Developing Supply Chain Domain Expertise with Mark Patel

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In this episode:

The world of global logistics is complex and ever-changing. Yet building deep domain expertise in a specific supply chain vertical can yield big advantages.

In this week's episode of Supply Chain Connections, host Brian Glick interviews Mark Patel, Group CEO at SCF Global. With over 35 years in the industry, Mark has rare perspective on what it takes to become a true vertical expert.

Mark shares how he got his start in freight forwarding, and how he quickly got "pulled into the quicksand" of solving complex supply chain challenges. He stresses the importance of listening and learning when entering new cultures and countries.

Some key takeaways:

• Vertical expertise brings deep domain knowledge and the ability to navigate volatility
• Technology has evolved, but integration and change management remain tough
• Forwarders must provide value beyond rates to win business
• Visibility means taking action when exceptions occur

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Episode Transcript

This transcript is auto-generated and may contain slight errors. We've edited lightly for clarity.

Brian Glick  00:00

Welcome to Supply Chain Connections. I'm Brian Glick, founder and CEO at Chain.io. It's appropriate that I'm actually recording the introduction for this episode from an airport lounge, because we're going to be talking to Mark Patel. Mark is an old friend of mine and a 35 year industry vet, and he's the Group CEO for SCF Global. A lot of our conversation on this episode is going to be focused on cross cultural communication, working in different regions, and, you know, the real challenges that come from working across countries and cultures in supply chain. So I hope you enjoy the episode.

Brian Glick  00:49

Mark, welcome to the show.

Mark Patel  00:51

Thanks, Brian.

Brian Glick  00:52

So why don't we start. Introduce yourself a little and tell us how you got into the business.

Mark Patel  00:57

So I have a pretty varied background, born in Africa, got to the UK, age 10, couldn't speak a word of English. I had to start fresh. I was working for General Electric, and a buddy of mine, he had some issues. He was working for a company called MSAs headquarters in Bracknell, UK. So over my holidays, he said, Look, why don't you come and help me out? And that's how I got into freight forwarding and logistics. And ever since then, it's like, you know, I always say to people, it's like quicksand. Once you're in it, you can't get out, because every day is different, man, you know, it's just, it's something new, something challenging. And when you solve that problem for a customer, it just feels so good.

Brian Glick  01:43

So you've worked, and I've known you a long time, and we can get into that a little bit, but you know, you've worked across different size organizations and different regions and different kinds of, across everything. So what's your favorite? Like, what do you, what size and shape and flavor of things do you really love?

Mark Patel  02:03

So, you know, going back to the question about how I got in, I got in as systems accountant. So I'm a CPA, and no one would know that with my comprehension numbers, I got into systems accounting. At the time, I was helping our guys to sort of test a freight forwarding system, believe it or not, green on black based on as 400 and without any freight forwarding knowledge. You know, they asked me to test certain concepts. I tried that, and then as part of that, I was asked to go out and implement the system globally. And you know, one of the things you do as you go out to different regions, you meet different people, the challenges are the same. Whether it's US, Asia, Africa, in our industry, challenges are the same. But you learn a great deal. You learn a great deal about the culture, people, and then you sort of get involved into sort of, hey, problem solving. And that's when you sort of really enjoy the part of problem solving, and then you say, Well, hang on, you know, this is just the internal side. Now, what's the other side? And the other side is the customers. So back in the day, I did freight forwarding implementations. Then from that, moved on to Warehouse Management implementations, be VMI, just in time. And then the big thing around visibility. So we did a lot of work around visibility and global solutions. I think when we first met 20 odd years ago, and then from there, it sort of morphed into things. But you know, I've done operations, finance, commercial side of the business, even HR and legal. But I would say the best, the area that I most enjoy is providing solutions. And providing solutions, the reason I say that, it's, you know, you go somewhere, you see a problem, and I always like to try and fix things. You know, the typical male DNA, right? You see a problem, you want to fix it. So in our industry, obviously, over the many years, there's been a lot of issues, whether it's integration systems, changing the landscape of technology across the last 15, 20 years. So yeah, I love solving problems and helping clients call it do better.

Brian Glick  04:18

So let's loop back on that culture thing for a second. When you and I met, which I think is just about 20 years ago, almost. And you know, I'd never done a project outside the US before, and we had to roll out Asia. So that was certainly a learning curve for me, you know. And I think for a lot of Americans in particular, there's less exposure to people from other countries, just, you know, geography and what have you. But kind of, what's your advice for someone who is walking into a new culture or trying something in a new country where maybe they've never done anything before, like, for the first timer? What's the simple advice?

Mark Patel  05:01

I think the simple advice, and you've obviously taken this on board very well, is listen, because as Westerners, and growing up in the West, in the UK, we are taught from a very young age, is to speak our mind. In Asia quite often, even though you know you're right and you want to say something is just bite your tongue and listen, listen, and then right at the end, then you can make your point. Because I think that culturally, one, if you speak over someone, they lose face, right? So it's just to sit down and listen. And I have to say, I've learned that lesson myself, because I was, you know, a lot of the times I'm too eager to interrupt trying to make a point, because, you know, you're right. And then someone pulled me aside and said, Look, Mark, this is Asia, you know, just take a moment, breathe.

Brian Glick  05:56

It's not always easy for all of us to do that. So one of the other things you mentioned was visibility, and that's a tricky word in this business over the last, say, five to 10 years, because it's come to mean a couple of different things. But when you were talking about visibility, I think you were talking about a different thing than maybe some people who have really come up through this most current generation of technology, think about so what's visibility mean to you? Like, what did you mean by that word?

Mark Patel  06:29

Let me just take you back, perhaps 20, 25, years, right? I mean, I've been in the industry now 37 years, right? But back in the day, and I'm talking about late 90s, early 2000s this is when visibility or freight forwarding companies or 3PLs at the time if they provided visibility, whether it's that PO management, order management, or the end to end tracking on a shipment that was deemed as a competitive advantage, right? Because not many people had the right types of systems to try and get that information across. And then subsequently, I did a lot of work with RosettaNet. I was a founding member of the RosettaNet logistics Council, which was, you know, try and drive process centric pips through systems and customs. And so you had an end to end view of something, and then, from my side, visibility is this, right, in supply chain, you expect something to go right 99% of the time. As a senior executive, I only want to know about the 1% when something goes wrong. But as a service provider, you need to capture 100% of the information so that just on the off chance that 1% goes wrong, I know, you know, there's an escalation process, and then you can take remedial action. And I'll give you an example, if you look at the Suez Canal issue couple years ago. Was it last year, 18 months ago? I think you know many people, those people that had the right exception management protocols in place, they were able to sort of navigate around certain their shipment requirements, where the shipment went to an extent, where they did sort of air freight to shipment certain place, and then from there they did ocean freight. So you're able to sort of react, or rather, proactively take action on potential challenges in the supply chain. And that's what you want from a visibility perspective.

Brian Glick  08:29

Yeah, I think that's an important issue,  is that visibility, in the absence of doing something about it, makes for a really nice dot on the map, right?

Mark Patel  08:41

All right. It's meaningless, yeah, because you expect, you expect things are going to go right. It's just the exception.

Brian Glick  08:48

So I think you as a, as a shipper, not you as a shipper, but the person who's a shipper certainly has that expectation, right? And part of the reason you pay a freight forwarder is to make all of the noise go away, right? Just make my shipment show up on time, right? And at the cost that I expected to pay for it, you spend a lot of your time working with forwarders where they always have. Kind of what's evolved in, you know, the last, say, 10, 15, years of how forwarders are approaching technology and how they're thinking about meeting those needs that the shippers have.

Mark Patel  09:25

Well, I think few things have happened. Number one, technology has obviously changed in the last 15 years. You've got new systems come on the market, new sort of end to end, ERP systems that sort of speak to or work well within the freight forwarding and logistics domain. The bigger guys have embraced those systems. More importantly, they've actually had to navigate around the change management system, internal change management issues on visibility. Not visibility, on systems, ERP. The other big area, I think that's happened in the last 15 years, more and more freight forwarders have gravitated towards buy, not build, and a lot of that has stemmed from three or four major factors, and number one, not being able to keep up with technology. So you buy a stack of servers, you've got a set of software, you put that in there. Before you know it, technology sort of enhanced, then not being able to attract the right people. And what's happened there is that within the industry, as more and more other parts of other industries require technology, tech centric individuals, they're paying more, so that you're not able to attract good technology people. Thirdly, and I think this is, this is probably one of the most important things, I think that's happened in the industry for us, and it’s  the requirement of the end customer has changed, right? So know when earlier, you mentioned that we provide services to the shipper community as 3PLs. I think what's happened in the last 15 years, more and more freight forwarders are worried about their end clients and pushing that, as in their customer’s, customer, rather than the freight forward, rather than the shipper, right? So if you're a HP, and we're doing some shipment for HP, you're not worried about getting something delivered for HP, but you're worried about getting that to the end client of HP and making that customer successful. So therefore, HP is successful. Just as an example.

Brian Glick  11:41

You know, I think that's a really important point. You know, I think we should spend maybe a minute on that. Like, what does that mean? Like, like, how does that change the thinking at a forwarder?

Mark Patel  11:50

Well, I think the thinking from the folder is number one, if you want to stay competitive and if you want to keep business as a forwarder, you start thinking differently. The conventional way of doing business is say, right, I've got my rates. I've got low rates for this particular trade lane. I'm going to get the business. No, it's not so much just the rates and good service that sort of wins your business, but you need a whole package. What is it that you're doing that your competition isn't doing for your big customers, and a lot of that means is how fast you give the shipper and the end clients data, information, how fast you integrate with their systems. And importantly, what happens is, if you have a facility whereby you're able to integrate with their systems seamlessly, then likely to then be in a position to help their end clients, rather than having to worry about, Hey, where's my shipment in the supply chain? Am I going to achieve my orders, orders target this year, etc? It's a given that information is going to come with the physical activity that takes place with it.

Brian Glick  13:03

So you've mentioned HP, and I know that in your background, you know you, especially when you're at MSAs, you're very vertical specific, right in cell phones in the 90s and electronics and the things that have grown from that, I come from a different vertical from wearing apparel which has obviously very, very different demands, right? Those are, with the exception of maybe pharmaceutical, I have trouble thinking of two different things that both go into retail locations that have different supply chains than cell phones and T-shirts, right? What advantages can afford to bring if they do stay focused on a vertical

Mark Patel  13:40

Knowledge base. Number one, so deep domain experience. Number two, ability to navigate volatile situations, because you know the product, you know what's going on in the market. Number three, in terms of handling. Now, you know, we did a lot of work in the pharma industry. For instance, as you know, certain pharma industries, whether it's medical kits or something else, requires a different type of handling, the white glove handling right, some of that product needs to be distributed within a certain temperature controlled environment. So these types of skill sets you learn these skill sets when you sort of home in on a specific industrial vertical, right? Retail, for instance, when you do your retail supply chain, the first and the biggest question you would have on your retail supply chain on a delivery is that individual going to be available to receive your delivery? If it's not, then What's plan B? What's Plan C? What happens if there's a flood or the road is sort of blocked by a tree fallen on the road. So all of these things, if you are specialists in a certain area, you'd know you would have come across those challenges. And therefore you've taken remedial actions in the past. And therefore you've got a plan B, so that your end customer is always one, kept informed, and then secondly, at least you're trying your best to get the freight or the product to them.

Brian Glick  15:04

You mentioned that when we're rolling out a new system, change management that's scary, scary words. So as I've always like to say, that computers do exactly what we tell them to the rest of it is hard. When you start engaging on a new global rollout as a consultant who's been brought in to make a system, what are some of the things that you see that maybe are going to tell you that the change management's either going to be easy or hard? What are the little you know, you and I've been in rooms doing this together so I could see the look in your eyes sort of happens, but kind of like, what are the little telltale signs that that executive should be looking for to see if they're ready for change?

Mark Patel  15:43

Yeah, and based on our experience of having done this for so many years, we have a cheat sheet of risks and risk mitigation. And number one on the risk for a transition to a new ERP system is change management, and that's the first thing, and how do you mitigate that? Now, in an organization, you'll have people that have been doing the same job for 20 years, 15, 20 years, they've been using the same system. They know the process. How do you get them to change the way they do things differently? Because now you have a different system, so the process needs to change. So one of the analogies I use is, and actually, back in the day, I used to do this in person, so I used to take the old phone. Do you remember the phone where you used to dial number nine, would go all the way down, and you had to wait and then dial this? And they said, Look, this is what you're using now, and the technology you have now is these things, which is a smartphone, okay? Now you decide whether this works for you, or the speed with which you can dial a number on your smartphone and see a person on the other side. What would you prefer? And, ah, the penny drops. Similarly with sort of change management of their systems, you say, look, you're working on green on black, and we're going to move you to a super duper system that's going to do all these things for you. You don't have to type out airway bills anymore. Is going to be there. You can send them by email. You can do your clearances and all of these things. But the biggest thing for change management starts with management at the top, and it's the narrative they portray to the staff on why they're changing the system, number one, and the biggest issue people have is the fear of potentially losing their job because something new, better, faster, is coming in, and this is where management need to explain to them, we're going to move to a new system. It would actually allow you to, you know, get a breather. But more importantly, rather than you thumping in way bills and information to create shipments, you can now spend more time serving our customer. And I think that's where, if you have the right narrative, then people understand that, because everyone likes talking on the phone to the client, right? You know, if you establish that rapport, they want to talk to them. They'd rather be talking to the client and understanding what their issues are and fix them than try and thump information into a old system.

Brian Glick  18:27

So I have never heard in my career, and I'm sure it's somebody's gonna immediately find a counterpoint to this, but it's not common, at least, that I've seen a company, a forwarder, implement a new system, and then 60 days later, let 30% of their staff go. Like it's not. It's never how it works, you find but every time we walk in the room that fear is there.

Mark Patel  18:55

It is there, absolutely, and it's management's job to try and, you know, try and compete things down. In fact, the easiest way to get around that is to say, look, we'll be able to do more shipments without hiring extra people. And that's it. You don't need to try and, you know, sugarcoat anything on that front. And I think there are times when what happens is people who are doing the ROI for a new system. Their, what do you call it? Their remit is to say, right, if we put a new system in, what's a cost saving? So immediately they're looking at the downside. What they should be doing is, if we put a new system in, how can we better serve our clients? How can we grow our business? How can we do more with the same amount of FTEs? And that's the narrative that should be put out there. Rather than, hey, we put this system in, it's going to save us 50 people here, 10 people here. And so it's just a headcount game, and it shouldn't be a headcount game.

Brian Glick  19:56

It's always a little interesting to me, again, coming from the US, this idea, one of the great learnings I had doing these rollouts, you know, in other countries, and particularly in Asia, actually, I was able to bring back to the US, which was, there's this very especially people, say, in their 40s and 50s now, who kind of grew up listening to, you know, Jack Welch and GE and all of that, of the you'll put in the new system, because you get paid on Friday. And I told you to, right? And that's the change and that's some of the change management is, I'm your boss, and I said, we're doing this, and we're doing it, and that's the end of it, right? And, you know, I may have shared this story on the podcast before, but I remember rolling out a large global system, and we rolled out all these different countries. And we got to Italy, and we walked in, and it was the last country to go, and we said, All right, here, you're doing this. And they went, No, we're not. Why don't we just go get a coffee instead? And then it was, like five years later, they went live, right? Because we didn't do the change management. Well, we do the change management like Americans, but even coming back into the US or into the UK or into, you know, places that do have a little bit more of a command and control structure, you still learn that there is huge value in putting in the time to get people excited about something instead of just telling them to do it, right, and that it's very frustrating when you have a project planned and you know the salesperson has sold your boss that, oh, yeah, this thing's going to be implemented in six months. You're like, Okay, I need to spend six months on change management, and then we can do this six months implementation, right?

Mark Patel  21:33

And you know something, Brian, what people forget is different freight forwarders are organized differently in terms of how they correspond or communicate with the customer. And in Asia, in many cases you either have a customer service department that is solely responsible for talking to the client, or in some cases, you have the operations department that does a customer service activity. And one of the things I found out is how deeply connected the operations people were to the customer, so if something went wrong, they would just pick up the phone and talk to them, and it was solved. It wasn't a case of a Salesman trying to, basically trying to give them a story as to why something's gone wrong, and a lot of that is because of the relationship and the rapport that's developed over time with these ops people that have been there several years. And I always say the value of these ops people, you can't buy. They've got that experience of what to do outside all of a sudden, when the rain hits the ground and your car goes outside, they've already got that covered. What to do when, you know, there's a strike somewhere. They've got ideas. They can talk to the client, and in some ways, they may ease the fears of the client, because they have that connection with them.

Brian Glick  22:57

And they can do the opposite. And I've seen it, where they, you know, they become, I remember we had someone, one of the companies I worked with in our, in our Chicago office, who had a, you know, very, very deep relationship with the import specialist at the customer, and she would, you know, they would talk like, three or four times a day, because all she did was handle their freight. And she was effectively embedded on their team, even though she was in our office, and we were making some changes, and, you know, she was just talking to her friend who happened to be the customer. Oh, this isn't going to work very well, and they're making me use this new system, and everything's slower because I have to learn this new thing, right? And then we get a call from the executive because that had moved in the wrong direction, because we hadn't done the change management, right? And it wasn't the fault of the person at the desk level who was honestly just, you know, she would talk to the customer more times a day than she would talk to the person at the desk next to her, right? And so, you know, that was on us for being naive and not understanding that we needed to, A.) make her feel better about the change, and B.) coach her on how we were going to talk about the change with our customers. And you know, there's this natural J curve when you implement a system where you do get less efficient for a while, and there's ways to manage that so.

Mark Patel  24:21

And then get that excitement going, Yeah, using the system, yeah.

Brian Glick  24:25

So we're running up towards time here. But I'm curious a little bit, kind of, what are you excited about for the future?

Mark Patel  24:35

Outside of family, in the industry? Look, I think there are several things that are going on in the industry that excites me. Obviously, the great work that you guys are doing, thank you. And this is not trying to blow smoke into you guys, but I think what Chain does, you know that's been a requirement for a long time, and it's like you guys are the 4PL of the integration work, right? And what I mean by that is, what you do, is the work you do, allows the freight forwarders or the shippers or anyone else to concentrate on their core number one, right? So that's the first thing. Secondly, allows, gives them the flexibility to change players without having to worry about the changes in maps and everything else, because you guys got that covered. Obviously, it reduces cost, overall cost of ownership. The big issue around trying to hire technology, good tech people in order to sort of navigate interfaces and changing face of how you interface with different people. You don't need to worry about that. The other thing, you know, I don't think people put enough emphasis on recruiting people, training them, and making sure they provide that right service, and especially when it comes to tech people, and it's not something you just bring someone from the university, put them in there, they might have got the best grades out, and they're going to be a technology expert. It doesn't work like that, because you need to understand the industry, the deep domain expertise you guys have, and then you supplement that with your technology expertise, and that's what you bring to the table, which is similar to what we do, from our 4PL side to the shippers, because we come from the industry, right? So as far as the principle is concerned, they only come to you, Mr. Chain, you guys need to solve our problems. All of these are interfaces. You help me solve them, and you do that. And I think that's important.

Brian Glick  26:35

Well, thank you, and I am flattered and certainly appreciative of the compliment. Why don't we take it out with, tell us a little bit more about what SCF does and where we can find you guys.

Mark Patel  26:47

So we have two sides of business. On one side, we're systems integration folks and consultants. Predominantly, we help clients go live on ERP systems and freight forwarding, predominantly CargoWise in that space, but not limited to CargoWise. So whether it's CargoWise, WMS, etc, and that's on one side of the business. On the other side of the business, we're a 4PL. So always in 4PL, we work with the likes of Schneider, HP, 3M, to name a few. But I always say we're in a unique position, because we see the challenges that freight forwarders have in serving the shippers. Similarly, we see on the flip side, as a 4PL, the challenges shippers have on trying to work with freight forwarders, and we're trying to sort of be that conduit that brings technology, different way of doing things, different thinking, if you like, into their supply chain needs.

Brian Glick  27:45

Awesome, and we'll make sure to get links to the website and your profiles and everything in the show notes. Mark, it's been a pleasure having you on and obviously you and I have known each other a very long time. It's always, always great to have the opportunity to chat.

Mark Patel  27:59

Always, always likewise. Good talk. Thanks, Brian.

Brian Glick  28:06

And a huge thanks to Mark for sharing all of that insight. As you can tell, Mark and I have known each other for a very long time, and one of the things I really appreciate with this industry is the ability to have friends all over the world. So hope you enjoyed the episode. Make sure you're checking out both SCF, which we'll have some links to, as well as the Chain.io blog and LinkedIn, had some really exciting announcements lately around data analytics and the supporting infrastructure that you need to really take on AI over the next 10 years, especially in relation to our recent connections that we've added for Snowflake. So if you're interested in that, make sure to reach out to us and look forward to speaking next time on Supply Chain Connections.

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