Michael Braunschweiger: 0:03

We have a supplier ecosystem that includes diverse suppliers across all of indirect categories. And we have our one market platform, which is a technology platform where all of our suppliers are housed and you can report and you can set a goal. So let's say, you know, today, spend with diverse suppliers only 5%, but you want to go to 15%. That's an achievable goal. And then you have a way to track it and measure it against all of the categories

Tom Raftery: 0:32

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, Tom Raftery. Hi everyone. Welcome to the Digital Supply Chain podcast. My name is Tom Raftery and with me on the show today, I have my special guest, Michael. Michael, welcome to the podcast. Would you like to introduce yourself?

Michael Braunschweiger: 0:57

Yes. Thank you very much. I'm Michael Braunschweiger. I'm the Chief Procurement Officer at LogicSource, which is a procurement management firm in Norwalk, Connecticut and United States. Just give you a quick overview of what my organization does. My organization, the Value Delivery Organization is responsible to identify, architect, and deliver value for our clients on an ongoing basis. Value is mainly, measured by savings. But what we do, we also deliver value beyond savings for our clients by driving operational, efficiencies, process optimization, and really help a client to become a better procurement organization through our help.

Tom Raftery: 1:42

Okay. And how , how do you help your clients, get these savings, secure their procurement, whatever it is?

Michael Braunschweiger: 1:52

Yeah, so, the way we, our solution works, we, uh, have a model where we have an onsite team that sits with our clients. It used to be, especially before covid, we truly sat in our science, building. We were part of their organization. Now most of our clients are still, remote and our team's remote as well, but our account team is fully dedicated to the client. They're hand chosen, and interviewed for a specific client. The client interviews them as well to make sure that they're good fit for their organization. And that organization is supported by our Center of Excellence or c o e, which is our shared service center of over 150 subject matter experts that sit mainly in Connecticut here in Norwalk, Connecticut. We have a couple of them across the country, but that really provide all the industry knowledge and industry expertise to our onsite team and our clients. And that's the way we work with our clients day in, day out and deliver value for them. We have a huge leverage in the industry. We, have insights into more than 65 billion dollars in spend across all indirect categories. We manage actively manage 15 billion dollars of spend with suppliers in a day in day out basis, and we run over 15,000 sourcing events for our clients. Again that's run based on with our onsite team, but also with our shared services, the c o e, the center of Excellence. So we have a huge market penetration where we see what's happening in the marketplace, which we then can utilize to really help clients react to market conditions as well, positive and negatively, uh, and help protect them as well during those times.

Tom Raftery: 3:32

Okay. Okay. One of the things that we saw early on in the pandemic was we saw a lot of supply chains fail because the supply chains had previously been optimized to be lean supply chains were seen as cost centers. So they were made as lean as possible, which ended up making them quite brittle. If you are working with your clients to make sure they get the best possible cost, is there kind of a trade off there in terms of security of supply?

Michael Braunschweiger: 4:03

Not necessarily. So let me, let me answer the question like twofold. Number one, really what drove, uh, or has been driving some issues in the, in the supply chain was obviously the rising inflation, the higher cost, the high freight costs, the high material costs, capacity issues, uh, not having availability on paper as an example for the print industry or for material for the packaging industry. Then also resources became very difficult to get. Labor was, you know, rising labor costs, but it was more and more difficult to get labor. People started to, folks started to retire early and really put a lot of pressure on the supply chain. The way we have been addressing those and still do today is really remained through main four main levers that we can drive. Rising inflation we addressed through value engineering, process optimization, spend governance and control. So to take spend out and spec optimization and operational redesign. So in certain areas where you were not able to negotiate rates any longer. As an example, in freight, we looked at how a client utilized FedEx as an example, u p s or some of the ocean lines, and were there efficiencies that we could drive. Did a client not necessarily need to ship everything priority, overnight, and was able to ship second day or, overnight, but afternoon delivery and still get the product into their customer's hand on time as needed, but to reduce cost from a, uh, supplier supply chain disruption perspective, LogicSource has over 4,000 suppliers in our ecosystem. We work with these suppliers on the executive level. Uh, really like with the owners and or C level folks at the suppliers. We use that leverage to work with them very closely. As I said before, we run over 15,000 market events per year so we see what's happening in the market and, and in the market, and we can adjust, accordingly. And then some of it was really cool last year where, you know, in book publishing as example, which actually that's my past, I, I grew up through publishing back in Europe and book publishing has been doing really well because of Covid. Most of our publishing, partners or clients had a 60% increase in business. The problem that that cost, they couldn't get books manufactured fast enough and get them into either the schools or onto the bookshelves. Our team, our center of Excellence, because they know the market really well, started to utilize some of the magazine printers because they could, the A had capacity available. B, they could produce some of the softcover books that nobody ever thought about using a magazine printer. The cost was higher than a book printer, but it didn't matter to our customers. It was more important to get the books on the shelves or into the schools. Even it wasn't slightly more expensive. So that was really the maybe kind of like know from our experience perspective how you react, and, and utilize that. Another big important part is the talent shortage, the Logic Source model as I mentioned in the beginning, we have an onsite team. We have over 150 subject matter experts. We call that the Logic Source COE Category, talent bench. So if you need somebody, you can reach into that talent bench, like reaching into a bookshelf and take a book out. And after you're done with that initiative, if you can put a person back, so you're only getting a partially allocated service from them. But again, during times where it was difficult for our clients to hire their folks, or some of them actually lost their people, they were able to augment our staff more than what we sold them. But we were able to get them through these, uh, tough times because of our flexibility and, and, and, uh, staffing the, the augmentation staffing model that we provide them.

Tom Raftery: 7:55

Okay. And you mentioned publishing, but what other industries are, are you working with? Are you working with all industries or is there a, a subsection of industries that you work particularly well with?

Michael Braunschweiger: 8:06

We we're working pretty much across all industries. So we do retail, retail is our, it's still probably our biggest industry. Then publishing financial industry. We have, healthcare has become a big industry for us, especially now with healthcare pricing and cost rising further. So they need to save money. It was interesting, prior to Covid, around 78% of our customers used to be out of retail. During Covid, we kind of rebalanced our customer platform, and while retail is still the biggest platform today, it's probably 48%. So we are much more, diverse across the different industries, which is also really important in in timing. As you know, with retail being tough at certain times, especially during Covid.

Tom Raftery: 8:50

Okay. Okay. And there's a big move, obviously globally as well, towards supplier diversity. Is that something that you're seeing and you're addressing, or how, or is it something that's affecting you at all?

Michael Braunschweiger: 9:03

We are proactively actually addressing it, right? So supplier diversity has become more and more important. In the past, it used to be a noble goal to have some diverse supplier in your platform. The problem that companies have, they, it's very difficult to measure and they don't really have the visibility into their suppliers and how much they spend with those suppliers. So while today roughly five to 10%, across corporate spend is with diverse suppliers, companies have a hard time to really track and measure it. We have a platform where a have the subject matter experts that know industry very well. We have a supplier ecosystem that includes diverse suppliers across all of indirect categories. And we have our one market platform, which is a technology platform where all of our suppliers are housed and you can report and you can set a goal. So let's say, you know, today, spend with diverse suppliers only 5%, but you want to go to 15%. That's an achievable goal. And then you have a measure a way to track it and measure it against all of the categories, based on our technology platform that we provide. And then also suppliers are housed in that technology platform with under diverse suppliers. And then we also look at, at tier two suppliers as well that support the tier one supplier may not be diverse today, but that have also an impact on how you can measure a diversity suppliers.

Tom Raftery: 10:35

Okay. And the technology platform you're talking about, is that just around supplier diversity or does it have other functionality as well?

Michael Braunschweiger: 10:42

It has other functionalities as well. So we use that platform for all of our spend. We manage all the procurement spend through the platform, but it also has a contract management platform in there so that we house all the contracts and we proactively measure. And, and evaluate contracts for their quality and maturity and when the contracts are up for renewal. There's a design module as well that can be used from for some of our, a couple of our clients use as well. So we have five different, modules in the technology platform.

Tom Raftery: 11:11

And the design module. What's that about?

Michael Braunschweiger: 11:13

It's a design module where, companies can use that to design. We have a customer that uses that for packaging design. And all their packaging designs are housed in that. And then they can go in and actually when, if they wanna look at optimizing their packaging specifications, they can relate to that and kind of work through that platform to see how they can, consolidate some of their specifications into a smaller set of SKUs.

Tom Raftery: 11:40

Okay. Interesting and in terms of, sustainability, for example, we're, we're seeing a big move globally, towards that as well. Is, is that something you're working on? I mean, supplier diversity obviously falls into the sustainability bucket, but is there anything else that you're helping your, your customers with on that front?

Michael Braunschweiger: 11:58

From a sustainability perspective, we look, we specifically look at geographic sourcing opportunities to make sure we can produce, products, especially for our retailers closer to their retail sites. So as an example, one of our key clients had one manufacturing sites for all their millwork and checked out counters that are pretty heavy and pretty difficult, you know, heavy to ship and they have to be trucked through the country. And they had, they used to have one supplier in the Midwest and shipped to their 1400 stores. We built them a whole new supplier network. It was one supplier with seven different facilities that had the same quality control, same material intake, and all that. But they were now much closer to the clients, the stores. They were better located geographically. We were able to reduce freight time and, and overall freight footprint. and, obviously lo they had a great impact not just in costing, but the sustainability as well.

Tom Raftery: 12:54

And in terms of use cases, are there any particular customer use cases you can speak to? Any big wins you can talk about?

Michael Braunschweiger: 13:03

Yes. we are very proud of the value beyond savings because again, when we engage with a client or if, uh, at the beginning, the, the ticket to the dance, so to speak, is all about savings, right? But in a long-term relationship, all of our relationship with clients range anywhere from three to four years. So in order not just to be, just to deliver savings, value beyond savings is a big, big portion of what we do. And, you know, they include, I, I kind of meant, we, we have six pillars, so What we actually did, we created a value being savings council, earlier this year that really focuses under, for everything outside of, of economical savings of what we can drive for our customer. They include or drive business continuation as an example. Ensuring our manufacturing clients have sufficient material and or supplier capacity available. So that their business, that they don't have to shut down the manufacturing sites. We have been able to find pallets paper for our customers, where they weren't able, or they were put on a, on a smaller amount of paper that the mill were able to ship to them. We found paper to them so that they didn't have to stop the manufacturing side. So that's key. The same thing with pallets. Customer experience, improving quality and consistency of service levels and improving time to issue issue resolution for our retail customers. Mainly by, improving the customer service, call centers, which was very important for many of our clients. Some of our clients have more than one customer service location. We consolidated those, put the same measurements in place so that the customer experience was much, much better. From a social responsibility, which we obviously diversification of supply base, we put that in place for many of our clients and have been really active doing this for the last two years. But it becomes more and more important. And again, with our technology platform, as I already mentioned now, the clients can really measure it. We also wanna actually put a, instead of a, a Value Beyond Savings Council. We also wanna put a diversity council at LogicSource. We are looking potentially to hire more folks that really are out of that diversity area and, and know it even better than what we do and, and put it as part of our solution for our clients in a more and more proactive way. Risk mitigation, like, you know, as an example for a couple of our clients, we their warehousing side and the data centers from a high risk, area into a low risk area, again, to make sure that the disaster recovery plan was set up well. And that was really important for a couple of our customers down in Florida where they had really like their, their data centers in a, in a high risk area, and we were able to help them out and, and find. One that I really like, which is really fun actually, is growth and innovation. Where we are bringing, we are doing cross client introduction in buying merchandise and promo items as well in print manufacturing. So as an example, one of our clients is the biggest check printer in the country and, but they have enough capacity to print other things as well than just checks that can print some commercial print. And we actually brought some of our clients' commercial print needs to them and they were able to drive, we were able to help them drive revenue with some of our LogicSource other clients, and vice versa, did that on premiums and promos as well. So that's kind of fun because you normally wouldn't think about a procurement organization doing this, which is a really kind of shows our innovation and creativity, you know? And then we look at, a big part of us is looking at operational efficiencies. We are kind of called the change engine, a change agent of our client. Because we are looking at things, how we can do things differently, how we can get the clients going and, and look at their process and sometimes even look at their organization, see how they can run it more efficiently. And we, we become really more like a partner now. We outgrew being a procurement management firm and we are more like the chief procurement office for our clients because we are really at that C-Level and not just looking at economical savings, but at at whole optimization from a process perspective as well.

Tom Raftery: 17:15

Okay.. Often when you go into organizations like that and look at their processes and suggest changes, you can get kind of pushback and it's kind of organizational, uh, development and change management and, you know, it's a lot easier to change technology than it is to change people. Have you come across that as well? And then how do you deal with it?

Michael Braunschweiger: 17:37

Yes. it's a very, it's a very good question. So, when we engage with a client originally, we, we do a mutual value assessment where we read, that's our, consulting phase where we go into a client and see what we think a client needs and what kind of a solution Logic Source can deliver to them. As part of that work again, we look at driving commercial savings, but as part of that work, we're looking at operational redesign, operational improvements, and then we rate them between low, medium, and high emotion. And then we have to read out with the client, which is normally the C F O or c E o. We show them our rating on each of the projects and we, the rating doesn't look the same client by client. We have certain clients that really don't want to drive a lot of operational redesign, and they also don't really need it because their business is actually doing really well, but they wanna have some commercial savings to have even more money to spend to grow. But then we have some clients that really need more, uh, savings and they're more open to drive change and for those some of the medium emotion may be low emotion. And then our goal is always when we present something to a client during the mutual assessment to have a, a minimum of 70% in low and medium emotion and only the smaller portion in high emotion and agree, that's tailor made for our clients. Having said that, when we then go live, we still have to sell it through each of the business stakeholders. We have to show them we have to get their buy-in and we have to find some replacement opportunities because they will never say yes to everything we present. and some of them say yes to more and some of them say yes to less, but we then kind of have to find alternatives. And again, we have a lot of time again, three to four years is our average deal cycle with the client and these operation redesigns. In year one are very small and they become bigger because now we have, we had time to build trust and the relationship with the client and they really kind of trust our, our process much better.

Tom Raftery: 19:29

Okay, interesting. And where to next for Logic Source? What's your kind of plans for global domination for the next five to 10 years?

Michael Braunschweiger: 19:38

No, not really. I mean, you know, logic Source is all, is focused in all indirect categories, so we don't do any direct categories for our customers. And the reason why that is, is our clients really focus on their direct categories. They don't really focus with the same rigor on indirect categories, and roughly 20% of a client's revenue is spent on indirect categories is much less process, much less rigor, and much less focus. So that's the area that LogicSource really kind of spikes in. Now, there is a lot of, clients and a lot of opportunity to do this in North America. So I call North America truly US and Canada, cuz Canada has been an opportunity for us. The biggest expansion that we do right now is in healthcare. We started in healthcare probably nine months ago. We've made a lot of investment in the healthcare area. We have gotten some really, some folks that come out of the healthcare business that know the healthcare business very, very well. That make now the introductions and we go in there. And, uh, again, healthcare being as it is today, and the high healthcare costs. For the first time really, healthcare has to kind of look at their costs from an indirect perspective, and that's a great opportunity for us to grow. So that's the main focus before we focus on, on a next, uh, approach going forward or a broader approach. But I don't think right now we would look at a global expansion. There's enough to do right now here.

Tom Raftery: 21:05

Sure, sure, sure. But in terms of functionality, where, where are you looking to, move to in the next five, 10 years?

Michael Braunschweiger: 21:11

It's actually, it's a very good question, right? So number one, LogicSource used to be a procurement management firm up to like three and a half years ago, four years ago, where we made a big, big change where we became, again, a client's chief procurement office because now we look at operational redesign, value engineering, which has become bigger and bigger and bigger. So our deals have gotten much bigger. Our deal lengths have become bigger than they used to be four years ago. We do already all indirect categories, so we do all of, you know, corporate services, which includes legal spend, professional services spend, HR related spend, benefit spend. So there is not a lot of opportunity to increase the categories per se. The value beyond savings is another, is is the next area where we probably will push harder. And one thing is for us to do a better job in selling the vision of how we can actually help a client during bad market conditions, right? Because again, we always got kind of judged on savings In today's market it's not just about savings. It's like investing your money with a good financial advisor. If I do, good for you in bad markets, it's pretty much the same thing. If I make sure your prices go up the least in a really high inflationary market, then already I drive drive a huge amount of value for you. That's one of a, a big, my personal, goal to make, make sure our clients understand that better the value logic source delivers in that area, than just the savings.

Tom Raftery: 22:43

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

Michael Braunschweiger: 22:57

No, I think we covered pretty much everything. I mean, yes, I think we covered pretty much everything here.

Tom Raftery: 23:02

Superb. Superb. Okay. So Michael, if people would like to know more about yourself or about Logic Source or any of the things we discussed in the podcast today, where would you have me direct them?

Michael Braunschweiger: 23:12

The easiest way would be to direct them to my email address, which is Michael dot Brown Schwager, which is B R A U N S C

Tom Raftery: 23:21

I'll, I'll put it into the show notes. Michael. There no need to spell it out.

Michael Braunschweiger: 23:25

Okay. It's Michael do brunch weger@logicsource.com and I will be the best way for, for anybody with, with questions to reach out directly to me and then I'm happy to answer these questions.

Tom Raftery: 23:35

Tremendous, great. Michael, that's been fantastic. Thanks a million for coming in the podcast today.

Michael Braunschweiger: 23:40

Thank you so much. Thank you.

Tom Raftery: 23:43

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, simply drop me an email to TomRaftery@outlook.com If you like the show, please don't forget to click Follow on it in your podcast application of choice to be sure to get new episodes as soon as they're published Also, please don't forget to rate and review the podcast. It really does help new people to find a show. Thanks, catch you all next time.