Podcast: The Next Big Thing in Supply Chain with Graham Parker

Listen to Supply Chain Connections from Chain.io!

In this episode, Graham Parker, CEO and Founder of Gravity Supply Chain, joins Host Brian Glick, CEO of Chain.io, to discuss:

• Why he founded Gravity Supply Chain
• The key factors that impact forwarder and shipper business
• How third-parties help you sell to your customers
• The importance of 'team' in logistics
• What forwarders and carriers miss when it comes to supply chain

Graham is an experienced founder and leader with a comprehensive and proven track record in the logistics and supply chain industry. He founded Gravity Supply Chain in 2014 to support the world's leading shippers and freight forwarders in streamlining operations, gaining better visibility, and making more informed decisions.

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Episode Transcript

Graham Parker 00:04

You know, if you get the right skill set in the business, you know, you can form it, it doesn't have to be a massive department, just with one or two people that understand and you don't try and sell it by yourself. You go in as a team, not one person ever wins everything all the time anyways, is pointless, right? So you have technical sales, people that understand the supply chain you go in, because it's about it's not about relationships and relationships, never going to change the relationship you have with that original sales guy, you bring in a broader team that helps you sell a much broader suite of services, you know, the stickiness, you get me a customer, you show that you care about them more. And it's not just about 18 cents or $25 on a container, you get so much more and you're getting to understand that their business, you live and breathe as if you are the customer.

Brian Glick 00:48

Welcome to Supply Chain Connections. I'm Brian Glick, founder and CEO of Chain.io. On today's episode, we have Graham Parker, of Gravity Supply Chain. Graham is one of those lucky people who has had the opportunity to work on sort of all aspects of the industry from the retailer side and the service provider side and now the software side. And so we're going to talk a lot about what happens in the first mile and what happens in the upstream part of supply chain before the logistics processes. So I hope you enjoy the episode. Graham, welcome to the show.

Graham Parker 01:18

Thank you. Thanks for having me.

Brian Glick 01:19

Why don't we start by just giving the audience a little bit of your background and kind of how your journey through the industry evolved?

Graham Parker 01:27

Yeah, sure. So I've been in industry now for best part of 40 years only. I've actually worked for four companies, two of which I started myself so quite loyal to the industry, quite loyal to my previous employees. But I started out in logistics supply chain working for a rather large logistics 3PL company in the UK that were acquired by large Asian organizations, did about 17 years, they worked their way up through air freight, ocean freight. And then the last 10 years was doing pretty much looking after their blue chip SCM clients. And looking on the technology side, though they weren't quite as they were quite well advanced in the early 90s. On technology anyway, so I got into the understanding of understanding that true end to end supply chain, then went and worked for a rather large UK retailer was tasked with setting up their whole their import department and then taking it to a supply chain level. And then looking after the supply chain as well. So looks end to end supply chain, b2c was really becoming quite prominent that point. So just essentially, they moved from being a landed product led business to a buying FOB design led business. And with that, obviously, they had to transform their entire supply chain, and then set about setting up a couple of supply chain companies. And the last one being gravity.

Brian Glick 02:40

So explain, for me and for the audience, what you were just saying about the difference between, you know, a landed supply chain and FOB supply chain, explain that to me like I'm six.

Graham Parker 02:53

Okay, right. So basically, the difference is, someone just delivers a load of product to your door, you've kind of bought it, but you have no say in it, you're buying off of a landed supplier. So they're responsible for managing the supply chain, you're only responsible for bringing that into the DC, right, there's specific timelines that will has to be met to meet the consumer demand. But basically, you just go around looking at catalogs, meeting companies and buying products, then you become a design lead product. So you start designing it in house, you become more attached to what your clients really, really want. And you're deriving that, essentially the new trends and all the things that you really want their business to go to. So you're then in control of your supply chain, obviously, you're reducing a huge amount of costs, and we'll come out because you're cutting out middlemen, essentially. But then you've got the added pressures off, you've got to get your manufacturing base, right, you got to get your factories, right, you got to get your sourcing, right. And then obviously, you've got the supply chain on the back end of that. So and we were doing the best part of 20 25,000 teas a year. And when we started and that grew to about 60,000 teas.

Brian Glick 03:54

So when you started gravity, you sort of double down on companies that are at that phase, right? And this idea of managing your entire supply chain instead of just delivering things to your customers.

Graham Parker 04:08

Yes, essentially, it was more around bringing the technology into the client into the BCo with very much as a user base lead approach, but with a customer focus. So you know, look at the customer look at your demands, and then bring that all the way back into the supply chain. So kind of get into the order management and execute change at the order level rather than just giving some kind of visibility. That was my goal when I set gravity, purely because I've done that, right. So that was the UK retailer I was working for. So we were able to just really redefine reengineer or create a new supply chain, but that gave me so much knowledge on the buying floor about how these guys really operate. And that's what I wanted to bring into the technology side of gravity.

Brian Glick 04:51

So what's the impact of that really owning that early stage pio-management anagement and the factor relationship? What kind of thing factors that have for businesses.

Graham Parker 05:01

Yeah, I mean, the collaboration piece between the purchase order, or the buyers of as a buying house, as a vendor, whether it's the factories, retailers, or BCo, shippers typically work in a very low level, right. So understanding at the earliest opportunity, if something's gonna go wrong, even if the raw materials are likely to be, don't get to hear that until it's too late, you have a plan, but you have a range and have a series of dates. And they move the purchase order moves many, many times. It's not just one POS raising, it doesn't change, you know, there's dates, change quantities, change price, all kinds of things mitigate into that purchase order that has significant impact on the intake plan date, right? So the earlier you understand that something's gonna go wrong. And inside that first mile, typically, that's the doer as the easiest place to fix it. So suddenly the cheapest place to fix but you've got a significant amount of time between that purchase order being manufactured and coming out. And if there's going to be late, fix it the first mile. And rather than trying to get to the last 15 or 16 days before you realize you've got a problem to meet customer expectations.

Brian Glick 06:05

That's always kind of an interesting thing for me, as we look at, you know, for instance, people looking at the inside the port visibility at the destination port. Well, and you say, well, by that point in the process, you know, no pun intended, but the ship has already sailed. Yeah, absolutely. Right. It's very, very little that can be done besides apologizing to your customer. At that point, right.

Graham Parker 06:29

And you think most of these BPOS Brian, they work on ranges and plans and they work on seasons, this stuff's been engineered 180, 200 days in advance, right? So your optimizers your merchandisers, people met buying floor, you know, when it's only two weeks out, there's little they can do, they've got commitments on stores, they've got commitments and promotions, you know, all kinds of stuff going on, you know, even just sold merchandise, right? It's better to fix it when you know, there's a problem. And especially if that problem was late coming out the factory that was 90 100 days ago, so fix it at that point, or understand there's a problem at that point. So you can change right and, and for me, it was more around giving everybody the same set of data, the same access to the data and making plans more visible throughout the entire business units. And rather than just the input guys have a supply chain, guys looking at it in a consolidated view and saying, Okay, well, inside there, someone was inside there, there's some skews, or some parcels and styles, give them the data in the world that they work in, not in a consolidated view where you have to take it in front of someone else.

Brian Glick 07:29

So when I was much younger, I worked at a forwarder and customs broker who spun out a company very similar to gravity, right, and we were doing order management and, you know, helping companies see their production schedules and their carton labeling and all of these things upstream. And that way, I think, when we started down that path as a forwarder, and broker, we sort of said, Oh, well, we'll build a website, and the rest of this will be easy. What is it that with forwarders? And even now carriers who want to be supply chain management companies, what did they miss? What did they not understand about what makes this hard?

Graham Parker 08:09

I don't think they understand necessarily, you know, workings of the company, so the people that they're serving, right, so you got to get very close to the work like your customer does. And, you know, managing it from pole to pole or x factory to arrival DC, that's one thing. But if you got to get into the lowest level of detail, I think that's what they miss. They don't understand what happens inside the factories, or the work in progress piece to QA, to QC, all of these things has an impact or potential impact on risk and delay, right. So I don't think they understand the true risk of managing the supply chain down into the lowest level, which is what you and I buy, right, you buy a shirt, you're not buying the whole containers worth of shares, you're buying a shirt, and certain shirts, and certain colors will sell quicker than others. And that's where these input departments, you know, they can see it at a high level, we give them down to that lowest level back into the way that the buyers, the optimizers. The merchandisers, these guys need to work, we need to deliver data at the same level that they work at. I think that's what a lot of people miss. It's not that they can't do it. They just missed that because it's not part of their core.

Brian Glick 09:09

So I'm gonna try to trigger you to say something controversial here, but we'll see what happens. Do you think that logistics providers should try to become supply chain companies? Or is this the industry headed down the wrong path?

Graham Parker 09:25

It's an interesting one, because there's no reason why they shouldn't. I mean, the customer has two options might be agnostic, but you still need the logistics company. So why not encourage the logistics company to be the true and there are a lot of good three and four ball providers out there. There really are, but there's nothing to stop, you know, a freight forwarder wanting to move up right? If you're happy just making four or five 6% I guess it's over as much as two or 3% on a box and live like that for the rest of your life. But I'm sure there's and they've been around for centuries. So it's probably wrong with me to say that they might not be around forever, but I think you know, the consumer wants more therefore the customer demand is more from the providers that give them the services? Why? So I think you should always look to get closer get stickier with your customer. So why shouldn't they be?

Brian Glick 10:08

What kind of skills? Or what do they need to do with their staff, if they want to participate better in this larger ecosystem?

Graham Parker 10:15

Yeah, you got to stop selling freight and freight, you don't go into selling boxes, if you want to be a supply chain, if you want to manage supply chain management, once again, it's understanding your customer understanding what the role of technology can play in evolving those companies up. So they just need to understand or get to understand Supply Chain Management more than anything else, you know, understanding that it's a purchase order and understanding a connected view across the entire stakeholder base, internal and external, what that delivers, right. So the value of giving an end to end supply chain versus the value of just trying to make 50 bucks on a container or five cents on a kilo of air freight or whatever. It's wildly different. There is an upsell in that. And I think from the freight forwarders themselves, the you know, the CIOs or the tech departments, they just need to look at, you know, becoming more familiar with the API world. And talking in an effort to understand that you're not just you know, you're not designing something or trying to incorporate something that looks at a master where you're looking at into an ERP solution, I think once they understand that, it's relatively straightforward. And then they use people like train IO, because you understand it, right. So like, font, try and build it use the third parties that are able there and only do this for them, right, it's just a mindset change. It's not fundamentally, they're still doing the same thing. There's a position of movement from A to B, or A to B, C, D, and E, but it's the technology that enables a lot more stickiness with that customer, because you're giving them an environment that they work in themselves internally every day.

Brian Glick 11:41

So one of the things that I saw across my career with this is, you know, we're in a freight company, you know, across several of them that you'd always have, like one or two salespeople who could sell this, yeah, and everyone else who just wanted to show up and quote, another 40, from Shanghai to LA. And that is really a different skill set in a salesperson who's gonna help a customer build a proposal for their CFO about how they're going to take the company, the BCo in a better direction, versus I am 18 cents cheaper per kilo than, than the guy down the street.

Graham Parker 12:20

So as wildly different, and you're not wrong. But you know, if you get the right skill set in the business you perform, it doesn't have to be a massive department just got one or two people that understand and you don't try and sell it by yourself, you go in as a team, no one person ever wins everything all the time anyways, is pointless, right? So you have technical sales, people that understand the supply chain you go in, because it's a battle still about relationships and relationships never going to change, right? The relationship you have with that original sales guy, we bring in a broader team that helps you sell, you know, a much broader suite of services and the stickiness you get via customer, you show that you care about them more. And it's not just about 18 cents or $25 on a container, you get so much more and you're getting to understand their business. You live and breathe as if you are the customer.

Brian Glick 13:05

So let me change gears here for a second. Why start a company?

Graham Parker 13:10

Yeah, that was a really good question.

Brian Glick 13:11

It's the worst question.

Graham Parker 13:15

Because of my age right?

Brian Glick 13:16

I didn't say it.

Graham Parker 13:18

I've worked in the environment, when I was in the retail days where I was bringing technology on bringing technology not only into the retailer that I was working for, but I was putting this particular company on our buying floor and saying like, if you want to understand sem go and work, this is what they do everyday, this is the lowest denominator worked out. So you know, for the last 20 odd years, I still haven't seen that evolve. So I decided to set gravity up to try and enable that thought for more and more people because you know, the role of the freight forwarder logistics provider three PL four PL isn't never gonna go away, you just need to offer a bigger and deeper suite of services. So I hadn't seen anything out there. Nothing compelling, that really went into the detail that I really want to go into with gravity, where I'm taking gravity as part of the vision. So I set the company up to try and bring some more technical and platform live businesses into the environment where I think the world needs to be which is down at the order level.

Brian Glick 14:16

So one of the things, Graham that I experienced as a freight forwarder was sometimes we would have to participate with bcos who were using systems like gravity, where oftentimes we were trying to sell them something competing, and there might be internal frustration, our company that oh, why are they using this third party tool? And you know, and in the long term, you know, what we learned was being a good participant with your customers ecosystem is important, but what advice might you have for forwarders who have to work with third party systems and you know, how do they best be a good partner to the bcos.

Graham Parker 14:52

Yeah, I mean, I would not hesitate. You know, data is essential. In any sales and supply chain, it's, we have to give you a customer the action You know, they're looking for insights, right? They're looking for actionable insights. And data is the only way you can truly get that. So, you know, you shouldn't be frightened to participate, you know, into a another. Even if you've got your own platform, I share that data with the platform of choices, there really is no issues that we've actually got a four PL solution built into gravity. So we've got quite a few scenarios where you know, we're working with one customer or one client, one PCO end user, and we're working with 678, different logistics providers. And at the beginning, it's relatively tough for them to accept, but you know, at the end of the day, you're gonna keep providing for your customer, right, you've got to serve the customer, you got to get that data. So yeah, that'd be a frightened of it, it's, and also, it's a great sales story, you've got a solution, where you can go to a customer, any customer, you have a new customer, go and try and win a customer, you've got the solution. And you might only want the or they might only give you the award, you 30 or 40% of the physical movement, or the logistics part, having the ability to go in with a system, let's solution is a lot more powerful than just trying to manage it.

Brian Glick 15:58

I agree, and I think, so I posted like a week or two ago on LinkedIn about a an opinion that I have, that your culture is defined as much by how you act with your competitors in front of the customer as how you treat the customer themselves. And, you know, kind of curious as to, you know, since you see this situation of six or seven or eight freight providers who have to interact and you know, participate in this platform and may be doing different roles, even on the same shipment, you know, does that ring true to you? Is that am I full of it?

Graham Parker 16:30

No, I think you're spot on. And you're right, you do see I saw him in my previous life as well, on my retail days, when I had three, four or five different LSPs coming in, and they've all got this ego around them. And they will think they can do something bigger and different, right? At the end of the day, your customer is key, right? And the customer serve the consumer. So you got to do what's right by them. So it's frightening. And I read your posts. And yeah, you're absolutely right. But there shouldn't be you know, this whole standoff workers one, right, the more you get sticky, because the more you give your customer, the more they're going to want to give you more fruits, you're further down the line, if you start putting up resistance, it's the quickest way to lose your customer, certainly.

Brian Glick 17:05

So do you think the next big things are for the industry, you've been through a career in a down cycle now and you've been through ups and downs, right, as of I kind of what do you think are some of the things that you have your eye on is interesting,

Graham Parker 17:18

the most immediate thing is the data is still in certain aspects of the interwebs, especially on the ports, and some of the carrier data is getting better. And I think the immediate thing is this will continue to improve, right. So I think, you know, the port infrastructures, the port owners and that infrastructure they are, they're able to give more and more. So I think that side of things will improve significantly, you know, carriers are talking about putting smart containers in. So you know, you have to assume that data will get better, I think IoT is becoming a lot more affordable. And it's coming a lot smarter, and you can do cellular, you can do GPS, you can do Bluetooth all on the label now. So when that gets down to a certain price point, then I'm talking sense really, you know, that's going to change the industry quite quite dramatically is just from a visibility of the tracking of the data side of things. Obviously, AI the chat to chat bots and stuff are coming out now. So there's a huge amount to look forward to. But you just we've got to get into that role of accepting data, trusting data, and then getting in and allowing it to be part of your day job and allowing you to make decisions and using that the actionable insights that come from that data and drive that into the business and then marry that up to demand patterns in a bcos. And shippers are really good at looking at what their customer portfolio, etc. And they're really good at understanding the demand cycles and patterns that say, Okay, we need to buy X, Y and Zed and move that through the supply chain. But then what they're not good at is linking that or having enough insights to link the actual physical supply chain back into those demand forecasts. So I can see a lot of clever stuff coming around in that. I mean, there's there's a lot lot more, but I'm trying to stick to you know, the stuff that I can see on the immediate horizon right here.

Brian Glick 18:53

What do you think is maybe something that we're not paying attention to, we're not doing well, as an industry that's frustrating to you?

Graham Parker 19:00

There's many things that are frustrating to me, I think the true understanding of what visibility truly is right. So you know, I see some people with some huge marketing spends talking about end to end. The word real time really annoys me somewhat. But yeah, there's a lot of things that frustrate me in that world. Because one of the biggest frustrations for me, Brian is why would you not want to give your customer and all of the internal stakeholders and external stakeholders visibility at the level they work to? That's hugely frustrating. And then seeing some of the RTV guys talking about they deliver end to end solutions, and it's real time and it's down at the order level. No, it's not. And the frustration is people buy it and then they get frustrated because they haven't got what they thought they were sold. And that frustrates the hell out of me. Right because the devils in the details I just, if you ask the pertinent questions, you'll probably find out that it's not actually what you want. Assuming of course, you know what it is your business needs.

Brian Glick 19:54

That's an interesting point. And I think there's a huge gulf between, say the top 5% of bcos, and everyone else is short, right? You go into the Walmarts and the Nestle's of the world, you know, they know what they want. And they know, you just give me the data, and I'll do something with it. And I've been an army of data scientists, you drop out of that top few percent. And, frankly, most of them are just looking for a glorified spreadsheet. And with a lot of market education that has to happen as you walk down that long tail, teach them what they want. So when you

Graham Parker 20:27

Put it on a post, that you said, look, you've got minus 1000 containers, you can probably manage it on the spreadsheet, right? And then there's like, between 1001, and then maybe say, up to 50,000 containers, I can't remember who that number you but, and that's the sweet spot where these are the guys that can do so much more. And the opportunity is there. It's rife, it's massive, and you're right in that top 5%. I've already got it, I got an army of data scientists, like you say, so, you know, it's just making sure that people understand that there is a huge amount of data that you really can access and, you know, really analyze, not only make decisions on to correct, you know, risk in the supply chain, but then look further into your why you run the business and look at the demand, look at the supply chain, look at the factories and how you're going to source and and then bring that back to working capital as one of the things I'm really trying to push om, and gravity's you know, we've got a view that shows you the committed dollar spend on that Pio throughout the entire lifecycle of that Pio from creation all the way through to delivered. And then if you can CFOs, looking at how can I save 1% of my working capital, then get into the day to get into the supply chain visibility, and then bring financing into this. There's a huge amount and so much more that you can do. But it's just frustrating that people can't even start with the basics.

Brian Glick 21:39

It gets back to that salesperson question of like who's selling it. So we had a is actually a true story from inside a chain I O, we went into a relatively large PCO, but they were commodity beasts here, they weren't in retail, they didn't do all of this kind of stuff. And their IT department could not understand why spending, you know, as I think it was $100,000, with us to integrate better to their freight providers mattered because they did a time study of what their employees were spending to send these god awful spreadsheets out to the free providers. And it was like, Oh, we're saving, you know, 10 minutes a day. Like, why would we spend $100,000 a year to save 10 minutes a day. instead? Well go back and ask your CFO, what it would mean to him, if he could sell the product that you are producing five days earlier, on average, because you're selling it at departure of the vessel. And you're burning time with these freight forwarders, where they're doing all this work to collect paperwork, and it's costing you five days per shipment. Absolutely right and ask him what the value is of those five days. And the next day, we got a phone call. Oh, yay. And we're signing the contract today. That framing right working capital. And it's something that I don't know that a lot of people in our industry understand is how to talk to a CFO about that knock on impact of what we do and how it really impacts everyone. No, you're

Graham Parker 23:05

Absolutely right, and margin, right and protecting knock downs. And if you could lose your mark on by, say, five or 6% on a per season basis. I mean, people ask me like, where's my ROI? Why don't you go back and ask your CFO, if you're like to your point of concern is five days early, you got 5% Less marked down, and 1% on your working capital. And you tell me what your ROI is. And if you still can't sign for 100 grand, we've got a problem, right?

Brian Glick 23:27

Yeah. You're not the right profile for us.

Graham Parker 23:31

Sick, we're spreading good luck. Yes.

Brian Glick 23:33

Well, on that note, you know, I think we're getting up on time here. So I really appreciate you joining us today. And can you just let everyone know where they can find you, how they can get in touch?

Graham Parker 23:42

Yeah, absolutely. So again, Brian, thanks for the opportunity. My name is Graham Parker. We're at gravitysupplychain.com. We do work a hell of a lot with freight forwarders, LSPs, 3PLS, and bcos as well. So we got opportunity. We're not scared. We're there to help.

Brian Glick 23:57

Thanks so much for joining us.

Graham Parker 23:58

Thanks, Brian. Take care.

Brian Glick 24:05

Well, thanks so much to Graham for all of those insights. One of the things that I particularly enjoyed that we spoke about in that interview was the connection of the value you're bringing to the financial metrics and what matters to a CFO and how to get that value translated into real progress. If you want to learn more about that if you visit the Chain.io blog, we have a great article called buy versus build how logistics service writers maximize tech ROI, where we talk about exactly that, how to think about whether you're building tech or buying tech and the value it's going to create and the financial incentives to either buy or build. So check that out. blog that chain.io and we'll catch up next time. Thank you

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