Tecsys, Inc: Guy Courtin

IndustrialSage

Guy Courtin of Tecsys Inc. returns to share how post-COVID public awareness has transformed both supply chain and industrial sales.

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Danny:

– Well hello, and welcome to today’s IndustrialSage Executive Series interview. I am joined by a familiar face, Mr. Guy Courtin who is back in the studio no less for another episode here. I’m super excited about this. If you aren’t familiar with Guy, he came on before. It was a couple years ago. I think we’ve interviewed you a few times.

Guy:

– A few times, yes.

Danny:

– But Guy is the VP of industry and advanced technology at a company called Tecsys. Not to be confused with the state, I’m sorry we have to say that.

Guy:

– We’re in Canada.

Danny:

– Okay, so polar opposite. So anyways, Guy, thank you so much for coming on the show again and also to be in person. I’m excited about that.

Guy:

– Danny, thanks for having me on the show. I guess the first few times I didn’t screw up, and you’ve brought me back. But I’m really happy to be back, and to be back in person is fantastic.

Danny:

– Well it’s super—yeah, I’m super excited about this. I’m excited to unpack, get into some of these things that we were talking about a little bit in the preshow. I think there’s no lack of great content here. First and foremost, for me and for our audience who maybe is not familiar with Tecsys, what do you guys do?

Guy:

– Sure. First and foremost, we’re a Canadian-based company. We are a supply chain company. We solve supply chain problems. We focus on a couple of big areas, healthcare, retail distribution. And when it comes to the solutions we provide, think of us as really helping solve a whole host of supply chain problems, so warehouse management, transportation, order management, things of that nature. Really exciting from that perspective of being able to provide solutions to customers’ supply chain needs. We are, again, based in Montreal, Canada, but have global presence in Europe and elsewhere. I’ve been there now for almost a year. It’s really exciting. I think we are continuing to grow, even during the pandemic. I look at the solutions that we have are really addressing today’s needs for tomorrow’s desires by our prospects and customers but also from their customers. That’s who we are in a nutshell, and like you said, yes we’re T-E-C-S-Y-S out of Montreal, not the great state of Texas.

Danny:

– Alright, perfect. Well good to know. Well it’s supply chain. I keep hearing things about this. I don’t know.

Guy:

– Yeah, it’s funny. It’s come up a lot recently in the past two years.

Danny:

– I don’t know why, but I guess there’s things. So let’s talk about how things have changed a little bit since the last time you and I spoke, which I’m a little gray on when we—I think I ran into you at MODEX in 2020.

Guy:

– 2020, correct.

Danny:

– You came on in 2019, I think.

Guy:

– Correct.

Danny:

– What’s changed?

Guy:

– A different world, right? Entirely different world. From my perspective, I think we all have lived it, so I’m not going to rehash it. But I think what has changed—maybe not necessarily what has changed, but what has been exposed by the pandemic is, I think, what we should focus on. You mentioned supply chain, and it’s like, “oh, well, it’s coming up more and more.” I see my local news; they say supply chain. My mom knows what supply chain is. My mom knows what I do now. So I think what’s happened is not necessarily the shortages and things of that nature because I think those of us who’ve worked in supply chain know these things happen on a regular basis. Not at this scale, but what I think has really happened coming through the pandemic is an awareness of what happens in the supply chain, what the supply chain is about, the sensitivity our supply chains have to disruption, and the impact it has on us as a consumer, both in the B2B and the B2C world. So if there’s one change I think that’s really happened since the last time we spoke is really that awareness of what this means. Have we solved it all? Of course not. We’re already still seeing there’s shortages. We still don’t have enough material for cars, just like the strike going on right now in Ottawa by the drivers has brought that automotive manufacturing cross-border.

Danny:

– Yeah, they shut down Ford, right?

Guy:

– Yeah, they shut down Ford. They shut down GM because there’s no parts coming through. But I think we’re more aware of that now. Maybe two, three years ago, that’s maybe a small story in the back of the newspaper or in the business section where people would not pay any attention to it. Today it’s top of the news, and then people understand, well wait. Why am I not getting a car at the car lot? Why does it cost me more? Why are used cars now priced higher than when they were new cars? Oh, now I understand why. So I think that’s the big one I would focus on is this awareness that the general public has or should have about the complexity of the supply chain to get their products, again whether it’s B2B or B2C.

Danny:

– Yeah, absolutely. It’s interesting. I’m seeing a lot of memes and different things talking about Thanksgiving and Christmas or whatever, that it’s going to be, everyone’s a supply chain expert. We’re going to talk, oh, we know why things are going on, or whatever. But it has been interesting. Even as late as this morning, I had some eggs, and we’re getting low on our Valentina. I was talking to my wife; it’s this Mexican salsa, great stuff, hot sauce. Staple for any Mexican household. I was like yeah, we need to get some. My wife’s like, I can’t find any. I’m like, again? Okay, well it’s not a surprise. We got all these spikes and all kinds of issues and things that are going on. Obviously we’ve had massive changes now. There’s some things that have, I think, we’ve had some short-term disruptions, short-term issues, but there’s also some longer-term changes that I think are happening. What are some of those short-term things that you’ve seen? And what are some of those things that you think, hey, these things are here to stay for the long term?

Guy:

– Yeah, I think some of the short-term things is, unfortunately, consumer behavior in terms of hoarding, in terms of—we’ve taken the whole notion of safety stock, from the consumer perspective—

Danny:

– Yeah, I’m buying a case of Valentina hot sauce the next time I see it.

Guy:

– Goodness, you can’t run out.

Danny:

– I cannot.

Guy:

– You cannot run out. Talking to my mom again, I love my mom to death, but during the pandemic I’d open one of her closets. I’m like, mom, how many wipes do you have in here? How many Lysol wipes? She was like, every time I go I get as many as I can. Mom, you and dad just stay at home. What, do you clean the house every two hours? So I think that’s a short-term reaction. And I think we’ve seen this on a smaller scale. I live in Boston, and we always joke whenever the meteorologist says there’s a snow storm coming, we all run to the supermarket and buy bread and milk. Don’t ask me why.

Danny:

– That happens up there, too.

Guy:

– It happens up here, too.

Danny:

– It happens down—okay.

Guy:

– Why bread and milk? I don’t know, we’re all making French toast. Who knows? There’s this innate reaction that we just go, and we start hoarding stuff. It’s a snow storm. We’re not going to be stuck in the ice age for 20 years. But we’ve seen this in the pandemic where in the short term, this has taken a scale we’ve never seen before. This consumer notion of having to run out and just hoard things. And I think we’re seeing at some level in some companies as well. They’re trying to figure out; oh goodness, we have to rethink some of our policies and hoard some raw materials, hoard some finished goods, hold back some material. I think it’s a knee-jerk reaction, especially from the consumer. So I think that’s going to go away. Or I hope it goes away.

The long-term, and I’ve seen more and more articles about this and discussions. I’ll be interested to see how this changes, and I hope it does, is re-thinking of our whole measurement of our supply chain. What I mean by that is the whole notion of lean, Six Sigma and all this, super efficient, just in time. Why am I holding inventory? Why do I have buffer stock? Why do I have safety stock? Everything will come to me just when I need it. I think we’re starting to see a shift where people are starting to question not necessarily going away from it, but maybe easing up on the stringentness that we came to saying, hey, I don’t need any safety stock. Everything’s just in time. I don’t even need that factory or that warehouse. Everything will come to my factory right away, and I’ll send it to the consumer. So I’m starting to see more and more of this. I spoke, I had a meeting with one of our clients in the healthcare side, and we had that conversation. It was a great conversation. He said, we cannot continue to proceed this way with the same notion of minimizing inventory, cutting down to bare bone, expecting things to come when they’re supposed to because this pandemic has shown us that it can’t happen that way. And yes, people might argue, well that’s a global pandemic. Hopefully we don’t get one of those again in our lifetime. But if you look at it from a company perspective, companies know that just a small disruption somewhere in the supply chain can have massive effects on the rest of the supply chain, a lot of it because of their sensitivity with their inventory.

So what I hope—and this is a hope, and a hope’s not a strategy. I know that. But my belief is that we’re starting to see some discussions around rethinking how do we look at inventory in the supply chain in other aspects and how do we start thinking about it from a perspective of, maybe I carry a little bit more on my balance sheet, and maybe that doesn’t make my financials look as good as they could. But you know what? It guarantees me that I can keep the factory moving if there’s a disruption at the border. It could keep me moving if there’s a fire in my warehouse and I lose inventory. It could keep me moving if there’s a spike in demand somewhere. And I think that, for me, is a good thing. I think we need to, as an industry, move away from the financial people telling us, hey, trim, trim, trim. Make everything look good, to the reality which is the supply chain’s about people. It’s about getting products out. It’s about addressing needs and demands, and we need to be more sensitive to that.

Danny:

– So many good things in there. A couple things that I think were interesting, one, you were talking about just in time inventory, lean manufacturing. I went to the assembly show, a lot of automation, pretty heavy in automotive. But there’s a lot of other industries as well. I started posing the question: as far as lean manufacturing goes, have we gone too far? Have we pushed the envelope too far? You’re talking about globalization, and now people are, all this talk of—not talk, it’s happening. Repositioning their supply chains, more in-shoring and looking at solutions on how, okay, gosh, maybe we could get things cheaper going out to China or wherever. There’s a whole host of issues now. Massive range, right? I think it’s a very interesting discussion to think, okay.

And to your point, I think companies are, they’re saying—and I brought this up, and I can’t remember who it was, an episode probably a year and a half ago, very early on. And I thought, you know what? We’re going to see an increase in warehouse production, and I think you’re just going to have to do this because—and I think what we’re seeing now, which you brought up the convoy which I think is fascinating. I think there’s a lot of interesting social implications to that, but I think you’re seeing some of the same responses, disruptions. Okay, trucking with infrastructure. It was also interesting, in the same notion, we get into the meme stocks. It’s some of the same, and it’s like another force now that seems to be—that has an impact and can have an impact on supply chain in certain areas. I’m not saying that game stock and those had an impact, but I’m saying just in the sense of the mobility, and there’s other forces now that are impacting it and can create, maybe not global, but certainly a little bit more disruptive in local areas.

Guy:

– Right, right. And I think part of it too, Danny, is it has to come back to, how do we measure? How do we look at our supply chains and say, this is a good or a bad supply chain? Is it because financially it makes our books look good, our balance sheet look good, our inventory levels look good, our efficiency? Or is it that we’re getting product to our end customer, whomever she or he is, in the most efficient, cost-effective, timely way for that business? I think those are, in a way, two different ways of looking at things. And I believe, at some level, we’ve gone too far by just measuring everything on the financial side and saying, oh, well the balance sheet looks great. Cash flow looks great. We’re doing fantastic. Not looking at, are we servicing our customer the best way possible? Well they’re paying us money, so we must be doing a good job. Eh, I don’t know if that’s necessarily the best, the only measure. I’m not saying it’s not a component, but it’s not the only measure.

So I think that’s something else we need to think about. And to your point, I’m glad to hear from your perspective too, you’re seeing it. I think it has to change a bit. We have to start rethinking about this moving forward from our supply chains, and then I mentioned the healthcare client I was talking to. Look at the healthcare space. Well, if I need to get material to a surgery, I need to get it there. It doesn’t matter how much it costs—I mean, it does, but the most important thing is getting it there when it needs to be there because there are literally lives at stake on this. So I think we need to start looking at it from that perspective and being more sensitive to that, if you will.

Danny:

– Yeah, it was interesting on that point, in healthcare from a goods standpoint. I thought it was very interesting. There were a lot of stories talking about PPE and there was a huge—and then ventilators and all that stuff. You were seeing this response from manufacturers. There are actually some pretty incredible stories on how companies were able to completely go through new R&D. I remember, was it—Flex Manufacturing in particular, in six weeks was able to completely redeploy lines, and they were cranking out—I’m trying to remember. I think it was ventilators. It was incredible. You were able to go through all the red tape and what not. It kind of goes to that demand shift and the focus piece saying, hey, let’s put all of our efforts into this because this is priority.

I remember talking with Fastenal, and this was probably in May of 2020. And I remember they were telling me, PPE, the masks and all this stuff, the next big thing, surgical gloves. That’s going to be, we’re going to have issues with that. Sure enough, a couple of weeks later, there it is. We even looked at the—I discovered this—the top rubber glove manufacturer is a Malaysian company called Top Glove. Their stock went from—because I was looking at this—it went from two bucks a share to 14. Now it’s back down to five-ish, something like that. I’m not giving out any—

Guy:

– No financial advice on the show.

Danny:

– I’m just reporting what I discovered and I thought it was interesting. Yeah, to your point, certainly a lot of these industries are going to be a little bit more important than others as far as—

Guy:

– Absolutely, and I think those industries also need to think about it from that perspective, but then also the people measuring it, the financial analysts, the stock and all, give them a break at some level. Or measure them differently. I don’t know if that’s going to happen. I hope it does, but we’ll see. A year from now we’re sitting back in these chairs in the studio, and it’ll be interesting to see what happens. Hopefully we’re completely out of the pandemic and things are becoming its own new normal. What does that look like?

Danny:

– I hate that word, by the way, that phrase.

Guy:

– Don’t get me started on that because there’s no such thing as a new normal. I’ll talk about this from a retail perspective when I hear that all the time, people saying the new normal. Well what was the old normal? Because before the pandemic there was this thing called Amazon that was killing all these merchants. Before Amazon there was this company called Walmart that was coming out crushing people. Before that there were malls. There’s never been a normal. It’s always just been constant change and evolution, which is a good thing. Now the pace has increased, but there’s no new normal. There’s just now.

Danny:

– Exactly. And the pace, I think, like you mentioned, for sure. Alright, we were talking about, before we started recording, the idea of the iceberg. Let’s get into that a little bit. Explain to me—let’s talk about what’s going on. You were saying at the top we’ve got demand and customer influences, this is what we want. And there’s a ton of things affecting that. Shifts in how people are buying, why they’re buying, how they’re buying, what they’re buying.

Guy:

– Who they’re buying from.

Danny:

– Exactly, but then there’s also this subset, underlying issues, big, big, big issues underneath. Let’s get into that a little bit.

Guy:

– Yeah. So I know it’s a very easy analogy because we see the posters and all that, but I do think it’s—to your point, I think the top, what we see above the water line is what you and I and all of us here are doing which is expectation-setting. We expect certain things. We demand both from our professional lives and our personal lives. We are demanding and demanding more and more. Like you said, speed and efficiency and selection and all this. But I think from a supply chain perspective, all the things under the water line such as labor issues, logistics, planning, execution, distribution, digital orchestration of orders, all those things that hold up the ability to meet those customer demands.

What I do think is interesting–– and we touched upon it–– is, I feel as if during the pandemic that waterline dropped a bit. People got exposed to what was under there and saw the massiveness of what’s underneath. And I don’t even think they’ve seen—they haven’t—the entirety of it. So I think under the waterline I think it’s really interesting as supply chain professionals, we need to constantly wrestle with making sure that people are aware of those things, not just the customer, but more importantly our bosses, our bosses’ bosses, other people in our businesses because I think at some level, and we’ve been on—we, I say we, those in my circle, so to speak—we’ve been on this sort of mini-crusade for the past few years which is, supply chain needs a seat at the C-level table. We can no longer be a cost center within the organization. I don’t care if you’re a candy manufacturer, pharmaceutical company, a toy distributor, clothing distributor, you make widgets, you make whatever. Supply chain has to have a seat at the table at the executive level because the supply chain, at the end of the day, is what gets the products even if it’s a digital product—because oh, well we’re a digital company. We just do digital. No, there’s a supply chain behind that. Let’s figure out how we make it more efficient, make it work better, make it address the customer’s needs.

And I think that’s what, when I look at the iceberg analogy, that’s what I feel we’re starting to see more of and be exposed to. But I think the complexity of it is still something that we need to constantly educate, not just the market and our customers, but even more importantly at times internally our own businesses to say, no, no, guys. We need to pay attention to this. We need to pay heed to this. We need to invest in it. We need to make sure that it does what it’s supposed to or else all the other stuff can fall short regardless of how well they’re doing. And I think that’s the part that I hate to say excited because of Covid, but that’s the part that, if there’s a silver lining it’s that that aspect below the waterline has sort of bubbled up, and I think more people are aware of it. Now it’s up to us to not just stomp around and say yeah, it’s important, but now to show why it’s important and how to turn it into a competitive advantage, not just a cost center.

Danny:

– Sure, absolutely. And I think—the silver lining piece is that there’s been so many learnings that we’ve had from this, and they’re going to continue to learn as things still evolve, I guess. But I think that there’s absolutely some great takeaways, and that was something that as far as specifically saying having a seat at the table, the C-suite role creation, that some of that doesn’t necessarily—yes, it falls under ops, but something that, especially I would say if you’ve got some of these manufacturing companies that you’ve got—you look at automotive for example. You’ve got how many components and pieces? And obviously they’re getting just destroyed right now. I was hearing, was it GE fridge, because of supply chain and labor issues, I think they’re down to one and a half or one and a quarter shifts or something like that. I mean, it’s crazy. Hopefully we don’t, obviously, run into something like this again, but I think as things are going to change, and I think that we’ve definitely seen that things can and do and will change and shift, it’s going to be critical to manage that. And the things that are being manufactured and created, certainly there’s levels of what’s important or not.

There was an interesting story. I don’t know if you heard about this. One of our clients over at Optimum, they are a healthcare recruiting agency. They ended up buying a US manufacturer, an antibiotics manufacturer, in Bristol, Tennessee. What happened was during the pandemic, they are the only domestically-produced antibiotics—they do, I think, penicillin, amoxicillin, and a few other things. They’re the only one that’s produced domestically. They’re a foreign-owned entity, I believe, even though it’s called US Antibiotics. They went bankrupt. They went bankrupt during the pandemic. Employees went and continued to help to work there because they realized how critical all of that was. So the company’s Jackson Healthcare. They came in, and they bought up the company saying, we feel like this is so—this is critical. This is national infrastructure.

You want to talk about supply chain issues and not having critical things, talk about hey, you know, I can’t get penicillin or amoxicillin which is used—it’s one of the most widely-used medicines. I think it’s a super interesting story, and why they went bankrupt. I think there are some supply chain issues and some things going on there. So when you look into that, you’re like, that actually really should be a national conversation as we get into—that’s critical infrastructure, and do we want to rely on foreign partners? We can get deeper into all this. But when we have specific domestically-produced battery manufacturers for those supply chain issues, issues with conflicts with other countries, what have you.

Guy:

– You’re absolutely right. I think it’s a great example, and that little piece is a critical part of a bigger supply chain, the healthcare supply chain and everything. So how do we shine a light on those important components and then have the right discussion about yes, we want to be competitive? We believe in the capitalist system. All things I agree with. But at some level we also need to understand there’s certain things that we need to be more conscientious of from that perspective. And I think that’s—I hope that conversation continues because I do think it’s—our supply chains are so global. They’re so sensitive to disruption. Massive or even minor, they’re very sensitive. And they’re all, you and I and the rest of us in our daily lives rely upon these supply chains not just to get our toilet paper, but in the medical space especially, to get the right drugs and pharmaceuticals, to be able to have access to hospitals to get the right procedures, et cetera.

And I think it’s a conversation that has to be had. We haven’t gotten into roads and bridges and rail and all this and ports. You’re seeing at the Port of Long Beach we can’t continue to go about business as usual when we see what’s happening at those ports. That’s just an issue, not just nationally but globally. And I think as we do more, as things are accelerating and they probably will continue to do so, and maybe not accelerate for the sake of speed but just for the sake of being more sensitive and responsive to the supply chain, is our infrastructure ready for that? That’s the part that’s going to have to continue. It’s not going to be an every two or four year-type discussion. This is long-term. This is the infinite game that we must continuously work on. And I think that’s the part that, as a supply chain nerd, I get somewhat excited because I think it’s finally time that we’re having these conversations. Is there an easy solution? Of course not. If there were, I would have it, and—anyways.

Danny:

– You’d have an island by now.

Guy:

– I’d have an island by now, yeah. I’d have an island with all kinds of cool stuff on it. You’d be invited. You could come out.

Danny:

– Oh, I appreciate that.

Guy:

– Of course. But I think it’s across the board, across industries. And I think what we need to realize too is, I think your example, Danny, was fantastic, if you look at, well they have supply chain issues. Well what was it? Or the GE example. There’s labor. Well the labor in the warehouse, that’s a supply chain issue. That’s a supply chain issue. And I know that, near and dear to my heart, people, well, let’s put automation in it. Okay, well automation is great, but there are other things that go around automation we need to think about. We can’t just slap in this—automation solves. No, it doesn’t solve it because there’s other issues around it that might pop up. If we’re not aware of the macro supply chain issue, then the solutions we provide at a micro level we don’t understand or at least are sensitive to the long-term repercussions or the wider repercussions. And again, back to the question, when you talked about what’s coming post-Covid, I think it’s a greater awareness of this. I think more discussion. And what I do hope is that we see more supply chain at the executive level getting the attention it needs because then that will continue to push the conversation and to find solutions for it.

Danny:

– It’s kind of funny—not funny, but I remember hearing stories initially when this stuff happened, to your point on this. C-suite executives were pressing everyone. Why is this—why are we delayed on this? What is going on? What do you mean? Which was fascinating to me to be honest with you because I felt like doesn’t everybody—

Guy:

– We’ve said this for the past 20 years, yeah.

Danny:

– Isn’t this a—oh, I guess not. I guess it’s the, what is it? The squeaky wheel gets the oil. I guess maybe there were some squeaks, but—

Guy:

– Not enough.

Danny:

– Not enough, right?

Guy:

– But now all of a sudden when you’re going to the grocery store and there’s no toilet paper, people are flipping out. Or there’s no Lysol wipes, or there’s no—I got a funny message from one of my good friends who basically, jokingly, yelled at me because I guess during the pandemic we all became bread-makers. So he was making bread, and he got very cross with me because there was no yeast at his local grocery store. Supply chain issues. What’s wrong with the supply chain? There’s no yeast. I’m like—so I had to explain to him, well we model a certain amount of demand. This demand has gone through the roof, and manufacturing is basically planning for that kind of demand, so they can’t just ramp up when there’s no labor, there’s no raw materials. He didn’t care. He was like, well why isn’t it on my store shelf? Every time before the pandemic, there’d be the yeast at the store shelf. Now it’s not there anymore. And to your point it’s like, well why not? Back to the iceberg, because there’s a ton of stuff under that waterline, and not just one disruption but multiple under the waterline creates this tsunami of issues, and then you don’t get your yeast at the grocery store.

Danny:

– Tsunami of issues, that’s—dominoes. A domino effect of tsunamis. Demand, and then we got labor issues.

Guy:

– No raw material, factories are closed.

Danny:

– Somebody crashes a boat in the Suez Canal.

Guy:

– Which is again—not to laugh about it, but you’re absolutely right. It’s another reminder. You get some guy who’s never driven the ship who gets control who’s been told to do it, and he makes a mistake and crashes a boat into the side of the Suez. What happens? Yeah, it’s only there for a couple of days, but look at the long-term repercussions that has.

Danny:

– Oh, exactly. I remember talking with—I do not proclaim myself as a supply chain expert at all. I know enough to be very dangerous. But I remember talking with people for years. Supply chain’s very fragile, and you don’t understand how many intricacies and nuances there are. Infrastructure’s so important. Do you realize that when we have hurricanes, a hurricane comes through that can cause disruption for weeks to months. And, whoa, really? I had no idea. Because it takes time to unload the boats and move them and process them through. Things stack up.

Guy:

– Well just look at what’s happening now. There’s about 103 boats sitting outside the Port of Long Beach. That’s not just a static number. There are boats that keep coming in. There’s just a physical constraint of, there’s nowhere to offload the TEUs at the port. There’s then not enough trucks to then move those to a rail head or inland. So as you said, you can see how—wait a minute. This is going to take a while to clear up. This is not weeks or months. I’ve been told a year plus before that it gets somewhat close to “normal.” And you realize very quickly, yeah. And you think about this. How much inventory is sitting on those ships that is perishable or is getting damaged by sitting out in the ocean water for this long? It’s not just sitting in a pristine environment. It’s sitting out in the saltwater ocean. It’s not in the water; I know. But it’s not meant to be sitting out there that long. And how much of the inventory do we really know is perishable or is going to be bad? Or even if you look at a retail perspective, how much of that is going to get offloaded, and it’s oh, it’s the style for the winter. It got offloaded next fall. Oops, too late. Right to the discount rack.

That long-term effect of some of these delays, you and I and I think others, we get it now when it’s finally hitting the average consumer—again, B2B or B2C—all of a sudden it’s like, oh, my goodness. What’s going on? Why is this happening? Well guess what? That ship that’s supposed to take two hours to be offloaded is now taking weeks. And then, therefore, it’s going to take another week to get on a truck. And it’s going to take another week, and oh by the way your warehouse, it’s already got inventory in there, and it’s just going to sit in the loading dock. So I can’t put it on the shelf or move it. You can see now the, like you said, the domino tsunamis that keep stacking up. All of a sudden you realize, well that’s why you’re not getting your product. That’s why you can’t run your factory. That’s why you can’t get your product to your customer.

Danny:

– And then consumer demand says, well that’s stocked. Hey, we like this new product over here. We like this. We don’t care about that anymore.

Guy:

– Right.

Danny:

Guy:

– And the demand goes through the roof.

– Yeah, and it is also a massive bulb effect across all this, too. I think, again, the silver lining is what I’m seeing, which I hope continues—and I keep saying hope—is the awareness of that. We’re starting to have more conversations about it. We’re starting to rethink how we look at these things from a lean perspective, from how we manage the supply chains. How do we measure them financially and otherwise? The belief I have is that as we continue to have these conversations, we’ll start thinking differently and therefore acting differently. And therefore, at some level also setting different expectations for our end customer. And all that I think is a good thing because if you look at supply chains in the past, man, we were running so lean. And if everything is perfect, it looks great.

Danny:

– This is awesome.

Guy:

– It’s awesome.

Danny:

– Until it’s not.

Guy:

– Until it’s not, right? Until there’s a tsunami that happens in the Pacific, and half my cars are underwater, and now what do I do? Or my chip plant is by a nuclear power plant that now has to shut down because there’s radiation. Oops. And I think that’s the part that we as an industry have to continue to work on ourselves, but also the general marketplace has to continue to have an awareness of it and be more sensitive to it. Give us a break sometimes.

Danny:

– Yeah, well I think, which is nice, I think the general public consumers have hopefully—hopefully your friend has calmed down.

Guy:

– That’s a good question. That’s a really good question.

Danny:

– But I think it’s—I’m not going to throw out the term, but it’s been ‘more normalized’. It’s more commonplace, and consumers, I think the awareness—it would’ve been nice if it had happened a different way, but it happened nonetheless. It’s happening. We’re seeing these adjustments, and we’ll continue moving forward. I want to pivot and move on to another area, unless there was anything else you’d like to add on.

Guy:

– No, oh, we could talk about this for hours, but let’s pivot.

Danny:

– I’m not going to bring in inflation, CPI, shifting consumer behavior habits. We’ll save that for another day because this is a lot of fun. I could go on, although I could do some bourbon. Well, it’s a little early.

Guy:

– It’s 5:00 somewhere, and it’s Friday.

Danny:

– Oh, that’s right. I have some WhistlePig—alright, well we’ll keep going. You went to NRF recently. This was December.

Guy:

– January.

Danny:

– January, early, mid-January.

Guy:

– During the pandemic I forgot what day it is. Now I’m forgetting what month it is. But anyways, yeah.

Danny:

– Everyone’s done the same exact thing.

Guy:

– Maybe you did put bourbon in this one.

Danny:

– I have vodka in mine. Alright, so you went there, and it sounds like a similar experience that we’ve seen with CES. We went to IPPE about a week or two ago. Just quick, your experiences, what was that? What do you think things are looking like?

Guy:

– So yes, we went to NRF, the big show, end of January in New York City, which I always half-joke, tongue-in-cheek that in normal years, the year truly hasn’t started until I’ve braved the New York winters and gone to NRF and hung out with 20,000 of my closest friends at the Javits Center and eaten Clif Bars for lunch as an acceptable form of sustenance.

Danny:

– That’s a good idea.

Guy:

– Yeah, but this year of course—last year they didn’t have it. It was virtual, and quite honestly, I don’t think it was very good. So this year it was back at Javits. When they started talking about it last summer I think we all got excited because obviously the vaccines had started rolling out. We had seen a little bit of a decrease. It felt like things were kind of turning a corner. Then unfortunately Omicron happened. Honestly, the event was good for me and the folks I went with from Tecsys. Why, because we were able to speak with a number of companies from a partner perspective who we otherwise probably would not have gotten that much time with. Why, because we’d have customers there we’d have to talk to. So from that perspective it was well worth the time.

However, I think what I saw is sort of a rigidity by NRF with regards to, hey, this is not normal times still. Let’s be a little more flexible. We’re all in this together. Those of us who did come to New York are spending money to be here. We bought the passes. We paid for travel and hotels, et cetera. And oh, by the way, there is this Omicron going around, so technically we are still in a pandemic. We are willing to take the risk ourselves and to be there. I will say this, NRF did a very good job. They were very upfront about having vax cards and how to get in. They were very good about getting us home test kits on a regular basis that we could take back and use. People at the show were very respectful. I think I maybe saw one person without a mask on, maybe because they were eating, but I couldn’t tell. Let’s just give them the benefit of the doubt. Otherwise 99.99% of the people were all wearing their masks, and properly too. I’ll give them credit for that.

So from that perspective, NRF did a great job. I think where I hold them a little bit accountable is, again, it’s not normal times. Let’s think about this together collaboratively. For example, my colleague and I–– we bought just a regular floor pass. So we got on the floor; we were able to walk around and interact. The general sessions we couldn’t get into. Why, because we didn’t pay for that pass. But we went up and asked, well can we go in? There’s no one here. We were told no, you didn’t pay for that pass. I was thinking to myself, wait a minute. You’ve got great speakers speaking to a half-empty, if not a quarter-empty, if not an empty room because no one’s going in because no one’s here. Why don’t you let the rest of us, because we want to listen, and we’re going to support the person that’s speaking.

So I think a lesson to folks today who are running these physical events is think about, be situationally aware. We’re still in a pandemic. People are still wondering whether they should travel. People are pulling out. When I was at NRF, I was telling you guys backstage this. You walked on the main floor, and the whole front row was empty.

Danny:

– That’s crazy.

Guy:

– Where usually you have the big SAPs and Oracles with massive booths, gone. And it’s jarring to see that. So my advice is, again, just generally, I do hope we continue to have physical, in-person events. I encourage people who feel comfortable to go to them. I still think they’re incredibly valuable, but I would push on the folks organizing them today to think a little bit, to be aware of the situation. Read the room. You know what? Maybe I didn’t pay for the full pass. But you know what? I’ve got the CEO of big retailer X speaking. Maybe she would like to have more people in the audience.

Danny:

– Maybe.

Guy:

– Maybe. Maybe not.

Danny:

– But that’s the new normal so—

Guy:

– So that was my experience, and again, from my perspective it was very valuable. Now we did not have a booth, so I didn’t spend—

Danny:

– Oh, so you were walking the show.

Guy:

– So we were walking the show. We didn’t spend the hundreds of thousands of dollars from that perspective. So that’s the other part that I can’t speak to that. If I had spent the money for a booth and was not able to get out of it, I would have a much different opinion, I think, of the show because frustration is only the beginning of the description of what I would feel from that perspective. And again, I appreciate NRF having an in-person event. I think that was fantastic. But again, have a little more situational awareness. We’re all adults. Next year when things are back to normal I’m not going to show up and be like, oh, last year you only let me into the main session, and I only paid for this.

Danny:

– It’s understandable.

Guy:

– It’s understandable. I get it. Again, that’s my one advice to NRF and others having events: have that flexibility at the show to think about what is actually happening.

Danny:

– No, that makes a lot of sense. Have some flexibility, empathy, not even just for the attendees but also empathy maybe for your speakers.

Guy:

– Well and that’s the thing.

Danny:

– You’d think you’d want to pack it. Come on; come on, let’s get in here. Let’s go.

Guy:

– Get everybody in there.

Danny:

– I know you guys aren’t part of it. Come on in.

Guy:

– Come on in. Just sit. I’ll give you something I found funny about that, the empathy side. When I worked at Forrester a long time ago, I remember when Forrester had our first few big user conferences. We were a 300-person company. People didn’t really know what we were doing, so we would have these user conferences. And to your point, Danny, we’d have a speaker up there doing the keynote. And we would be like, get all the research associates, get everyone in the office to come because we’ve got the back row empty. We’ve got to get it—

Danny:

– Pack it.

Guy:

– Pack it. Make it visually—because you have a speaker taking time out of their day and their calendar. They’re coming to speak.

Danny:

– Is this worth it?

Guy:

– Yeah, are they going to come back next year or the year after? Pack it. Now, the good problem was as we went through better times, then we’d have to turn people away. That’s a good problem, but again, situational awareness.

Danny:

– Right, yeah, demand. So I’m curious. Are you guys planning on this year attending other—not just walking the shows, but are you going to actually have booths at any? Are you planning on—okay.

Guy:

– Yes, so we will, and a shameless plug, so we will be at MODEX back here in Atlanta in a few weeks, or in six weeks.

Danny:

– It’s not long, end of March.

Guy:

– End of March. We’re very excited about it. We are all in from that perspective. We will have a booth. I should have the booth number, but I don’t. I apologize, but anyone can look up our website and see it. We’ll have a booth. We are actually going to have a couple of speaking sessions as well, so we’re excited about that. So that’s the next big show for us, and then we will be starting to go to other events, not just walking, but putting more time and investment into it both in the healthcare side, the supply chain retail side, distribution side.

We certainly will start seeing Tecsys more at these events as we go through this year. I can’t believe we’ve just started 2022, and I’m going to talk about 2023. We are in the midst of trying to think about, alright, for 2023, where do we start investing more in some of these because if we’re still like we were in January of this year next year, then you know what? I’m going to retire to a log cabin in Canada. You’ll never see me again. I’m off the grid. I’m out. But no, we certainly recognize the importance of that and are looking forward to it. I’m personally looking forward to it as well because I think it’s one of those that we don’t have it, we realize how much we miss it, how much business we drive from it. So I’m really excited about getting back and having that type of presence and the conversations that it creates and the buzz it creates.

Danny:

– I’m curious, just from right now, it’s like we’re back—I was just telling somebody, it almost feels like we’re trying to learn how to drive a stick shift. We’re in first; then we’re second. Then we’ve got to downshift back to first or whatever.

Guy:

– And we fry the clutch, and we start over again.

Danny:

– And then there’s a speedbump. We’ve got to go—I had to learn—this is coming from real experience here. I had to learn in Mexico with a guy who—my Spanish was okay. The guy that I was with didn’t speak any English, and I had—and where we were driving to was very hilly. It was in the mountains. And they have these things called topes, speedbumps, in the middle of the dang interstate. You could be doing 80, and then tope! You’ve got to—and then boom! boom! Then there would be a suspension shop right next to—Now that’s called creating demand. That’s a great—one day, as an aside—I’m getting very ADD. I’m going to write a business book. “Everything I Learned About Business, I Learned In Mexico.”

Guy:

– That’s a great use case right there. Create a demand and have the supply right next to it.

Danny:

– Perfect.

Guy:

– There you go.

Danny:

– That’s business right there.

Guy:

– That’s business right there. Done.

Danny:

– Yeah, exactly. That’s kind of what it feels like right now. Shows are happening. They’re not happening. We’re doing this, or—as we’re going through that, how are you guys, whether that’s you or Tecsys in general, handling that, just in terms of customer reach? I’m imagining that your business, like others, it’s very relationship-driven. I would imagine, too, that you need to get boots on the ground to be able to see things, how things are going. How have you guys been managing that? I’ll do a second part on that. I won’t. I’ll do the second part afterwards.

Guy:

– You know Danny, it’s the million-dollar question. I think we’ve been managing it as well as anybody can and is expected to these days. I think for us, it really has to be a combination. Again, back to the situational awareness. We have to be sensitive to our customers and our prospects and how they want to interact and where they are. I think it’s a combination of being at events, so walking the floor, getting face-to-face, a combination of course of a lot of digital marketing, and that has a lot of different flavors. I think it’s a combination of old-fashioned email reach out, things like that.

But what we have found and what has been really good for us is early spring last year when things started to creak open a little bit more, and then really in the summer, it was really a dedication to—people are going to laugh at me in this, but old-school stuff. Getting on an airplane, going to meet customers and prospects, going to visit people for face-to-face meetings. Taking the time out to do this. I met with a customer at the beginning of the year, and had a great meeting, in person. When we were leaving, he said it a few times. Said hey, the fact that you guys came out to visit, that’s big. That’s really important because we could do this over Zoom. We could do this over—but the fact that you’re coming out, and you’re taking the time out in these conditions to come visit and spend time and sit down face-to-face, that goes a long way.

I think that’s what, from our standpoint, that we’re certainly very reticent of is that this has to be a combination of a lot of different tools. Part of it is, again, it’s going to sound super cliché, but people buy from people. It’s still the way it works. And I think what we have found is during the pandemic and going to a lot of digital activities, those only go so far. Now it doesn’t mean that we stop. It doesn’t mean that they’re not useful. But it is a tool in the toolkit, and I think that’s what we’re seeing is that—and to your point, I think you’re absolutely right. It’s a great analogy.

We’re relearning everything. I think we’re in this process of relearning, what events do we go to? Do we sponsor? Do we do a webinar? Do we go to IndustrialSage and have a session? What do we do? We forgot how to do this because the last year and a half it was, well we’re going to do a webinar, or we’re going to do a Zoom chat. Or we’re going to do another webinar. It’s like, okay, we’re all going to be sitting in our offices at home, and we’re all going to wear sweatpants on the bottom and look professional on top. And we’re going to smile and try to relate to our customers that way. We were able to get to a certain point with that, but I think what we’re rediscovering is if we can get 20, 30, 40% of the way with this, how do we get to 100%? Okay, we have to mix it up, and we have to again go back to old-school, traditional stuff. Get in front of people. Meet face-to-face. Shake people’s hands. Look people in the eye across the table. And I’ll tell you; it was interesting.

I was with another customer of ours last summer, and great meeting and everything. But I remember we finished the meeting, we were walking out to our cars, and we were just chit-chatting, small chit-chat. And in that five-minute small conversation, I was like, Oh, we just discovered something about what one of the projects is that we can help him with. This is why this is so valuable.

Danny:

– Exactly.

Guy:

– It was just this hallway conversation. We were saying goodbye. She mentioned something and talked us through it, and afterwards I was like wow, that’s it. We can’t do that over Zoom or email or anything. I’m going to throw one of my friends under the bus. Love him to death, one of my—

Danny:

– You’re throwing all kinds of friends.

Guy:

– I’m throwing everybody under the bus. One of my best friends from college, brother of mine, love him to death, best friend. But he and I have a small difference in this where he’s an accountant, and he looks at everything as black and white. His vision is, well, you made it through the pandemic without traveling, so why do you need to go travel again? His feeling is, just send them an email and an invoice, and just get stuff done this way. I’m always like, no. People buy from people. These face-to-face conversations are how things progress and move. And don’t look at the dollars and cents of the cost of travel. Look at what it’s opening up down the road. And I think that’s where we’re relearning that skill. We’re rebuilding that muscle.

Now does it mean that we’re going to just travel like crazy? No, I think we need to constantly reassess. But I think from a marketing and a sales perspective, we at Tecsys, and I think others are doing the same, is we’re taking this opportunity to relearn and to figure out which muscle we have to work on. Which muscle has atrophied a bit? What are the new muscles we can leverage with the old-fashioned muscles, so to speak? In a way I think we should look at it as an opportunity, and I think we are at Tecsys to really start rethinking about this and see, what can we do moving forward to take the lessons we’ve learned and then relearn the ones that we forgot?

Danny:

– Oh, totally. And I think it’s—definitely heard that from other people as well where it’s—I wouldn’t say it’s an old-school tactic at all. We’re human beings, even a B2B product, there is a level of emotion, even though there’s a lot more scrutiny that goes into it. But there still is a lot of emotion because it could come down to—unless if you’re the only provider of something. But when you’ve got a whole host of competition, people that can do something that’s similar or whatever, it’s going to come down to several things. The money certainly is one piece, but the other piece is the relationship and the team that we’re going to be working with on this. Do we really feel that they have our back? There’s a lot more at play. My background’s in accounting, believe it or not, so I totally get it. But the money, the black and white, it will show in the bottom line and the top line. Well probably more top line—we’ll see. Hopefully it’ll show in the bottom line, too. But from a top-line perspective, yeah sure, it may not change dramatically, but it will.

I think to your point okay, maybe not everything you need to go jump on a plane and go whatever. There’s some stuff that yes, we can do Zoom meetings, and they’re totally appropriate for that. But it’s these interactions like you mentioned. I feel like business really happens, this stuff really happens not in the office. Like you said, you’re in the hallway. You’re walking out. You’re at dinner. And it’s these side conversations, these little things that you pick up on. Like you said, there’s no way you’re going to pick that up in the awkward five-minute pre-chat with Zoom while we’re waiting for Billy to jump on.

Guy:

– Right, well and what’s interesting, too what I’ve seen too, Danny, and I don’t know if you’ve seen this in some of your conversations. This is something I’m a little nervous about. I feel like sometimes on the flipside people are using Zoom as a crutch now where it’s like, oh, you know what? I’ll be in Atlanta. Let’s—happy to come by. No, no, no, no, let’s just start with a Zoom meeting, or let’s meet on Teams first, and then we’ll figure it out. So I think that’s the new muscle that we have to constantly work and harness, which is how do we get, if we’re going to be pushed to a first virtual meeting, how do we make the most out of that to earn the right to get that in-person meeting?

Old-school before all this it was like, hey, I’m in town. Let me stop by. Yeah, okay, sure. Here’s my address; come by. Sit in my office. Maybe I’m not paying attention, but at least I’m forced to some degree to be there physically. Now I’ve seen this where people are like, let’s do a Zoom meeting first. I think that’s something that, as a vendor selling or anybody selling we have to keep that in mind, that our customer might use that as a crutch. That’s okay. Let’s figure out how to again maximize that opportunity with the goal intent of the next meeting and hopefully drive it to in-personal-type things. But that’s interesting. I’ve seen that coming out of the heavy part of the pandemic where we’re like, we’d be happy to come down, or we’ll be down wherever on this date. No, let’s just do a Teams meeting first. And it’s like—

Danny:

– It makes sense. I could see a couple of reasons for that, and maybe you got some insights on this as well, too, I’m sure. I could see that maybe, are they working from home, and it’s like, that’s going to require me to go into the office? I don’t necessarily want to do that. The other piece that I’m seeing is, especially I would think in your space, that there’s a lot of other, a lot of competition out there. And they are probably being hammered from multiple areas, so it’s like, before I really want to commit time, I really want to make sure this is worth it because I don’t want to go—

Guy:

– With 17 meetings for, yeah. You’re absolutely right.

Danny:

– And I think that’s, on the marketing side and the sales side, we’ve seen a massive uptick in terms of ad spend, email campaigns. You were mentioning webinars. Everyone’s doing the same thing, and they’re not doing them well. Present company included. We try to really make sure to provide value in our interactions, but sometimes, you know—

Guy:

– It’s a tough—you get it; we get it on our side. It’s tough. Personally, I know you do the same, we get so much email, personal email, work email. I’m like, why? I will say there’s been one or two that I’ve actually clicked and looked at because I’m like, oh, that’s kind of interesting, just to more learn what they’re doing, not to talk about their service.

Danny:

– Why have you clicked? What intrigued you?

Guy:

– There’s one that I clicked because this woman did a great job where she—I forget where, but she sent me a quick video where I was like, oh, that’s interesting. Then she followed up, and I didn’t take this meeting, but she followed up which I thought was good. She was like, happy to send you a $5 Starbucks gift card, get coffee, and you and I can just chat over coffee, virtually. I was like, eh, okay. I’m intrigued. I didn’t take the meeting, but I clicked. I opened up—

Danny:

– Enough to where you remembered it.

Guy:

– And I remembered it. I’ve gotten plenty of other ones I remembered for the wrong reasons. It was like, did you get my email? Why aren’t you responding? I’m like, oh, my God. Are we back in high school, and you’re like a jilted ex-girlfriend?

Danny:

– Can you just circle yes or no?

Guy:

– It’s like, read the room. If I’m not clicking—but again, I didn’t take her meeting. But I got past stage one. We have this conversation internally a lot. I just had this call recently about this, and again, I feel as if too what we, the challenge we have is with digital technology. It’s too easy to send messages to everybody. It’s too easy to say, oh, let’s craft this fantastic email, and then blast it to 10,000 people. As opposed to saying no, like in the old days where I’m sending a mailer or something. It’s like, well this costs money, so I can’t do 10,000 of these mailings. So let’s get that 10,000 list down to 2,000, and then 2,000 down to 200 and then down to 20 that we really think. Let’s really work it and figure out, Danny likes this, and Guy likes this, and we’re going to craft it. I think we’ve lost some of that discipline because now it’s just so easy to hit send, and we have all these great automations.

Danny:

– Doesn’t that solve it?

Guy:

– It solves everything.

Danny:

– Just like in a facility.

Guy:

– Absolutely, and I think that’s where we’ve missed out. And the problem is everybody’s doing it, so then we get lost in the sea of everything else.

Danny:

– Exactly.

Guy:

– And one of the things I talk to our team all the time about always is old-fashioned stuff. Go to their LinkedIn profile. Read about them. Go to their Twitter profile. I know some of it’s kind of creepy, but figure out—

Danny:

– It’s not creepy; it’s all public.

Guy:

– It’s all public.

Danny:

– I go to people’s houses—oh, no, I’m just playing. That’s creepy.

Guy:

– As long as you’re on the street, which is a public domain, you’re fine.

Danny:

– I’ve never done that. I’m just going to say that for the record.

Guy:

– But I think we as an industry, speaking as marketing folks, as an industry too I think we need to go back to—again, use all of the tools that are at our disposal, but go back to the old-fashioned way of, all right, get your list; work it. Figure out what makes people tick. And it’s not one-size-fits-all.

Danny:

– Exactly.

Guy:

– Danny might like emails. Guy might like snail mail. Figure that out as opposed to just saying let’s just click the button. Let’s canvass everybody. I’ll give you a story. When I worked at a company called Progress Software, we actually had a campaign that was really interesting. We had a lot of hospitality businesses: airlines, hotels, cruise ships. And we came up with this really targeted campaign where we, snail mail, got out and printed out on very high-gauge paper, looked like a menu you would get at a high-end restaurant, nicely printed, nice font and everything. And it was basically just a, here’s who we are. Here are some of the things that we can do, like a menu. Like if you need this, we’ve got these three things. For your entrée, it’s this. And we sent it out with, I forget the verbiage. We got a pretty good conversion on that. Why, because A, it was real mail. It was a nice envelope, heavy gauge, hand-written type stuff. And it wasn’t to 10,000 people. This was a very curated list, but the beauty of it was people got attention, and it was like, this is different. Let me go to the website and see.

We did the same thing when I was at Infor which was, I thought was really cool as well. Same thing, we curated the list. There were 20 people in North America we wanted to go after. We were going after the French-speaking market, 10 in the French-speaking market. They literally brought myself in and Kurt who was our founder. And we said, alright, you’re going to read a 20-minute blurb for each one, but with their name at the beginning. So it’s not read a blurb and then we’re going to insert the name later. No, no, you read it each time. And it takes time, but you know what? On our side I remember, so they had me come in and do the French one. We sent out 10; we got one that got put in the pipe.

Danny:

– Hey, that’s great.

Guy:

– That’s fantastic. We used a digital tool, but we personalized it. And we did our homework beforehand to figure out this list we need to curate down to a size that makes the most sense. And I think that’s a lesson we at times forget is that we buy these lists. We say oh, yeah, there’s—

Danny:

– Blast them.

Guy:

– Yeah, 6000 people in North America that want supply chain solutions. Great, let’s blast them. And we do the usual problem with 6000, if we get 1% conversion, then that’s this many, and then of that it—oh, great, we’re going to make two million bucks out of this. It’s not—just put a spreadsheet and run the numbers like that. So I think we as a market, from a marketing perspective, I think we need to go back again to old-school of do your research, understand what people are looking for, just like we as consumers. Understand what makes us tick, and then go out, reach in. To your questions to start this is, we’ve got to learn or leverage the muscles we developed during Covid and relearn the ones that we forgot. And then figure out what the mix is moving forward because I think it’s exciting because we’ve learned these new techniques. It’s also daunting because we’ve forgotten some of them. And what I fear sometimes is that the pendulum swings too much. Oh, let’s do everything digital. Eh, I don’t know.

Danny:

– Right, right, totally makes sense. Love it. This is great. Personalization has always been a huge—I’ve just loved it. And there is some great technology out there now where you can still automate it a little bit, but you can still personalize it a little bit more. Great example. I absolutely love that. You’re seeing these a lot in account-based marketing campaigns, ABM, targeting, just being really targeted. Instead of 2000 people, we’re going to focus on these 20 and go real deep and provide real value. I love it. Thanks for sharing that, by the way. That was great. I’m going to check our time here. You’ve got a plane to catch. I want to make sure—oh, we’re doing real good. I’m going to ask you one last question. And this only going to go 45 minutes. No, I’m just playing.

Guy:

– The question or the answer?

Danny:

– Both. No, if you had a magic wand that you could change anything in the industry, what would that be?

Guy:

– I think for me the magic wand is, and this is for B2B or B2C is, and going back to our iceberg analogy, the magic wand is to have the consumer, and I don’t just mean us as consumers of retail, but consumers of any good or product is to reset or to create more reasonable expectations around fulfillment and things of that nature. Now I’m not saying that we should accept subpar service or we should accept bad fulfillment. I’m not saying that at all. What I’m saying is, the magic wand would be to make us more aware of what is it that it takes to get a product, this mug, from design to sourcing to manufacturing to shipping to storing to getting here to getting to this table. What is that journey, and the complexities of it that go into it so that if Danny orders 10 of these and they’re supposed to come next week, but they come two weeks later, you don’t flip out. Now, again, I’m not saying you accept poor service. But understand why, and that magic wand is not only the expectation, but also from the supply chain to be as open as we can be to our end customer so that they can have better expectations as well.

That’s the magic wand I want because I feel as if supply chain at some level, which we’ve all played the beer game. I don’t mean the one, how many shots can you do? But the old beer game of operations. We’ve all realized, when we play that game at times, that supply chain sometimes is just this cloud of mystery. So you said you wanted 10 cases, but I really think you want 12, so I’m going to manufacture 15 because I want some safety stock. And then I’m going to tell my supplier, but my supplier knows that I always lie to her, so she’s actually going to under—think about it. It’s all expectations that are shrouded in mystery and that we are trying to game the system. I know we talk about digital and all this. Yes, that adds a level of transparency, but there’s still that underlying notion of, do I really trust you? Am I going to hedge? And I think the magic wand is to continue to have better discussions but more importantly is the customer’s expectations to be more in line with the reality.

And we even touched upon this, but part of it too, and I think we’re going to see more of it, is around things like sustainability. Oh, you really want that product? Well I’m going to have to put it—and you ordered five items in your shopping cart, but you really want that one, so I have to expedite it. So instead of doing a full truckload, I’m going to send you one little item in a corrugated box, and I have to air ship it, and this, and this, and this. Do you really need it then? Can you set your expectation—maybe you do, in which case fine. But you need to understand the repercussions. You need to understand the cost. I think that magic wand is to open our eyes as consumers into what expectations should be and can be. And it’s to open the eyes or to encourage the supply chain to be more forthcoming with us as consumers so that we understand. My mom understands, why is there no toilet paper on the store shelf? My friend understands, why is there no yeast at the store? Now, he will probably still yell at me about it because he thinks I control the supply chain.

Danny:

– You do, don’t you?

Guy:

– Well yeah, but let’s not let that out too much. But that would be my magic wand. And again, I don’t want to make it sound like it’s kumbaya stuff because I do think if we had that better expectation, then we could manage in such a way that makes things—it might actually make things more efficient. It might actually make things better in the long run because—my little rant, I’m going to go on it for a quick second here is the notion of we need something in two days or two hours is an artificial need. Do you really need something? In some industries, yes. Healthcare for example, if somebody’s going into surgery and we need blood, there’s a time sensitivity to it.

Danny:

– They get a pass.

Guy:

– They get a pass. Certain things, yes, there is more time sensitivity. But honestly, if I order my kid a Christmas present and I ordered it late, that’s my fault. That’s on me. But does my kid really need something on this specific date? Probably not. They could probably wait a day or two or three or a week. Now again, I’m not saying we completely relax expectations and say, oh, if you told me it was going to be here next Thursday and it comes in three months, that’s okay too. No, let’s not go that far. But I think again, this preconceived notion that, well I need everything in two hours. Really? No, you don’t. So I think the expectation level, if we start understanding more about that, I believe that some of us—not all—will then understand better. Okay, yeah, I could wait. I can wait until you assemble all the items I ordered into one box. I can wait until your truck is full, and you can expedite it to me. I can wait until oh, your truck is going to fulfill that item at the store, and I can just go to the store and pick it up. Because now what’s it going to do? It’s going to save one extra truck coming to my house. It’s going to save a corrugated box. It’s going to let me go to the store and pick it up.

So I do believe that if we have some of those changes, it actually might make the whole system better, more efficient because again, we as consumers will have more sensitivity to the intricacies of it and the suppliers or the folks in the supply chain will be able to offer us more ways of fulfillment that we otherwise now are just saying, no, no, no, it’s got to be here in two days. Eh, really? So I think that my magic wand is understanding from both sides. Visibility, understanding, expectation-setting which I think only can happen as we get more visibility, more trust, more understanding of what’s happening within the system because otherwise we’re back to the beer game. Yeah, I don’t really know if you are going to get me the stuff I need, so I’m going to hedge. And they– you’re going to hedge, and then your supplier’s going to hedge. The next thing you know, we got a bloated supply chain. That’s my magic wand.

Danny:

– I love it. No, it’s great, and it’s interesting. That is very interesting, and I think you’re 100% right. It goes to expectations. There is an expectation, but there’s one company that I think has created that expectation. Which is—I mean, look. I remember as a kid, getting packages was like Christmas. It was amazing. You’d have to wait freaking forever. If you ordered something, if you actually ordered something. Yeah, and then it would come in, and you’d be like, this is amazing. My kids are like, “Oh, another box.”

Guy:

– “You going to open it?” “Eh, I’ll open it tomorrow.”

Danny:

– Oh, yeah, you know, it’s some more stuff.

Guy:

– It’s awful, but it’s true. We live in a condo. We have a door person, and it’s great because they’ll get our packages. There’s not a day that goes by that, oh, you got a package which we’ve grown accustomed to. But again, it’s like, do I need this right away? No, I could probably have waited. This is that same company that’s driven that mentality. I look at them and say, guys, you’ve also messed up in a way because you started to creep a little bit into giving us more flexibility of, I’ll wait because then you’ll put all this stuff—now they’ve backed off on that. But also, the other day I ordered—super sexy order. I ordered a shower door sweep.

Danny:

– Oh, tell me more.

Guy:

– Oh yeah, it’s fantastic. It’s a little piece of plastic. It’s about this big; it’s about that wide. You would think the packaging would be small. No, big box. I was like, what is this? Really? You’re wasting all that corrugated. It’s not efficient in your truck because now you’re loading a pallet with all this stuff, all because you’ve got to get it—no, the system, from that point of view, that one company, you can do better. Do better.

Danny:

– Yeah, that is interesting. And I do know some of the incentives, and to be honest with you I haven’t shopped on there recently—or bought. We talked about the difference between buying and shopping which makes a lot of sense. But I do remember digital credits and stuff you get. Hey look, if you don’t need this thing now, that worked for me. I could see different things. It makes sense. It makes a lot of sense. What could we do to pull some of the pressure off? It also goes into, I feel like, just our society as a whole. From an ecomm perspective and the expectation of two hours or two days or what have you. What about fast food? It’s a cultural and societal thing, and it’s, “I have a need or a problem or a pain, and I want it solved as quickly as possible.”

Guy:

– We could write a PhD thesis on this.

Danny:

– Now we’re getting into psychology.

Guy:

– And you’re absolutely right. I’m an old fuddy duddy, so I’m like, ah, get off my lawn type stuff. But part of that too, I think it’s the expectation being set at that level from a standpoint—on the flip side when I look at things from the retail space, some of the brands I love like Bonobos, like Indochino, if you go to Bonobos when they first started—less so now, but they still have this model where it’s a showroom. You walk in; you go look at a shirt. You look at fabric. You look at this sports coat. You’re going to see what it looks like, see some colors. But then I’m going to ship it to you. Yes, I’m still shipping it to you, but the expectation is such that I can wait for it to come.

Danny:

– Because otherwise you would want it, get it, and I’m going to walk away with it.

Guy:

– I’m in the store, yeah. I went to Indochino, and they were purely digitally native. You would measure yourself. They gave you all kinds of ways to measure. You would send the measurements in, and then you, online, you would pick your suit, your patterns, and all this. They’d send it off. It went to China. They manufactured and sent it to you, and it was much cheaper than if you went to Savile Row in England. Funny story; one day I’ll show you pictures of when I first did this. My measurements, obviously, were off because I looked like I was wearing fat guy in a little suit type stuff. But anyways, I digress.

Indochino’s done a great job of now putting in physical stores. Not stores, but basically tailors in malls. And I went to one recently in Las Vegas, and it was a great experience. I didn’t leave with anything. Why, because they’re going to ship it to me. To your point, Danny, I think that yes, culturally, psychologically, we’ve come to this instant everything mentality. But what’s interesting, there’s still some slivers where people are willing to say, you know what? Okay, we’ll wait for this. If I look at high-end luxury items, there’s still an experience, and there’s still a rarity involved with it. I was recently in Paris, before Omicron hit again, so last fall. I went to Maison Goyard, very high-end store. I was buying my girlfriend a present. And again, there was a scarcity. They don’t do any ecommerce. I can’t just go online and go click, click, click, and it’s shipped to me. You have to make the investment, literally both monetarily and physically, to go and stand in line and get in the store, but then it’s part of the experience.

Now again, back to the earlier conversation around marketing, it’s not one-size-fits-all. If I’m buying something, I don’t want that. If I’m shopping, I’m okay with that. I want that, and I don’t need the instantaneous satisfaction. If I’m buying because I need a roll of toilet paper, I want to go and get it. We have to also, from that standpoint, see those expectations. And I think again, back to the magic wand, I think if we started to get more clarity as consumers around both of those activities and what goes behind it, then the players in the supply chain can then tell us or give us more options that are more viable as opposed to just, I need it in two days.

Danny:

– Right. Yeah, makes a lot of sense. I like the magic wand answer. It was good. Thank you. So Guy, listen. I’ve thoroughly enjoyed our conversation. I’ve thoroughly enjoyed having you in the flesh.

Guy:

– Hey, thanks for having me in the flesh again. You know I love coming here, so really appreciate you taking the time and having me onstage, in-person.

Danny:

– Well this has been awesome, and we’re going to do it again.

Guy:

– Absolutely.

Danny:

– And we were talking about, maybe we’ll change the set, and we’ll have some bourbons.

Guy:

– Have some bourbons, some cigars. Read some Chaucer while we’re at it.

Danny:

– That sounds like a win to me. Alright so, well thanks again for coming on.

Guy:

– Absolutely.

Danny:

– I’m going to wrap up today’s episode. This was awesome. I loved it. Listen, if you want to learn more about Tecsys, you can go to the website. It’s T-E-C-S-Y-S dot com. And if I misspelled it, it doesn’t matter because we have a link in the website in the video and on the post right there. But thank you so much for watching this episode. This was awesome, and again, I really enjoyed, always enjoy having Guy come on and sharing his expertise and insights and conversations, always been a joy. So you can check him out. He’s pretty active on LinkedIn. You can find him there.

That’s all I’ve got for you today. Thank you so much for watching. Listen, if you’re not subscribed I implore you to go, if you’re not on the website right now, IndustrialSage.com, and you can subscribe because you’re missing out on great content like this, conversations with leaders in the industry to understand different perspectives and what’s working for them, how they’re seeing what things are going on. Maybe you’re in the same industry; maybe you’re not. A lot of learnings there, so a lot of great content you’re missing out if you’re not subscribed. So that’s all I’ve got for you today. Thank you so much for watching or listening if you’re on the podcast. I’ll be back next week with another episode on IndustrialSage.

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