May 6, 2020
On this episode, we host Paul Noble, Co-founder and CEO of Verusen, and Aaron Meredith, Director of Manufacturing Innovation at Georgia Pacific. The discussion covers the importance of experimentation, change management, and startup/corporate engagement.
Below is a transcription of the interview:
Santosh Sankar 0:00
Hey ladies and gents Welcome Back to the Future of Supply Chain Podcast. I'm your host, Santosh Sankar. And joining me today we have a two for one special. We have Paul Noble, CoFounder & CEO of Verusen, and with him is Aaron Meredith, Director of Manufacturing Innovation at Georgia Pacific. Welcome gentlemen.
Paul Noble 1:02
Thanks and thanks for having us.
Santosh Sankar 1:05
I'm excited about this episode where we're all distributed obviously. So, getting all the logistics together came together quite easily. With that, Aaron we would love to play host as the Dynamo family always does, and start with kind of your background, your story, how did you get into supply chain, and what do you spend your time on a Georgia Pacific?
Aaron Meredith 1:30
I've been with Georgia Pacific for around 20 years now. So a pretty long period of time. My background is in engineering, manufacturing, dabbled in the IT world, business development, and innovation. I've worked in plants, worked in corporate roles, been in our offices in Switzerland for a while. So I've got a generalist background when it comes to this area. And today I'm working in the Point A Center for Supply Chain Innovation that Georgia Pacific founded. And we're all about driving collaborative innovation and supply chain area for our member companies. And so it's a membership organization. We've got over 40 members now within Point A. This includes companies you'd recognize like UPS, Delta, Amazon and Microsoft, companies like that. Also startups like Verusen, as well as a lot of other Koch industry companies other than GP. And so we bring forward problems from our problem generating companies and look for ways to connect our solution providers on innovative solutions.
Santosh Sankar 2:38
Very cool, and if I recall correctly, Point A is how Verusen and GP came together and began the relationship is that right?
Paul Noble 2:49
It was very much a catalyst for it. We originally were introduced Georgia Pacific through our investment in participation in the Engage program in Atlanta, where Georgia Pacific is a an LP and a corporate partner there. Then we were quickly introduced to the model and the things that they were doing at Point A. It really intrigued our ability to connect with Georgia Pacific and the other member companies on common problems in supply chain from a foundational level and really kick things off.
Santosh Sankar 3:33
Yeah, Paul, you're you're a long standing member of the Dynamo family, but our audience likely doesn't know the founding story and how you got into the supply chain technology world. Would would love to touch on that.
Paul Noble 3:51
Sure. Yeah. So we are an Atlanta based startup. We do supply chain intelligence for materials management and we are tackling some decades-old problems as it pertains to system related issues. Really legacy systems making it very difficult to manage data around materials that are used across global supply chains, automating a lot of manual processes and giving a level of trust to data that's often untouched or overlooked. That data is costing organizations significant amount amounts of working capital tied up in inventory, and inhibiting them from really moving faster to industry 4.0 which is where we play. I grew up in supply chain working for the Sherwin Williams company for a little over a decade. Most of that time was spent in industrial distribution, selling into manufacturing and during that time I was exposed to some of these problems and how it affected me downstream from where, say Georgia Pacific would use products. We would supply products twice removed through industrial distributors like Granger and Fastenal all and Integrated Suppliers. So with that, that brought me to Atlanta, I saw the ecosystem in Atlanta and decided to go tackle the problem. And that's where we met. And the rest is, as they say, history.
Santosh Sankar 5:33
Yeah. So I'd be curious here, you have both sides of this Verusen/GP Alliance. Aaron, you know, we discussed how both sides initially were introduced. But I'd be curious, you know, what was that approach in evaluating Verusen? What were the types of things you know, as an organization, you and your colleagues were looking to solve. And how did Verusen align to that? What were the benefits?
Aaron Meredith 6:05
I first met Paul and his team a little over a year ago. We hosted a workshop in New York, with a lot of our member companies really deep diving into visibility problems that many of our members have. So if you think about the potential for member companies across verticals, customer supplier relationships, how could we share the right information across multi enterprise business networks to create value for all parties involved? And, you know, as we got along into the summer, we were doing some specific discovery work with Georgia Pacific around some specific issues they had around MRO inventory management that people have been trying to tackle their entire careers. And, you know, as Paul's alluding to inventory is just insurance, and there's a lot of inherent waste. And it was really as a result of that discovery work. And we had Verusen in to meet with GP and do a deep dive with them, that it became apparent to the folks on the inventory team at Georgia Pacific that Verusen had a unique offering in this space that was very different than the approaches they had tried in the past. So that led to, you know, let's do an experiment. Let's run a proof of concept. So that's really how that project based engagement really began at GP was through that, through that discovery work. In terms of benefits, I think that some of the things that were really unique about Verusen's approach versus what folks have been doing their entire careers was you've got this software as a service model is a low cost of entry. You can experiment quickly with low risk, you can get results fast, and it's not a heavy lift from an IT standpoint. It's not like going in and standing up a new software platform that you've got to have your IT department heavily involved in either. So all those types of elements, just really made it very easy and effective to engage at that proof of concept level.
Santosh Sankar 8:04
I think that in this current environment when we think about safety, stock, inventory management, that's really in the forefront of a lot of headlines. And also on top of mind for supply chain managers, because you're seeing stock outs and in some instances, you're seeing excess inventory and in other cases, I'd be curious what both of your takes are in regards to inventory intelligence and management. As we come through this COVID crisis.
Aaron Meredith 8:37
I could start there and Aaron, feel free to piggyback. It's been interesting because obviously, demand signals are important to managing inventory and having the right product at the right place at the right time. Whether you're talking specifically finished goods, in terms of what we're all starting to stock up on and order differently than historically has been the case. But the same is relevant, kind of down the various nodes of the supply chain. So as we're looking at it from a current environment perspective, there's something where companies like Georgia Pacific started that process before the pandemic, and can now harness the intelligence using our technology and AI platform to understand the decisions made today and the needs of today versus what has historically happened. That's a really interesting opportunity that's come out of it. And I think there's also the ability to start taking action on really understanding how to harness that information. And it really all starts with understanding your foundational data, which is something we began developing over the past couple of years. The traditional approach has always been, "I can't really optimize my inventory until I clean my data." And it's always chicken and egg, right? So it's very reactive. There's a lot of decisions and data that's managed outside of the system that really puts organizations in a difficult spot when something changes in a small fashion or obviously as dramatically as it has today. So I think that there's, after this period of uncertainty that we're going through, you know, what's this going to look like? I think that it's important for organizations to take action and really understand and not go the complete opposite way, right? This can't be the example that affects them 15 years down the road because of the time they ran out of stock during the pandemic type of thing right? Levels, all whip back up to adjust for that. But it needs to be a signal to allow for putting levels where they can appropriately manage the information and take action and be more connected with their suppliers.
Santosh Sankar 11:16
Yeah. And Aaron mentioned some of the the benefits to the Verusen approach in regards to making it easy to run a POC. Get a pilot environment going. In a similar fashion as a founder, what were some of the things that Aaron and his team did that was notably helpful to you in getting the engagement, progressing, making it easy to do business with?
Paul Noble 11:44
They've been very helpful and continue to be a great partner as we work. As Aaron mentioned, with other Koch and other Point A members. It's often difficult as you know, across your portfolio, for startups to get a seat at the table not across from the table with organizations as large as Georgia Pacific and developing enterprise solutions are more of a challenge because they need to be enterprise ready. So what was helpful from the Point A team was aligning us with these stakeholders from the executive level in the C Suite from the Chief Procurement Officer down who was leading that charge and understood the value that could be created, both from a working capital perspective and a foundational perspective to help them with goals long term. The alignment of those. That communication of experimentation, right? You know, this is a partnership that goes well beyond a POC. This is something that gives Georgia Pacific a voice to solve some foundational opportunities. Not necessarily problems because it's really a system related thing, but fill some gaps that they've looking at for long periods of time, and the technology just hasn't existed to do so. So to be able to experiment with with that quickly, was helpful and communicated very well and helped us really do a quick start program and have significant results achieved in a 90 day period of time.
Santosh Sankar 13:20
So, you know, I'd be curious to hear both your perspectives and maybe starting with Aaron. Are there strategies out there that you've identified with that help this kind of engagement? Because I'm hearing themes around communication, being open to piloting and testing things. There's give and take by both sides. What should corporates and startups listening gather from this as they try to maybe improve on this front themselves?
Aaron Meredith 13:50
I think that a lot of this begins with experimentation. And that's really how you learn. I mean, companies can spend a lot of time trying to develop points of view about how to go about doing things and benchmarking, different solutions and other companies out there. But until you actually do something, you don't really know how it applies to you. So, you know, within Point A, we're biased toward driving to experimentation across multiple parties, right? You know, startups bring the technology that's really helping drive innovation in the supply chain area. And most big companies just they don't have time to go sort through 100-200 startups to figure out who to work with, or the bandwidth to do that. And so our approach within Point A is "let us bring that environment to you and bring for your problems." We can pitch it out to the solution providers in our ecosystem. Furthermore, I spent a lot of time finding out what new emerging technologies there are out there, you know, connecting with VCs such as yourself and others to see the new emerging technologies so that when I see a problem emerging, within Point A, I can quickly say "You know what I just heard about this company over here, startup company. Let me just hook you up on a phone call and see what you think." And if there's interest there, then we can help bring you together and do an experiment to learn what that's all about. So we've done that, you know, a number of times, and I think that's a pretty beneficial way for both corporates to quickly get exposed to new technologies, experiment with them, as well as startups to, you know, as Paul said, get a seat at the table and not just go in and pitch to people all the time. But let's go experiment.
Santosh Sankar 15:34
Yep. Absolutely. Paul?
Aaron Meredith 15:37
I think there's another element that actually is pretty prevalent. I think you and I had this conversation a few days ago. Around what, you know, putting ourselves in the seats of corporates right now. Right. It's a very uncertain time. More so than dollars it's allocating resources, across most industries, being people resources and what does it take to stand up a project, or an experiment like this? It is often overwhelming because most traditional methods do take a significant amount of on premise engagement, significant amount of time to get data ready and get systems integrated. So, I think one of the things that we've discovered and learned through our engagement with GP and Koch and Point A was the importance of communicating that this is a high value, low effort, low risk, engagement, and that can be done a majority remotely and now all remotely both from from sales, to scope, to deployment and customer success. And I think that's something that obviously we're continuing to build awareness on. Because I don't see that going away for a good period of time. I think it's going to change the mindset of buyers and stakeholders at the corporate level of what's possible with technology and how they should be looking at new ways to solve age old problems. Plus, you know, not removing large portions of the process to accomplish things faster as you know, time is the enemy. Speed to value is key. So resources has been the prominent thing that we've been discussing with our customers.
Santosh Sankar 17:34
Yeah, I think that's a super super good point, making it such a no brainer to at least give it a go on part of a large customer that's being pulled in every which direction. There's a lot of value in that type of distribution. You know, I'd be curious, poking and prodding when both sides started the engagement. How did you think about the scope of the initial pilot? How did you think about the expansion? Don't need to get into the numbers obviously want to be respectful, but I'd be curious kind of how did that all come to be and grow? How is success determined?
Aaron Meredith 18:15
I can tee it off, Paul. I felt that for us, it was a kind of, you know, your off-the-shelf PoC approach (proof of concept approach), it really fit perfectly with what we were driving forward in Point A. To say, "Hey, let's do minimum viable products and 12 weeks or less," that's what we want to go do. And that's how we're going to learn and then we can decide how to expand upon there and not solve the entire equation, but solve a critical piece of it. And then see how it fits with other pieces later on. And, you know this project between GP and Verusen is a really important and very viable project. Meanwhile, there's some tangential kind of projects and use cases going on with GP and other Koch companies that this should complement very wel. We can bring it forward into it yet another kind of experiment, how do we combine these solutions into a larger, holistic solution across multiple companies? Or between customers and suppliers, and expand in that in that way. But we don't have to do it linearly. We can do and we are doing multiple experiments in parallel that we can then bring together after the fact.
Paul Noble 19:26
Yeah, and it's, you know, as we was we looked at and sat down to scope out the challenges, it was very consistent with what we see across really every corporate that we engage with. Independent of the system they're running, it's, you know, they're all running legacy ERP systems, looking at digital transformation and know some of the challenges. It's really difficult with the with current resources to be able to, you know, quickly develop a plan and go attack. So as we looked at, you know, the starting point was, SAP is a system of record, and then bolt on that helps manage asset the MRO part data across, you know, 120 plus plants. Multiple data sets that were demonstrably different, right. And that's, that's really the key is our unique ability is that we can go into that existing data set the quote unquote, dirty data, and drive business value quickly out of it and insights out of it, that can start the knowledge transfer in the feedback process around comparing across those data sets. applying that to inventory optimization, and verified savings. It's been a real pleasure to work with the GP team because we knew we knew what we were going after, and aligned very well in getting that foundation laid quickly and driving results that, again in that 12 week period, have delivered an ROI that multiple times over pays for the cost of the subscription.
Santosh Sankar 21:13
Paul Noble 21:14
Which is very exciting, and then building building on that and scaling it up. That's what we're excited about is seeing this continue to scale. And then to, as you look at many organizations that have grown through M&A, or a part of a portfolio as GP is with Koch, how can you then add new data sets to that across companies, across systems and have a more intelligent view of that baseline data. How can that be used elsewhere? To make it visible, make it easy, take complex things and make them very simple to take action on. I think that's what is really lacking in today in a lot of optimization or data software is removing that complexity removing the data analysis burden from organizations that can take up to 50% of their time on an infrequent basis, and that's just not gonna, not going to cut it in day to day business operation, let alone amidst the environment we're in today, and we'll be in for the foreseeable future.
Santosh Sankar 22:27
Right, and I want to pull on a thread that I believe Paul, you mentioned a few moments ago, around being able to sell remotely, to have the ability to try things and test things in this remote environment. And it all kind of comes towards this point where the the world is changing, and a lot of the things related to supply chain technology end being an exercise in and around change management. And my question for you, Aaron, would be how have you as a leader over the last several decades navigated this change? Because you've seen technology come and go, you've seen organizations change in various ways. What are some of the things that you think about in that context as a business leader?
Aaron Meredith 23:21
Well, I think that, you know, I don't know where we're on where we're at on the Moore's Law curve with the exponential expansion of technology. But I'm quite confident that technology has past people's ability to change fast enough. And the technology is out there to do things that we could never do before and do it so much better than we could do before. The challenge is all about, you know, changing what we do. And the way we do it and trying to reform our paradigms, right? And the best way I know how to do that is to experiment. You have to experiment to catalyze that learning so that people can see what's possible. And then that can lead to real change. And then people are like, "Yes, I get it. I know what we need to do to take advantage of this." And that's, you know, that's, why we have that bias to action within Point A. It is all about getting to that experimentation, and letting that help catalyze the change you need to make.
Santosh Sankar 24:26
And, you know, how, how should people treat things that don't work positively? We're talking about situation here where the engagement with Verusen has gone well. But equally, you know, part of experimenting and trying things and innovation per se, is also having the stomach to embrace things that don't work. What might be some practical ways to do that?
Aaron Meredith 24:50
Well, I mean, I think the failures are just as important if not more important than the successes. Because I would hate to wake up one day and say, "Man, we spent a year diving into a huge project. We designed it great on paper, and then we found out at the end it didn't work." Think about all that opportunity cost, all the resources, the things that were applied toward that. That's, that's a dangerous approach. If you're a business, you know, that quick, agile experimentation is really necessary if you're going to be successful going forward. It's just too risky to not take that approach in my opinion. So you have to accept those failures. You're going to learn from them just as much as the others. If nothing else, you'll say, thank God, we didn't spend a year on this. We found out in two months instead, right? Yeah.
Santosh Sankar 25:44
That's right. That's true. I've been speaking with other corporates and the one thing that they've been struggling with - Paul brought up one where it's just a bandwidth issue right now. They're trying to ensure that their current supply chain operations are going as planned. They're trying to shore up weaknesses. But then they also ask, how are people, you know, engaging remotely? It's not something we're comfortable with. We're usually used to in person meetings, whiteboard sessions roundtables, but we need to make up for that because you can't stop innovating. Are there some things that you've maybe figured out that others could benefit from in that matter?
Aaron Meredith 26:31
Well, we're experimenting a lot at Point A with our approach there. We're used to highlighting problems getting people aligned around it, find out who's going to go work on it, and then we bring them together for like a workshop, right. We take him through design thinking exercises, and very quickly and efficiently get to novel solutions that people could team up and go experiment against. So, we can't do that in person. And and so we're trying to do this virtually now. And at the same time, all of our member companies are really busy. But if there's nothing else true, you know, supply chain is all the rage in the news right now. So it should be clear to everybody that the way we're doing things today is not going to cut it. And if there's not a catalyst for change, it's going to accelerate innovation like this then I don't know what it's going to be. So the motivation is there, I know everybody's busy, but the companies that are going to succeed are the ones that say, "In spite of how busy we are, we're going to have to commit resources to doing these types of things." And we're going to try to help them get there within Point A, and we change our approach multiple times a week just about and Paul could probably speak to that because he's been involved in another project right now that we're doing some ideation around, and maybe let me know how successful or not we're being on that right now. I don't know.
Paul Noble 27:52
You guys are doing a fine job. But I think you know, from our perspective, too, is interesting. The approach is, especially as you take on enterprise wide inventory optimization, data management type product projects and things that they're kind of all over every note of the supply chain. The traditional way that these are sold are heavy on premise engagements, as I mentioned earlier. And we've actually seen a pretty open arms approach from those prospects and customers that we have, that we're integrating with and already have onboard as well as those that we have in flight of pulling the resources together and it maybe easier to get to get everyone on a zoom call them aligned scheduled and all meet in the same place with you know, with travel being restricted. But I definitely do see this time, to Aaron's earlier point of you know, being able to say, "it's working well enough, right?" I don't think that's the change management winning over the technology advancement, the innovation. I think this time, will put organizations and leaders and individuals over the top to say, we need to take action now. We need to start experimenting, and laying the foundation that we should have been laying, you know, over the past 6, 12, 24 months, that would have put us in a better position to manage this unprecedented situation. So I've said it on a podcast last week and its like I can see and do feel that there will be kind of a supply chain tech renaissance of really accelerating. Let's get going on things that we've been kicking the can on because we didn't want to change. And we're excited about it and we want to lead the charge.
Santosh Sankar 30:00
Yeah, I couldn't agree with you both more. I think through all this... supply chains in the headlines. Corporates are leaning in more and more you're seeing folks like Paul and the team at Verusen come up and you know, leverage technology to question the way things have been done. I think rightfully so, but ultimately work collaboratively in order to bring the supply chain world forward with technology. But with that, gentlemen, it was great having you here we covered a lot of ground and wish you both a safe, healthy, and sane rest of the month here as we're all hunkered down in order.
Paul Noble 30:42
Yeah, right. We'll do our best. Thanks for having us always enjoy it and then we can we can circle back on a as we come out of the fog here. circle back on what the how the bullet effect worked in the toilet paper side of things here.
Santosh Sankar 31:00
Transcribed by Otter