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 in 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.

Tom Goldsby: 0:28

Hello and welcome to another edition of Tennessee on Supply Chain Management, coming to you from Rocky Top, knoxville, tennessee, the campus of the University of Tennessee, tom Goldsby, here pleased to be joined by my good friend, colleague and collaborator, dr Ted Stank. Hey, ted, how you doing.

Ted Stank: 0:44

Hey Thomas, how you doing man Good to be with you.

Tom Goldsby: 0:47

You know we're coming off the July 4 holiday. You know a lot of people consider that like the beginning of summer, but really it's like the middle of summer for those of us in academia. So I'm starting to get a little bit nervous that we're on the far side of summer. I got to get the syllabus ready. How about you?

Ted Stank: 1:02

Yeah, I'm actually teaching an online class this summer, so this is about halfway through that course. So, yeah, we're pushing through the end of summer. I think people that say that 4th of July is the beginning of summer must be people who live in like Saskatchewan or something where the waters are finally getting to be warm enough to dip a toe into or something.

Tom Goldsby: 1:21

You're right. But yeah, I get a little bit nervous when the calendar turns to July because you know August is close at hand. But hey, we do have some really exciting news to share with the audience. Every two years, gartner, the supply chain consultants, the advisory group out of Connecticut they do rankings of supply chain companies, for sure, every year, but every two years they unveil rankings of supply chain programs in North America. And hey, ted you up for the task of sharing with our audience how we did.

Ted Stank: 1:54

Absolutely. You know you always hold your breath when these come out because if you all remember when we didn't have a college football playoff and media voted for the number one team, this is kind of like that. But for the second ranking in a row, we were number one in North American graduate programs and number two in undergraduate programs. Cue the applause. Yeah, so we've been in the top three the last several times.

Tom Goldsby: 2:19

That's right, and you know our friends down in northwest Arkansas continue to hold number one spot, which just keeps us hungry, Right? You know they came in number two in graduate programs, so I feel like we're in good company, certainly in that list.

Ted Stank: 2:35

Absolutely. I had a dean one time say that rankings matter to the degree of the company you keep who's around you. There you go.

Tom Goldsby: 2:43

We're in good company. So congratulations certainly to our team for coming out on top Number one graduate, number two undergraduate program, and also to those other programs recognized in the top 25. We've got a lot of good friends out there who are competing and providing us with some good, stiff competition. But hey, let's jump into some news and notes just to kick things off, because we're really excited to have a special guest with us in Mr Dave Clark, and we'll bring Dave into the conversation in a bit, although he did threaten to maybe interrupt us during this opening segment, which would be really cool.

Tom Goldsby: 3:19

I don't know if anyone's ever jumped in midstream, but let's break the ice with something that's been actually probably near and dear to Dave's experiences at Amazon, which is the US warehouse worker count. I'm always keen to point out that the number of warehouse workers we had working in the United States more than doubled from 2010 to 2020 and approached nearly 2 million, I think, last year, but it seems like maybe it's kind of peaked or leveled off and, in fact, maybe the demand for warehouse workers is leveling off. Do you make much of that news, ted?

Ted Stank: 3:56

Yeah, I was noting from the jobs report last week that warehouse jobs, I think, are down about 170,000 from the peak in May of 22. I mean, I think it's a reflection of, you know, general cooling off in the economy. You saw what our GDP was first quarter. When people are buying less stuff, then we don't need as much stuff being shipped to stores or people's homes. So of course we're going to have some softening in that market, but that was a red hot market. That couldn't have continued that way. It wasn't too long ago that companies were offering like crazy bonuses for people to come and workers were working for two months and then quitting and go and taking another job with another bonus.

Tom Goldsby: 4:40

You know I mean more power to them 50% from pre-pandemic rates in that sector to where the hourly wage is about $24 an hour now up 8% just in the last few years and, as you pointed out, signing bonuses and just all kinds of accoutrements to kind of draw that supply. And a lot of that is attributed to the growth in e-commerce which is still going strong. It's about 16% of all retail in the United States. Surpassed a trillion dollars of spend in the US last year. But certainly the rate of growth is leveling off. But we always kind of make reference to that old notion of it takes a lot more hands to move each than it does pallets. It takes about twice the number of hands and also about three times as much space once you break down that pallet. So that all kind of explained why we saw such a surge. But it's interesting to see it's cooling off a little bit now.

Ted Stank: 5:35

I mean, I just feel like all these signs are indications that we're getting back to a kind of a steady state after the pandemic.

Tom Goldsby: 5:42

Yeah, fair enough. Well, hey, something that is also on the march though ocean rates, and this is kind of interesting because it's a little bit early in the season to be seeing this kind of surge in ocean container rates. I was looking at the Drury Composite World Index, which is kind of the sum of all the freight flowing around the world's oceans, and it was about $2,800 to move a 40-foot container as an average about two months ago, and that's now $5,900. And just increased 10% week over week. Now that's nowhere near where we were, like September 2021, when we were talking about the $10,000 container, but it's still about 4x where we were pre-pandemic. We're getting close.

Ted Stank: 6:29

Shanghai, la, the end of last week was 7,000 or just over 7,000. Shanghai, new York, was just over 8,000. So yeah, it's doubled since January. And there's just a lot there Talking about steady state. I think, well, that's an area that there's not a steady state. There's a lot of uncertainty about what the holiday season is going to be, what kind of capacity is available.

Ted Stank: 6:50

You know, one of the things I love I hope I don't piss off any ocean carrier folks but I love the word blank or the phrase blank sailing. How would you feel if you were in an airport and they came out and they said, oh, your flight isn't going to take off, it's been blanked. It's like, what does that mean? Does that mean canceled? Yes, you know. I mean the number of blank sailings is way up. You know what's still happening in the Red Sea is adding a lot of time an average of about two weeks time of sailings eastbound from Asia Pacific, which of course increases fuel prices and ties up capacity. So you know, there's just all kinds of wrinkles that are going on there and as we approach holiday season, I think people are willing to pay the bucks to lock in capacity and that's what's driving things up.

Tom Goldsby: 7:40

Well, by its very nature, ocean freight involves the globe right, and that then brings in geopolitics and vagaries happening all around the world Right, and that then brings in geopolitics and vagaries happening all around the world.

Tom Goldsby: 7:47

And, as you point out, you know, red Sea crises and Houthi attacks are still very much in the picture, which calls for longer lead times. You point out longer sailings and more capacity being introduced, and you know there's also some suggestion that folks are trying to get ahead. We just talked about, you know, warehousing kind of cooling off. Just talked about you know, warehousing kind of cooling off. Maybe there's some warehouse space and it's okay to kind of front end load those warehouses maybe a little bit sooner than they might traditionally. And then we still got the issues with the East Coast Gulf Coast negotiations and you know we're just now about two months out, two and a half months out, from that agreement expiring and it looks like the East Coast workers are certainly going for the same sort of bump that the West Coast workers sealed late last year. So I do pick up that some of the market share gains that the East and Gulf Coast ports picked up in the last few years might be shifting back a little bit to the West Coast to avoid some of those uncertainties.

Dave Clark: 8:43

Well, you guys are stressing me out having to be quiet in this whole warehouse and ocean rage conversation. It's killing me over here.

Ted Stank: 8:51

Dave Clark is our guest. Dave does not need an introduction, but I'm going to do a quick one. Dave's former CEO of Amazon, 1999 graduate of Tennessee's MBA program. He had many leadership jobs at Amazon, over 20 years, ultimately leading Amazon's consumer business and for a long time led their global supply chain operations and technology group. During his tenure at Amazon, he built one of the planet's most extensive supply chain operations, with hundreds of fulfillment centers and transportation facilities, a fleet of 80 plus aircraft, a huge army of delivery vans including probably being a first mover on electric vans and a group of over 2 million employees and contractors. Dave's a member of the American Red Cross Board of Governors, a longtime advocate of the Red Cross. He's also got a bachelor's degree in music education from Auburn One of those programs that's in that top 25 with Gartner and we have some good friends down there and again his MBA from UT. Dave, welcome, sorry, you know what? We should never keep a guest like you.

Dave Clark: 9:51

I mean it really is. I mean you should leave in there. I'm impatient and have a hard time shutting up.

Ted Stank: 9:56

So, dave, stand there at the plate. Let me toss you this softball. What do you think's going on? What's your take on some of this stuff?

Dave Clark: 10:04

Part of it, I think, the warehousing. So the BLS numbers and the way they track it don't really capture all the categories anymore. Right, there's way more than 2 million people operating in the e-commerce fulfillment and general warehousing space, I think, just in Amazon alone. I don't know how many they have today, but probably half that number floating around somewhere in that space. It kind of depends how you count it. I a day, but probably half that number floating around somewhere in that space. It kind of depends how you count it.

Dave Clark: 10:27

I agree with you, though. I mean I think the economy is sort of settling down a bit. The inflation piece has to catch up at some point. Credit card spending going up. I'm personally an optimist. I think it's going to be a good holiday season. I think deals are still big for people. Some of the ocean traffic over the last couple of months has been. A lot of people have the summer sale now driven by Prime Day deals going on. You see Target following that, walmart, a lot of other people copying that too, and so that surge is a bunch of retail in. But I think the economy is still in real good shape. But it's leveling out to your point. I don't think it's on fire anymore. But all the deal seasons, I would expect to be quite good this year.

Tom Goldsby: 11:00

Yeah, you're right. Ordinarily in retail this is a quiet time, but Amazon really changed all that. Prime Basin said, hey, all right, let's pick it up and, as you point out, others have followed suit, and those were peak days. Can you share with us a little bit about what it was like to kind of feed that beast to solve the needs that before they were even obvious to us? I refer to the American consumer, particularly the online consumers, being diabolical and so demanding in every aspect of the customer experience. But I've got to admit, amazon created the beast that is the diabolical consumer. Folks like Ted and me here that you know wanted an incredible assortment of products at competitive prices. We wanted to be able to track our order from the minute we submitted the order until it arrived at the door. We wanted to have the opportunity to question things and to return it without hassle. All that.

Dave Clark: 11:56

Well, nobody ever wants less selection at higher prices and slower delivery. The consumer has always been diabolical. That's not new. Just maybe what's new is people are actually meeting the consumer needs, are working much more aggressively to meet consumer needs. I think that was one of the truly special things about Amazon was it is customer first in the approach to the way the business goes and everything's optimized around. How do you give customers more selection, lower prices, better delivery, putting convenience deeper and deeper into what they do? And it's not just an Amazon thing.

Dave Clark: 12:34

What you've seen in the last decade or decade and a half of retail is retailers who have met those needs and who have invested in and improved the customer experience have succeeded and excelled, and the ones who haven't have gone away. And so retail hasn't gotten smaller and e-commerce certainly hasn't eaten all of retail. But retail is consolidating into the players who are really aggressive about meeting consumer need. Walmart is a fantastic meter of consumer needs and they do it more offline than online, but it is a phenomenal retailer and so they continue to thrive. The same thing what happened with Jolly and Best Buy over a decade in there, of converting that into a new experience and something that met consumer needs in a different way for electronics than what they could find in most other venues, and so I think the unique aspect of Amazon and the specialness of Amazon was really just that.

Dave Clark: 13:35

It said consumers, to use your word, diabolical. But they are never satisfied and you need to wake up every day trying to invent a new way to meet their needs. That's why it's customer-focused versus competitor-focused, because the customer is always going to be tougher than the competitor. Always. They always want more than what some competitor is going to be willing to provide, and usually if a competitor has beaten you on something, it's because they figured out something the consumer wanted that you didn't. That's really the reason to look at competitors is to make sure you didn't miss some vector of customer need. I'm shocked today I still get into these conversations with CEOs and board members at some companies that want to debate whether or not customers really want faster delivery and whether that really sells more goods, and I feel like debating is the earth round, like debating is the earth round.

Tom Goldsby: 14:24

Now, dave, just as you say that you know Amazon's made news in the last few weeks for again innovating with the consumer but also trying to keep up with competition, namely the Chinese suppliers Xian Taimou, ali and these folks that are selling direct into the US, and I guess what Amazon announced is that Chinese vendors can bypass the FBA fulfilled by Amazon service and get inducted direct into the delivery network, and there we're talking like seven to like 12 days delivery, as we see this pivot from kind of fast fashion to what they're calling on-demand fashion. You know what's hot and happening on TikTok is getting into production, maybe you know, later today, and then delivered to the US for again maybe 10-day delivery. What's your kind of reaction to what you're seeing there in terms of a little bit of a shift, at least in that maybe that younger segment, the TikTokers out there that are willing to maybe wait a little bit longer to get maybe the absolute hottest item out there?

Dave Clark: 15:34

You know I think I'd redefine it slightly which is for fast fashion, it's not waiting longer. It's actually the contrary, which is you're creating visibility for the product at the point of manufacture. Right, this is the classic. Go back to the early days of just-in-time or make-on-demand for apparel. Somebody comes up with a design idea, they surface that to customers immediately. Customers give a buy signal and then they produce. It is less in that supply chain than it would be for manufacturing that item, delivering that item to a fulfillment or distribution center of a retailer in country, and then listing that item and then delivering it, and so just most of that supply chain is invisible to the customer. They're unaware that they're waiting.

Ted Stank: 16:27

Right.

Dave Clark: 16:28

And so you just made it visible. So they're aware now that they're waiting, but they have no path to get it faster. I think those are really interesting and it's probably an important piece of the business to be connected to, particularly in fast fashion, but it's still a sliver of the business. I think when you talk about Xi and Teemu and Wish had the same problem, or Wish had the same kind of concept, but it wasn't just fast fashion. I think people are not as willing broadly to wait for things that are readily available. They are willing to have a longer shipping time for something that is new and unique and not readily available. That's a selection expansion.

Ted Stank: 17:10

And Dave correct me if I'm wrong, but the typical marketplace lead time was about 10 to 14 days, right, if you ordered from Amazon Marketplace when it flowed.

Dave Clark: 17:18

If you're a, seller and it's not an FBA. That ranges but yeah, I think memory serves it's in that sort of seven to 10 days for a lot of sellers. Amazon can leverage their logistics platform to be likely faster on that arrival delivery into the US than perhaps she and her team who could be on that. If they try to use the sort of de minimis work it's a little bit different deal. You know you don't get quite as much the combinatorial benefit out of it.

Ted Stank: 17:47

Well, hey, let's pivot to some bigger, broader issues. Okay, we could talk to you all day about this stuff, but I also, since we have you here, would love to have many, many discussions with you over the years about things that are going on in the broader world that impact us in business and impact us in supply chain. Would love to get your take on some of this. So let's start with the turmoil that we're in with the 2024 presidential election. I mean, so many things are going to be predicated on who wins in November. What's your take on? I'm not asking you to pick a winner or anything like that, but what's your take on where we are in terms of the choice and how this is going to impact business come 2025?

Dave Clark: 18:26

Well, if I just take it from a business standpoint, I think the status quo continuing to sort of divided government or you have an aligned government.

Dave Clark: 18:36

It's either going to be status quo in the sense that you have a Democratic president and I think the Republicans keep House and Senate one or the other. You end up divided government and things are fine for business. The only real chance I think you have at a unified government would be is if you have a Republican president and the Republicans take House and Senate, which is the way things are. Tracking is certainly a real possibility, in which case I think a relatively high number of things that are priorities on the business front have a path through legislation and to make it into the legislative agenda, through legislation and to make it into the legislative agenda. So, from a business standpoint, I think worst case is basically status quo and best case is some form of more business-friendly approach to the legislative agenda over the next couple of years. I don't actually, from a business standpoint, don't see a particularly negative outcome, no matter how you slice it from what could happen with legislation negative outcome, no matter how you slice it from what could happen with legislation.

Ted Stank: 19:38

Both parties have talked pretty strongly about tariffs that will probably heat up after the election, particularly tariffs on product coming from China. What's your take on the impact of those?

Dave Clark: 19:44

I'm certainly a free trade oriented kind of person. My bias is towards free trade makes things better for the world and has lifted millions of people out of poverty. I do think former President Trump's tariff approach is more negotiation-based than it is actually tariffs per se stances. Then you often don't get very favorable terms, and so if you want to negotiate something with China, that is a more equalized win for both kind of scenario, because I do believe China having growth is important from a US defense initiative as well. A failing China is not good for anyone. So I think it needs to be win-win. But I think to get to win-win probably requires some fairly punitive-oriented negotiation tactics. I would say so. I tend to think it's more negotiation tactic than anything else, but we'll see. That's just my opinion.

Ted Stank: 20:47

Yeah, interesting Tom. What else are you going to throw at them?

Tom Goldsby: 20:50

Well, you know, something I'm always keen to pick up is what took day one from being a music education major at Auburn to pursuing an MBA at the University of Tennessee and then going to work for this outfit that. I have to admit. I've been an Amazon member since 1997, I think, when I was buying books and CDs because that's all Amazon sold at the time as a big connoisseur of books and CDs. But I'm just kind of curious about Dave's journey, if you'd be willing to share that with our listeners about what took him from music education and I do believe that you practiced that for a short time before pursuing the MBA. Can you take us back to those days, dave?

Dave Clark: 21:36

Yeah, I taught school for a year. Let's just say I was not the world's most motivated student over my academic career for a lot of different reasons, but was much more interested in working most of my time in high school and college and learned to drive on a forklift. My parents owned a carpet store when I was growing up, and so I'm going to come by the supply chain bug, naturally a little bit. And I really love teaching, though. I really love working with people. I love teaching and it was really that I was a great musician, but I really enjoyed being in band and being with a group of people and working together to achieve an outcome as part of a group, but I found that very satisfying. What I didn't find satisfying was the $20,500 that was my annual paycheck when I was a teacher.

Dave Clark: 22:19

Everything else about being a teacher was fantastic, other than I really thought it was going to be sort of the same type of experience over the next however many years and, as Ted knows well, I get bored easily and have trouble sitting still. But I wanted to do something that had a lot of diversity to it and I had a family friend that suggested Tennessee. What was the logistics and transportation program at the time and I went and checked it out and fell in love and the rest is history. But it sort of blended all the things that I really liked, which was working with groups of people on a shared mission, working with things that are tangible and real in the physical world and getting to work with cutting-edge technology on the edge of innovation, of what people were doing in the space. And that's also what drew me to Amazon.

Dave Clark: 23:04

Amazon was working with Tennessee at the time on network optimization for that first tranche of FCs that they came out and expanded in 99 and 2000. And I got to meet Jimmy Wright, who was the head of operations at the time, when he came to Tennessee and went and visited the company Again fell in love with just the incredible mission orientation of the people that were there. He was pretty clear that they had big aspirations of changing the world and the way people bought and sold and experienced consumerism. And they also were a little rebellious and I like that. I enjoy the fight, if you will. So it was a great fit for me and graduated on Friday, started on Monday and spent a little over 23 years there. Loved all of it.

Tom Goldsby: 23:47

The build-out of the Amazon network that you not only witnessed but were instrumental. I mean, I think it's one of the incredible stories of supply chain ever told, right, and the time that you joined in 1999, they were pretty much distributing out of Kentucky, right, that was about the extent of it.

Dave Clark: 24:05

When I joined we hadn't opened Kentucky yet. We had. Seattle was the primary and there was a site that had opened in Delaware and then there was a site that opened shortly after in London that we part of an acquisition did, but it was really Philly and Seattle Wow.

Tom Goldsby: 24:22

One of my favorite slides to share in class is to show that mushrooming year over year and again in the early days of Amazon. I use five-year increments right, because there just wasn't a lot of build-out from, you know, 95 to 2000, 2000 to 05, 05 to 2010. And then things get really interesting around 2016. And I was living in Ohio at the time and I point out AWS, you know, had a data center maybe in Columbus, but other than that there was no FC in all of Ohio. And then, lo and behold, 18 months later we've got three, four, five. Something very interesting happened there about 2016. Can you kind of explain was that when the pursuit of the two-day delivery was really being built out. I think there were some regulatory changes also about then. Can you kind of explain what that trajectory was all about?

Dave Clark: 25:22

Yeah, you could kind of plot Amazon's expansion over time kind of where they started. The first big tranche was that 99 build out the five big fcs that got launched in that year and we lived off of that capacity to optimization, software build and everything else because we basically nobody had done custom direct consumer fulfillment at that point. You couldn't buy anything. So you had like, if anybody remembers, bushman like you know, I had like old you know, and chris plants you know, and stuff in these sites and it was all designed to move cases. And to your point, back in the warehouse section, it was all designed to move in cases and pallets, not moving in each, and Jeff Wilkie was driving the bus then and did this phenomenal job of implanting this culture of Six Sigma and lean into the organization and applying software into continuous flow environment for warehouse direct consumer fulfillment and we lived off of that till probably 2006. We started selling a lot of the new thing like toys and hardware and all these things. They had a lot of bigger items.

Dave Clark: 26:27

So we did a big non what we call non-sort or this big item build outs over a couple of years in there and Prime launched somewhere in there I forget the exact year, 2005 or 2006 or somewhere along the line, and then in 2008 or 2009, the big pivot happened, which was sellers on Amazon.

Dave Clark: 26:47

That's really what drove the next big wave, once you started bringing sellers on, is this process of bringing incremental inventory in, and so if you look at Amazon today, over half the business that gets fulfilled to customers is seller inventory, not Amazon first party, and so all of that is business that came in in that post-2008-9 timeframe, and so we built the first multi-story new sortable box in 2010 or 11, right after that.

Dave Clark: 27:20

And then we acquired Kiva in 2012. And then it took us about a year and a half to redo all the code and set there, to get it to go multi-story and to work with the other solutions we put in place. And so then you really start to see that build out, blow up in like 2014-ish, 2013-2014, and then it goes crazy, and so by the time you get to 16, you're cranking out 15 new boxes a year of these really big footprint sites. And then you get around to 2017, 2018, and delivery is not going to expand to meet our needs, and so we start building out the delivery network, and so the network basically doubled every two years, from 2010 on. It's sort of the general profile was, I know I got to double the size of our network and the leadership team and our capabilities every 24 months and that was the cadence we were on until we got to COVID and then it was, you know, every year instead of every two years.

Tom Goldsby: 28:19

And finally, lo and behold, in East Tennessee we finally have a fulfillment center in our neighborhood. They're everywhere.

Ted Stank: 28:26

Hey, dave, you told me one time that you would define the Amazon consumer business as a supply chain company married to a technology company, and I think certainly, over the storyline that you just talked about, you could see where that's true. Where do you see it going? Not just with Amazon, but with supply chain in general, with technology? What's next? What's the next big thing? You know the buzzword today, just like blockchain five years ago, buzzword today is generative AI. Where do you see all this going?

Dave Clark: 28:55

Honestly, much of supply chain needs to catch up with the last wave. Still Supply chain tech tends to be I mean, it's not very good across the board. You know there's a lot of good segments as pieces of tech that's good, but there's very little end to end. That's good, but there's very little end-to-end. Unless you're Walmart or Amazon, you don't really have internal true end-to-end capabilities. In most respects you patchwork, quilting stuff together. Generative AI as you see from all the stuff that's constantly broadcast about it is only as good as the quality and consistency of the data that feeds it, and most organizations aren't prepared to leverage AI in an effective way because they neither have consistency of data nor a key that would enable them to create consistency of data across these multiple platforms. So they're trying to leverage it, but they're leveraging in spots as opposed to across the total. Unbelievable unlock in both cost savings, efficiency and environmental footprint reduction through end-to-end optimization across supply chains, and we barely scratched the surface on it. I think one of the gifts that I hope we're able to take out of COVID is that a bunch of people who did not know what supply chain was suddenly were experts in supply chain and were very passionate about it and supply chain technology suddenly hit the C-suite in an investment category that it wasn't getting before, because most companies like Amazon, they're not inventing the next shoe like a Nike or Adidas or somebody, so they're not trading off the product development for supply chain. Supply chain is the product development, advertising is the product development. It's a marketplace more than it is a pure retailer, at least from my opinion and so you really get into this place where that was an investment focus, but most companies are really trading off. Do I want to invest in the next generation of shoe or celebrity endorsement or marketing, or do I want to invest in this supply chain technology? That's a tough place to sit for most CEOs unless you have a lot of scale, and the market I don't think has really produced a great alternative for them. People have segment solutions, but again, nobody's really offering a way to stitch these things together. So I still think that's a big.

Dave Clark: 31:12

This sort of who's going to be the sales force of supply chain, you know, I think is still a big opportunity space for someone out there that nobody seems to have been able to got to it. But if I've had the most thematic thing, I would say getting to a place of data consistency, less for generative AI and more for classic AI. You know, sort of ML neural network. Like you know, true high-end analytic calculation and optimization performance, I think is a huge impact available. And then robotics is the next big unlock. You know robotics is just going to be such an influence and you know I've seen it in the investments we made over the decade and a half or so at Amazon, that we were working on it and you start to see it in the marketplace in a big way. I think there's a bunch of odd focus on humanoid, but the idea of robotics, I think over the next 10 or 20 years, is truly one of the more foundational changes in the way we experience the world.

Tom Goldsby: 32:12

And Dave, while we've got you. You know, ted and I are in the business of producing a product which is the next generation of supply chain talent and, given the rapid technological changes that you speak of given again in the earlier in the podcast, we're talking about geopolitical issues and uncertainty and, dare I say, maybe even chaos out there what advice would you direct to the likes of Ted and me and other academics in terms of preparing that next generation of workforce?

Dave Clark: 32:43

I certainly don't think chaos is going to be reduced over time. I mean you could argue that we had like a 20 or 30 year period in there. There was probably the least amount of supply chain chaos in the history of supply chains. That sort of 80s, 90s, early 2000s was a pretty sweet time. I think we're back to a place of lots of things happening, which I personally is.

Dave Clark: 33:04

I think one of the more maybe this is Damascus to me is the thing that makes me love supply chain Is that every day you wake up it's a new something on fire, you know, and I think that's a big deal in the profession. And so I think building leaders who are dynamic, who are resilient, I think the number one skill I used to say software is probably the number one skill. I think just mathematics you know, math generally, is probably the number one base skill. It's like getting a language you know or historical background to go be a lawyer, I think be a supply chain professional. The background is probably going to be some sort of deep math basis is really your you know OR some version of something in that nature, because speaking the language of code is going to be about optimization models more so than sort of maybe what it's been historically, and so I think that's where people are going to spend their time.

Dave Clark: 33:55

And then generalized leadership how do you lead people? Because leading people in a world filled with AI and robotics and the kinds of challenges and things people are going to be working on and facing will be very different, and so people expect different things from leaders than they did 20 years ago, and so people expect different things from leaders than they did 20 years ago, and so I think generalized leadership, in broad math, are probably the two of the most important aspects for people in being successful. I don't know how you teach resilience other than just lock them out of the building once a week and figure it out.

Ted Stank: 34:25

I had an engineering professor friend that said his final exam, he wanted his final exam. He was a mechanical engineer. He wanted to parachute his class out with a 20-foot container filled with a bunch of random junk and give them like 10 days to find their way out of the jungle, or something Sounds fun.

Tom Goldsby: 34:43

Be the way to build resilience, but we can do the same thing in the Smokies now far away. Hey, Dave, I wanted to ask you, as we've got time maybe for one more big question and something that Ted mentioned in your introduction was your service to the Red Cross and the Board of Governors, and we talk about kind of chaos and managing through chaos, helping navigate crises, the leadership that you bring of having, as you point out, a million associates and getting folks to kind of get concerted and focused and solving a problem. I'm just curious maybe I'm answering your question for you but what business sense do you bring to the American Red Cross, Maybe? What challenge and joy do you find in that work?

Dave Clark: 35:28

Look, those folks are amazing people and I would say I get way more than I give out of that experience.

Dave Clark: 35:36

Maybe the most interesting thing for me is, you know, having grown up at Amazon, seeing the Red Cross is seeing a very different kind of organization with a very different kind of mission and a really interesting and eclectic group of board members, and what you start to learn is that there are a lot of ways to be successful and Amazon has one culture and one approach that's been very successful to Amazon and to developing the company.

Dave Clark: 36:01

But the Red Cross has a radically different culture, like the level of broad empathy across the Red Cross, at all levels and at the board at the Red Cross is really phenomenal. And to produce the level of outcomes and the exceptional results that they produce for those affected by disaster and for the people who are recipients of blood that the Red Cross generates and delivers every day, to see them be able to have that kind of success with a very radically different and empathetic type of culture is very instructive and I've learned a lot from that and I've tried to help where I can with the expertise that I have in supply chain and delivery in those places and with just sort of managing issues, but I've learned a lot about the way different people approach achieving success and positive outcomes in different leadership frameworks. That's awesome.

Ted Stank: 36:57

I'm sure that organization appreciates your expertise and insights too, dave, as do we. It's always a joy to speak with you, dave. I always love to have you with us. Thank you so much for spending the last 45 minutes or so with us. We are going to wrap this and ask anyone that has any comments or questions to send us at gsci at utkedu.

Dave Clark: 37:19

Come to UTK, the greatest supply chain school in the world.

Ted Stank: 37:22

By the way, national baseball champions as well.

Tom Goldsby: 37:26

That's right. We failed to touch on that Right, so I just learned that 14 of the baseball players are Haslam College of Business students. So that's got to be about half the team, right. Yeah, very cool.

Ted Stank: 37:39

All right, that's a wrap, everybody, dave. Thanks again, tom, great to be with you, as always.

Tom Goldsby: 37:43

All right, let's enjoy the balance of summer. Thanks everyone for listening.

Introduction: 37:48

Thanks for tuning in to Tennessee on Supply Chain Management listening. 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.