Speaker 1: 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.

Speaker 2: 0:28

Hello and welcome to the Tennessee on Supply Chain Management podcast, professor Tom Goldsby coming to you from Rocky Top with the back to school edition of the podcast. What do you think of?

Speaker 3: 0:38

that, hey, ted, how you doing Absolutely. I'm doing great, Tom, how you doing Great to be here.

Speaker 2: 0:43

It's Professor Ted Stank alongside me here, and hey, we've got another individual in the room today. You want to introduce our guest? I do.

Speaker 3: 0:51

I do Doug Gray, vice President of Integrated Supply Chain with Trane Technologies. Proud University of Tennessee Executive MBA alum. Doug and I have been friends for a long time Not quite as long as you and I, tom.

Speaker 2: 1:02

Okay, let's go back a ways, though. We've done Gay Street together, tom. We have absolutely Thanks for having me. Guys, I appreciate the invite. What brings?

Speaker 4: 1:11

you to town, the Global Supply Chain Advisory Board, in here from dinner last night and today and getting to hear all the great things that UT is working on.

Speaker 2: 1:19

That's right. So, as I said at the outset, it is our back to school edition. I kind of threw Ted off with that, but we didn't talk about that beforehand.

Speaker 3: 1:28

We're here with 40,705 of our favorite undergraduate and graduate students.

Speaker 2: 1:33

It is bustling here on Rocky Top. We just started classes a couple of days ago. Hey, I'm really excited because we launched the new MS in Global Supply Chain Program Reimagining for some time. So we're really proud to have 15 students in our introductory cohort there. But you're right, they're in the larger context of nearly 41,000 students, a record number here at UT Knoxville, and you know there's just so much excitement when the kids come back. You know it's harder to find a table at a restaurant and I can never get a machine at the fitness center, but despite those, challenges.

Speaker 3: 2:09

You have to time when you come on campus.

Speaker 2: 2:11

You do that's right.

Speaker 3: 2:12

Finding a parking spot is impossible, but there is an excitement to it.

Speaker 2: 2:14

There is, and we haven't even played a football game yet. No Right.

Speaker 3: 2:17

I'm thinking Tennessee Vols are going to win the national championship this year. Oh, my goodness this year I predict 42-17 over University of Michigan in the final. I like that.

Speaker 2: 2:28

That was a pointed comment, I think, to Doug. We talked about this beforehand.

Speaker 3: 2:32

We weren't going to bash the University of Michigan in this, but anyway, doug is a University of Michigan undergrad but he's got the big orange graduate.

Speaker 2: 2:42

That's right. He eventually got it right, and as we all have for that matter. But yeah, with regard to back to school, a lot going on here, rocky Top, also a lot out and about in the world. Where do you think we ought to break the ice in terms of talking about supply chain? So I'll tell you what.

Speaker 3: 2:58

I am freaking tired of talking about tariffs. Okay, real brief tariffs. Are there Probably at some point in the future going to gravitate to like a 15% across the board? Aluminum and steel just got 50% tariff put on it, so that's causing a lot of uproar. One of the things I think we all have to kind of take a tempered view of. These like okay, canada is at correct me if I'm wrong are they at 25%, 35%?

Speaker 2: 3:29

Somewhere in there.

Speaker 3: 3:30

But over 75% of products coming in from Canada are exempted.

Speaker 2: 3:37

Right USMCA coverage.

Speaker 3: 3:38

Same with Mexico, so it's a lot grayer than what you kind of originally see in the media. But that said, prices are going to go up.

Speaker 2: 3:49

Yeah, something you see the economists or hear them talk about is the effective tariff rate right.

Speaker 2: 3:54

So if you look at the summation of goods, coming in to your point, those that might already have some provision in place, protections, if you will, you really have to kind of get that and ultimately it comes down to the individual company right and what they're facing. And, doug, I'm just curious, what's the nature of the tariff conversation to the extent you can share with us anyway at Train? I mean, you all not only buying a lot of stuff from overseas but also selling a lot of stuff around the world too.

Speaker 3: 4:21

I saw in the Wall Street Journal logistics briefing this morning. I can't remember whose quote it was, but it said basically anything shiny is going to get impacted by these aluminum and steel tariffs. Well, you sell some stuff that has a lot of shininess to it, Absolutely.

Speaker 4: 4:34

It's really interesting because I started my career out early on in trade compliance and I'm now using all of those muscles again. Right, I'm talking about substantial transformation of compressors out of Mexico and how that's going to drive our sourcing. I think from the train technologies perspective we've come out and said it's probably plus or minus $150 million of risk for us. We're going to figure out how we manage that and where we need to manage that cost structure, whether we take that or we look to pass on some costs to our customers. I was reading an article last week about Caterpillar, where I used to work, and their number's in the billions. They're like $1.2 to $1.5 billion. We've had a strategy at Train Technologies to in-region, for-region for a number of years and we think that's helping us manage through some of the ambiguity and uncertainty that all of these tariffs really provide.

Speaker 3: 5:33

A wise approach. I think there was a book written in 2013.

Speaker 4: 5:37

Something about Epic. Maybe Something about Epic that recommended yeah, in-region, for-region.

Speaker 2: 5:43

Yeah, that proposition of regionalization was really ahead of its time. Right, you still have exposure perhaps there. But you know something else? I was listening to a podcast just yesterday, I think S&P Global offered a really good upshot on tariffs and there was kind of a conclusive comment. You know we're tending to view this all from a US-centric perspective and that makes sense. That's where we're sitting, that's where we live and work. But one of the economists from S and P said keep in mind, the U? S really only controls or influences about 15% of global GDP. There's 85% of trade taking place that's not involving U S companies or in and out of the U S. I think the comment was and they're doing just fine. Thank you very much.

Speaker 3: 6:28

Well, not only that, it's sparking a lot of discussions among those other countries. China and India are engaged in conversations. China and Brazil are engaged in conversations that ultimately, will have an impact on US products.

Speaker 4: 6:42

It was only four years ago, five years ago, when you saw India and China as direct competitors to each other in very unfriendly terms. We were trying to get people to get visas between the two countries and they weren't allowing them to happen.

Speaker 2: 6:56

Now they're talking about strategic partnerships, yeah their trade leaders are coming together having photo ops, right, and you know it could be some element of posturing, but there's probably also going to be some substance behind it. For sure, you've unloaded a little bit on tariffs and, doug, thanks for your perspective on how you're navigating the situation. What do you want to move on to next?

Speaker 3: 7:13

I would say you know as you look across the supply chain landscape. I think one of the most impactful news events of the last couple of weeks, at least from a US domestic standpoint, is the pending UP Norfolk Southern merger to create, for the first time in history, a true transatlantic United States domestic railroad. I just read again this morning that some of the more proactive shareholders of CSX are challenging them, at the risk of firing the CEO, to engage in potential mergers with BNSF and Canadian Pacific to counter that UPNS potential merger. Doug, I don't know how much shipping, probably with CAT. You probably did more. I don't know how much rail shipping you do and how you think that might influence the domestic transportation landscape.

Speaker 4: 8:06

Yeah, we don't do a whole lot of rail shipping in the train side, so most of my experience is from the Caterpillar side. But you know, it's interesting to think about. We're going to have this possibility, but how much now pricing power and control really is seated to that relationship, and is that going to make it less competitive or more competitive? I think those are some of the things that we might see play out over time right.

Speaker 4: 8:30

Are they going to provide a better service at a lower cost, or are they going to provide a mediocre service at a higher cost, which you know? That's some of the challenges, I think, with Rails.

Speaker 3: 8:40

Yeah, and you know it's interesting. On our faculty we have people from across the spectrum with expertise areas. I think Tom and I maybe less so you definitely one railroad. You lose degrees of freedom. They're going to squeeze pricing and you know and do all kinds of things. But others said, well, you got to take into account some of the efficiencies that will come from that. Does that enable better service at lower cost? That kind of stuff?

Speaker 2: 9:18

Yeah, and I think there's also. You know, those of us that have fairly long memories think the last time, you know, time we entered into consolidation, the rail industry you know the BNSF wasn't a great combination from the outset A lot of service disruptions, and I'm going back more than 20 years ago now but it resulted in a moratorium being placed on any further consolidation in that industry. And so I think there's concern that, hey, just because conceptually this might make a lot of sense to have East meeting West and vice versa. You know you can't just wave a magic wand and expect those efficiencies to come about. You know we're only talking about having a couple of Eastern railroads and a couple of Western railroads, but then the CN and the CP to the North they like, oh yeah, well, we can get involved south of the border, and they started taking direct ownership of some considerable assets here and connecting to Mexico, so truly having a continental railroad. So I think there's a bit of a feeling if the Canadians can do it, why can't we do it right here?

Speaker 3: 10:18

I feel like we're playing a board game. What is that? There's this railroad board game. I can't remember what it is.

Speaker 2: 10:23

Are you talking about Monopoly?

Speaker 3: 10:25

No, it's not. No, no, it's a railroad. It's specifically a railroad, and you kind of try to buy up territory and put your assets in place and all that kind of stuff. Okay, I'll have to think about what the name of it is Between Monopoly and Risk. I mean that's kind of like supply chain games to me anymore.

Speaker 2: 10:41

I was thinking risks yeah. Okay, so that's out there, that's out there and you know, I think there are kind of bets being placed as to whether or not this is going to be approved ultimately. But it is interesting to see how you know, the shipper community is responding. But also to your point, you know the CSX and those shareholders going, hey, we need to be ready to play.

Speaker 3: 11:00

Of course you know it goes beyond just railroads too. I mean inter. Of course you know it goes beyond just railroads too. I mean intermodal transportation, et cetera. All gets impacted by that.

Speaker 2: 11:06

Well, I remember, actually not long after Berkshire Hathaway acquired the BNSF, I was on faculty at Ohio State. Warren Buffett came to campus actually not long after that acquisition he was so excited about quote unquote his railroad. And you know he was talking about how the 21st century was going to be the century of the railroads again. And you know it was making a big play on sustainability, the carbon footprint of moving the same ton by truck-rail-truck combos, far less. You know, various times we're driver shortages we're dealing with on the highways and byways and you know this seems like a natural solution. You know that said, intermodal hasn't quite taken off to the level we thought. You know it seems like when fuel prices get up, you know, four or five, six dollars a gallon suddenly it's like hey, let's talk intermodal and shift that. But, doug, you're saying you're not a big user of the railroads and intermodal. Is that right?

Speaker 4: 12:00

No, we really don't. I think to your point. It's a commodity driven conversation, because I don't think it works that smoothly from an operational efficiency perspective. You know, you look at it conceptually, it looks like a great solution, but all these railroad interchanges, congestion can get to be a real problem, and how they manage that track in and out, and it can add days of time and you just don't know what's happening. It's like a black hole from the visibility perspective.

Speaker 3: 12:28

But you would think that if they could figure this out, if that merger happens, they could figure it out. Think of the potential of bringing something in from Europe or Asia to US East Coast port and intermodal railing it across the country to, you know, to Denver, or you know Denver, or even all the way to the West Coast.

Speaker 4: 12:47

Yeah, with consistency.

Speaker 3: 12:49

With consistency and visibility Exactly. Transparency.

Speaker 4: 12:53

Yeah, we always think about that concept of standard deviation. Right, and how much standard deviation in that transit time do we have that's driving that kind of volatility in your planning signals.

Speaker 3: 13:03

Well, I would say, the other thing that's kind of the ongoing, it's almost as pervasive as tariffs is AI and how are we using AI? Here at our advisory board meeting today we had a presentation from Sean McLeod of Axel Logistics talking about how they're implementing AI in their freight brokerage business and it was fascinating and we'll continue to have these use cases. But that's out there. It has technology implications, it has talent development implications. It, you know, just across the board. It has economic implications from headcount standpoint. The most extreme of the tech bros out in the West Coast, you know, are saying by 2030, we're going to have 20% unemployment because of AI replacing people. I mean, that's an ongoing conversation and if it happens, I would say that in many situations, supply chain roles will be some of the first impacted, because we do so much rote manual work, both administrative and physical.

Speaker 4: 14:05

Yeah, if you listen to the tech bros, they'll basically say you guys are out of business because there's going to be no entry-level jobs. I'm not sure. I really believe that. I think that same kind of noise came about when they talked about the ATM machine, but I think it's going to change the nature of work.

Speaker 3: 14:23

Although I just heard a podcast Ezra Klein New York Times podcast with a woman named Natasha Saron. She's an economist from Yale and they said that we always use the ATM example and for decades it did not decrease the number of bank tellers as predicted, but now it is. So they said that there is some kind of lagged effect. So AI may do that, but probably not by 2030.

Speaker 4: 14:49

But it makes you wonder is that really the ATM machine or is that online banking that really disrupted? That Great point I don't go into a bank branch.

Speaker 3: 14:58

It would be the worst thing for me is if I actually had to go into a bank branch.

Speaker 2: 15:03

I actually bank with a company that does not have a branch within three hours of Knoxville, and how liberating is that. Yeah, but to your point though, you know it does seem the nature of work is going to change, and it was really great to hear from Sean today, because we visited the shop at Axel just earlier this summer and I commented to him afterwards it's like, wow, you all continue to double down. And I gave him so much credit for having the gumption, the courage to be innovating in that space. And you know, my comment was that it seems like you are fulfilling that prophecy of and that they are able to create better service provision for their clients and to do so at a lower cost. However, I was asking him about, you know, any aversion that the clients have if they learn about how AI is being used? You know, are we taking some of the human touch out of the business? And he said you know they had to be very selective about that right.

Speaker 3: 15:57

Well, the last thing he talked about was that AI answering phones and how they've been able to make it really sound like it's in a beta phase, but really sound like somebody truly answering the phone. And, of course, my thoughts went immediately, as I'm starting to become one of the prime targets of scammers. As a quasi elderly person, you know it's like when somebody calls me up. How do I know it's Tom asking me for money?

Speaker 2: 16:21

Like he always does. I always do, that's right.

Speaker 3: 16:24

Just keep saying yes, Ted, and we'll be all right.

Speaker 2: 16:26

This is my Venmo really going to where I think you need to go buy those Amazon cards, but I mean, those are the downside of technology, right?

Speaker 3: 16:34

I mean Doug and I were talking during the break after that about we can make it do so many things, but it makes us upload our data, and so we're not able to truly plumb the opportunities because we have to worry about data security.

Speaker 4: 16:50

Do you really want everything to be public?

Speaker 2: 16:52

Right.

Speaker 4: 16:52

There's so many things, personally and professionally, you don't want everyone in the world to know about, and I think that's one of the reasons why I think on the internal side of our organization, we're moving at a very measured pace because we've got an internal tool. I think you were mentioning UT has one as well. It's okay and we're improving it, but it's really the safeguards of our information that we have. And it was kind of the same thing when I was using ChatGPT. Personally, I'm not going to put my personal specific information out there, but I'm going to put information that maybe it gives me a more intelligent response than just a simple Google search. So you got to be really cautious about that. But Sean's presentation was fantastic. I think they're doing some really great things on not only driving efficiency but driving more revenue opportunity. The numbers he was talking about of like the number of loads that they're bidding on every day with a 3% take rate. I mean think if you were putting people against that, how many people it would take to try and just grow that increment.

Speaker 3: 17:54

And I was thinking of cashflow issues too their ability to automatically capture bills of ladings and invoices and proof of delivery. How long would that take? I think he had said one time when we went and visited that it was usually like three to four days to get an email and capture that proof of delivery before you could bill somebody. Well, now it happens instantaneously. So what does that do to your cash flow?

Speaker 2: 18:16

On that volume of business they're doing.

Speaker 4: 18:18

Yeah, no, on the opposite side, we're very focused on things that are going to help our customers from an AI perspective. Ai perspective, we just bought a company in January called BrainBox AI and how it's going to help our large commercial customers understand what's going on within their complicated building solutions like the one we're in right now. Right, thank you, by the way, for you guys. Being a great customer of Trane Technologies, I'm sure there's a lot of good product in here. But these implementations you think about, we just assume the temperature is going to be right. That's just natural for us, and all the complexity that goes into how you control the temperature across X number of rooms across X number of environments is sort of that secret sauce, and we're using AI to really help our customers in that space.

Speaker 3: 19:03

I think it's going to be a bottom up. I mean, obviously, when there's good use cases, we're going to adopt them. It'll be top down, but I think a lot of the innovation with AI is going to be bottom up. Doug, I mentioned to you that I always use your example when you were with CAT and your team was kind of intimidated, I guess, by using precursors to AI to automate some of your administrative processes, and you kind of gamified it and had them come up with ways that developed tremendous benefits and all of a sudden everybody embraced it and thought, oh, this is cool, let's figure out what else we can use it for.

Speaker 4: 19:35

Yeah, exactly, you have to create that environment where it's kind of safe to play and experiment and then show the results and tell your story really well. When we're talking earlier about in the planning conversation, about this compelling conversation skill, I call that storytelling, and it's as much about how you can communicate, what is the impact of what you're doing, what's that burning platform, the why behind it, and I think that is an underdeveloped skill set, I think in the business world.

Speaker 2: 20:06

So how have you brought that logic, that experience that you had at CATT, to your current role at Train? Have you been able to bring most or all of that goodness and integrate it into your current functioning role, or what are you finding in the way of different?

Speaker 4: 20:22

opportunities. It's been a really interesting process for me. I've been at Train now for about 15 months and before I joined Train, probably one of the reasons why they asked me to join Train was there was quite a bit of disruption in the network and the aftermarket space that was impacting our customers and at the same time that they decided to move to a regional structure, they also created an aftermarket business unit, separate from where it was before that, and they said we want to go run this as a business, but we need to improve our performance to our customers. So really the first 12 months for me was getting back to basics. How are we going to function into distribution center and improve our overall performance to our customers?

Speaker 4: 21:08

You know we have these different order types. We have emergency orders and stock orders and when I was looking at the metrics, we had emergency orders that were at like 65% same day on time, but they had an overall on time measure, which included all the stock orders, of like 90% and I said we're really not taking our customer's point of view. So we went, we focused on emergency orders and year we're seeing a 30-point improvement in those emergency orders on time and the overall SLA has gone up as well. So we've created that basic stability. So our emergency orders have gone down by about 40%. So get the availability out there. If you think about our customers in the residential and light commercial space, if their equipment's not running, they're in an uncomfortable environment. It's either the hottest day of the year or the coldest day of the year.

Speaker 4: 22:03

That's when your stuff goes down Absolutely and they don't want to wait. And when you're talking to a warehouse associate out in the environment that they're working in, what do they see? Brown boxes, that's what they see. That they're working in, what do they see? Brown boxes, that's what they see. So how do you make that personal to them and talk to them about hey, this brown box is probably that part that you needed when your air conditioning was down and it was 95 degrees in your house and making that more realistic to them.

Speaker 4: 22:28

So we've done a lot on kind of back to basics to drive performance improvement and really drive stability from an availability side.

Speaker 4: 22:37

And now we're working on how we're going to take our planning capability and automation to the next level.

Speaker 4: 22:43

So we just started with you guys on a project in the advanced supply chain collaborative on demand and how we need to do better advanced demand segmentation, customer segmentation, because we've got a long skew of part numbers, a really long tail in that skew set and all of those are customers that their units are going to go down in the field if we don't have those parts available to them and if we can't get them, they're going to go find a solution somewhere else. And the really cool thing about Trane is we're in this growth period From roughly March 2020, we kind of spun out from Ingersoll Rand and became a pure play climate control innovator and we've grown from like $12.5 billion to $20 billion in that time period. So we still have a long runway to really take advantage of the market that's out there for us, but we've got to be able to not just have the product, but have it where they need it and when they need it at the right price.

Speaker 3: 23:46

Right, I mean, it's that typical supply chain that you talk about, and especially with after parts, I mean after market. That's really the business there, exactly. If I'm getting a new unit in and a new build or something, okay, if you're delayed a couple days one way or the other, that's fine.

Speaker 4: 24:00

Not that big of a deal, right. And then we also, as a part, we support our services business, which is going into places like these large chillers in your buildings here and doing either preventive maintenance or repair if something's happening to it, doing either preventive maintenance or repair if something's happening to it. And those technicians are highly skilled, highly capable individuals that we put years of training into. We don't want them thinking about parts. They shouldn't be spending any time or energy thinking about how am I going to have the parts to do this job, because that's your asset utilization. Play is to get that technician to be most efficient. So really those are kind of two big pieces of what we're trying to do in aftermarket is how do we help services be more effective and efficient and utilize their assets, and then how do we drive availability to our customers so that they stay in their comfortable environment.

Speaker 2: 24:47

Well, and to the extent that you talk about new build and you talk about maintenance, sustaining equipment, you know it takes me to some of the conversations we've had with some previous guests that are talking about kind of lifecycle management and just kind of being that ongoing steward of the technology that you're implementing and hey, when it's time to move out into something that's more efficient, you know we can help you navigate that. That's what in academia we were calling the service dominant logic right Long time ago, as opposed to just pushing product. But would you say Trane has kind of taken on some of that. You know being a consultant or steward of the assets and not just someone who manufactures, distributes and sells the hardware.

Speaker 4: 25:27

Absolutely. That's again, that's our services side of our business. If you think about the complexity of controls right, you remember we went through all this chip shortage a few years ago after COVID hit. These controls get updated every three to five years and you're kind of on that next version of capability and what that means for the customer is more energy efficiency, less emissions, so us being able to have those service contracts and stay connected with those customers and talk about, hey, your unit could get a controls update, for example, and then you might see a 5%, 6%, 7% improvement on efficiency. Because if you sort of look at the built environment right now, if you take from the meter to where we're sitting right now, you tend to lose 30% of the energy available. It's really incredible to think about that.

Speaker 2: 26:18

Yeah, it really is.

Speaker 4: 26:26

You put another set of controls on that. That can maybe take that from 30 to 27 or 25, and it's meaningful from the dollars and cents that your facilities people are looking at every day.

Speaker 3: 26:31

Yeah, that's huge. I had no idea how much else do we lose. So that's just that one little. I had no idea how much else do we lose. So that's just that one little part of the distribution grid. How much do we lose upstream from that?

Speaker 2: 26:39

But it talks about raising the level of the conversation from a just purchase price right to the life of the unit and total cost of ownership something we talk about quite often. But train becomes that partner in helping to navigate those conversations.

Speaker 4: 26:55

And we'll go in for, say, a large chiller installation, we'll go in and propose to do a complete refurbishment of that chiller. So roughly between 15 and 20 years we will tear that down, rebuild it. It is a like-new product. We warranty it as if it's new and you get another 20 of life cycle out of it, which is part of our sustainability.

Speaker 3: 27:18

I was just going to bring that up. I said that sounds like a sustainability.

Speaker 4: 27:21

If you look at our sustainability report, this is something I knew to me as I was learning more about HVAC. It doesn't say we have a strategy around sustainability. It says sustainability is our strategy and it's how we differentiate for the customers. You know we've got a by 2030, we have a pledge to help our customers reduce one gigaton of emissions. I had to look up what a gigaton was.

Speaker 1: 27:46

Sounds like a lot, it's a lot.

Speaker 4: 27:47

Sounds really heavy One billion tons of emissions and we started that in 2020. And we're about 25% of the way there right now and it's a flywheel effect, so you can imagine it's going to pick up as we progress along. That's the product innovation side electrification of heat, reduction of emissions based on efficiencies, and then we've got the whole piece of what are we doing in our own operations. And I was talking a little bit about how we've seen that revenue growth from 2020 to 2025. In that time period we've reduced our energy consumption at our facilities by 3.2% and you would say, well, 3.2% is not that much, but think about 60% growth, at the same time reducing your overall energy output by 3.2%. And now in 2024, we kind of started this whole effort on what we call embodied carbon.

Speaker 4: 28:43

So it's how do we help improve the overall supply chain for emissions? So we kind of move from help our customers then go focus on our own facilities and drive improvement in energy consumption, water consumption and emissions. And now we're focused on how do we work on that upstream value chain and we're taking the big key components of emission creators. You can imagine what they are Like. We have now 20% of our steel is low carbon steel, Like we have now. 20% of our steel is low carbon steel and we've been the leader in that space, trying to get other both peer groups and people in the industry to go out and use low carbon steel as part of their products, Because that's one of the ways that we could try to take embodied carbon out. So it's really interesting, coming new into the HVAC industry and seeing Trane really be a leader as a climate innovator and what we're doing to really kind of put that into action across customers, our own operations and our inbound supply chain.

Speaker 3: 29:46

That's fascinating. It really is. Let's pivot. Our producer, brian, has given us the high sign that we're getting close to time. Let's pivot. Briefly, then, to talent. We'd given Doug a bunch of topics I think we gave him about 35 questions and we've gotten to three of them so far.

Speaker 3: 30:03

So, listeners out there, if you have another five hours we'll be with you. Let's pivot really quickly to talent. Every supply chain leader that we have in here talking to us as a guest has a lot of content-oriented responsibilities, but at the end of the day, talent is a big part of what you do. Can you talk to us a little bit about the kind of things that are challenging you from a talent development standpoint, both for new hires as well as your existing teams?

Speaker 4: 30:30

Yeah, absolutely so. Right when I was joining the team at Train was talking about coming and starting recruiting at Tennessee and I'm like, well, hey, I know that process, I know we can get engaged really easy and kind of got the college recruiting process started for us because I knew from my Caterpillar time how much value we could get from that connection and the kind of students you guys are putting out connection and the kind of students you guys are putting out. So we're really focused on that. From an early talent development perspective, I think we're going to now start to try and engage more in some classroom interactions to get our name out there a little bit more, because a lot of people will say I don't know train, you know, what do you guys do. So that's kind of the.

Speaker 4: 31:09

On the early talent side I'm starting now with my team. We've sent a couple people through the Leadership Academy, we've sent one person through the Planning Academy, so I'm getting us into those executive education type programs. So the benefit we have at Train is we have a lot of long tenured employees. The challenge with that is they don't necessarily know all of the things that everyone else is doing right. So getting people to come to the forum and getting exposed to what's happening, like I've done that already. We've gotten people come to the forum, starting last fall now putting them through these exec ed programs, really just trying to expose them to how we can help build their skills and develop them.

Speaker 4: 31:54

Because I think my overall material strategy is let's find the redundant manual work and let's automate that, not for a headcount reduction, but I need to redeploy to the higher value add Because right now that transactional work is pulling us away from that higher value add. So, as we've kind of established that, back to basics, get everything going in the right direction. Now it's like how are we going to start to do upskilling? How are we going to start to really drive the conversation about where can we add value in the integrated supply chain?

Speaker 3: 32:28

Fascinating. Well, Doug, you've always been a great partner of ours. As I mentioned earlier, we've had a relationship from several years ago when you were in the executive MBA program. It's been a real joy for me to kind of watch your career as you moved up in Caterpillar and now moved over to Trane and really have a huge responsibility for managing the end-to-end supply chain for your business.

Speaker 2: 32:50

And brought Trane into our fold as well. We always have a little bit of a hang when we lose someone at one of our corporate partners, but oh, he's going to train and you've really helped to reinforce that relationship, so we're very appreciative of that.

Speaker 3: 33:02

Yeah, you mentioned that. You know you're working on one of our advanced supply chain collaborative projects too. Lance Saunders is working that project. He's talked to me a little bit about what you guys are looking at. Exciting stuff.

Speaker 2: 33:12

Yeah, plugging in in a lot of different ways. And, hey, thank you very much for allowing us to be in climate-controlled comfort on a very hot and steamy day here in Rocky Top. And again, we appreciate the business at a lot of different levels. But what do you think, ted, have we kind of closed out? We didn't have any undergraduates barge in on us in the middle of this recording in the house of business.

Speaker 3: 33:34

It's too early in the semester. They're not working on their projects yet. Yeah right, fair enough. Doug, thanks again for spending time with us. Great to have you with us, and we'll continue this conversation over the years, I'm sure.

Speaker 4: 33:45

Thank you for having me both. It's an honor and a privilege to be here with you guys. You're two legends in the industry and it's great to call you friends. Thanks so much, doug.

Speaker 2: 33:55

All right, folks. With that, we'll close out. Be well, go, vols, and stay tuned for a lot of great podcasts coming to you the Balance of the Fall. Oh, and one more thing before we go, we need to remind folks to sign up now for the Fall Supply Chain Forum, november 4th through 6th. Registration is open. Go to gsciutkedu and all the details you need to get registered will be right there waiting for you. Hope to see you here on Rocky Top in November.

Speaker 1: 34:23

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.