Intro & Outro: 0:00

Welcome to Tennessee on Supply Chain Management, where we unpack the drivers shaping today's global supply chains. From innovative ideas to real-world solutions, each episode brings you insights from the leaders charting the course for our discipline. Now here are your hosts.

Scott DeGroot: 0:19

Welcome everyone to Tennessee on Supply Chain. This is episode four of season four. And my name is Scott DeCrude. I am on the faculty here at the University of Tennessee. And I'm also the managing director of the Global Supply Chain Institute. And I'm here with Dr. Lance Saunders today.

Lance Saunders: 0:36

How are you doing, Lance? I'm doing great, Scott. Thanks. I would say thanks for having me, but you're not the real host either.

Scott DeGroot: 0:44

No, no, we we should tell all of our listeners that Lance and I are filling in because um Dr. Ted Stank and uh Dr. Tom Goldsby are not able to be with us for this episode, but we are here and we are very pleased to have what I think is an amazing guest with us. We have Kevin O'Mara from Zero100. Kevin is co-founder of Zero100. Zero100, of course, zero carbon, 100% digital. Um, great organization with a lot of great people. And of course, you have an amazing resume, Kevin. Many of us know you from your time at SEM World and AMR, and also working for a while as the uh chief storyteller at Amazon. That's an amazing title. I wish I had a title like that. I don't have a cool title either.

Lance Saunders: 1:33

You don't, what's your title? It depends if I'm at home or if I do work, but um, I'm pregnant saying yeah, so we say we have the B team host, but we do have an A-team guest today. So before we get started, and we'll let Kevin introduce himself. Just a reminder that our supply chain forum is coming up. Please register. It's coming up April 21st through 23rd. Make sure to subscribe or follow the podcast, and you can email us with any questions or any additional information at gsciutk.edu. So, Kevin, welcome. Thank you.

Kevin O'Marah: 2:03

Great to be here, you guys. And by the way, you forgot the most important part of my bio. I'm a distinguished fellow here at the Global Supply Change. Ah, yes. I'm involved, man. I got plenty of orange at home. What are you talking about? No, it's great to be here, you guys. You guys do great work, and it's a pleasure to be able to participate.

Scott DeGroot: 2:18

Yes, thank you. And Kevin, and one of the other things that's happening today is um we are holding the advisory board meeting for the Global Supply Chain Institute, which is a part of the supply chain department here at Tennessee. Kevin, you just spoke with some of our advisory team, and it strikes us all, as you said this morning, that amazing things have happened in the last seven to ten days. We've had the uh Supreme Court Lance finally come out with uh decision on AIPA tariffs.

Lance Saunders: 2:46

And but they left more unsaid, which is do we get refunds on those tariffs?

Scott DeGroot: 2:52

My refund's in the mail, isn't that right, Kevin? Don't you think the refund is coming?

Kevin O'Marah: 2:55

I'm not banking on any of those refunds just yet. Dyson's asking for a refund. They've come through and already started to put in a lawsuit. I don't think it's going to happen anytime soon. But we do have a bit of a shift in the landscape. So I think it's pretty meaningful.

Scott DeGroot: 3:08

Maybe we can just talk a little bit more on that one topic. Certainly the current president, the administration has been very forceful in influencing a particular kind of trade policy and using tariffs as as a way to do that. But you you gave us some perspective a few moments ago that maybe that's just becoming the new normal. Maybe you can comment a little bit more on your view of how the United States trade policy is influencing global supply chains.

Kevin O'Marah: 3:33

It's a structural shift. I mean, it's it's really a move that is not going to turn back anytime soon. The AIPA ruling out of the Supreme Court doesn't really change the overall trend, which is more industrial policy, more trade policy, more tariffs. It just takes it out of the hands of the executive branch with the emergency powers and it turns back to where it belongs, which is Congress. That doesn't mean it's not going to happen. This whole thing was done in response to active industrial policy, particularly out of China, from the moment they joined the World Trade Organization, which was accepted by folks because it was a great chance to get some growth in a huge part of the world economy, some nice low-cost manufacturing and all that. But that push to manage trade, that push to industrial policy has been in place for a long time. Europe does it. India is very aggressive with it right now. So it's not going away. It's just being driven into the regular channels of government controls.

Scott DeGroot: 4:28

You know, at the same time, those things are happening, Lance. You were just chatting with the advisory board about planning capabilities. And the other thing we're all talking about is AI and the re-industrialization, the sort of recapitalization that's coming into the AI sphere and every company everywhere, not just NVIDIA, not just other hardware companies, but big industrial companies are starting to talk about AI all the time. Lance, you kind of put a good frame around that in terms of talent and technology. You want to say a few words and then Yeah, sure.

Lance Saunders: 5:02

You know, we had a great long conversation at the advisory board on that. And it was interesting because I think somebody said, you know, AI is ready for the supply chain, but supply chain might not be ready for AI. And I I think the technology is a great resource, but anytime you have new technology, that doesn't mean that its implementation is going to be successful. And so I think not only here at UT, how you know we teach students to use that technology, but how companies utilize that. You know, there's a potential for an over-reliance on it that actually takes some of the problem-solving ingenuity that the supply chain, that's the value we add, right? We solve problems. And if our first thing is to go to AI on that, you know, without thinking through it ourselves, then we we at least risk um losing some of that value we provide. So I think it's a it's a learning process that a lot of companies are going through is we have this shiny new toy, but how do we use it to be better? And I think that's what the challenge is going to be over the next few when you talk about the investments in AI. It's not just the technology, it's the people.

Scott DeGroot: 6:11

Kevin, a few moments ago, you were sharing with a number of us some work that you've done and Zero 100 have done relative to creating the um sort of the roadmap for execution of agentic AI and modern supply chains. And you attached, I think, to the infinity loop that maybe you could say a few more words about that and how you see it happening.

Kevin O'Marah: 6:30

Yeah, and I think that as you say, it's totally a radical tool. But if you're lazy about it, it's going to do you more harm than good. If you're smart about it, by which I mean think in workflows, not in task replacement. Think in terms of how the work that AI can do for you to take care of some basic suggestive stuff, things like sorting your suppliers or cleaning your data or producing forecasts. That's good. If you can connect that to the workflows that are going to help the business move better, then it's back to what you said during the advisory board session, which is how do I frame the problem? What problem am I trying to solve? What data do I need? If I had the answer to that, what would that create as a set of possibilities? So we think in terms of workflows and we show, as you saw, this infinity loop on its side. The left-hand side looks like classic good old-fashioned plan source, make deliver. The right side, sell, use, renew. In other words, I want the demand side as part of this. Order taking, customer service in the field, customer renewal are part of running the business smoothly. AI helps you solve some of the task work underneath that, but connected in a workflow, it lets you run the whole system better. So it's it's a different way of thinking about using technology.

Lance Saunders: 7:44

In my opinion, we've been here before, right? It's the same problem we encountered back when I first started working with ERPs were going to save the world. And then it became big data. And now it's AI. And I never heard somebody that was selling us an ERP that said their ERP couldn't do something. And what I found is that you have to have a really good process, and then that tool supports good process. It doesn't drive process. And I think AI is just a supercharged version of all these things that we've gone through before. And the firms that look at it as a supportive tool that enables better process are going to be the winners. And those ones, like you said, that get lazy about it are going to be the losers.

Kevin O'Marah: 8:28

Yeah, you know, Lance, you say something that's like so on money for the way supply chain has to think about AI. And I'm going to quote Bonnie Fetch, who's the COO at Cummins. You guys work with Cummins a fair amount, so do we. Process is really kind of the secret power of supply chain because data quality is a function of process integrity. If the process breaks down, you can't trust the data. People always talk about data first and then AI. Really, process is kind of the key ingredient. And Bonnie, I think, goes on about this in the way Commons thinks about it. Because to your point about ERP, software can do everything. I remember asking software developers early in the day in the 90s and the early 2000s, can it do this? The answer is always yes, because it's software. They haven't written it yet. That's even more true now. If your process isn't prepared to take use of that tool and give you a better outcome and be able to measure it and be able to own the KPIs that are going to come out of it, the tool may do it, but does it actually do anything? And the answer is no. You need to have a process that you trust and you need to be prepared to revisit that process once the tools change. So AI is accelerating that in a way that ERP or big data or the original dot-com boom really kind of didn't even go as far as this. This is deeper and I think more powerful.

Lance Saunders: 9:46

Yeah, I agree. And you know, one of the things that you're seeing a lot of headlines about right now have to do with, you know, private capital investment and driving a lot of this infrastructure and automation investment by a lot of these companies. Do you see companies investing heavily in this or are they still being defensive? Like where are we seeing this moving next 12 to 18 months in terms of where we're headed?

Kevin O'Marah: 10:08

Yeah, companies are investing. I mean, we can see the highly visible investment on data centers, which is happening out of your big hyperscalers. But we also see investment that's happening in plant and equipment. And I think as people begin to think about, and we're back to the original question.

Lance Saunders: 10:24

Same supply chain stuff we've been doing for a long time.

Kevin O'Marah: 10:26

Bang, exactly, man. I mean, robotics. Robotics is growing very, very quickly. And automation absent robotics also growing very quickly. AI is enabling those things. You're not necessarily building the kind of AI infrastructure that the hyperscalers are building, but you are at a very macro level, private capital, looking at capital expenditures on things that are pretty vast, including, by the way, power. I mean, increasingly, I think this came most recently out of the news. Is it the uh the hyperscalers are now promising to provide their own power?

Lance Saunders: 10:55

Yes.

Kevin O'Marah: 10:56

Nuclear power is absolutely part of the future here. Oh, yeah, absolutely.

Lance Saunders: 11:00

Right here at Oak Ridge.

Kevin O'Marah: 11:01

Exactly. And I think that that's the path forward. So you're looking for infrastructure build-out on power systems, on networks, on 5G and 6G, as well as, of course, on the underlying data centers. And let's not forget the actual plants. I mean, most of this stuff isn't going to work without plants that are built with really full, you know, 5G, 6G connectivity, a lot of mobility in the plant, and a lot more robotics of various kinds, right up to humanoids, but that's sort of the cutting edge. That's all part of what has to happen. And it's happening out there, I think, fairly quickly. So I expect it to pick up speed.

Scott DeGroot: 11:39

I find this just an amazingly exciting time to be in industry and in the supply chain specifically. We always like to think about the major trends. And the best thing about a trend is you know that it happened looking in the rearview mirror. That was a trend. But it's obviously predicting more difficult predicting the future. And so maybe Kevin and Lance, we talk a little bit about it. Feels like we're at an inflection point where we're moving beyond visibility into AI as an agent, where it's designed to not only understand things, but then to execute work back into the resident system.

Lance Saunders: 12:18

And this is what I'm I'm seeing, and I'd be really interested in Kevin's thoughts on this. You know, everybody says AI is going to take all these jobs. I think AI is going to change jobs. I think AI is really good at those repetitive tasks that we do over and over again. And so I'm actually hopeful of what AI does in the supply chain because I hope it frees up the actual people to work more on the value-added task instead of those tasks that aren't adding as much value, but we have to get done so that we can operate as a company. So those more repetitive type tasks that we can automate, I'm hoping it frees us up the people to actually add value instead of just copy and paste from one Excel file to the other.

Kevin O'Marah: 13:00

Yeah, Lance, I mean, yes, that is happening and it absolutely has to happen. So if you think of things like repetitive work, credit checks, producing quotes. I mean, Ari in a CH Robinson case study that we use a lot because it's really easy to understand, producing, oh, a million quotes automatically with agents that simply check availability and loads and rates and go ahead and create the quote. What happens to the person, whether it's a credit check example or it's a forecasting example or it's a C. H. Robinson example, is the account manager goes from spending a lot of time doing the same old quote generation and looking up the same old tables to talking to the customer, to talking to the shipper or the carrier, whomever they're dealing with. The fact is you're gonna get the boring rote work handed to an agent using an AI, whether generative or discriminative tool, to produce the outcome. And then there you are, minutes later with that in your hand, and you can take the time to look somebody in the eyes and have a conversation about what they might like, how you're gonna get more money out of them the next time, how you're gonna help them solve a problem that isn't within the sort of standard scope. That's trust building at a human-to-human level. So the people who are good at taking advantage of what AI can do to jump up into that human-to-human decision-making, trust building, problem solving, you know, framing capability, they're gonna get very powerful very quickly. They're gonna make more money increasingly. And, you know, the automation is gonna be on the boring stuff. That's the way it should be. And I think we should anticipate that.

Scott DeGroot: 14:29

The other week I was in Las Vegas for a show called Manifest. That's what I would say too. Tech. I shouldn't have told you what city I was in. Then you wouldn't have to. But anyway, a lot of tech, a lot of people uh chasing um AI the other way around. I think somewhat of a picture that this is, and we use the word today, K-shaped. And I got the sense from your answer just then, Kevin, that um some who are early adopters who really get it will accelerate in terms of revenue growth and margin improvement and talent fulfillment. But then the other side of the K is everyone else is gonna fall behind and be out of the game. Is it that drastic? Is it jump on board now or you're gonna be caught on the dock forever?

Kevin O'Marah: 15:10

I think it's that drastic, you know, and I think you used the phrase K-shaped this morning, Lance. And you and I both I wrote an article specifically, K-shaped economy, what it means, just about a month ago. Yes. And it applies at the individual employee level, up to, by the way, CXO. So entry level to CXO should be using these tools to be able to solve the boring stuff, to be smarter about the tough stuff, the exciting stuff, the innovative stuff. And it works at the company level. Companies who are dragging their heels, which are very few, frankly, wait and see how AI is going to evolve is a recipe for disaster, especially given what you said about PE, which is they're floating around out there getting ready to buy companies and lump them together and tear them apart. So if you are falling behind the eight ball, you're gonna suffer pretty bad. The strides being made by companies or individuals or teams within companies compared to those who are sitting around doing nothing are drastic. And I think it's really critical that you just start to play in the game as as quickly as possible. Learn from small mistakes ideally, but keep going.

Lance Saunders: 16:12

I love the term fail fast, but don't stick on to something just because you tried it. Yeah. Learn from it and adjust. And I I think that ability to be agile as a company and as an individual is going to only become more important moving forward, you know. I deal with students every single day and I tell them, like, this is a great tool, but it's also a really scary tool because you can use it as a crutch. And if you use it as a crutch, like you said, you're gonna get left behind if it's thinking for you. But if you use it to accelerate your thinking and not just be your first thing you go to, but actually understand how to frame a problem and all of that. I mean, the possibilities are just really, really exciting. Like you said, all the way from that individual entry level, all the way that chief supply chain officer. It's the same potential drawbacks, but it's also has just all these possibilities.

Kevin O'Marah: 17:06

Massive upside. You know, I think you frame it really well as an educator, and you're dealing with students who are, as we saw on the other side, my wife teaches seventh grade.

Lance Saunders: 17:14

She would tell you that I am not an educator. I just play one on TV.

Kevin O'Marah: 17:17

Well, you're doing it very well, Lance. But what I would say is what you said earlier, and that is it's a massive accelerator. If AI is something you lazily play with, it will convince you that that's the answer and you're done. It will tell you your job is over. When in fact, you should be thinking to yourself, what is AI saying this wrong? Everybody knows AI likes to try to please you, at least generative AI. So ChatGPT, Claude, et cetera, they'll try to make you feel good with the answer they give you. And they're gonna want you to walk away, you know, feeling like you got the answer. Ask questions about whether you believe that's the answer, challenge it, reverse it, flip it on his head, take it, and then build the question of, okay, if that's true, then what else? But I think the way you're challenging your students here at UT to think about it, that's gonna make them effective in the real world.

Lance Saunders: 18:02

That's our hope, because then they can come back and educate the next side. You know, we've been talking about AI a ton, and obviously it is a big trend in supply chain, but there's other things that happen. You know, you talked about we still do have these factories and manufacturing plants and things that we have to run. Um, we still have trucks. I'll give a shout out to Don Meyer because he hates it when I say this is we still have boats on the ocean. Uh boats. But yeah, if Don's listening, he's teasing him by saying, Yeah, I'm poking him right now. Uh I know they're ships, Don. But what are some other big trends you think they're gonna be dominating moving forward related to supply chain?

Kevin O'Marah: 18:40

I think the biggest one is related to what we talked about up front, industrial policy. I think we're in the middle of this really historic shift back from a 30 or 40 year push to globalize ever more completely. We're in the middle of turning it back. We're gonna end up with regionalized, localized, nationalized supply chains. I don't like to say nationalized because I don't mean nationalized the way they've nationalized the oil industry in Venezuela. I mean think of them as natural catchment areas, at least continental. Why ship stuff 15,000 miles if you can have it somehow close by? Why have dependencies upon geographies that you can't necessarily count on being friendly for the long run? Why depend on getting through the Panama Canal or the Suez Canal or through Ukrainian airspace if you can avoid it? And it's not easy. I mean, this this is the giant investment. It's not just new plants, it's new tier one, two, three, four, five plants, particularly chemicals. Chemicals is the biggest problem in the North American environment, is we have a massive shortage of super base chemicals. So you've got all of this stuff that has to happen, but the mega trend is India, China, the European Union, Brazil, as well as, of course, the United States is trying to figure out how to make a certain amount of independence uh as a fact of their economy going forward. I think that's going to be a huge amount of change.

Lance Saunders: 20:08

You know, I I would look at it like if you take the highest level, you know, we had, like you said, 30, 40 years of globalization. I also think there was a lot of lean mentality in there. And actually, relative stability to what we have now also was happening. And so we took that lean mentality and we probably took the pendulum too far. Not probably we did. And now what you're seeing is this shift back to you know what? I have much more chance of having a wreck if I drive across the country than if I drive across town. And I think we're realizing that and we're starting to hopefully take the pendulum back a little bit. My fear is that we take that pendulum too far. And how do you guard against that? Was that as you guys?

Scott DeGroot: 20:49

I think it's a good point. And maybe we just talk a little bit about this thought I heard uh recently of this idea that supply chains used to try to control the entire outcome. Plant source make deliverer, return, optimize. But now we're becoming more and more in a in a world that will not be as global as it was in the past. That we're becoming more dependent on really, really trusted suppliers, that our supply chain is really this network of trust because I may not have all the rare earth minerals, or I may not have all the technical capability, but I'm trusting on others to get it. Kevin, do you have any insight in terms of moving away from a command and control sort of supply chain into one of, you know, deeply trusted supplier networks? Kevin Kevin Kevin Kevin.

Kevin O'Marah: 21:34

I do. And I think actually it goes back to Lance's point about being too lean. We got too lean. I agree with that. I think one of the benefits of rethinking the global supply chain structure to be a series of regionals or locals is you have an easier time building trust with your suppliers and with your customers. The biggest untouched opportunity as far as improving the way supply chains operate is the demand side of the equation. We spend all our time. Trying to solve every single problem with inventory or capacity or expedited transportation, all that stuff. No one ever goes back to the demand side and says, hey, you know, how about if we delivered on Thursday instead of Tuesday? Or what if we delivered you a whole case instead of a one? That happens. Consumers buy that way anyway. They're already used to thinking that way. But that demand side of the equation is a tremendous amount of degrees of freedom. Getting at it is a question of trust, right? Especially B2B, by the way. I mean, in a B2B environment, if I have a trusted supply base who is near me and close to me and I understand them, we can work together on where we store the inventory, where the capacity is, where we bear the risk. This is push-pull supply chains suffer from this a lot. Asset heavy upstream supply chains, ExxonMobiles, these kinds of guys, they have to keep those things running 24 hours a day. But the downstream guys that are dependent upon those as inputs, why shouldn't we kind of work together to negotiate and actually quantify the buffering that we're putting in place with prices? And the answer is we can, we will, if we have trust. So I think that that trust component gives you a ton of freedom, especially with all the technology, a lot more fine precision analytics. But that's a benefit of being more local, national, regional. Um, and I think it's critical for the future.

Lance Saunders: 23:21

And so you're hitting on a lot of things that when I think this is the world I live in for research, is the planning function. And I think a lot of times we want to blame the consumer for a lot of our problems. And if you look internally, I would say most of the variation in our supply chains is caused by the supply chain, not the consumer, even though we blame the consumer for it. Where do you think the next five to 10 years are going on, understanding that we do drive a lot of that variation ourselves and how do we adjust our planning, not just internally, but across the supply chain end-to-end to maybe get better at what you were just talking about?

Kevin O'Marah: 23:58

It's the end-to-endness, right there, is the main thing. I mean, we have these habits in supply chain, which which are siloed. You have a job in sourcing, lowest unit cost for, you know, or highest purchase price variance, or I want to have a demand forecast that's as accurate as humanly possible, or I want to have a supply plan that is, you know, highest possible, you know, conformance to plan. But those things normally have a handoff that's no good. I mean, I told a story when we were upstairs about gotta have that full truckload, keep my unit cost of transport down, leading to a provider of potatoes in this case, not shipping trucks to McDonald's for their most profitable product. I think that that lack of through thinking, that lack of process through thinking, end-to-endness, if you like, is where the opportunity is. Because you work in planning and what you see is the way that these things come together. I think in some respects, the culprit is SNOP. In other words, the process of going through the meetings and getting the stuff prepared and then sort of negotiating it in a room. Automated planning, touchless automated planning, which is increasingly possible. You know, Unilever Walmart did something in Mexico they call the Sky program. It's touchless, automated, AI-enabled planning. It's fantastic at on-shelf availability, at a SKU, date, and location level. It's incredible. But for that to work, you can't be worrying about my piece of the SNAP process. I want the outcome. That's a major thing that's going to change in the next five plus years.

Lance Saunders: 25:25

I see that. And planning is not one size fits all. And smartly segmenting, again, that pendulum can't go too far because I can't have 65 ways that I plan. But three or four is probably okay.

Scott DeGroot: 25:37

It strikes me during this conversation, especially when we start talking about SNOP and IBP and this idea, that the technology and our capabilities are rapidly outpacing our decision-making organizational models for how to run a business. And that many times, please correct me if you feel differently. Many times it's the mindset of the middle manager or the senior leader or the vice president that says this is the way that we operate that's actually holding back the organization's performance.

Kevin O'Marah: 26:08

I think that's right. I mean, I think the culture comment, I think Alan made that, Alan Amling made that comment upstairs. The culture of whether or not I'm going to embrace what's possible with this technology is really important. If you're protecting your domain or the way you look in the meeting, or the way you're hitting your own personal KPS, and I get it. I mean, frankly, if your MBOs, if your personal objectives are X, Y, Z and you're going to get comped on that, sorry, that that's not your fault. That's the fault of somebody who set your MBOs. But the fact is, a culture of enthusiasm about how to solve the full problem, which is how to make more money on this business while satisfying the customer, you know, that's an attitude that lets you have multiple different planning approaches. Let's just say instead of having a it's not done that way here mentality, let's do the right way, whatever it is, and and maybe some variation is key to it. But thinking about the entire flow through is what's most important.

Lance Saunders: 27:01

I I think this is all uh really interesting. And so if you're a leader and we've talked about a lot of different issues, what that we've talked about, do you think leaders and the companies you talk to are underestimating the most? And where do you think that capital is gonna need to flow most aggressively moving forward?

Kevin O'Marah: 27:21

I think, believe it or not, I mean, it's just in talent. They are very conscious of talent, but I think they're not necessarily appreciating how much they're gonna have to spend to differentiate good talent management from just attempted talent management. And that sounds really scathing. But what I mean is if you're just putting in programs and training, that's a good step in the right direction. What you have to be able to do is invest in differentiation. It goes back to that K-shaped evolution of all of this. Those who are going up, you've got to find a way to really comp them more. One of the biggest problems, I think, is real simple. You don't pay them enough. If they're really amazing, you gotta pay them more. I think the comp band is too tight, if you ask me.

Lance Saunders: 28:04

We definitely want to have, you know, standards so people don't get mad. But I've seen students who I'm like, I know that this student can go in and provide an ROI in about a month and they would take your job if you could up it $5,000. But nope, that's not our policy. And I'm like, well, last time I checked, there wasn't a a law on the books that said you weren't allowed to. There's a difference between policy and law. And so I agree with you. You know, I think adding some flexibility in that space is gonna give some companies an advantage.

Kevin O'Marah: 28:38

It's gonna be essential, I think.

Scott DeGroot: 28:40

You talked about this idea of improving the organizational capability and paying for the things that can really unlock some of this performance. But I did want to touch one other item, and I know it's important to all of us here and to you, Kevin, is this idea of circularity and the idea of you know maybe the environment in some places, and we don't talk about sustainability with as much gumption or maybe fervor as we did before. I don't know exactly why that's the case, but it still seems to me that supply chains are going to depend on good stewardship of resources and that all of this data and AI that's now available should help us to become much better stewards and much more efficient when it comes to circularity. What do you think about that and how should we think about it?

Kevin O'Marah: 29:28

I think that the sustainability imperative isn't gone. And in fact, carbon accounting is still happening. They're just not talking about it anymore. The fact is, if you think of yourself as a supply chain or ops person and you've been gathering data on carbon intensity in various different places for seven, eight, ten years, you're gonna stop gathering that data right now with a data set that's that old and that stable. No way. You're gonna keep on gathering the data and it'll come back and somebody will ask you for it, you'll be glad. So, number one, there's an inertia in trying to do the right thing with this. Number two, I do think that the AI moment has a productivity impact, which we're beginning to see. There's a lot of debate about whether it's really happening or not. And there's some very, I think, dubious competing studies. The famous MIT study that 95% fail. Well, that's because we're experimenting a lot. By the way, that's only Gen AI. They're not talking about agentic workflows where we know the impacts are. We know that there's 30 to 40% headcount potential in most planning and sourcing situations these days with a Gentec. All of that adds up to the same thing. I can get a lot more done with a lot less resources. If I include the one other really important thing, circularity, you use the phrase circularity, all of this regionalization of supply chain, it's painful, but we're gonna have different energy profiles, different raw material profiles, different SKUs, different formulations, different last mile network infrastructures by geography. And I think you're gonna end up with eventually quite a bit more returnable packaging, certainly secondary and tertiary packaging, quite a bit more recapturable materials. We do it with precious metals and cell phones and stuff. We certainly do it with, you know, steel and aluminum, the easy stuff. We will continue to use plastic, by the way, and not every kind of plastic is the same, you know. Whatever it is, expanded polystyrene is gonna go away, but striated polystyrene will stick around. Polyethylene is good, et cetera, et cetera. All that stuff is gonna benefit from AI from an efficiency standpoint, from localization and regionalization from a shrinking the total footprint standpoint. And, you know, who knows whether or not we're really gonna have a, you know, earth crisis with global warming. I don't actually know about that. I'm trusting the data. But the fact is that's geologic time, and we're dealing with a quarter at a time. So it's not going away, but it's gonna be a while before it really takes root.

Scott DeGroot: 31:50

I'm glad to hear you say that. I find a lot of positive impacts, even if we didn't expect, for example, we talked already today about the supply chains, even now, and in the future, maybe it'll be less global, there'll be more localized, regionalized, dependent, data-driven, that all those things also lead to a substantial reduction in your carbon footprint. And if we can reduce the volume of air freight or ocean freight even by, you know, five or 10%, it's a huge amount of carbon improvement. Uh and so maybe that wasn't the intention of some of the industrialized policies that are driving these more regionalized supply chains, but it's a sure is a nice outcome to get.

Kevin O'Marah: 32:31

Yeah, that's what I think. It's not the intent. But it is going to be one of the outcomes. It'll take a long time to happen, though. We're talking a decade.

Lance Saunders: 32:39

And that's okay, right? I mean things can be win-win. I think a lot of times we think sustainability and profits go against each other, but they don't have to. And it's great when they can we keep using that word acceleration. Yeah, it's really cool when they can accelerate each other. And I think that's exciting moving forward.

Kevin O'Marah: 32:56

Yeah, I think it's happening. I think you're totally right, Lance.

Lance Saunders: 32:59

So it's time to uh I think wrap up a couple things before we go. If you like this episode, please email gsci-utk.edu and say that you want it changed to the Lance, Kevin, and Scott show. We'd be glad to hold that over, Tom and Ted. But they should be back on the next episode. I'm sure that they have a good one planned. And we want to make sure to, you know, thank our guest, Kevin Omar. This has been a great episode. A lot of good things in here that I think a lot of leaders are a lot of people working in supply chain are dealing with. So thank you for coming on the show.

Kevin O'Marah: 33:32

Thank you, guys. It's always a pleasure.

Intro & Outro: 33:34

Thanks for listening to Tennessee on supply chain management. Be sure to subscribe on your favorite podcast platform for more conversations with the leaders framing the path for practitioners, scholars, and students. Have a question or idea? We'd love to hear from you at gscii at utk.edu. Until next time, listeners.