Chonchol Gupta: 0:03

We also look at things like ESG risks, so sustainability, insurance risk, geolocation risk, health and safety, risk and fraud sanctions and money laundering risks. But there's patterns that we see in the data. And that data really, if you analyze it correctly, and if you use proper AI tools, will show you who your stronger suppliers are. And oftentimes they might surprise you

Tom Raftery: 0:30

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, Chochol. Chochol, welcome to the podcast. Would you like to introduce yourself?

Chonchol Gupta: 0:54

Thank you for having me, Tom. it's an honor to be here. I've listened to your podcast for, for probably as long as you've been having it, so I know how valuable it is to practitioners in the industry and I'm happy to, introduce myself now as well. So, I'm the CEO of Rebirth Analytics, and we help large enterprises and our customers predict the risks associated with their suppliers and in their supply chain. So what that means is that we give them predictive visibility into the multiple risks that are associated with their suppliers. And we do that all in one location. And why that's important is because now traditionally, business management decisions are frequently shaped by siloed risk solutions, so companies might have multiple reports for each supplier, one on ESG, one on financial health or credit reports, and there's no way that these risks are seen or viewed by those large enterprises in a connected way. And so what our message really is, is that large enterprises, businesses of all sizes, really need to start looking at risks in ways that are not only predictive, but in ways that they can connect the dots and see how one risk can coalesce with another risk to create a bigger event.

Tom Raftery: 2:08

Okay. Fair enough. And how long have you been doing this, and why? as in what was the genesis of the company?

Chonchol Gupta: 2:17

So we've been working on this for the past four years, and we launched right before the Covid 19 pandemic, which was fortuitous for us because obviously a lot of companies were going through a lot of supply chain problems and they still are. And now as we look at how supply chains are rebuilding, there's been a mandate not just by governments, but by businesses themselves, that they wanna rebuild their supply chains in a more resilient way. So for us, you know, the timing has, has been good. Unfortunately for business, that means that the supply chain has been bad. But what's nice is our clients are finding stability faster than their peers and they're finding resilience, in ways that they had never thought about. So it's not just about finding which supplier is good or bad and dumping them. It's really if supply chains are a partnership, It's about building that partnership. It's about building that coalition that you use to be as strong as possible. So for us and for our customers, I think it's been a really good opportunity to go out and prove how our solution builds strong companies. And I, I'm not here just to pitch our solution. I really want large enterprises to understand that the way that they see risk and the way that they look at risk traditionally is flawed. And there are alternatives out there, there are better ways to do it. And to get back to your original point, the way that we started this company. My first startup ever, was a peer to business lending platform. We were the first in the United States to allow individuals to lend money directly to businesses in their communities. And the way that that started and the reason the impetus for that is because of Hurricane Katrina and the, the financial crisis of 2008, 2009. So I was living in New Orleans. I did my M B A at Tulane University down in New Orleans. And one of the problems was that businesses were struggling after Katrina to rebuild. And the traditional way of looking at risk for those businesses, which was done by the banks and lenders at the time, wasn't working, right? There was just so much going on that they were getting high defaults, they were lending to the wrong people and there needed to be a new way for them to approach and look at risk. So my background in risk really comes from the financial side. But fast forward 12 years or whatever it's been, and I think that it's the same challenges we're seeing in the supply chain, and when we look at large enterprises, and as we've understood large enterprises, they haven't done risk analysis differently than they have for the past 20 or 30 years. We still talk about the same types of analysis that are done. For example, a lot of companies will look at the credit score of a supplier, and that's very important because a credit score, and they consider that almost a gold standard, right? They say, well, we've done a credit check on this company. We've done a credit analysis, so we've got pulled a, done a Bradstreet report or whatever it is. We've, we've done it in whatever market we're looking at. But what that only tells you is how likely a company is to repay a debt because a credit score, as the name implies is based on lending. It's based on credit. It doesn't tell you how stable, financially stable a company is. And it's these types of flawed decision making that has been done by the industry because there wasn't any other solution, there wasn't this proliferation of AI that there is today. There has not been the, the academic research to support the correlation of risk or how risk spreads systemically through a supply chain, until very recently to be able to show people that the traditional ways of looking at risk and looking at resilience aren't working. And I, and if we can just stay here for a second on credit. Tom, you and I might have the same credit score. We might both in the US we would be, you know, one through 800 something, right? So let's say we both have a 700 credit score because we've both been paying our credit card bills on time, and we've been both been paying our, our electricity bills and our cable bills. There's only a few organizations that report credit. So when you look at a credit score, it's based on how a business repays their debt. It's not based on how stable that company is. So that means from a personal perspective, You and I could have the same credit score, but you make a million dollars a year and I only make $50,000 a year and I might have lost my job yesterday and gone out and bought a new car and uh, lost my house and everything else. But that doesn't reflect right away in my credit score. And, and I'm gonna give an anecdote here that we've seen. There's a large UK construction company that went bankrupt and for two years we were telling our client, hey, this company is a risk. This company poses a risk to your suppliers and your to, to your supply chain. But their credit score up until the day that they went bankrupt, the day before that, they went bankrupt and filed for administration the day before, that was the only time that their credit score dropped. So they got, if you were looking only at the credit score of this large construction company, you had a one day notice. So it's just a flawed way of, of looking at risk that's perpetuated because there were no other solutions, in the market.

Tom Raftery: 7:55

Right, right. And just to be clear, I don't earn anything like a million a year , but, but getting back to it, I mean, what made you decide to start Rebirth Analytics? What was it that drove that?

Chonchol Gupta: 8:11

I think for me personally, I have a passion for small business and I have a passion for helping, small businesses prove their worth. And when you look at the supply chain, a lot of the times through crisis, the first people on the chopping block, are the small businesses. My father's a small business owner, for example, and, in, in engineering. And it's always the small businesses that get hit first. But what our research has shown is that it's those small businesses. It's those small suppliers which are oftentimes the most resilient. And why are they the most resilient? What our findings have shown is that those that don't have access to the types of credit facilities that the larger companies have access to are in a more stable footing. Sure. That means they can't expand as fast or can't perhaps take on as many big projects. But when the rubber hits the road and there's a big crisis, they are also the ones that are not entrenched in debt. And are able to sustain for a longer period of time. So for me, my passion really is in building these partnerships, strengthening these partnerships, and showing that resilience can come from unexpected places so that large enterprises are on the most stable footing as possible. And we've talked a lot about financial risk. But with Rebirth Analytics, we, we also look at things like ESG risks, so sustainability, insurance risk, geolocation risk, health and safety, risk and fraud sanctions and money laundering risks. But there's patterns that we see in the data. And that data really, if you analyze it correctly, and if you use proper AI tools, will show you who your stronger suppliers are. And oftentimes they might surprise you.

Tom Raftery: 10:11

Interesting. So you're sourcing data from various places and putting it into a big pot, stirring it around and seeing what comes out. And that pot is made of ai right?

Chonchol Gupta: 10:55

I think that's a good way to analyze it. Yes. Uh, and that's a very, very basic, approach to, to what AI does but if you look at where data comes from, the source of the data that we put into that pot is also very important. So again, going back to the way that businesses traditionally look at siloed risk and the way that they try to look at the different research areas, the multiple risk hazard areas. Really, again, leaves them with blind spots because they're working with stale data. They're working with database data and. Once data is in a database, it's already old. It's taken a while to get there, and that's why credit reports, for instance, are so cheap. That's why ESG reports are so cheap. If you try to go out and buy one, uh, and you negotiate correctly with your, with your salesperson, you can get these reports for less than a dollar a piece because they're not worth much at all. And if you look at databases, that is again, something that's been compiled over time, and just ends up being the medium and the data that people use to make decisions. But what Rebirth Analytics does is we reach out directly to the supplier and we get the fresh data on an ongoing basis from the supplier. So we're not looking at historical databases to find, you know, what their financials are or, find out where they have operations. We're, we're talking with them directly, and we're taking that fresh data. And that's what's going into that pot of AI that you talk about, and it's that difference, I think that really, sets us apart. So the next question logically oftentimes is, well, why is a supplier willing to give you all of their proprietary information and data,

Tom Raftery: 12:53

And how do you know you can trust it?

Chonchol Gupta: 12:55

and how do you know you can trust it? Correct. So the first answer there is, that suppliers are hesitant to share their information and their data with their customers with a large enterprise, mostly because they're worried that the large enterprise is going to try to squeeze their margins down. And we had a customer of ours, a large airline, uh, in the United States that tried to do the exact same thing. They said, Chonchol we understand that you can show us which companies are doing worse than their industry peers, but can you show us which companies are doing a little bit too good? Which ones are making a little bit too much money from us? And then I said, yeah, we could do that, but that would violate our trust with the suppliers, and that's something that I never want to do. You know, our, our trust is implicit and we never show this raw data to the large enterprise client, which is how we build that trust with the suppliers. And so being that third party that's sitting in the middle, taking the raw data and then giving a red light, yellow light, green light to the large enterprise protects the supplier so that they can share that confidential information with us without worrying that their customer is going to squeeze their margins. And in terms of data accuracy, this is where really the magic of, of AI gets blended with a lot of, hands-on experience, from the financial industry where we look at audits, we look at at reporting metrics, but also our AI very quickly catches and flags any types of problems or any types of potential inaccuracies so that we can do a manual review or we can talk with that supplier and say, what's going on here? So we, we as a company, uh, in our years of experience have had very, good success of catching and getting ahead of any type of, misrepresentation by the supplier. And I will say, I don't wanna throw suppliers under the bus. I think a lot of the time it's a misunderstanding of what's being asked or a misunderstanding of the way to show, their data. Because how we look at a company, how we look at a supplier is industry by industry. It's supplier by supplier. And this is the same way that large enterprises need to look at suppliers, right? They shouldn't just be pulling, a standard report, whether it's an ESG report or a geolocation report, and comparing them to other suppliers around the world, they need to be looking at them, against their industry peers, against their regional peers, because once you understand that a paint supplier naturally will have more inventory than a management consulting company. Only then can you give an apples to apples comparison of how one supplier is performing against its other peers.

Tom Raftery: 15:47

Fair enough. And What industries are you in? You've mentioned airlines. Is it just airlines? Is it just transportation? Is it construction? Is it leisure? Is it, you know, where, where are you mostly working or are you across the board?

Chonchol Gupta: 16:02

We're across the board. Obviously we have some areas of focus for ourselves, but our clients run the gamut from governments, from federal governments, state governments, agriculture airlines, as you mentioned, construction companies. We have the largest infrastructure and construction project in the world, which is Neom. The, the city that they're building in Saudi Arabia from the sand up, all of their supply chain risk analytics. So for us, we're really industry agnostic, large manufacturing, high tech, manufacturing, things as exotic as, uh, new technologies like EV or, traditional industries like agriculture fishing it, it doesn't really matter to us as long as there's a long supply chain tail that a customer is having problems seeing, and it doesn't just need to be their first tier suppliers. We also look at the second tier or the third tier, or the nth tier supplier and help them better understand and quantify the risks, as they build back up. Because remember, it's not just about the disruption. Now, it's become so much about reputational risk. And we had a, a long conversation with one of the largest marketplaces in the world and they said, Chonchol, we, we did not know that there was slave labor in our supply chain, in our manufacturing. How did the New York Times find out that some of our products were being made with slave labor and the New York Times is not a magical institution. They're a great journalist, institu, uh, great journalism newspaper, but they're not, they don't have any magic, right? They follow the data and they follow it really well. And so what I said to this marketplace was the data is there. You just need to, to understand how all of that data comes together, how you can analyze that data to be able to find the problems in your supply chain and get ahead of 'em before they become problems. So there's nothing magic here. and every industry really is going through this, be it pharmaceuticals or medical, or airlines like we talked about. It can be anywhere. And I think that your listeners on this podcast, this probably resonates with them. No matter what industry they're in, they don't have visibility. 90% of large enterprises right now are still doing things on spreadsheets. Only 2% of large enterprises deploy AI in their supply chain decisions. So it really runs the gamut of anybody that's working with counterparties, with partners, being able to understand and predict the risk has truly been a problem for them.

Tom Raftery: 18:47

Okay. And I mean, you mentioned the long tail of suppliers and second and third tier. How do you get to all of those suppliers? Because I mean, we must be talking tens of thousands at that point, considering all the customers that you have.

Chonchol Gupta: 19:02

Yes, and what's exciting for us is that we have that ability to do so. And again, it really starts with that conversation with a supplier and letting them know what we're doing. We're not here to steal their business. You know, I'm not gonna become a, a spring manufacturer overnight. I'm not looking to, to go out and replicate a particular supply chain. So for us, it's really about instilling that confidence where they can share that information with us. But at the same time, they get a benefit because we let them know which of their suppliers are doing well, which of their suppliers are having issues. So for, for them it's a benefit as well because they can strengthen their supply chain and they become a better tier one supplier to their customer in a way that everybody wins. So it really all starts with, again, going back to that trusted relationship and building trust with the suppliers so they know that we're not here to displace them. We're not here to tell their customer to go find another supplier. Although we will tell their customer if there's a problem, we're here to say, look, your supplier's having an issue, and here's where that issue is, and I'll give you an example of how that works so well. One of our customers, one of their tier one suppliers was having problems and, and they did not know that those problems existed. And we told them, look, one of your platinum suppliers, you really need to have a conversation with them and understanding with them, because there was over 20 million pounds of dependence on this one supplier, and that supplier was so critical and so important to that customer, to that large enterprise. They, they were doing an analysis every year, but their analysis, this one again, happens to be financial, was based on credit reports. They said, no, no, they've got a great credit score. They've been a supplier for years we know them, they're good. We said, no, just have a conversation. Just here are the talking points. This is what you need to ask them and have that conversation. And they had the conversation and they came back and they said, you were absolutely right. We had no idea that this company was in such bad financial condition. They were paying their bills on time, which is why their credit score was good, but they were in a very bad financial stability state. And what this, large enterprise did was do something as simple as change their payment terms. So they didn't fire them, they didn't go out and find somebody else. They worked with that supplier, that key partner, to be able to come to an understanding and do business in a way that was a win-win for everybody and allowed that supplier to get on a more stable footing. And be, that platinum supplier that they needed and depended on.

Tom Raftery: 22:01

Nice. Nice. Now you've mentioned, an example in Saudi, for example, the Neom city of Neom Plus also you've mentioned, the US. Are you working in any other geo geographies?

Chonchol Gupta: 22:14

Yeah, so we're on all continents right now. Well, every continent that, that doesn't have penguins, I should say, Yeah, so we are, we've got a good presence in Latin America, and that's really a focus for our agriculture work. And in, Asia, again, a lot of our suppliers are based in Asia. A lot of the, our customer suppliers are based in Asia. But also there's really strong big businesses in Asia that have lengthy supply chains outside of Asia as well. So for us, It's global. Europe that we didn't mention is one of our biggest markets. So it's really about helping to make this world a smaller place when it comes to suppliers. As we've all grown dependent on globalization and as we've all grown, dependent on, on trade. We've realized that we need to have a better understanding of the world because it's not just the supplier that matters. It's geopolitical risk. It's geolocation risk, it's a flood. And, and I'll give you an example that I like to use. You might be doing business, you might have signed a contract with a company in Wichita, Kansas, for example, but you don't know that they have a manufacturing facility or a warehouse in Miami, Florida. And you don't know that the raw inputs are coming from Brazil or from uh, Nigeria or other places. So when you look at the risks that can just perpetuate in this system, it's, it's incredible. And what's interesting is, let's say there's a hurricane coming and it's gonna hit Florida, it's gonna impact Florida. And you look, and you right now, people look at information in siloed ways. They look at a. It's unfortunate, but, supply chain leaders have 10 pieces of paper in front of them, 10 different reports for each supplier. They've got a insurance report, they've got an ESG report, they've got a financial report, they've got all of these different reports, but they're not connected. So if you look at, and you say, okay, well this company has insurance. This company that has their manufacturing facility in Florida has insurance. They've got, you know, 10 million, 20, 50 million of insurance. They should be okay if this hurricane hits. What you might not understand is that you don't look at their financials. You haven't looked at their financials to see that they've only got two,$300,000 in the bank, yet their insurance deductible is a million dollars. So, You see, on one hand, yes their insurance is there, but on the other hand, you don't see how there are more problems in those 10 pieces of paper that you have in front of you. And, and if you think of 10 pieces of paper for the thousand or 2000 or 3000 suppliers that you have, it really gets quite complicated. And it makes the supply chain, it puts the supply chain manager in a bad position because they're having to make gut instinct decisions as opposed to really mathematically based or quantitative decisions that make sense.

Tom Raftery: 25:21

Cool. Yeah, no, that makes a lot of sense. We're coming towards the end of 2022, Chonchol, looking forward 2023 and beyond, what do you see happening to supply chains and to yourselves?

Chonchol Gupta: 25:35

I just got back from the APEC conference in Bangkok, and what was so interesting there was that the focus of, of all of the global leaders, I'm talking heads of businesses, heads of state presidents, prime ministers, all of the conversations I had were focused on resilience. If you look at the speeches that were made, if you look at the, the conversations that were had over coffee, Everybody was talking about the need to rebuild supply chains, resiliently, and I think this answers the second part of that question. What that means for, for Rebirth Analytics is that we are, we're sitting in a very good spot to be able to help large enterprises understand a better way to see risk and a better way to build those supply chains more resiliently. My hope for 2023 is that large enterprises recognize that the way that they've been doing risk research and risk analysis on their suppliers is flawed. That this creation of siloed risk areas and the the siloization of risks creates blind spots for their companies. And whether they work with a company like Rebirth Analytics or they, they take this on themselves. My hope is that they start this journey of up-leveling their risk analysis; of understanding the way that risk is interconnected, the way that risk plays and creates super disruptor events, and the way that they can better understand and analyze risk, not just using traditional methods and databases as we talked about earlier, but using fresh ideas, that really can future-proof their businesses. So my hope is that those companies, that start on that journey are gonna end up in a more resilient place and that our supply chains globally will settle down.

Tom Raftery: 27:31

Okay, great. We're coming towards the end of the podcast now. Chonchol. Is there any question I haven't asked you 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?

Chonchol Gupta: 27:44

I think that when we look at, it's not necessarily a question that you haven't asked but because you do a very good job, Tom, and everybody listens to this podcast, knows you do a good job. So you haven't, you haven't missed any questions. But I think the, the overarching message here in my mind is that business leaders, even if they're not involved in supply chains, everybody's got pressure on them to stabilize their companies the way that we talk about risk, the taxonomy around risk, the way that risk is incorporated into our operations as companies really needs to be analyzed for strength, needs to be pushed in a way that understands that suppliers are partners. And it's not about dumping a supplier. It's about working with the suppliers to do better business. My thought is, even as we talk about Nearshoring suppliers, bringing suppliers closer to home, whatever the decision of a company might be, we're still globalized and we're still dependent on raw inputs coming from other places, and we're still dependent on third parties. So instead of looking at supply chains in an adversarial role, I think it's imperative that business leaders start having more frank open conversations with their suppliers and not using that information against the suppliers. And I think it's up to suppliers too to get influence from their customers to be able to say, look, let's, let's sit down together. Let's talk about the challenges we're having and let's do better business together. Because at the end of the day, everybody just wants this system to work.

Tom Raftery: 29:31

Yeah, that makes sense. Okay, great. Chonchol, if people would like to know more about yourself, Or Rebirth analytics, or any of the topics we discussed in the podcast today? Where would you have me direct them?

Chonchol Gupta: 29:42

I think our website is the first stop for most people, and that's rebirth analytics.com, that's got a wealth of information. It's easy to reach out to us there and on LinkedIn. I think that's an also a great tool to use to, to reach people that you want to talk to. So from my perspective, reach out. Even if you aren't a customer of ours, we're happy to help point you in the right direction of what you can do as an enterprise. We have some tools that you can use internally to help analyze and strengthen your own supply chain processes because at the end of the day, Our goal, and as we talked about, my goal is just to help suppliers do better business, help large enterprises do better business and stabilize the supply chain in the world as we know it right now when it comes to business.

Tom Raftery: 30:25

Excellent. Great. Chonchol, that's been fantastic. Thanks a million for coming on the podcast today.

Chonchol Gupta: 30:30

It's wonderful to be speaking with you, Tom. Thank you very much.

Tom Raftery: 30:34

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.