Navigating the ‘Amazon Effect’ in Food Logistics | Episode 50

Hey, everybody. Thanks for joining us for another Banyan Technology’s Tire Tracks podcast. I'm here with a special guest, Jordan Pearman. How you doing, Jordan?

Doing pretty great, Patrick. How are you?

I'm doing awesome. Jordan is the VP of Supply Chain over at Skidmore Sales & Distribution. If I didn't know you for the past three years, I would assume, Skidmore sells tires for burnout competitions. Is that accurate?

Not quite. Skidmore is actually one of the largest food ingredient distributors in the country. We just celebrated 60 years. We're a family-owned business. Doug Skidmore, our owner and our namesake does not sell tires, but we sure move a lot of food product.

It's not for just the sheer amount of skids that you have coming in and out. That's right, more skids.

I like that approach better.

No, as you can tell, I'm clearly a comedian here, that's why no one pays me to do it. But, yes, Jordan, so in your rise to VP of Supply Chains and Operations, is that where – tell me about yourself within logistics and how you got to either A, where'd you get the itch as a lot of people I talked to, it's not where they started, but somewhere along the lines of like, "Man, this is all I think about. How'd you get into logistics in the first place?

By accident. So, my background before Skidmore was heavier in manufacturing. I tell people that I used to do a lot of manufacturing and a little distribution, and now, I do a lot of distribution and a little manufacturing. Skidmore being a distributor, logistics is core to our business and at a scale, actually, that a manufacturing company, you don't typically have. So, that's how I got into logistics business and I've been lucky. Skidmore has an amazing team of people that have expert level industry knowledge, and they've been doing this a long time. Because, like I said, we've been at this for 60 years, and getting freight to our customers is the core of what we do every day.

Well, you look great for 60 years in that, and no, you've got better hair than I do. But within that, and I know you haven't been in the full 60, but what makes you passionate about the distribution, the whole logistics supply chain process? What keeps coming you back day in and day out and coming up with either new ideas of how to do it better? What makes you love this? Because you wouldn't be doing it as long as you have if you didn't.

Sure. First of all, I love the food industry. The food industry is a lot of fun. I don't know for a fact, but I would be shocked if you don't have something in your house that has an ingredient out of one of our warehouses. We make and touch stuff that we eat, our kids eat, get shipped all over the country, goes into some of the biggest food brands in the country and in the world. And we also get to serve local restaurants ,and pizza shops, and things like that that have a Cincinnati presence. So, I love the food industry first and foremost. And logistics in the food industry is pretty simple. Everybody has to get exactly what they want when they want it, and it has to show up how they expected to get it.

It sounds so simple. As soon as you said simple, I'm like, "Where is he going with this?" Because I think food is not that.

So, it is a little different. Food is all about the cheapest freight. It's about the best value freight. Our customers want what they want when they need, and it needs to show up to spotless. There's a lot of regulations around shipping food. And all food companies have a lot of internal programs and policies to just keep our food safe and keep our supply chain intact, so that everybody gets yummy stuff for their pantry.

As we're talking about that, as you mentioned, that probably creates quite a few challenges outside of anything logistic, but with food particularly, like you said, safe, getting it done right, and on time. Some of those are in everything. What challenges has Skidmore within the supply chain or even just industry-wide? What are some of the biggest challenges that you see from getting things from point A to point B, as you said, spotless, and on time.

Two things. One is always going to be damaged for us. A lot of food product starts in 50-pound paper bags, and they like to get torn on LTL cross docks. So, if we ship something LTL, which we ship a lot of, the damage rate tends to be high because it's not exactly fragile freight. But if you rub it with a fork truck, it's going to break open.

That's a nice little in between. You're not quite China and glass, but at the same time can't have it spewed over the dock.

Yes. The others, I call the Amazon effect. People want to be able to see exactly where their stuff is at all times, and it creates a pretty interesting problem for the industry. Because to be able to do that, and do it well, you have to get a whole bunch of carriers who aren't going to want to, to do a whole bunch of things and some electronic forms that you can track down to the pallet. And it's a topic that keeps coming up because the younger generation that's entering supply chain positions and our customers in all industries, that's what you're used to.

Yes, and to that point, what they're used to in the younger generation. Looking back, before we got into a lot of this automation, and where everything is, and it's just had the Amazon effect, how, how long ago, and was Skidmore doing things manually when you got there from a logistics and execution standpoint, or has automation been a part of Skidmore's for even before you got there?

For our size, we are very technologically advanced. I've only been at Skidmore three years and a lot of the automation in the ERP system we use was put in several years prior to me getting here. We implemented Banyan and connected it to our ERP, I believe about a year or two before I started. I remember when I interviewed here, and they explained to me some of the things that we do, I thought, "Oh my gosh. Where's this been my whole life?" Things like, well, things like our ability to manage freight at the individual level. Everyone at Skidmore can book a load and manage it, because we have Banyan connected and integrated to our ERP.

That's not something that was in the other lives you lived that was out there. Because, and again, I'm, I'm skewed because my logistics world basically starts with Banyan. So, I have this weird assumption that everybody's got something like this. And the more I talk to people, like, "No, man, that is not how it is across the board." If not everybody could do it before and they didn't have tools, what are some of the big pain points in your life before this at Skidmore with the automation? Where were the big hiccups?

 It's usually around communicating. So, if there's a problem, if there's a freight bill that's off, if there's a load stuck somewhere, even if there's a truck broken down, all that communication, and a lot of organizations funnels through some type of team, some type of logistics team. For us, we can have any of our customer service reps, any of our buyers who are purchasing freight for inbound material. They see every single thing about that load at the touch of a button. They see it in their native work screens, in our ERP. So, if a customer calls, one of our customer service reps can very, very quickly see where their freight is.

I mean, is it an oversimplification to say that having a system built into an ERP solves it all right there or is their nuance to that. What goes in? Is it just, "Hey, as long as the systems are talking to each other, you're good"? Or there's got to be more to it than that, I would assume.

Yes, I think for us, the difference is that, because it's very democratized, that we have a whole lot of people that can touch it. So, you're taking something that could be a lot of work for a small team, you're spreading it out over a whole a lot of people, dozens of people for us. So, being able to have knowledgeable people, touch it, check on it, answer a question for a customer, it decreases our response time to that customer.

I guess that would, that democratization would also kind of help with the scalability, right? If you have all hands on deck, then, everybody knows how and what to do. Then, when all of a sudden, you have more to do than you did the month before, the year before. You're not trying to find more people, you have the pool of resources right there.

Yes. So, instead of having a logistics team that's dedicated to nothing but managing loads, we have a logistics team that any one of the dozens of people who book freight at Skidmore can escalate issues too. So, I'm able to use less people to solve more problems because there are just lots of hands booking, and managing, and watching freight at Skidmore. Traditionally, where you'd have just a handful of people doing the booking, your handful of people are putting out fires, and/or, if there's something that's of real importance that someone needs help with, they're like a response team almost.

Yes.

Okay. How did that come about? Is that something you put in place or something that as a team happen? Where do you get that democratic logistics operation? Where does that mindset come from?

Well, I didn't make it that way. It was largely that way when I started working at Skidmore and we continually try to enhance it. But what drives it is just speed of information to the customer. So, if a customer calls and we don't have an answer, that's a cardinal sin to us, distributor. So, it puts us in a precarious position, and that we have to answer questions that involve information from suppliers, information from carriers. So, if we can't answer a question, that just doesn't look good. We want to be able to solve our customer's problems. It's one of our core values. So, when they call us, and we can't solve their freight problem or tell them where tell them where their load's at, it's completely driven by our customer focus as an organization.

Now, as we talked about what the systems allow and I love this democratic logistics process. Are there rules for carrier selection or is it all – everybody makes a decision? How does that control? Because I know that's generally what a lot of logistics teams or executives are spending a lot of time on either – back in the day when it was manual, you'd have an RFP you lived by. But with technology, it seems it might change much more day to day. How is that handled in Skidmore?

Well, using some tools from Banyan, our folks who are booking freight are able to do, you know, just things that provide more value. Like, we have a waterfall to tender loads. We can check multi-mode shipping costs. A lot of our freight is not exactly the sweet spot for an LTL carrier. It might be four or five pallets and weight 15,000 –  wouldn't move if it was four or five pallets, but –

Don't worry, I won't do math. I know it' 11, but it's too early for math for me.

Yes, the LTL carriers and dimensionalizers are wrong.

Somebody will, don't worry. You won't have to.

The freight that a lot of our customers want is going to be a handful of pallets and that's not necessarily what an LTL carrier wants. So, you know, we have the ability to do things like quickly check if we've got 12 pallet load, if it's actually cheaper to ship it on a full, dedicated truck. Our waterfall tendering is very effective. We load in all of our tariffs, we give them to you guys. Then, when we look at a lane, there's a waterfall that happens, so that we're getting the lowest cost for that lane. Some of the value is already built in because we're loading tariffs with customers that we have relationships with. We use for a very long time. Some of the carriers we've been using since Skidmore existed.

Yes, I was going to say, how do you maintain those relationships with the carriers that you've had since Skidmore has existed while wanting to continuously, what I would assume, have a big pool of carriers at the ready? How do you balance that?

We absolutely bid things out for truckloads. That's kind of the easy way, because it is a full truckload. With LTL carriers, because I have access to a lot of information in Banyan, I can analyze that information, pull it out, put it in spreadsheets. I can tell carriers where they're strong. I can tell carriers where they're not. I can tell carriers where they're losing loads over pennies.

Do they like that or does it feel like you're interrogating them or bringing them into to detention back in third grade?

No, it's nothing like that. I'm actually providing them information they'd never be able to get.

Okay.

So, I don't do it in a way where we're violating confidentiality in what one carrier is charging us versus another. But we can help carriers understand where they're gaining and losing freight with us. Really, we tie a lot of it to damage rate, so I can see what we're paying for every LTL load, and then, what the damage rate for that carrier is. So, that creates a lot of conversation that we use to maintain relationships with the largest carriers we use.

That makes sense because you talked about it earlier is that, you go for the most value within that versus where I would assume that a lot of, especially, LTL carriers would come in and just be talking about cost. But for you, value doesn't necessarily equal cost.

No. I mean, look, the LTL market is very saturated. There's a lot of LTL carriers. And if you go ask 10 of them to give you their best price, it's going to be pretty similar. Well, I'd rather spend five extra bucks or 20 extra bucks and know that it was getting my customer perfect.

It's interesting because, and maybe it's because COVID hit us so hard at one point that it was, cost went up, cost, it was hard to get. But then, more and more I've talked to people, cost isn't everything whereas it used to be before, and I don't know. Do you think that is just due to the more savvy of a shipper of knowing the customer base? Or is it something that the Amazon that goes in the face of the Amazon effect? Where does that play, where, on one hand, I want everything next day as cheap as possible, and the other hand, I want it to be quality and done right? How do you balance those in a current logistics space?

It's in our form, not a science. It's something that AI and robots probably never going to be able to do first perfectly.

Good, as long as there's some room for you and I, and whoever your

unicorn friend is in the back. Then, you know.

That's cupcake. I wear cupcake on Dunk Your Boss Day here at Skidmore.

So, when is the next Dunk Your Boss Day? Because we might need to film that for like a podcast opening or something.

We can do that. I will definitely send you the invite.

I like that. Is that a once a year or just depends on how annoying your democratic team is with you?

Once a year, we do it as a fundraiser, and if you're a manager of people, you're getting dunked.

I like it. I definitely want to – I want to be. If I can't be there, I want to see a clip of this. I like that a lot. You mentioned AI, and this is good. I know we've had conversation without going into that depth here for everybody that is listening or watching. Where do you see the future of some of these pieces you already have in place, and then, you've got technology like AI, and robots. Where does that take Skidmore into the future?

Yes, I think for us, in particular, using more and more robotic process automation is in our future. We have some capabilities we're building in-house to try to be able to develop some of that automation ourselves, being able to connect with Banyan. We're talking about full API connectivity where we can feed information back and forth in real time. So, on the process automation side, I think that because Banyan being a technology company that happens to do TMS, that there's a lot of opportunity for us to move information back and forth that we can use to make decisions.

In terms of AI making those decisions, I think the jury is still out. So, we'll see who gets there first and how they get there, and if it actually is making decisions versus AI tools that enhance our decision-making ability. I definitely think that AI giving us tools to make decisions quicker and better is on the horizon. It's things like being able to tell us if we're going to book a load, the best value freight at a given time based on live load data. Things like that people are tinkering on, I definitely think it'll be part of Skidmore's future. I don't see anything yet that tells me, anybody's really got it figured out.

Yes. And if they did tell you that, I think that you'd have to really question that, just because it's, it's really – I mean, as far as sure, AI has been around for a little bit, the machine learning. But putting into application without guardrails is something that is still very fresh, I think. Like you said, making the full decision without checking in with any real live human, and then, there being trucks and goods attached to that. You'd probably want a few tests runs in a few years of probably some samples before you went full. all into that. No, that's a great point.

I wanted to ask you something. This is may be more on your personality, just because I know you. You seem to be very trustworthy of your team below you. I'm not saying that every executive isn't. You seem more comfortable to allow delegation and decisions. How do you get to that point to trust your team with getting the things done and just calling you when they need it in a logistics and supply chain perspective? How are you not secretly pulling put your hair, going, "Man, I hope they get this right."? I mean, that's why my hair is gone. But where does that come from, from just a leadership perspective while I'm talking to you?

Well, like Banyan, we are an EOS company, and simply put, we have the right people in the right seats. Skidmore's culture, we have an award-winning culture. We're winning national workplaces awards. Currently –

Congratulations, and that doesn't surprise me.

We really have a unicorn of a culture. If you walk around Skidmore, you're not going to see anybody that doesn't want to be here today. So, because we have the right people with the right knowledge in the right places, we're able to democratize information for freight and booking freight, and answering questions for customers. Because we have the right people and the right places, no, we don't have to worry about people making the wrong decision. And when they do, people here feel comfortable to bring it up so that we can learn from it.

Okay. No, that's key, because I'll tell you, you are one to – when we talk, you're not one to grab the conversation. You let those people you work with talk on your behalf. I think that that is very telling of the team you guys have and how much you all look at doing your jobs from a very professional level. From our conversations up to this point, I want to give you a kudos for that, because I know you won't actually take credit. So, I wanted to take this opportunity to give you some.

The reality, Patrick, is that, the folks here at Skidmore have booked a heck of a lot more freight and managed a heck of a lot more freight than you and I ever will.

And speaking of that, within, we talked about booking it on the flip side, invoicing with technology and automation. It's still painful. How does Skidmore get around some of the pain with the invoicing within those electronic systems? How does that play into it? I know that that's one of the ones that probably isn't going away with the disputes, and the re-wills and re-weights. What is it that's not accurate, but we won't tell anybody? Dimensionalizers. How does that play into your operation? Has that become a bump that you have to go over every time, or have you found a way in process to smooth that out?

So, we've smoothed it out, but I won't say it's smooth. I won't say it's not painful, it is. It's very tedious. It's a lot of very detailed work. It's a lot of communicating back and forth with carriers that don't want to admit that they're wrong. So, we've spent a couple of years just very, very methodically in every single lane we have correcting things like accessorials. We correct them, we give that information to Banyan, so that as loads were booked, that would have something that would trigger an auditing issue. We're correcting them. I don't have the exact numbers in front of me, but today versus two years ago when we started all those corrections, the workload is probably down 90%.

Okay.

But we still do it.

Sure.

And we still get through the work, and we still go through the effort every week. It's probably one of those things that's like a little bit like an email inbox. If you're away for a week and you don't clean it up, then you're always playing catch up. But if you take the time to clean it up, it's easier to stay over those one or two emails that come in each time.

Exactly.

Two years ago, it was probably a lot of work. And then, you got to a point where it cleaned up. Like you said, if you let your guard down a little bit, you're going to get piled up and not know where everything is again.

Sure, and it exploits a luxury we have, and that most of our customers aren't moving their ginormous food plants around every day. So, we tend to ship a lot of stuff to the same locations over long periods of time, and we tend to have great carrier relationships. So, in lanes where a carrier is strong, we can correct things like assessorials, give that information to Banyan, and we fix the error from happening again.

When you say that, like the great point that they're not moving, but you're also hitting 35 plus states. Does a lot change in how you're operating with each of those different, whether it's a client or a partner within that? Or is it all fairly similar, or is it a different kind of rulebook everybody you work with?

For us, particularly, we have about 23 warehouses across the country and our main one here in Cincinnati. We strive to make it the same every time, because if it's not standardized, it makes it real hard to keep repeatable service levels to the customer. We have amazing and industry leading service levels, and we use Banyan and freight to keep it that way. So, for us to interact with any of or outside partners or outside locations, we handle it the same way. There's going to be someone at Skidmore that is going to book and manage that freight.

That makes a lot of sense. Obviously, there's going to be some variance, but as much as you can standardize that, the more benefit you're going to get out of that for yourself and for the client's sake. Now, without spilling any secret sauce or anything, I know that between our talks, Skidmore has made some pivots and changes in the years after, I'll say COVID, but within the past four years. Can you speak to any of that? Like I said, without giving the secret sauce where you've made some changes or looked at what you can, what you do today, what you could do to give yourself a new edge or find revenue somewhere else. What did that look like? I said, it's up to you it to talk about it as much detail as you want.

Post-COVID, we put a lot of effort into using data, which we get from Banyan.

He gets paid $5 bill every time he says Banyan, so I'll just put that out there, full disclosure.

Oh, $10, Patrick.

Whoa, whoa, whoa. I can't afford that. I don't even have a blow-up unicorn. All right, go on.

We did a lot of work with just the data that we have. That data is valuable, and it can help us answer questions. and it can point us in directions we didn't see. We spent a good amount of time and expended a good amount of resources to just be better at where we put stuff, be able to optimize geographic location of products, the amount of product we're bringing in to certain places. So, again, without giving any secret sauce away, we use –

Which you probably sell, you probably make the secret sauce and distribute it, specifically, not just the, the reference we're making right now. There's somewhere in the Skidmore warehouse is the, the ingredients for the secret sauce, right?

At least part of them, yes. We sure hope so, anyway, that's why we're here.

You got the data that says so. That's I think very telling, because like you said, Skidmore has been around 60 years, but it's not like you guys are operating like a 60-year-old company that's stuck in the past. This adaptation of technology and the use of data is huge and has to be, I mean, at least a good portion good portion of why Skidmore is as successful as it is. Where do you go from here? Again, I don't need to know your next quarter goals, but what's the next year and a half look like within? Do you jump into more technology? Do you try to flip over some other stones? What does it look like for the future for you, Jordan, your team. and for Skidmore?

I think, for us as a team, connectivity is on the top of our minds, just building bigger and better connectivity, just like we have with Banyan, but with everybody we do business with. I think that that connectivity is the thing that will be needed if there's ever any AI to work.

Okay, makes a lot of sense. So, that's something that we keep at the forefront of our minds. I think for Skidmore in particular, look., we're here because we solve problems for our customers. So, where we go is going to depend on the problem that comes in the door tomorrow.

Hey, I love it. It's always a pleasure talking to you, Jordan. But as we're kind of drawn to a near here, because I can only think of so many intelligent questions and comments to make within any given time, here's my opportunity to you. What do you have to say to anybody listening and watching, whether it's from a personal standpoint, a Skidmore, or logistics. Use the platform for whatever it is, and step on the soapbox. What do you got?

Boy, that's a tough one.

I'll leave it vague, just to make it really anxiety-inducing.

Yes. So, I would just say that, we've been successful serving customers with freight solutions, supply chain solutions, and managing their shipments because we've been able to build a great partnership with Banyan. Banyan is supply chain. So, that partnership is critical to our ability to get product all across the country every single day. Just for anybody listening, that would be the advice I would give them. Build great partnerships with people who align with your values. That way, you can best execute for your customer.

Hey, that was very well put, and I literally have Banyan is supply chain. I'll be going over to marketing right after this, and that may be our new logo moving forward, maybe with a cartoon picture of your face right next to it. No, but –

Please use the unicorn, not my face.

I think we can find a combination of the two, it'll be great. No, Jordan, this has been awesome talking to you and getting your insight. I know Skidmore has done great things, will continue to do great things. For everybody listening, like you said very biasly, Banyan is supply chain. But if you're in the food industry at all, and you don't know Skidmore, you need to know Skidmore, and I'll put that out there.

Jordan, where do they go to find out about you? I'm sure you got a website. You're going to come to people's houses. What the best way for someone to get in touch with Skidmore if they want to find out more about you or do business with you.

First of all, you can Google my name and reach out to me on LinkedIn. We have a web and LinkedIn presence. Our industry is a fairly tight-knit community. So, there's probably not a whole lot of food companies that haven't heard of us, or at least, I'd like to think so. But I'm about to go ask the marketing team to make sure.

That sounds good. So, as Jordan and I go both and harass our marketing team, I want to thank everybody for watching and listening. Jordan, I want to thank you again for feeding me all of your insights. And again, I'll get that Banyan money to you in the side, in a gift card, or I'll just have it in coins for when you get dunked, and you can grab those from the bottom of the pool.

You take it off of my contract renewal, Patrick.

That sounds good. That sounds perfect. Jordan, thank you so much for everybody else watching. I hope you got some enjoyment out of this. Thanks for watching. Subscribe, like, engage, all of the things that everybody says at the end of these. But thank you for watching another Banyan Technology's Tire Tracks podcast. I'm Patrick Escolas, and I love doing these, and see you on the next one. Thanks, Jordan.

Thank you, Patrick.