Podcast: The Value of Supply Chain Partnerships with Juli Lassow

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In this Episode

In this episode, Juli Lassow, Owner & Principal at JHL Solutions, joins Host Brian Glick, CEO of Chain.io, to discuss:

• How LogTech has impacted supplier partnerships
• The impact of insolvency on supply chains
• How to transition from customers to partners
• The nitty gritty of sourcing, nearshoring, and multi-source sourcing
• How virtual meetings enable creativity
• The best operational practices for shippers and retailers

Juli is dedicated to supporting retailers and suppliers in finding, developing products, and negotiating with each other. In her role at JHL Solutions, she works to connect the dots between mass retailers and suppliers and to arm them with the strategies, processes, and tools to make better products faster – and for less. Prior to launching JHL Solutions, Juli spent 15+ years in progressive leadership roles in sourcing, project management, inventory management and buying for Target Corporation.

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Episode Transcript

Juli Lassow 00:00
I think the conversations matter, in the partnerships that you're looking to deepen and create more value. The closer you get to face to face, the better positioned you are to deepen that partnership. It's you're building the know like trust factor, which certainly is important across many aspects of life. But in business partners are willing to give more to their partners that are growing in the same way that they're excited about bringing the future to life with them. It's hard to communicate that over an email, you lose a lot of that dimension.

Brian Glick 00:44
Welcome to Supply Chain Connections. I'm Brian Glick, the founder and CEO of Chain.io. Today, we're gonna get a little bit out of my comfort zone and talk about the thing that happens before shipping and trade compliance and all of that, which is sourcing. Our guest today is Juli Lassow, and we'll let her do her introduction. But I'm super excited to learn all about the things that happened to get us the products from the beginning.

Brian Glick 01:10
Julie, thank you so much for being on the show.

Juli Lassow 01:12
Brian, I'm thrilled to be here. Thanks so much for having me.

Brian Glick 01:15
So why don't we just start with a little bit of introduction, kind of where you come from and what you're doing today.

Juli Lassow 01:21
Yeah, happy to share. Thank you so much for asking. I grew up professionally at Target Corporation. So I'm Minneapolis based and like to say I still live in the shadow of the bull's eye. I worked mostly in the merchandising or merchandising adjacent areas, so inventory planning, buying negotiations, and some finance rotations. But I spend about half of my time at Target, working in the own brand sourcing space. And at Target. That's all about finding the right suppliers working with them throughout the supply chain, as they're sourcing new materials, and really onboarding them so they can bring amazing own brand products to the shelves. And I left target six years ago now and launched my own consultancy, and I've stayed really focused on that supplier partnership space. So today's I support retailers and finding the right partners, developing products with them or deepening their agreements, oftentimes in own brands, but not always, and then do a lot of work negotiating with them. And as you and I have chatted, I know it won't be news to any of your audience, the last couple of years, I've just put a lot of stress and strain on those supplier partnerships. So that's the place within the supply chain that I really focus is how retailers and suppliers can can partner together and either mitigate supply chain risks or resolve issues quickly and with as minimal impact as possible should and as they arise.

Brian Glick 02:43
So how has the chaos of the last couple of years? How has it impacted those relationships? I mean, I know that certainly have changed, but have they gotten stronger, weaker? Like kind of what's the real landscape out there?

Juli Lassow 02:57
I wouldn't say yes, all of the above. And I would add a third feeling that was the answer I would have a third category to that is that some of the partnerships that existed pre the onset of COVID don't exist anymore. So that's often or unfortunately has been a situation that I've had to help resolve as we're partners have gone out of business or elected not to do business with each other anymore, because of the whatever happened during COVID, either one of them out of business or made their partnership untenable, unfortunately. But on the other end of the spectrum, I think there's a lot of retailers and suppliers now that have deepened their partnership that have come to realise how important they are to each other how well aligned they are, and how they were able to survive, and in some cases thrive as they were navigating the COVID response era. So those teams that have done exceptionally well are the ones that are have been really open and transparent about their strategies, the issues they're facing, they come to the table with solutions and a little bit of business empathy and grace, where it's called for. And then there's a spectrum in the middle of that from having a great partnership to no partnership where some are stronger, some are more transactional now, because I didn't take the opportunity or didn't find the value in deepening the relationship.

Brian Glick 04:06
So is there a any kind of correlation or between the amount of tech that's involved in those relationships? And versus the conversations that happen? And the health of those relationships is, you know, tech helping? Is it hurting?

Juli Lassow 04:22
I love that question. I will start by saying that I am not a deep tech expert. I know what some of your guests have been. And that is that's not the space that I played as deeply. But what I would say is where tech can enable really great conversations is when it brings data that's meaningful, timely and accurate. And you're able to use technology to either strategize or problem solve better. That's the places where tech can help where tech can get in the way or interrupt a conversation that can sometimes be hindrance it when you're resolving problems and you're just communicating through email or just spinning information back and forth to each other and you either don't have the right information, or you're not making time for a conversation. That's where I can see tech start to erode a relationship or keep it from deepening.

Brian Glick 05:09
So what do you love about this? Why after all, these years still deal with all of these nightmares of all of the chaos that's out there.

Juli Lassow 05:17
I am a problem solver at heart. And I think working in retail working in supply chains gives me ample opportunity to work on finding ways to solve problems, and create more value. Honestly, I look for that just from a professional personal satisfaction in the work that I do is deepening and adding value. And when I can help my clients and their partners add greater value to their organisations, their teams, ultimately, their customers, that's something I find a lot of personal satisfaction and motivating in motivation in doing. So that's why I come back.

Brian Glick 05:50
So which are the problems that are keeping you up at night this year? What are the big ones?

Juli Lassow 05:55
I think the the big ones are certainly global instability, and how that's going to continue to have impact on on supply chains. And importantly, raw materials, I do a lot of work in negotiating when we're looking at raw materials. And we're starting to see inflation unwind a little bit, it's a lot less predictable, because of some of those bigger global factors and global instability. So that's making it challenging to appear into the crystal ball to say the least.

Brian Glick 06:23
So I'll make you pure into that crystal ball. No one has an answer for the question I'm about to ask, but I'm going to ask it anyway. You know, over the next 510 years, is that instability? Are you thinking that that's the new normal? Or is this thing that goes away? And we all get to relax?

Juli Lassow 06:41
Oh, yeah, yeah, we're totally gonna relax. It's gonna be fine.

Brian Glick 06:44
Oh, great. If we could just have the interview.

Juli Lassow 06:48
Yeah, we're done, eight minutes in. It's interesting that you say that, because as we're recording this, and as we chatted, just before we hit record today, there's a lot of instability within the banking sector right now that completely colours my answer in a way that it wouldn't have even 72 hours ago, I would have said that we were heading to somewhat of a normalisation where, yes, we're globally connected. But I'm seeing supply chains become much more flexible. And so we've uncovered a lot of those break points and congestion points and teams have been making progress, I'll say it that way, on finding their next best alternative, if solution, one isn't going to work, but this is a mission critical point. A lot of people now a lot of teams in place, have that that go to, and that's created a little bit more given supply chain and good little bit weren't given the product lifecycle. That being said, I don't know if we know what the bottom is of what the fallout is going to be. We're making insolvency right now in the US how wide that's going to spread. So that's, I would imagine that's going to be resolved, within five years, hopefully, we'll come out of whatever the impact is that we see in the short and midterm. But I think we've just reinforced now that we can't have the brittle supply chains that we've had. So I think that's creating some more stability. But then the pendulum will swing and at some point will become more brittle again, and more short sighted and then have to go through the cycle again, that is my prediction on the 10 year front.

Brian Glick 08:15
So actually, so that brings up an interesting thing that I've always kind of seen in my work over the last, you know, 20 years or so rare, you have some sort of impact whether it was you know, in the transportation space, obviously, September 11 has a huge impact, right, and then everyone is focused on security, and cost become second to security or when the free trade agreements all started falling apart. And we had the trade wars in 2016. So okay, well, we'll focus on that, and costs become second, but eventually see, the CFO always seems to push costs to be the most important thing, and then you get brittle. And then you break again. Is that a valid theory? I mean, have you had that experience on the sourcing side as well? I come from more of the transportation side.

Juli Lassow 09:01
Absolutely. I think that's really well framed, that the urgent of the moment, will drive a lot of decision making the short and midterm, but I was touching on earlier. There's definitely a pendulum where you're solving you're prioritising. We're never let this happen to us again, Mantra until we do. And I think your conclusion is a reasonable one that as things start to stabilise, we become a little more targeted and focused. And think technology and tools and analysis continue to evolve that. Yeah, that CFO is going to come knocking and they they're going to have their questions and there's more accountability on that in the financial space where retail used to be a lot looser. I've been at this for a couple decades now. When it came to knowing where all your pennies were and you just can't operate that way anymore. You we have access to the data. It's easy to understand easier to understand than ever. So I do think that the momentum will be back to more rigidity. In time, but we had a pretty good shake to the system. So I think it's going to take a little while before that pendulum will fully swing back to rigidity.

Brian Glick 10:07
So that flexibility that's been introduced in all of this data, I would imagine that in your consulting, you've worked with at least one other company that's smaller than target. Is there a big drop off? As far as when you go from the, you know, let's say those top 10 or 15 supply chains in the world to everybody else? Is there a big drop off? Or are you seeing that even our smaller clients have are starting to be more mature, have that data available to them?

Juli Lassow 10:37
The smart ones do. There's such a fantastic opportunity to digitise throughout the supply chain throughout product development. And you do want to size the solution to fit the problem. There are some solutions that are way over the top and not going to be worth the investment and capital investment and team resources to run. There is a breaking point. But the teams that I work with that understand what their pain points are or what their aspirations are, and focus the solution to meet just ahead of where they are. So they're stretching themselves a little bit, they are looking down the field of this is the organisation we want to be with this solution help with this solution help? Or what are some of the roadblocks that are keeping us from being that team? And how do we can we remove some of those roadblocks by an additional build on or reimagining? I think those are smart teams. It's tricky. I think that things that are tricky about that is when you just try to fix one piece. So that's what I see my clients are struggling with the most is when they're trying to pick just one specific piece. Sometimes that's hard to do. It could be the most important thing. But if you're going to touch this, you need to touch this, this and this, right. Again, I'm not a technology expert.

Brian Glick 11:53
No, no. And, you know, I have a personal cliche, at least that I like, which is that there is no such thing as a technology problem. There are only business problems that involve computers. Right? And that if you're coming at anything from it, even as the CEO of a tech company, that if you're coming at anything, and the first conversation you're having is using the word data lake, you probably already lost, right? Like you have lost the bore before you fought the first battle. Right? That the the first thing should always be, we're trying to make more money, spend less money, satisfy this brand promise something that has no where the word XML or the word data lake or API, or blockchain is not in that sentence. Right. And then tech is very valuable after that point to then go solve that problem. Absolutely. Absolutely. So it would be irresponsible of me to have a an opportunity to talk to somebody from the sourcing world and not just randomly for the word China and nearshoring and reshoring, that you and let you free associate for a moment.

Juli Lassow 13:04
Happy to, it's something that I've been very interested in for a while some of my bigger priorities within the sourcing and retail space are how do we source more sustainably? How do we think about improving the value and impact of products not only for the end consumer but how they're being made and how they transition to the supply chain. So nearshoring isn't something I've been excited about. And while I don't take the phrase Silver Linings lightly when we're talking about COVID response era, I think looking at the opportunities to near shore, and what can we do to create some flexibility and increase the health and increase the sustainability of our supply chains through nearshoring. I think those are really great conversations to be having. And I'm happy to see that that's been something that it's been increasing over the last year. I think it does predate COVID, and a lot of senses. But when you start talking about critical infrastructure, critical technology, computer chips and bringing those back to the Americas, I think we're seeing a lot of conversation now and change starting. And I think that's only going to increase in size, scope and speed.

Brian Glick 14:14
I'm gonna go one level deeper on this. One, we're working with global organisations who are selling globally, right, the nearshoring to me as a little bit of a different definition than just oh, I can do it in Mexico, right? Or I can do it in Texas, it's, you know, being able to multi source the same SKU or similar skews, being able to build the product that's appropriate for the market. And you know, whether that markets Europe, or South America, it's going to be a different vendor mix and like, is anyone or companies really ready for that world in your opinion, whereas this fantasy of like, being able to say, hey, you know, I want to really be able to produce, you know, for the carbon impact To be alone, I want to be able to produce in Uzbekistan, the t-shirt that I'm going to sell in Eastern Europe, and I want to produce it in Honduras for the US, right? That kind of world. So, is that a reality?

Juli Lassow 15:12
There are times where it makes sense to fully dual source, because it protects, increase the resiliency in your supply chain, and or it's got the benefits of it's closer to where you're shipping, it's closer to your ultimate consumer. So that saves on time, it creates some benefits and forecasting accuracy. Certainly from a sustainability perspective, there are definitely cases where that is going to be fantastic. What you have to look at in the balance, then is that you are splitting your opportunity to create value with a single partner. And you're gonna have to look at the value that you create with two partners and net net, are you coming out ahead by splitting that that production across two or three key suppliers, great partners and great resources, you are going to be able to solve the quality of the product problem, I'm pretty confident that Apple if they are going to dual source iPhones in China and in their factories in India, they're going to get to a point where they're going to hold a high enough level of integrity and QA that you aren't going to be able to tell the difference between the fonts. And you'd certainly be able to do that with a T-shirt. If you're producing in Honduras versus Uzbekistan. To use your example, I think you'll be able to sell the product and the client customer satisfaction in the quality of the goods. But if I'm splitting my buy between those two factories, am I as important to them? And Will their relationship with me? Well, their turnaround time while they're costing be as compelling as if I just sourced out of one factory. But then I'm looking at the total cost of goods and the commitment that it takes to make products in Honduras where I might have to have extra product lead time built into shipping across the Atlantic Ocean in the example that you brought up? That's a bit of a long answer. I don't think it's the right answer for everyone. And those would be the considerations that I would go through and trying to decide.

Brian Glick 17:04
Yeah, no, that makes sense in that impact gets to some words that I think people use interchangeably that you're using very specifically here, which are supplier versus partner, vendor, like all of these words can mean different things. And that, you know, the size of your spend is obviously a big impact on where you fit in that hierarchy with the person or the company who's producing your product, but kind of how do you advise that companies get from being a customer to a partner with their vendors? What are the best practices there?

Juli Lassow 17:43
Absolutely, tearing them and thinking through, who are the partners that I can't live without, and thinking about them that way. And, again, navigating 2020 2021 probably made it pretty clear to you who your key partners are, it's certainly some of your largest vendors with the greatest amount of spend. Sometimes it's very mission critical if you are an apparel supplier, and you've got a very specific set of trims, zippers, buttons, whatever that you need, or packaging that you need. That might be one of your more critical supplier partnerships that might not be the top and dollars, but is essential. So start with thinking through who those vendors are, and splitting them out appropriately. If you've got 1000 vendors on your matrix, you aren't going to be able to treat them all the same. And so some of them you may aspire to be partners with, and someone's gonna be much more transactional. And they will always just be a vendor or a supplier. And then once you've got that tearing broken down and you've qualified or I do I have the scope and then capability to really deepen and prioritise these partnerships, what would success look like? What do I need this conversation to be? And with those vendors that you are looking to deepen the partnership, I encourage a lot of communication around what your strategic plans are. Where do you want to take the business more broadly? In some cases, more specifically, with a category? Do you have major growth plans? Are you shifting from an ESG perspective in a meaningful way, and encourage them to be transparent alongside the view, so that you can understand our party is continuing to go down the same path, our growth trajectories? Similar? If we want to double this business and size? Can this partner go with us? And so we're really mapping that out and being transparent with where your strategies are, and then focusing on where are the places that we're creating value. And that's when you start talking about certainly your cost of goods, length of contract, quality of product that you're building. And you can create the time and space to go deeper again with some of those vendors, not with everyone. But that's how I think you're really deepening that partnership, and creating value with that top tier of suppliers. And as you move down your hierarchy, both based on time and return on investment of the partnership, you often will get more transactional and you're focused on just a handful of things whether that's lead time or cost of goods. It's a little bit more interchange. While you can't be the same to everyone, I wouldn't encourage anyone to be the same planet showing up the same way to everyone. And it just your activities and investment of time and resources accordingly.

Brian Glick 20:10
So, question that just popped into my head that we didn't talk about in our prep. But just for fun, just for fun, because you got me thinking about when we used to do factory visits, and a lot earlier in my career, or, you know, versus the conference calls and the beatings via conference calls, we would do in like the, let's schedule it at a convenient us time just to torture the vendors who are non compliant today on their data. How much does face to face matter? And does it still matter when it comes to these relationships, being in a room?

Juli Lassow 20:47
I think the conversations matter, in the partnerships that you're looking to deepen and create more value, the closer you get to face to face, the better positioned you are to deepen that partnership, it's you're building the know like trust factor, which certainly is important across many aspects of life. But in business partners are willing to give more to their partners that are growing in the same way that they're excited about bringing the future to life with them. It's hard to communicate that over an email, you lose a lot of that dimension, you get closer on Zoom, certainly. But if you're in the room, and you're having those strategic conversations, you're both bought into that vision of success, you start to get a lot more creative. And then you also position your partner to be able to tell that story, vision, share that internally at their organisation, so that they can advocate for better access to development resources, it costing, etc. Because everyone's excited about the story of the future they're building.

Brian Glick 21:48
Yeah, one of the things that I've found that I've never been able to replicate on the zoo, is the accidental conversations that happen that open up, you know, you start talking about somebody's kids, and then someone has an idea about something that just kind of pops into their head. And, you know, video calls tend to be agenda very well. Right. And you never sort of deviate and have those accidental learnings that then open up oh, that's why that vendors they've got I didn't realise that their kids sick or that, you know that now I've seen the talent that they live in. And I understand why they are now unable to supply this service to us because it is so far away from where they are. That type of thing. That accidental thing, I think sometimes you get on a plane, you discover those things a little bit faster, I think.

Juli Lassow 22:37
Absolutely agree. I think you can shortcut your way to synchronicity. If you are walking in the factory, if you're walking the showroom, you can solve problems in a more creative way often completely agree. But what I will say that virtual meetings have allowed for is an increase in touch points. So you might be able to solve a problem faster if you're in a showroom. But it's so much easier now to connect with global partners than it was when I think about when I was at Target, when you had to just set the time for the conference call it took however long to get on the call. And now it is a lot easier is built into a lot of our work patterns to pick up a zoom as it were, when picking up the phone wasn't quite as convenient. I know, I wasn't calling my factory partners on the phone. But people are more open to virtual communication. You don't want to be the jerk that sets a call in the middle of the day, you understand that you've got to find those bridging times, depending on where your partners are in respect to that. And then also, just from a talent perspective, if you've got a dispersed workforce, teams have just become so much stronger that you bring greater talent to the screen. Now, I think so that's also improving, I think the quality of the partnership, and the output of those decisions and priorities. I wouldn't fully unwind the Zoom culture because I think it helps a lot. But I wouldn't say that it can fully replace face to face either.

Brian Glick 24:07
So when we did our prep, I only underlined one word in my notes, circular. It's a passion of mine. And I know a lot about it when it comes to the end of the lifecycle of the product or the return side. But for as a sourcing professional, kind of what is circular mean to you? And kind of how you think about it in your practice,

Juli Lassow 24:33
in the retail space in the consumer goods space, which is where I've spent my career circulars about a handful of things. One, it's about how are you designing a product and a product lifecycle to create the smallest amount of waste. So you're bringing the fewest raw materials out of the ground to make your product. You're making less waste and pollution or minimising to some extent eliminating waste and pollution when you're producing the product. You're being thoughtful on how the product is transported. And when it gets into your customers hands, you've designed it for size to fit from a length of service perspective, when that customer is done with their use of the product, there's a home for that product that is in the landfill. And the longer that you keep it at its highest best use of those original raw materials and components, the better. And ideally, that product like the sweater that I'm wearing, I get to wear it, I donate to someone who also wears it, and then two or three people down the road, it gets recycled. But the end date is not that it goes into a landfill. So think about that the product perspective designing that lifecycle. And when I say product, I would include packaging. So packaging is also sized to fit to purpose for what we need it to do. And then there are so many ways that that comes to be. So if those are the key elements, it's the lifecycle of the product itself and its packaging, then there's so many ways to think about how do you engage along the way to close waste loops. So sometimes that's a waste loop that you can close as a retailer internally, sometimes you see your supplier partners that need to close the waste loop and their production. And sometimes it's your consumer, and how are you helping them with their solutions and how to use the product and move that product to its next user. I love it. Because the solutions can start really small, really focused, you're closing one waste loop at a time. But you're building a lot of momentum and moving progress forward, which I think is important when you are trying to solve really challenging issues around global sustainability, global stability.

Brian Glick 26:34
So don't try to fix the entire universe in one design session.

Juli Lassow 26:37
Yeah, when it comes to circularity, I think it's it can be off putting because the idea of zero waste, it just sounds like you are closing one giant waste loop at once. I don't think that could be further from the truth. There's certainly different ways loops will have different impacts, obviously in scale, and scope and complexity. But start where you can start where it's most important to your customer, your client where you're best able to make action, but the key is to start. So that's where I think about it.

Brian Glick 27:01
You know, it's funny on the transportation side, when we talk to people in there, oh my god, we have to think about, you know, the exact routing and whether our ocean providers are slow steaming things. And in the meanwhile, they're doing 30% of their volume and airfreight. Like guys, let's maybe let them use whatever fuel they want and not order everything a month late so that you have to then move it to air, which you didn't even budget for in the first place. Let's go address that one first. It is interesting how people seem to think that new creative solutions are needed for a lot of things where you just better operational practices can make a huge, huge impact, right? Yep,

Juli Lassow 27:42
Absolutely. Absolutely.

Brian Glick 27:44
So what else are you excited about that maybe we haven't talked about as we're wrapping up here.

Juli Lassow 27:49
What else am I excited about? We covered COVID, we covered circularity, what else is there? Like I said, I love the work I do because it presents an opportunity to solve problems and build value in partnerships. And it's fun to have conversations like this recognising that your audience and your company show up in support in a different way than I'm used to. But that there's so many things that translate and I think there's a connectedness across even industries and sub industries. Now, it's just so exciting. We're all on the same or on a lot of these issues and pull them the same way, which I think is a lot of fun.

Brian Glick 28:23
Well, I would certainly admit that when I started in the customs worker space 25 years ago, and would go into, you know, large apparel companies love the trade compliance, people hated the transportation, everybody in the sourcing people. And they were on a different floor, right, or in a different building in a different city. And that was just the way it was right? There Was You can I remember many, many times, especially on the fashion side of the business, you can't even pretend that you're going to go tell a designer to do anything that might have an impact on any downstream process. Because God forbid, right? God forbid, we do anything to a sourcing person that would maybe improve the landed cost of the product or improve the Available to Promise date or the life but I don't think that's the world that people younger than us are living in anymore. I think people are more collaborative than they have been in the past.

Juli Lassow 29:24
Yeah, I agree. I use the phrase business empathy earlier. And I think the teams that are set up and have a culture of that are able to just be so much more successful because there's a sense that yes, the cross functional team that needs to make this happen. But the teams that work well at least have that perspective in mind that there's different ways to build a great product to lower costs to shorten lead time and you don't have all of the answers and being open with at least some of the questions or knowing who to go to to ask some of those questions and get a broader perspective than what you bring to the table. That's a pretty fantastic way to go. So empathy plus curiosity is a pretty good mix in my book.

Brian Glick 30:02
I think that is an awesome place for us to wrap up on a high note. So if someone wants to get in touch with you wants to talk more, what's the best way to find you?

Juli Lassow 30:11
Well, I have every confidence, you'll put the links into the show notes, but I'm very findable on LinkedIn. So I'm Julie Ju, Li lasso la SS Oh w. So not quite like Ted. But please feel free to reach out on LinkedIn. Also website jhL dash solutions where I've got a fair amount information around partnerships and circularity, and you can email me through the site or take a look at some of the things I've already shared. Clearly, I'm passionate about many topics across retail and circularity. So I certainly welcome the conversation and would love to have you reach out.

Brian Glick 30:40
Thank you so much for chatting today.

Juli Lassow 30:44
Yeah, of course. Thank you so much for having me. It was a delight.

Brian Glick 30:47
All right. Thank you. Goodbye. Thank you so much to Julie for such a wonderful conversation. As she mentioned, we'll include all the links to her contact information in the show notes. And also make sure that you head over to chain.io and check out all the new content we have in the blog section. Recent updates, including a celebration of women in supply chain, white papers on making better build versus buy decisions, information on how to weather the rate decreases economic downturn, and all sorts of other really great industry content, either for your personal development or for steering your company forward through these uncertain times. So looking forward to speaking to you again next time. I'm Brian Glick, founder and CEO Chain.io.

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