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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.
Keith Carter [00:00:00]:
I want you to know more, decide what you're gonna do, and then take action. Don't regret not getting in, and trying out AI as much as you can today in various different ways.
Eric Fullerton [00:00:16]:
Welcome to Supply Chain Champions, the show brought to you by project44, where we're talking to the people who make supply chains work. Hello, and welcome to another episode of Supply Chain Champions. I am your host, Eric Fullerton, and I am joined today by Keith Carter, Partner at KDA Capabilities. Keith, thanks for being on.
Keith Carter [00:00:42]:
Hey, thanks for having me here.
Eric Fullerton [00:00:45]:
So I want to start by flashing backwards a little bit. Fourteen years ago, you were global supply chain intelligence lead at Estee Lauder. And I'm going to give you some credit because you coined, I think, to some degree the term actionable intelligence. And for many, that was the first time that they'd heard that in relation to supply chain. So my question is, what did you see as the gap that existed at that time to really create the need for more actionable intelligence?
Keith Carter [00:01:24]:
Well, at the time, we had always wanted to know, what is the right product, what's the right placement, what's the right price? And these have been evergreen questions. But if you look backwards, you're only seeing, did you service the customer? How much inventory did you have left over? And I wanted to make sure that we had something called end-to-end supply chain visibility, a concept that I had read about from MIT about 10 years earlier. And with that information, you could actually get to where, hey, this is what's the best case that could happen? A leading and predictable visibility. And so Actionable Intelligence was about having the right information in the right person's hands at the right time in order to improve outcomes. And I said, if we focus on this as opposed to analytics, which is actually means the study of math, which supply chain doesn't have a lot of time for. It should do, but that's for other reasons and for planning. But rather, when you're in the middle of the action, when you're trying to get the goods right to the customer, you have to have actionable intelligence.
Eric Fullerton [00:02:35]:
So a lot has happened in the past 14 years. There's been tech companies building visibility platforms and products. There's been a lot of evolution and maturity in some ways in the industry. How is that gap closed over the past 14 years from your point of view? And then how do you think it's going to continue to close?
Keith Carter [00:03:00]:
One of the big points is about data, of course. And you shouldn't just have data in your company. Data in the company is only half of the story, you have to have your economic data, political data, also your external supply chain data, your suppliers, as well as where you're going in terms of your customers. And of course, lastly, the most, some of the most important data is your competitors. So over time we've gotten more and more sources of data. project44 provides that data in terms of moving goods from one location to another, which is something we had to string together by contacting all of our transportation partners. And so I think things like that make it a lot easier to jump in and say, hey, I can really just plug into end-to-end supply chain now. Whereas before maybe I had to do a lot more negotiation and partnerships from the ground up.
Eric Fullerton [00:03:59]:
So I wanted to talk a little, a little bit about your career. You've gone from Wall Street to luxury fashion to academia and you've kind of keyed in on a lot of emerging technologies, right? AI, blockchain, automation, you've written books. What's the common thread for you, Keith, across all of these things?
Keith Carter [00:04:23]:
For me, data driven decision making, really giving facts, information, ideally ahead of time. How do we get the right information into people's hands at the right time? Being part of the ecosystem that helps provide data to people at the right time is what's been through my career on Wall Street. What I mean by that. I was working at Anderson Consulting at the time and I was with Goldman Sachs on the equity desk. Had a great time working on something called a legal entity workstation, where if you place a trade and Goldman, as you can imagine, places large trades, you have a certain limit to how much you can own in a company without having to declare and so forth. But if a company also has subsidiaries and owns other things, you can by accident trip that or get too much exposure into an industry or into a company just by purchasing even other companies you didn't think were related. So imagine, you know, giving that information to the traders in a fast way, in a way that makes them say yes or no to pull the trigger on a trade. Moving over to estate, same thing.
Keith Carter [00:05:40]:
We wanted to control safety stock. We always wanted to reduce inventory, especially excess inventory. How do you do that? You have to make the right calls. In the manufacturing side, what do we need to replenish? And ideally, if you're driving return on invested capital, you're trying to replenish the things that are going to give you the most profit, not necessarily just help the manufacturing plant do cost recovery. And those are two different things. One is profitable margin driven products versus units and maybe costs and what have you. And finally, teaching it, pulling it all together at the National University of Singapore. Starting off with my first class being materials management systems and teaching undergrads about it.
Keith Carter [00:06:26]:
And again, that was data, data for them. Information. And so these are all the points of having the right information in people's hands so they can really learn or use it or make the right call has been the consistent theme. And I still do that today.
Eric Fullerton [00:06:45]:
Awesome. I wanted to shift gears a little bit and talk about something that you've spoken about and written about around AI. And there's kind of like a general theme and fear around AI. And I think it flows into AI and supply chain as well. And I think there's a very real concern and fear that AI will result in fewer jobs. The machines are going to take my job, and I think it's an understandable fear. But I know, Keith, you have a very different perspective on this. Can you share that?
Keith Carter [00:07:24]:
People thought that Excel would kill accountants in the 1980s. We have more accountants than ever. So what happened? How come Excel doesn't just account for everything? What we realize is that technology actually enables more people to do things that they never dreamed they'd be able to do. And that's very much the same with AI. In fact, while there was an explosion of computers, there was certainly an explosion of Excel mavens. We'll have an explosion of AIs. I think some estimates of having a billion AIs are probably right, but at the same time, we're going to have an explosion of capability that we've never seen before. Today, people can interpret supply chain data.
Keith Carter [00:08:21]:
There's no excuse not to understand a forecast. And so your whole forecasting team, even a new forecaster, is going to be decent at their job. That means I can bring on board people faster. That means the market that I had trouble covering before, I can cover now with more detail. The customers. I couldn't respond to 24 by 7, but my competitor Amazon, you know, Taobao, et cetera, could now, all of a sudden, so many other organizations can respond 24 by 7. I mean, how many people does Amazon have on their payroll? Hundreds of thousands, right? Yeah. Super automated, you know, dark warehouses.
Keith Carter [00:09:03]:
Hundreds of thousands of people, but serving almost a billion people. Right. So automation enables a company to really scale AI, and automation allows us to scale with intelligence like we've never seen before.
Eric Fullerton [00:09:19]:
So I wanted to get a little specific about supply chain use cases for AI. Can you give me one very actionable, clear use case for AI and supply chain today, where we're seeing or will see very soon, tangible, real value.
Keith Carter [00:09:38]:
We need to build updated end-to-end supply chain systems. Normally as a supply chain person, we may go to the IT department which seems to be ever busy and say, hey, can you add this functionality? Can you incorporate this data? But now another way generative AI can really be used is by the IT department supporting supply chain and by supply chain themselves. So if I use claude, which is by Anthropic, as a supply chain person, I can go and say, hey, I want my screen to look like this, I want it to have this functionality and I can type that in with English and Anthropic will design the screen for me. Not just the wireframe, but a working screen. Listen, it's not ready to connect to SAP yet, but now I can provide that to the IT department and say, this is the functionality I've always been looking for. And now I've gotten it out of my head onto a working prototype in minutes. Can you help me build it for enterprise? The IT department isn't just thrown now a whole bunch of things they can catch and say, sure, no problem, let me use Bolt new or replit and design the screen instantly. And so I have these really new workflows that can reduce what's called tech debt.
Keith Carter [00:11:07]:
How much time it took for us to come up with specifications of technology support supply chain and how much time it takes for the IT department to deliver prototypes and workable solutions. And that means then that we get to competitive capability much faster. And Eric, I just, I have to share one more with you. Can I share one more? Can you give me space? All right, the last one is go to market time to market. So I was talking with a supply chain executive a couple years ago and I showed him how you can use a graphical AI to design and at least give a prototype of primary and secondary packaging. And he said, Keith, look, after I asked him how could this help, he said, you can design this and make us so many different versions and variables with our brand, our color, the shape and everything so quickly. That means that normally in product design, you know, someone comes up with the concept and then we do R and D with the material and then we start to do the bottle design and 3D diagrams and so forth and we get a supplier to agree and then all these are going in parallel. But oftentimes, right as you want to go to production, you, you still didn't have approval for the primary secondary packaging.
Keith Carter [00:12:35]:
And any change at that point, delays go to market or put stress on the supply chain or increases your freight costs because you were delayed as well. By having so many different variations that AI can generate of how the primary packaging looks, of how the secondary packaging looks, the whole supply chain team can get approval faster in parallel and so at a much lower risk. And also I can more quickly get to market. And he said that can save millions. Save millions of dollars in supply chain costs, generate millions of dollars in getting to market faster than competitors.
Eric Fullerton [00:13:15]:
The velocity of what's possible when you start to leverage AI and use it in kind of this human assist fashion becomes really interesting. I'm going to shift gears again. You're also a writer. I don't know how you have enough time in your day, in your week and in your month. But you've written two books. One is Actionable Intelligence: A Guide to Delivering Business Results with Big Data Fast! And then Know Decide Act: 10x Your Productivity at Work with AI and Automation. So I know these are full books.
Eric Fullerton [00:13:57]:
I'm going to press you a little bit because we don't have time to fully unpack them. But if you could give kind of the Cliff Notes version, big kind of takeaway or key component from each one, that would be helpful.
Keith Carter [00:14:10]:
So the Actionable Intelligence book was built for people that are in supply chain to be able to convince it, hey, let's get data together so that we can better predict our next action in our sales and operations planning meeting. And also for IT departments and IT leaders to say, hey, can we get permission to share data across functions to break down silos? Because by doing that, we're going to be able to interact better across the company and make better decisions. And one more thing in the book is about how you're supposed to capture the value of the better decision. So often sales gets recognized because they sell a customer and money comes in. And so they drive the Porsche coming into the company. The supply chain guys, they, they deliver, you know, that whole thing. But when the CFO says, oh, so what was the value delivered today? Well, we are more efficient. Oh, great.
Keith Carter [00:15:23]:
How much headcount can you cut with that more efficiency? We reduce inventory. What does that mean? You know, how many customers does it help us sell? It doesn't sound very sexy. But when we can actually use actionable intelligence to say, I was able to rescue a launch because we decided to run those products instead of these. And the brand president said that resulted in a $20 million, you know, launch achievement. Now supply chain is in the money game. And lastly the key, takeaway here. What I've done in that short discussion there is I took economic value add, which is your profit and your cost of capital and combine it with supply chain operating reference, which is your agility, your expense, your asset utilization. Bringing those two together allows supply chain leaders to have very good robust discussions with the Wall Street measures that makes the company really get rewarded.
Keith Carter [00:16:26]:
That's what the Actionable Intelligence book is about. And I finish off with security. By the way, when you have all that data in one place, you better lockdown security. The next book ten years later, long time in coming was Know Decide Act as you said, around 10x your productivity. The reason I said that was because there's a policeman in Denver, Colorado and he used AI in order to finish off his police notes. And he said, listen, I finished it in 10 minutes instead of taking an hour and a half plus. And I was like that sounds like 90% savings. And if this a policeman can do that, we can do different things.
Keith Carter [00:17:10]:
You know, it should be really accessible to anyone. So the key thing around that book is don't regret, don't regret not getting in and trying out AI as much as you can today in various different ways. And so I walk through helpful use cases where taking notes in a, in a meeting and how AI can help with that or documenting software because we always change. And so using a software called guide that helps you document software or going in and getting new users in place with Workado each one of these things are there, but I start off with the workflow, the current workflow, and then talk a little bit about the technology because the workflow will be there forever. The technology keeps changing again. One of the key things around security though also is involved in the book I talk about private versus public large language models. A public large language model we know and love chatgpt but when you put your supply chain data there, a lot of people around the world have access to that data and forever by the way. So you lose competitive advantage.
Keith Carter [00:18:22]:
Give me the idea for the next product launch on that. But you can install on your computer a large language model now using LM Studio. And so that allows you to install Meta's large language model or Google's large language model, which are free by the way. And then you get to actually interact with an AI, get most of the capabilities that you're used to, but now it's within the security of your own machine. I love to use it on my laptop when I'm on an airplane because I don't have any Internet, but I Still want to get that AI intern to do some work. So this is what the two books are about. So don't regret. Go and experiment.
Keith Carter [00:19:06]:
Leverage that AI as an intern today. That's what the No Decide Act book is about. I want you to know more, decide what you're going to do and then take action.
Eric Fullerton [00:19:14]:
Awesome. Yeah, I know. I mean I can speak for us and for our company. We essentially have a mandate to ensure you're using it to mitigate some of the manual effort. Right. I think I know for myself. I do a lot of writing or messaging or content creation and it's all about not starting from blank pages.
Keith Carter [00:19:40]:
Exactly.
Eric Fullerton [00:19:40]:
Massive, massive speed to market, you know. Yeah, you can review things or you know, you can put more sensitive data in. But for me like the biggest help. Yes, that meeting notes is definitely great. Synthesizing existing things you've already written. But it's also just like how do I eliminate beginning projects at blank pages and instead start from something I can iterate on, edit, add maybe more sensitive information to afterwards, but just like create those frameworks and those structure and then like that's the speed.
Keith Carter [00:20:16]:
Exactly. Yeah.
Eric Fullerton [00:20:18]:
We're gonna wrap up with a, with a quick hits which we like to do on on Supply Chain Champions. So I'm gonna throw some questions at you and you don't have to go one word but just a sentence or two. So what is one thing that you wish everyone who worked in supply chain knew and the industry would be better for it?
Keith Carter [00:20:39]:
Make sure to have a 360-degree view of your supply chain with data.
Eric Fullerton [00:20:47]:
Clean. I like it. What is one trait that all of the best supply chain professionals seem to have?
Keith Carter [00:20:55]:
Great communication skills. You've got to be able to keep people together, share the good and bad. One leader I remember saying, bad news doesn't get better over time.
Eric Fullerton [00:21:10]:
Fair enough. Yeah. Supply chain trends all over the place. A lot of trends. I would like your your perspective. One trend that is overrated and one that is underrated. I'll let you explain why. Don't worry.
Eric Fullerton [00:21:25]:
One overrated. One underrated.
Keith Carter [00:21:27]:
Overrated is that companies can implement AI successfully. Underrated is cyber security. So overrated in order to use AI effectively you have to have your data in place and you have to have the chessboard of data in place. You can't win a game of chess without seeing your competitors moves, analyzing what they were in the past. So I need a data set that's so rich that it tells me I discounted last year, what did my competitor do and when. So I need the competitive data, I need the economic data, the trade data. I heard a lot about tariffs coming. All those things are going to drive my forecast, drive my business in the next coming year.
Keith Carter [00:22:13]:
And so I need a really good model. Not just the math model, but the data that supports it. And then the AI can be of assistance. That also means I need to digitize my customer journey and my supplier journey in order to have enough data to make that refresh. The other one, in terms of cybersecurity, banks have super massive cybersecurity teams, but supply chain companies don't and it shows. There's a statistic that says that 60 to 70% of the cybersecurity attacks come through the supply chain. So we need to really pick up and join even cross-industry organizations like IT-ISAC and others that will let senior leaders share threats, investigations and more so we can be prepared. You know, this is something that's going to be even faster because of the first thing AI.
Keith Carter [00:23:14]:
AI now allows any new hacker to be really good for better or worse. And so as a result inject things into our supply chain that later on cause impacts on our banking systems. So high risk and really important to prioritize even more.
Eric Fullerton [00:23:34]:
Okay, so one last question for you. What is your hot take on the supply chain industry today?
Keith Carter [00:23:44]:
I'm really excited because the supply chain has weathered some tough storms with COVID and more. It's grown in agility for sure. And I'm excited because I think this next wave of supply chain challenge with geopolitics, we're going to still be able to deliver products on time and at cost. So let's do it. Get it done with the excellence we've always had.
Eric Fullerton [00:24:15]:
Hell yeah. Awesome. Keith, thank you for spending some time for sharing your experience and your expertise. Most of all, thank you for being a Supply Chain Champion. Appreciate you being on.
Keith Carter [00:24:28]:
Oh man. My pleasure. Thank you for doing this and and let's continue to spread the word.
Eric Fullerton [00:24:35]:
Yes sir.
Keith Carter [00:24:36]:
Supply chain is your best partner to take a dream to a launch.
Eric Fullerton [00:24:43]:
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.