In the latest installment of Better Yet, Better Trucks’ fireside chat series with innovators, visionaries, and leaders in the supply chain industry, we sat down with Coby Nilsson, CEO and Co-Founder of Enveyo, a data-centered tech platform that helps companies optimize their supply chains, and Andy Whiting, Better Trucks’ CEO and Co-Founder. The pair discussed supply chain technology, how it has evolved the industry, and how it can be better leveraged to make supply chains more efficient and cost-effective.
There’s no doubt that the supply chain industry in general and shipping in particular have been on a roller coaster over the past few years. First Covid shutdowns then all the supply chain bottlenecks that came along with them, then soaring rates and new players entering the industry as companies scrambled to account for unprecedented demand, and now rate drops and high fuel prices plague the industry. Despite the roller coaster, all these changes in the industry have left a lot of room to find opportunities when you’re looking, and that’s exactly what Andy Whiting and Coby Nilsson sat down to discuss.
This fireside chat started out with Dan asking about challenges transportation managers have faced over the last year as things have begun to settle in after the chaos that COVID wrought on the supply chain. Speakers then went on to discuss technology challenges and how organizations could go about instituting organizational shifts that embrace new technologies and other changes.
They dug into data and how it can be used to kick off internal changes and build use cases for new technology. That led to talking about the importance of changing the mindset within organizations since expectations have changed so much and altered consumer perceptions of brands. To finish the conversation, Dan asked Andy and Coby about their take on peak season, closing, as always, with the things the speakers are most excited about coming down the pipeline in the shipping industry.
When host Dan Ptak brought up the challenges that transportation managers have faced over the last tumultuous year in the supply chain, Coby had a great perspective to offer.
“They're facing all kinds of challenges in terms of rising costs, availability of new carriers, and yet maybe not having a platform or a technology suite that will allow them to take advantage of these gains that we saw emerge from the chaos in regional carriers and folks like Better Trucks and solutions to the duopoly that exists.
So, I think technology is still a challenge for them, getting their arms around the mass amounts of data. I think everyone understands that data is really, really important, but being able to aggregate it, normalize it, and then actually leverage it in a way that helps them make the decisions or use the tools at their disposal, it's a problem. It's still a problem. And then once they know the answer, so let's say they solve that problem and they know what they want to do, they're still a little bit constrained by technology to take advantage of these great organizations and alternative solutions that have emerged in the marketplace,” he said.
Dan asked about the challenges surrounding technology specifically and how those issues could be addressed, and Coby and Andy both had strong takes on the situation.
Coby responded, “Tech debt is a real thing, especially some of these systems companies have invested millions of dollars in a WMS (warehouse management system) or in a specific platform that they've built their business around. And the problem is those platforms with their customizability and all that they've bolted on, they've built custom elements to it. And so they're held hostage by some of that. So part of it is the technology that's limiting factor.”
Andy had this to say on the challenges being presented to the industry and how companies can begin to address them: ”From an operational perspective, we don't walk in and talk about, oh, we can take all your volume because it's not the case. Anybody that says that just is lying. And so it's let us start with either a hard problem or something that you're really having a challenge with to solve, demonstrate value, and then grow the account organically. And we've seen that successfully over and over, our customers continue to grow with us, whether that be more volume into existing zip codes or as we turn on new zip codes and grow into new markets, we see more and more volume from our customers.”
This led to discussing how shifts in organizational culture are required to institute improvements, because change can be so hard to sell.
“Little gains can add up really quickly, but the other thing is there's a psychological benefit to it for the organization. As you're building that business case internally, it's like, "Hey, we got to win here. What else can we win with?" And so you do see this groundswell of momentum and confidence in instituting changes to the way things were always done. Because that's a scary proposition,” Coby said on the subject.
Andy followed up with, “That's just what they do. Yeah, they've been late all this time, but it's FedEx, what are you going to do? And so that's what I was talking about with the inertia of it's how we've always done it. Yeah, we could maybe save some money or there's decreased transit times or there's value here, but is it worth the risk? And so building that case, like I said, is super critical. And then building that trust as a partner is even more critical, and so it's like let us win small and then we can help you win big over time.”
Since Enveyo is so data-focused, Coby had great insights to offer on the right jumping-off point for companies looking to embrace new technologies and shift mindsets within their organizations.
“They all have a data silo, and even if they have BI (business intelligence) tools and things like that, that doesn't solve your data problem. BI is the pictures on top of the data. And it's also not an area where you actually have to rip out hardware generally to do anything with it. You're just assembling information and building a fact-based business case that can drive some of those other things that are more oriented toward, hey, I've got to rip something out or I've got to tear something up here. So when you think about our technology stack and our suite of tools, that's where we start is on the data,” Coby said.
He continued, ”So this is a general progression for our customers. It's like, "Hey, let's get it together." Let's figure out where we're doing well, where we're not, and then let's test some scenarios to address it. It might be adding a regional carrier in these areas. It might be a Better Trucks that could help us take this particular slice of volume that's going to drive savings and customer satisfaction because of their delivery times. Or it could be something else, right? Expanding distribution or otherwise. Then it's now you're at the execution level where those are the harder things.”
When Dan asked Andy about his take on jumping off points for making positive changes, he had this to say, “It's what Coby said about trying to find out what sucks in the organization, what's the problem? Where are the issues? What are the hard things to do? Or maybe better yet, where's the most value that we can create quickly and demonstrate that in a way.”
He did make note that this isn’t the time of year when leaders are looking to make huge changes thanks to peak volume, continuing to say, “So right now people should be thinking about, okay, what are things for next year? What did not work well at the beginning of 2023? What should I be spotting out for the peak of '23? And then into next year, are these things that we can leverage multi-carrier movement to handle? I think that the business case, working with customers to identify those things, it's sometimes a political battle for people inside their organization. Identifying these small wins that they can build momentum behind is valuable.”
When Dan specifically brought up data, Coby said, ”It is talked at ad nauseum, as well as visibility. “Data” and “visibility” are very buzzwordy. Now AI and other things too, but the problems still exist and that's why we're still talking about it.”
“You really have to have your arms around foundational technology that's going to allow you to scale and allow you to take advantage of it, especially these really large organizations. So I think it's still a big problem, and it's a big problem because of a lot of the things we've already talked about, the technical debt, the silos of information. And then one more that I would add there is historically, supply chain has been technology starved, meaning there's a lot of technology investment on the front end in taking orders for your business because after all your business, whether you're a 3PL or whatever, I mean you're making money off what? Selling a good or a service,” he continued.
Coby wanted to point out how critical shipping is in today’s marketplace, stating, “The shift that you're starting to see and that we need to see is that for all companies, all businesses that are product companies, they need to start to shift that mindset and realize that they're not just product companies, they're shipping companies. Whether they're outsourcing it or doing it in-house, your face to the customer now is less about them walking into your store and more about that experience on the delivery side.”
Andy agreed wholeheartedly with Coby’s assessment there, stating, “A lot of these customers don't go in the stores, and the experience of the delivery is the physical contact with the customer. And so we're really proud to work with the brands we have as customers to make that experience as pleasant as possible. It doesn't always go perfectly, but we believe that with combination with good technology, not only from communication to customers, but also APIs that feedback into their systems appropriately and providing status updates and everything, it can be a great experience for the customer. And it's not just a physical world, it's the combination of the physical and the digital that really makes it work well together.”
When Dan brought up peak season, Andy brought up concerns about how excess capacity might affect the market this year, “We've seen a lot of carriers waive peak surcharges, and we're seeing what feels like a little bit more capacity than normal, especially when you look at the freight market in general, it feels like the rates are super low, which would indicate that there is more capacity than there is demand. And so all of those things, I'd say it's a lot of uncertainty this year, not in a way of what's going to break, but really just, are shippers going to actually meet their end of the bargain?”
Coby’s take on peak season was similar. He offered some perspective on how to improve not just this peak season, but peak seasons to come, “It's so uncertain, right? In prior years or the past two years it's been, well, the capacity isn't there. That's the lever that's been used to either force price increases or decisions about who to standardize on at this point in the year. You got to ride the horse. You've saddled at this point, and there's not a lot of room to adjust, both in terms of a technology getting something in. If you don't have a platform that's flexible like our cloud route to be able to add a carrier really quickly and efficiently, you may be stuck with the carriers that you have.”
He finished by saying this, “There's a reticence to take on net new business leading up to this because of the impact it can have on performance metrics. A lot of the carriers came out of COVID with some serious baggage that they had to write into their new contracts that they're not going to fall below certain thresholds of performance 95% on time and all that stuff. These are all byproducts of the chaos. So back to the theme we kicked off, there's always opportunity in the midst of chaos. I'm a big Sun Tzu guy, but great changes, and these are positive changes are proceeded by chaos and COVID added to that. We've still got it in a chaotic environment that can drive some more of these positive changes.”
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