Richard Seel: 0:03

Is there an option to, say, nearshore 20 percent of your manufacturing and keep 80 percent offshore and make sure that capacity in there is capacity in that 20 percent to to ramp up very quickly if need be? So you can scale in the event of pandemics, in the event of geopolitical sort of challenges.

Tom Raftery: 0:29

Good morning, good afternoon or good evening where ever you are in the world. This is the Digital Supply chain podcast. The number one podcast focussing on the digitisation of Supply chain. And I'm your host, Global vice president of SAP. Tom Raftery. Hi, everyone, welcome to the Digital Supply chain podcast. My name is Tom Raftery with SAP. And before we start today's podcast, I would like to just make a brief announcement, and that is we are starting a new livestream, a series of four layered streams starting on this October 27. So in just over a week's time and the theme of the first of those live streams will be Industry 4.0 insights on intelligent products. Then the following three Tuesdays, we will have three more live streams. There will be on intelligent factories, intelligent assets and empowered people. So look out for those. They will be eight a.m. Pacific on the Tuesday, the twenty seventh and the following weeks they would be the same time. So that's around four or five p.m.. European or UK. Irish. So look out for those. We'll be posting about them. You'll be free to join in, drop on listen and we'll respond to comments live as they come. And it's going to be a real fun livestream series. I'm hoping so. Having said that, on with today's podcast on my special guest on the podcast today is Richard. Richard, would you like to introduce yourself?

Richard Seel: 2:02

Yes. Thanks, Tom. Yes, my name is Richard Seel I'm a managing director at Delaware Consulting. I'm based in the US. But work across the US and the UK. I've had over 27 years of delivering SAP solutions in all those sort of geographies that focus very much sort of on the supply chain, the warehousing sort of space. I worked in a lot of different organisations in those locations, including the Kraft Foods across Europe, Boeing, Dr. Pepper in the U.S. So I specialise very much in the sort of food and beverage space, as well as a sort of aerospace and defence aftermarket sort of spares. So those are that's me in a nutshell.

Tom Raftery: 2:50

OK. And for people who might be unaware or can you just say a few words about Delaware?

Richard Seel: 2:56

Yeah. Delaware is a international company. It's based in about 13 different countries across the globe. Ranging majority is in Europe or in the US, Brazil and APAC region, including China, Philippines and Malaysia and Singapore. We fundamentally or the majority of the work we do is SAP delivery. That's about 80 percent. But then around 20 percent delivering Microsoft Dynamics as well.

Tom Raftery: 3:24

Okay, very good. And Richard, we're in kind of a weird time with Supply chain. You know, there's lots of stuff happening in the world between pandemics and Brexit and storms hitting the US East Coast and typhoons in the Pacific. How is this impacting what you're seeing in the Supply chain space?

Richard Seel: 3:52

So very good question, Tom. I would like to sort of start off with an interesting little story that I've got for one of the organisations that I'm currently working for. It's a large sugar manufacturer and they explained their problem to me when we were doing a a warehouse optimisation review. It's quite interesting. They are. Their challenge was changing their manufacturing process. So as we went into this sort of Covid-19 pandemic, the challenge was going from sort of food service, which was supplying restaurants to changing their bag size, changing their consumers are changing their products to consumer products because everybody started to bake. So everybody got a everyone's making biscuits. So their challenge was going from a 25 kilo bag or a large sort of a large a large container to a small consumer units. So that shifted that production was the same, but they needed to manage their supply chain different channels to market different customers. So that's that, I think is really sort of depicts one of the key challenges in, say, the food and beverage market. But I mean, you can jump to the aerospace and defence space and aftermarket. We see these pictures of large numbers of planes on the ground and that that spaces are slowed dramatically. The supply of spare parts, aeroplanes aren't flying. So depending on the industry you're in. I think there's some very different, different challenges and different situations that people are having to deal with.

Tom Raftery: 5:39

Yeah, I was I was speaking to an executive from Cascade's who are a paper and toilet paper company. And we saw at the start of the pandemic the shortages of toilet paper, for example. And one of the reasons wasn't that there was a huge increase in the demand for toilet paper. It was, to your point, a shift in where the demand was coming from. So things like hotels stopped requiring toilet paper because people stopped going to hotels, whereas people and businesses as well, because people were not working from home. So the market shifted from there to to your point, like the sugar to the consumer market. And so the the apparently I learned, the market for toilet paper is very much binary. It is, you know, the consumer space and then the likes of hospitals, hotels, businesses. And there are two very distinct markets. And suddenly the toilet paper company, you know, didn't have this massive spike in demand, but it had a complete shift in where the demand was coming from. So they had challenges to meet that shift in demand rather than an increase in demand, which sounds like what the sugar company had to go through as well. How do you deal with something like that?

Richard Seel: 6:59

I think the challenge is understanding of channels to markets. I mean, they are two different channels, as you say, the consumer and the and the let's call it the hotel or the the larger consumers in that channel with regards to. And they're supplied in different ways. So the consumer is supplied through a supermarket, whereas hotels and things and food service companies are supplied to wholesalers. So a lot of these organisations sort of let's call it the intermediaries, whether it be the supermarkets or the wholesalers, they've got to change their processes. So the host, the wholesalers are struggling. So a very good example is in Boston where one of the wholesalers actually became a consumer supplier. So to get rid of there, they're holding a stock. They actually opened up their their effectively their sales space to consumers. And they were offering. They were packing. They were packing boxes. They were packing sort of consumer sized products to actually sell to the consumer as opposed to saying to the hotels or some of the larger the larger buyers. So it's really trying to understand your channels to market, understanding who your customers are. But then how do you got the systems to be able to support that back channel? And I think that's one of the real challenges, the I.T. challenge. So, I mean, we if we take the Amazons of the world who are absolutely set up to shift things from our electronic websites, from digital platforms, they've got the infrastructure, whether it be a supply chain, right from the warehouse, right through to the last mile, right through to the consumer. They've got that in place. And I think it's organisations such as wholesalers who don't necessarily have that infrastructure to be able to connect to the consumer. So having that and creating that provides the opportunity to access different market or different channels to the market.

Tom Raftery: 9:05

And if you don't have that, how do you get it?

Richard Seel: 9:09

How do you get it? That is a very good question. The IT system implementations always take a long time. They always are. It's something that you can't just switch on instantly. So I think it's I think a lot of organisations are focussing back on the sort of the digital platforms and the digital cause to try and enable themselves will be prepared for this ongoing pandemic or change the way are changing the way the world is going to behave and work over the next year, two years and going well into the future. I mean, I've seen a number of a number of articles where people have said that the change to business has been condensed sort of five years, has been condensed into a year. I don't know if anyone has got any facts to back that up. But it it sounds good. A lot of people are making some very sort of quick decisions to try and to try and set themselves up and prepare themselves for either this ongoing pandemic or into the future.

Tom Raftery: 10:15

I remember seeing a cartoon which became kind of a meme that someone tweeted and it was, you know, who was who led your digital transformation in your company. Was it your... And then there's options to choose from CEO, CTO, CIO. And then the last one with a tick in the box was Covid-19.

Richard Seel: 10:36

Exactly. Exactly. I think I think a lot of things change happens when you're forced to change. A lot of people can sit and debate about change. They can say they can produce business cases, they can produce. All this is backor material to to to initiate such a digital digital change. But then something like this pandemic comes along and things happen very, very quickly and people are able to see through the fog or be able to make decisions very quickly to enable these sort of transformations.

Tom Raftery: 11:10

The head of the CDC yesterday was testifying to Congress and said that it would be late q2 2021 to probably more likely q3 2021 before a vaccine is generally available. So this is not short term. I mean, we've been through it six months already, but by his estimation, we're looking at another 12 months. So if companies haven't started down this digitisation line, they're in trouble.

Richard Seel: 11:42

I think this is going to go on a lot longer. I mean, again, I have not no facts to really back that up, but it just feels that we've sat in it for six months already. And with these current spikes occurring across different different countries around the world or the second sort of ramp up of spikes doesn't feel very different from six months ago. But apart from hopefully people have learnt some lessons and starting to act and act in a way to be able to prepare themselves for the longer term and AI. This could be into the middle of next year, could be into early 2022 before this really sort of settles down. And I think people people are learning to work in a different way. People are learning to how to do things differently. I mean, I used a word the other day with somebody I said I've got a bit of Zoomitis staring at a camera a little bit too much. But I think that is going to be the way things are. We're running. We're running projects. We're starting projects. I mean, companies are still implementing and they're starting projects, but we're doing them remotely. So we're working remotely on with workshops and and been implementing solutions without being on site, which used to be the norm. Everybody got on a plane every week in the US that is. I mean, across Europe, went to the project site, delivered the project and return home. I think people are now working, finding more comfortable and starting to learn how to work remotely and deliver these projects. So I think I think the risk is reducing in people and being able to understand how to deliver these things more remotely. So I think I think the world is going to need to adapt and is adapting to to be able to deliver these solutions, these digital solutions to support this new ways of working.

Tom Raftery: 13:38

What about manufacturing organisations? Because the requirements for physical distancing for manufacturers is going to be problematic?

Richard Seel: 14:21

Yes, I think that is a number of organisations have had challenges, especially in the US, where there'd been manufacturing products and they've had large numbers of people very close together, especially sort of in the chill chain side of things and the meat producing manufacturing. Asians and there's been large outbreaks of Covid-19 within that organisation. So I think I think there's a lot of thought needs to go into how you reorganise and position your manufacturing. Let's call it work cells or manufacturing production lines in a way to try and keep people socially distanced. I mean, one of the one of the discussions I've had with a colleague is how we actually when we're talking about warehousing, how can we actually keep people separated within a warehouse and how they can actually pick things. And in a way, the same way as some of the supermarkets are organising themselves with arrows down. So the one food aisle and coming back the other, you organise your warehouse in a way that your your solution, your warehouse solution supports a sort of a social distancing and allows people to work in particular areas of the warehouse and make sure that people only go down one direction of an aisle. So using the technology to try and help keep people socially distance within a warehouse and again, by changing some of the physical layout, potentially in a manufacturing environment to help keep people keep separated. I mean, one of the one of the things we've done within Delaware, we've pulled together an app which allows us to book desks. It allows us to track who is at that desk. It allows us to make it ensures is a level of social distancing within the office to try and get people back into the office. So we're using that technology to try and encourage people back into the office. But keeping people socially distant or socially separated within the office and keeping a track and a log of who's been where. So if anything does happen, we can go back to the history and try and understand who was doing what and when, where and how.

Tom Raftery: 16:41

All these measures in manufacturing facilities. In warehouses. Even in your own offices that you referred to there, they're going to... they have to, by definition, lead to increased costs, in some cases in manufacturing and even in warehouses, they might lead to reduced productivity. Does this mean that we're looking at an increase in cost of living consequently?

Richard Seel: 17:06

I think that will bareness an element of cost increase initially. But again, it's it's similar to the challenge with the toilet paper moving from one channel to another channel. This is moving money from one space to another. Are people going to be travelling less, therefore not spending so much money in one space? But then money is used in other places to invest in technologies and solutions that allow people to work more effectively. But I. I generally think there will be an element of cost inflation within the businesses. But again, introducing new technologies such as warehouse technologies, there is an element of functionality in there that supports and allows you to to optimise things. But again, may not be people who might start introducing technology such as autonomous robots, CoBots, collaborative robots, robots. I work with people you start introducing other technologies to to offset the cost. Again, that may not may reduce the number of people required to work in those locations as well. I mean, to use one example sort of. Is 3-D a sort of 3D manufacturing gonna become more sort of prevalent in bringing manufacturing closer to the consumer? So I think this will drive more than just change of people and how they work. And I think this will be a real opportunity for beyond sort of let's call it ERP systems. The technology that sits around those, I think is going to be a it's going to be a lot more a lot more common. And I think people will be prepared to to invest in those technologies and prepared to take a risk to to use those technologies.

Tom Raftery: 19:08

Ok, superb. To get off this topic of Covid for a minute, we also mentioned at the start Brexit the horrible B word. And to avoid any political conversations about it. But it is going to have a huge impact on organisations in Europe and in the US as well, because, you know, trade deals, et cetera, will need to be negotiated and new ways of transacting codified are you seeing any implications of that so far.

Richard Seel: 19:42

I think Brexit has been put in the top drawer for a period of time. While this this pandemic has been going on and I think only recently as sort of deadlines are looming. People are starting to take this seriously. But on the other hand, I think hopefully some of the pandemic experience has been a dry run for some of the challenges. We're going to see if there's no deal signed between the UK and Europe. But, I mean, you've got to mix this all in, as you just said. I think there's a geopolitical challenge going on as the US China trade talks Brexit. Pandemic, the pandemic. You're mixing in huge amounts of unknown into the pot. And I think all people can do is try and I think take some of the lessons from the last six months and apply them to their businesses. I mean, it's about a sustainable supply chain. I mean, are they looking at how they direct the supply chain, how they ensure that products can come in? I mean, I think there will be challenges that could be physical disruptions at the border. There could be increased tariffs. There could be a challenge with the pound weakening. I mean, the pound started to strengthen over the last sort of few months, but I think it could potentially weaken again. So I think there's going to be a lot of challenges that people are going to have to deal with. And they could coincide with, let's call it a second wave or a real challenge has been predicted through the winter with with Covid-19. So, again, all these things mixing together create more challenges and more disruption, the opportunity for more disruption. But hopefully people have started to to work in a new way and are adaptable to these challenges.

Tom Raftery: 21:41

We are coming up on the 20 minute mark now, Richard, which is, you know, by the time we wind the podcast down. Is there anything that I haven't asked you that you think I should? Is there any topic we've not covered off that you think it's important for people to be aware of?

Richard Seel: 21:57

Yeah, I think one of the my sort of recent discussions with a number of people is about the sort of the localisation or the near shoring of manufacturing. Will that happen? There are a lot of articles out in the ad in the press about people talking about manufacturing, returning to there to the US, returning to the UK. I mean, you hear here the leaders of both the UK and the US are sort of encouraging that behaviour. My question is, is it going to happen? I mean, I was talking with a colleague of mine, and he was he was explaining the sort of is there an option to say, nearshore 20 percent of your manufacturing and keep 80 percent offshore and make sure that capacity in there is capacity in that 20 percent to to ramp up very quickly, if need be. So you can scale in the event of pandemics, in the event of geopolitical sort of challenges. So it's it's where and how you do do reorganise your supply chain. Do you understand right through the sort of the hierarchy? I mean, a lot of organisations understand sort of Tier one and tier two suppliers. Do you really understand three, four, five. And do you understand, though, you may be mitigating your risk at the sort of the top and buying from a number of suppliers? Are those suppliers, suppliers, suppliers buying from the same supplier in China? Plastic pellets, for example, so do organisations, though they think they're mitigating risk at the top end by diversifying their supply, their suppliers, are they ending up or do they understand where the source right down the supply chain is? So I think there's a lot of a lot of questions to be asked about where you position your manufacturing and understanding of supply chain that need to be asked as we are as we move forward in whether it be pandemic environments or the geopolitical Brexit, China, US trade talks.

Tom Raftery: 24:09

Super, super, Richard if people want to know more about yourself or about Delaware or about any of the topics we've discussed today. Where would you help me direct them?

Richard Seel: 24:22

The first place is my LinkedIn. I welcome any connection with anyone interested in the Supply chain? That's Richard Seel, so I've got a number of articles on there which I've published on these topics that I've talked about today. Or alternatively, you can go to the Delaware Consulting dot com, which is our Web site, and there's a lot of Web pages, a lot of information about all the different solutions and the products that we provide in the SAP space, whether it be in Supply chain, whether it be in planning, warehousing there's a great deal of content there of interest and a lot of points of connexion as well into our organisation of experts. I can provide opinions and insights into those areas.

Tom Raftery: 25:16

Fantastic, fantastic. Richard, that's been great. Thanks a million for coming on the show today.

Richard Seel: 25:20

Absolutely. It's a pleasure, I've enjoyed it very much. Thanks, Tom.

Tom Raftery: 25:25

OK, 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 dot com slash digital supply chain. Or simply drop me an email to Tom Dot Raftery at SAP dot com. If you liked the show, please don't forget to subscribe to it in your podcast application of choice 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 the show. Thanks. Catch you all next time.