June 11, 2024 • 41 mins
What if all companies worked toward creating a transparent, efficient, and ethical supply chain landscape?
In this episode, we welcome Peter Smith, a seasoned executive with a rich background working for major companies such as Carters, Party City, and VF Corporation. Joined by our hosts Logan Ensign and Joel Beal, we're diving deep into the evolving landscape of consumer brands and the retail market.
Peter shares his insights on how brands can better collaborate with retailer partners, on the declining dominance of large monolithic brands, the rise of lesser-known brands, and the significance of data transparency and collaboration across various departments and external partnerships. We'll explore the challenges that new brands face as they strive to sustain initial success and navigate a rapidly changing market, and discuss the transformation in data availability and its crucial role in supply chain management.
In this episode, you’ll learn about:
- How data transparency can improve collaboration across sales, marketing, and supply chain department
- The different strategies your business can adopt to sustain success in rapidly changing markets
- Practical applications of AI that have a profound impact on supply chain operations
Jump into the conversation:
00:00 Critical data areas: inventory and supply chain
09:39 Data-driven market analysis improves product performance
13:04 Supplier challenges in negotiating discounts transparently
18:47 Increased data communication and transparency between organizations
23:13 High-quality global manufacturing accessibility for startup brands
29:58 Advocating for data transparency within organizations
35:58 Leveraging machine learning for supply chain insights
39:05 Machine learning replicates human intuition for guessing
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
From Alloy AI.
This is Shelf Life.
Speaker 2 (00:19):
How can suppliers better collaborate with
retailers to drive sales?
What are some?
Speaker 1 (00:23):
of the impediments to data sharing within a company
and with external partners.
Speaker 2 (00:28):
What are the things you must know to be an effective
supply chain leader today?
Speaker 1 (00:33):
On every episode of Shelf Life.
We answer questions like theseand more, with the help of
leaders across the consumergoods industry.
Speaker 2 (00:41):
Today we're happy to welcome Peter Smith.
Peter was formerly ExecutiveVice President of Global Supply
Chain for children's clothingbrand Carter's and former Chief
Operating Officer at Party City.
During his 37-year career, hehas held leadership roles in
supply chain at PBH, london Fogand the VF Corporation.
I'm your co-host, joel Beal,ceo of Alloy AI.
Speaker 1 (01:03):
And I'm your co-host, Logan Ensign, Chief Customer
Officer at Alloy AI.
Speaker 2 (01:08):
We'll be back with Peter right after this.
Speaker 3 (01:13):
As a consumer brand, you connect with dozens of
external partners and internalsystems to get a complete
picture of your business.
Each one is different.
Alloy AI makes it easy toconnect data from retailers,
e-commerce, supply chainpartners and even your own ERP,
then easily surface insights todrive sales growth.
Every day, brands use Alloy AIto see POS trends, measure
(01:34):
promotion performance and makebetter replenishment decisions
with their retail partners.
That's why we're trusted by BIC, crayola, valvoline, melissa,
doug Bosch and many more.
Get a demo at alloyai today.
Speaker 2 (01:49):
All right, Peter, welcome.
We're so happy to have youtoday.
Speaker 4 (01:53):
Thank you very much for the opportunity to talk
about these interesting things.
Speaker 2 (01:57):
Well, you have a wealth of experience in many
topics that we're passionateabout, so very excited for this
conversation.
But before we kick things off,or as a first question, you know
you've had a career that hasspanned a lot of different
well-known companies, companiesthat many of us have worn or
used.
You know the products for, andI'd love to just have you, in
(02:21):
your own words, describe kind ofyour journey, of how you made
your way in the supply chain andgot to where you are today.
Speaker 4 (02:28):
Yeah, thank you.
It has been an interestingjourney in the apparel and
footwear space, and retail ingeneral has evolved pretty
dramatically.
From the start, when I went towork for PVH, I was a little bit
unconventional at the time inthat I went to work for one of
the largest wholesale shirtbrands in the world, but I
(02:49):
actually went to work in theretail half of the organization
or part of the organization.
It was a tiny speck at thattime but then later grew to a
thousand stores.
When I joined we had 30 stores,had 30 stores.
When I left we had 350 to 400stores, and all the consumer
(03:10):
brands apparel and footwearbrands that I have worked for in
the course of my career haveall embraced retail and then
later e-commerce.
So they've all becomeomni-channel consumer brands and
, frankly, the retail companiesthat we supplied the Macy's of
the world and such, they steppedup their game on the private
label side.
So the two worlds sort ofconverged and stepped on each
other's and became frenemies inthe space in pursuit of a share
(03:35):
of wallet.
So it's been quite interesting.
Speaker 1 (03:39):
Well, peter, one thing I've known you for a while
at this point and one of thethings I really appreciate about
you because we come from a datacompany is just how you think
about data, the importance ofdata and being so enthusiastic
about the role of data in supplychain and so excited to kind of
have this conversation andmaybe to kind of dive in on that
front.
What do you view as sort of themust have in piece of
(04:01):
information?
Supply chain leaders need to beable to do their jobs
effectively.
Speaker 4 (04:06):
So top of mind for me , I guess, are probably two
arenas of data.
One is internal data, allrelated to the supply and demand
of your inventory.
For every company out there,the single largest asset on
their books is the carriedinventory and as a supply chain
leader books is the carriedinventory and as a supply chain
(04:27):
leader operations leader youreally need to have a full line
of sight to everything that Icurrently own, everything that I
have on order.
What is its status in theacquisition and or manufacture,
the logistics or my distributionor at my retail, and what's the
status of all that relative towhat my future order book is and
what I have to meet that demand?
(04:48):
That's one arena, just becausethe dollars are so large and,
with today's interest rates,costly to carry all that
inventory.
The other arena of data that iscritical is what's going on in
my supply chain.
Is the manufacturing processand or the sourcing process.
Are those things happening ontime?
Did those containers get on thevessel on time?
(05:10):
Are they going to dock andunload the vessels on time, or
is the truck going to comeacross the country on time?
What capacity am I running inmy distribution centers?
What's my turn time in thedistribution center or cost per
unit in the distribution center.
What's my click to consumertime?
What?
A consumer places an order onan e-com site and she typically
(05:31):
clicks the mouse saying, boom,I've now ordered.
From that click to the timethat we knock on the door and
leave the package at the frontdoor, that C2C timing.
There are a ton of KPIs in that, but they probably fall into
those two big arenas.
Speaker 1 (05:47):
In both those domains .
Given sort of your experience30 plus years in the industry
has your line of sight changedradically over time?
And I am curious just sort ofthat transparency, visibility,
pressure on data, how that sortof evolved through your career.
Is this different now todaythan 15, 20, 30 years ago in the
(06:08):
space?
Speaker 4 (06:10):
So, logan, it is radically different.
I'm old enough to say that theworld was barely in spreadsheets
when I started my career.
Thank God it wasn't in paper,but it has progressed
dramatically, both in the depthand breadth of the data that is
available and the sources thatwe can now ingest into our
(06:30):
models.
It's a completely differentlandscape and playing field than
it was at the beginning of mycareer, all to the betterment of
us having ultimately, the rightproduct in the right place at
the right moment in order tofulfill the demand again,
whether it's directly from aconsumer or one of our
significant retail partners.
Speaker 2 (06:51):
And Peter has the biggest transformation over
those past decades.
Has that really been thetakeoff of e-commerce or have
there been other significantevents that you'd say, hey,
these really were catalysts forchanging kind of the data that
we're collecting, the way weneed to work?
Speaker 4 (07:09):
Yeah, certainly modern technology has had a lot
to do with the ability ofcorporations to share data.
So the availability of point ofsale data, so from a wholesale
supplier perspective, the datathat is available in the
partnerships with significantretailers, that's an explosion
of data.
You know e-com and all the datathat we get directly as a brand
(07:31):
operating an e-com site andhaving a direct relationship
with customers.
That's an explosion of data andfor better or for worse, maybe
a tiny silver lining to whathappened with COVID is that the
world realized how bad mostorganizations were in terms of
granular knowledge as to whereis my production, what's going
(07:53):
on, did it get on a ship, did itget off a ship, what's going on
at the port and all the rest.
That was a catalyst to anexplosion of data as well.
Speaker 2 (08:02):
Yeah, no, covid is a great example, you're right, I
think, just exposing they'vealways been messy, but it kind
of exposing a little more,probably, to the world of hey,
supply chains, while they'reincredible and how they operate
have been for a long timethere's they're a lot less
automated and maybe intelligentthan probably sometimes we think
(08:23):
.
So you mentioned earlier this issomething we think a lot about
of, I guess, merging of you'vegot your brands, consumer brands
where you've traditionallyworked, and then you've got the
retailers, and those lines havebecome more and more blurry over
time, as you said, as brandshave said, hey, I'm going to
first of all, maybe open my ownstores and then, obviously now
(08:44):
most of them are going to selldirect to consumer, at least on
their own website, and you alsohave retailers that are
introducing private label andsaying, hey, we can get higher
margins, you know, selling ourown brands.
Let's talk about how that worksand kind of relate it to this
data transparency and datasharing.
So it seems as though there'sbeen a long-term trend of people
(09:06):
at least understanding thevalue of sharing more data with
their partners.
On the flip side, they're alsoprobably competing more with
those same partners than theyever have before, and so we'd
love to hear your thoughts onhow these dynamics are playing
out.
What are kind of the incentivesfor people to share more
(09:29):
information and the impedimentsas well?
Speaker 4 (09:34):
Sure Well, having been an econ major in college, I
love the notion of a freemarket where knowledge as to the
market dynamics, who's winning,who's losing, it's all up on
the big scoreboard and that wecan all see it and that really
then just invokes game on kindof effort, like I'm going to win
(09:55):
this game, and all that data istelling me how I'm doing in the
performance of that.
So the more data I can getwhether it's data in contrast to
a store's own private label,whatever the data I think that's
rich and I think that'sbeneficial because it allows me
to modify my game, to test,learn and adjust as to how we go
(10:17):
to market as a branded productscompany in the marketplace to
see what resonates with theconsumer.
That is dramatically better.
Having data that tells youwhat's going on with your
product and your competitors inthe marketplace is so much
better than earlier days whereyou wandered and you wondered
about well, why are things notselling?
(10:38):
Did we choose the wrong colorpalette this year?
What's the other brand doing?
I mean, gone are the days, Ihope, of the wander and wonder
as to why things aren't selling,because when they're selling
really well, you don't thinkabout it, you just sell it right
.
So, when sales slow down, datais absolutely the key to
unlocking what the adjustment isthat we, as a company supplying
(11:00):
consumers what do we need to doto adjust in order to do better
?
Speaker 1 (11:06):
It sounds very mutually beneficial.
Hey, let's all understandwhat's going on so we can
evaluate winners, losers, how wecan maximize sell-through and
be collaborating effectively.
Are there times you've seen ormaybe you could unpack a little
bit more why we haven't reachedthat utopia right and maybe some
of those impediments, or maybewhat it doesn't make sense to be
(11:27):
fully transparent andcollaborative?
Speaker 4 (11:30):
Sure, I mean, at the end of the day, it is a
competitive marketplace.
There is a long and rich historyin consumer sales of people
essentially wanting your dataand not offering you their data
back, sort of the one-way streetlike oh sure, I'd love to know
what's going on and I'd love tohave your insights from your
data.
But I don't necessarily want totell you about how my private
(11:51):
label brand is doing or how yourcompetitors are doing, and I
think people have tried it's nota pursuit that I would endorse,
but tried to throttle forwardand pull back the flow of data,
thinking that they could craftan advantage through that.
To me, that's just a distortionof the marketplace by mucking
(12:12):
around with the data in order togain a short-term advantage.
I'd rather have that open andtransparent playing field where
we can all see it and we live ordie by the virtues of decisions
we made, versus someone tiltingthe data one way or another.
But it certainly goes on a lot.
Even today, there are partnersin that equation that don't want
(12:34):
to share some of their databecause they think they will
lose a bit of the competitiveadvantage that they perceive
that they have.
I happen to disagree with them,but that certainly goes on.
Speaker 2 (12:46):
So, Peter, can you elaborate why?
I mean, you've already talkedabout it at a high level, but
why wouldn't somebody share data?
Like what's a time where itwould say, oh, it's in my best
interest to keep this for myself?
Speaker 4 (12:57):
where it would say oh , it's in my best interest to
keep this for myself.
Sure, I sat in enough meetingsas a supplier and the company
you're supplying to where thebuyer is saying well, your
sell-throughs really aren'tgreat and I think we should talk
about an additional discountand all the rest.
And what I really would like topull up and said well, my
sell-through data from the pointof sale information you show is
that we're quite robust.
I'd be surprised and interestedto hear that our competitors
(13:19):
are actually doing better and so, frankly, by sharing that
sell-through data, they do losesome of the cloak and dagger
techniques of days gone by inorder to get a discount on the
next order, because that data isthe data.
Some of the gamesmanship thatgoes on.
I mean, I'm sure have any of usever bought an automobile?
(13:39):
And there are vendors out thereselling automobiles that it's
one price and this is our priceand there's no gamesmanship at
all.
And there are others that youneed to dedicate five and six
hours at the dealership becausethe dealership representative
needs to go talk to theirmanager.
They're having a cigarette outback.
There's no talk, it's just acigarette out back.
There's no talk, it's just agame in order to get to what
(14:01):
they want.
I'm an advocate of transparencyand a straight up model.
I think it leads to moreefficient decision making and a
better outcome in the long runfor all of us.
Speaker 1 (14:14):
A lot of the conversation has been focused
more on retailers giving moreinformation to their suppliers
so that you can have really goodpartnerships and good strategic
conversations.
I'm curious, on the other sideof the coin you'd mentioned this
really benefits from abi-directional.
Hey, I'll show you myinformation and data and be open
and transparent, and you'll betransparent and we're all going
(14:36):
to benefit together.
Could you speak a little bitmore to on the supplier side how
you can be more transparentmaybe some blockers there and
how that ultimately can stillbenefit both parties?
Speaker 4 (14:50):
Sure, logan, I guess I come from the school where I
do believe in bi-directionaldata transparency and I would
like to say to all of my retailpartners, as a wholesaler, most
of my career, I'd like to say toall of them I'd like to give
you a line of sight to theinventory that I own that is
uncommitted, and so in ourweekly review, typical of what's
(15:13):
hot and what's not, if you'reselling through something at a
rate more than we jointlyforecasted or more than you
anticipated, I'd like you tohave a line of sight to what
might be sitting in mydistribution center, because the
more that we can docooperatively to get merchandise
where it needs to be and whereit is selling, that's the
(15:33):
benefit to the retail partnerand to me both.
I have very few reluctances orinhibitions about sharing the
data that we have.
I do think there are probablysome exceptions.
Frankly, during COVID, as weall remember, there was a lovely
container ship, the Evergreen,that was stuck in the Suez Canal
(15:53):
and, frankly, it's superuncomfortable from a supplier
perspective that when you hearabout something like that comes
across your desk or you wake upin the morning and there's an
email saying, oh my God, thishas happened and then you spend
maybe a couple of hours tryingto figure out OK, what do we
have on that vessel?
Which of the retailers thatwe're servicing, is that their
(16:15):
product tied up?
Is that their product tied up?
And then, frankly, you have toengage cross-functionally in
your organization to say to yoursales organization retailer A
and B has goods on that.
We cannot tell them when thosegoods are going to actually
arrive.
Now we had a forecasted date.
We know that forecasted date isno longer valid but frankly,
(16:36):
it's a dynamic situation and wedon't know when those goods are
going to be in.
I've been in conversations withan organization where the sales
organization doesn't want tocommunicate that forward to the
retailer because they're franklyconcerned that the retailer
wants to turn around.
It might turn around and cancelthose units and then that's
excess inventory for us andthat's a fear that might keep us
(17:01):
from being transparent with theretailer.
I think that requires across-functional partnership
within your own organization.
It probably also requires anassessment of what your
relationship with the party thatyou're supplying to, again a
major retailer.
In that instance we had producton that vessel from two of the
(17:21):
largest retailers in the countryand, frankly, one of them was
sympathetic and understanding ofwhat was going on in the world,
maybe because they might'vealso had product on that same
vessel.
They were understanding of itand they were going to work with
us within a reasonable bounds.
Another retailer had prettymuch like I don't care, go pound
(17:42):
salt.
If you are a day late I willput you in the doghouse and
you'll be there and I'll punishyou financially.
Start taking discounts on adaily basis off of what I'm
going to pay you for thatproduct.
I would have to defer to mycolleagues in sales as to how to
handle each of those situations.
They own those relationshipsfirsthand.
They're going to have to make ajudgment call as to what to
(18:04):
communicate when, but I wouldhope that that's far more the
exception than the rule.
Speaker 2 (18:11):
Peter, have you seen a shift in that desire to be
collaborative versus punitiveover time?
Clearly it's going to vary byorganization, probably person.
Within those organizations youcan get somebody that's more
understanding than another.
But have you seen over thedecades just a greater desire
not just to share informationbut then to jointly problem
(18:34):
solve?
Or is it okay, we're sharing alittle bit more data, but at the
end of the day it still can bepretty tense?
Speaker 4 (18:42):
I have seen, joel, to your question.
I have seen an improvement inthe lines of communications and
the number of touch pointsbetween organizations over the
years, as we have had tocollaborate on more issues than
just what's the product you'reselling me and what price is it
at and what's the availability.
It's a relationship where theconsumer, the end consumer,
(19:04):
wants to know about yoursustainability efforts to try to
minimize waste in the supplychain.
You know that is an aspect oftheir decision-making criteria,
so as a supplier to a retailer,we need to communicate that
forward.
When situations arise, like inChina with the Uyghur forced
labor, consumers want to knowabout that, and then maybe
(19:26):
rightfully so in the world thatwe live in.
So the number of points ofcontact between wholesale,
supplier and retailercircumstances have forced those
to increase.
So typically, organizations aretalking to each other on a
multitude of levels and the bestis the relationship can be at a
top to top.
The CEOs decide exactly howthey want to handle each of
(19:47):
these situations.
There certainly are more pointsof contact, and I think it's
healthy for both organizationsto have greater transparency and
understanding as to how theyeach do that.
I do offer that answer from theperspective of.
I've had the good fortune ofworking for leading national
brands and, to some extent, thatbar being raised that not only
(20:09):
do you have to supply me greatproduct at a great price, with
great availability, I want toknow that you're doing, you're
manufacturing your product andrunning your operation in a
sustainable way and in a legalway, as with regards to foreign
corruption practices and withlabor practices around the world
.
The raising of that bar knocksout a lot of players, that
(20:31):
suppliers that I don't want tohave to compete against with
those less reputable operators.
I want the bar.
Personally, I want the bar tobe raised high because the
brands like the North Face on mychest here.
I know they're going to do theright thing and I think that
differentiates and separates usin the marketplace to drive
behaviors that we can all beproud of.
(20:53):
And when we talk to our kidsabout the way that the company
that I work for operates, we cando that with pride and
transparency rather than a shadyoperation or a cloak and dagger
.
Speaker 2 (21:06):
I love that answer and that's really interesting to
me.
I hadn't thought as much aboutthe sustainability piece.
And you're right.
Probably you both haveconsumers that are putting
pressure to say I want to makesure these supply chains are
ethical, and obviously someregulatory elements as well, and
forces supply chains to be morecollaborative and hopefully
that bleeds over into otherthings as well of just hey,
(21:27):
let's operate more efficientlyand more ethically and more
responsibly.
Speaker 4 (21:32):
I've always been open when a retailer has come and
said hey, let's have atop-to-top in the supply chain
and if there are things that weare doing that are costing you,
as a supplier, money and don'tadd value to what you're doing,
let's collaboratively worktogether to drive costs out not
just your cost or my cost, butsystemically let's drive costs
(21:53):
out.
Or, on maybe a more upliftingnote, do you have any production
in this hemisphere or do youhave any made in the USA
capability?
Because we'd like to promotethat and we'd like to partner
with you.
We know the product's gonnacome out of the factory a little
bit more expensive becausewages in this side of the world
are just more expensive, butlet's collaborate and see if we
(22:14):
can bring some of those jobs andsome of that production home
Again.
Another aspect of where a tightand productive relationship
with a retailer from awholesaler perspective can be a
win-win relationship with aretailer from a wholesaler
perspective can be a win-win.
Speaker 2 (22:30):
So let me drill in a little bit here.
I know this is a bit off script, but you mentioned how you know
you've worked for obviouslyleading kind of global brands
right that have a lot ofresources and the ability to do
this, and these higher barriersactually kind of help to
insulate you against competition, right.
So do you think that's going tobe more challenging then to
start a new brand because thereare more barriers?
(22:52):
And then I'm also wonderingabout all of these Chinese
brands in particular, butforeign brands that are trying
to break into the US market.
Do you see that as being a bigbarrier for them if they're not
going to have the weight, as yousaid, of VF Corporation, for
example, to be able to do all ofthese things?
Speaker 4 (23:09):
The raised bar of operational practices that are
now demanded of companies byconsumers and by the regulatory
environment are both a blessingand a burden.
The startup company has themost hospitable access to high
quality product overseas thatthey've ever had before, and
(23:30):
once upon a time the sort ofrunning joke of private label
suppliers was all they needed isa fax machine and a contact in
China.
The reality is, though, todaythat, just through email
correspondence and trading backand forth, there are very, very
high quality manufacturersaround the world.
If you're a startup brand andyou want to produce a product,
(23:53):
the factories you're likelygoing to take them to require
dramatically less educationabout how to make a world-class
product.
Frankly, your factory might besaying we have a few design
changes that we think, based onwho else we make for that, this
would make the product superior.
And all the factories you knowyou're going to ask about their
environmental footprint andtheir corporate social
(24:15):
responsibility stuff.
So, to some extent, there'snever been an easier or more
accessible time to be a startupbrand and you get to write all
of your standard operatingprocedure about sustainability,
workplace issues and such.
You get to write all that,whereas a large, entrenched
organization might have to undosome of the practices and or
(24:39):
just moving things and changingthings.
In a large, complexorganization that inertia is
hard to change or hard to getdistance on, and to some extent
it's sort of nice to start withthe clean sheet for the startup
brands, because they'll write itonce and they'll do it in the
moderate tone, as opposed to.
Some larger and moreestablished companies might have
(25:01):
to unwind some of the pastpractices that they've operated
with.
Speaker 1 (25:13):
So I'm hearing hey, although it might seem like
these are high barriers to entry, the reality is those best
practices are quite accessibleby smaller brands and sort of
across the board improvementsare being seen rather than just
you know, oh, this is a highbarrier to entry and impossible
to kind of go compete.
Speaker 4 (25:27):
I'd say there's probably never been a more
accessible time to be a startupbrand and, right out of the gate
, produce high quality footwearand apparel and get it into
consumers' hands than there istoday.
And whether that's a reflectionof the world that has shrunk,
or the technology that we allhave access to, or, just,
frankly, the sophistication ofoffshore production and all the
(25:50):
rest, there's just never been amore conducive time for the
startup brands to get themselvesinto business.
Speaker 2 (25:57):
So, peter, I know, with maybe the exception of
Party City, most of your careerhas been in apparel and footwear
.
Where do you see the industrygoing then been?
Speaker 4 (26:06):
in apparel and footwear.
Where do you see the industrygoing then?
I think it's going to be harderand harder for a large
monolithic brand to hold on tothe kind of market share that
they might've had in days goneby.
Frankly, a long time ago, whenI was a kid going to high school
, you walked into your localArmy Navy store and there were
(26:27):
probably two, maybe three brandsof jeans.
We all know them, they're namedbrands.
They just don't have the marketshare that they had back in
that day.
And, frankly, neither doesGeneral Motors or Ford Motor
Company.
And people in California arebuying automobiles from a
company called VinFast.
I see that trend continuing,where more and more of the share
(26:51):
of wallet is going to come awayfrom a well-known brand name
and people will experiment withbrands they've never heard but
they've read about or someonereferred them to or tried.
So I think it is a golden ageof brand development and brand
creation, but many of them willget to 80, 90, 100 million and
(27:15):
sort of plateau at that point.
But there's going to be a muchlarger cadre, in my humble
opinion, of that size brands andthe large monoliths that we
might've grown up with will havea hard time holding share.
Speaker 2 (27:29):
Yeah, I think the plateau and it certainly feels
like the way that it's playingout you're closer to it than I
am but that plateau that many ofthese new brands hit, where
they get that kind of explosiveearly growth, they can come out
with a great product and spend abunch of money on online
advertising and those CACs startto get higher, they hit kind of
(27:52):
a ceiling.
And it's interesting just howyou have these conglomerates,
you know, are they going to buyup those brands and is that
going to be the way it works?
They can allow, basicallyoutsource their product
development.
Hey, go try things in themarket, We'll buy you up as we
see success.
But feels like it's been hardfor a lot of brands to kind of
really break out beyond that.
Speaker 4 (28:12):
Yeah, I mean frankly, allbirds is probably the poster
child of what you justdescribed.
It's amazing Just anotherreflection of the time we live
in the amount of time that ittakes from a brand splashing
into the marketplace becomingthe oh my God, I have to have
that product running to the moonand the men and women of that
(28:33):
organization working their tailsoff in order to get production
to beat that demand.
And then they wake up onemorning and they're no longer
the favorite thing on Twitterany longer.
The rise and fall happens in aremarkably short amount of time,
unlike it did decades ago.
That it's just really tough andknowing.
(28:53):
Have we hit the peak or isthere yet another peak beyond?
It is almost impossible, Ithink, for anyone to tell.
Speaker 2 (29:00):
I think there's a lot of venture capital investors
that have learned this lessonover the last couple of years,
looking at that exponentialgrowth curve and, as you said,
not often realizing they wereright at the top.
It's just a different type ofmarket.
Getting back a little bit todata sharing, so we talked about
sharing between the suppliersand retailers and some of the
(29:22):
challenges there, theimpediments and also benefits.
Obviously, what aboutinternally within an
organization?
So you've been in a lot of bigcompanies.
They're complicated, lots ofdifferent functions, lots of
different incentives.
We'd love to hear what you'veseen within organizations that
are really good at sharing, saybetween sales and supply chain
(29:42):
right or marketing and finance,where that's gone well and where
there can also be challengeswith even sharing the data
within an organization itself.
Speaker 4 (29:52):
Sure, and similar to a number of the conversations we
have had, there's been a prettysignificant evolution even
within.
Whatever your favorite tool isand get a very, very wide
(30:19):
understanding about what's goingon in an organization,
everywhere from future sales andforecasting, through what's
going on with this week'sdelivery or even beyond that, to
what's going on at point ofsale with our retail partners.
I'm an advocate of that.
I think we all spend atremendous amount of time in the
places we work and oftentimeswe're emotionally tied to the
(30:42):
success or failure of ouremployer, and I think that makes
it incumbent upon those of usthat have the opportunity to be
amongst leadership teams to beas transparent as we possibly
can about what's going on withthe organization the good, the
bad and the ugly because overtime you're going to live
through all of it.
So I'm an advocate of datatransparency within the four
(31:05):
walls of an organization,because we're all adults and we
all have decisions to make, andan informed decision is better
than anything less than fullyinformed.
Speaker 1 (31:15):
Maybe if you're earlier in this process.
What steps have you been ableto take to build that trust,
whether it's between supplychain and sales or more
generally?
If some of our listeners are inan environment where maybe
there isn't that level oftransparency and collaboration,
how do you foster that and howdo you build those bridges
internally?
Speaker 4 (31:36):
The old adage never eat lunch alone applies to this,
logan, in that it has alwaysserved me well to sort of reach
across the aisle, you know ifyou're manufacturing and
sourcing and all the rest.
Reach across the aisle to yourfriends in marketing and sales
business development.
Get to know them on a personallevel and try to walk in their
(31:59):
shoes and understand thechallenges they're up against.
Because, although I might thinklike Ed Carters, I might think
producing 600 million pieces ofbaby clothing every year and
getting it to an ultimateconsumer is a magical feat.
The men and women that run thesales and organization and
business development or run thee-com have their own challenges
(32:22):
and I guess I've just rarely metsomeone that given an
opportunity to have lunch or acup of coffee and just say, hey,
what are the three or fourthings that are your greatest
challenges?
Oftentimes, as they describetheir challenges, there are
nuggets in that that in mysupply chain I can influence and
maybe improve, and I think ifyou know the sincerity that I
(32:45):
come to that interaction with, Ithink they get it.
I'm actually, and I've said toa lot of sales and marketing
leaders, my job is to make you awild success in having the
right product in the right placeat the right time.
Everything that I can do tofacilitate that and make that
happen is to the good of both ofus.
I hope it's not overly corny,but a bit of the three
(33:07):
musketeers all for one and onefor all.
We're all in this together.
We all work for the brain.
Let me help you, you help me,and I think one plus one can be
three or four.
At least that has been myapproach to the role in the job
and the vast majority of timesthat has served the company and
the individuals.
Speaker 2 (33:28):
well, it struck me, peter, as you were talking, how
much of the lessons internallycan also be used externally,
with third parties.
We're talking about, obviously,trust.
And hey, does somebody feellike me as a partner, whether
it's different teams within anorganization or you working with
a retailer?
Am I there to help you solve aproblem or am I there to get you
(33:52):
in trouble or to blame you forsomething?
So there's clearly someuniversal truths.
I also, as you were speaking,talking about reaching across
the aisle, I wanted to startchanting.
You know, peter Smith, 2024.
I think we can use a little bitof that more in general.
So that was great.
Okay, we're going to end withone other thing, just because
(34:13):
it's top of mind.
So I recently got back from theGartner Supply Chain Symposium.
The talk of the conference,surprise, surprise, was all
about AI, and I know we'vetalked a little bit about this,
peter, but AI is everywhereright now.
There's a lot of marketinggoing in explaining what it can
(34:34):
do and how it's going to changethe world.
So I'd love to get yourthoughts as someone who has seen
a lot of marketing going inexplaining, you know, what it
can do and how it's going tochange the world, so I'd love to
get your thoughts, as someonewho has seen a lot of evolution
and supply chains over the yearson, practically speaking, like
what is the state of AI andsupply chain right now?
What are you skeptical of andwhat are you excited about?
Speaker 4 (34:53):
So when I engage in a conversation about AI, I just
assume that we're talking aboutwe've discussed.
We do live in an era wherethere is a mushroom cloud of
(35:22):
data available to us.
No organization can get throughall that data.
I mean a party city, 700 retailstores, 20,000 SKUs per store.
Every one of those geographiesand store locations are unique.
One of them is sitting in thebackyard of Notre Dame and one
of them is sitting in thebackyard of the University of
(35:44):
Alabama.
You're going to guess that theysell more crimson and then more
gold in South Bend, indiana,and more crimson color at the
University of Alabama.
Just to those kinds of things,with all the explosion of data.
The only way you can eitherhave an army of Alabama just to
those kinds of things, with allthe explosion of data.
The only way you can eitherhave an army of individuals,
which is not economic, or youcan employ the compute power
(36:04):
that is now available to us andlet the machine grind through it
all and see things that none ofus, or certainly not me the
pattern recognition, one of thebenefits that the ML tools and
the AI engines can bring.
It will see things and itshould, if used properly, bring
those to your attention, bubblethem up to the top and present
(36:28):
the human with the opportunityto make a decision to do
something differently next year,so that you know.
Simple example again, alabama,let's find out what the
homecoming weekend is.
It probably moves around on thecalendar a little bit, but
again, the ML tool will see thatand it should bring it to your
attention.
I get that the greatest merchantminds in the world have always
(36:50):
internalized all those thingsand distilled them down and then
came up with the way to get theright product in the right
place.
But not everybody is MickeyDrexler and have his mind and so
, frankly, the compute poweravailable to us allows everyone
to raise their game.
As to what can you see in allthat data?
Where are the patterns?
(37:11):
Where's the insight?
Where's the early warningindicator that is coming from it
?
To me, that is the benefit ofthe compute power again targeted
towards ML or AI that isavailable to the supply chain
world Folks in marketing andproduct.
They probably have more of anopportunity to really tap in to
the AI side of it.
(37:32):
They're really creative andinteresting.
You know, write me a productdescription or help me combine
these three attributes of aproduct and a new product.
The AI might be more tailoredto the front end of the business
.
The ML side is we're in nascentdays of leveraging all of the
data that we now have at ourfingertips to benefit that
(37:54):
on-time, in-full requirementthat we have with the retailers
that we operate with.
There will be an explosionleveraging all of that data to
make sharper, faster, morecorrect answers.
Speaker 2 (38:10):
Thank you for that answer and, as you mentioned,
there's a big umbrella thatfalls under AI a lot of
different pieces and what'sgoing to be most useful in some
areas, whether it's machinelearning and using that more in
forecasting models.
Another place is going to bemore generative AI, so it's
going to be it's alreadyfascinating and it'll be
(38:31):
interesting over the comingyears.
What I could tell being atGartner was everybody's thinking
about AI Everyone's earlier, orat least the vast majority of
companies than I think theywould like to be, and so they
want to appear as though they'refurther down.
What really got people'sattention was it was like show
me very practical, even ifthey're simple applications of
AI, just so I can get startedand feel like I'm getting out of
(38:53):
the marketing speak.
So we're getting there.
There's definitely been someinteresting progress in the last
year or two.
Speaker 4 (38:59):
By the way, I happen to think that I guess I've drawn
this analogy to wrap my headaround it.
I do think what machinelearning and generative AI can
do is really what the humanbrain does in intuition.
I mean, I think intuition isyour own internal AI engine,
connecting a couple of dotsmentally and saying, okay, I
(39:21):
think my intuition says we'regoing here, you don't have quite
enough data yet to get to ananswer.
I think what the compute poweris doing is really replicating
what intuition has done for allof us in the past, and people's
intuition and their skills withtapping into their own intuition
very dramatically.
(39:41):
So you really did get thesavants, the retail savants and
the merchant savants.
Well, that's just because theirintuition was that much more
developed.
We are leveling the playingfield because the machine
intuition engine will make manyof us dramatically better at
guessing what's coming next.
So to me that's going to be funto watch.
Speaker 1 (40:05):
Peter, we're going to have to bring you back for an
hour on that concept.
Super fascinating and I think,yeah, a lot to unpack there,
potentially Terrific.
Speaker 2 (40:14):
Well, peter, thank you for your time, really
appreciate it.
Tons of insights.
We appreciate you spending alittle time with us this
afternoon.
Speaker 4 (40:22):
And I appreciate the conversation with you.
Gentlemen.
It's a fun and dynamic worldthat we live in right now.
Have a lot of energy andpassion around running towards
the opportunities that are infront of us.
I do appreciate what Alloybrings to the table and
additional data, because themore data we can feed into the
model, the smarter the modelwill be.
So thank you for what you guysdo and the contribution you make
(40:44):
to that open and transparentand data flowing world.
That should just lead to lessproduct being sold at discount
or dumped into the marketplace.
So I appreciate what Alloy doesand the contribution you make
to making the supply chains ofthe world more efficient.
Speaker 1 (41:02):
Love that.
Thanks, Peter.
Thanks again, Peter.
You've been listening to PeterSmith.
That's all for this week.
See you next time on Shelf Life.
From Alloy AI.
This is Shelf Life.
Speaker 2 (00:19):
How can suppliers better collaborate with
retailers to drive sales?
What are some?
Speaker 1 (00:23):
of the impediments to data sharing within a company
and with external partners.
Speaker 2 (00:28):
What are the things you must know to be an effective
supply chain leader today?
Speaker 1 (00:33):
On every episode of Shelf Life.
We answer questions like theseand more, with the help of
leaders across the consumergoods industry.
Speaker 2 (00:41):
Today we're happy to welcome Peter Smith.
Peter was formerly ExecutiveVice President of Global Supply
Chain for children's clothingbrand Carter's and former Chief
Operating Officer at Party City.
During his 37-year career, hehas held leadership roles in
supply chain at PBH, london Fogand the VF Corporation.
I'm your co-host, joel Beal,ceo of Alloy AI.
Speaker 1 (01:03):
And I'm your co-host, Logan Ensign, Chief Customer
Officer at Alloy AI.
Speaker 2 (01:08):
We'll be back with Peter right after this.
Speaker 3 (01:13):
As a consumer brand, you connect with dozens of
external partners and internalsystems to get a complete
picture of your business.
Each one is different.
Alloy AI makes it easy toconnect data from retailers,
e-commerce, supply chainpartners and even your own ERP,
then easily surface insights todrive sales growth.
Every day, brands use Alloy AIto see POS trends, measure
(01:34):
promotion performance and makebetter replenishment decisions
with their retail partners.
That's why we're trusted by BIC, crayola, valvoline, melissa,
doug Bosch and many more.
Get a demo at alloyai today.
Speaker 2 (01:49):
All right, Peter, welcome.
We're so happy to have youtoday.
Speaker 4 (01:53):
Thank you very much for the opportunity to talk
about these interesting things.
Speaker 2 (01:57):
Well, you have a wealth of experience in many
topics that we're passionateabout, so very excited for this
conversation.
But before we kick things off,or as a first question, you know
you've had a career that hasspanned a lot of different
well-known companies, companiesthat many of us have worn or
used.
You know the products for, andI'd love to just have you, in
(02:21):
your own words, describe kind ofyour journey, of how you made
your way in the supply chain andgot to where you are today.
Speaker 4 (02:28):
Yeah, thank you.
It has been an interestingjourney in the apparel and
footwear space, and retail ingeneral has evolved pretty
dramatically.
From the start, when I went towork for PVH, I was a little bit
unconventional at the time inthat I went to work for one of
the largest wholesale shirtbrands in the world, but I
(02:49):
actually went to work in theretail half of the organization
or part of the organization.
It was a tiny speck at thattime but then later grew to a
thousand stores.
When I joined we had 30 stores,had 30 stores.
When I left we had 350 to 400stores, and all the consumer
(03:10):
brands apparel and footwearbrands that I have worked for in
the course of my career haveall embraced retail and then
later e-commerce.
So they've all becomeomni-channel consumer brands and
, frankly, the retail companiesthat we supplied the Macy's of
the world and such, they steppedup their game on the private
label side.
So the two worlds sort ofconverged and stepped on each
other's and became frenemies inthe space in pursuit of a share
(03:35):
of wallet.
So it's been quite interesting.
Speaker 1 (03:39):
Well, peter, one thing I've known you for a while
at this point and one of thethings I really appreciate about
you because we come from a datacompany is just how you think
about data, the importance ofdata and being so enthusiastic
about the role of data in supplychain and so excited to kind of
have this conversation andmaybe to kind of dive in on that
front.
What do you view as sort of themust have in piece of
(04:01):
information?
Supply chain leaders need to beable to do their jobs
effectively.
Speaker 4 (04:06):
So top of mind for me , I guess, are probably two
arenas of data.
One is internal data, allrelated to the supply and demand
of your inventory.
For every company out there,the single largest asset on
their books is the carriedinventory and as a supply chain
leader books is the carriedinventory and as a supply chain
(04:27):
leader operations leader youreally need to have a full line
of sight to everything that Icurrently own, everything that I
have on order.
What is its status in theacquisition and or manufacture,
the logistics or my distributionor at my retail, and what's the
status of all that relative towhat my future order book is and
what I have to meet that demand?
(04:48):
That's one arena, just becausethe dollars are so large and,
with today's interest rates,costly to carry all that
inventory.
The other arena of data that iscritical is what's going on in
my supply chain.
Is the manufacturing processand or the sourcing process.
Are those things happening ontime?
Did those containers get on thevessel on time?
(05:10):
Are they going to dock andunload the vessels on time, or
is the truck going to comeacross the country on time?
What capacity am I running inmy distribution centers?
What's my turn time in thedistribution center or cost per
unit in the distribution center.
What's my click to consumertime?
What?
A consumer places an order onan e-com site and she typically
(05:31):
clicks the mouse saying, boom,I've now ordered.
From that click to the timethat we knock on the door and
leave the package at the frontdoor, that C2C timing.
There are a ton of KPIs in that, but they probably fall into
those two big arenas.
Speaker 1 (05:47):
In both those domains .
Given sort of your experience30 plus years in the industry
has your line of sight changedradically over time?
And I am curious just sort ofthat transparency, visibility,
pressure on data, how that sortof evolved through your career.
Is this different now todaythan 15, 20, 30 years ago in the
(06:08):
space?
Speaker 4 (06:10):
So, logan, it is radically different.
I'm old enough to say that theworld was barely in spreadsheets
when I started my career.
Thank God it wasn't in paper,but it has progressed
dramatically, both in the depthand breadth of the data that is
available and the sources thatwe can now ingest into our
(06:30):
models.
It's a completely differentlandscape and playing field than
it was at the beginning of mycareer, all to the betterment of
us having ultimately, the rightproduct in the right place at
the right moment in order tofulfill the demand again,
whether it's directly from aconsumer or one of our
significant retail partners.
Speaker 2 (06:51):
And Peter has the biggest transformation over
those past decades.
Has that really been thetakeoff of e-commerce or have
there been other significantevents that you'd say, hey,
these really were catalysts forchanging kind of the data that
we're collecting, the way weneed to work?
Speaker 4 (07:09):
Yeah, certainly modern technology has had a lot
to do with the ability ofcorporations to share data.
So the availability of point ofsale data, so from a wholesale
supplier perspective, the datathat is available in the
partnerships with significantretailers, that's an explosion
of data.
You know e-com and all the datathat we get directly as a brand
(07:31):
operating an e-com site andhaving a direct relationship
with customers.
That's an explosion of data andfor better or for worse, maybe
a tiny silver lining to whathappened with COVID is that the
world realized how bad mostorganizations were in terms of
granular knowledge as to whereis my production, what's going
(07:53):
on, did it get on a ship, did itget off a ship, what's going on
at the port and all the rest.
That was a catalyst to anexplosion of data as well.
Speaker 2 (08:02):
Yeah, no, covid is a great example, you're right, I
think, just exposing they'vealways been messy, but it kind
of exposing a little more,probably, to the world of hey,
supply chains, while they'reincredible and how they operate
have been for a long timethere's they're a lot less
automated and maybe intelligentthan probably sometimes we think
(08:23):
.
So you mentioned earlier this issomething we think a lot about
of, I guess, merging of you'vegot your brands, consumer brands
where you've traditionallyworked, and then you've got the
retailers, and those lines havebecome more and more blurry over
time, as you said, as brandshave said, hey, I'm going to
first of all, maybe open my ownstores and then, obviously now
(08:44):
most of them are going to selldirect to consumer, at least on
their own website, and you alsohave retailers that are
introducing private label andsaying, hey, we can get higher
margins, you know, selling ourown brands.
Let's talk about how that worksand kind of relate it to this
data transparency and datasharing.
So it seems as though there'sbeen a long-term trend of people
(09:06):
at least understanding thevalue of sharing more data with
their partners.
On the flip side, they're alsoprobably competing more with
those same partners than theyever have before, and so we'd
love to hear your thoughts onhow these dynamics are playing
out.
What are kind of the incentivesfor people to share more
(09:29):
information and the impedimentsas well?
Speaker 4 (09:34):
Sure Well, having been an econ major in college, I
love the notion of a freemarket where knowledge as to the
market dynamics, who's winning,who's losing, it's all up on
the big scoreboard and that wecan all see it and that really
then just invokes game on kindof effort, like I'm going to win
(09:55):
this game, and all that data istelling me how I'm doing in the
performance of that.
So the more data I can getwhether it's data in contrast to
a store's own private label,whatever the data I think that's
rich and I think that'sbeneficial because it allows me
to modify my game, to test,learn and adjust as to how we go
(10:17):
to market as a branded productscompany in the marketplace to
see what resonates with theconsumer.
That is dramatically better.
Having data that tells youwhat's going on with your
product and your competitors inthe marketplace is so much
better than earlier days whereyou wandered and you wondered
about well, why are things notselling?
(10:38):
Did we choose the wrong colorpalette this year?
What's the other brand doing?
I mean, gone are the days, Ihope, of the wander and wonder
as to why things aren't selling,because when they're selling
really well, you don't thinkabout it, you just sell it right
.
So, when sales slow down, datais absolutely the key to
unlocking what the adjustment isthat we, as a company supplying
(11:00):
consumers what do we need to doto adjust in order to do better
?
Speaker 1 (11:06):
It sounds very mutually beneficial.
Hey, let's all understandwhat's going on so we can
evaluate winners, losers, how wecan maximize sell-through and
be collaborating effectively.
Are there times you've seen ormaybe you could unpack a little
bit more why we haven't reachedthat utopia right and maybe some
of those impediments, or maybewhat it doesn't make sense to be
(11:27):
fully transparent andcollaborative?
Speaker 4 (11:30):
Sure, I mean, at the end of the day, it is a
competitive marketplace.
There is a long and rich historyin consumer sales of people
essentially wanting your dataand not offering you their data
back, sort of the one-way streetlike oh sure, I'd love to know
what's going on and I'd love tohave your insights from your
data.
But I don't necessarily want totell you about how my private
(11:51):
label brand is doing or how yourcompetitors are doing, and I
think people have tried it's nota pursuit that I would endorse,
but tried to throttle forwardand pull back the flow of data,
thinking that they could craftan advantage through that.
To me, that's just a distortionof the marketplace by mucking
(12:12):
around with the data in order togain a short-term advantage.
I'd rather have that open andtransparent playing field where
we can all see it and we live ordie by the virtues of decisions
we made, versus someone tiltingthe data one way or another.
But it certainly goes on a lot.
Even today, there are partnersin that equation that don't want
(12:34):
to share some of their databecause they think they will
lose a bit of the competitiveadvantage that they perceive
that they have.
I happen to disagree with them,but that certainly goes on.
Speaker 2 (12:46):
So, Peter, can you elaborate why?
I mean, you've already talkedabout it at a high level, but
why wouldn't somebody share data?
Like what's a time where itwould say, oh, it's in my best
interest to keep this for myself?
Speaker 4 (12:57):
where it would say oh , it's in my best interest to
keep this for myself.
Sure, I sat in enough meetingsas a supplier and the company
you're supplying to where thebuyer is saying well, your
sell-throughs really aren'tgreat and I think we should talk
about an additional discountand all the rest.
And what I really would like topull up and said well, my
sell-through data from the pointof sale information you show is
that we're quite robust.
I'd be surprised and interestedto hear that our competitors
(13:19):
are actually doing better and so, frankly, by sharing that
sell-through data, they do losesome of the cloak and dagger
techniques of days gone by inorder to get a discount on the
next order, because that data isthe data.
Some of the gamesmanship thatgoes on.
I mean, I'm sure have any of usever bought an automobile?
(13:39):
And there are vendors out thereselling automobiles that it's
one price and this is our priceand there's no gamesmanship at
all.
And there are others that youneed to dedicate five and six
hours at the dealership becausethe dealership representative
needs to go talk to theirmanager.
They're having a cigarette outback.
There's no talk, it's just acigarette out back.
There's no talk, it's just agame in order to get to what
(14:01):
they want.
I'm an advocate of transparencyand a straight up model.
I think it leads to moreefficient decision making and a
better outcome in the long runfor all of us.
Speaker 1 (14:14):
A lot of the conversation has been focused
more on retailers giving moreinformation to their suppliers
so that you can have really goodpartnerships and good strategic
conversations.
I'm curious, on the other sideof the coin you'd mentioned this
really benefits from abi-directional.
Hey, I'll show you myinformation and data and be open
and transparent, and you'll betransparent and we're all going
(14:36):
to benefit together.
Could you speak a little bitmore to on the supplier side how
you can be more transparentmaybe some blockers there and
how that ultimately can stillbenefit both parties?
Speaker 4 (14:50):
Sure, logan, I guess I come from the school where I
do believe in bi-directionaldata transparency and I would
like to say to all of my retailpartners, as a wholesaler, most
of my career, I'd like to say toall of them I'd like to give
you a line of sight to theinventory that I own that is
uncommitted, and so in ourweekly review, typical of what's
(15:13):
hot and what's not, if you'reselling through something at a
rate more than we jointlyforecasted or more than you
anticipated, I'd like you tohave a line of sight to what
might be sitting in mydistribution center, because the
more that we can docooperatively to get merchandise
where it needs to be and whereit is selling, that's the
(15:33):
benefit to the retail partnerand to me both.
I have very few reluctances orinhibitions about sharing the
data that we have.
I do think there are probablysome exceptions.
Frankly, during COVID, as weall remember, there was a lovely
container ship, the Evergreen,that was stuck in the Suez Canal
(15:53):
and, frankly, it's superuncomfortable from a supplier
perspective that when you hearabout something like that comes
across your desk or you wake upin the morning and there's an
email saying, oh my God, thishas happened and then you spend
maybe a couple of hours tryingto figure out OK, what do we
have on that vessel?
Which of the retailers thatwe're servicing, is that their
(16:15):
product tied up?
Is that their product tied up?
And then, frankly, you have toengage cross-functionally in
your organization to say to yoursales organization retailer A
and B has goods on that.
We cannot tell them when thosegoods are going to actually
arrive.
Now we had a forecasted date.
We know that forecasted date isno longer valid but frankly,
(16:36):
it's a dynamic situation and wedon't know when those goods are
going to be in.
I've been in conversations withan organization where the sales
organization doesn't want tocommunicate that forward to the
retailer because they're franklyconcerned that the retailer
wants to turn around.
It might turn around and cancelthose units and then that's
excess inventory for us andthat's a fear that might keep us
(17:01):
from being transparent with theretailer.
I think that requires across-functional partnership
within your own organization.
It probably also requires anassessment of what your
relationship with the party thatyou're supplying to, again a
major retailer.
In that instance we had producton that vessel from two of the
(17:21):
largest retailers in the countryand, frankly, one of them was
sympathetic and understanding ofwhat was going on in the world,
maybe because they might'vealso had product on that same
vessel.
They were understanding of itand they were going to work with
us within a reasonable bounds.
Another retailer had prettymuch like I don't care, go pound
(17:42):
salt.
If you are a day late I willput you in the doghouse and
you'll be there and I'll punishyou financially.
Start taking discounts on adaily basis off of what I'm
going to pay you for thatproduct.
I would have to defer to mycolleagues in sales as to how to
handle each of those situations.
They own those relationshipsfirsthand.
They're going to have to make ajudgment call as to what to
(18:04):
communicate when, but I wouldhope that that's far more the
exception than the rule.
Speaker 2 (18:11):
Peter, have you seen a shift in that desire to be
collaborative versus punitiveover time?
Clearly it's going to vary byorganization, probably person.
Within those organizations youcan get somebody that's more
understanding than another.
But have you seen over thedecades just a greater desire
not just to share informationbut then to jointly problem
(18:34):
solve?
Or is it okay, we're sharing alittle bit more data, but at the
end of the day it still can bepretty tense?
Speaker 4 (18:42):
I have seen, joel, to your question.
I have seen an improvement inthe lines of communications and
the number of touch pointsbetween organizations over the
years, as we have had tocollaborate on more issues than
just what's the product you'reselling me and what price is it
at and what's the availability.
It's a relationship where theconsumer, the end consumer,
(19:04):
wants to know about yoursustainability efforts to try to
minimize waste in the supplychain.
You know that is an aspect oftheir decision-making criteria,
so as a supplier to a retailer,we need to communicate that
forward.
When situations arise, like inChina with the Uyghur forced
labor, consumers want to knowabout that, and then maybe
(19:26):
rightfully so in the world thatwe live in.
So the number of points ofcontact between wholesale,
supplier and retailercircumstances have forced those
to increase.
So typically, organizations aretalking to each other on a
multitude of levels and the bestis the relationship can be at a
top to top.
The CEOs decide exactly howthey want to handle each of
(19:47):
these situations.
There certainly are more pointsof contact, and I think it's
healthy for both organizationsto have greater transparency and
understanding as to how theyeach do that.
I do offer that answer from theperspective of.
I've had the good fortune ofworking for leading national
brands and, to some extent, thatbar being raised that not only
(20:09):
do you have to supply me greatproduct at a great price, with
great availability, I want toknow that you're doing, you're
manufacturing your product andrunning your operation in a
sustainable way and in a legalway, as with regards to foreign
corruption practices and withlabor practices around the world
.
The raising of that bar knocksout a lot of players, that
(20:31):
suppliers that I don't want tohave to compete against with
those less reputable operators.
I want the bar.
Personally, I want the bar tobe raised high because the
brands like the North Face on mychest here.
I know they're going to do theright thing and I think that
differentiates and separates usin the marketplace to drive
behaviors that we can all beproud of.
(20:53):
And when we talk to our kidsabout the way that the company
that I work for operates, we cando that with pride and
transparency rather than a shadyoperation or a cloak and dagger
.
Speaker 2 (21:06):
I love that answer and that's really interesting to
me.
I hadn't thought as much aboutthe sustainability piece.
And you're right.
Probably you both haveconsumers that are putting
pressure to say I want to makesure these supply chains are
ethical, and obviously someregulatory elements as well, and
forces supply chains to be morecollaborative and hopefully
that bleeds over into otherthings as well of just hey,
(21:27):
let's operate more efficientlyand more ethically and more
responsibly.
Speaker 4 (21:32):
I've always been open when a retailer has come and
said hey, let's have atop-to-top in the supply chain
and if there are things that weare doing that are costing you,
as a supplier, money and don'tadd value to what you're doing,
let's collaboratively worktogether to drive costs out not
just your cost or my cost, butsystemically let's drive costs
(21:53):
out.
Or, on maybe a more upliftingnote, do you have any production
in this hemisphere or do youhave any made in the USA
capability?
Because we'd like to promotethat and we'd like to partner
with you.
We know the product's gonnacome out of the factory a little
bit more expensive becausewages in this side of the world
are just more expensive, butlet's collaborate and see if we
(22:14):
can bring some of those jobs andsome of that production home
Again.
Another aspect of where a tightand productive relationship
with a retailer from awholesaler perspective can be a
win-win relationship with aretailer from a wholesaler
perspective can be a win-win.
Speaker 2 (22:30):
So let me drill in a little bit here.
I know this is a bit off script, but you mentioned how you know
you've worked for obviouslyleading kind of global brands
right that have a lot ofresources and the ability to do
this, and these higher barriersactually kind of help to
insulate you against competition, right.
So do you think that's going tobe more challenging then to
start a new brand because thereare more barriers?
(22:52):
And then I'm also wonderingabout all of these Chinese
brands in particular, butforeign brands that are trying
to break into the US market.
Do you see that as being a bigbarrier for them if they're not
going to have the weight, as yousaid, of VF Corporation, for
example, to be able to do all ofthese things?
Speaker 4 (23:09):
The raised bar of operational practices that are
now demanded of companies byconsumers and by the regulatory
environment are both a blessingand a burden.
The startup company has themost hospitable access to high
quality product overseas thatthey've ever had before, and
(23:30):
once upon a time the sort ofrunning joke of private label
suppliers was all they needed isa fax machine and a contact in
China.
The reality is, though, todaythat, just through email
correspondence and trading backand forth, there are very, very
high quality manufacturersaround the world.
If you're a startup brand andyou want to produce a product,
(23:53):
the factories you're likelygoing to take them to require
dramatically less educationabout how to make a world-class
product.
Frankly, your factory might besaying we have a few design
changes that we think, based onwho else we make for that, this
would make the product superior.
And all the factories you knowyou're going to ask about their
environmental footprint andtheir corporate social
(24:15):
responsibility stuff.
So, to some extent, there'snever been an easier or more
accessible time to be a startupbrand and you get to write all
of your standard operatingprocedure about sustainability,
workplace issues and such.
You get to write all that,whereas a large, entrenched
organization might have to undosome of the practices and or
(24:39):
just moving things and changingthings.
In a large, complexorganization that inertia is
hard to change or hard to getdistance on, and to some extent
it's sort of nice to start withthe clean sheet for the startup
brands, because they'll write itonce and they'll do it in the
moderate tone, as opposed to.
Some larger and moreestablished companies might have
(25:01):
to unwind some of the pastpractices that they've operated
with.
Speaker 1 (25:13):
So I'm hearing hey, although it might seem like
these are high barriers to entry, the reality is those best
practices are quite accessibleby smaller brands and sort of
across the board improvementsare being seen rather than just
you know, oh, this is a highbarrier to entry and impossible
to kind of go compete.
Speaker 4 (25:27):
I'd say there's probably never been a more
accessible time to be a startupbrand and, right out of the gate
, produce high quality footwearand apparel and get it into
consumers' hands than there istoday.
And whether that's a reflectionof the world that has shrunk,
or the technology that we allhave access to, or, just,
frankly, the sophistication ofoffshore production and all the
(25:50):
rest, there's just never been amore conducive time for the
startup brands to get themselvesinto business.
Speaker 2 (25:57):
So, peter, I know, with maybe the exception of
Party City, most of your careerhas been in apparel and footwear
.
Where do you see the industrygoing then been?
Speaker 4 (26:06):
in apparel and footwear.
Where do you see the industrygoing then?
I think it's going to be harderand harder for a large
monolithic brand to hold on tothe kind of market share that
they might've had in days goneby.
Frankly, a long time ago, whenI was a kid going to high school
, you walked into your localArmy Navy store and there were
(26:27):
probably two, maybe three brandsof jeans.
We all know them, they're namedbrands.
They just don't have the marketshare that they had back in
that day.
And, frankly, neither doesGeneral Motors or Ford Motor
Company.
And people in California arebuying automobiles from a
company called VinFast.
I see that trend continuing,where more and more of the share
(26:51):
of wallet is going to come awayfrom a well-known brand name
and people will experiment withbrands they've never heard but
they've read about or someonereferred them to or tried.
So I think it is a golden ageof brand development and brand
creation, but many of them willget to 80, 90, 100 million and
(27:15):
sort of plateau at that point.
But there's going to be a muchlarger cadre, in my humble
opinion, of that size brands andthe large monoliths that we
might've grown up with will havea hard time holding share.
Speaker 2 (27:29):
Yeah, I think the plateau and it certainly feels
like the way that it's playingout you're closer to it than I
am but that plateau that many ofthese new brands hit, where
they get that kind of explosiveearly growth, they can come out
with a great product and spend abunch of money on online
advertising and those CACs startto get higher, they hit kind of
(27:52):
a ceiling.
And it's interesting just howyou have these conglomerates,
you know, are they going to buyup those brands and is that
going to be the way it works?
They can allow, basicallyoutsource their product
development.
Hey, go try things in themarket, We'll buy you up as we
see success.
But feels like it's been hardfor a lot of brands to kind of
really break out beyond that.
Speaker 4 (28:12):
Yeah, I mean frankly, allbirds is probably the poster
child of what you justdescribed.
It's amazing Just anotherreflection of the time we live
in the amount of time that ittakes from a brand splashing
into the marketplace becomingthe oh my God, I have to have
that product running to the moonand the men and women of that
(28:33):
organization working their tailsoff in order to get production
to beat that demand.
And then they wake up onemorning and they're no longer
the favorite thing on Twitterany longer.
The rise and fall happens in aremarkably short amount of time,
unlike it did decades ago.
That it's just really tough andknowing.
(28:53):
Have we hit the peak or isthere yet another peak beyond?
It is almost impossible, Ithink, for anyone to tell.
Speaker 2 (29:00):
I think there's a lot of venture capital investors
that have learned this lessonover the last couple of years,
looking at that exponentialgrowth curve and, as you said,
not often realizing they wereright at the top.
It's just a different type ofmarket.
Getting back a little bit todata sharing, so we talked about
sharing between the suppliersand retailers and some of the
(29:22):
challenges there, theimpediments and also benefits.
Obviously, what aboutinternally within an
organization?
So you've been in a lot of bigcompanies.
They're complicated, lots ofdifferent functions, lots of
different incentives.
We'd love to hear what you'veseen within organizations that
are really good at sharing, saybetween sales and supply chain
(29:42):
right or marketing and finance,where that's gone well and where
there can also be challengeswith even sharing the data
within an organization itself.
Speaker 4 (29:52):
Sure, and similar to a number of the conversations we
have had, there's been a prettysignificant evolution even
within.
Whatever your favorite tool isand get a very, very wide
(30:19):
understanding about what's goingon in an organization,
everywhere from future sales andforecasting, through what's
going on with this week'sdelivery or even beyond that, to
what's going on at point ofsale with our retail partners.
I'm an advocate of that.
I think we all spend atremendous amount of time in the
places we work and oftentimeswe're emotionally tied to the
(30:42):
success or failure of ouremployer, and I think that makes
it incumbent upon those of usthat have the opportunity to be
amongst leadership teams to beas transparent as we possibly
can about what's going on withthe organization the good, the
bad and the ugly because overtime you're going to live
through all of it.
So I'm an advocate of datatransparency within the four
(31:05):
walls of an organization,because we're all adults and we
all have decisions to make, andan informed decision is better
than anything less than fullyinformed.
Speaker 1 (31:15):
Maybe if you're earlier in this process.
What steps have you been ableto take to build that trust,
whether it's between supplychain and sales or more
generally?
If some of our listeners are inan environment where maybe
there isn't that level oftransparency and collaboration,
how do you foster that and howdo you build those bridges
internally?
Speaker 4 (31:36):
The old adage never eat lunch alone applies to this,
logan, in that it has alwaysserved me well to sort of reach
across the aisle, you know ifyou're manufacturing and
sourcing and all the rest.
Reach across the aisle to yourfriends in marketing and sales
business development.
Get to know them on a personallevel and try to walk in their
(31:59):
shoes and understand thechallenges they're up against.
Because, although I might thinklike Ed Carters, I might think
producing 600 million pieces ofbaby clothing every year and
getting it to an ultimateconsumer is a magical feat.
The men and women that run thesales and organization and
business development or run thee-com have their own challenges
(32:22):
and I guess I've just rarely metsomeone that given an
opportunity to have lunch or acup of coffee and just say, hey,
what are the three or fourthings that are your greatest
challenges?
Oftentimes, as they describetheir challenges, there are
nuggets in that that in mysupply chain I can influence and
maybe improve, and I think ifyou know the sincerity that I
(32:45):
come to that interaction with, Ithink they get it.
I'm actually, and I've said toa lot of sales and marketing
leaders, my job is to make you awild success in having the
right product in the right placeat the right time.
Everything that I can do tofacilitate that and make that
happen is to the good of both ofus.
I hope it's not overly corny,but a bit of the three
(33:07):
musketeers all for one and onefor all.
We're all in this together.
We all work for the brain.
Let me help you, you help me,and I think one plus one can be
three or four.
At least that has been myapproach to the role in the job
and the vast majority of timesthat has served the company and
the individuals.
Speaker 2 (33:28):
well, it struck me, peter, as you were talking, how
much of the lessons internallycan also be used externally,
with third parties.
We're talking about, obviously,trust.
And hey, does somebody feellike me as a partner, whether
it's different teams within anorganization or you working with
a retailer?
Am I there to help you solve aproblem or am I there to get you
(33:52):
in trouble or to blame you forsomething?
So there's clearly someuniversal truths.
I also, as you were speaking,talking about reaching across
the aisle, I wanted to startchanting.
You know, peter Smith, 2024.
I think we can use a little bitof that more in general.
So that was great.
Okay, we're going to end withone other thing, just because
(34:13):
it's top of mind.
So I recently got back from theGartner Supply Chain Symposium.
The talk of the conference,surprise, surprise, was all
about AI, and I know we'vetalked a little bit about this,
peter, but AI is everywhereright now.
There's a lot of marketinggoing in explaining what it can
(34:34):
do and how it's going to changethe world.
So I'd love to get yourthoughts as someone who has seen
a lot of marketing going inexplaining, you know, what it
can do and how it's going tochange the world, so I'd love to
get your thoughts, as someonewho has seen a lot of evolution
and supply chains over the yearson, practically speaking, like
what is the state of AI andsupply chain right now?
What are you skeptical of andwhat are you excited about?
Speaker 4 (34:53):
So when I engage in a conversation about AI, I just
assume that we're talking aboutwe've discussed.
We do live in an era wherethere is a mushroom cloud of
(35:22):
data available to us.
No organization can get throughall that data.
I mean a party city, 700 retailstores, 20,000 SKUs per store.
Every one of those geographiesand store locations are unique.
One of them is sitting in thebackyard of Notre Dame and one
of them is sitting in thebackyard of the University of
(35:44):
Alabama.
You're going to guess that theysell more crimson and then more
gold in South Bend, indiana,and more crimson color at the
University of Alabama.
Just to those kinds of things,with all the explosion of data.
The only way you can eitherhave an army of Alabama just to
those kinds of things, with allthe explosion of data.
The only way you can eitherhave an army of individuals,
which is not economic, or youcan employ the compute power
(36:04):
that is now available to us andlet the machine grind through it
all and see things that none ofus, or certainly not me the
pattern recognition, one of thebenefits that the ML tools and
the AI engines can bring.
It will see things and itshould, if used properly, bring
those to your attention, bubblethem up to the top and present
(36:28):
the human with the opportunityto make a decision to do
something differently next year,so that you know.
Simple example again, alabama,let's find out what the
homecoming weekend is.
It probably moves around on thecalendar a little bit, but
again, the ML tool will see thatand it should bring it to your
attention.
I get that the greatest merchantminds in the world have always
(36:50):
internalized all those thingsand distilled them down and then
came up with the way to get theright product in the right
place.
But not everybody is MickeyDrexler and have his mind and so
, frankly, the compute poweravailable to us allows everyone
to raise their game.
As to what can you see in allthat data?
Where are the patterns?
(37:11):
Where's the insight?
Where's the early warningindicator that is coming from it
?
To me, that is the benefit ofthe compute power again targeted
towards ML or AI that isavailable to the supply chain
world Folks in marketing andproduct.
They probably have more of anopportunity to really tap in to
the AI side of it.
(37:32):
They're really creative andinteresting.
You know, write me a productdescription or help me combine
these three attributes of aproduct and a new product.
The AI might be more tailoredto the front end of the business
.
The ML side is we're in nascentdays of leveraging all of the
data that we now have at ourfingertips to benefit that
(37:54):
on-time, in-full requirementthat we have with the retailers
that we operate with.
There will be an explosionleveraging all of that data to
make sharper, faster, morecorrect answers.
Speaker 2 (38:10):
Thank you for that answer and, as you mentioned,
there's a big umbrella thatfalls under AI a lot of
different pieces and what'sgoing to be most useful in some
areas, whether it's machinelearning and using that more in
forecasting models.
Another place is going to bemore generative AI, so it's
going to be it's alreadyfascinating and it'll be
(38:31):
interesting over the comingyears.
What I could tell being atGartner was everybody's thinking
about AI Everyone's earlier, orat least the vast majority of
companies than I think theywould like to be, and so they
want to appear as though they'refurther down.
What really got people'sattention was it was like show
me very practical, even ifthey're simple applications of
AI, just so I can get startedand feel like I'm getting out of
(38:53):
the marketing speak.
So we're getting there.
There's definitely been someinteresting progress in the last
year or two.
Speaker 4 (38:59):
By the way, I happen to think that I guess I've drawn
this analogy to wrap my headaround it.
I do think what machinelearning and generative AI can
do is really what the humanbrain does in intuition.
I mean, I think intuition isyour own internal AI engine,
connecting a couple of dotsmentally and saying, okay, I
(39:21):
think my intuition says we'regoing here, you don't have quite
enough data yet to get to ananswer.
I think what the compute poweris doing is really replicating
what intuition has done for allof us in the past, and people's
intuition and their skills withtapping into their own intuition
very dramatically.
(39:41):
So you really did get thesavants, the retail savants and
the merchant savants.
Well, that's just because theirintuition was that much more
developed.
We are leveling the playingfield because the machine
intuition engine will make manyof us dramatically better at
guessing what's coming next.
So to me that's going to be funto watch.
Speaker 1 (40:05):
Peter, we're going to have to bring you back for an
hour on that concept.
Super fascinating and I think,yeah, a lot to unpack there,
potentially Terrific.
Speaker 2 (40:14):
Well, peter, thank you for your time, really
appreciate it.
Tons of insights.
We appreciate you spending alittle time with us this
afternoon.
Speaker 4 (40:22):
And I appreciate the conversation with you.
Gentlemen.
It's a fun and dynamic worldthat we live in right now.
Have a lot of energy andpassion around running towards
the opportunities that are infront of us.
I do appreciate what Alloybrings to the table and
additional data, because themore data we can feed into the
model, the smarter the modelwill be.
So thank you for what you guysdo and the contribution you make
(40:44):
to that open and transparentand data flowing world.
That should just lead to lessproduct being sold at discount
or dumped into the marketplace.
So I appreciate what Alloy doesand the contribution you make
to making the supply chains ofthe world more efficient.
Speaker 1 (41:02):
Love that.
Thanks, Peter.
Thanks again, Peter.
You've been listening to PeterSmith.
That's all for this week.
See you next time on Shelf Life.
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