June 10, 2020
In this episode, we sit down with Ed Clarke, Co-Founder and CEO of Yojee to talk about smart dispatching, route optimization and accountability and control with logistics software.
Santosh Sankar 0:40
Hey ladies and gents. Welcome Back to the Future Supply Chain podcast. I'm your host Santosh Sankar. Joining me today is Ed Clark, Founder and CEO of Yojee. Welcome, Ed.
Ed Clarke 0:53
Thanks for having me on. It's super interesting to get on here and discuss supply chain with people from around the world, so, really excited to be here.
Santosh Sankar 1:03
Indeed, indeed. And I'm sure our listeners will realize, given your accent, we are many time zones apart. And would love just to kind of open up with what we have Yojee. What are you building with the team over there?
Ed Clarke 1:20
Good question. So yeah, Yojee as a business is about four years old. I've been involved in eCommerce for well before Yojee, helping companies out here, organize their sort of databases and monetize that database online through some sort of algorithms and predictive technology. But all of our conversations with the eCommerce guys in Asia kept leading towards: we've got all these problems here with our supply chain. We've got these problems with fulfillment. We don't know what's going on, things are getting lost. And at that stage, I was a novice in supply chain. I'm like, "I don't understand that there's UPS, DHL. Why is this a problem?" Over probably a six month 12 month period, I just kept hearing these complaints. And so I sort of decided, I'm quite a curious person, and I really started to dig into why is this. Why are there these problems? And what we really found was that there's no real solution in Asia to help with eCommerce. There's big time players, and then there's big black holes. And so it's really, really difficult. And then we looked at well, it takes, for example, Indonesia. Indonesia has the same population as the United States. It really has a capital city, which has its economic hub, and then it's just out to the villages and you know, some cities beyond that, but everything is fulfilled from the capital city, Jakarta, and 70% of 270 million people. People's purchases are shipped out across the provinces to 10,000 Islands and everything went missing. And so we really started to look at what supply chain was and start educating myself and now we found that everything was taking more than one movement. And everyone that we saw in technology was focusing on like single leg before delivery type concepts, which are more appropriate for pizza shops and small warehouses that are doing a couple of hundred or a couple of thousand movements a day. But we're really interested in this nationwide multimedia and transaction. Movement type concept, which is a very, very different concept in Asia. And so we've been focusing for a couple of years on really solving that problem through technology that does things like SLA management. It does things like planning optimization, end to end visibility even through subcontractors. some really interesting stuff that's especially suited to Australia and Southeast Asia where you've got huge populations huge ecommerce correct, but it's a much more laggard market to the US market. So a lot of differences, also to to Europe as well.
Santosh Sankar 4:05
Digging in there a little bit, because we don't we don't have a founder from the Asian region very often. Give our listeners an understanding of what are the things that are similar to the US and Europe? Where are things you know, vastly dissimilar. Some of these might be obvious, but it would be great to kind of go through that real quick.
Ed Clarke 4:30
Yeah, well, I think the most shocking one is, in a lot of these countries. Amazon's not even a player yet. So you've got marketplaces. Some very good very large marketplaces that are selling through places like Vietnam, Malaysia, Philippines, Indonesia, that are doing a really good job. We just hired an incredible Head of South. I did a tour of the US again this year and one thing that we should have been teaching each our markets. And one thing I really discovered in the US is that it's such a, it's a very commoditized transactional, you know, price search market. Whereas in Asia, it's very much about your IP and building logistics networks with with reliable subcontractors. So it's still a bit of a secretive nature in terms of I've got the best group of partners and I'm reliable. Versus, you know, I'm struggling because I can't scale up and down and things like that. So it's not that kind of elastic commoditized market but I think in the US and Europe, people really understand is kind of a given an operating and you get your million parcels, you put them into your system, you get to choose the lowest cost carrier and you shift through that method. Really, it's about now you'd have to build robust, scalable supply chains from scratch in many cases. And it's a really, really difficult problem that people have been trying to overcome for a long time and we've never been lucky enough to start to sell these things. For a number of companies and also remembering that in many of these places, you're doing cross border movements. That's not the mistake. You're doing even tracking across two or three borders to move things. So it makes it even more complex, especially when you're trying to track a parcel. So yeah, some really interesting things and some things we've really enjoyed helping our clients.
Santosh Sankar 6:20
You mentioned some of the things that the platform offers. And the one thing I picked up on was visibility. So when we talk about visibility, what types of data are you talking about? What are you gathering and then providing insight or access to for your customers?
Ed Clarke 6:41
Yeah, I mean, this is a good question. And this is something that from what I've seen in the last probably 12 months supply chain has changed more than I've seen it in the last five years because clients are our customers. Clients are coming to them and you say tenders and the tenders will stay with one control tower. We want visibility over our parcels at all times. And it's just such a critical thing now that people know where their freight is, throughout, even these cross border movements at all times. So say, customers are coming to us and saying, "hey, we've got a visibility problem." Okay, well to explain the visibility problem, and they're using 4,5,6,7 subcontractors crossing borders. They have to de-consolidate these movements, put them into express couriers and get it out to clients. But the client wants to know where everything is the whole way through. So there's a new, there's a new norm in Asia. Which is I need to see where my goods are at all time. And so these kind of notifications, real time visibility, SLA, planning SLA and insight so that even the salesperson can go and talk to a client about how they're performing. So that visibility is become critical and it's making the relationship for our customers with their clients much tougher and It's making the relationships with the subcontractors even more tough. And now there's some sort of forced adoption of technology happening in an agent as well just so you can meet the needs of your clients and the SLA is of the tender. So very interesting change that's happened here over the last really 12 months where the supply chain operators are working out to what's possible if you push your area partners.
Santosh Sankar 8:28
Why is it so important? So beyond just providing kind of an interface where you could see a piece of freight and transit? It sounds like there's a lot of accountability, validation around pricing relative to what is actually happening. Is there anything else that that we're missing as people walk away with understanding why visibility and transparency are kind of a perennial topic? When you think about that?
Ed Clarke 9:00
It's a great question. And it's sort of something that helped me understand when I went out to the US earlier in the year and really spend some time researching the differences. And add here in Asia and even Australia does not many large asset networks, right. So there's not many carriers, trucking companies with many assets at all, if any. So there's Oh, you know, 70, 80, 90% subcontractor environments in Australia. And I read a statistic a while ago, $110 billion dollar market for land transport, and only about 10... A couple of $10 billion of that is, is owned by the top four. So there's 100 billion over 110 billion, that's mom and dad businesses, essentially. And so you've got this huge, you know, fragmented environment. And historically it's had absolutely no kind of visibility or IP connectivity and things like this. So you've got things about slow payments, you've got issues with, you know, how do I charge for the margin some of these really important things, how do I hit my SLA and my customer now wants to see where things are. So it's a completely different environment because of that fragmentation which means that for a long time, there hasn't been much pressure to paper to provide that kind of standard end to end visibility but now it's really happening just because margins are so tight. Customer Experience is so important and SLA is so critical so that people can actually make plan their warehouse resources or plan their when they're going to be at home to collect things and there's a lot of stakeholders as you know, and supply chain so it becomes very complex if no one knows what's going on.
Santosh Sankar 10:47
Yeah. And you know, you just mentioned the the fragmentation. How do you practically as a software provider wrangle all of the players their respective systems that they're using. And then, you know siphon out the relevant data points for your customers benefit. How does that happen? Because you mentioned you're crossing borders, cultures, languages, let alone organizations and their technology.
Ed Clarke 11:19
It's a good question and one that we had to try and figure that out at the beginning. And who is, in fact, our customers. One of the first things you have to ask, right, because this is the environment, you've got the very large players and you've got the very small clients. And so we essentially wanted that same advice, because we thought we'll create a bottom bottom down, top down, bottom up talk environment. And so we really focused on building the right technology to help people very simply connect. A traditional integration between two carriers is probably a couple of months. We're doing it in 30 seconds. So we provide that connectivity very, very quickly. And what's happened is by focusing on that pace, we really started to get noticed by some of the bigger players who came to us and helps not only to be out kind of big pioneer customers with worked with guys like UPS, DB Schenker worked with now got agreements with it, and then three year agreements with a couple of the top 10 fold this in the world. So the big guys are really pushing down the technology towards the smaller companies and demanding that the subcontractors get onto onto the software so that they can maintain their multimillion dollar contracts. So the data that we've gotten really important obviously, the number one thing for most CEOs and directors is that proof of delivery slip which you can get in real time from the subcontractor or the third person in that chain. That brings us on to payment and by 30, 60, 90 days, which is critical and then you know, optimization and then become things after that but even just getting paid faster since has a huge impact on businesses as you know.
Santosh Sankar 13:00
On your website as I was going through it, there are two words that kept coming up. We've alluded to it, but they are accountability and control as to the benefits of the platform. Could you expand on that for us? So we have an understanding what that means?
Ed Clarke 13:22
Yeah, so we really focus on three pillars. And that's visibility, which we've gone through accountability and control. And why we do that is often you have an hour with a customer or 30 minutes with a customer, whatever it may be, and you have to kind of help sit at a table and find some things that really need addressing, and then you need to provide technology to solve a problem. And technology's really there to help businesses change, incremental gains. And that's what we really focus on. So you have to come to the table with some kind of with language that the customer can understand and we can start to talk about business problems and not features. I think one the things that is very hard to do often with technology startups especially want to do is come to the table and talk about we've got features, we've got this and we've got this feature, we've got this feature. And often, the customer is not very good at buying technology. They haven't maybe even done it before. They've maybe done it once before. They're not very good at buying technology. And so we have to help them learn how to buy technology. And what we do is we focus on this visibility base which have gone through accountability in terms of helping them make their staff, their team, their subcontractors, accountable for the processes that are happening and getting the data points that are really important in terms of processing information tracking, reporting cost, accountability, and then being accountable to the customer. You really improve your relationship if you have that accountability with your customer. And then the control pace like control is everything from you know, having integrations instead of CSV files and type of an email orders and things like that. So you get mad better information to work on making sure that you're using the software to enact your business rules, which are super important. And even things like giving your customer service team the ability to have information so that they can actually work with the clients in real time. And so that that's really critical. And sometimes, if you have that technical conversation, you don't really get anywhere because the customer doesn't really know what to ask. Whereas if you have this business conversation, and you help help understand what are their issues in visibility to that control issues, so they have accountability issues, it becomes the more business discussion and then we bring in new technology and help them understand how the technology itself that time points as opposed to kind of features shopping a feature kitchen, which is probably the common way to sell technology.
Santosh Sankar 15:49
Over the years I've come across a lot of solutions that promise visibility, transparency, control, doing things with the the data that they're able to access. What are all those solutions? Perhaps missing or not understanding that Yojee gets and is leaning into?
Ed Clarke 16:15
Yeah, that's a good question. I'm kind of laughing a bit to myself, because we had some, we've got some very good investors in our company. And we had a big FUND flying to Singapore towards the end of last year, essentially, this this question and why, Yojee, and they flew in, and they sat down with a multinational client of ours. They said, you know, but we've said we say, delivery companies, we say logistics technology companies, what is it about AIG and this, this customer sort of sat down and said, look at three things that we can't get in the package. Provide the optimization capability so they can actually plan and execute in the same system that they're managing their customers. border movements. And then also as a third, we give you the ability to include your subcontractors in the same quality in the same level of optimization in the same capability, their shade SLA, as the big parent, company and affordable level. So, essentially, they're big, big things around how do we plan and execute? How do we do this cross border pace and this big concept of hubs in transit that will help customers work through cross border, which is consolidation and the consolidation and then the subcontractor, so there really are three big problems, right? How do you actually be able to plan to hit all your SLA s? How do you move it across border and track it in that movement, and essentially, you know, you might have three or four habits where you're consolidating and deconsolidation goes on and off tracks and containers and that movement. And some of those movements may be done by subcontractors, or movements might be done by subcontractors. So it's not just this is my this is my business. This isn't our vehicles. It's, I actually have a big network of of things happening here. And how do I get visibility across all of that mess, the big thing we solve, which is not really in another package, so, you know, there are some tracking software's out there, but they won't provide you that, that planning and subcontractor capability when you're really optimizing what you're doing. The optimizing solutions don't really give you the ability to work with subcontractors and to do that cross border pay. So it really tried to bring it all together and provide a really nice simple to use solution that gives what's needed for for the environment that the company is working in.
Santosh Sankar 18:31
Yeah. And it sounds like an absolute necessity given the region you're in, you do have to work with subcontractors. You do need to be able to navigate the complexities of cross border. And we touched on that earlier. You know, I'd be curious, could you tell us about the Yojee collaborative network that sounded really interesting as I was digging into it?
Ed Clarke 19:00
Yeah, this is one of the success stories of the way we've built the software. So essentially, we start to say clients, and even ask those people working together, because their software peers, and so they'll create networks. And we had one example where we've got it, we've got a network operating in Singapore, which does three hour, same day, next day delivery all of our software, we don't own a single vehicle. And that's kind of a sandbox testbed that will not only learn how to use and improve our software off but created a really valuable network, which actually came at an article recently as one of the top 10 Courier companies in Singapore. But then we sort of say that we really focus on being asset light and even operationally. We've seen something happened in Malaysia where a big retailer came in and multi billion dollar company and actually moved away from their carriers, bought our software and started to act as as a logistics company just by using our software so they could dispatch out to their chosen subcontractors and have all of their supplies in and they had, you know, different subcontractors are doing the bulk store replenishment. Different subcontractors during the one hour delivery of different subcontractors during the eight comments from warehouse pace, and oh down also single bit of software. And I've got single place of dispatch, full visibility of everyone doing everything and full reporting across their network. So it really enables people to come and work together. And there's kind of that that the momentum that it builds when people see the benefits of being with someone else that's using our software because as I said, you can make a phone call and then be integrated within about 30 seconds of a phone call and you've got as much visibility as you can ask for and you can maintain all of the SLA s and your costs come down significantly. Your time to payment comes down and it's just a much more you have a much more confident environment. And also scale up when you have things like Black Friday Singles Day, you know that you're scaling up is something that you're going to have control over and you're going to see what's going on and be able to act on and keep your client updated. So it's been a really valuable part of what we do how we said that we're trying to sell this supply chain network problem, which I sort of alluded to at the beginning. And that collaborative network has been a big part of our vision and our software that we identified as a key part of our success because it's a massive problem in in Asia Pacific.
Santosh Sankar 21:33
You've mentioned the cashflow aspect, around the benefits. Could you detail that for us? You know, why? Why does this type of visibility help increase cash conversion cycles and help your customers sit on the positive side of the cash flow dynamic?
Ed Clarke 21:54
Yes, I was going to give you an example of a client as opposed to talking more generically, so Australia, everyone would say that's a pretty developed country and is a pretty good technology. But no, we did a project with one of the biggest 4PLs in the country. And they, as I sort of mentioned before, they want to attend this thing that give visibility to the client, and then started to roll out out of software through their carriers. And what we found what we found when we sort of went to roll out to the carriers and some of these smaller guys that were working in essentially country towns would have four or five people consolidating paper based invoices into putting something together that they can then use the P o DS and the invoices and send that back to the full APl. And not only does this process take weeks or months, but the cost of servicing that type of arrangement is just immense. In Australia, probably paying $20,000 a month just to do the POD and to do invoicing. So when we put the software in because the pod has been taken off glass on the Mobile phone instantly back at the four POS platform and ready for invoice, which not only means they can invoice the customer, but it means they can pay their subcontractors, so the subcontractor loses headcount. And it can really diversify where they're spending their money on people and move towards growth and things like that. And then I can get good cash flow much faster from the person they're working for. So it's an everyone wins scenario. And even what we found is it's like costume with those that instead of tiny net 30 days, who are you that 15 days if you use the software because it's so much easier for everyone. So there's some really, they're probably not the things that we set out at the beginning to solve but there's some of the benefits of being able to provide that real time visibility, accountability and control across networks because you've got all of the information the pod you can take photos with it and put in your waiting times. All of the things which may not be solving a lot of problems in which is cash flow. Part of and obviously, even environment like Australia, if you've got a semi trailer to demurrage fees can be very high and very has historically been very easy to argue. So there's huge implicit implications if you give, digitize footprints and you can prove things it reduces the time to payment on the argument that he has argued invoices and things like that. So it's been a real, unforeseen highlight of providing that into an end to end capability that cash flows we've been have been had a huge impact on companies.
Santosh Sankar 24:34
That completely makes sense. Wrapping up. My final question is kind of what's your vision for supply chain visibility as you look ahead and are building out the the yoji platform? What does the world look like in 5, 7, 10 years?
Ed Clarke 24:55
I probably wouldn't have dared say this before COVID and I listened to your podcast before I was really interested in these kind of micro distribution centers. And what's really come out of this house I got from a supply chain perspective is you need to have the ability to sort of get a bit more deconstruct your supply chain and it'd be less reliant on a single point or a single process in your supply chain to be able to handle things in Asia. We had lots of companies in a lot of trouble because they couldn't get anything out of China for a long time. And there are good manufacturers in Vietnam and Malaysia and Indonesia and so there's a lot of options but when you sort of hard code your supply chain in one way, which is usually has been the case historically because PayPal a fan that's the only really way to get get profits. I think people now really going to look at decontrol deconstructing what they have and diversifying and having more flexibility and more switch on switch off capability and that's that's always been our focus is helping people flex their networks and Helping people run multi country networks and things like that. I really think that's the way forward in five years, you're gonna see a lot more diversification in where things are manufactured. And I think that you're going to see, especially in e commerce, you're gonna see people getting close to the customer. And you're going to say these micro warehouses, you're going to say, distribution getting closer and closer. And that's where I really see it happening. It's going to be less of a massive, massive hub setting big regions. It's going to be all smarter models with more and more backup plans and more and more providers helping so that's really where I see things happening.
Santosh Sankar 26:39
Yeah, no, totally makes sense. And it was great to have you on the podcast. I think we learned a lot about the regional differences in supply chain and equally, understanding how important visibility is not just operationally but equally when it comes to being able to control and have quality operations, and everything ultimately distills into dollars of some sort. So it's great to see what you and the team have been doing. I look forward to keeping up with your progress. Cheers.
Ed Clarke 27:17
Thanks for having me on.