Sustainable Supply Chain

Reducing Friction In Product Development - A Chat With Calico's Kathleen Chan

July 01, 2022 Tom Raftery / Kathleen Chan Season 1 Episode 238
Sustainable Supply Chain
Reducing Friction In Product Development - A Chat With Calico's Kathleen Chan
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Show Notes Transcript

Product development is obviously a key part of supply chain. In the apparel industry communicating with manufacturers can be challenging, so enter Calico to help reduce that friction.

To find out more about how this young startup Calico raised money from Serena Ventures, and is helping direct to consumer brands in the apparel industry more easily connect to their factories, I invited Calico CEO Kathleen Chan to come on the podcast.

We had a fascinating conversation. I learned loads, I hope you do too...

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Kathleen Chan:

when everything's in one place and everything's accessible to both your internal teams, as well as your factories, you're able to produce a lot better. You know, you're not initiating prototypes that have errors. You're not initiating prototypes that just miss the mark on certain, specs. And we've seen this happen over the course of some of our brands. So they've been able to take their prototyping down from, you know, four to five times down to one or two and be able to go to market really quickly

Tom Raftery:

Good morning, good afternoon, or good evening, wherever you are in the world. This is the digital supply chain podcast. The number one podcast, focusing on the digitization of supply chain. And I'm your host global vice-president at SAP Tom Raftery. Hi everyone, w elcome to the digital supply chain podcast. My name is Tom Raftery with SAP and with me on the show today, I have my special guest Kathleen, Kathleen, welcome to the podcast. Would you like to introduce yourself?

Kathleen Chan:

Yeah, for sure. I'm Kathleen, I'm the founder and CEO of Calico. We are a supply chain operating system for direct to consumer and retail brands.

Tom Raftery:

Okay. And. Why, why did you set this up? Why did you feel it was important to do this?

Kathleen Chan:

Really good question. Uh, so prior to this, I was actually a, I had two other brands that I had started. One in jewelry, had one in apparel, and I had grown them very quickly in a very short amount of time. And in doing so I had been running my supply chain on some combination of Excel and emails and we chat and WhatsApp apps. So like looking back, I have a lot of, just misery about that. It was a very tough time. And then doing this twice, I, I was prompted to kind of explore a little further to see there were other options because I figured there, like, you know, large, massive brands could be running their supply chain this way. And I started talking to folks from, you know, nimble emerging D to C to, to very large retailers. And I had made my way to a very, very large retailer. And I had asked a question of like, what are you using to manage your factory relationships today? How are you doing that process? And how are you, you know, sending your tech packs or creating those and sending them halfway across the world to your manufacturers. That answer was still email and Excel. Um, and so I had realized that, you know, I had stumbled across this massive gap in the market. And, for my third business, I had basically built the system I wish I had. And so that's Calico, it's an operating system that helps you go from development to production, with your factories in a collaborative space.

Tom Raftery:

So for people who might be unaware because the, the, the listeners to this podcast are, are varied. I gotta think because we, we cover all aspects of supply chain, everything from the, the planning and the, the making through to the actual, you know, logistics, warehousing delivery through to final operations. So for people who might not be familiar with the kind of aspect of supply chain you are talking about, can you give us a little bit more context?

Kathleen Chan:

For sure, for sure. So Calico starts at the very first phase of, development. So think of when you're creating that recipe book of how to make something, you know, what components are in there, how do you put them together? What goes, where, um, we start at that phase and we help you bring your factories into one platform. Help you manage quotes, run orders, and create prototyping relationships and design reviews in one place and help you produce and manage that relationship all the way to when it's ready on, you know, the factory floor for your logistics or freight forwarder to come and, and take it to the next stage.

Tom Raftery:

Okay. Very good. And so if it was all Excel and email before. And now it's all on a single platform. How do you manage moving people from the Excels and the spreadsheets onto the platform? Because you know, we're people we fear change. That's gotta be a whole change management issue that you gotta work on.

Kathleen Chan:

For sure. And I think that's probably the biggest hump that we are working towards because you know, this is, this has been the process for the last 20, 30. I don't ever, since spreadsheets has been around really. Um, and so reeducating and, you know, re re showing them a better way has been what our focus has been on Kaka. Every time we kind of come into a new client or, you know, come into a new exposure, we, we basically show them cool, like, this is how you do it on Calico. Look how much time have you've been able to save. You've been able to do this in two to three clicks versus quite literally hours of your time previously. And that has been pretty pivotal for us, to, to kind of grow and, and change, manage if you would, with some of our customers. Um, so a lot of that has been just showing them the before and after, uh, because really seeing the impact of what you can do with technology or a system like Calico is, has been the main driver of change for, for a lot of our clients.

Tom Raftery:

Okay. And are there particular industries that you work with? I mean, you, you mentioned retail and fashion, uh, starting out I, is it just that, or are you going into other industries as well?

Kathleen Chan:

Great question. So we are hyper focused on the, like a few verticals here, apparel, accessories, and, and footwear. We don't do everything else. mostly because our team comes from this space. My team is X, although X logistics. And they've worked in this space for the last little while. And so we like to kind of start our, our, our growth and impact change on the verticals that we know best. I'm not gonna try to teach someone how to build a car or a rocket ship, or, uh, you know, uh, do that. If I've not done that before. So, you know, we've we started those three verticals and those are the areas that we played really well in.

Tom Raftery:

Okay, and in those particular areas, I know you mentioned, getting people off Excel and getting people off email, what kind of advantages apart from time saving, what kind of advantages are you giving your customers? What kind of benefits do they get from it?

Kathleen Chan:

There's a massive data play here. So if you think about how someone goes to market today or goes to their factories today, a lot of them is siloed information in, in inboxes or spreadsheets, or just, you know, someone's phone because they've decided to, you know, WeChat, their factory. And so all that data is just stuck and lost. Um, and when you comes down to actually trying to leverage that data for decisions, or just empowering the insights for your next production run, that's very difficult to do today. If you're running everything on Excel. So beyond time we enable, you know, brands to kind of leverage their production data and be able to empower their insights for their next production run. Because right now, today, It's very much a gut decision. You know, you kind of put a finger to the wind and you kind of go, okay, cool. I think this is how much we need for the next season. and that's how some decisions are made today. And that's a little, little dicey in today's age. So we, we, try to help you become a little bit more data driven. So beyond time, there's a lot of money savings there as well. And then information kind of being leveraged to do what it's supposed to be doing.

Tom Raftery:

Okay. And, do you then provide an analytics suite for that data? For example?

Kathleen Chan:

Absolutely. So for some, um, larger scale customers, we take all the information that you and your factory kind of put into Calico and, and pull that out into an analytics suite where you can very much run reporting on open inventory, assortment, breakdowns, just everything you would really need to empower your next production run. We can put that into a beautiful spreadsheet or, report for you. And then you can use that to, you know, empower your decisions or just go up to execs and be basically be able to show and, and show them how your, your team has performed in the last little bit. So, yeah, we do have that, component as part of Calico as well.

Tom Raftery:

Okay. And you're still a startup. When did you kick off and what stage are you at in the kind of startup life cycle?

Kathleen Chan:

For sure. So we started really, really late 2020 arguably, basically 2021. Um, you know, we, we popped into an accelerator called Forum. And then shortly after that, we came out and raised our first institutional round. We raised from Serena Williams's venture funds, Serena ventures. Um, and so right now, you know, we've closed that round we're heads down, building growing, and then, um, kind of taking Calico to market with some really interesting customers.

Tom Raftery:

Okay. And did you get to meet Serena?

Kathleen Chan:

That is the most common question I get asked and, um, she's incredibly involved. So yes, so she was part of both the, the fundraising and she's been very hands on after, as well.

Tom Raftery:

Nice. Nice. Nice. Nice. Okay. what about outcomes? Are there any outcomes you can speak to for your customers?

Kathleen Chan:

For sure. Yeah. So we, we work with a few footwear brands that are, up and coming. I won't name names, but we've been able to take them from quite literally a team of Excel, you know, aficionados, they can run pivot tables and you know, the back of their, um, just sleep basically. And so we've been able to take them to a place where they can really operate efficiently with factories, bring down costs because they've been able to build better relationships and get everyone on the same page, cuz that's a whole other issue when it comes down to supply chain. And be able to just move a lot faster because when everything's in one place and everything's accessible to both your internal teams, as well as your factories, you're able to produce a lot better. You know, you're not initiating prototypes that have errors. You're not initiating prototypes that just miss the mark on certain, specs. And we've seen this happen over the course of some of our brands. So they've been able to take their prototyping down from, you know, four to five times down to one or two and be able to go to market really quickly. So that's been a really interesting outcome that we've been seeing. And I think that's a massive value add for, for today's day and age, especially where supply chains are today.

Tom Raftery:

Nice. Nice, nice. Very nice. And where to from here, I mean, I know the ultimate aim is global domination, but you know, what are the two or three steps before you get to that?

Kathleen Chan:

Hmm. Yeah, you're right. Global domination is definitely where we wanna get the next. I think there's a few really interesting things that coming, down the pipeline with Calico so beyond just, you know, a beautiful software that helps you manage your, your supply chain, we're really opening up our, our factory marketplace so that brands can, produce better with a phenomenal suite of factories that have been vetted for sustainability ethical and you know, certain other key points. And now we've found that this has been really, really impactful for a lot of emerging D to C brands. So the next little phase is, is that, um, and there's some very cool things coming down the pipeline. So stay tuned on that piece and I'll, I'll send over a link to our roadmap for you as well, Tom.

Tom Raftery:

super. Thank you. Thank you. We are coming towards the end of the podcast now Kathleen. Is there any question I haven't asked that you wish I had, or any aspect of this that we've not touched on, that you think it's important for people to be aware of?

Kathleen Chan:

Yeah. I mean, I'd love to kind of spend a little time on, you know, supply chains today and how that's impacting brands, especially with some of China's most recent shutdowns. I think that's been very, very moving for a lot of folks and, kind of reigniting their, their initial impact or thoughts around reshoring or changing up their supply chain, which has been a massive, massive mover for what we're doing at Calico, especially with some of our factory networks and, and technologies. So yeah, that's, that's pretty cool. Um, but yeah, nothing left.

Tom Raftery:

Okay, super in that case, Kathleen, thanks a million for joining the podcast. If people want to know more about yourself or about Calico or any of the things we discussed in the podcast today, where would you have me direct them?

Kathleen Chan:

I will send you a link, but we, you can visit Calco ai.com.

Tom Raftery:

Fantastic. Kathleen. That's been great. Thanks a million for coming on the podcast today.

Kathleen Chan:

Thanks so much, Tom.

Tom Raftery:

Okay, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about digital supply chains, head on over to sap.com/digital supply chain, or, or simply drop me an email to Tom dot Raftery @sap.com. If you like the show, please, don't forget to subscribe to it in your podcast application at choice to get new episodes, as soon as they are published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks, catch you all next time.

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