Carl Lewis: Welcome to the Connected Enterprise Podcast, where our guests tell us how they stay connected. I'm your host from Vision33, Carl Lewis, and my guest is John Wager from Saddleback, in the United Kingdom. John, tell us about yourself, your background, and Saddleback.
John Wager: Hi! I'm John. I'm the IT and operations manager for Saddleback, which distributes high-end cycling products. If listeners are into the Tour de France or downhill mountain biking, and they like the nice stuff, we probably do it. We have good brands from the US, Chris King, ENVE, and premium Italian brands. We've been in business for 14 years, and we’ve used SAP for nine years.
Carl Lewis: I looked at your website, and you have extremely nice cycling equipment for anyone interested in that hobby. It's not my hobby, unfortunately, but it probably ought to be.
John Wager: It might be more expensive than tennis.
Carl Lewis: I've talked to many people in the last year, and I'm happy you can join us to answer the same questions: From your business and community, what trends do you see in the industry, especially in automation, that Saddleback and others are doing? What strategies are beneficial? What do you see happening?
John Wager: I have several things. The first one is about data protection. In Europe, the GDPR went live in May 2018. We spent 18 months to two years making sure everything was ready for that. It was a real look at how we could do stuff better and protect our data. One thing we've automated is looking at every packet of data, analyzing it, and deciding if it's doing the right thing. A little AI engine in the software then determines what should happen based on the answer.
John Wager: One of the big selling points is ransomware. Once it infects your machine, it can encrypt your drives and block access to your data. The AI product sees when you open an email, download a file, and, say, open a Word document. The AI knows that instead of just opening the document, the file is sending off commands to do bad things. It can shut it down in 30 milliseconds.
John Wager: If I got an email where someone said, "I can't access my drive, or I can't access this at the moment," I’d stop my bike ride to log on and see what happened. By the time I did that, our data would be gone. And unless you're into paying a lot of Bitcoin out, that’s an expensive challenge. That was a big one for us.
Carl Lewis: Nobody has discussed AI from a security perspective before. It’s interesting.
John Wager: We're not a huge industry. As a company, we're bigger than some we deal with, but the industry isn’t huge. We’re taking more on and directing more in how things go. If someone's supplying us with six months’ worth of clothing, those notifications will be paper-based with maybe a little Excel, but we don’t have EDI going backward and forward and other true integrations.
John Wager: We're trying to get people to go down that route. Internally, we've done a little process automation. We're big fans of Boyum and what it can do, but that's talking on a department-by-department level and asking, “How can we make your life easier?” Then we make ten clicks into two clicks. What we really want is to start checking documents as they come in, making sure we can process thousand-line orders, match them up, and put them through. Currently, that's a manual job. If we can look at some of the document processing solutions available, I think it’s the next step for us.
Carl Lewis: What are the biggest challenges when you deal with technologies like this, especially working with AI on a security side? What was the challenge of getting that operational?
John Wager: Getting that operational was relatively easy because there’s a strong business case to say, “If someone shuts down our system, how much will it cost to bring it back?” You have backup tapes and disaster recovery; this is taking it to the next level. Asking, “Where are the threats coming from, and how can we thwart them?” If something can knock it out in 30 milliseconds as opposed to me taking ten minutes or half an hour, it's an easy case to make.
John Wager: When I mentioned the document part, the biggest challenge is more people than technology. You're getting each element in that chain to a level where you can do something with the data. If they're doing a printout, it’s difficult for you to bring something in, whereas if everyone processes files in the same format with the same codes, it makes everything easier down the line. We then pass that on. Whether it’s our suppliers or the dealers we sell to, we're slightly ahead of where they are. I guess it’s due to the size of the industry, how much money people have to invest in doing it, and what the return will be for them.
Carl Lewis: It sounds like it's easy to build a cost-benefit scenario with security.
John Wager: Yes.
Carl Lewis: With other technologies, it's more, “What's that going to do for us?” Saddleback is a leader in your industry, somewhat because of your size, but also because you have an innovator's mindset. What’s the next big thing Saddleback is considering from a business and technology perspective?
John Wager: It comes back to processing the orders coming in. As we take on more brands, the orders get bigger and more frequent, so we're running up against the upper limits of what SAP can do. If we can make things easy around the edges, it will help us. If we can get our suppliers to give us information in a good format we can process more quickly, that enables us to get it on the shelves more quickly, which enables us to get it back out and get the money back in.
Carl Lewis: That sounds a little bit from the supplier perspective, more like an EDI hope that someone would take that on from an ordering process.
John Wager: The EDI part would be good if they could do that, even if it's just using companies that allow you to scan documents and match information up against your purchase orders, AP invoices, etc. That would save a lot of time, but it's experimenting with those things. It's for me to decide if I want to do that, and if it's a paper-based solution coming in, I have to sell that to our owners by explaining how much time, effort, and money we can save.
Carl Lewis: There are many things, like error reduction, cost savings, and shipping for incorrect orders that go into that type of evaluation.
John Wager: Right.
Carl Lewis: You say a lot of your suppliers are small, so EDI is an expensive solution for them to take on themselves.
John Wager: Right.
Carl Lewis: I'm sure you’re looking at other possibilities for small vendors to transmit orders in other fashions you integrated.
John Wager: Even to help them out and pass some of that knowledge on.
Carl Lewis: Exactly.
John Wager: If we can help them and it benefits both parties. Knowledge sharing is important.
Carl Lewis: I've been asking guests about business communications and personal communications. For you and Saddleback, has your communication changed? Perhaps your communication was primarily email, but social media or other channels are becoming an entryway to do business and professionally conduct communication. Is that happening in your life?
John Wager: Within my lifetime, almost certainly. With the changes we've seen so far, I'm sure changes we can’t even imagine are coming. But for the time I've been with Saddleback and supporting companies before that, email is still at the front end. For us as a distributor, and the type of distributor we are, it's personal communication as well. We want those close relationships with the brands, with the guys buying products from us, and the phone is a good method for that. Every year we try to gather our dealers and suppliers to do a Saddleback show to get everyone together and talking. What can't you solve over a beer and a hot dog?
Carl Lewis: I'm happy to hear you say the telephone because it's the last place people want to go today. The electronic stuff is great, but the phone lifts it up a level of personal. Then there are conference experiences, which takes it up another level. As efficient as the electronic stuff is, we still need good old face-to-face communication.
John Wager: Every level you put technology on something, you strip away nuance. If you don’t have that nuance in a conversation, the meaning can change.
Carl Lewis: Yes. You have your supplier network and customers, and you're working with vendors like Vision33 and others. What are the most challenging parts of collaborating with third parties? What makes it difficult to rely on suppliers, etc. to implement the new technology changes in your company?
John Wager: Building trust. Everything comes down to that. There's a lot of stuff Vision33 does for us that pushes the bounds of what we understand. We know how our business works, but it's translating that into the technological side of it. Like, how did that order this person transmitted get from this website to our system to be translated? How did it go down to the warehouse and back out and have the extra bits and pieces go onto the end of it?
John Wager: If you're building those relationships and talking one to one, it’s easier to build trust. You don't lose the nuance and go down the rabbit hole of throwing money at something while neither party understands what they’ll get at the end. That's the big challenge: getting everyone to understand what they're doing. Obviously, what we want is to sell lots of something, but that doesn't give you something to aim at because “lots” isn’t a number you can measure. If I say I want to sell 10 bikes, we have something we can aim for.
Carl Lewis: I like that you talk about trust. Stephen Covey wrote The Speed of Trust, which was about where trust is high, you can go fast. Where trust is high, you can generate a lot of revenue together, etc. Trust is such an essential component of the supplier relationship all businesses have. We talked about the need to automate some processes with your supply chain, but are there parts, like payments, you’ve automated?
John Wager: We've had automation from our website running for a little while, so we can see where the order comes in through the server into SAP. We can then send a call to our payment processor to match us up, process it, then release those products down to the warehouse.
Carl Lewis: Excellent.
John Wager: That was the biggest automation we did because it saves a lot of time in case the warehouse guys are sitting there at 8:00 am on a Monday, thinking, "Oh, it's nice and quiet. I’ll get a cup of tea and put my feet up." But there might have been 100 orders waiting to go from over the weekend, and the sooner we can get those out, the sooner people are riding their bikes with their new kit.
Carl Lewis: That's working well for you?
John Wager: There are always little niggles as people change protocols or bits and pieces in the background as you go along, but it’s one of the ones we've had going the longest. There are parts we then try on a department-by-department basis around the usability pack and how we can make things faster. I mentioned reducing ten clicks to two clicks. It doesn’t sound like much, and it’s not groundbreaking in the grand scheme of things, but it's marginal gains. It's a big one. You take two seconds off, and that could be the difference between winning and losing.
Carl Lewis: Especially in a multistage race.
John Wager: Definitely.
Carl Lewis: Do you have KPIs you regularly track to measure your productivity gains, etc.?
John Wager: As we're growing as a company, we're now looking at that. We're going to put some in place within the warehouse. Then, as a management team, try to review on a department-by-department basis to ask what's good, what's bad, what do we need to improve on, and set benchmarks. When I finish my MBA, it's one thing I'll work on setting up.
Carl Lewis: That sounds like a fun project.
John Wager: It will be interesting.
Carl Lewis: I loved working with customers when they're trying to accomplish those things. One of the smallest businesses I ever worked with ended up with large screens in various departments with each department's KPIs in real-time in front of them. It helped the employees visualize how their work made a difference in the business goals on almost a minute-by-minute basis. It’s very thrilling to be part of those projects.
John Wager: It comes back to what we said about communication. If you involve everyone in the communication and people can see what they're doing and what they're contributing, it makes for a better, more efficient company.
Carl Lewis: Getting everybody on the bus.
John Wager: No, on the bike.
Carl Lewis: Or the bike, or riding as a team, is what you would say, right?
John Wager: Exactly.
Carl Lewis: John, thanks for sharing a bit about Saddleback and what you’ve done, are doing, and are dreaming about for the future. Companies listen to these podcasts and get great ideas from hearing what others have done, what's been beneficial, and how other companies view the landscape. Thanks for sharing your story with us.
John Wager: My pleasure.
Carl Lewis: Thanks everyone for joining us. It's easy to make these things too long. I know some of you are driving to work or home, and 20 minutes is just about perfect. Until next time, please stay connected.