The Connection Between Supply Chain Data and Better Decisions

Welcome to this Inbound Logistics video podcast presented by Inbound Logistics Magazine. Today we'll be talking about the connection between supply chain data and better decisions. Our guest is Mike Maderos, executive vice president of operations for Penske Logistics. And here is our host Amy Roach. — Thank you Jeff and welcome Mike. Thanks for joining us this morning. How you doing? — Wonderful. Thanks for having me Amy. — Absolutely. We have a great discussion lined up today. We're going to talk about supply chain data and uh that's obviously something we're all dealing with every single day. Uh but before we jump in, just take a minute, introduce yourself, tell us about your role there uh at Penske Logistics. — Yeah, so my name is Mike Maderas. I am the executive vice president of operations here at Penske Logistics. I have the pleasure of leading all of our operations from uh dedicated contract carriage to warehouse management services as well as our supply chain management product line. So, um, been with Penske for 26 years in a variety of different roles and responsibilities over that time and, uh, happy to be here today with you. — Absolutely. Sounds like you've seen it all. And that's kind of a good segue because we're going to start out with, you know, things are changing rapidly, uh, especially in the on the data front. Um, supply chains today have access to more data really than ever before. Uh, but it seems like a lot of organizations are still struggling to make faster, confident decisions. Um so I want to start by asking you know why do you think that gap still exists? — It I think more information doesn't necessarily equate to better outcomes and yes systems have evolved evolve significantly but they've really done so independently. Um most systems core systems provide very strong visibility and outputs inside of that single system. And when you look at down andin transportation, yes, there's tier one technology that's available. Down andin warehouse um management, there's tier one technology available. But again, the complexity has continued to increase. And providing that single source view across the supply chain, I think is still a challenge. — Yeah, I got it. So, it's not really uh a lack of data, right? There's something else happening there. What is the real problem that's going on? Yeah, I think if you asked anyone, there's probably no one that would say, "Yeah, I just don't have enough data. " Um, — yeah, — you know, organizations certainly they're not short on information. I think they're short on information that they can truly trust. And — you know, that brings up this idea of data quality and data [clears throat] matters. Um, the integrity, the quality of your data matters. Um, disconnected systems oftentimes create a lot of friction. uh they create that uncertainty that leaves people kind of second-guessing their decision- making process. You know, I would say is, you know, bad inputs create bad outcomes and if you don't trust the data, you can't trust the decisions you're making on a day-to-day basis. — Yeah, absolutely. I think that's key. Bad input creates bad outcomes. Can you expand on that a little bit? I think, you know, again, there's so much data out there. What what's the challenge there and what are the negative consequences if you're working off the wrong data? Yeah. So, you know, I think today um not a minute of the day seems to go by where you don't hear the word AI and uh people are talking about it, but in order for AI to truly have an impact and be a force in your business, you really need good quality data inputs. And um you know, just aggregating data, pulling it into a single source isn't enough. The context matters. Um — and I think when I think of Penske logistics journey, you know, data integrity, we identified early on that was a significant opportunity. How do we ensure that the inputs are delivering the output we desire? And we began on a journey to really identify what are the critical data elements that we need — to ensure precise outputs and accurate visibility in the platforms we're operating. And um we really we created a three-pronged approach. you know, it's manage, it's monitor, and it's remediate. And in that manage phase, we identify those critical data elements. We promoted data literacy and data stewardship across our organization, across every team member. Um, and then you move into the monitor phase where we established very clear rules. We created processes to identify those anomalies that are certain to arise. Um, we established appropriate alerts and notifications around potential quality issues. And then the last piece was that remediate. When we identify those opportunities, what do we do? So we've maintained very clear metrics around the data quality that we have. We're actually measuring our data. We have dashboards that go out to the field every single day that identify, you know, what the quality of the data that they're inputting into the core systems is. And it allows them to take swift action when those anomalies are identified and detected. And I think that approach has really allowed us to build confidence not only with our team but with our customers. — So as you mentioned, it seems like every conversation is about AI now. So I'm curious, can you tell me a little more uh what is Penske Logistics doing with AI right now? — I'll preface it like I always do and

everyone talks to me about AI. It's with good data. Um, so with good data, you know, you can you can do a lot with AI. And I think of where we're at in our journey with supply chain insight. And we have AI powered insights through our integrated AI assistant. And today that assistant can query loads. It can look up orders. It can identify exceptions. Um, you can ask it performance related questions really without um needing to go to dashboards or analysts to identify the information and it quickly responds to those prompts. But the future um it's really designed to evolve into this proactive personalized supply chain analyst for our customers and really position them to deliver faster decision- making with broader access and insights um without requiring a great deal of technical expertise. So, we're excited about where this is headed and um we're really laser focused as I mentioned earlier in the discussion around, you know, that data quality and making sure that the inputs will drive the outputs that we want not just for today but for the future. — Yeah. And that data quality on the AI side is just as important if not more so, right? Because now you're talking about having maybe not full human control of certain things. You have to have that good data. — Yeah. I mean wi with good data um you can leverage AI to close those gaps and if you see something that statistically happens 99. 9% of the time and the fix is always the same then you can leverage AI to just fix it in the background and again the goal is to allow our people to focus on you know those value ad activities and and not that nonvalue ad work. So um I think the sky's is the limit but uh it all starts with good data — with Yeah. Okay. And will we get to a point you think where AI becomes uh you know basic everyone you have to have it or else? — Yeah I I'd like to think so. Um I think the challenge that is going to continue to plague people is you know when you think of where their data is coming from and the multiple systems and sources maybe through time or mergers and acquisitions. Um, you know, you got to identify what those critical data elements are that need to be right day in and day out without fail to give you that visibility and the data quality that you need to really layer in AI to have a positive impact on the business. — And I want to talk a little bit more about the customers and uh, you know, back up maybe a little bit. What are they struggling with today? What are the things that they're coming to you that they're really needing this data for? — Yeah. And I'll kind of go back to where I started. I think it's just that uncertainty. Um, and what I see customers today, it's they're trying to anticipate where their next challenge is, but all too often they're being alerted to a problem after it's too late, after it's already a disruption in their supply chain. So, um, now they're forced in that uncomfortable position of how do I minimize the impact of where I am today versus why aren't I upstream far enough to have headed this off or to have anticipated a potential disruption and put some insulation in between that disruption, me and my business. And uh, I think that's still a very real challenge for our customers. Um, this whole idea of reacting verse anticipating. And you know, I think that's really the premise behind why Penske Logistics has been on this journey to build um supply chain insight and that platform really aggregates data with correct data quality controls to provide that single source view of trusted information not only for our customers but for our people in the field supporting them. — Right. You said about the disconnected information. And I think that's an important uh you know point to hit on when you're dealing with all of these disruptions and when you're trying to uh you know coordinate all these different facets of the supply chain if you have that disconnected information that really is a struggle. Is that correct? — Yeah I think when I think of our customers today they probably have 10 15 windows open they're managing multiple different systems um and trying to connect the pieces across their supply chain. You know what we've done with supply chain insight is we we've created a platform that aggregates the data from all those systems and provides that single source pane of glass view for our customers and our people. And [clears throat] when you can manage and monitor the performance and health of your supply chain in one place, um we're seeing more expedited decision- making, more confidence, and really allowing us to get to that desired state where we're anticipating where the next disruption is coming from rather than reacting to a problem once it's occurred. Right. When it comes to making faster decisions, you know, can you share an example maybe of what kind of a decision could be expedited through using the supply chain insight platform compared to, you know, before? — Yeah. And I think, you know, I go back um I think of customers that have called us and they're struggling to cover a load on with a third party carrier and they [clears throat] can't identify um a

method or means to get it done. It it could be critical. They came to us. we were able to identify a driver within our network through our visibility platform, reroute our driver immediately to pick up the load in need and get it to where it needs to go. You know, those are the kind of things that are playing out every single day across our business and uh our customers are coming to us when they have challenges and it could be something outside of what we manage today for them, but we're adding value with the resources and the team we have in place. — Yeah. Okay, that makes sense. Um, I'm going to shift a little bit and talk a little bit about visibility because I think maybe it's the most overused word in supply chain. I don't know. We hear about it all the time. Tell me, is that enough anymore? Is visibility, you know, the baseline now? Is it not enough? — Yeah, I I don't think visibility is enough. Um, I think visibility has really become table stakes in our business, showing you where's my thing. Um, but just seeing something doesn't necessarily mean you understand it. And I think really the next evolution is you know that across the supply chain view um taking that context and turning it into action and moving more towards this state of operational intelligence. Really truly trusting the information you're seeing, anticipating those potential disruptions and taking action early. And I think that's the next phase of visibility. um that that's where we're headed with supply chain insight and I really uh really am excited because the ability to be proactive in our world is so important um to save ourselves from a headache or a disruption. And then when you think further down the stream, the customers we serve and uh the products we move um we're moving medical supplies, we're moving automotive parts, things that are critical for people to get the care they need to get their kids to work uh to school the next day. Um, we just we can't miss when it comes to the work we do for our customers. So, being more proactive and getting further upstream is crucial. — I like that idea you said about moving toward operational intelligence. Can you break that down a little bit more? What does that how does that play out? What does that look like? — Yeah, I think for me, and I I tend to simplify things, but I think it's just trusting the information you're seeing and really making that gut decision earlier and more frequently and often. and we do that with our customers today shoulder-to-shoulder. Um, but you know, operational intelligence, how can we leverage that data to identify historic trends that maybe indicate a future disruption? That that's really where we're going. It's how do we get further upstream with everything we're doing in support of our customers as we manage the movement of goods across the supply chain. — Mike, I'm going to give you a little bit of a crystal ball moment here. uh if you as you look forward, where do you see supply chain decision- making specifically? that going? — Yeah, I mean from a Pensky logistics lens, it's helping people move faster. It's helping our customers make uh more confident decisions. It's bringing to the surface those critical things that matter the most to enable us to be a ahead of a potential disruption. really removing anything from a friction standpoint, helping our teams focus their attention to the greatest points of risk, I think is really where I see us going. — Fantastic. And along those same lines, organizations when they come to you uh to help with the supply chain decision- making, you know, what do you think they could do better? Where's one place they could start today? — And I would tell I would tell organizations, don't look to technology to solve all your problems. You got to start with where your problems are. And everyone has unique problems. They're all a little different. You need to really truly understand the problems you're trying to solve for. And then you can begin to maybe identify the tools, the technologies that can enable and enhance performance. You know, I think of our journey with supply chain insight, it started really with an internal problem. Um we have several customers we provide multip multi-product services to. So it could be we provide final mile transportation along with warehousing. Um, so we were losing visibility of the flow of the goods through the warehouse onto the dock into the truck. We were we're toggling between multiple systems to track those mo that movement and often leaving our ourselves on our heels a little bit. And we found ourselves saying if we just had another hour, if we knew this ahead of time, we could have been more proactive. We could have put contingency in place and really helped uh prevent a disruption before it occurred. And you know that was really the premise of supply chain insight. And now we have this secure unified platform that aggregates that data across multiple applications. It offers that real time visibility really when you think about it from the supplier into the warehouse through final mile delivery even with reverse logistics when we have returns. So um it allows us to monitor that performance, spot those trends and make those data-driven decisions with confidence that will really accelerate supply chain performance. — Yeah, that's so important because I

think you know the biggest challenge obviously is once you get to a supply chain disruption and you figure out how to handle it while you're doing that in the background the next disruption is coming up and you have to be ready. So I, you know, I don't know how else you can uh can get to that point. — And I think, you know, when you look at the workload on the front line folks and in our customers as well as our leaders at Penske Logistics, um they got a lot on their plate every day, you know, so how can we make their lives easier? How can we raise to the surface the things that really matter where their focus needs to be and let some of the other things kind of just manage and happen as they normally would? And I think that's crucial. We have to be in the forefront when it comes to pulling out that data and information and those insights that truly will help accelerate performance, give our people a head start, and help them focus on where their expertise and input is really most needed. — Fantastic. Makes perfect sense. Uh is there anything else that you'd want to uh touch into on uh supply chain decision-m, where we're headed, where we need to be? No, I think it's um it's an exciting time. Um you know, technology is uh is abundant and I think identifying where to lean into technology and how it can help your business. I'm going to go back to, you know, really understand your problems and um really understand what you're trying to solve for and that will lead people to the right technology. I found that with our journey and um we still see it, you know, really in everything we do today and it's uh it's an exciting time. I'm excited about supply chain insight and where the platform's taking us and our customers and the conversations it's leading to. Um it's great to be able to be upstream and planning how to avoid a potential disruption rather than — too late. the disruption's already occurred and now we're in uh triage mode and really trying to just do the best we can with what we have on our plate. So, um I'm excited. Uh the system has the ability to aggregate even thirdparty data. So, if there's pieces of a customer supply chain we don't manage today, we can pull that into supply chain insight and really provide that single source view. um that that's crucial to being able to get upstream and really make those decisions that you can trust and prevent those disruptions because at the end of the day there's customers supply chain and you know I mentioned it whether it's medical supplies or automotive or groceries um they all have a pretty big impact and someone's waiting on those goods and services and you know being part of that is exciting and anything we can do to accelerate it and improve that performance is exciting. So, it's an exciting time for sure, Amy. — Absolutely. Really critical stuff and I think really valuable for our audience. So, thank you again for joining us today. — Thanks, Amy. — Absolutely.