In this Digital CxO Leadership Insights series video, Mike Vizard speaks with Dr. Lisa Williams, CEO for World of Entertainment Publishing and Inspiration, about supply chain issues.
Mike Vizard: Welcome to the latest edition of the Digital CXO Video Podcast. I’m your host, Mike Vizard. Today we’re here with Dr. Lisa Williams, the CEO for World of Entertainment Publishing and Inspiration. They make a variety of things, everything from toys to publications that will help you live a better live. We’re going to be talking about supply chain issues. Dr. Williams, welcome to the show.
Dr. Lisa Williams: It’s a pleasure to be here.
Mike Vizard: I think everybody in the world is conscious of the supply chain issues we’re currently experiencing, from a digital CXO level is there something I should be thinking about today? It might be too late to do anything about it for this Christmas, but is there something I should be thinking about my supply chain for the future and how I might use digital technologies to drive deeper into that analysis to not have this be a problem again next year?
Dr. Lisa Williams: Absolutely. I mean, as you just said, let’s dig into the analysis and look at what we did that worked well this year and then let’s try to figure out how we can prevent problems from happening in the future. So looking at the sales, looking at the inventory, looking at the supply chain challenges that you have, looking at those metrics and then making decisions, which could include anything from increasing people that we hire to training to the salaries and compensation that we award people to increasing inventory to make sure that we don’t have stockouts for next year
Mike Vizard: Do you think that this is more challenging than ever? Because when I look at the supply chain it’s extended these days, it’s global in nature, and it gets impacted by everything from COVID flus taking out entire factory towns in China to now we don’t have enough truck drivers sitting in a port somewhere to help unload these container ships. How do I get visibility into things that I don’t own or control?
Dr. Lisa Williams: That’s a great comment. I mean, those are things that we are encountering in our industry. For example, you know, with the pandemic, we produce our dolls as does most doll manufacturers, in Asia, and Asia has a zero-tolerance policy where it comes to COVID. So one person, as you said, in a factory or at the port can shut down everything, which creates a backlog. And then, of course, when it gets here we see them circling here in California off the coast, the ship that can’t get in. And then there’s such a shortage of drivers.
All of that is creating havoc for us individually as a company and collectively as a global manufacturer. What do we do about it? We try to communicate better with our factories and our ports. We try to make sure we have visibility into all of the systems. And we also try to adjust our supply chains. So we look at other areas or other locations that are geographically closer to us. That will hopefully cut down the time that we have to ship products in to get them into our system.
Mike Vizard: Is that just a matter of human effort and collaboration or is there a technology approach to this that people should be thinking about in terms of are there analytics platforms or are there ways that people standardize in how they put together their supply chain conversations around the process? How do I actually do what you just described?
Dr. Lisa Williams: Well, it’s actually a twofold process, right? First of all, we have to get a handle on what those issues are and the components of the issue. So it is – that’s the human component, where you have to sit down with your partner and really analyze the system and the processes. Once you’ve done that, then yes, we can digitize it, we can automate it, and we can make sure that it runs on a platform that is efficient so that all entities, all partners have transparency and visibility, because that’s going to be key to making sure that everything runs smoothly and everything is in alignment.
Mike Vizard: These are clearly complicated processes. Do you think going forward we might be applying more artificial intelligence to this whole thing so that we’re not as surprised as we often are these days, and we can actually maybe get an alert that’s going to tell us about an issue before we even know it’s going to happen?
Dr. Lisa Williams: Absolutely. You said it beautifully. That’s exactly where the future is going.
Mike Vizard: If that’s the case, then what does it take to execute on that and what should I be planning for today from an IT perspective? Should I be aggregating a massive amount of data or is it just – it’s not about the volume of data, it’s about getting the right data at the right time and putting that together in a way that creates something that’s actionable, or how do I think about this from the perspective of somebody who might be building a data warehouse or something?
Dr. Lisa Williams: That’s exactly what you have to do. You know, it’s important to really understand the system, really understand what is happening, and then have the right people that can digitize that, that can turn what appears to be a mess of a system and actually make it very detailed, very systematic so it can be automated. And then hiring the right people that have the understanding of supply chain and technology. That combination will help create a platform or platforms so that, right, you’ll get an alert before it happens and you’ll know how to respond in an efficient way to prevent any serious repercussions in your supply chain.
Mike Vizard: I think this year we’re being somewhat forgiving to folks for the supply chain issues we’re encountering because COVID did kind of throw a wrench in the works and it’s taken a long time to work that through. But if we had this issue the same time next year, do you think the response from the board might be different because they’ll be saying, you know, you had a year to think about this, we’ve seen this before, and you did nothing about it?
Dr. Lisa Williams: I think that’s going to be interesting. If this happens next year, what’s the cause? You’re right, if it’s something predictable, you’re right, based upon our experience now and we have historical data to help us in the future, absolutely, board, CEO, directors are not going to be understanding, as they shouldn’t be. But indeed, if we see something that’s unexpected, like COVID for example, which is totally unexpected, if we continue to see more unexpected things happening, more variants, more global responses that are unexpected, there may be some leeway there.
But I do think that we should take what we’ve learned this year and what we’re experiencing now and automat that. Make that so that that’s something that we can look at to try to extrapolate for the future to protect or guard ourselves from what’s happening now.
Mike Vizard: Do you think it’s easy to find the expertise to automate that and find the people who can help with the analytics or is that part of the challenge as well?
Dr. Lisa Williams: That absolutely is part of the challenge. I mean, we’re just seeing a human resource challenge across all areas, from something as simple as working at restaurants to all the way to what you’re talking about with technology and engineering. So it a challenge finding the right people, and we do know that there was the great resignation where we saw throughout the United States many, many, many people opted not to return to work and they are resigning from their positions. So this simply acerbates the problem of trying to find good talent.
Mike Vizard: So what’s your best advice to people then about how to go after this, looking towards next year, and say what do you know now that you wish you knew six months ago, a year ago, and what’s actionable?
Dr. Lisa Williams: What is actionable is, again, looking at your supply chain, looking at this contingency of, you know, a pandemic. We can’t predict that, but there are things now that we know that we can start to predict. What do we need to do to help against that? And if that’s hiring more people, hiring the right people, then what things are in place for that? Is that greater incentives in terms of work/life balance, is it increased benefits or bonuses, is it increased salary, is it giving greater flexibility? Whatever that is that we need to do to be more attractive to talent, then that’s what needs to happen.
Because without the talent you can’t automate the system, you can’t get those automatic warnings that says warning, warning, Will Robinson. [Laughs] I’m dating myself from watching Lost in Space. You won’t get that prewarning so that you can act upon it. So those are things I think we need to look at. In terms of inventory, I think we need to be conscious of how our inventory is moving. I mean, typically we look at inventory turns.
We still need to look at that, but also look at inventory-to-sales ratio. If we’re starting to see that our sales are outpacing our inventory well into next year, that’s still telling us we’re having a problem, meaning we’re still having a shortage of inventory and that’s why sales are outpacing. So we need to get more people in all areas of our supply chain, those particularly to digitize the information and to watch our inventory levels and our metrics so that again it’s more information for us to make better decisions to ensure we’re not here next year.
Mike Vizard: Alright. Finally, do you think that – we’ll move away from this just-in-time manufacturing model where we’re trying to build things from global sources to where we may manufacturer or at least assemble more things closer to the point of consumption and kind of try to balance out the supply chain that way, or is that too expensive?
Dr. Lisa Williams: I think there’s going to be a combination of both, right? I think we’re going to do so many things to try to balance out the supply chain irregularities and the peaks and the valleys, and that’s going to be based upon each individual company. But I do think that the experience that we’re having here will indeed help us in the future.
Mike Vizard: Hey, Dr. Williams, thanks for being on the show.
Dr. Lisa Williams: Oh, my pleasure.
Mike Vizard: Alright. Take care and best of luck to all you guys rebuilding those supply chains, because I think this is job one in 2022. Take care.