S2E6: Planning for Global Business Success with Schneider Electric VP Jen Kelly

Introduction: 0:00

Welcome to the Tennessee on Supply Chain Management podcast. Listen in as co-hosts Ted Stank and Tom Goldsby set sail into the world of end-to-end supply chain management, diving deep into today's most relevant business topics. They'll share insights and pressing industry issues and tackle the challenges keeping supply chain professionals up at night. If you're enjoying the ride, download and subscribe to Tennessee on Supply Chain Management on your favorite podcast platform now.

Ted Stank: 0:28

Welcome everyone to our second podcast of 2024, Tennessee on Supply Chain Management. We've got lots of interesting things going on in the world today and we're going to touch on a lot of those and then bring in a guest speaker to talk about some specifics about network redesign and how she is looking at her organization and reacting to some of the things that are happening in the world. First let me introduce my co-host today, Lance Saunders, not Tom Goldsby. Today, Lance Saunders many of you know Lance, one of our rising faculty. He's going to sit in for Tom Tom's. Actually attending the Manifest Conference out in Las Vegas is what he says he's doing, but I also happen to know he has U2 tickets.

Lance Saunders: 1:04

I don't know if they say what he told you. I saw him buying U2 tickets in the classroom.

Ted Stank: 1:07

Yeah, he has tickets to U2 in the what's it called the sphere. The sphere yeah, our guest today is Jen Kelly, vice President of Supply Chain Planning North America with Schneider Electric, one of our really good partners. Lance is going to talk a little bit about some things happening in the world today that are impacting our supply chains. We'll start talking about the economy. Lance told me that he has a real deep economics background and I'd like to talk about all the underlying reasons for this.

Lance Saunders: 1:31

Yeah, the Baker Center has actually been over here trying to get me to change colleges.

Ted Stank: 1:36

Due diligence here. Lance told me before we started recording don't ask him any underlying reasons for these. He knows they're happening. My big thing about the economy is despite its demise Tom and I have been talking about this for probably two years. Despite talk of its demise, the economy just seems to keep on clicking along. It's indicators that have come out in the last few weeks. For example, amazon's fourth quarter and full year earnings surpassed expectations. They saw a 14% year over year jump in net sales in the fourth quarter, including their prime big deal days in Black Friday and Cyber Monday. One big retailer, I think Walmart, reported some pretty similar statistics. A lot of other things coming out too, lance. What are you seeing?

Lance Saunders: 2:17

It's really interesting. I'm like you. The time I go to the Wall Street Journal, I see jobs, added economy grows, and then we also see that people aren't as pessimistic about it. I don't really know what to think. Overall, I think it's really interesting. There still is an appetite for people to buy goods. I think those retailers that are doing a good job of giving people what they want and doing the predictions which we're going to talk about planning today are really seeing some of those investments since COVID paying off now.

Ted Stank: 2:46

One sector of the economy that had been suffering for quite a while now was transportation and logistics sector, as we had so much inventory after COVID because we just stocked up and all this period of de-stocking. There's actually recently some indications that freight is starting to surge again. We can start seeing some of that excess capacity go away and probably expect freight rates to rise. We're already seeing it in ocean shipping something we'll talk about later on because of things that are happening in the ocean environment that are causing prices to increase.

Ted Stank: 3:15

I think it was the middle of last week the jobs report came out. The expectation was, I think, 150,000 jobs added and instead 353,000 jobs were added. Unemployment rate was expected to tick up and it stayed at 3.7%. My friend, bill Simon, who does have a bit of an economics background I think he's former CEO of Walmart North America and has been a guest on here he's been telling me for two years that the United States has never had a full employment recession. He kept saying don't listen to it. We're not going to have a recession as long as we keep full employment. So far, bill, you've been right.

Lance Saunders: 3:49

I guess it makes sense. People have jobs, they can spend money right.

Ted Stank: 3:52

I think I've read that American savings is double or triple what it was pre-COVID like in 2019, in the trillions.

Lance Saunders: 4:02

So seeing at home, not spending our money.

Ted Stank: 4:04

I think a lot of that has to do with housing. Housing prices are still high. I know I have three millennial children and they are all bemoaning the fact that they can't afford to buy houses because housing prices are so high and interest rates are high. Of course, they live in three hot markets to Nashville, atlanta and Charleston, but Knoxville, tennessee Raise your hand out there, podcast listeners, if you're dying to move to Knoxville Tennessee. Our housing prices are out of control.

Lance Saunders: 4:29

I mean we've almost doubled since I moved here in 2017.

Ted Stank: 4:34

What interest rate do you have?

Lance Saunders: 4:37

I don't want to brag to people buying now, but it has a three in front of it, maybe a two. I'm at two and a half. Yeah, I think I might have a two actually.

Ted Stank: 4:45

Consumer sentiment is rising. For a while it was weird that people were spending. This is a Tom's big thing. Consumers are spending if they have a real pessimistic view on the economy. Actually, consumer sentiment in January is up to 78.8, up from 69.7 last month and 64.9 a year ago.

Lance Saunders: 5:02

Do you think that's just because the media, everything we see, is just everybody's telling us how bad it is, so it's just perpetuating itself?

Ted Stank: 5:08

We talk about economists and economics. I've had this long held theory that if there are three consecutive reports in the news about the economy doing great, we all feel really good about the economy. It's mass psychology. Then if you see three reports about it being bad, then we all get pessimistic. So I do think it's somewhat driven by media, especially the social media, and headline grabbing.

Lance Saunders: 5:30

You see it, we don't usually even read the story, but you see the headline and self-perpetuates.

Ted Stank: 5:36

You can't also dissociate it from the political cycle we happen to be. I think one of the other big things that we'll track over the course of this year is not only what's happening with the economy, but what's happening in the political world. You can't dissociate the two.

Lance Saunders: 5:49

You mean the lack of things happening in the political world.

Ted Stank: 5:52

No, there's a lot of things happening in the political world. There's the lack of things happening in the government world. A lot of energy to get into office. Once we're in office, let's not do anything that the country needs. So what else is going on?

Lance Saunders: 6:06

All this really gets into what has an impact on a lot of the people out there, which is interest rates. Right, has a large impact on businesses Because of a lot of this recent data. Jerome Pouse poured a lot of cold water on the notion they're going to lower interest rates, which is going to have an effect on almost every business out there.

Ted Stank: 6:25

Yeah, Heading into January, there were signs from the Fed that March was going to be potentially an interest rate cut and I think one of the Fed board presidents said potentially five or six interest rate cuts this year. Given that the economy is clicking along so strong, that's probably not going to happen in March. At least that's what they're saying now. The interesting thing is the market seems to have baked that in. The market didn't take a big crash after. It looks like we're not going to have interest rates cuts. So I think that most analysts out there are thinking well, okay, the economy's good. There's a lot of other things that drive market value, so let's not overpanic on that. Cpi Consumer Price Index came in at 3.1% in January, so lower than December. So again, this proverbial soft landing of being able to maybe get interest rates down without causing a recession and layoffs is potentially within sight.

Lance Saunders: 7:16

Yeah, hopefully we'll see some of that Consumer Price Index at the grocery store soon.

Ted Stank: 7:20

Yeah, yeah. And again, housing. We talked about housing. That's probably one of the big areas that it hasn't hit yet. Of course, a lot of this depends on what happens in the war. Hold, right, I think we've talked about on this podcast before how we came out of COVID. We're expecting stability, and immediately when we were coming out of COVID, the Russia-Ukraine war spiked and caused all kinds of craziness and pricing, and now we're seeing the increased unrest in the Middle East, and whenever you talk about unrest in the Middle East, you can't dissociate it from fuel prices, right? So I think we need to talk a little bit about what's going on over in the Middle East.

Lance Saunders: 7:56

I mean shooting missiles at tankers in Yemen. Yeah, I mean it's obviously. I've never thought we'd be in a podcast talking about Houthi rebels in Yemen disrupting role trade, but that's where we are right now.

Ted Stank: 8:07

Right, yeah yeah, absolutely, and we heard a geopolitical person here on campus talking about what's happening over there and she said that it is acknowledged now as a proxy war with Iran. I mean, probably, as we speak, we're launching lots of missiles at several of these different groups that are Iranian-backed and that's not common down. They're not backing down.

Lance Saunders: 8:27

No, I thought the interesting thing she said is that you know, we keep waiting for there to be a break in a lot of this fighting with Ukraine and the Middle East and all of this, and her comment that really stuck out to me was it's not going to calm down. This is kind of the new normal, and there are a lot of conflicts that affects supply chains that we don't even hear about, like Sudan and all these others, and that's just the way of life and we're going to have to adapt to it.

Ted Stank: 8:52

Yeah, and if it becomes a hot shooting war with Iran, then all kinds of crazy things are going to happen and we're going to see fuel price spike and lots of different things that impact us in the supply chain. Some supply chain management news, other than those geopolitical things that impact us Walmart announced that they're going to grow again, expanding to 150 stores, which I think is really significant, particularly in consumer products and consumer marketplace, because essentially that's the equivalent of them saying they're going to open 150 order fulfillment centers Right, and I know they're also remodeling a lot of their.

Lance Saunders: 9:26

They tried those smaller format stores. That really didn't work for them and I think it's interesting how this has evolved. You know, when they first started, amazon really was the big thing. You saw a lot of these stores think, all right, we have to go online. And what they figured out is those stores are the advantage they can have over Amazon and when we adapt those stores to get the customers that are willing to actually come there, we can actually do a really good job of winning those customers. But they're not. If they're going to go online, they're going to go to Amazon.

Ted Stank: 9:56

Yeah, but have you ever bought from Walmart? Yeah, I love it. I mean not to have delivery. I love the buy online pickup in stores.

Lance Saunders: 10:03

That's the key. I can remember talking to you 10 years ago and we talked about if they could look at online, like they do, the oil change, which sounds really weird. But you know, the oil change is a completely separate part of the building and so if they make the pickup easy like that, where you can go into the store, there's a big segment of customers that really want to do that.

Ted Stank: 10:22

You can park right up front. Yep, you go right in the front doors. I bought a TV not too long ago from Walmartcom buy online, pickup in store, and the experience was fantastic.

Lance Saunders: 10:31

And you don't even have to go in if you don't want. You know, now, if you want to go in, you can but think. When they first started doing this, you know a lot of these pickups were in the very back of the store. But if you're buying online to pick up in store, what's the last thing you want to do most of the time? Walk through the store.

Lance Saunders: 10:43

Yeah, the car walk through the store, so once they've kind of figured out what these customers changed their inventory models. You know it's really great to have little kids and you never believe this, but they like toys and they think my middle name is, you know, toy and that's the number, and so it's great. You know Walmart target. You can look and see if something's actually in stock. You know exactly where it is before you go.

Ted Stank: 11:05

I tracked Walmart's change to 2017 when Target bought Whole Foods and when it turned out really, Target bought Whole Foods not because they wanted to own those brick and mortar stores but because they needed a footprint, essentially an order fulfillment footprint for perishable grocery goods, and I think a light bulb went on at Walmart that like, hey, we got 4700 of those order fulfillment centers, you know.

Lance Saunders: 11:29

They've had to change how they manage inventory because the worst thing they can do is try to manage it with us legacy inventory models.

Ted Stank: 11:36

and you come in, it says something's there, it's gonna be there, and you go in sure being able to have that transparency Across their entire network of DCs and stores, to know where the inventory is and where's the most efficient place to fall.

Lance Saunders: 11:47

You know, even those DCs have become a huge advantage for them because they can have, you know, maybe the stock, white and if you want that you know, or black, or whatever the colors, if you want that piece of furniture, they have sitting there. But it's something I can actually go look at it and see it and then then they have all the other colors. I'm deep, it is that you know.

Lance Saunders: 12:03

I was buying a piece of furniture and I like the piece of furniture, not the color. They had. Within two days is from a DC to the store to my home.

Ted Stank: 12:10

It's a pretty ingenious way to do things, yep sure is Something else happening in the world, so let's keep that. I like in a parking lot, because I want to get Chen's take on some of this from a planning and inventory placement standpoint. But we talked about the Houthi attacks, you know the, the drought in Panama that's causing capacity restrictions in the Panama Canal all these things that are impacting global shipping Tensions with China continue. Some recent data came out that China is now, I think, only the fourth largest trade partner with us, which is a big change from a couple years ago. Mexico number one, I think. Uk number two, canada number three. So that's pretty significant.

Lance Saunders: 12:46

That's a good trivia question for next Tuesday.

Ted Stank: 12:48

Absolutely is but other things that are happening from a regulatory standpoint President Biden's executive order on supply chain resiliency, signifying a turning point for US business, saying that there's going to be regulatory Constraints, if you will, on certain industries and where they source from, and really trying to drive near shoring or even reshoring for some industries. I think that's a pretty important happening on the supply chain world that we need to keep our eye on. So a lot of these things that kind of Boiled down to supply chain managers having to be Dynamic in looking at economic issues, geopolitical issues, obviously competitive issues that are causing people to have to constantly dynamically realign their supply chains. So we asked Jen to join us Jen again VP of supply chain planning. So assume you have big responsibility, jen, for all the placement of inventory in your network for Schneider Electric.

Ted Stank: 13:41

Absolutely you want to tell us a little bit about your job and how you come to Schneider Electric. I know it's recent for you, right?

Jen Kelly: 13:47

Yeah, so I've been with Schneider now almost three years leading planning for North America. So really what that encompasses Demand planning, production scheduling, materials planning really that end-to-end planning piece for our supply chain. And before I got into this role With Schneider I actually worked for Morton salt some are commodity based where I was with their supply chain planning Organization and then sales and marketing and really started my career with Exxon mobile as an engineer. So what I've loved about my role in planning right now with Schneider I think is so really impactful is just the fact that of having engineering operations, background, sales and marketing really makes it beneficial when you think about planning, because planning is all pieces, all parts of that company coming together.

Ted Stank: 14:26

So, jen, given all these crazy things happening I know you said that that one of the your big areas of focus is your Changes in the way you're looking at your network design and and how you're planning your inventory and where you're placing things. Could you go into a little detail on that?

Jen Kelly: 14:41

Yeah, absolutely, I would say. You know, starting out of cova, probably like all companies, it was really that focus of saying how do we localize or how do we bring our production back into North America. One of the things I think Schneider did very well was take advantage of our global production footprint and really try to optimize our Supply chain, but realizing that we need to make sure that we have speed to the market, we can act quickly. We started bringing things back within North America, within the region, even from a manufacturing stem correct, correct, yep. We are investing heavily in our production footprint in the US, also in Mexico, so really trying to shorten our supply chain wherever possible and wherever we can. Again, that was kind of coming out of the agility play looking to, you know, have less lead times, less disruptions, but now we're seeing that really continue when you think about the chips act made in America, all the industrialization efforts coming to the US. So it was great to kind of get a little ahead of that, that work stream there.

Ted Stank: 15:36

Yeah, that's interesting you bring that up. I was gonna ask you how much that's impacting. You know, I just talked about the executive order and you know this emphasis on Critical product lines and clearly in the business you're in electric utility and provision of lecture that's a that's a pretty critical Business area.

Jen Kelly: 15:51

So yeah, when you think about the industrialization or all of the new companies or manufacturing that's built up, the equipment that Schneider Electric puts into those new facilities is significant. So we need to make sure that we're producing Locally to support all the other companies or peer companies we're talking to, to make sure that we can support their growth plans as well.

Ted Stank: 16:11

Do you contract out maintenance of all your equipment, or is that part of Schneider's business as well?

Jen Kelly: 16:15

I'm, it's part of our, so we do have a services department that does all the maintenance to and and maintenance.

Ted Stank: 16:20

So tell me ballpark figures, how many SKUs are you dealing with?

Jen Kelly: 16:24

Globally we have about 290,000 excuse. I was gonna say I'm working with him on a project.

Ted Stank: 16:29

Lance is working on it.

Lance Saunders: 16:30

I was gonna tell you the technical answer. It's a whole bunch.

Ted Stank: 16:34

You're an engineer. You said yes, okay. I'm an industrial engineer, so that's not more like an economist answer than an engineering?

Lance Saunders: 16:39

I'm an imaginary engineer, I would say it's way too many so if anyone's out there listening.

Jen Kelly: 16:44

Skew rationalization is a passion of mine and one that we need to deploy raise your hand if you're in supply.

Ted Stank: 16:48

Jenin skew rationalization isn't a passion, but yeah. What other kind of internal changes are you making in response to these? I know we've talked a lot about planning and planning technology, those kinds of things. Lance, working a project with you on planning as well be interesting.

Lance Saunders: 17:02

I think they use Excel for everything.

Jen Kelly: 17:04

No, no, no, no, no, no you can't get number one on Gartner if you're using Excel.

Ted Stank: 17:10

Exactly right, exactly right. Thank you for mentioning that. Congratulations.

Jen Kelly: 17:13

Thank you, thank you. You know you ask kind of what else we're doing. Some of the things that we're doing is really looking at our supplier base. So we've invested heavily in ourselves, which is fantastic, right. We see the demand coming, the growth coming, and we're investing in our production footprint, but one of the key things for us has been making sure that our suppliers are investing at the same rate and can keep up with us. So, you know, I mentioned we have over 290,000 finished good references. That doesn't cover all the materials that we plan and over the 3,000 suppliers that we have and need to manage within North America as well. So it's a very extensive network that we have. And so trying to grow with, you know, 3,000 suppliers, double digit growth year after year, has proven to be a little bit more challenging than probably one would hope. So that's been a big focus for us.

Ted Stank: 17:58

And while you're trying to reshore or at least to Mexico too, has that been a struggle finding supplier capacity, as you've tried to pivot back to kind of a more of a nearshoring philosophy.

Jen Kelly: 18:08

Yeah, we've actually deviated a bit from that. So long term view strategy is absolutely still kind of nearshoring with our suppliers. But what's been so critical for us is trying to keep up with the growing market and so, where we've needed to, we have looked at some supplier development back overseas, back in Asia, just with their kind of speed to market and to supplement the suppliers that we have in the US and Mexico. Mainly how about talent.

Ted Stank: 18:31

Have you seen that as a challenge, as you've? You know you've brought capacity back either onshore or to Mexico. Have you been able to find enough talent, not only in planning but in your supply base?

Jen Kelly: 18:40

Yeah, I mean, I would say overall, from a talent perspective, it was really tight coming out of the COVID timeframe Something Schneider did very well with Stay on Top of the Market, the market trends, as you guys just spoke to and made sure that we were paying competitive wages and that we could stay ahead of not trying to play catch up but retain our talent that we had. It's going to continue to be a challenge, though, you know. I think that's one of the things that we see is even, you know, partnering with University of Tennessee. We're getting great talent, great recruits coming. It's really keeping people in their jobs long enough to make that impact. What we see is a lot of people looking every year saying, OK, I've checked this box, what's next? So we're challenging ourselves to say how do we change the mindset of some of our newer employees and say how do we retain them and really make an impact in their current roles?

Lance Saunders: 19:26

Are you finding a lot of? You're paying the competitive wages. What I find from students, especially today's generation, is they're focused on things that you know. Even people my age salary was just such a big deal and there's things outside of salary that seems to drive them. How have you guys focused on those issues for retainment?

Jen Kelly: 19:45

Yeah, I would say one of the things that drew me to Schneider Electric in the first place was just what we stand for from a sustainability perspective. If you think about the electrification that's going on right now, schneider Electric is at the heart of that and bringing clean energy globally and bringing energy to, you know, locations in the world that haven't had the benefit of having access to energy. So, for us, we've really tried to tap into that and show that we're more than just a salary or a dollar figure to people, but that what you do when you work for Schneider Electric is that you're having a sustainable impact on the world around you, and so I think that, for us, has been a great differentiator.

Ted Stank: 20:23

This is kind of off topic, but I know Schneider has traditionally a French company, european company. How does that culture? Obviously the sustainability issue probably is a function of that. I know that benefits tend to be pretty different for Schneider than most US based companies.

Jen Kelly: 20:39

Yeah. So I would say we've done a lot really to globalize Schneider Electric. We were at a conference in Barcelona even in September with some of our top leaders and some of my peers were like if you were at this 10 years ago, it would have been only Frenchmen, and now, when you look at it, it's a great diverse mix. You have men, women, you have people from all over the world really coming together and I think part of that, we had obviously great leadership that recognized the need for diversity, that helped start that change. And then we also have a global hub strategy where we don't just have one location and say, okay, paris is our central hub, but we have locations in Boston and in Hong Kong, really trying to bring the global benefits and diversity to Schneider, to everyone.

Lance Saunders: 21:22

And is your planning? How much do they interact in those locations? From planning? Because I think that's one of the interesting things about a global supply chain when you do have people in all those different locations, they all bring different perspectives and different knowledge. How do you bring all that knowledge together from it? An overall planning standpoint.

Jen Kelly: 21:39

So we actually have a global planning organization that sits across the various regions. So I have planning for North America and then I have a peer that has planning for Europe, and then we have someone that has planning for Asia with a global planning head, and we actually have weekly connects, connects or battles. But we all try to kind of get together and make sure that we're doing things in a standard way or working together, because a lot of our products that we do for final assembly with the North America, it's all based on parts and components we're buying from Schneider in Europe or buying from Schneider in Asia as well. So we've got to stay very closely connected.

Ted Stank: 22:13

Did you do capacity sharing across regions? We?

Jen Kelly: 22:16

do. We do that part of our five year plan. So there's a strategy group that again sits across all the regions based on our business units. That way they can really look and understand and say what is that long-term strategy look like for the company.

Ted Stank: 22:31

Obviously major growth areas, probably in Western Europe and North America, but where are your other big growth areas globally?

Jen Kelly: 22:38

Right now we're also seeing Middle East.

Ted Stank: 22:40

Middle East.

Jen Kelly: 22:41

So North America, I would say we're continuing to see very strong double digit growth across the board. Slowed down a bit in Asia, but the Middle East and Africa we're seeing a lot of growth. But I think it comes to the development too of in that area of bringing energy, management, distribution, manufacturing, industrial automation. So it's growing well as well.

Ted Stank: 23:01

You know there's been a lot of talk over the last I don't know 10 years or so about the US electric grid and the need for growing that capacity. Are you seeing that happening in your business?

Jen Kelly: 23:10

Absolutely, we're seeing it quite a bit. We're also seeing a lot with the government funding and new initiatives of partnering with government agencies in order to continue to support that growth and that made in America. But I mean really we talk about it of saying, okay, you know, industrial revolution was a huge milestone in the US, the launch of the internet was a huge milestone in the US, and now it's like we're in the third revolution, right of this electrical revolution that we're seeing.

Ted Stank: 23:36

That's good to hear, you know. I mean just anecdotally. We just came through across the South some pretty severe weather and as compared to last year, I think there weren't reports of rolling blackouts or anything like that.

Lance Saunders: 23:48

You know. Another thing you're talking about is you're seeing these trends and I know you guys are pretty heavy in analytics. From working with you, I think one thing that stood out to me is you do a really good job of relying on the numbers, that the numbers are telling you, but you have all these employees and planners that have context right. That's why I tell all of our students, like, you're always gonna have a job because you have context that analytics can't know. How do you guys blend those? Because I mean, I've been fascinated working with your group that they do a really good job of knowing what the numbers tell them but then taking their own knowledge and blending those two. Like, how do you do that when you're managing all this growth?

Jen Kelly: 24:24

So I think the way that we've been structured and the way that we have kind of our teams mapped is that they're linked to a business unit and then with planning, I really stress the importance of the team is being connected with understanding of your key market drivers and what's happening, as opposed to just saying here's a number or a staff that we're reporting. So we've done a very nice job. I think of that partnership with ourselves and marketing organization to make sure that if something is happening with order growth that we can articulate as well and say it's linked to this customer, it's linked to this opportunity, it's linked to this market trend, and I think that's made us a much better supply chain end, because we're able to then take that information and share it with procurement too. So when procurement's negotiating with suppliers, we're linking it back to. These are the key market trends. Here's why we're growing, here's why we're the horse to ride. Invest and we'll invest and grow together.

Lance Saunders: 25:13

Did you just say sales talk to supply chain talk to procurement.

Jen Kelly: 25:16

It's a foreign concept, isn't it?

Lance Saunders: 25:18

This is groundbreaking stuff too.

Jen Kelly: 25:19

Some days I don't want to, but most days yeah.

Ted Stank: 25:21

We said you had a little bit of a sale background too. There's value in it, yeah.

Jen Kelly: 25:25

Being on the other side of it in sales and marketing. You know the close partnership there.

Ted Stank: 25:28

So I worked in sales for a while too, and I shudder every time I think about some of the things I did to the supply chain from a planning standpoint.

Lance Saunders: 25:36

I had someone in my class last week and we were talking about the planning process and I think the students were surprised that the first thing he talked about is the real intel that we have to talk to the sales and marketing or we're going to miss.

Ted Stank: 25:50

I gamed it because I was paid on a like a base salary plus bonus, and we were kind of encouraged to game it. The game was you wanted to come up with a forecast target number that was high enough that wouldn't get thrown back at you, low enough that you knew you could beat it to get your bonus. And, yeah, we did some awful things. This was 30 some years ago, though, so we weren't sophisticated.

Lance Saunders: 26:10

So the statute of limitations has passed? Yeah, I think so.

Ted Stank: 26:13

I didn't tell you who I worked for either, so so, on the planning front, what other kinds of initiatives are you looking at to try to improve the way you're able to accurately have SKUs in the right place, the right time?

Jen Kelly: 26:24

What we've done at Schneider is we've built our own end to end control towers. So it's really bringing visibility to kind of planning. But every single order you can get visibility, you can get alerts of if there might be a risk to an order shipping on time. So we're really trying to bring that visibility for all teams to see and have access to, to honestly be self-serve too, because so much is changing where we can't rely on someone to call someone, pick up the phone, wait for Asia to wake up. You can go in the system, look it up real time, and that's been a huge game changer for us. So continuing to think about how we leverage everyone's access to real time data has been a game changer for us and will continue to be a game changer for us. We are leveraging more to what we call our act capabilities from that, so really driving automation within our end to end control tower as well.

Lance Saunders: 27:12

So how do you manage with all this data, focusing it on the important parts so that the people making these decisions don't get overwhelmed?

Jen Kelly: 27:21

So what we think we've tried to do the most is categorize our SKUs and so really say, okay, here are your fast movers, or these are the ones that are linked to our high revenue products. That way we can help and let the system just run for what we call our medium or rare movers and keep our eyes focused on the most impactful for the organization. Otherwise, as you mentioned, I mean it's way too much for anyone to manage via Excel or to manage every single reference. So segmentation, whether it's with our customer, segmentation within our supply chain, is very critical to our success.

Lance Saunders: 27:52

Yeah, I mean. I personally think one of the big trends in the next five to 10 years is people are gonna realize that you can differentiate your planning process for different SKUs and different customers and we don't have to have this off the shelf, everything looks the same from a C to an A to every customer. I think more businesses are gonna start going that way.

Jen Kelly: 28:10

Yes, schneider does a nice job of that. If we have, for all of our SKUs, they basically fall automatically into a quadrant that's updated every month, so we can then look in and say you know, how are we setting the right stocking policies, the right parameters around these SKUs, based on order patterns. So that's been, I think, a great example of how we're leveraging data and analytics to help us drive a more efficient supply chain.

Ted Stank: 28:32

Everybody's talking about generative AI these days. What kinds of initiatives you got going on in there, particularly in the planning space?

Jen Kelly: 28:38

So right now, I'd say our main focus is looking at demand forecasting. If you think typically about using a stat forecast, I think the only thing we know at this point is that it's wrong. So really we're looking and trying to say what do we need to do differently? Coming out of COVID and just the unknown and the growth that we're seeing is fantastic, but what key trends do we need to map our business performance to, to understand what growth looks like, as opposed to looking in the rearview mirror? So that's probably the biggest place for us right now is really with demand planning. That's exciting.

Ted Stank: 29:08

All right, we're nearing the edge of our time, Jen. We've really appreciated you have time to spend with us. Any final parting shots you?

Jen Kelly: 29:15

have. Thank you for having me, and I told my son, if I got a chance, I was going to tell him hello, so I will say hello to my daughter and my son, and we'll throw in my husband Awesome.

Ted Stank: 29:27

I meant to mention early on that Jen comes from a true basketball blue blood. She's a UCLA grad. For those of you who aren't old enough, UCLA won about nine in a row and 10 out of 11 a while back in the 60s and 70s of basketball national championships and won in 95.

Jen Kelly: 29:43

I think one in 95.

Ted Stank: 29:44

Yeah, and so here she is at this football school. Was able to attend a Tennessee basketball game last night, a win versus LSU.

Jen Kelly: 29:51

I'll note so yeah, it was a great first experience and get the win. But I would say if UCLA was playing last night I would have had to go for them.

Ted Stank: 29:59

I get it, Lance. Thank you for sitting in.

Lance Saunders: 30:01

No, thanks for having me.

Ted Stank: 30:03

So this is a wrap. This is Tennessee on supply chain management. You can find our podcast on any of your favorite podcast sites. As always, if anybody has any ideas, questions for us that you'd like us to cover, GSCI at utkedu is the email address for you to send things in, and with that we will sign off. Thanks everybody, We'll see you next month.

Introduction: 30:26

Thanks for tuning in to Tennessee on supply chain management. If you enjoyed the episode, subscribe today on your favorite listening platform to get all of our episodes as soon as they drop, and don't forget to take a moment to leave us a rating. Have any questions, thoughts or feedback? We'd love to hear from our listeners. Email us at GSCI at utkedu. Join us next time as we continue pulling back the curtain on the world of supply chain, educating and entertaining you along the way. Until then, listeners.