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From natural disasters like hurricanes and earthquakes to pandemics, cyberattacks, and labor strikes, companies have to navigate so many complexities to get goods where they need to go.
What's their secret weapon to operating within the unknown?
It’s the people.
Welcome to Supply Chain Champions, the show that showcases the stories of those who keep supply chains running smoothly. We're here to highlight their untold stories and share lessons they’ve learned along the way.
Join us as we peel back the curtain on the people who make supply chains work and enhance your own career in the process.
Tune in. Get smart. Move forward.
Jake Barr [00:00:00]:
There's a large number of companies that are walking around dead and they just don't know it. They truly haven't embraced change fast enough. And it's sad because many of these things are avoidable. But it takes leadership to actually want to step back and recognize, hey, admitting that you've got things to work on. There's nothing wrong with that.
Eric Fullerton [00:00:29]:
Welcome to Supply Chain Champions, the show brought to you by project44, where we're talking to the people who make supply chains work.
Eric Fullerton [00:00:39]:
Hello and welcome to another episode of Supply Chain Champions. I'm your host, Eric Fullerton, and I am joined today by a true veteran of the industry, often called not by himself to his credit, but one of the leading minds in supply chain today, Mr. Jake Barr. Jake, thank you very much for being here.
Jake Barr [00:01:02]:
Eric, a pleasure to be with you today.
Eric Fullerton [00:01:04]:
So if I'm counting right, I see a 45-year career in the industry.
Eric Fullerton [00:01:09]:
Right, so you're in Procter & Gamble for 33 years, transition to consulting for top Fortune 500 companies for the last 12 years. And I think what's interesting in this space is that a lot of things obviously have changed, but there are also these things that stay the same. So what I kind of wanted to ask you is as you look back at your career, whether it's the whole breadth of it or even just the past 12 years since you left P&G, what's changed and what's stayed the same?
Jake Barr [00:01:43]:
Truthfully, there are a couple things that have really been pivot points for the industry. Let's say the age of personalization and the Amazon effect. If you wanted to point to two things that have had profound influences in the structure, the organizing models, the way that you think about the delivery mechanisms, execution of processes and tasks, it really traces back to those things. First and foremost, there's not an industry vertical that me and my team work across that hasn't had an explosion and request for, I'll call it different additional levels of personalization or differentiation. Right. At a patient, because we do work in life science and pharma as well as in the consumer goods kinds of arenas, and that puts heavy stress on supply chain processes. Because what is that? That's the antithesis of everything supply chains hate.
Jake Barr [00:02:47]:
It's an explosion of more SKU offerings. It's a dramatic increase in materials and packaging and sourcing and labor combinations and partners that you have to use to actually end up offering Eric something to buy. Right. So that's the first. And then the second is, without question, the arrival of Amazon on the scene profoundly changed forever our joint expectation around both level of service and importantly speed of service. So think about that. The turnaround time, you know, in the time that takes us to talk and chat today, you might have picked up your smartphone and decided, hey, I forgot I needed something. Right? And you're not asking for it in four or five days, you're asking for it likely this afternoon or tomorrow.
Jake Barr [00:03:41]:
So the stress that that put again on the entire ecosystem of how partner relationships and material procurement and fabrication of products and availability and the distribution models and the ability to understand what's been selling or not sold and then to get it and fulfill it. Right, those two things I will say, however, my opinion, those are going to end up being dwarfed by the impact of AI and machine learning as we move forward.
Eric Fullerton [00:04:13]:
We'll unpack the AI and machine learning in a little bit. But I think one of the interesting things about your career from conversations and just some research I've done is that I think one of your probably many focus areas has been to try to empower this pivot from supply chains and supply chain operations being a cost center, which it's historically been, to positioning it as a profit driver. So I'm kind of curious, like how do you think about making that happen and enabling that switch, whether it be big, broad org or specific tactical things.
Jake Barr [00:04:54]:
You know, I give tremendous credit to former chairman at P&G A.G. Lafley that I had to great honor of working with, with a team of people to kind of flip the business model upside down to go from what we referred to inside out driven products. We formulate, figure something out and then stick it out and hope you bought it to outside in being consumer driven and realizing the need to actually change the entire way that we thought about the, the relationship, the flow of information, the flow of people to tasks and processes and the turnaround times and what machines couldn't do but needed to do to help deliver upon that expectation. So when you talk about it in the old terms, old days we would have said, hey, it's a cost center. Hey, you got a 3 million transactions, you know, you just need to squeeze a couple pennies out of every transaction will deliver what you need. In today's age, with the levels of personalization and additional offerings, you really have to use the information and the data to help you drive the profitability of the lineup, the ability a supply chain is a weapon to actually go and build a market, not just react to a market. And so a lot of the processes and a lot of the work that we do are really tied to transforming the way companies operate and how they execute those things day to day because that allows you to completely reshift. You're always going to have a cost focus because at the end of the day you've got to be able to have an efficiency to get a gross margin low. Right.
Jake Barr [00:06:50]:
But the ability to package and take the capabilities and out pivot your competition. I'm far more agile in filling the shelf or the reaction time to the consumer that wins you market share because you're doing something they're not able to do.
Eric Fullerton [00:07:11]:
I think we see this a lot in more commodity-style businesses too where they're like the opportunity to differentiate is less on product and more on service level. And sure price of how you deliver that. But that service level is really where supply chain can play a huge role. For many of our listeners. This is going to sound really normal. I think to the other half it might sound crazy, but 33 years at the same company, what was that journey for you like?
Jake Barr [00:07:40]:
I tip my hat, and I'm just incredibly thankful for the experience because it's one of the best, best and it is, it's acknowledged. It's one of the best training grounds and development areas for talent in the world. And if you look at the diligence in the what I call a process of dipping and exposing individuals and broadening their capabilities and challenging them in areas that may not be their strengths so that they can build a robust toolset to actually attack any problem. So truthfully, I would have spent 45 years there because it's such an enjoyable culture, great people to work with, always pushing the boundaries of what comes next in terms of capability, never satisfied with status quo of where you are. Hey, that's to be achieved, that's to be celebrated. But what's next? So the eye was always constant tension on what's next reality. The old body simply couldn't take 300,000 airline miles every quarter. And I said I know the bench is trained because I had a hand in training them.
Jake Barr [00:08:57]:
They're more than capable of stepping in and taking over. And they have. They've even taken it to bigger lines. I wouldn't have the last 12 years. It happened by happenstance. I'm in the immigration line at the Miami International Airport. I happened to have a tap on my shoulder from head of Kellogg's chief operating officer at Kellogg's who I happened to have sat on an industry committee. But when you work for P&G, we compete against everybody.
Jake Barr [00:09:29]:
You had to, to benchmark outside the vertical or with non-compete companies, what few that were there. And I literally had my services bartered away by my wife because the woman in question had met my wife at a social engagement and knew she had a love, she willingly dove off 10-meter platforms in college as a love for water and brokered my services for about eight weeks to help them improve their operations while she got to stay in a condo on the beach.
Eric Fullerton [00:10:02]:
That's a nice deal for her.
Jake Barr [00:10:03]:
Yeah, well, I, I'm not sure I like the terms of engagement, but it turned out okay.
Eric Fullerton [00:10:09]:
So in that current kind of role you have now in the Fortune 500 consulting space, are there, are there some big kind of themes or specific things that, that these orgs are coming to you to try to fix around their supply chain operations?
Jake Barr [00:10:23]:
They are. Think about the challenges we've spoken about already. You know, there's not a single firm that we don't walk into that isn't trying to both transform how their organizations are both structured and the task, how they're trying to execute the task, but also modernize what I'll call their IT stack. Realizing that to keep pace with their competition who are now starting to use AI and ML to make faster decisions, it's created even more tension and pressure on them. And so a lot of the work, a lot of the engagements we get into are folks looking and saying when we got these three bottlenecks from an operations standpoint and it's because we don't know how our operations are running, we can't make decisions fast enough. Okay. Or we peel it back and take a look at what's stopping them. In many cases it could be outdated info flows.
Jake Barr [00:11:29]:
It could be the way they're getting little or no information from strategic partners, whether it's raw and packing material partners or to a great extent contract manufacturers. Right. But it's almost been operating like a black box. So there's a whole host of challenges that get introduced there, but they tend to be in one of those areas. Hey, we're behind on how quickly we can make decisions. How do we transform the way the process execution is going so we can make decisions faster and predict where the outages are going to be, which is very important.
Eric Fullerton [00:12:07]:
I want to ask about trends.
Eric Fullerton [00:12:09]:
Right, obviously you have a strong purview and I'm sure some opinions on what are those key trends you're seeing today. We already mentioned AI and ML, we'll dig into that a little bit. But there are other elements that you're seeing as kind of key trends that if you're a supply chain leader you need to focus on for the future.
Jake Barr [00:12:30]:
There's no question you're going to hear people talk. And even the most recent discussion around potential tariffs and a number of things like that, it's got a number of firms that we work with in a mad scramble going oh my God, doing we need to reshore. How do we reshore? Realistically, I hate to say it, but they're not restoring, they're nearshoring. I call that nearshoring. So it could be they're cutting reaction time, they're coming into somewhere in Latin America or in Canada for a material or an ingredient. But here's the brass facts. There are a number of categories and a number of industry verticals where the only places on earth to go get what they need are still in the countries being discussed as potential tariff locations. So we have an awful lot of that that we're going through.
Jake Barr [00:13:27]:
But I always say beware what you wish for, because assuming that you can just lift up an operation and move it does not mean the operation is going to be any more efficient. In fact, it could actually be directly opposite to that. So you need to factor in, even if we move it out of location X country Y to Z and we might have picked up a day in reaction time, what evidence do we have that the throughput, the quality, right, the efficiency, the cost structure really will bear its weight when we put it through a full stress test? We like to look and do a lot of risk management scenarios about how do you walk your rate? I'm a big believer in pragmatism. Look, I learned early in my career one of the biggest benefits I learned is how to fail fast and make adjustments. I was blessed by being brought up in a great people development system. But having A-type personalities around you all day long, right, put a stress on you. You were always looking for four decimal point perfection. And I used to teach people, hey, two decimal points are okay, and we'll actually course correct our way to what we learn as we go.
Jake Barr [00:14:54]:
Too many people won't fail fast by saying, hey, if we're 100% sourced from there right now, let's split it, let's take 25% off, let's start flowing through the secondary location, let's map out the processes and make sure everything works. Then if it's not, the entire business isn't at risk. So you've got to be able to do that. And quite frankly, even in today's age, no one can really flip on a dime 100% of their production capacity or sourcing on two days notice.
Eric Fullerton [00:15:29]:
One of the other trends that's probably on the tip of yours or others tongues is this AI machine learning, incorporating it into supply chain operations. I think one thing that's interesting is that oftentimes we hear the terms, we hear the high-level narrative, but I think there's still specificity that's lacking.
Jake Barr [00:15:56]:
Let's start by going back to elementary school and kind of grounding ourselves and what is it, right? AI is fundamentally a place where it's the acquisition of information and the ability to apply that knowledge against typically processes or tasks, right? That in the past have required perhaps 100% human intelligence to kind of execute. Now why is that different? Well, it's different because it can do it at a scale and a speed that no human can do that at. Right now machine learning is really a subset of that. You have to think of it as being a plank within AI where you're specifically focused on the use or the development of mathematical model algorithms, right. That can enable the computer to learn actions, behaviors and predict outcomes. Right? Because it's able to look at this transactional mass for, you know, seconds. What you and I would take several days, if not weeks to just make it through one time. It can go through it a myriad of times and identify, hey, there's a pattern there.
Jake Barr [00:17:21]:
And oh, by the way, every time this pattern happens, this shows up, right? So now I've got not only pattern recognition, but insight, understanding, and importantly, Eric, what we call noise cancelation, right? So I want you to think about in the world of p44 and others, I'll use a transportation example, right? A company like P&G had 500 tractor trailers, right? 53-foot vehicles moving in and out the front, side, and the backside of every single facility they had. Now you go, oh, geez, that's not much, really. Okay, let's try that out for size 43 production facilities in just continental U.S. okay. Okay. 500 times 43, front, side, and backside. Okay, now I'm starting to get some real numbers, right? And now I want you to think about every single one of those is pinging me with an update. Hey, I didn't make it to model market.
Jake Barr [00:18:27]:
Oh wait, I just recovered that. Oh no, there's a trap, there's a traffic accident or we've added two hours. Every single one of those. Honestly, you look at it as a piece of information, right? But the reality is 98% of it is noise. Why do I say noise? It's noise because it has absolutely no consequence on the outcome. So the ability to take and use AI, ML, and the capabilities of that to separate out the two or three, it's like the needle in the haystack. Hey, these are the three that overtly you need to do something about. And then, oh by the way, AI and ML can actually trigger automated process activities.
Jake Barr [00:19:16]:
Hey, this one's connected to a production run at that factory. Those materials aren't going to be there when that production is scheduled. Now I'm talking about using information not across Eric who worked in transportation or Jake who worked in production, but both of them together. That is what makes this an explosion that's going to happen.
Eric Fullerton [00:19:40]:
Yeah. When we think about, we have a concept at project44, it's high velocity supply chain. It gets inventory where it needs to be. It's faster, more efficiently, more cost effectively. And what you need is the ability to have scale and speed. And AI is a bucket terminology, but it's specifically those algorithms for quick learning and pulling out useful data out of the sea of information that starts to help these companies get there.
Jake Barr [00:20:12]:
Yeah, Eric, you said something that's really important to distinguish if I can, because of course there are hundreds of worthwhile small startup AI effort companies out there. Many of them are purpose built for a single siloed process execution. Be it something connected to demand sensing and demand planning, or something connected to a inventory optimization of a safety stock or something that's connected to a reaction time calculation for a supplier. What in most cases, my experience that most of those folks do not have are what you just described, which is a hyperscale engine to ingest all of the real-time data. That is what makes an AI ML firm different because then you can do speed at scale interrogation of the information to derive the consequence.
Eric Fullerton [00:21:29]:
Right, you kind of need the data moat, if you will, and the ability to process it with impossible, or at least for human comprehension, speed. So I wanted to kind of to zoom out a little bit and just think about. You've been in this industry for a long time, you've seen multiple things play out in multiple ways. But I'm kind of curious just a little bit about you. Let's flash back. You're starting out at P&G. You're getting into your supply chain.
Jake Barr [00:21:59]:
Oh, you missed. I never intended to be a P&G. I didn't even intend to be in the profession, but I literally started, I came out, I was combination industrial engineer and what you might call a math geek. And I don't advertise it, but Kind of an operations research kind of background in deep math. But what I really was, I loved solving problems, right? And I actually had intended to actually tackle and try and get a law degree at the time, but had a in law, who was a innovative scientist at IBM. And that in law exposed me to IBM, and I literally did an internship at one of the factories there. I learned, unfortunately, what it was like to work in the IBM culture in the late 70s. A great company, just like P&G, but working with the team at this factory in question.
Jake Barr [00:23:07]:
And the plant manager asked me to wear a coat and tie to work for the visit of the executives. They wanted to check I was working on this, you know, this launch, right? The visit went exceptionally well. The team was doing a great job on the line for up, etc. But the only thing plant manager could talk to me about after that was over was why I wore what I did. So I quickly determined that probably wasn't the culture I wanted to go to. So I found my way two months later to this company called P&G that they didn't care if I wore white shirts, blue shirts. It was all cool. I was like, okay.
Jake Barr [00:23:47]:
It was the least stiff environment I could find. But they wanted high-quality talent. Found my way in by chance, literally.
Eric Fullerton [00:23:56]:
You know, and obviously you had a great career, and you still are still active and successful. What could have made it easier that you wish you knew now that you would tell your younger self?
Jake Barr [00:24:05]:
Couple of life lessons. And then individuals who also invested in me, you know, first, don't be fearful of failure. You learn more from failure than you actually do from success. If you're only successful in what you're offering up, it probably means you're not pushing the boundaries. So you have to be willing to push boundaries so that you can learn. Doesn't mean you're accepting failure. It means you're failing fast forward so you can identify where the tension spots are, so you can start challenging and reshaping. The second thing is, I had a manager early on who took the time and invested me and said, you must be a student of the game.
Jake Barr [00:24:51]:
So he was saying, hey, you must constantly be sucking in knowledge about everything. Not just what you do, but all the surroundings. So you can look for what are the pivot points? How are people going to attack us? What should I be working on that can take away that advantage? He introduced me to a book. I have used it repeatedly in my career. The Art of War, Sun Tzu. It is incredible. You never go to battle without having already pre-thought, every angle of where the attack is going to come from, what countermeasures are, what they will do in their reaction. And if you force your brain to be in a constant learning journey, then I think you're always looking for connections.
Jake Barr [00:25:43]:
I'm referred to occasionally as the great connector. And it's because I am literally always looking for, well, wait a minute, you actually should go talk to so and so, because they're working on this and you're working on that, but the two of them together, wow, that would be even bigger. It's like I see a giant wiring diagram in my head and I'm always trying to play the connections. Probably the last piece is, you can't accomplish anything in life by yourself, truthfully. And so I had an individual give me two very critical pieces of what I call people advice. And the first one was, clearly, you should constantly be working, trying to work yourself out of a job. And how do you do that? Well, if I make the people that work with me and for me better, then they don't need me anymore, and it releases me to another challenge. So I said, I like that because that means if I actually double down on their skill sets, the company could go and take me and move me someplace else, and I get another opportunity.
Jake Barr [00:26:55]:
And the second one was, and it's an incredible piece of advice. It was, no matter how much talent you see in someone, you can't make them something they don't want to be.
Eric Fullerton [00:27:08]:
I had one more question before we close out. It's something we actually, we ask all of our guests, and there's an opportunity for some hot takes and really simple, high-level. What is your hot take on the supply chain industry today? Current state, where we're headed, where we're going, what's your hot take?
Jake Barr [00:27:29]:
There's a large number of companies that are walking around dead and they just don't know it. They truly haven't embraced change fast enough. And there's a great book called Clock Speed written by Charlie Fine at MIT that talks about the cycles of how you will end up being obsoleted. There are a number of folks out there today that unfortunately, you might as well hang a going out of business sale. They just haven't officially announced it yet. And it's sad because many of these things are avoidable, but it takes leadership to actually want to step back and recognize, hey, admitting that you've got things to work on. There's nothing wrong with that. In fact, I would submit to you, if you're honest with your people and saying if we're going to be relevant as we move forward based on all these other macro changes that are going on, we got some things we got to go get done.
Jake Barr [00:28:32]:
That empowers people. It doesn't scare them. It empowers people. Actually, the opposite takes place. When they see leadership not doing something like that, and they're managing the day-to-day, they can read the tea leaves. They're going, boy, I need to be looking for another opportunity because I'm not sure this one's going to be here much longer.
Eric Fullerton [00:28:54]:
It's a great point. I think honesty from leadership resonates far better because if you are in day-to-day operations, maybe you don't have full business purview or context, but you know what's going on, and you know some of the pains. And when you see your leaders own those things and then try to action them, that's empowering, that's encouraging. If you're in this business, like you mentioned, you want to solve problems. That's why you're here.
Jake Barr [00:29:20]:
The great leader has two jobs. The great leader is always executing what's in front of him or her. That's the day-to-day. But they're also sadly accountable for blowing it up and starting over because they have to have an understanding of one eye towards the future of if we're going to stay relevant. What got me here will not be good enough to get me where we need to go.
Eric Fullerton [00:29:51]:
I really appreciate you taking the time, sharing your experience, your perspective. When we think about the name of the podcast Supply Chain Champions, you look at your background, your experience, the connections that you've created and built and fostered and I think you certainly, certainly hold up to that name. So appreciate you being on, and thank you for sharing your expertise with us today.
Jake Barr [00:30:13]:
Had a great time. Thanks, Eric.
Eric Fullerton [00:30:17]:
Thank you for listening to Supply Chain Champions. To get connected and learn more, visit project44.com and click the link in the comments to subscribe to project44's newsletter. Tune in, get smart, and move forward.