest networksaround supply chain, and it's
not only spans manufacturing.
It actually spans logistics, itspans global trade and it spans
the channel of our productsassault.
So that was the second veryimportant thing that we said
right at the onset it should beon the cloud and it should have

(09:01):
a network orientation for theplatform.
And then the third thing we veryquickly recognized is that when
you're solving these problems,it's not just about me bringing
data to open customer and thecustomer makes a decision and
tells everybody else what to do.
The whole reason why this thingwill work together is when
there's a collaborativeframework that extends the
business process outside thefour walls.

(09:21):
So when I detect a shortage, asa contract manufacturer, I want
to know where that shortage is.
I want to know from a brandwhat should I do about the
shortage.
But I also want to know from mysupplier how can they help me
deal with that shortage.
Can I propose an alternativepart?
Can I propose shipping it froman alternative factory?
Can I propose doing somethingdifferent?
And if it is truly constrained,then can I ask the brand to say

(09:44):
I'm on a constraint, which oneof your products should I
actually make?
Being able to do that in a verycollaborative fashion is really
how brands succeed, but, moreimportantly, how supply chains
succeed, which is the reason whybrands will succeed.
And that's really the missionthat we've looked at.
We started in the manufacturingside, that these three design
patterns that I talked aboutappear across the board.

(10:05):
Whether you're moving productsaround, you run into disruptions
.
Ship got stuck in the SoyuzCanal.
Okay, what do I do now?
How do I recover stuff that'salready stuck there?
How do I actually look foralternative modes of
transportation If I'm not ableto sell a particular product, or
a particular product has adefect?
How do I actually do a quickrecall from everywhere on the
channel Because I don't knowwhere it is?
My retailers and distributorsknow.

(10:25):
How do I pull that back?
Global trade, another greatexample.
I'm actually moving productsaround, but somebody's actually
transacting on my behalf and ifit gets stuck at a border, how
do I actually get it unstuck?
What kind of filings do I do?
What kind of additionaldecorations I need to submit so
that design pattern for us thatwe started in manufacturing
applies across the board.
And if you take one step backand think about the end-to-end

(10:47):
supply chain, that is what we'retrying to solve.
We basically say supply chainsdon't stop at departmental
boundaries, they don't stop atenterprise boundaries, as the
product is flowing, the data hasto flow, the decision-making
process has to flow and you haveto have a collaborative
framework for these people tocome together.
And that's really what we'vecreated the last 23 years being
able to create that networkedplatform that runs on the cloud,

(11:11):
that has the ability to bringeverybody on board, not just in
terms of data and transactionsand movements, but also people,
so that that entire group ofpeople can work together
virtually as one team,irrespective of what badge and
what employee they belong to.
That's the core concept thatwe've been able to create.

So really breaking down silos, really
introducing the concept of datamanagement collaboration from
every level, and then also doingit in the cloud and doing it
for more than 20 years, I wouldimagine that a lot you've done a
lot of explaining in educationto your customers over the last
couple of decades, I imagine.

Yeah, I think it is explaining, but I think it's
also a lot of it has to do withlearning as well.
So we are on the technologyside, so we're providing
solutions to real world problemsand in my role I'm running
products and strategy.
So for me, I don't wanna thinkabout, I know everything.
I think the true problems areactually on the ground.

(12:11):
So for me, every day is notjust about having a discussion
explaining what ETO Open does,but also understanding what ETO
Open should be doing.
What are the problems we needto solve?
What are the problems we thinkwe can solve but are not able to
solve?
Because when the solution hitsthe reality of the ground, it
breaks.
It breaks for reasons thatwe've not anticipated right.

(12:32):
So how do you go fix that?
How do you actually look at thereal world problem and start
looking at solving that?
So for me, 20 years has beenawesome because it's not only
about trying to put togethersomething that it seems to be
obvious If you think about itone step back, like why would it
not be this way?
But the reality of the world,it is not that way.
So it is actually movingtowards solving something that

(12:54):
is remarkable.
But for me it's also aboutlearning, like every new
customer that we talk to, everynew industry that we go after,
every new use case that weuncovering, even in the same
industry, in the same function,has a different nuance, and
knowing that actually, I think,helps us become better and helps
us serve our customers better.
So that's really what gets usgoing.

(13:14):
So to your point.
Yes, it's a lot of dialogue inmy mind, not just one way
explanation of what we do.

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visit spi3plcom.
Well, speaking of continuouslearning and then getting to the
ground level of what's going onin a lot of different supply
chain constraints and issuesgoing on all around the globe,
one of the bigger ones that hassurfaced over the last couple of
months is this rice ban fromIndia, the non-Basmati and I

(14:28):
know that I'm not saying thatright Basmati rice from the
region.
They are the number oneexporter of rice all over the
world.
This is a staple in householdsall over the world.
I was doing some research onhow far back the cultivation of
rice and it dates back over10,000 years originated in China
.
Since then, the supply chainhas evolved across various

(14:50):
civilizations and continents andit is the primary food source
for more than half of theworld's population, particularly
in the Asia region.
So I was hoping that you, withyour manufacturing background
and obviously extensiveexperience at Eat2Open, could
you explain a little bit aboutwhat exactly is going on and why
this ban needs to take place.

Yeah, so I think when we talk about rice, I look
at this as a prime example ofhow supply chains are so
interrelated, but, moreimportantly, they're also
dependent on some veryfundamental things that are
non-supply chain oriented, likein case of rice.
Why is this a problem right now?
It's a problem right nowbecause of weather patterns.
India anticipated that thisyear and for the last couple of

(15:35):
years, the rain that is neededto produce rice is not gonna be
enough in parts of India.
So what does a country likeIndia do?
It's one of the largestproducers of rice, but it's also
one of the largest exporters ofrice, and the reason why it can
export it is because theyproduce enough to feed the
population.
Right, and whatever is excessyou send outside.

(15:56):
And what has really happened inthis environment is, when the
rains are not, when you don'thave enough water because of
rains, you tend to produce asmuch as you can, and if you
can't produce as much as youproduced last year, guess what
you do?
You first feed your populationbefore you send anything out.
So India's done the same thingright Back in July, around the

(16:18):
20th or so, and towards the endof July it announced a ban
saying that there are certainkinds of rice which is staple to
a vast population in India isthey're not allowed to be
exported out, like some of thehigher varieties and more
expensive varieties were stillavailable out there, like the
vast mati varieties, is stillexportable.
Now what it has done is it'snot just India.

(16:40):
The bad drop of this is, youknow, last year Pakistan, which
is one of the top five producersof rice, had massive floods,
right.
So if you start thinking abouttheir export, rice exports are
pretty knocked off and thatwhole snowball effect has
happened because when you'reproducing grain, you're not
shipping what you producedyesterday.
What you're shipping out iswhat you produced, you know, a

(17:04):
year ago, two years ago, becauseeverybody creates the stockpile
of grain and stores it so thatit is available when you have
right.
These are long production times, the long distribution times,
and they have stockpiles, right.
Just like you have stockpile ofcorn, you have stockpile of
soybean.
So what happened a year ago,two years ago, three years ago,
in terms of weather patterns, onwhich you know production or
rice and, for that matter, anycrop, happens, you start seeing

(17:26):
the effect at some point in timein the future.
Now the reaction to that isimmediate because you wanna make
sure that you have enoughsupply in the short term, but
over a period of time when theconditions catch up, you know
production goes back to whateverits levels are and you know the
inventory and the storage andhow much ever reserves you have
starts to balance out most ofthese things for the most part.

(17:48):
So if you look at the realityof the world right now, there's
India.
Banning some of this stuff hasnot created immediate disruption
in the supply of rice.
Yes, it has gone down a bit,but it's not that all of a
sudden.
You know 10 million tons haveto be filled in just because
that's the shortage.
Now, over a period of time,you'll have to make up for it,
because now we are taking downour reserves.

(18:08):
Now what happens immediately isprices go up because you
anticipate demand and supplyimbalance, hording and some of
those things.
Exactly so.
When either hoarding happens oreven there is enough supply,
there is a reason for us to say,okay, you know what, maybe we
should bump up the price.
And that's the thing that we'veseen.
And it's not just rice, it'sany kind of commodity that goes

(18:30):
through this demand and supplyand balance, and that's kind of
what we've seen.
Now, the side effect of thisalso is, if you take a few steps
back, the two main staplesgrains are rice and wheat, and
wheat supply chain has beendisrupted because of the war in
Ukraine, and Ukraine used to beone of the largest exporters of
wheat.

(18:50):
Because it's not producingenough wheat and because it's
not able to whatever it has,it's not able to ship out,
there's been a decline inavailability of wheat.
So when you combine these twotogether wheat and rice all of a
sudden you start seeing theconnection that you think supply
chains are linear.
This is when the intersectionstarts happening.

(19:10):
At the end of the day, we'vegot to feed our families, and if
you can't feed them rice, whichis your staple you go look for
what's the alternative.
Okay, let's move to wheat.
And that's some of the dynamicthat always happens.
Now, that's on the demand side.
Now you look at the supply sideas well.
All of a sudden you thinkyou're a farmer that can grow
either rice or some other crop,because you have the right water

(19:33):
supplies and the right soil mixand everything.
And then you start seeing, hey,the price of rice is going up.
Maybe this year I should plantrice instead of, let's say,
soybean or corn.
And then that dynamic also getsinto the picture.
But all of a sudden now peoplethat were not producing rice are
beginning to produce rice.
So that's the.
It takes time for all thesethings to get to a steady state,

(19:53):
but over a period of time allthese things balance out,
because if it's more lucrativefor me to produce rice instead
of what I could produce, maybe Iswitch to rice for a couple of
seasons.
And when I switch to rice for acouple of seasons, I get supply
come from areas that were notproducing rice before and that
actually contributes to thesupply going down.
So all these are very dynamicsituations and we've seen this

(20:17):
happen in other parts of theworld with other crops, like
corn, like soybean, and we'veseen how the supply US used to
be the largest exporter of cornfor the longest period of time.
This year, for the first time,brazil took over.
Why?
It's not that you has producedless corn than last year.
Us actually produced more, butit didn't export enough because
a lot of the corn went intoother places.

(20:38):
So that dynamic, I think, is adynamic that's super important
and has always been happening.
So for me, the net result ofthis, if you think about it
purely from a supply chainperspective, is really the
realization that our supplychains are very dynamic.
You cannot just say I'm goingto build this based on X number
of units being imported or beingproduced or being consumed at

(20:59):
this thing.
There is always going to bethis volatility, and it's not
volatility, not just becauseyou're introducing your products
.
It's not just because you'rebringing in new capabilities or
you're changing the underlyingtechnology.
It is about non-supply chainevents, like weather, like
geopolitics, like tradeembargoes and trade wars and all
those things.
So when you start thinkingabout a supply chain design,

(21:20):
it's not just about how quicklyyou can move from point-to-point
view.
How quickly can you make it.
It is how do you react to allthese things with this kind of a
backdrop of things that youcan't control?
You know there's going to bedisruption, you just don't know
what kind of disruption and whenit's going to happen.
So resiliency is superimportant.
One of the things that welearned during the pandemic was
exactly this Like all of asudden, overnight, our demand

(21:42):
patterns completely shifted.
And when you shifted themupside down, we became from an
experiential economy going outto eat, traveling, enjoying our
social lives to being stuck inour homes and just focused on
how do we actually spend time athome, what kind of home
improvement projects we do, whatkind of backyard furniture we
buy, how we cook more at home.

(22:04):
And all of a sudden our demandpatterns changed and you saw the
impact of that on global supplychains.
Like completely upside down,bringing in more products from
the east to the west, whereconsumption was very high, and a
lot of raw materials from thewest did not go back to the east
because there was so much of ademand of containers coming from
east to west that it was easierfor some of these ocean liners

(22:28):
to send empty containers back.
So that dynamic also playedthrough the net things, since
the rice is a great example, Ithink, in my mind which plays
out this dynamic.
We don't think about rice as onething, but the supply chain is
so connected not just acrossdifferent commodities, but

(22:48):
they're connected across thewhole globe Like we cannot put
this connected supply chainworld back into a box and say,
okay, we'll just operate withinour borders.
So I think the next, if there'stopics like these, continue to
reiterate resiliency in oursupply chains.
Continue to reiterate that factthat you've got to prepare for
disruptions.
You've got to prepare for someamount, have some amount of

(23:09):
redundancy into the mix, but,more importantly, be very aware
of detecting some of thesechanges as quickly as you can,
because the people that candetect these changes as quickly
as they can and react to themare the ones that are going to
survive.
They're the ones that convertdisruptions into opportunities.
If you cannot, then you'regoing to be on a sliding scale
down.
If you can, then you canconvert this into an opportunity

(23:31):
and really think about supplychain as a point of
differentiation, as acompetitive weapon, rather than
something that you have to dealwith.

And so a few questions, because that was just
such an incredible answer, soright off the top of my head.
Why is it?
Why is basmati rice notaffected versus some of the
other types of rice?
And then, how are maybe some ofyour customers or maybe some
other solutions that you'reaware of?
How are they combating the banon all of the non basmati rice

(24:05):
versus other solutions?
Maybe you can export it toanother country, or I don't know
, there could be other ways thatexporters are trying to, or
importers are trying to, getaround this ban, or what kind of
options exist.
And why is it basmati riceaffected?

Yeah.
So if you look at the priceprofile of rice, they're a high
grade, high grade, long grainrice, rice which is basmati,
which is more expensive ascompared to some of the short
grain, parboiled, thicker grainsof rice, right, jasmine and all
those things.
So if you, if you start drawinga curve around what the

(24:42):
population can afford, what thehow much of that population is,
and the price points, you'llvery quickly realize that
basmati, if you think.
Look at the Indian populationas an example, where which,
since we talked about the ban,the demand for that short grain,
thicker rice is much, muchhigher as compared to basmati

(25:02):
right.
And if you look at theproduction, demand and supply,
again, supply is not thatconstrained, demand is not that
high.
So you can afford to exportthat and continue to keep the
trade going.
But the part that you want toprotect is the part that most of
the population, or a largesegment of the population, and
it needs, and that's where youput the ban to say, look, I want
to make sure my people are fedbefore actually think about

(25:24):
exporting.
So that's kind of the firstpart of your question, I think,
in terms of reacting to how ithappens.
I think a lot of this has to dowith the rest of the.
It's not that India is the onlyexporter rice.
There's a lot of othercountries that export rice and
when the price of rice will goup, I think there will be
there'll be a.
There'll be a interestingdynamic on certain countries

(25:46):
wanting to say do I actuallyneed to keep the same lower
reserves that I need to keep, oris there an opportunity for me
to step in and actually exportmore, fill that gap, make some
more money that I typically useto, because I'm not the one
exposed to those, let's say,weather patterns that are
preventing me from not beingable to produce rice.
So it's not that every part ofthe world is producing less rice

(26:10):
.
It's the certain parts of theworld that will produce more
rice in this environment andsome of the others will step up
and take that place.
And that's the dynamic on thesupply side.
Like the example I gave you,when prices go up, some of the
producers might say you know whyam I doing this?
Let me go produce the higherrevenue crop.
So that's the other change inthe supply dynamic.

(26:32):
I think the other thing also isgoing to be the demand itself
changing around a bit when youhave to buy more expensive rice
but there's cheaper other grainslike wheat, you might switch
over for a period of time untilit comes back.
Those are all dynamics thatwill naturally come in and play.
I think the one thing that wehave to always realize is that

(26:54):
the free market approachautomatically balances itself
out and, yes, in some countriesyou might have to put some
subsidies of.
Rice is the main source ofthings to actually make sure
that everybody is well fed.
But I think I look at it fromthat perspective and of course,
there'll be some optionalproducts that are produced by
rice that are not as critical.

(27:15):
You might be banned to put onthose like crispy flakes as an
example rice crispy flakes.
If it really comes to that,certain products might be priced
higher which has which haveused rice as an ingredient.
You might see a less supply ofthose, but I don't think that
the drop is that dramatic incountries like the US, because

(27:35):
US itself produces enough riceto actually step up and take
care of that gap.

And that was going to be my next question is
you know there's a lot ofbyproducts that are created from
the manufacturing process ofrice.
So, like bran, you know, I knowa lot of cattle, some of the
byproducts of rice.
You know beer is brewed with alot of the hops, the byproducts
of rice as well.
So are those different thingsaffected by this ban, or is it

(28:04):
just that those couple ofdifferent variations of rice?

So typically it's the process rice coming out of
India that is subject to thisban.
So I mean, what you're talkingabout is the byproducts, like
that happened during theprocessing of the rice, the
finished product that comes out,so that I think is still there
and that will continue.
Yes, it might see certainvariations around.
But to your example, let's saycattle feed, right, the

(28:28):
alternative cattle feed that youknow people can use, corn is a
great example.
I mean, when you switch overfrom a rice based stuff and rice
is actually truly constrainedand the prices go up, you know
people might switch to corn orother ways.
How interesting, and that's thepoint I was trying to get
across.
Right, it's not a.
Our supply chains are notlinear.

(28:48):
You can't trace, you know thisevent happens linearly.
Here's the effect these are sointertwined in terms of demand
and supply and price being avery important role to clear up
and bring the right balancebetween demand and supply.
And anytime where the demandsupply disruption is actually
taking us in the wrong directionand the you know the, I would

(29:10):
say the people that need helpare not getting the help that
they need, then that's whensubsidies and some government
protections would come in, likewhat India did, and I think
other governments would reactthe same way If they go through
the same constraint, like whywould you produce something that
is, you know, super high and ismore luxury oriented when

(29:32):
certain things are more basicthat the average population
can't have access to?
So we've seen that happen overand over again and I don't think
we've reached that point wherethat is going to happen.
But if it does, you know, thenatural system that we have in
place will take care of a lot ofthose things.

So the import and export of rice has it always
kind of followed, I guess, thesame pattern, the same
manufacturing processes,transportation processes.
Has it historically always kindof been, at least in the, you
know, the last couple of decades, has it been kind of the same?
And then this is the first kindof disturbance that has hit the

(30:07):
rice supply chain.
Try and understand thehistorical perspective.

You bring a very, very good question and point to
the table, right?
So a lot of these disruptionsand I've said this multiple
times it's not that our supplychains just started getting
disrupted.
Our disruptions were alwaysthere, like weather patterns
were constantly changing,monsons were moving in and out,
up and down all over India.
You look at Asia, china, allover the place, right, it's not

(30:34):
that we did not have thesedisruptions, it's just that we
did not hear about thesedisruptions the way we hear
about it now.
Right, and so that's one.
The second thing is, whendisruptions happened when we
were not so connected globally,these disruptions were fairly
local.
So if India produced rice onlyto serve its local population,
we would not hear about itenough.
But since India pretty startedproducing more and started

(30:56):
exporting it and other countriesstarted relying on India,
that's when you startedrealizing that.
Okay, I need to pay attention towhat's happening in India and
the increase in rice productionor any manufacturing capacity in
countries like India, china,parts of Southeast Asia, vietnam
all those countries has beengrowing.
It's on the growth part.
So when they're growing and theother countries rely on it,

(31:19):
anytime there's a disruption inthat growth, it actually
disrupts all the other placesthat are actually relying on it,
like we did not know aboutUkraine being the largest
producer of wheat until itactually got disrupted.
We did not know, like anaverage population around the
globe did not know India was thelargest exporter of rice until
it actually happened.
And when it happened, all of asudden we realized okay, what do
we do about it?

(31:39):
That disruption has beenhappening, with rice being the
source from India, or a periodof time.
Monsoons go in and out.
Same thing with Pakistan, orthat part of the world is not
relying on artificial irrigation.
It is actually relying on rainsnaturally to occur so that the
paddy fields can get flooded upduring the monsoon season and

(31:59):
you can start producing ricetowards the end of that season.
If that rain gets disrupted,for weather patterns changing
and we won't go into the wholediscussion around global warming
and climate change and all thatbut if that core set of
ingredients to produce ricechanges, then it doesn't matter
how effective your supply chainsare, it does not matter where

(32:22):
you're sourcing it from.
If you can't produce enough andyou rely on mother nature to
give you something that you needto produce, that there's very
little you can do about it.

Are there ways to use software, maybe the E2
platform?
Are there ways to notice thesekinds of disruptions before I
guess maybe everybody elsenotices it evolves into panic
buying?
Are there ways that companiescan predict this, that can kind
of plan for it in advance?
Or is it really just when thestuff hits the fan?

(32:52):
That's when you can startturning these problems into
solutions?
What does that sort of I guesswarning system look like?

if there is a warning system, no, I think this
is a great point.
I think there is enough warningsystems now in place.
In this day and age, we cantrack and predict weather with a
very high degree of accuracy,even if it is like two, three,
four months out.
The question really here is ifyou can predict it.
But if you ignore theprediction and wait for the

(33:23):
actual event to happen, thenyou're reacting to things.
That's exactly what we need insupply chains is when you're
connected in a decision-makingprocess and you forecast
something.
If you're predicting something,when you predict it, you also
look at the likelihood of thathappening and you start taking
corrective action even beforethat event happens.

(33:43):
That's really what we need.
In this particular case, weknew there were early
indications that monsoons aregoing to be weak.
There were early indicationslike there will be massive
flooding in Pakistan, but we didnot know the magnitude of that.
But we knew that it's going tobe problematic In India.
We definitely knew it's goingto be problematic because we

(34:06):
were predicting a weaker monsoonseason.
Now what did we do about it?
I think what we should havedone about it is if you take all
the stockpiles the globalstockpile of rice that exists
around the world, and then yousaid we're going to put it to
best use optimal use across allentities.
I'm pretty sure we would havebeen able to solve this problem

(34:26):
without anybody even realizingthere is a shortage, because
there is enough stuff, enoughinventory around the world.
I use rice as an example.
It's true across the board,whether you're feeding your
population or whether you'reactually bringing products to
market.
The challenge is then this isthe whole connectedness I keep
talking about Something happensin your supply chain and you

(34:47):
know it is happening, but youdon't tell others that are lying
in your supply chain thatsomething is happening.
Others have no idea you may bedoing something about it, but
others can actually help youfigure that out.
A good example of this is if ashipment from Shanghai to Long
Beach is running late.
Let's say you're shippingShanghai to let's use another

(35:08):
example of a supply chaindisruption that's happening
right now If you're shippingproduct from Shanghai to, let's
say, houston, you got to crossthe Panama Canal because that's
your shortest path.
Panama Canal is going throughits own set of challenges right
now because, again, lack ofrainfall is causing water levels
at the freshwater lake that isused to pump water into the

(35:28):
locks to raise the ships up sothey can cross the canal.
Right now, instead of 50 shipspassing a day, about 50 ships
passing a day, about 30-ish andless than 30 are passing, which
means capacity is going down.
If you're shipping from Shanghaito Long Beach and you know that
there's a prediction, you knownot just prediction.
There's a fact that not onlydid you predict the rainfall is

(35:51):
going to be less in that part ofthe world, in Panama, but you
also know that the throughputcrossing the Panama Canal is
going low, but you don't reactto it.
Why?
Because you're still assumingthat it's going to be the same
lead time to move from Shanghaito Houston and you're still
running your operation based onthat.
So, yes, you will have ashortage and you won't know how
to react to that shortage untilit's too late.

(36:14):
What do you do?
You know that your capacity iscoming down in terms of your
transportation needs.
You know that where the patternis going to not be cooperating,
there's no rains predicted inthe next few months to bring the
water levels up.
That's going to be a mode ofoperation for the next three,
four, five months.
What do you do?
You actually change how youbring products to Houston.
Maybe you look at moving fromShanghai to LA or Long Beach or

(36:38):
to Seattle and from there youuse a multi-mode transportation
road or rail to bring it over toHouston.
Now, unless you change yoursupply chain and you react to
those decisions, you willcontinue to predict oh yeah,
there's going to be problemsmoving from Chang'e to Houston.
But what do you do about it isreally the key, and in some
cases, like the world,government agencies around the

(37:01):
world do not have that luxurytoday for certain things, but in
smaller private enterprisesabsolutely do.
That's the nature of supplychain.
They can do it much faster thannational players.
But even there we still arebroken down by a silo
decision-making process.
My transportation department isoperating in a silo, my
manufacturing department isoperating in a silo, my

(37:22):
fulfillment department isoperating in a silo and
typically I don't talk.
These people don't talk to eachother, and that's the result of
which by which you're reactingto things when they've already
happened, not proactivelyfiguring out how to avoid these
situations.
It's like driving by lookinginto the radio mirror You've
already gone over the bump thatyou're seeing what bump it was,
and now you're reacting to it.

(37:43):
So I think the nature of thisproblem is how do you get
proactive?
Proactivness starts by gettingthe information, getting
visibility into what's going on,and then not just saying, oh, I
now have visibility, being ableto answer the question.
Okay, now that I see, what do Ido?
Answer the question?
Okay, so what?
And you act based on that.
So you see, you act and, mostimportant part, is you learn

(38:07):
from it.
Because if you keep seeing andacting, seeing and acting, but
you're not fundamentallychanging the root cause, like if
you don't recognize thatdisruptions are going to happen,
but you always see thedisruption early and act to it,
then you're still inefficient.
But if you realize actuallydisruptions are going to happen,
then you actually havealternate modes of
transportation ready, availableto you as an example.
So that's the nature of it isbeing able to see what's

(38:31):
happening, being able to predictit, being able to act on it.
But also learn from thatprocess and say what can we do
better?
How can we see even earlier,how can we act even earlier, so
that we can actually turn thesethings that we know are going to
happen into opportunities thatactually take my supply chains,
my entire supply chain not me,but my entire supply chain to a
whole different level, and sousing you know this rice example

(38:54):
that we've been talking aboutfor there for the show plus E2,
how, if I'm an E2 open customer,what am I looking at inside the
system?

You're probably looking at a variety of
different things with within thesystem, but how am I using your
software to solve that justpivotal problem of I'm?
You know, I know I need tosupply.
You know 12 differentrestaurants with rice.
You know weekly shipments.
How are you solving thatproblem using you know E2 open?

Yeah.
So it all starts up by okay, ifI have 10 places from where I
actually get rice right is ouralternate and disrupted.
The sooner I know about it, theearlier I can say, oh yeah,
okay, only five of them aredisrupted.
The sooner I know that I can goto the remaining five and say,
look, I need more from you guysfor the next six months or nine
months, right.

(39:42):
And the sooner I can go lockthat capacity right, the easier
it's going to be for me to beable to serve my customers right
, because if supply isconstrained, it's all about who
can lock that supply ahead oftime.
So if I'm able to do that allof a sudden now, I'm the only
game in town that is actuallybeing able to serve my customers
, and that's when I turn mydisruption potential disruption

(40:03):
into an opportunity I start.
At the very least, I have areputation that if I'm the one
selling rice, then you can relyon me, right.
That's at the very worst.
At the best case scenario, ifI'm actually being able to
source those rice better thananybody else, then actually I
can win market share because Ican be the only one game in town
that has actually figured outhow to actually deal with it,

(40:25):
and we use rice as a very simpleexample.
But think about components,think about products that rely
on thousands and thousands ofcomponents, like automotive.
If you are able to back duringthe pandemic, if you're a brand
owner that was able to actuallystill bring your cars into
market in spite of thesemiconductor shortage, the
amount of cars that you wouldhave sold when nobody else could

(40:46):
actually sell cars could havebeen phenomenal, right?
And those are the kind ofdisruptions.
Realizing that disruptions willcome, you don't know from where
they're coming.
But how do you actually beprepared for that the moment
that disruption happens?
I know what my choke points inmy supply chain are.
I know how do I actually veryquickly without my siloed
monthly decision-making process,weekly decision-making process

(41:09):
understand where the issue is,very quickly go down, solve that
issue in a manner that actuallygives me an advantage, not a
disadvantage, like I'm notsolving for that specific
problem, I'm actually solvingfor actually taking, converting
that into an opportunity.
That's that.
That's really, I think, thename of the game.
So our job as technologyproviders is to create a
platform that allows ourcustomers to go connect their

(41:32):
end-to-end supply chain right,not just how products are made
across multiple tiers, but whoare you relying on to move them?
Who are you relying on to doyour global trade and filings
and declarations, and who do yourely on to sell them?
When you're able to get thatacross those four we call them
ecosystems a few across allthose four and you're able to
make holistic decisions not getmy product there on time, but

(41:54):
maybe sometimes getting productthere late is good enough
because my demand is not thathigh and it's fine for me to
actually keep it delayed than toget it there on time.
Realize that my warehouse isfull, don't know where to store
it, so go across the street,rent a building.
So not only have I spent moneyexpediting that shipment, I also
spend more money storing ashipment of products that I did

(42:16):
not need.
So it's like a double-bammy.
So being able to look at thatholistically and make those
decisions, that's really the key.
So how do you convertdisruption into an opportunity
is really the name of the game.

Brilliantly said, because that was going to
be.
My final question related to thediscussion that we were talking
about here is how does thisapply to other commodities and
other types of shipments?
And it sounds like it's reallythe same approach about being
proactive, noticing thedisruptions and being able to
find the opportunities andhopefully get ahead and gain
some market share from yourcompetitors.

(42:48):
So I think that that is reallyfascinating on how you can
connect all of these differentdata points from all over the
globe and then be able to put itinto a cohesive plan and
hopefully have it be proactiveinstead of reactionary, like you
said, driving in the rearviewmirror.
Now I know we only have a fewminutes left with you, so I
wanted to kind of close out theshow with this new segment that

(43:11):
we're calling the relatableeight, which is eight questions
kind of rapid fire style on justmarketing and tech and how you
kind of think about sort of theoverall supply chain and
logistics industry.
So I will kick it off with thisfirst one and I guess we can
kind of get a hint of youranswer because you're on this
podcast right now.
But how do you think about yourmarketing when it comes to you

(43:32):
and E2 Open?

I think our marketing department is doing a
phenomenal job.
Supply chain, especially inthis day and age, is very
difficult to communicate what wedo, especially when we have
such a broad portfolio, and Ithink we have an A plus team
here and we're talking to one ofthe A plus podcasts here.

So the check is in the mail.
I'll make sure you get it.
Appreciate that Now.
Next question what is yourfavorite social media platform
and why?

So I'm not much on social media, but for me, I
think I find LinkedIn being verycritical for the kind of work
that we do, because I think itis related to not just
connecting people which is superimportant connecting experts,
but also, more importantly,sharing ideas and thoughts,
because of which we need thoseconnections.
Right, you can sit there inisolation and look at what we're

(44:23):
doing, but we are connected.
The sooner we recognize that,the better it is going to be for
us.

Yeah, couldn't agree more.
And that kind of speaks to theethos of E2 Open, of having
those open discussions in orderto solve a lot of complicated
problems.
All right, next question whatis your favorite SaaS tool that
you use every day?
Can't live without, but it'snot your own.

Not my own, okay.

So it can't be E2 Open.

So I think there are two or three that we find
very, very critical.
One is how we measure and keeptrack of what we call a product
backlog, which is what is itthat our customers and the
market are expecting us to do?
The second one is what systemsthat we use to keep track of
whether we're actually meetingthem or not, what my development

(45:08):
team is working on and whatthey're doing.
And I think the third, at theend of the day, becomes product
doesn't matter unless theircustomer is using it.
So how do we actually bringcustomers to the table?
So, crm we use Salesforce forthat, aha, which is what we use
to keep track of requirementsand customer engagement and what
their needs are, and our ownbacklog and what the market
needs are.
And then we use JIRA to keeptrack of what's happening on the

(45:31):
development side.

Oh, super interesting.
I haven't heard of a couple ofthose.
Okay, Next one favorite freightbusiness that isn't your own.

Favorite freight business.
It's very, very difficult toname names, but I can name a
segment.
I think that is very important.
I think, in the role that weplay, we have a very high degree
of respect for people that arejoining the dots, and I think
the freight forwarding businessis one of those.

(46:02):
So not only is it operatinginternationally, it's connecting
carriers on one side that ownthe assets on which freight
moves to the brand owners on theother side whose freight
they're moving around, but, moreimportantly, what we don't
recognize enough is the rolethat they play in crossing
borders and coordinating thatthing.
So that's a very fascinatingindustry for me.

(46:23):
I think that industry has wehave a lot to learn from that
industry from a technologystandpoint, but I think that
industry also has a lot oftechnology I would say runway to
improve and streamline it.
So for me it is fascinatingwhat they're able to do with
what they have and the promisethat they have to support our

(46:44):
global supply chains.
I look at supply chains reallynot being as a company asset or
as a national asset.
I think our supply chaininfrastructure has to be a
global asset and I thinkforwarding industry plays a very
important role in that.

Very well said.
I couldn't agree more that verywell said.
Okay, what's one task in yourcurrent job that you can't stand
doing?

I can't stand doing Whoa.
That's a very difficultquestion.
What I can't stand is whensomething so obvious, people
don't do it.
For me that is.
Oftentimes we ignore theobvious and focus on the not

(47:24):
obvious.
But the more difficult part.
I believe that our successcomes from first doing
everything that's obvious andthen moving on to the next set
of problems, because oftentimeswe ignore the obvious, which is
the basics, and we focus on theadvanced and we're building some
stuff on a foundation that'snot solid.

(47:45):
For me, I would say it's notabout what I can't tolerate,
it's really about what just getsme going.

Little things that are missing when the simple
solution can be the easiestpath of resistance.

Exactly.
Simplify is really what we haveto focus on.

We have a few more here Real quick.
If you didn't have to worryabout money, what would you do
for the rest of your life?

I would focus on trying to have everybody
understand that this world ofenvironment, supply chain, doing
business and social welfare orwhatever you want to call it
social responsibility is all one.
What we do in supply chain istry to bring products and
services to market.

(48:31):
Then, if our activity isactually going to be detrimental
to what we're doing for ourcustomers, we have a very myopic
view.
If we think about our immediateneeds and not think about what
we're doing to meet ourimmediate needs and what it is
going to be doing for the future, I think it is again going to
be very detrimental.
If I had everything that I hadand let's say if I had

(48:54):
everything that I wanted I wouldspend a lot more time talking
about that.

Absolutely.
It sounds like a magic wandquestion where you almost need
one in order to fix these big,complex problems.

I think you talked about the magic wand.
I look at some of the work thatwe do at ETO Open as at least a
step in that direction, becausewhat we are really saying is,
if you're able to do your workmore efficiently in the supply
chain world, if you're able toproduce what you really need not
produce because you have toproduce it, produce what is
really in demand and not wasteyour time in the middle

(49:30):
producing something that you'renot able to sell or sell
something that you are not ableto produce, you're just creating
more constraints.
If you're actually able tooperate within constraints and
really be able to shape yoursupply and understand your
demand better, we can produceless waste.
If you produce less waste andwe produce the right thing at
the right time, and if you don'texpedite just because we want
to expedite, because that's whatour KPI is I think there's a

(49:53):
lot more progress that we can do.
At the end of the day, I thinkthe true thing that I believe in
is, if you're not connected interms of a thought process and
don't ask the question whyyou're doing it, you oftentimes
continue to do what you're doing.
That, I think, is the reasonwhy we are across all these
things.
We've been burning coal becausethat's the easy way to do

(50:14):
things, that's the only way wedo things.
Have we ever thought about whatdoes it really mean and what
else can we do to actually getthe output that we need, get the
energy that we need?
I think that's the kind ofchange that we need.

I was thinking of the quote from a League of
their Own where the coach in themovie and he says he's talking
about baseball and softball andhe says the hard is what makes
it great, embracing thechallenge.
I think that kind of echoeswhat you were just talking about
there.
Let's do.
I'm going to skip this oneFavorite supply chain or
logistics fact.

(50:48):
I guess we could probably leanon the rice supply chain for
that one.

Yeah, I think my favorite fact is disruptions are
going to happen.
The question is how preparedare you for that?
At the end of the day, that'swhat I think suffocates,
summarizes what the world is.
Supply chain If forecast wasaccurate let's start there and
there was no disruption in yourforecast, everything would flow

(51:12):
smoothly.
You would know exactly what toproduce, who to sell it to, what
you need.
And then, if your logistics wasperfect, if your global trade
was perfect, if your sellingprocess was perfect everything
happens, but they're not perfect, and the sooner we realize that
, the sooner we embrace that andthe sooner we actually start
dealing with that, I thinkthat's the easier it's going to
be for us to actually react tothat and be proactive about it.

Pawan, this was a great interview, great
discussion, anything else thatyou know.
Where can folks follow you?
Follow, you know.
Check in with E2 Open.
We'll have some links in theshow notes, of course, but
anything lastly you want toshout out?

I think I just want to shout out to the supply
chain professionals around theworld it's not an easy job and I
think our job at E2 Open is toprovide technology to solve
these problems.
You know our processes, theproblems have not changed that
dramatically over the last, youknow, I would say a few decades.
They've become more complexbecause we are more global and I

(52:12):
think our job really from a andour processes were evolved.
What we're doing today wereevolved.
You know, 20, 30, 50 years ago,when technology was constrained
, we did not have enough compute, we did not have enough
connectivity, we did not havepeople that were savvy enough to
leverage some of thattechnology.
The world now is exactly in theopposite place.
Technology is ubiquitous.

(52:32):
There's connectivity, there'scompute, there's knowledge
across the board.
I think it's time for us.
My call to action is it's timefor us to change our business
processes to adopt thattechnology.
Whatever was a constraint froma technology standpoint is no
longer there.
What is a constraint right nowis the processes that were
constrained by technology, thathave to be unconstrained, that
have to be connected, and that'smy call out.
I think that's what I would say.

Incredible.
This was fascinating discussion.
Thank you so much for joiningus.
I will be sure to link to E2Open in the show notes, of
course, and your LinkedIn aswell.
Thank you so much for joiningthe show.
This was great.

Thank you very much .
I appreciate the opportunity.

I hope you enjoyed this episode of
Everything Is Logistics, apodcast for the thinkers in
freight, telling the storiesbehind how your favorite stuff
and people get from point A to B.
Subscribe to the show, sign upfor our newsletter and follow
our socials over ateverythingislogisticscom.
And in addition to the podcast,I also wanted to let y'all know
about another company I operate, and that's Digital Dispatch,

(53:34):
where we help you build a betterwebsite.
Now, a lot of the times, wehand this task of building a new
website or refreshing a currentone off to a co-worker's child,
a neighbor down the street or astranger around the world,
where you probably spend moretime explaining the freight
industry than it takes toactually build the dang website.
Well, that doesn't happen atDigital Dispatch.

(53:55):
We've been building onlinesince 2009, but we're also early
adopters of AI, automation andother website tactics that help
your company to be a centralplace to pull in all of your
social media posts, recruit newemployees and give potential
customers a glimpse into how youoperate your business.
Our new website builds start aslow as $1,500, along with

(54:17):
ongoing website management,maintenance and updates starting
at $90 a month, plus some bonus, freight marketing and sales
content similar to what you hearon the podcast.
You can watch a quick explainervideo over on DigitalDispatchio
.
Just check out the pricing pageonce you arrive and you can see
how we can build your digitalecosystem on a strong foundation

(54:39):
.
Until then, I hope you enjoyedthis episode.
I'll see you all real soon andgo Jags.

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Navigating Disruption in the Rice Supply Chain

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