Steve Yurko: 0:00

A thing we've had a lot of fun with is taking all this information and putting it in our neural engine and training the neural engine to the client's requirements so that it can actually produce an outcome to reduce risk, or reduce the reliance on suppliers that are harming the, the world.

Tom Raftery: 0:19

Good morning, good afternoon, or good evening, wherever you are in the world. This is the Sustainable Supply Chain Podcast, the number one podcast focusing on sustainability and supply chains, and I'm your host, Tom Raftery. Hi everyone and welcome to episode two of the Sustainable Supply Chain podcast. If you're wondering what happened to the Digital Supply Chain podcast, I've rebranded it after 381 episodes to the Sustainable Supply Chain podcast. And this is episode number two. My name is Tom Raftery, and I'm excited to be here with you today, sharing the latest insights and trends in supply chain sustainability. Before we kick off today's show, I want to take a moment to express my gratitude to all of this podcast's amazing supporters. Your support has been instrumental in keeping the podcast going, and I'm really grateful for each and every one of you. If you're not already a supporter, I'd like to encourage you to consider joining our community of like minded individuals who are passionate about sustainability and supply chains. Supporting the podcast is easy and affordable, with options starting as low as just three euros or dollars a month. That's less than the cost of a cup of coffee, and your support will make a huge difference in keeping the show going strong. To become a supporter, you simply click on the support link in the show notes of this or any episode, or visit tinyurl. com slash sscpod. Now, without further ado, I'd like to introduce my special guest today, Steve. Steve, welcome to the podcast. Would you like to introduce yourself?

Steve Yurko: 1:53

Sure. Tom. I'm Steve Yurko. I'm the CEO of apexanalytix. It's good to be with you.

Tom Raftery: 1:58

Thank you, Steve. And what is apexanalytix?

Steve Yurko: 2:03

Our company does ultimate supplier management. What that means is supplier information, supplier risk, and supplier working capital opportunity management. The three main offerings that we have are service and a, and a technology solution that identifies overpayments, reaches out to the suppliers and recover, recovers those overpayments for a contingent fee. The software piece of that solution does all that in an automated way. And we do that for about 200 of the Fortune 1000. Been in business 35 years. The second piece of the company the second offering is a supplier portal application, which does the ultimate supplier information and risk management. And that's in use by 90 of the world's largest companies. And it manages the onboarding of that supplier. Validating their information around the world, across over a thousand different databases. And then monitors for risk, cyber risk and, and other types of bank account fraud and other types of risk. And then the third thing that we do is through these first two offerings, we just get access to a massive amount of data. About $9 trillion in invoices. Tens of millions of updated supplier records from our customers. And we use advanced technology, some statistical models, some AI engines, large language models to consolidate and curate all of that vendor master data and create what we believe is the world's most accurate supplier information database in the world. And we sell access to that and use it, and it's used as a backbone of our other solutions to make sure that we're doing a great job for customers.

Tom Raftery: 3:40

You're keeping them honest,

Steve Yurko: 3:43

Exactly.

Tom Raftery: 3:44

Okay, great. Great. If I were to ask you about supply chain risks, we're at the start of 2024. What do you think are the kind of top supply chain risks for organizations these days?

Steve Yurko: 3:57

Yeah, I mean, by far, Tom, I think the, I think, and this is across our customer base and almost every prospect that we talk to, by far the biggest risk to the supply chain from a, from a sustainability perspective and, and from a going concern perspective is, is the compromising of emails and, and bad actors using that, those compromised emails to gain access to systems for, for the world's buyers. And so bank account fraud and changing bank accounts and and, and using that to, to to steal money is, is really one of the, one of the biggest disruptors at our clients. And it's not getting better. You know, there, there's. And you know, by the way, I had the opportunity to interview General David Petraeus and, you know, he was a direct director of the CIA and obviously has had a great military career and hi, and his point around supply chain resiliency and the, the importance of protecting the supply chain is that when, when it's compromised, these bad actors are not donating it to UNICEF or the Red Cross. They're using, they're using it for really nefarious purposes. And so. It's really important. It's an important topic, an important thing for large companies to protect against.'cause there's a lot of evil being done with what's done with, with the theft there.

Tom Raftery: 5:21

Sure, sure, of course. And . Are, I mean, you, you talked a little bit about the fact that you're using AI and large language models. Can you talk to me a little bit about, you know, technology and automation in supplier risk management? How, how that's working out.

Steve Yurko: 5:38

Sure, sure. Yeah. I mean, you know, there's, there's several components that, that we utilize and that we apply towards the, the three solution sets that I talked to you about. One is the statistical models to predict which of the suppliers have billing issues or have other issues that could disrupt the procure to pay process or the supply chain for our customer, the buyer. So across, you know, all these transactions, across all the interactions we have with, with suppliers, we use technology to predict which suppliers ought to be really looked at really, really hard as we move to a new client, for example, in the new project. The other, the other thing that we're using advanced technology for is in curating the data to create what, what we believe is the most accurate and up-to-date vendor, vendor master record. So there's data coming from, I I mentioned over a thousand different data sources plus. Tom, when we do the recovery of the funds of an overpayment for our client, you know, we're interacting with the, that supplier sometimes over the phone, sometimes electronically. And our technology, the large language models pick up that activity and we do fun things with it. For example, we, we can know if there's been a contact change at a supplier recently. That can get expanded throughout all of our different data sets. Or for example, if we want to know a particular contact and whether they pick up the phone or respond to email and what their preference is. And if they do pick up the phone, what time of the day is most likely that, that they'll do that? So there's some really interesting, interesting applications of that technology to help us serve our clients better, for sure.

Tom Raftery: 7:24

Nice. Nice, nice. And of course this is the Sustainable Supply Chain podcast, so we should really be talking about sustainability . So, talk to me a little bit about the evolving landscape of ESG compliance, for example, and how that's impacting supply chains.

Steve Yurko: 7:43

Yeah, Tom, I mean the, the, the second solution that I talked to you about, that, that is our supplier portal, supplier information risk management. One of the key categories that we're helping our clients with is around sustainability and, you know, the, the definition that we use around sustainability is you know, is that, is their supplier is, is their supply chain environmentally responsible? Are they socially responsible? Do they have good governance around their incentive plans lined up with shareholder objectives, but also is the supply chain resilient? And you know, as we think through the different categories of supply chain resilience, you have this issue of, boy, as a, as a large company, I need to know who my suppliers are and which supply, which suppliers supply, which suppliers. So that's kind of a, a first level of, of, of care, of, of analysis that we want to do for our clients. So, which supplier supply, which suppliers. The second level deals with well, what, what's the location types of those suppliers? So it matters greatly, whether that's a business office or distribution center or manufacturing center in terms of, you know, a potential weather event that's coming and, and the disruption. So the second level is, is what's the location type of that supplier. The third level is, you know, what, what is the main product that's being traded between suppliers through the, the n-tiers in the supply chain? And so, our platform of our, you know, confidential and connected platform where suppliers and customers can interact, it, it enhances the ability for our, those suppliers to represent through their supply chain where they're getting their key products and, and, and identifying that so that our client, the ultimate buyer can get a feel for when supply chain disruption can be predicted. And then the fourth level is really you know, when it gets down to bill of materials. I know, Tom, you have a background in ERP and, and you know, ultimately, you know, there's, there are, there are solutions out there that take a look at boy, all through the supply chain at each level. What are the bill of materials and those bill of materials being shared and what are the part numbers as part of that bill of material and when there are supply chain disruptions, how to, how to predict that and to get out ahead of that as a buyer so that you can do supply chain planning. And so, you know, from our perspective when we talk about sustainable supply chain, it's all those things. It's environmentally responsible, it's socially responsible. There's good governance, but there's also a really deep knowledge of you know, first of all who you are, your first level suppliers. First of all, that's the adding and subtracting that we've gotta get right before we go to the calculus of you know, the n-tier. But you know, we're, we're heavily involved in all of those things with, with all of our clients to help them mitigate risk,

Tom Raftery: 10:38

Sure, sure. And if if I am, for example, a company on your platform, and I'm looking down through my suppliers, is it possible for me to identify which suppliers would add the most to my emissions, for example? Given that, you know, 90% of most organizations emissions come from their supply chain, I'm guessing the best way, well, I'm not guessing, I know. The best way to reduce your, your emissions is to to source from suppliers that themselves are low emissions, given that 90% of your emissions come from your supply chain.

Steve Yurko: 11:19

Yes, Tom. I mean, it's a great point and, and yes, you know, when we are working with large buyers we we have two different ways that we can help large buyers. One is, first of all you're right, 90% comes from their supply chain. But, but I. You know, especially if they're a manufacturer, of course they could have a big footprint. And so one of our solutions actually connects to the different machines that may be, may be being used to measure the energy used and the carbons being e emitted by their own machines and align that with a project management capability that allows them to track towards whatever their net zero, for example, if they have a net zero goal that's time driven. And so there's a solution there that, that actually helps the buyers with their own tracking of that. But you're exactly right, most of it comes from the, the supply chain. And so, as you know, Tom, you know, the, the gathering that information about carbon footprint and, and energy uses usage from the supply chain to traditionally is done through surveys, through you know, communication where the, the suppliers actually representing what they found about their own internal study. But one of the things that we've been able to do with some advanced technology, is we can do the questionnaires and, and we do that with multiple tiers in the supply chain. But we've also developed using some advanced technology an extrapolation model that will take the, all the public documents from all the public companies that are required to disclose their ESG progress and the way that they're measuring it and capture that. Most of them are PDFs posted on websites. The technology captures that translates it into metrics that feed the various frameworks. And based on the country and the, and the industry that they're, that they're in, we can instantaneously we have customers with hundreds of thousands of suppliers instantaneously score their suppliers based on, on the publicly available information, extrapolated into, into industry and, and region of the world, and help our clients get to a, a place where they can rapidly Identify what potential opportunities would be. And use a platform like ours to reach out to that supplier to work on remediation. So, it's a, it's. It's something that, that, that is not just for the global good either. I think the, the world's largest companies look at it as a, as a, as a profit issue. And and it's, it's fascinating how that is evolving where, you know, the, the capitalism of the whole thing is also driving it, which is, I think ultimately a, a key to this being a long-term, area of investment and progress. Most importantly, for, for the world's largest buyers.

Tom Raftery: 14:45

Yeah, absolutely. I mean, I, I'm just thinking in terms of organizations. You have pressures coming from their investors, but you've also got pressures coming from their customers, you got pressures coming from their employees. So if you have a good sustainability story, you know, you find it easier to recruit and retain good candidates. And as well you find it easier to recruit new customers and, and keep them as well. So, you know, that's, I think that's the point you were making about profitable. But maybe, maybe you had another spin on it.

Steve Yurko: 15:21

No, no, no. You, you, you nailed it perfectly. I mean, the investors, employees, customers. You know, they, they're also getting smarter and smarter and looking past the pr and looking for progress and practical proof, you know, that hey you know, we, we, we need to understand, really the, the outcome, the, the, the outcomes that you're achieving, the, the actual progress. And so solution providers have to play a key role in that because it's, it, the world is moving to practical, not political, around this issue. And, and I think it's a very, very positive development.

Tom Raftery: 16:01

And speaking of pr, I mean how, how can you be sure or how can I be sure or how can investors be sure or employees be sure or customers be sure that this is not greenwashing, that this is actual hard data backing up these claims?

Steve Yurko: 16:20

Yeah, I mean, you know, ultimately, and it's why we're so excited. We, we made an equity investment in acquisition of a company that has this, this technology to actually capture it off of machines. And depending on how big a supplier is to a large buyer, you know, we, we are starting to see that, that, that the buyers are requiring suppliers to not just produce A PDF representing, you know, what, what a, a claim about the progress they're making in reducing their carbon emissions, but looking for hard data. And so I think that's gonna be also something else, Tom, that, that starts to become more and more prevalent is, you know, I, I, I appreciate the, the pr, but I need the proof.

Tom Raftery: 17:04

Yeah. Yeah, exactly. No, that makes a lot of sense. And for solution providers for global 2000 companies, you know, what, what do you think are the biggest challenges when it comes to implementing new tools for managing ESG goals and complying with global regulations, which we haven't touched on yet, but are really, really moving fast as well?

Steve Yurko: 17:28

Yeah, I mean, you know, we, we use this analogy a lot internally. You know, when we decided to go to the moon, we didn't start off the designing the little buggy that we're, that, that the folks were gonna ride around on. We, we started off designing the the jet propulsion and the, and the life sustaining systems in the, in the rocket. And, and so it's, your question is a really important one. It's like, how, how do we, you know, what, how do we get there? And I think it's, it is very important to, to take a look at, boy, the first thing we need to do is understand first of all who our suppliers are. Who do we do business with? And have good, good information about them. And, and then once that relationship is formed, and the trust is formed, start to share. Have a platform where information can be shared. So, there may not be a public company. You're asking them questions about, you know their own operations, all the way down to, gosh, where are you building things and what's your bill of materials, which is very sensitive to the, you know, to to suppliers. It's a competitive advantage for many of them. And so there has to be that trusted relationship that's set up. So, you know, there, there are some real important kind of blocking and tackling things that need to happen first, and then from there you can progress towards boy, there's a, there's trust there. Let me share with you our expectations of you as a supplier. You're making this widget you're claiming that you're, this is the cer, this is the carbon emission that's being produced as a result of that. We need, we need to see proof. If you don't have a way of, of developing the proof, then we've got suggestions on tools that you can implement and that, that and so we're starting to see you know, it's not at scale yet. If you've got our customers have hundreds of thousands suppliers, it's hard to do that immediately. But very strategically with this, with, with the large suppliers and the ones that, that are making things and shipping 'em that have a lot of carbon emissions associated with them. We're starting to see this relationship being more of a partnership around this issue between buyer and supplier.

Tom Raftery: 19:35

And how much of it is compliance driven versus how much of it is companies just, you know, being best in class versus well, I would, I I, I think the point I'm trying to get to is can supply chain sustainability and transparency, can that actually evolve into becoming a competitive advantage? You know, is it, do you think that's something that's likely to happen? Has it happened already? or, or will it happen in the next few years? Or, you know, how much of this is, as I said, as a start compliance driven, you know, where are we on that kind of scale?

Steve Yurko: 20:13

Yeah, Tom, I mean a really great question. I mean, from a compliance perspective, you, you know, all of the different regulations that, that are, that have been put in place, but also that are on the way, they're, they're, they're and they're not, they're not getting fewer, in other words. So there, there's, there's regulation on the way for sure. And I think that is driving some of the conversation. But I, I will say also that, you know, these large, large buyers, and again, that that's the main experience that we have the last 30 years pretty much exclusively in the Fortune 1000. So that's the, that's the experience that I can speak from large companies even before these regulations happen. I'll go back five or six or seven years ago. You know, nobody wants a supplier that's that's been convicted of dumping a bunch of waste in river or has a human rights violation. And so there's some kind of common truths about you know, who I think a, a, a as human beings we want to do business with. And so I, I think the, the beautiful part about what's happened over the last four or five years especially that's accelerated over the last couple is you know, there, there are ways to kind of create systems that can help these buyers make sure that they're you know, that they feel good when they leave work that day that they did something good. And so I, I think that's been around for a while, Tom, but I think it is accelerating and to the extent that, that there are people and solutions that can help them reliably have accurate information about that. I, I think I think they're gonna do well and I think it's gonna be in high demand.

Tom Raftery: 22:01

Okay. We've talked a lot about the E in ESG. What about the two other letters, the S and the G? Can you. Talk a little bit about the social and governance?

Steve Yurko: 22:13

Yeah, I mean, you know, from our perspective, you know, the, the, the, the key technology that any provider needs to have that's helping a company evaluate that is the ability to really look in the nooks and cranny, crannys of, of all the news cycle and even the dark web. And, and and, and just span the, the globe for information about what's going on with with suppliers and, and, and what they've been convicted of or, or and or what's going on with them in the dark web. And so, you know, we haven't really talked about cybersecurity, but it, it, it all plays into the same issue of, boy, I want to, I wanna responsibly allocate the resources that I have as a large company to the right suppliers that are, that are doing the right things. And so, you know, the ability to go and monitor around the world, what's going on in the news cycle is very important to understanding are people being environmentally responsible. Um, and, and so that's a key part of, as a solution provider, what we rely on to help our, our companies understand what's going on there. From a cyber perspective, there's, there's applications and we made an equity investment, an acquisition this year for a company that does nothing but that looking for weaknesses at suppliers in their supply chain. The reason this is this is important is, as I mentioned earlier when things are stolen from large companies and traded on the dark web and sold, the funds that are changed hands as a, response to that are not, you know, they're not good things being done with that money and so, from an, from an environmental perspective you know, you can, you can span the globe looking for infractions, lawsuits, guilty pleas, and, and, and create a score around that. You can also have suppliers self represent what, what things are going on in their business and, and have a, a mechanism to collect that. And then from a governance perspective, it's really the hardest one. I mean, you know, ultimately, you know, the, the, it it's looking at, at a supplier, do they have incentive practices, for example, that aligned with the best interests of our client or the stated objectives of that company. And, and so some of that is subjective. Questionnaires are a great way to get to that. Also using news monitoring to to monitor, you know, are there some lawsuits happening between board members, that sort of thing. But it, you're right, it, it, both of those, really all three of those, it what's going on in the environment and what, what, what's happening socially and, and, and what, what's happening in the governance environment, it, it all plays into and can be scored to help a client figure out whether or not, boy, I want to continue to do business or not with this supplier.

Tom Raftery: 25:12

Yeah, it's a very immature space, Steve, isn't it? I mean. There aren't really reporting standards per se. We're starting to see them in the emissions space. Sure. But particularly for social and government governance, less so. Do you think that's gonna be something we'll see change in the coming years?

Steve Yurko: 25:32

I think it will, Tom, I mean, we, you know, we have the privilege of working with some folks in Washington. And so we have you know, a an opportunity to understand the things that are being talked about around this topic. And so I, I think you know that there's gonna be an attempt just like there has been around some of the environmental things. It, it, you're right, it is gonna be more difficult and but you know, from our perspective we, we can stay pretty focused on the things that we know large buyers care about. And it's, boy, if you've been convicted of modern slavery violation most likely that's gonna be in the news. And that's something that it's pretty easy to grasp and, and, and put in front of a client so that they can make a, a decision around. And the, and the important thing is, you know, for, for folks like, like Apex and, and other solution providers, it's also to focus all this information because there's all these signals of risk that are happening, especially if you have hundreds, hundreds of thousands of suppliers. And so, systems that can consume these faint signals of risk and translate them into an outcome, which is, boy, you know, we've got a child labor law violation. There's a, the email compromise from that same supplier. There's a new login from Nigeria that we've never seen before, and, and they just changed their bank account to something that the bank says doesn't really connect with that, that vendor in any way. So, what suppliers need to do that, that are helping companies with this is to, is to create outcomes and that that is consume all of those faint signals of risk. Work with the client on how they want a decision from those signals, and then reach into the ERP, for example, and put that vendor on hold until somebody releases it. And so that's that's a, I think a a thing we've had a lot of fun with is taking all this information and putting it in our our, our neural engine and training the neural engine to the client's requirements so that it can actually produce an outcome to reduce risk or reduce you know, the, the, the reliance on suppliers that are harming the, the world.

Tom Raftery: 27:52

Nice. Yep. Yep. And where to next? I mean, where do you see the likes of sustainable supply chains moving in the next 2, 3, 4, 5 years?

Steve Yurko: 28:02

Yeah, Tom, I mean I think that this, and you asked the question earlier, it was a really important question about how, how do we progress and how do we get there faster? I think the, I think ultimately the world's buyers who are responsible for distributing the blessings of their resources to the, the world's suppliers, the you know, they are, I believe, are going to take a more and more active role in working with those suppliers to mitigate the risks that are there, the environmental risks. It, it help them eliminate the exposure they have across their own supply chain to modern slavery, for example. And so, I really anticipate we're starting to, to see this in the world's largest companies is, is taking a more active role in managing and mentoring their supply chain, but not, not, you know, manually it's, it's gonna be using technology.

Tom Raftery: 28:59

Sure.

Steve Yurko: 29:00

And, and I think, the pace at with which you know, the change for good happens is gonna is gonna rapidly accelerate due to that.

Tom Raftery: 29:09

Yeah. Yeah. I mean, it can't be done manually. Otherwise it wouldn't scale. It has to be, it has to be automated. Yeah.

Steve Yurko: 29:14

that's right.

Tom Raftery: 29:15

Totally. Steve, we're coming towards the end of the podcast now. Is there

Steve Yurko: 29:19

Yes, sir.

Tom Raftery: 29:20

Any question I didn't ask that you wish I had or any aspect of this we haven't touched on that you think it's important for people to think about?

Steve Yurko: 29:28

No, I, I mean, Tom, I I, I, I think that you've covered the things that certainly our clients are asking us about around these topics. I think the, the, the journey that you're on to make these things front and center to the solution providers of the world, but also to the buyers and the suppliers, I think is really important. And I think they're universal things. They're universal goodness that, that that solution providers and buyers can, can drive in the world. And I think it's really important. It's a really important to do so.

Tom Raftery: 30:00

Super great. It's nice to hear . Fantastic. Good, good, good. Steve, that's, that's been really interesting. If people would like to know more about yourself or any of the things we discussed in the podcast today, where would you have me direct them?

Steve Yurko: 30:15

Yeah, Tom, Www apexanalytix dot com. Analytics with an X. And there, you'll get a look at all of our different client stories and, and the things that we help 'em with. And then also we actually put on a uh, a, an Icon Conference. It's a conference of our customers and, and other Fortune 1000 companies to get together and talk to each other about these issues and how they're being solved. Some of the times we talk about our solutions, some of the times we don't. It's really, we put it on to get the world's largest companies together to help each other get better and improve and, and share solutions. And so that's another way that, that someone could interact with us. But that information's on our website as well.

Tom Raftery: 30:57

Fantastic. Fantastic. Steve, that's been great. Thanks a million for coming on the podcast today.

Steve Yurko: 31:01

My pleasure, Tom. Have a good day. Thank you.

Tom Raftery: 31:05

Okay, thank you all for tuning in to this episode of the Sustainable Supply Chain Podcast with me, Tom Raftery. Each week, thousands of supply chain professionals listen to this show. If you or your organization want to connect with this dedicated audience, consider becoming a sponsor. You can opt for exclusive episode branding where you choose the guests or a personalized 30 second ad roll. It's a unique opportunity to reach industry experts and influencers. For more details, hit me up on Twitter or LinkedIn, or drop me an email to tomraftery at outlook. com. Together, let's shape the future of sustainable supply chains. Thanks. Catch you all next time.