Blythe Brumleve:
0:05
Welcome into another episode of Everything Is Logistics, a podcast for the thinkers in freight. We are proudly presented by SBI Logistics and I am your host, Blythe Brumleve. On today's show, we got Pawan Joshi he is the senior vice president of products and strategy over e2open and we're going to be talking about a lot of really I mean not necessarily cool things, but interesting things that are going on in the global supply chain of rice, the staple in many households all across the world, how it's made, how it ends up, how it goes from the source to your porch, and then also how India's ban on non-Bazmati rice exports will affect more than 40% of global rice trade, and how the market is trying to fill that 10 million metric ton gap, which is a huge accomplishment that has to be tackled. So, Pawan, welcome into the show, super excited to get your perspective on this issue.
Pawan Joshi:
1:04
Thank you, Blythe. It's great to be here. Appreciate the opportunity.
Blythe Brumleve:
1:07
Absolutely Now. From what I understand, yo u have been at e2open for 20 years now. I'm curious, before we get into your experience at e2open, were you interested in supply chain logistics beforehand or did you just fall into it, like a lot of folks within logistics and supply chain?
Pawan Joshi:
1:27
Yeah, I know that's a great question. I never thought about it. I was ever interested in that or not, but somehow my career path led me there. I started my journey back in India. I was born in India, raised in India, I did my undergrad in engineering in India. My engineering was focused on manufacturing systems, which is how you produce things inside the four walls on the shop floor designing products, making products and all that and came to the US to do my masters and joined a University of Wisconsin's manufacturing systems and engineering program, thought I'd be spending maybe nine months or a year here and going back to India, but then I got immersed into the University. We had an outreach program where you actually had to do a semester worth of project with an actual manufacturing company in the area in the neighborhood within 100 or 200 mile radius. So I got really I mean, that was one of the capstone projects that we did and that got me interested and took my manufacturing background, expanded that out and very quickly realized that there is action inside the four walls of a company, whether you look at a manufacturing floor or a warehouse or a transportation department or a crosstalk. But that just represents 10 to 15 to 20% of the action, because most of the stuff happens outside the four walls. It's your critical components that come in, the ingredients that have to be brought in, and it's not just one tier, it's across multiple tiers as they process through before they come to the factory. The factory is doing the final assembly and even when you bring them in, you're relying on logistics of his partners, right? You don't have your own transportation department and your own trucks and your barges and rails and ocean carriers, so you have it's all outsourced. And then, finally, when you produce something, then you look to sell that particular product and even there, you're outsourcing it. Right? Very few brands have their own shops and they're selling through their own brick and mortar online stores. A lot of them rely on distributors, retailers, value-added resellers before it actually makes into our homes or before we actually go buy them at a retail store. So when you put that all together, that was a pretty eye-opening experience for me that you tend to focus on. Let's optimize this step in the machining process. Let's optimize this step in the production process of an assembly line and very quickly realize that you're focused on a very small part of a very, very, very large problem that you rely on so many outsourced partners to do on your behalf. So that kind of got me going and I finished. I stuck around my advisor and I decided we agreed that he'd take me on as a doctoral student, finish my PhD and came and joined a company called I2 Technologies, which again exposed me to the world of software, which is how you solve these problems. And then from there the last 20 years I spent about two to three years there and then the last 20 years have been a deed to open Really in my mind, really trying to solve or at least provide a technology platform to solve that exact problem I described, which is when you're a brand and you own your product and you own the distribution, you own the brand and how your product is brought to market. How do you actually rely on partners to help you make your products, to help you move your products and help you sell your products, if you want to think about it that way. So that's kind of been my journey and that's how it kind of stumbled on supply chain, so you can say whether I was always interested in it or not. But somehow through that journey the bits and bytes got added to get me to this point where we're doing what we're doing here at e2open.
Blythe Brumleve:
4:54
And especially from the software perspective, that you've been involved in sort of these cloud-based solutions with e2open and they've been kind of at the forefront, I think, of a lot of different, just the fact of that simple approach being cloud-based, being data-backed, trying to break down some of these silos that still exist today. Before we get into the topic of the global supply chain of rice, tell me a little bit about e2open and how they've evolved over the years since you first joined and the solutions that they're providing.
Pawan Joshi:
5:26
Yeah. So if you take a step back about 23-ish years ago, e2open was formed as a consortium. A group of high-tech companies led by IBM came together and created a consortium and the problem that they were trying to solve was what happens when you actually sell your factories and create this concept of contract manufacturing right and IBM was at the peak of that and a lot of the high-tech companies back then started doing that and what really happened was, as a company, as a brand, you own the demand, you own the customers, you own the products. You're helping others help you design it, but at the end of the day, it's you got your logo and your reputation and you're the one selling it right in the eyes of the end customer. But when you actually lose visibility into the manufacturing process, when you lose visibility into the shop floor and what's happening, you have no idea what materials are coming in, you have no idea where your true constraints are. Am I short on hard drive? Am I short on ASICs that go into my hard drive, because of which I can't produce hard drives, because of which I can't ship my thinkpads and my laptops? How was the problem that we were kind of founded to solve? And the idea really was that every company in that multi-tier supply chain has to do that demand supply balancing, has to manage, inventory, run their shop floors and run their operations. But what is really missing is how do these things, how do these entities work together to bring products and services to market right? Companies, the brand owners, are successful not because they're successful brand owners, they're successful because their supply chains are successful right. So we were basically founded to do that and there were two very important, three very important principles that we had to do to recognize that One was we could not be sitting inside everybody's four walls trying to solve this problem right, you had to be above so that you could orchestrate this end-to-end supply chain. So, naturally, you could not deploy infrastructure inside you know, a computer inside any one of those entities. So we basically bought compute, put it in a room and we started hosting our own applications, and that was the birth of cloud, even before there was cloud, right. So that was, we were pioneers there. That was a critical ingredient for us, because we were born in the cloud is what we like to say, and you know, first 10 years of our existence, all we were convincing our customers was don't worry about it. That is a viable way to do it right. Nobody now thinks about it twice, right? So that was one fundamental thing that we innovated on. The second thing we innovated on was recognizing the fact that step one of orchestrating that supply chain is to provide information on what is really happening inside the four walls of all these tiers in that node right, or entities in that node. So data was really important and we recognized the fact that we cannot prescribe a standard to get data. We should be conforming to whatever data, whoever can provide data in whatever format. So we created this approach called come as you are in terms of acquisition of data. So we would not prescribe a standard. Whatever format you can provide the data, however you can send that data to us, we'll consume it. So we created a platform in the cloud that was network oriented right, which was, if I connect this partner once, whether customer one is using it or customer two is using it, that data flow can be reused right and we would make sure that there's privacy and security there. So that was the second part, and we have, 23 years later, we run, one of the largest networks around supply chain, and it's not only spans manufacturing. It actually spans logistics, it spans global trade and it spans the channel of our products assault. So that was the second very important thing that we said right at the onset it should be on the cloud and it should have a network orientation for the platform. And then the third thing we very quickly recognized is that when you're solving these problems, it's not just about me bringing data to open customer and the customer makes a decision and tells everybody else what to do. The whole reason why this thing will work together is when there's a collaborative framework that extends the business process outside the four walls. So when I detect a shortage, as a contract manufacturer, I want to know where that shortage is. I want to know from a brand what should I do about the shortage. But I also want to know from my supplier how can they help me deal with that shortage. Can I propose an alternative part? Can I propose shipping it from an alternative factory? Can I propose doing something different? And if it is truly constrained, then can I ask the brand to say I'm on a constraint, which one of your products should I actually make? Being able to do that in a very collaborative fashion is really how brands succeed, but, more importantly, how supply chains succeed, which is the reason why brands will succeed. And that's really the mission that we've looked at. We started in the manufacturing side, that these three design patterns that I talked about appear across the board. Whether you're moving products around, you run into disruptions. Ship got stuck in the Soyuz Canal. Okay, what do I do now? How do I recover stuff that's already stuck there? How do I actually look for alternative modes of transportation If I'm not able to sell a particular product, or a particular product has a defect? How do I actually do a quick recall from everywhere on the channel Because I don't know where it is? My retailers and distributors know. How do I pull that back? Global trade, another great example. I'm actually moving products around, but somebody's actually transacting on my behalf and if it gets stuck at a border, how do I actually get it unstuck? What kind of filings do I do? What kind of additional decorations I need to submit so that design pattern for us that we started in manufacturing applies across the board. And if you take one step back and think about the end-to-end supply chain, that is what we're trying to solve. We basically say supply chains don't stop at departmental boundaries, they don't stop at enterprise boundaries, as the product is flowing, the data has to flow, the decision-making process has to flow and you have to have a collaborative framework for these people to come together. And that's really what we've created the last 23 years being able to create that networked platform that runs on the cloud, that has the ability to bring everybody on board, not just in terms of data and transactions and movements, but also people, so that that entire group of people can work together virtually as one team, irrespective of what badge and what employee they belong to. That's the core concept that we've been able to create.
Blythe Brumleve:
11:30
So really breaking down silos, really introducing the concept of data management collaboration from every level, and then also doing it in the cloud and doing it for more than 20 years, I would imagine that a lot you've done a lot of explaining in education to your customers over the last couple of decades, I imagine.
Pawan Joshi:
11:51
Yeah, I think it is explaining, but I think it's also a lot of it has to do with learning as well. So we are on the technology side, so we're providing solutions to real world problems and in my role I'm running products and strategy. So for me, I don't wanna think about, I know everything. I think the true problems are actually on the ground. So for me, every day is not just about having a discussion explaining what ETO Open does, but also understanding what ETO Open should be doing. What are the problems we need to solve? What are the problems we think we can solve but are not able to solve? Because when the solution hits the reality of the ground, it breaks. It breaks for reasons that we've not anticipated right. So how do you go fix that? How do you actually look at the real world problem and start looking at solving that? So for me, 20 years has been awesome because it's not only about trying to put together something that it seems to be obvious If you think about it one step back, like why would it not be this way? But the reality of the world, it is not that way. So it is actually moving towards solving something that is remarkable. But for me it's also about learning, like every new customer that we talk to, every new industry that we go after, every new use case that we uncovering, even in the same industry, in the same function, has a different nuance, and knowing that actually, I think, helps us become better and helps us serve our customers better. So that's really what gets us going. So to your point. Yes, it's a lot of dialogue in my mind, not just one way explanation of what we do.
Blythe Brumleve:
13:21
Are you in freight sales with a book of business looking for a new home? Or perhaps you're a freight agent in need of a better partnership? These are the kinds of conversations we're exploring in our podcast interview series called the Freight Agent Trenches, sponsored by SPI Logistics. Now I can tell you all day that SPI is one of the most successful logistics firms in North America, who helps their agents with back office operations, such as admin, finance, it and sales. But I would much rather you hear it directly from SPI's freight agents themselves. I want a better way to do that by listening to the experienced freight agents tell their stories behind the how and the why they joined SPI. Hit the freight agent link in our show notes to listen to these conversations or, if you're ready to make the jump, visit spi3plcom. Well, speaking of continuous learning and then getting to the ground level of what's going on in a lot of different supply chain constraints and issues going on all around the globe, one of the bigger ones that has surfaced over the last couple of months is this rice ban from India, the non-Basmati and I know that I'm not saying that right Basmati rice from the region. They are the number one exporter of rice all over the world. This is a staple in households all over the world. I was doing some research on how far back the cultivation of rice and it dates back over 10,000 years originated in China. Since then, the supply chain has evolved across various civilizations and continents and it is the primary food source for more than half of the world's population, particularly in the Asia region. So I was hoping that you, with your manufacturing background and obviously extensive experience at Eat2Open, could you explain a little bit about what exactly is going on and why this ban needs to take place.
Pawan Joshi:
15:12
Yeah, so I think when we talk about rice, I look at this as a prime example of how supply chains are so interrelated, but, more importantly, they're also dependent on some very fundamental things that are non-supply chain oriented, like in case of rice. Why is this a problem right now? It's a problem right now because of weather patterns. India anticipated that this year and for the last couple of years, the rain that is needed to produce rice is not gonna be enough in parts of India. So what does a country like India do? It's one of the largest producers of rice, but it's also one of the largest exporters of rice, and the reason why it can export it is because they produce enough to feed the population. Right, and whatever is excess you send outside. And what has really happened in this environment is, when the rains are not, when you don't have enough water because of rains, you tend to produce as much as you can, and if you can't produce as much as you produced last year, guess what you do? You first feed your population before you send anything out. So India's done the same thing right Back in July, around the 20th or so, and towards the end of July it announced a ban saying that there are certain kinds of rice which is staple to a vast population in India is they're not allowed to be exported out, like some of the higher varieties and more expensive varieties were still available out there, like the vast mati varieties, is still exportable. Now what it has done is it's not just India. The bad drop of this is, you know, last year Pakistan, which is one of the top five producers of rice, had massive floods, right. So if you start thinking about their export, rice exports are pretty knocked off and that whole snowball effect has happened because when you're producing grain, you're not shipping what you produced yesterday. What you're shipping out is what you produced, you know, a year ago, two years ago, because everybody creates the stockpile of grain and stores it so that it is available when you have right. These are long production times, the long distribution times, and they have stockpiles, right. Just like you have stockpile of corn, you have stockpile of soybean. So what happened a year ago, two years ago, three years ago, in terms of weather patterns, on which you know production or rice and, for that matter, any crop, happens, you start seeing the effect at some point in time in the future. Now the reaction to that is immediate because you wanna make sure that you have enough supply in the short term, but over a period of time when the conditions catch up, you know production goes back to whatever its levels are and you know the inventory and the storage and how much ever reserves you have starts to balance out most of these things for the most part. So if you look at the reality of the world right now, there's India. Banning some of this stuff has not created immediate disruption in the supply of rice. Yes, it has gone down a bit, but it's not that all of a sudden. You know 10 million tons have to be filled in just because that's the shortage. Now, over a period of time, you'll have to make up for it, because now we are taking down our reserves. Now what happens immediately is prices go up because you anticipate demand and supply imbalance, hording and some of those things. Exactly so. When either hoarding happens or even there is enough supply, there is a reason for us to say, okay, you know what, maybe we should bump up the price. And that's the thing that we've seen. And it's not just rice, it's any kind of commodity that goes through this demand and supply and balance, and that's kind of what we've seen. Now, the side effect of this also is, if you take a few steps back, the two main staples grains are rice and wheat, and wheat supply chain has been disrupted because of the war in Ukraine, and Ukraine used to be one of the largest exporters of wheat. Because it's not producing enough wheat and because it's not able to whatever it has, it's not able to ship out, there's been a decline in availability of wheat. So when you combine these two together wheat and rice all of a sudden you start seeing the connection that you think supply chains are linear. This is when the intersection starts happening. At the end of the day, we've got to feed our families, and if you can't feed them rice, which is your staple you go look for what's the alternative. Okay, let's move to wheat. And that's some of the dynamic that always happens. Now, that's on the demand side. Now you look at the supply side as well. All of a sudden you think you're a farmer that can grow either rice or some other crop, because you have the right water supplies and the right soil mix and everything. And then you start seeing, hey, the price of rice is going up. Maybe this year I should plant rice instead of, let's say, soybean or corn. And then that dynamic also gets into the picture. But all of a sudden now people that were not producing rice are beginning to produce rice. So that's the. It takes time for all these things to get to a steady state, but over a period of time all these things balance out, because if it's more lucrative for me to produce rice instead of what I could produce, maybe I switch to rice for a couple of seasons. And when I switch to rice for a couple of seasons, I get supply come from areas that were not producing rice before and that actually contributes to the supply going down. So all these are very dynamic situations and we've seen this happen in other parts of the world with other crops, like corn, like soybean, and we've seen how the supply US used to be the largest exporter of corn for the longest period of time. This year, for the first time, brazil took over. Why? It's not that you has produced less corn than last year. Us actually produced more, but it didn't export enough because a lot of the corn went into other places. So that dynamic, I think, is a dynamic that's super important and has always been happening. So for me, the net result of this, if you think about it purely from a supply chain perspective, is really the realization that our supply chains are very dynamic. You cannot just say I'm going to build this based on X number of units being imported or being produced or being consumed at this thing. There is always going to be this volatility, and it's not volatility, not just because you're introducing your products. It's not just because you're bringing in new capabilities or you're changing the underlying technology. It is about non-supply chain events, like weather, like geopolitics, like trade embargoes and trade wars and all those things. So when you start thinking about a supply chain design, it's not just about how quickly you can move from point-to-point view. How quickly can you make it. It is how do you react to all these things with this kind of a backdrop of things that you can't control? You know there's going to be disruption, you just don't know what kind of disruption and when it's going to happen. So resiliency is super important. One of the things that we learned during the pandemic was exactly this Like all of a sudden, overnight, our demand patterns completely shifted. And when you shifted them upside down, we became from an experiential economy going out to eat, traveling, enjoying our social lives to being stuck in our homes and just focused on how do we actually spend time at home, what kind of home improvement projects we do, what kind of backyard furniture we buy, how we cook more at home. And all of a sudden our demand patterns changed and you saw the impact of that on global supply chains. Like completely upside down, bringing in more products from the east to the west, where consumption was very high, and a lot of raw materials from the west did not go back to the east because there was so much of a demand of containers coming from east to west that it was easier for some of these ocean liners to send empty containers back. So that dynamic also played through the net things, since the rice is a great example, I think, in my mind which plays out this dynamic. We don't think about rice as one thing, but the supply chain is so connected not just across different commodities, but they're connected across the whole globe Like we cannot put this connected supply chain world back into a box and say, okay, we'll just operate within our borders. So I think the next, if there's topics like these, continue to reiterate resiliency in our supply chains. Continue to reiterate that fact that you've got to prepare for disruptions. You've got to prepare for some amount, have some amount of redundancy into the mix, but, more importantly, be very aware of detecting some of these changes as quickly as you can, because the people that can detect these changes as quickly as they can and react to them are the ones that are going to survive. They're the ones that convert disruptions into opportunities. If you cannot, then you're going to be on a sliding scale down. If you can, then you can convert this into an opportunity and really think about supply chain as a point of differentiation, as a competitive weapon, rather than something that you have to deal with.
Blythe Brumleve:
23:42
And so a few questions, because that was just such an incredible answer, so right off the top of my head. Why is it? Why is basmati rice not affected versus some of the other types of rice? And then, how are maybe some of your customers or maybe some other solutions that you're aware of? How are they combating the ban on all of the non basmati rice versus other solutions? Maybe you can export it to another country, or I don't know, there could be other ways that exporters are trying to, or importers are trying to, get around this ban, or what kind of options exist. And why is it basmati rice affected?
Pawan Joshi:
24:20
Yeah. So if you look at the price profile of rice, they're a high grade, high grade, long grain rice, rice which is basmati, which is more expensive as compared to some of the short grain, parboiled, thicker grains of rice, right, jasmine and all those things. So if you, if you start drawing a curve around what the population can afford, what the how much of that population is, and the price points, you'll very quickly realize that basmati, if you think. Look at the Indian population as an example, where which, since we talked about the ban, the demand for that short grain, thicker rice is much, much higher as compared to basmati right. And if you look at the production, demand and supply, again, supply is not that constrained, demand is not that high. So you can afford to export that and continue to keep the trade going. But the part that you want to protect is the part that most of the population, or a large segment of the population, and it needs, and that's where you put the ban to say, look, I want to make sure my people are fed before actually think about exporting. So that's kind of the first part of your question, I think, in terms of reacting to how it happens. I think a lot of this has to do with the rest of the. It's not that India is the only exporter rice. There's a lot of other countries that export rice and when the price of rice will go up, I think there will be there'll be a. There'll be a interesting dynamic on certain countries wanting to say do I actually need to keep the same lower reserves that I need to keep, or is there an opportunity for me to step in and actually export more, fill that gap, make some more money that I typically use to, because I'm not the one exposed to those, let's say, weather patterns that are preventing me from not being able to produce rice. So it's not that every part of the world is producing less rice. It's the certain parts of the world that will produce more rice in this environment and some of the others will step up and take that place. And that's the dynamic on the supply side. Like the example I gave you, when prices go up, some of the producers might say you know why am I doing this? Let me go produce the higher revenue crop. So that's the other change in the supply dynamic. I think the other thing also is going to be the demand itself changing around a bit when you have to buy more expensive rice but there's cheaper other grains like wheat, you might switch over for a period of time until it comes back. Those are all dynamics that will naturally come in and play. I think the one thing that we have to always realize is that the free market approach automatically balances itself out and, yes, in some countries you might have to put some subsidies of. Rice is the main source of things to actually make sure that everybody is well fed. But I think I look at it from that perspective and of course, there'll be some optional products that are produced by rice that are not as critical. You might be banned to put on those like crispy flakes as an example rice crispy flakes. If it really comes to that, certain products might be priced higher which has which have used rice as an ingredient. You might see a less supply of those, but I don't think that the drop is that dramatic in countries like the US, because US itself produces enough rice to actually step up and take care of that gap.
Blythe Brumleve:
27:41
And that was going to be my next question is you know there's a lot of byproducts that are created from the manufacturing process of rice. So, like bran, you know, I know a lot of cattle, some of the byproducts of rice. You know beer is brewed with a lot of the hops, the byproducts of rice as well. So are those different things affected by this ban, or is it just that those couple of different variations of rice?
Pawan Joshi:
28:08
So typically it's the process rice coming out of India that is subject to this ban. So I mean, what you're talking about is the byproducts, like that happened during the processing of the rice, the finished product that comes out, so that I think is still there and that will continue. Yes, it might see certain variations around. But to your example, let's say cattle feed, right, the alternative cattle feed that you know people can use, corn is a great example. I mean, when you switch over from a rice based stuff and rice is actually truly constrained and the prices go up, you know people might switch to corn or other ways. How interesting, and that's the point I was trying to get across. Right, it's not a. Our supply chains are not linear. You can't trace, you know this event happens linearly. Here's the effect these are so intertwined in terms of demand and supply and price being a very important role to clear up and bring the right balance between demand and supply. And anytime where the demand supply disruption is actually taking us in the wrong direction and the you know the, I would say the people that need help are not getting the help that they need, then that's when subsidies and some government protections would come in, like what India did, and I think other governments would react the same way If they go through the same constraint, like why would you produce something that is, you know, super high and is more luxury oriented when certain things are more basic that the average population can't have access to? So we've seen that happen over and over again and I don't think we've reached that point where that is going to happen. But if it does, you know, the natural system that we have in place will take care of a lot of those things.
Blythe Brumleve:
29:46
So the import and export of rice has it always kind of followed, I guess, the same pattern, the same manufacturing processes, transportation processes. Has it historically always kind of been, at least in the, you know, the last couple of decades, has it been kind of the same? And then this is the first kind of disturbance that has hit the rice supply chain. Try and understand the historical perspective.
Pawan Joshi:
30:11
You bring a very, very good question and point to the table, right? So a lot of these disruptions and I've said this multiple times it's not that our supply chains just started getting disrupted. Our disruptions were always there, like weather patterns were constantly changing, monsons were moving in and out, up and down all over India. You look at Asia, china, all over the place, right, it's not that we did not have these disruptions, it's just that we did not hear about these disruptions the way we hear about it now. Right, and so that's one. The second thing is, when disruptions happened when we were not so connected globally, these disruptions were fairly local. So if India produced rice only to serve its local population, we would not hear about it enough. But since India pretty started producing more and started exporting it and other countries started relying on India, that's when you started realizing that. Okay, I need to pay attention to what's happening in India and the increase in rice production or any manufacturing capacity in countries like India, china, parts of Southeast Asia, vietnam all those countries has been growing. It's on the growth part. So when they're growing and the other countries rely on it, anytime there's a disruption in that growth, it actually disrupts all the other places that are actually relying on it, like we did not know about Ukraine being the largest producer of wheat until it actually got disrupted. We did not know, like an average population around the globe did not know India was the largest exporter of rice until it actually happened. And when it happened, all of a sudden we realized okay, what do we do about it? That disruption has been happening, with rice being the source from India, or a period of time. Monsoons go in and out. Same thing with Pakistan, or that part of the world is not relying on artificial irrigation. It is actually relying on rains naturally to occur so that the paddy fields can get flooded up during the monsoon season and you can start producing rice towards the end of that season. If that rain gets disrupted, for weather patterns changing and we won't go into the whole discussion around global warming and climate change and all that but if that core set of ingredients to produce rice changes, then it doesn't matter how effective your supply chains are, it does not matter where you're sourcing it from. If you can't produce enough and you rely on mother nature to give you something that you need to produce, that there's very little you can do about it.
Blythe Brumleve:
32:31
Are there ways to use software, maybe the E2 platform? Are there ways to notice these kinds of disruptions before I guess maybe everybody else notices it evolves into panic buying? Are there ways that companies can predict this, that can kind of plan for it in advance? Or is it really just when the stuff hits the fan? That's when you can start turning these problems into solutions? What does that sort of I guess warning system look like?
Pawan Joshi:
33:01
if there is a warning system, no, I think this is a great point. I think there is enough warning systems now in place. In this day and age, we can track and predict weather with a very high degree of accuracy, even if it is like two, three, four months out. The question really here is if you can predict it. But if you ignore the prediction and wait for the actual event to happen, then you're reacting to things. That's exactly what we need in supply chains is when you're connected in a decision-making process and you forecast something. If you're predicting something, when you predict it, you also look at the likelihood of that happening and you start taking corrective action even before that event happens. That's really what we need. In this particular case, we knew there were early indications that monsoons are going to be weak. There were early indications like there will be massive flooding in Pakistan, but we did not know the magnitude of that. But we knew that it's going to be problematic In India. We definitely knew it's going to be problematic because we were predicting a weaker monsoon season. Now what did we do about it? I think what we should have done about it is if you take all the stockpiles the global stockpile of rice that exists around the world, and then you said we're going to put it to best use optimal use across all entities. I'm pretty sure we would have been able to solve this problem without anybody even realizing there is a shortage, because there is enough stuff, enough inventory around the world. I use rice as an example. It's true across the board, whether you're feeding your population or whether you're actually bringing products to market. The challenge is then this is the whole connectedness I keep talking about Something happens in your supply chain and you know it is happening, but you don't tell others that are lying in your supply chain that something is happening. Others have no idea you may be doing something about it, but others can actually help you figure that out. A good example of this is if a shipment from Shanghai to Long Beach is running late. Let's say you're shipping Shanghai to let's use another example of a supply chain disruption that's happening right now If you're shipping product from Shanghai to, let's say, houston, you got to cross the Panama Canal because that's your shortest path. Panama Canal is going through its own set of challenges right now because, again, lack of rainfall is causing water levels at the freshwater lake that is used to pump water into the locks to raise the ships up so they can cross the canal. Right now, instead of 50 ships passing a day, about 50 ships passing a day, about 30-ish and less than 30 are passing, which means capacity is going down. If you're shipping from Shanghai to Long Beach and you know that there's a prediction, you know not just prediction. There's a fact that not only did you predict the rainfall is going to be less in that part of the world, in Panama, but you also know that the throughput crossing the Panama Canal is going low, but you don't react to it. Why? Because you're still assuming that it's going to be the same lead time to move from Shanghai to Houston and you're still running your operation based on that. So, yes, you will have a shortage and you won't know how to react to that shortage until it's too late. What do you do? You know that your capacity is coming down in terms of your transportation needs. You know that where the pattern is going to not be cooperating, there's no rains predicted in the next few months to bring the water levels up. That's going to be a mode of operation for the next three, four, five months. What do you do? You actually change how you bring products to Houston. Maybe you look at moving from Shanghai to LA or Long Beach or to Seattle and from there you use a multi-mode transportation road or rail to bring it over to Houston. Now, unless you change your supply chain and you react to those decisions, you will continue to predict oh yeah, there's going to be problems moving from Chang'e to Houston. But what do you do about it is really the key, and in some cases, like the world, government agencies around the world do not have that luxury today for certain things, but in smaller private enterprises absolutely do. That's the nature of supply chain. They can do it much faster than national players. But even there we still are broken down by a silo decision-making process. My transportation department is operating in a silo, my manufacturing department is operating in a silo, my fulfillment department is operating in a silo and typically I don't talk. These people don't talk to each other, and that's the result of which by which you're reacting to things when they've already happened, not proactively figuring out how to avoid these situations. It's like driving by looking into the radio mirror You've already gone over the bump that you're seeing what bump it was, and now you're reacting to it. So I think the nature of this problem is how do you get proactive? Proactivness starts by getting the information, getting visibility into what's going on, and then not just saying, oh, I now have visibility, being able to answer the question. Okay, now that I see, what do I do? Answer the question? Okay, so what? And you act based on that. So you see, you act and, most important part, is you learn from it. Because if you keep seeing and acting, seeing and acting, but you're not fundamentally changing the root cause, like if you don't recognize that disruptions are going to happen, but you always see the disruption early and act to it, then you're still inefficient. But if you realize actually disruptions are going to happen, then you actually have alternate modes of transportation ready, available to you as an example. So that's the nature of it is being able to see what's happening, being able to predict it, being able to act on it. But also learn from that process and say what can we do better? How can we see even earlier, how can we act even earlier, so that we can actually turn these things that we know are going to happen into opportunities that actually take my supply chains, my entire supply chain not me, but my entire supply chain to a whole different level, and so using you know this rice example that we've been talking about for there for the show plus E2, how, if I'm an E2 open customer, what am I looking at inside the system?
Blythe Brumleve:
39:04
You're probably looking at a variety of different things with within the system, but how am I using your software to solve that just pivotal problem of I'm? You know, I know I need to supply. You know 12 different restaurants with rice. You know weekly shipments. How are you solving that problem using you know E2 open?
Pawan Joshi:
39:21
Yeah. So it all starts up by okay, if I have 10 places from where I actually get rice right is our alternate and disrupted. The sooner I know about it, the earlier I can say, oh yeah, okay, only five of them are disrupted. The sooner I know that I can go to the remaining five and say, look, I need more from you guys for the next six months or nine months, right. And the sooner I can go lock that capacity right, the easier it's going to be for me to be able to serve my customers right, because if supply is constrained, it's all about who can lock that supply ahead of time. So if I'm able to do that all of a sudden now, I'm the only game in town that is actually being able to serve my customers, and that's when I turn my disruption potential disruption into an opportunity I start. At the very least, I have a reputation that if I'm the one selling rice, then you can rely on me, right. That's at the very worst. At the best case scenario, if I'm actually being able to source those rice better than anybody else, then actually I can win market share because I can be the only one game in town that has actually figured out how to actually deal with it, and we use rice as a very simple example. But think about components, think about products that rely on thousands and thousands of components, like automotive. If you are able to back during the pandemic, if you're a brand owner that was able to actually still bring your cars into market in spite of the semiconductor shortage, the amount of cars that you would have sold when nobody else could actually sell cars could have been phenomenal, right? And those are the kind of disruptions. Realizing that disruptions will come, you don't know from where they're coming. But how do you actually be prepared for that the moment that disruption happens? I know what my choke points in my supply chain are. I know how do I actually very quickly without my siloed monthly decision-making process, weekly decision-making process understand where the issue is, very quickly go down, solve that issue in a manner that actually gives me an advantage, not a disadvantage, like I'm not solving for that specific problem, I'm actually solving for actually taking, converting that into an opportunity. That's that. That's really, I think, the name of the game. So our job as technology providers is to create a platform that allows our customers to go connect their end-to-end supply chain right, not just how products are made across multiple tiers, but who are you relying on to move them? Who are you relying on to do your global trade and filings and declarations, and who do you rely on to sell them? When you're able to get that across those four we call them ecosystems a few across all those four and you're able to make holistic decisions not get my product there on time, but maybe sometimes getting product there late is good enough because my demand is not that high and it's fine for me to actually keep it delayed than to get it there on time. Realize that my warehouse is full, don't know where to store it, so go across the street, rent a building. So not only have I spent money expediting that shipment, I also spend more money storing a shipment of products that I did not need. So it's like a double-bammy. So being able to look at that holistically and make those decisions, that's really the key. So how do you convert disruption into an opportunity is really the name of the game.
Blythe Brumleve:
42:28
Brilliantly said, because that was going to be. My final question related to the discussion that we were talking about here is how does this apply to other commodities and other types of shipments? And it sounds like it's really the same approach about being proactive, noticing the disruptions and being able to find the opportunities and hopefully get ahead and gain some market share from your competitors. So I think that that is really fascinating on how you can connect all of these different data points from all over the globe and then be able to put it into a cohesive plan and hopefully have it be proactive instead of reactionary, like you said, driving in the rearview mirror. Now I know we only have a few minutes left with you, so I wanted to kind of close out the show with this new segment that we're calling the relatable eight, which is eight questions kind of rapid fire style on just marketing and tech and how you kind of think about sort of the overall supply chain and logistics industry. So I will kick it off with this first one and I guess we can kind of get a hint of your answer because you're on this podcast right now. But how do you think about your marketing when it comes to you and E2 Open?
Pawan Joshi:
43:34
I think our marketing department is doing a phenomenal job. Supply chain, especially in this day and age, is very difficult to communicate what we do, especially when we have such a broad portfolio, and I think we have an A plus team here and we're talking to one of the A plus podcasts here.
Blythe Brumleve:
43:49
So the check is in the mail. I'll make sure you get it. Appreciate that Now. Next question what is your favorite social media platform and why?
Pawan Joshi:
44:00
So I'm not much on social media, but for me, I think I find LinkedIn being very critical for the kind of work that we do, because I think it is related to not just connecting people which is super important connecting experts, but also, more importantly, sharing ideas and thoughts, because of which we need those connections. Right, you can sit there in isolation and look at what we're doing, but we are connected. The sooner we recognize that, the better it is going to be for us.
Blythe Brumleve:
44:28
Yeah, couldn't agree more. And that kind of speaks to the ethos of E2 Open, of having those open discussions in order to solve a lot of complicated problems. All right, next question what is your favorite SaaS tool that you use every day? Can't live without, but it's not your own.
Pawan Joshi:
44:43
Not my own, okay.
Blythe Brumleve:
44:44
So it can't be E2 Open.
Pawan Joshi:
44:46
So I think there are two or three that we find very, very critical. One is how we measure and keep track of what we call a product backlog, which is what is it that our customers and the market are expecting us to do? The second one is what systems that we use to keep track of whether we're actually meeting them or not, what my development team is working on and what they're doing. And I think the third, at the end of the day, becomes product doesn't matter unless their customer is using it. So how do we actually bring customers to the table? So, crm we use Salesforce for that, aha, which is what we use to keep track of requirements and customer engagement and what their needs are, and our own backlog and what the market needs are. And then we use JIRA to keep track of what's happening on the development side.
Blythe Brumleve:
45:33
Oh, super interesting. I haven't heard of a couple of those. Okay, Next one favorite freight business that isn't your own.
Pawan Joshi:
45:42
Favorite freight business. It's very, very difficult to name names, but I can name a segment. I think that is very important. I think, in the role that we play, we have a very high degree of respect for people that are joining the dots, and I think the freight forwarding business is one of those. So not only is it operating internationally, it's connecting carriers on one side that own the assets on which freight moves to the brand owners on the other side whose freight they're moving around, but, more importantly, what we don't recognize enough is the role that they play in crossing borders and coordinating that thing. So that's a very fascinating industry for me. I think that industry has we have a lot to learn from that industry from a technology standpoint, but I think that industry also has a lot of technology I would say runway to improve and streamline it. So for me it is fascinating what they're able to do with what they have and the promise that they have to support our global supply chains. I look at supply chains really not being as a company asset or as a national asset. I think our supply chain infrastructure has to be a global asset and I think forwarding industry plays a very important role in that.
Blythe Brumleve:
46:56
Very well said. I couldn't agree more that very well said. Okay, what's one task in your current job that you can't stand doing?
Pawan Joshi:
47:03
I can't stand doing Whoa. That's a very difficult question. What I can't stand is when something so obvious, people don't do it. For me that is. Oftentimes we ignore the obvious and focus on the not obvious. But the more difficult part. I believe that our success comes from first doing everything that's obvious and then moving on to the next set of problems, because oftentimes we ignore the obvious, which is the basics, and we focus on the advanced and we're building some stuff on a foundation that's not solid. For me, I would say it's not about what I can't tolerate, it's really about what just gets me going.
Blythe Brumleve:
47:54
Little things that are missing when the simple solution can be the easiest path of resistance.
Pawan Joshi:
47:59
Exactly. Simplify is really what we have to focus on.
Blythe Brumleve:
48:03
We have a few more here Real quick. If you didn't have to worry about money, what would you do for the rest of your life?
Pawan Joshi:
48:11
I would focus on trying to have everybody understand that this world of environment, supply chain, doing business and social welfare or whatever you want to call it social responsibility is all one. What we do in supply chain is try to bring products and services to market. Then, if our activity is actually going to be detrimental to what we're doing for our customers, we have a very myopic view. If we think about our immediate needs and not think about what we're doing to meet our immediate needs and what it is going to be doing for the future, I think it is again going to be very detrimental. If I had everything that I had and let's say if I had everything that I wanted I would spend a lot more time talking about that.
Blythe Brumleve:
48:59
Absolutely. It sounds like a magic wand question where you almost need one in order to fix these big, complex problems.
Pawan Joshi:
49:08
I think you talked about the magic wand. I look at some of the work that we do at ETO Open as at least a step in that direction, because what we are really saying is, if you're able to do your work more efficiently in the supply chain world, if you're able to produce what you really need not produce because you have to produce it, produce what is really in demand and not waste your time in the middle producing something that you're not able to sell or sell something that you are not able to produce, you're just creating more constraints. If you're actually able to operate within constraints and really be able to shape your supply and understand your demand better, we can produce less waste. If you produce less waste and we produce the right thing at the right time, and if you don't expedite just because we want to expedite, because that's what our KPI is I think there's a lot more progress that we can do. At the end of the day, I think the true thing that I believe in is, if you're not connected in terms of a thought process and don't ask the question why you're doing it, you oftentimes continue to do what you're doing. That, I think, is the reason why we are across all these things. We've been burning coal because that's the easy way to do things, that's the only way we do things. Have we ever thought about what does it really mean and what else can we do to actually get the output that we need, get the energy that we need? I think that's the kind of change that we need.
Blythe Brumleve:
50:27
I was thinking of the quote from a League of their Own where the coach in the movie and he says he's talking about baseball and softball and he says the hard is what makes it great, embracing the challenge. I think that kind of echoes what you were just talking about there. Let's do. I'm going to skip this one Favorite supply chain or logistics fact. I guess we could probably lean on the rice supply chain for that one.
Pawan Joshi:
50:52
Yeah, I think my favorite fact is disruptions are going to happen. The question is how prepared are you for that? At the end of the day, that's what I think suffocates, summarizes what the world is. Supply chain If forecast was accurate let's start there and there was no disruption in your forecast, everything would flow smoothly. You would know exactly what to produce, who to sell it to, what you need. And then, if your logistics was perfect, if your global trade was perfect, if your selling process was perfect everything happens, but they're not perfect, and the sooner we realize that, the sooner we embrace that and the sooner we actually start dealing with that, I think that's the easier it's going to be for us to actually react to that and be proactive about it.
Blythe Brumleve:
51:34
Pawan, this was a great interview, great discussion, anything else that you know. Where can folks follow you? Follow, you know. Check in with E2 Open. We'll have some links in the show notes, of course, but anything lastly you want to shout out?
Pawan Joshi:
51:49
I think I just want to shout out to the supply chain professionals around the world it's not an easy job and I think our job at E2 Open is to provide technology to solve these problems. You know our processes, the problems have not changed that dramatically over the last, you know, I would say a few decades. They've become more complex because we are more global and I think our job really from a and our processes were evolved. What we're doing today were evolved. You know, 20, 30, 50 years ago, when technology was constrained, we did not have enough compute, we did not have enough connectivity, we did not have people that were savvy enough to leverage some of that technology. The world now is exactly in the opposite place. Technology is ubiquitous. There's connectivity, there's compute, there's knowledge across the board. I think it's time for us. My call to action is it's time for us to change our business processes to adopt that technology. Whatever was a constraint from a technology standpoint is no longer there. What is a constraint right now is the processes that were constrained by technology, that have to be unconstrained, that have to be connected, and that's my call out. I think that's what I would say.
Blythe Brumleve:
52:55
Incredible. This was fascinating discussion. Thank you so much for joining us. I will be sure to link to E2 Open in the show notes, of course, and your LinkedIn as well. Thank you so much for joining the show. This was great.
Pawan Joshi:
53:06
Thank you very much. I appreciate the opportunity.
Blythe Brumleve:
53:12
I hope you enjoyed this episode of Everything Is Logistics, a podcast for the thinkers in freight, telling the stories behind how your favorite stuff and people get from point A to B. Subscribe to the show, sign up for our newsletter and follow our socials over at everythingislogisticscom. And in addition to the podcast, I also wanted to let y'all know about another company I operate, and that's Digital Dispatch, where we help you build a better website. Now, a lot of the times, we hand this task of building a new website or refreshing a current one off to a co-worker's child, a neighbor down the street or a stranger around the world, where you probably spend more time explaining the freight industry than it takes to actually build the dang website. Well, that doesn't happen at Digital Dispatch. We've been building online since 2009, but we're also early adopters of AI, automation and other website tactics that help your company to be a central place to pull in all of your social media posts, recruit new employees and give potential customers a glimpse into how you operate your business. Our new website builds start as low as $1,500, along with ongoing website management, maintenance and updates starting at $90 a month, plus some bonus, freight marketing and sales content similar to what you hear on the podcast. You can watch a quick explainer video over on DigitalDispatchio. Just check out the pricing page once you arrive and you can see how we can build your digital ecosystem on a strong foundation. Until then, I hope you enjoyed this episode. I'll see you all real soon and go Jags.
