The Future of Supply Chain with
Doug Draper of Inland Star

Transcript

Evan: Doug, I appreciate you talking to me today. Could you share a little bit about yourself, your background, and maybe dive into Inland Star and your role there?
 

Doug: So, my name is Doug Draper. I'm with Inland Star Distribution, and I've been in the logistics and supply chain world for close to 25 years. Started in the small parcel world with a company called Airborne Express. Some of the listeners may have heard of that company way back in the day. Then moved into freight forwarding, and the last 15 years or so, I've been on the warehousing side of the supply chain.

Evan: So, how have you seen the industry change both from the start of your career but also just in the past 4 or 5 years?
 

Doug: I would say speed. Things just move so much faster nowadays than they used to. The other thing is client expectations of what they want when they want it, and creativity and cutting-edge approaches to problem-solving. Those are a couple of the key things I've seen most dramatically. We could get into details of all those, but as far as the large brushstroke, those would be a couple of the key things I've seen in my career.

Evan: So, what are some of the things that Inland Star is doing to meet and exceed those customer expectations?
 

Doug: Yeah, so I'll answer that with one word, and then we can expand upon it, but: listen. I think that there's so many bells and whistles out there, and technology and service offerings that sometimes companies come in and just regurgitate all this cool stuff that their company is involved with or a benefit and a feature that's out there. And so we've kind of slowed down a little bit and listened—like what is the underlying problem you're trying to solve? What does success look like? And ask open-ended questions and then figure out what their problems are. And then go to those features and benefits of some of the technology and offerings. But the bottom line to answer your question is we prefer to listen out of the gate and kind of see how the conversation goes from there.

Evan: No, I love that. It's getting back to basics. I feel like there's a lot of talk in the industry on AI and technology and this is happening over here and this is happening over there. But sometimes all it comes down to is just nailing the fundamentals—what are we trying to solve for in the first place instead of jumping to the big shiny bell and whistle.
 

Doug: Yeah. Agreed. 100%.

Evan: So, I see that Inland Star's motto is "do it right." What does that mean to you specifically? What does that mean for the team? How do you live that out every day?
 

Doug: Yeah. It came about many years ago with our president and CEO, Michael O'Donnell. And it seems so simple, right? And you can do it right if you assume a task, take responsibility, and do it completely to a high standard. And we take that approach with our customers, with our vendors, with our employees. And even the self, so to speak, right? Not to get too namaste on that question, but it's really a mindset and an attitude to do it right in your life, supporting the customers, and taking care of the company and the members of our team.

Evan: I mean, it sounds like accountability is a pretty big piece of Inland Star and the culture you've built there. So, what are some of the pieces that you do, both from a customer standpoint or internal employee standpoint, to make sure that everyone's rowing the boat in the same direction, accountable to a standard, just doing things the Inland Star way?
 

Doug: Our company is an ESOP, which stands for Employee Stock Ownership Plan. Everybody in the organization is an owner. Obviously, we have a CEO and a president and a leadership team that guides. But that is an underlying baseline that I think is a little unique. Everybody's an owner, right? And so, if you stay a few minutes longer to accomplish this goal, we may not need to hire more people to accomplish it. We may be able to save some money, and that benefits the bottom line. So, that baseline really helps with that approach, and it works. I mean, Evan, to be frank with you, I wasn't a believer. And I'm like, "Ah, ESOP, it's a funny name and an acronym or whatever," but being in the organization for the time that I've had, it is genuine. People really care, which goes along with the do-it-right attitude. If I do this right and I advocate for myself, my company, and my customers, I'm going to have a successful career. I'm going to feel empowered. And I'm going to be part of the solution, not just an employee cashing a paycheck every two weeks. So I think that underlying premise of the ESOP of our organization has really set us apart.

Evan: Yeah, and I think I hear a lot, going back to the pre-COVID/post-COVID world, that everyone talks about post-COVID talent seems to be harder to find and retain. And I mean, it sounds like what you've done at Inland Star is a system to get people to buy in because it's theirs, right? They're owners. Accountability and ownership kind of go hand in hand at Inland Star, which I think is an interesting take on how do you get people motivated every day to wake up and do the best job they can possibly do.
 

Doug: Yeah, it's really cool to see out there, right? I mean, there's always opportunities to say, "I'm a forklift operator or material handler, or I'm an order picker on the floor." And Amazon or another big box retailer down the street—you know, I could make a couple dollars more per hour, but being the ESOP and the support that the company provides around our owners really shows it's like, "Hey, am I going to chase a dollar or two, or am I going to stay and work hard and reap the benefits both professionally and financially?" So it truly is a differentiator. I'm a firm believer in that.

Evan: Yeah, absolutely. And we kind of alluded to it earlier when we talked about AI and technology. I'm curious, both from your personal standpoint—you have your own podcast in the space and you see a lot of different things in the logistics industry over the years—and also from Inland Star's perspective. But what do you see as the role of AI and technology in logistics, warehousing, and supply chain today?
 

Doug: So, my personal take on AI is it's a huge buzzword right now. There's so many companies coming out with AI this and AI that and this solution can solve that problem. It's a very noisy space right now, and it's difficult for companies and even individuals to figure out what is valuable, what isn't valuable, what's going to stick. Trying to figure out what is valuable and what isn't I think is one of the biggest challenges right now. I mean, just every other day, there's some new AI feature or something going on, and it's like, "Well, what does that actually do again? I'm not sure how that's going to help me pick a box and have an accurate order go out the door from a warehousing perspective," right? So that's the kind of the high-level thing. But specific to warehousing in Inland Star, artificial intelligence is allowing us to do data. And that's one of the reasons that we've partnered with OneTrack over the years is that data is empowering. And artificial intelligence can generate that much quicker, which means you can respond more quickly as well, but more accurately. So you can provide a solution. And some of the things that we're working on with your company and have implemented for several years is a testament to that. One tangible example is partnering with you and the visibility and the safety element that you've given our company and our individual employees.

Evan: Yeah, I think there's a lot of stuff going on in the space. A lot of noise. A lot of, quite frankly, I hate to say it, but a lot of vendors that maybe don't fulfill the promises they make to people. There's a lot of slick marketing and sales going on out there, but it really comes back to what are the problems we're trying to solve. How is the best way to solve that problem? And I think, to your point, what we kind of talk about at OneTrack is that starts with visibility. You can't solve problems you can't see. You can't manage what you don't measure. So let's figure out a way to bring visibility to operations and give you the data to better manage the problems in your own business because I think every 3PL is different. Every warehouse is different, even in its own network. So I think that's a really key point you made there—there's just a lot going on out there, and you've got to find the right solution for you.
 

Doug: Absolutely. You know, being a sales guy, sometimes I overlook the impact of data. We have some engineers in our organization that always steers me back to say, "Hey, well, let's look at what the data is saying so we can make the right decisions." And the AI aspect, specific to the safety features and the productivity you are giving to us, has been phenomenal.

Evan: And we've been partnering with Inland Star for a few years now. So, what was it that initially brought Inland Star to OneTrack? What was that problem you were trying to solve, or what was the kind of impetus of now is the time to look at one of the AI technologies out in the space?
 

Doug: Yeah, great question. And the big lights on the billboard—safety, right? And I'm sure that that's what you hear a lot about. Inland Star is a very compliant organization. We've been around for 40 years, and our legacy business was really supporting the ag industry. And that's related to chemicals and things of that nature. So, compliance and safety are huge. And so when we were introduced to your group a couple years ago, what a great opportunity to engage and see what our operators are doing in the warehouse and what that's evolved into. And I'm sure this is very similar to experiences that you've seen, is that we need to see what's going on in the warehouse so we can be compliant and safe. And the initial feedback from the operators is, "Well, hold on a second here. You're going to be watching me 24 hours a day?" And there's this barrier that pops up immediately to say, "What? I'm not doing anything wrong. Why are you monitoring me?" And it quickly, over time, with looking at the data, analyzing the data, it's really teaching moments and education. And it took a little bit of time for our owners/employees to come full circle on that. But to answer your question, it was all forward-thinking of safety and compliance. And it's really morphed into training and education, and the whole organization has embraced it and understands the power that can bring to all aspects of our company.

Evan: Yeah, I think that's not an atypical story, right? You get those grumblings at first because someone hears AI camera and it's, you know, to your point, it's like, "Well, are you micromanaging me? Are you just wanting to watch me do my moves throughout the day?" And I think it's important that, one, the AI part of that. No one's actually watching these cameras. The only thing that you see is if something goes wrong. And then, more importantly, it's not meant to be punitive. It's not like a gotcha thing. It's how can we work together to find ways to improve so that everyone's safe? I always go back to watching videos like game film. So we talk about the great athletes out in the world of the Brady's and the Mannings and LeBron James and Michael Jordan. I'm sure they were constantly looking at performance and how can we get better? And I think that's really what this brings to the table—is now you have the data, you see what actually happened with video, and now you can see, "Okay, is it something in the warehouse that we need to change? Are the racks too narrow? Does someone not press their horn coming around a corner? And how can we then fix that moving forward?" As opposed to, "Hey, we got you doing something wrong." It's how can we all improve as a kind of a holistic unit?
 

Doug: And it's all about just managing the expectations with the operators and things of that nature. So, 100% agree on that.

Evan: So, what are some of the ways that you think data and visibility helped Inland Star provide better service to customers?
 

Doug: I'll answer that in two ways: internal and external. So, internal is when you have the operators zipping around the warehouse and everything else. I'm just going to give you examples really of this, right? Is the layout of the warehouse—is this corner too tight for a driver to effectively navigate? Are, like you said, the aisles too small, too large? And so, internally, it gives us an opportunity to see the day-to-day activity, how people are using their equipment and using the warehouse, and what can we do to make it safer? What do we need to do to fix it? That gives visibility internally of how we can reset our warehouse, realign the flow of how we move around the building, right? So those are kind of intangible, and those help us become more efficient and safe while we're doing that. And then externally, to the customer, it's like, "Okay, that's cool. How does that really make my world better as a customer?" Right? And one example that we always look at is that loading a truck—if you can turn the truck and get it loaded quicker and keep the wheels turning for the trucker or get the product out the door and make a deadline. It's being recorded the whole time. So, you can show the customer, "Here's what literally transpired when we were operating and loading your truck." And then additionally, this is the time that it took. Here's some things that we could do a little bit differently. And then we've seen a lot more with clients that need to be compliant that are taking pictures of the product. "Hey, I need you to take a picture when you load it a third of the way, two-thirds of the way, fully, when you put the seal on, all that kind of stuff." And that just happens. I mean, yes, it's training, and we have to explain the importance of all that to the drivers, but it's right there on video. And so, when you have clients say, "Hey, I need proof that this transpired because I need to work with my client," all that's there. You're not going back and pulling paper records and, "Oh, this employee is on vacation, and I can't really get the true information." So, just empowering to have that information right there at your fingertips to help the customer provide the things they need for their own customer base. So, internally and externally, we've seen value.

Evan: No, I think that's huge. The load recording piece of it. The best way I heard it said was someone said, "We want to make sure that our customers know that not only the safety in the building but the safety of their product is at the top of our priority list." And I think that's what this helps with is. We're able to show with video, not just a picture of nose, middle, tail, but end-to-end, here's what happened of, "Yeah, we actually loaded this correctly. We put the kickstops in, we put the crossbars, and we put airbags, and we did all the things we were supposed to do. Here's the video proof to show you that we did our job and we did what you expected us to do." It's proactive communication in that sense of, "No one has to go search for it. It's, 'Hey, we want to let you know that your experience is the top of our priority list.'" So, here's this to kind of put your mind at ease. And I think that's been really huge for customers.
 

Doug: Yeah, for sure. And usually, if a customer is asking that question, there's a problem or something that needs to be justified. So, there's a little bit of a stress level where you're like, "I need this data. I need it now. We're not going to get paid unless we provide this information." So, it minimizes the stress, the urgency, the incompleteness of asking the question multiple times or going back. So, that's kind of intangible, but you know, this industry moves with people, right? I mean, there's automation and robotics and stuff, but it's still a human that has to pick up a box and ship it out in most instances. I mean, the whole automation and robotics and warehousing is another podcast for sure, right? But for the most part, a human needs to touch—you can't virtually ship a box. And so, whenever you're trying to clarify, or your customers are trying to clarify, what transpired so I can get the information I need to close out this question or problem. It's amazing with the visibility that OneTrack provides in those situations.

Evan: We might have to have you on later on to talk through all the robotics implications in the warehouse, but that's a podcast for another day. So, what would you say that data-driven operations mean to you and Inland Star?
 

Doug: For me, being on the sales and marketing side, sometimes it's overlooked, you know, "Oh, data is important, but let's close the sale, or let's make sure the customer gets what they need." And so, capturing the data and simplifying it to enable a solution to the customer very quickly. We just talked about a couple of examples of that. So, I think that the data empowers. It provides a proof statement.

Evan: Yeah, I always think data-driven operations. And you can't manage what you don't measure, and you need data to actually measure something. And it's not about getting so lost of like analysis paralysis, getting so lost in the details, but it's really just, "What are the signals that I can look for?" Maybe there's a lot of accidents in this part of my building, or maybe I heard a story of the settings on like a stand-up or a reach truck was set too aggressive, so the g-force was like rocking the operators, and it was causing a lot of stress on the backs. They were actually able to see that just looking at the data and broad strokes and adjust the settings on that equipment. And then a week goes by, and the operators come in like, "Man, what did you guys do? Like, we're feeling a lot better." You don't have to be an engineer to sit there all day and figure out every little nuts and bolts in the data, but at a broad strokes level, you can really see trends and just make sure that things are running smoothly. But again, you have to have the data in the first place to make those better decisions.
 

Doug: Performance measured is performance gained, right? Or efficiencies gained. And it's a very easy, non-confrontational way to just do that. I love the story about who would have thought the operator didn't do anything wrong. The process was working well. It was basically just turning a lever on the equipment itself that solved the problem that wouldn't have been visible or identifiable without tons of analysis. I mean, just think about five years ago, to come to that root cause analysis would have taken days or weeks and testing and what's going on and interviews and all kinds of stuff. And then, in a matter of minutes, you figured out what the problem was, you made a switch, and everybody's happy. So, the speed at which you can find out what is the root cause is the speed at which you can fix the problem, and that's good for everybody—the customer, the employees. So, I love that story. That's a good one.

Evan: So, what do you think is next in the industry? What do you think is the next change that is going to come at the supply chain logistics industry?
 

Doug: Well, speed is something that's going to continue to move forward—speed in the sense of new automation and new approaches to solving our industry. Speed with the expectation of the customers—they want what they want, and they want it now, right? And that's not going to change. Maybe that's the Amazon effect with two-day shipping. And that's been around for a while, but I think speed is going to continue to accelerate. The other thing is I think that there's going to be some consolidation in the industry. During COVID, nobody really understood supply chain, right? I joked that, you know, when going to a cocktail party pre-COVID, you're having a conversation—there's a doctor, there's a lawyer, and there's a scientist. And they're like, "What do you do again? What does that mean?" Well, during COVID, you were the topic of conversation because everybody understood the implications, right? And so, there was a lot of money and a lot of VC money that was chasing supply chain innovation and technology. And so, if you can remember, people were buying companies, and it was all this rage, if you will—we were the hot industry for a long time. And then things changed. Consumers, instead of buying stuff when COVID broke, they were experiencing things, you know, "I didn't take any vacation in years. I haven't eaten out." So, I'd flip to the experience economy. My point in that is I think in the near term and what's going to come in the future is there's going to be acquisitions. There's going to be more consolidation in the industry—maybe a little bit on a mature level—that's going to come around. And then the one nuanced thing that I've seen in the last six months is I think returns management and reverse logistics are low-hanging fruit. If you ever have said like, "Okay, I ordered this, I didn't want it. How do I effectively get it back to where it's supposed to be so I can either get a refund or, more importantly, get the right item that I wanted?" So, I think returns management is ripe for innovation, and we're going to see some cool stuff related to that segment of supply chain in the next handful of years.

Evan: Yeah, you talk about returns management right on the cusp of we're about to enter Black Friday season and all those massive eCommerce sales. And I don't think there's anything more pressing than having to deal with returns during that time of year. Could just imagine it's incredibly crazy and chaotic.
 

Doug: Yeah, well, we've all had an experience where, "I'm not sure if the medium size blue red or green works better or the large whatever." And you buy five things, and you know full well you're keeping one, right? And the system allows you to do that, and that's what the customer wants, and that's what you have to accommodate. And that's a huge issue to deal with on all levels. So, I agree.

Evan: Yeah, not everyone thinks about the person that has to pick it and pack it and ship it and take it to your door and do all the things that go along with just getting that extra item. But that's the blessing and the curse of living behind the curtain of the supply chain world.
 

Doug: Yep. And I didn't fix the problem right now because I needed to take care of speed, speed, speed.

Evan: Yeah. It was the name of the game. Well, Doug, I really appreciate you coming on and talking to us today. It's been enlightening from my standpoint, just getting your perspective on the industry, especially chatting through some of these things about what's next on the horizon. So, again, really appreciate you hopping on.
 

Doug: Yeah. Well, thanks for the invitation. I really enjoyed the conversation. Thank you.