Paul F Magel: 0:03

If you automate a broken process, it just breaks down that much faster. So it's really understanding the relationship that you have from a supply chain, the business processes that you have in place, find the blind spots that you have. So you know how to map out a technology and a digitisation journey. Look at those relationships because the relationships are key.

Tom Raftery: 0:26

Good morning, good afternoon, or good evening, wherever you are in the world. Welcome to episode 54 of the Sustainable Supply Chain Podcast, the number one show focusing exclusively on the intersection of sustainability and supply chains. I'm your host, Tom Raftery, and I'm thrilled to have you here today. A huge thank you goes out to our amazing supporters. You make this podcast possible. And if you'd like to join this community, support starts at just three euros or dollars a month, which is less than the cost of a cup of coffee. And you'll find the link in the show notes or at tinyurl. com slash SSC pod. Now in today's episode, I'm excited to talk to Paul Magel and stay tuned because in upcoming episodes, I'll be talking to Sundar Balakrishnan, who's Director of Supply Chain Analytics at LatentView. Juan Meisel, who's CEO of Grip Shipping. Shannon Payne, who's SVP Supply Chain at MDSI. And Mickey Vandeloo, who's the founder of Lakeview Consulting. All that in upcoming episodes, but back to today's show. And as I said, I'm talking to Paul Magel. Paul, welcome to the podcast. Would you like to introduce yourself?

Paul F Magel: 1:39

Absolutely. And Tom, thanks for having me. Again, my name is Paul Magel. I am with Computer Generated Solutions. We're a global software and technology solutions company. I am responsible for the global software business. We have a software platform. Our product is called Blue Cherry. we primarily focus vertically in the fashion business, apparel, footwear, and accessories. I would say with an unfashionable side of fashion. We're focusing on the back office solutions. And again, to your podcast really dealing with the supply chain issues that the industry facing and focusing on today.

Tom Raftery: 2:13

Ok, and what kind of problems are you solving for your clients, Paul?

Paul F Magel: 2:17

You know, again we really touch on everything from supply side, demand side, making sure efficiencies across the supply chain, a big piece now that we're starting to see is around the whole sustainability piece and how do you track where goods are coming from, how they're being made from a labor compliance standpoint and how things are going forward, but it's all about efficiency, efficiencies and distribution of goods to the customers in efficient in an efficient manner. So again, all of the back office functions all the way through distribution and then the finance and the accounting side,

Tom Raftery: 2:48

Okay. And I saw on the website that you've been with the company since 97, I think it is.

Paul F Magel: 2:53

Twenty, 20, it'll be 28 years in 2025. And you know, I used to say I was 10 years old when I started. Now that's even sounding old. So I was five when I started, but you know, a lot of it's gone on in those last 28 years.

Tom Raftery: 3:07

Okay. What has happened in the last 28 years that has surprised you most?

Paul F Magel: 3:14

That's a loaded question. It's gonna take me 28 years to answer the answer the question. But, you know, obviously we've gone through some titanic shifts from a technology standpoint, right? The most recent one being artificial intelligence and A. I Probably prior to that, where's the Internet and the whole connectivity of the world. And then prior to that may want to go from kind of the mainframe centralized solutions to much more what back then was client server to now we've got this whole cloud enabled world. And we're moving from totally cloud based to hybrid cloud based, but, you know, those are kind of, of those years, kind of the major And again, I think currently everybody's getting their arms around artificial intelligence and what that means to them and their business model.

Tom Raftery: 4:02

Fair enough. And I mean, digital tools are reshaping supply chains. Where do you see the biggest opportunities for digital transformation to drive sustainability today?

Paul F Magel: 4:14

Yeah. So tremendous amount of opportunities, right? And yes, specifically about sustainability, but you know, digitisation and supply chain and the use of artificial intelligence really crosses everything, which again, certainly brings sustainability in as well. You know, I tend to speak to my team and even my customers, when we talk about AI around kind of three P's and I try to make it as simple as possible for folks to understand is first P is productivity. So it's, how do we look at the things that we're doing day in, day out to get our job done? And that could be along the supply chain. And that could be in terms of sustainability, but with the new digital tools with AI, how do we get more productive? So we get more done than we've done in the past. Second p is process. Our interactions with our customers and how we work and the tools that we have across the supply chain. How do we improve that process? How do we really turbocharged those tools through artificial intelligence to make them more efficient, more intelligent and more proactive. And then the third piece is product. And certainly as a software industry executive, what can we be infiltrating into our product set from an A. I standpoint to add more value to our customers as we go forward? So again, from a sustainability standpoint, the only way you can track sustainability and find and respond to all the compliance and rules and regulations that are coming out now is to digitize that whole supply chain from your vendor all the way through to the consumer. So that's kind of the first step is to get everybody connected digitally. And I think AI will help to accelerate that as we go forward and certainly new platforms, I mentioned cloud. Cloud based open APIs and just some of the newer technologies that allow us to be much more interactive at how we communicate among systems will help drive that message and value proposition.

Tom Raftery: 6:02

Okay. And what about something like transparency? It seems to be kind of the Holy grail of modern supply chains. How, how far are we from achieving real time end to end visibility across supply chains?

Paul F Magel: 6:13

Yeah, look, it's a It's an interesting conversation, right? And when it comes to sustainability, I talk to a lot of people are very, very passionate about sustainability. And, you know, I always say, Hey, as a technology guy, it's really not that complicated to me. It's just another field in the database, right? So in order to be transparent means you have to have the information you have to track it. So from a technology platform standpoint, it's about having the right container to capture the data that you want to capture where something was sourced, who touched it. right? You know, the amount of labor was put into it, you know, the raw materials that were used, et cetera, et cetera. So we have to track all of that. And then we may have, you know, but then we have to have kind of a reporting layer so we can report back to whether it's government agencies, the consumers or to your stakeholders about those goods and where they came from and how they're being And then from a platform standpoint, we've got to have open APIs and things so we can connect from system to system. So that data is going forward. So, you know, your question was how close are we are? How far are we from a technology standpoint, the capability is certainly there. You know how complex supply chains are. It's one getting every link on that chain connected, which again, if you go back a few years ago, and I didn't bring it up in that first question about some of the major changes which was blockchain, right? Blockchain was talked about tying this all together, building all this, but it was a very heavy lift in terms of technology, very heavy lift. You're only as strong as your weakest link. So if you don't have the data in that chain, then you're not transparent or traceable as we go forward. So technologically wise, we're there, we can handle it. The challenge is getting that entire supply chain linked together. There's some old legacy systems that have to be updated. There's suppliers in parts of the world that don't have some of the infrastructure that's required to provide that going forward. And it's not also just about reporting on it. The other question is how do you validate that data. Which is kind of the next piece of that. People can put things into the system as much as they want, but how validated is it? And that's where I think AI is going to help come and accelerate that. Cause you can start doing things like tapping into public satellite feeds and start looking at your suppliers and start rating your supplies. And based on activity from those satellites, you can kind of see where people are living, how they're living, how much time they're spending in the factories as one example of one way. It's to use technology to kind of help with that certification of data and traceability, as you mentioned.

Tom Raftery: 8:41

Yeah, interesting. Okay. And what about costs? Because you know, sustainability often feels like it's a trade off with cost efficiency. How do businesses strike that balance effectively?

Paul F Magel: 8:54

Yeah, I think that's something that people are struggling with here in right? There's certainly requirements coming in from the consumers. You know, if you look at the data, they'd like to buy from a company who's more sustainable, who's not exploiting workers and those types of things, but it's, but it also costs more to do that. And I think the data also shows that there's a certain point where as much as people desire to purchase those types of goods with those types of attributes there's only a certain amount of money they want to spend for those. Again I think that's also where technology comes in again today. So we talked about kind of that first T P about productivity and using AI to become more productive. So if I can do more with less and deploy technology to make us more efficient, we hopefully can drive the cost down so that when we bring in that traceability data, And we start looking at some of the costs of doing business to allow it to make that more visible and accessible to the, consumers that it's done in a way that, it's the right product at the right price at the right time. So the customers have what they need and they've got a price point they're willing to pay for. So again, I think it's a balance that everyone's kind of looking at. we give them what they need, give the government what they need and still be able to provide a product that people are willing to pay for.

Tom Raftery: 10:12

Okay. And you mentioned AI, it's obviously transforming supply chain planning, but how can it handle the increasing unpredictability of global disruptions? I mean, they're popping up all the time now, it seems.

Paul F Magel: 10:26

Yeah. So again, AI and just that whole digitisation of the supply chain, right? At the end of the day, it's all about collecting as much data as you can to not only predictive models, but to be much, much more agile as you go forward. So, you know, one of the big benefits of AI is to take a tremendous amount of data, um, and be able to make, not just looking in the past and make predictions from the past, but also sensing demand that's current, sensing different things that are going on. I talked about satellite images and input. It could be weather related. models and predictive models that can all be brought into how we can bring all of these pieces together to be much more efficient So I think AI is going to help drive that that efficiency going forward, allow us to build a much broader base of supplier relationships and much more, you know, I speak to my clients a lot about, you know, if we didn't learn the lesson during covid about having a supplier relationship that's much more kind of a risk reward model where you're tied together, but by having the ability to sense demand, know where the consumers are going to want what they want, you can diversify your supplier base much, much more and then based on where the demand is coming from, whether it's onshore, near shore, or you're doing things offshore, you can really have a much more of a balanced supply chain. And then just going back to your question is, once I have a balanced supply chain and I know the attributes of that supply chain, if there is a disruption that comes and I'm digitised and I have real-time information, I can quickly reroute, or remake, or reorder or do whatever I need to do to be much more agile to navigate whatever disruptions may come in the future. So, summarising, just, we've got to have a much more diversified supplier base. You can't just look at one region, follow the cheapest needle, because if that gets tariffed or if that's a region that gets shut off because of geopolitical issues, you have no other place to go. But if You built out a very wide breath of supplier base because of the data that's now available through that digitisation of supply chain, it gives you many, many more options as you go forward. And based on what AI can bring to the table in terms of demand predictability, you can make the pieces in the right place. Or revert if there is a disruption in that supply chain.

Tom Raftery: 12:50

Fair enough. And what about things like then circular economy, it's, we're starting to see a, an uptick of interest in circular economy in the kind of manufacturing space, for example, but in the fashion industry, is that starting to take hold as well? You know, are companies taking steps to embed reuse and recycling into their supply chains?

Paul F Magel: 13:10

Yeah. Look, there's a lot of that going on, right? And you're seeing rental companies coming up, you're seeing, you know, a lot of different areas, certainly from a standpoint of raw material sourcing, where they're getting raw materials from, you know, the goal is to really reduce the waste. This industry, you know, produces a tremendous amount of waste. So one thing is being able to better forecast demand and, you know, AI in the supply chain, that's one of the first areas folks are looking at is, demand forecasting and making sure we're, you know, making to the demand and not over overproducing, which will help from a sustainability standpoint and and putting less into the landfills and those types of things, certainly so that that piece as well. And then again, as you look at folks who are looking at models now, where things can be returned and repaired and sent back rather than being replaced rental models. And again. Using technology to trace garments. So even when you're renting them, you know where they came from initially. So I think it's a combination of looking at producing less. So there's less waste. Reusing what's already been produced in a way that's efficient and you're seeing business models come up on that as well. And again, I think technology just drives the ability to do that going forward.

Tom Raftery: 14:28

Okay. And what about the regulatory environment? How should businesses prepare for emerging environmental regulations while staying competitive? Because as we're seeing, there are far more regulations coming up in this space globally. It's not just here in the EU, but globally.

Paul F Magel: 14:47

Yeah, absolutely. Look, you know, if you look back again in the past, like you had asked me, look in the, in In the beginning of the conversation is you would say it was primarily an unregulated industry. And now it's much more moving to a regulated industry and certainly what's going on in Europe in terms of regulations around ESG and sustainability, environmental and societal and governmental type is becoming much more relevant as part of a business model, right? Where I think initially a lot of this was looked at as a public relations brand identity standpoint, but now it's becoming table stakes and, and it's just part of doing business, like customs compliance is part of doing business. And again, the only way you're able to do it is through deployment of technology because you have to be able to document and prove where your goods are coming from, the makeup of your goods, for each order down to a kind of a PO level down to a sales level. And again, if you don't have technology to track that, you're not going to be able to meet those new government regulations and the penalties will put you out of of business. So that now those regulations are now part of your business model, part of your costing structure, and part of your go forward model. Again, back to how you present yourself as a brand. It's less about that being what's going to drive your business, but it's more going to be, if I'm not doing this, you're not going to have a business.

Tom Raftery: 16:11

That's a fairly sobering way of looking at it, I guess. Yep.

Paul F Magel: 16:15

Yeah, but I think you have to, right? I think it's I think you have to look at it that way. Cause that's the way the government's driving it.

Tom Raftery: 16:20

And rightly so. In terms of agility, you talked about that earlier, is agility becoming more important than efficiency in today's supply chain?

Paul F Magel: 16:32

Yeah. And I think, you know, somewhat they're a little bit tied together, agility and efficiency, right? So you know, we talked about kind of broadening that supplier base. The more efficient you become, by definition, we allow it to be more cost effective, which allows you then to do some of the things we spoke about earlier, being more sustainable and take on some of the additional costs that are required to track all those different data points across the supply chain. So efficiency ties into the agility and then the agility is allowing you to overcome some of those you know, disruptions that we talk about in the supply chain and also just being able to, as you have more data coming in allowing you to be more responsive to consumer demand. So the days of, you know, ordering products six months prior. And then hoping it comes in and hopefully that the weather's warm or the weather's cold, depending on what goods you may be selling, you can either be much more real time manufacturing as we go forward. We look at what's coming around with robotics and those types of things, or also combination, as I mentioned, onshore and near shore type manufacturing. So you can respond much more agile to oncoming demand. So again, I don't think they're mutually exclusive. I think efficiency. Is important and agility is important. I think they're kind of tied together. And again, that linchpin is always the technology platform that's open and connected to as many points in that supply chain as possible.

Tom Raftery: 18:23

Okay. I remember back when I was with SAP, I was talking to one of our customers, a guy called Christian Beschoff in Continental and, you know, Continental are known as the rubber company. The tyre manufacturers, but in fact, that's only 40 percent of their revenue. The other 60 percent comes from building a lot of the smarts that we have in our cars. So, they supply all the car makers with a lot of the smarts that are literally under the hood. And they went on this journey, pardon the pun, to create this remote vehicle data platform where they were taking in data from customer's vehicles into this platform and the idea was that they would sell it to the likes of service centers or fleet managers so that would be a predictive maintenance platform and so they were collecting all this data from all these cars and they were approached by a weather company. And the weather company said to them, you've got all this data from the cars. You've got GPS time of day. You've got windscreen wiper status, fog light status, et cetera, et cetera. The weather company realized that all these vehicles were a little moving real time weather stations.

Paul F Magel: 19:40

Yeah.

Tom Raftery: 19:40

And so suddenly continental going on this predictive maintenance project had this whole other alternative revenue stream approaching them saying, you know, here's the left field use of your data. And so I'm just curious that's, that's story always struck me as fascinating because when you go on these data collection projects, there's often left field uses for data that might not have occurred to you. So I'm just curious, had you ever come across anything similar to that, where you were collecting data or your customers were collecting data and suddenly they saw a whole new avenue open up for them?

Paul F Magel: 20:17

Yeah look, it's an interesting example and a very interesting question, right? And again, as we talk about artificial intelligence, right? The same way we used to talk about business intelligence, in the past, at the end of the day, it's all about the data. And it's all about that data being contextualised that then can be utilised through these different models. So more important than ever today is that as a story like that, where that data is so important, because that's what they're using to train these large language models on to be able to provide that intelligence back to the users. So there's, you know, a tremendous amount of opportunity data and the commercialisation of data you know, as we go forward, you know, one example, we have a partnership with Juki. And again, I mentioned, we're very vertically focused in that apparel footwear and accessories brand. And Juki came out with a line of smart sewing machines. We can connect those to our manufacturing products through kind of a IOT device. So now we're collecting every time that needle's going up and down we're collecting data. So one to your point from a preventive maintenance standpoint, we know exactly how much that machine has been used when preventing maintenance has to get done. So rather than starting at the beginning of the line and ending at the end of the line, we know exactly where to go. So you can be much more efficient from that. We've also measured the efficiency of the operator. And the operation quality from a standpoint, and then also real time visibility into the goods on the manufacturing floor. So going back to that agility. And again, that's all data, then that we're able to pull back into kind of our E. R. P. Solutions and again, start to seed large language models and AI capabilities so that then the supply chain predictions and what's going on will be very, very important going forward to make a much more efficient supply chain interaction. So yes, data, data is key to all of this and it's clean data. I think a lot of people are learning as they start deploying AI. First step is going to be get your arms around your data and make sure that you're not training models on data that can't be interpreted appropriately. Cause again, as you know, there's a term called hallucinations and AI without information that's incorrect. So as a software provider, you have to be very careful before you commercialise anything. And before you start taking actions on data coming out of these models. That it's gotta always be correct. Otherwise you're going to produce goods that no one wants, or you're going to produce more goods than people want. Because you're relying on that data to make forecasting recommendations and those types of things. So data is the fundamental key to all of this. And that's why that's a relevant story. Cause it's a. It's becoming more important than ever in today's day and age.

Tom Raftery: 22:56

Yeah, yeah, absolutely. A left field question for you, Paul. If, If, you could bring in any historical figure or fictional character to consultant, to consultant building a resilient and sustainable supply chain, who would it be and why?

Paul F Magel: 23:14

You know, that's it's an interesting question and you didn't give me any prep for that. So now you're going to put me on you're going to put me on the spot. You know, again, I, I, I'll say Winston Churchill just for that, because I think people from a supply chain standpoint will tell you they've been going to war in terms of having to really strategise and plot and the logistics of that have to be put in place and the strategy that has to be built, you know, again, back to your question about navigating disruptions this must be more, I think, appropriate than disruptions that happened during a war where, you know, routes are routes are shut off. Or, troops are not where they're supposed to be. It can be likened to a supply chain. And I think just understanding some of the logistical strategic thinking, someone like a Winston Churchill might be a very interesting conversation to have in regard to today's supply chain challenges that are there.

Tom Raftery: 24:08

Nice. I like it. Very good. Very good. For supply chain leaders who are just starting their digital transformation journey, where should they focus first, do you think to make the most impact?

Paul F Magel: 24:19

Look, you know, at the end of the day. I would say if you automate a broken process, it just breaks down that much faster. So it's really understanding the relationship that you have from a supply chain, the business processes that you have in place, find the blind spots that you have. So you know how to map out a technology and a digitisation journey. Look at those relationships because the relationships are key. And, and again, I think they've got to be much more risk reward, shared, shared reward, shared risk models as we go forward. So when things happen you're able to react much quicker and you've got a partner on the other end, not somebody who you're fighting with over, you know, do you need the goods anymore? You don't need the goods anymore, but you've got a relationship that are working together and it's also going to be key because the data that we talk about that has to be shared. If you don't have a mutual beneficial relationship to get that data, that also becomes another contention point that you need to flatten. So everybody within that supply chain has to be more than willing to provide the data that you need. And sometimes that data will get you into their pockets a little bit. And people are very hesitant to show as much data as you need to show where they're getting their goods from. Who's working on those goods, how they're treating their workers, you know, that's all important stuff. So I think, you know, those are the areas really to focus on.

Tom Raftery: 25:36

Okay. What's one often overlooked step companies could take to make their supply chains more sustainable without breaking the bank, let's say.

Paul F Magel: 25:48

Again, it's just information, right. And it's being able to report. So as I said, from a technology platform standpoint, it's not a heavy lift. So it's again, going back to that business process. Making sure you know who your partners are on the other side and making sure you've got an agreement to get the data that you need to be able to report on in an efficient manner. And if you do that, your costs are not going to go wildly out of whack. And if you're working with reputable suppliers, you're not going to find a blind spot that someone comes around because at the end of the day, you're going to be the one that's responsible in terms of how you, how you source. So it's going to be, you know, without heavy lift, it's doing your homework, partnering with the right organisations and then having an agreement on the data that you're going to collect. And make sure that you've got some way to validate that going forward.

Tom Raftery: 26:35

Okay. Fair enough. If you had to make one bold prediction about the supply chain of 2030, what would it be?

Paul F Magel: 26:45

Supply chain of 2030. Let's hope that all the work that we're putting in now, it's going to be much more efficient than it's ever been. People have much more information about their supply chain, so they can make much better decisions. I hope that it's much more diversified from a standpoint where people have many more kind of chains in that link that gives them a lot more agility to move and produce and collect and source from many different areas around the globe so that they're never kind of hamstrung or stuck. If something breaks out or a tariff comes out or a disruption happens in shipping or logistics or whatever it may be. So I'm hopeful that they will be more complex in nature, but more simpler to understand and manage because of technology deployment going forward in terms of what's happening with platforms like the BlueCherry platform, what's happening with AI and artificial intelligence. And again, also what's happening because of government focus and regulations, which is forcing people to be much more astute in their supply chain.

Tom Raftery: 27:50

Okay, great. What metrics or KPIs do you think companies should focus on to measure the success of their sustainability initiatives and ensure continuous improvement?

Paul F Magel: 28:04

Look, you know, you can be very simply from a KPI standpoint is don't get fined and don't get you know, don't get called out in the press. But I think that's every company, as I said earlier on, right? It's some of the first steps is really to understand your business process, understand your blind spots, understand the white space. And then those KPIs will come out of that, in terms of as you start to build out your roadmap, You're going to want to have measurements along the way and, and measure certain things. One is how you're progressing along. And then the other KPIs will be specific to, you know, the requirements of your business, both from the government side, but also from your consumer standpoint, to make sure you're measuring yourself in a way that's going to continue to allow you to build your brand and continue to build your business.

Tom Raftery: 28:48

Okay. Are there any books, movies, documentaries that you found particularly inspiring when thinking about sustainability or leadership?

Paul F Magel: 29:00

You know, from leadership standpoint, I'm actually in the middle of a, I don't want to call it a book because I do it in my long commute back and forth here in uh, New York, but it's Rockefeller's 38 Letters To His Son. and it's very interesting. And it's, it, one of the, some of the interesting things there's a lot of leadership stories in there, everything from competition to pricing to ethics in business. And what I find interesting is that these letters are being written from late 1800s, early 1900s. And the lessons being taught to J. D. Rockefeller's son back then are the same lessons that I'd like to be, you know, teach to my kids today and my, my subordinates today, because it really crosses the boundaries of of time. So that's one that's relevant because I'm actually listening into it on my commute in now, but it's a great great leadership lessons in there. A lot of basic blocking and tackling, but it's very good to kind of continue to reinforce some of those things and get the perspective of somebody who had the success that he had.

Tom Raftery: 30:02

Fascinating. Great. We're coming towards the end of the podcast now, Paul. Is there any question that I didn't ask that you wish I did or any aspect of this we haven't touched on that you think it's important for people to think about?

Paul F Magel: 30:15

I think, you know, one is I want to just make sure if anyone has any questions feel free to reach out to me on LinkedIn. I'm on, I'm on LinkedIn. Our website is www. bluecherry. com or cgsinc. com. You can find out more about our platform there as well in terms of the work we're doing. Again, we've got customers across, across the globe. I'm working on supply chain issues every day. As I say, we kind of eat, sleep and live these things. We've got over 500 customers that we work on a best practices basis with. So, you know, I know what your audience is interested in and more than happy to have further and follow on discussions with anybody who wants to discuss anything further than I said, LinkedIn, or just reach out to me any way you can,

Tom Raftery: 31:00

Okay, fantastic. I'll put those links in the show notes, Paul, so everyone has access to them. Great.

Paul F Magel: 31:05

all right, perfect.

Tom Raftery: 31:07

That's been fascinating. Thanks a million for coming on the podcast today.

Paul F Magel: 31:10

Tom, been my pleasure. I enjoyed the conversation.

Tom Raftery: 31:13

Okay. Thank you all for tuning into 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.