Streamlining Operations: How Bayer and DHL are Reducing Complexity

00:00:08:20 - 00:00:10:00 Welcome to All Business. 00:00:10:00 - 00:00:14:06 No Boundaries., a collection of supply chain stories by DHL Supply Chain, 00:00:14:06 - 00:00:16:14 the North American leader in contract logistics. 00:00:16:20 - 00:00:18:13 I'm your host, Will Heywood.

00:00:18:13 - 00:00:21:20 This is a place for in-depth discussions on the supply chain challenges 00:00:21:20 - 00:00:23:04 keeping you up at night. 00:00:23:04 - 00:00:26:05 We're breaking beyond the boundaries that are limiting your supply chain. 00:00:26:05 - 00:00:28:18 Today's episode is: Streamlining Operations: 00:00:28:18 - 00:00:31:17 How Bayer and DHL are Reducing Complexity. 00:00:31:17 - 00:00:34:14 Our guests are Michael Sullivan, Senior Vice President, 00:00:34:14 - 00:00:38:05 Product Supply Chain, North America Bayer and James Hoskins, 00:00:38:05 - 00:00:42:16 Vice President, Operations, Life Science and Healthcare, DHL Supply Chain.

00:00:42:16 - 00:00:44:13 Let's dive in. 00:00:44:13 - 00:00:45:14 Welcome, both of you. 00:00:45:14 - 00:00:47:15 I'm really happy to have you here today. 00:00:47:15 - 00:00:50:12 I appreciate you taking the time to come on to the podcast.

00:00:50:12 - 00:00:51:23 I will start like we always do. 00:00:51:23 - 00:00:54:04 I'll ask you both to introduce yourselves. 00:00:54:04 - 00:00:56:05 So if Michael, you could go first. 00:00:56:05 - 00:00:57:19 Tell us your name.

00:00:57:19 - 00:01:00:17 Who you work for and what your role is there, and maybe 00:01:00:17 - 00:01:03:17 how long you've been, at that company. 00:01:03:20 - 00:01:04:18 Sure. 00:01:04:18 - 00:01:08:15 So, Michael Sullivan, I'm the Senior Vice President 00:01:09:03 - 00:01:12:10 of Product Supply at Bayer Consumer Health. 00:01:13:04 - 00:01:14:23 Based in New Jersey.

00:01:14:23 - 00:01:19:22 I've been here for about six years of my 30 plus year career. 00:01:20:10 - 00:01:23:17 And, I've had a really good time here, with the Bayer Corporation. 00:01:24:03 - 00:01:25:13 Okay, terrific. 00:01:25:13 - 00:01:28:13 James, you're not a stranger to the podcast.

00:01:28:13 - 00:01:31:13 But please, if you can introduce yourself to the audience again. 00:01:31:16 - 00:01:32:19 Yeah. No problem. 00:01:32:19 - 00:01:36:03 James Hoskins, I'm the VP of Operations for Life Science Healthcare.

00:01:36:11 - 00:01:38:15 I'm the executive sponsor for the Bayer account. 00:01:38:15 - 00:01:42:13 I've been with DHL for about 28 years, and my background is majority 00:01:42:13 - 00:01:45:15 in operations, packaging, warehouse management systems, and quality. 00:01:46:16 - 00:01:48:10 Michael, you said Bayer Consumer Health. 00:01:48:10 - 00:01:49:08 Tell us.

00:01:49:08 - 00:01:52:08 I think a lot of our audience knows the brand name. 00:01:52:08 - 00:01:54:10 But tell us more about the organization. 00:01:54:10 - 00:01:56:12 What is it? 00:01:56:12 - 00:01:59:15 I think there's a broader Bayer Company.

00:01:59:15 - 00:02:04:15 So if you could just for a walk us through, who Bayer is, who Bayer Consumer 00:02:04:15 - 00:02:08:12 Health is and where we may run into it, as, you know, consumers. 00:02:09:03 - 00:02:13:05 So, you know, Bayer is, a big multinational conglomerate 00:02:13:05 - 00:02:16:05 where we're operating in most countries around the world. 00:02:16:16 - 00:02:19:16 And, we we really have three divisions. 00:02:19:20 - 00:02:22:20 We have a consumer health division, of which I'm part.

00:02:23:08 - 00:02:27:17 So I think, consumer health being, products, you can buy over the counter, 00:02:28:12 - 00:02:31:12 at your pharmacy, at your local store, online, 00:02:32:07 - 00:02:35:21 to meet your various, self health, needs. 00:02:36:14 - 00:02:38:16 Now we can talk more about the brands later. 00:02:39:16 - 00:02:42:10 We then have a division which is our pharmaceutical division, 00:02:42:10 - 00:02:45:19 which produces, of course, prescription medications. 00:02:46:17 - 00:02:49:17 Large focus on oncology, 00:02:49:23 - 00:02:52:23 biologics, women's health, 00:02:53:04 - 00:02:57:04 and a lot of core, a core, needs for, people, individuals.

00:02:57:19 - 00:03:01:15 And then we have our division, which is, what we call crop science. 00:03:02:04 - 00:03:06:11 And so they're making, the growing seeds, for farmers to plant, 00:03:07:05 - 00:03:09:08 herbicide treatments. 00:03:09:08 - 00:03:12:09 And so, you know, very much, for the agricultural space, 00:03:12:10 - 00:03:14:10 we got three divisions. 00:03:14:10 - 00:03:16:10 But we're all we're all helping consumers.

00:03:16:10 - 00:03:20:05 We're here to help everyone, every everyday life in different ways. 00:03:21:03 - 00:03:24:17 Health for all, hunger for none is our mantra. 00:03:25:04 - 00:03:29:02 And, our three divisions are they're working together, to achieve that. 00:03:29:16 - 00:03:32:15 Just a general scale, you know, 00:03:32:15 - 00:03:35:15 what's the overall annual revenues of the company.

00:03:35:23 - 00:03:37:22 North of 50 billion? 00:03:37:22 - 00:03:39:07 Yeah. Billion dollars. 00:03:39:07 - 00:03:42:12 And, you know, like, sort operating in most countries, 00:03:43:19 - 00:03:44:17 that the consumer 00:03:44:17 - 00:03:47:17 health division is the smaller of the three divisions.

00:03:48:11 - 00:03:51:09 But it's got a fantastic worldwide footprint. 00:03:51:09 - 00:03:52:02 Okay. 00:03:52:02 - 00:03:54:22 And you share something in common with us, which I think you're a 00:03:54:22 - 00:03:58:11 you're a German, multinational, like DHL is. 00:03:58:15 - 00:04:01:04 So we've got that in common.

00:04:01:04 - 00:04:03:18 We are, you know, our heritage. 00:04:03:18 - 00:04:07:09 You know, we started, as the Bayer brand with the Bayer aspirin. 00:04:08:03 - 00:04:11:19 In Europe to call a Bayer, German-founded company. 00:04:11:19 - 00:04:14:08 We've been a business for more than 150 years.

00:04:14:08 - 00:04:17:08 Each one of our divisions has a headquarters, somewhere, 00:04:18:00 - 00:04:20:06 in either Europe or the US. 00:04:20:06 - 00:04:23:20 And, we run the consumer health division for North America. 00:04:23:20 - 00:04:26:20 Other out of New Jersey. Okay, terrific.

00:04:27:06 - 00:04:32:02 So, James, catch us up here on the relationship that DHL has had with Bayer. 00:04:32:02 - 00:04:33:06 What's the history? 00:04:33:06 - 00:04:36:06 Yeah. So we go back about 25 plus years.

00:04:36:11 - 00:04:38:07 Global account. 00:04:38:07 - 00:04:43:04 We, in 2019, we started up a 1,000,000 square foot 00:04:43:04 - 00:04:46:12 build to suit, CRT facility with cold chain for Bayer 00:04:46:16 - 00:04:49:11 that's in our Manchester, Pennsylvania area. 00:04:50:10 - 00:04:53:13 Bayer operating in about 800,000ft² of this, 00:04:53:13 - 00:04:57:03 which includes about 150,000 in secondary packaging. 00:04:57:11 - 00:04:59:16 And then Bayer being the anchor client.

00:04:59:16 - 00:05:03:05 We support the consumer pharma packaging and a little bit of plant support. 00:05:03:19 - 00:05:06:10 This was by design to have flexibility and scalability. 00:05:06:10 - 00:05:10:19 So for Bayer's needs to kind of grow or shrink into that space as they needed. 00:05:11:03 - 00:05:15:05 We currently house about 5,000 pallets of raw material that supports that inbound to 00:05:15:06 - 00:05:17:06 manufacturing in Myerstown.

00:05:17:06 - 00:05:20:16 And then on the packaging side, we do cartonization, blister packs, shrink 00:05:20:16 - 00:05:21:12 wrap and display. 00:05:21:12 - 00:05:24:22 So, this building is kind of also with, 00:05:25:06 - 00:05:29:02 a facility that we have in Las Vegas and then McDonough, Georgia as well. 00:05:29:17 - 00:05:30:00 Okay. 00:05:30:00 - 00:05:33:00 So it's a it's a network that you're running.

00:05:33:10 - 00:05:35:20 Three. Yes. Three DC network with packaging. 00:05:37:08 - 00:05:37:20 Okay.

00:05:37:20 - 00:05:38:14 And so, Michael, 00:05:38:14 - 00:05:42:08 I think it's safe to assume that fits within your scope of responsibility. 00:05:43:01 - 00:05:45:05 What else are you overseeing? 00:05:45:05 - 00:05:48:05 And in your role as, Senior Vice President? 00:05:48:17 - 00:05:48:22 Yeah.

00:05:48:22 - 00:05:52:08 So I have responsibility for, manufacturing, 00:05:53:00 - 00:05:55:11 both internally, at our own facility. 00:05:55:11 - 00:05:59:21 And then externally with, our cmo or contract manufacturing partners. 00:06:00:04 - 00:06:02:22 In North America have responsibility 00:06:02:22 - 00:06:06:21 for all of the supply chain functions, project management, 00:06:07:20 - 00:06:12:21 the distribution team, which which James works with, in the, in the US 00:06:13:12 - 00:06:17:05 and then, as well as, a customer logistics team.

00:06:17:05 - 00:06:18:09 So I have a part of my team 00:06:18:09 - 00:06:22:16 is actually embedded with the sales organization calling in customers. 00:06:23:04 - 00:06:26:04 And then I've got a financial services team, 00:06:26:08 - 00:06:29:22 which also collects revenue from all of our customers, 00:06:30:09 - 00:06:34:17 both for the consumer business and also for, the farmer division. 00:06:35:19 - 00:06:38:09 You know, one of the things that we talk about in this podcast is, 00:06:38:09 - 00:06:42:13 you know, careers in supply chain and, and how, broad they really are.

00:06:43:02 - 00:06:47:14 What you just outlined there certainly, supports that contention. 00:06:47:15 - 00:06:51:15 You said that you've had a pretty long, supply chain career prior 00:06:51:15 - 00:06:54:09 to coming to Bayer. What what were you up to? 00:06:54:09 - 00:06:54:17 Yeah.

00:06:54:17 - 00:06:58:21 You know, before Bayer, I spent, 27 years at Proctor and Gamble. 00:06:59:23 - 00:07:02:15 Started manufacturing management, which is what I wanted to do 00:07:02:15 - 00:07:04:17 coming out of out of school. 00:07:04:17 - 00:07:06:03 So got right into operations. 00:07:06:03 - 00:07:09:03 Spent a lot of my years in operations.

00:07:09:08 - 00:07:14:01 But I've had the good fortune of working in most disciplines 00:07:14:11 - 00:07:18:12 in the operations slash supply chain space. 00:07:18:12 - 00:07:23:00 So, contracting factory internal manufacturing, 00:07:23:09 - 00:07:28:17 project management, supply chain, some some procurement work along the way. 00:07:29:19 - 00:07:32:18 Had a chance to work, several years in Asia. 00:07:32:18 - 00:07:36:12 About half my half my career has been doing work internationally.

00:07:37:10 - 00:07:40:10 Changed companies a couple of times. 00:07:40:11 - 00:07:42:15 And then came to Bayer in 2019. 00:07:42:15 - 00:07:46:10 So I think I've had the good fortune of working almost every discipline, 00:07:46:20 - 00:07:49:20 you can imagine up and down the supply chain. 00:07:50:05 - 00:07:51:20 And really enjoy operations.

00:07:51:20 - 00:07:56:13 And it really inspires me to be able to make a product, to go out the door. 00:07:56:14 - 00:08:00:22 And, so you get into the hands of a consumer, who's benefiting from it? 00:08:00:23 - 00:08:01:18 Yeah. 00:08:01:18 - 00:08:06:16 So you're at Bayer, and, I understand you have a new global CEO, 00:08:06:16 - 00:08:10:08 and there's a program, underway that you're, 00:08:10:20 - 00:08:13:19 taking part in or leading part of, I suppose.

00:08:14:01 - 00:08:15:01 Tell us what that is. 00:08:15:01 - 00:08:19:00 And, and kind of how it breaks down and what kinds of things 00:08:19:00 - 00:08:20:00 you're, you're working on. 00:08:20:23 - 00:08:21:09 You know, when I, 00:08:21:09 - 00:08:24:09 when I first came to Bayer in 2019, 00:08:25:03 - 00:08:28:03 very traditionally run company. 00:08:28:06 - 00:08:32:13 You know, run a lot from the corporate offices, a lot of run a lot from, 00:08:33:08 - 00:08:36:11 the global headquarters, things deployed, 00:08:37:02 - 00:08:39:22 to be done, things monitored.

00:08:39:22 - 00:08:42:18 Very traditional, management approach. 00:08:42:18 - 00:08:46:04 And, you know, we we wanted to do better. 00:08:46:12 - 00:08:48:22 And, and the idea was much like 00:08:48:22 - 00:08:51:22 we've been trying to do in manufacturing for a long time. 00:08:51:23 - 00:08:55:12 How do you get to run a business more locally?

00:08:55:13 - 00:08:56:21 How do you get to run a business? 00:08:56:21 - 00:08:59:02 More from a bottom up. 00:08:59:02 - 00:09:01:17 How do you get teams to be more autonomous? 00:09:01:17 - 00:09:03:21 How do you get more local decision making?

00:09:03:21 - 00:09:09:23 How do you respond faster and better to products and development? 00:09:10:00 - 00:09:13:16 How do you respond faster to customer needs and consumer needs? 00:09:14:16 - 00:09:15:03 How do you 00:09:15:03 - 00:09:18:11 take out bureaucracy, and create agility? 00:09:18:16 - 00:09:20:22 How do you make teams 00:09:20:22 - 00:09:24:18 more effective together, how do you get teams to be inspired 00:09:24:18 - 00:09:29:00 to drive as much efficiency at the, you know, unit level as possible?

00:09:29:14 - 00:09:32:17 And how do you get people who are doing that work every day to create the insights 00:09:32:17 - 00:09:36:14 and ideas, and the creativity, for improvement. 00:09:36:14 - 00:09:39:22 And so I like this idea of Dynamic 00:09:39:22 - 00:09:41:18 Shared Ownership. 00:09:41:18 - 00:09:44:18 You know, what do we what would what do we change? 00:09:45:03 - 00:09:49:01 Well, we've taken out a lot of bureaucracy where we've taken out a lot of, 00:09:50:08 - 00:09:52:03 kind of central organizations.

00:09:52:03 - 00:09:55:13 We've taken out a lot of excessive governance. 00:09:55:13 - 00:09:58:17 We've created more autonomous teams. 00:09:59:14 - 00:10:03:05 We've created, product teams we didn't have before. 00:10:04:04 - 00:10:07:04 And we were driving efficiency this way, too.

00:10:07:06 - 00:10:09:00 So it's a it's a journey. 00:10:09:00 - 00:10:12:18 And like any other large culture organization 00:10:12:18 - 00:10:14:23 transformation, it takes it takes some time. 00:10:14:23 - 00:10:17:23 You know, we're about Year 2 into this now. 00:10:18:17 - 00:10:21:21 We're we're getting, you know, deeper and deeper into it 00:10:22:06 - 00:10:25:00 or we're starting to see some benefits from it.

00:10:25:00 - 00:10:25:22 But it takes time. 00:10:25:22 - 00:10:27:14 And I think, 00:10:27:14 - 00:10:31:03 well, that's one of the key things about culture and organization transformation. 00:10:31:03 - 00:10:31:22 It's not quick. 00:10:31:22 - 00:10:34:22 You don't, you know, you just don't send out the letter and get it done.

00:10:35:04 - 00:10:36:18 You have to bring the organization along. 00:10:36:18 - 00:10:40:03 You have to train it to bring a lot of people along with you. 00:10:40:14 - 00:10:43:12 You have to be willing to listen to the issues and some of the change 00:10:43:12 - 00:10:46:21 crates and and making sure that you're going at a rapid pace, 00:10:47:08 - 00:10:49:11 but bringing the organization along for success. 00:10:49:11 - 00:10:51:13 When I feel really good about 00:10:51:13 - 00:10:54:17 and the transformation we've made, the last kind of year, year 00:10:54:17 - 00:10:57:22 and a half is while we've made this large transformation, 00:10:58:10 - 00:11:00:08 we've actually been improving results at the same time.

00:11:01:11 - 00:11:04:09 And I think that just proves that that's a it's hard, but we get it. 00:11:04:09 - 00:11:05:19 We've gotten that done. 00:11:05:19 - 00:11:05:21 We've gotten that done. 00:11:05:21 - 00:11:07:19 And I would I would fully agree with you, Michael.

00:11:07:19 - 00:11:12:04 We've seen the speed to implementation improve our direct contacts at the plan 00:11:12:04 - 00:11:15:21 and these teams have had direct ownership in when it comes to our innovation 00:11:16:02 - 00:11:18:13 that that speed implementation is very important. Right. 00:11:18:13 - 00:11:20:23 We're seeing a lot of that and we're still new in this journey. 00:11:20:23 - 00:11:23:21 But I have seen some great improvement in this area.

00:11:23:21 - 00:11:25:05 So good things to come. 00:11:25:05 - 00:11:25:15 So good things to come. 00:11:25:15 - 00:11:28:00 Yeah. So James, go a little deeper here.

00:11:28:00 - 00:11:29:01 With some of the innovations. 00:11:29:01 - 00:11:32:01 What what kinds of things have you been working on with the Bayer team? 00:11:32:10 - 00:11:34:04 So we just did a customer for life. 00:11:34:04 - 00:11:36:19 So we are kind of focusing on all the areas.

00:11:36:19 - 00:11:39:19 I know we've got some areas where we're doing a lot of data analytics 00:11:39:19 - 00:11:43:14 on some of our OS&D and fines through the end to end process. 00:11:43:23 - 00:11:49:01 You know, we've got, some kind of, the new gloves to help us pick faster. 00:11:49:02 - 00:11:51:14 We're doing kind of like a visual voice pick as well. 00:11:51:14 - 00:11:54:16 So, we have, you know, electric yard trucks, those sort of things.

00:11:54:16 - 00:11:57:13 So all the normal stuff that you would see in those implementations. 00:11:57:13 - 00:12:01:02 But really getting into this new vision of what Bayer wants to be 00:12:01:02 - 00:12:04:02 and how we're going to end up with in two years, especially since 00:12:04:07 - 00:12:07:04 I think the biggest thing for Bayer is you're going to your objective 00:12:07:04 - 00:12:11:02 to to reduce inventory 25% across your network by 2027. 00:12:11:02 - 00:12:15:07 So using all of our data and our analytics and our AI support to look at what 00:12:15:07 - 00:12:17:00 that's going to be and how we can meet there 00:12:17:00 - 00:12:19:22 to make sure that we are funding innovation responsibly.

00:12:19:22 - 00:12:20:03 Right. 00:12:20:03 - 00:12:22:11 We can't put in a lot of these, you know, big robotics 00:12:22:11 - 00:12:24:12 and those sort of things until we know where we're going to be. 00:12:24:12 - 00:12:26:03 So we're seeing a lot of stuff 00:12:26:03 - 00:12:29:22 around data, data analytics, AI and those sort of things and reporting. 00:12:30:09 - 00:12:33:09 Michael, what are your thoughts on some of those topics?

00:12:33:10 - 00:12:37:15 Look, I think, you know, one space we've made a lot of progress, 00:12:38:00 - 00:12:41:13 in the last couple of years is really about serving our customers. 00:12:42:10 - 00:12:45:13 And, first of all, our service 00:12:45:13 - 00:12:48:23 levels are near all time highs, which is which is great to see. 00:12:48:23 - 00:12:54:07 And that's that's a joint effort, between, you know, our manufacturing sites 00:12:54:07 - 00:12:59:02 and our supply chain team and you as our distribution partner.

00:12:59:02 - 00:13:02:09 So I really feel good about the progress we've made on servicing our customers, 00:13:02:23 - 00:13:05:08 but then how we service the customers. 00:13:05:08 - 00:13:08:06 And, you know, what we're trying to do is, 00:13:08:06 - 00:13:10:16 take empty miles off the road. 00:13:10:16 - 00:13:13:18 How do we get more efficient in a way that it's better for the customer 00:13:14:03 - 00:13:16:13 from a receiving standpoint? 00:13:16:13 - 00:13:18:10 How can we make the whole experience better?

00:13:18:10 - 00:13:22:00 How do we, you know, help eliminate over shorts and damages 00:13:22:00 - 00:13:26:20 and avoid fines and things that come along with those, those topics. 00:13:26:20 - 00:13:29:23 So, you know, this these are collaborative activities. 00:13:30:12 - 00:13:33:12 And one thing we've seen from the DSO effort 00:13:33:16 - 00:13:37:18 is even within our own organization, you know, getting the customer team, 00:13:38:03 - 00:13:41:22 collaborating with the distribution team, collaborating with the financial services 00:13:41:22 - 00:13:46:14 team is really helped us think more end to end on servicing the customer.

00:13:46:23 - 00:13:49:23 And I think in the end it's better for for all the parties involved. 00:13:50:09 - 00:13:54:06 Michael, when you when you say customer, are you thinking about, 00:13:55:06 - 00:13:56:20 consumers, are you thinking 00:13:56:20 - 00:13:59:19 about, other entities? 00:13:59:23 - 00:14:02:11 Our customers are the retailers. 00:14:02:11 - 00:14:06:10 We, we're not a direct selling organization at all.

00:14:06:10 - 00:14:09:10 So everything we get to a consumer, 00:14:09:20 - 00:14:12:20 is getting to a consumer through a retailer. 00:14:13:09 - 00:14:16:03 Those retailers may be brick and mortar. 00:14:16:03 - 00:14:18:12 They may be online. 00:14:18:12 - 00:14:20:02 Most are now a hybrid.

00:14:20:02 - 00:14:23:17 And, but in one form or another, we're selling to a retailer. 00:14:24:11 - 00:14:27:04 Who is that getting to? A consumer. 00:14:27:04 - 00:14:28:17 Right.

And I'm not sure. 00:14:28:17 - 00:14:29:19 Everybody unders, 00:14:29:19 - 00:14:32:14 you know, a lot of our listeners understand some of the dynamics there. 00:14:32:14 - 00:14:36:09 So when you talk about service, you also mentioned fines that can come into play. 00:14:37:15 - 00:14:39:15 You know what what are those dynamics?

00:14:39:15 - 00:14:43:12 And you know, how do the how do you manage the, 00:14:43:12 - 00:14:46:12 the relationship with your retailer partners? 00:14:46:17 - 00:14:48:13 To kind of get them the service that they need? 00:14:48:13 - 00:14:51:21 How do they try to either support or guide your, 00:14:52:06 - 00:14:55:12 your actions to, to, to deliver service levels? 00:14:56:02 - 00:15:00:06 You know, the partnership with the retailers is absolutely essential.

00:15:01:08 - 00:15:04:08 You know, let's look at it from the retailer lens. 00:15:04:08 - 00:15:05:20 You're a consumer. 00:15:05:20 - 00:15:10:09 You go into a store, you have a shopping list, you you have a product 00:15:10:09 - 00:15:14:16 you want to get, you want it there, you know, you want it on the store shelf. 00:15:15:06 - 00:15:19:10 And, that store shelf is, the retailer's real estate.

00:15:19:15 - 00:15:22:01 And, you know, they want to have it stocked. 00:15:22:01 - 00:15:25:23 And so, our job, our job is to partner on how to make that happen. 00:15:27:03 - 00:15:30:03 And obviously, they have a very important piece to play. 00:15:30:03 - 00:15:31:04 They receive products.

00:15:31:04 - 00:15:35:12 They have their own networks to distribute from large distribution facilities down 00:15:35:12 - 00:15:38:20 to their stores and from their stores, maybe to a back room 00:15:39:07 - 00:15:42:07 and, you know, maybe from a back room, then to a shelf. 00:15:42:07 - 00:15:45:09 So they have a series of steps in this process as well. 00:15:45:22 - 00:15:46:21 But we have to help them. 00:15:46:21 - 00:15:51:06 And so we have to get things to the warehouse, their distribution point, 00:15:51:14 - 00:15:54:08 when they need it, we need to get it to them 00:15:54:08 - 00:15:57:08 in a way that's easier for them to understand what they're getting.

00:15:57:13 - 00:16:00:18 So when they unload it, they, you know, unloaded record for it properly. 00:16:01:21 - 00:16:05:01 And they have other complexities, you know, they have, 00:16:05:14 - 00:16:09:06 they may only have so many truck slots available per day, their warehouse. 00:16:09:06 - 00:16:12:06 So when it gets there becomes very important. 00:16:12:10 - 00:16:15:01 We know the things to get go into a drop lot.

00:16:15:01 - 00:16:16:19 You don't get a load for a couple days. 00:16:16:19 - 00:16:18:07 That's lost time. 00:16:18:07 - 00:16:19:21 Maybe you didn't get to the store on time. 00:16:19:21 - 00:16:20:05 So we want to work with the retailer to make the flow of goods 00:16:20:05 - 00:16:23:00 So we want to work with the retailer to make the flow of goods 00:16:23:13 - 00:16:25:01 as seamless as possible.

00:16:25:01 - 00:16:28:19 We want it to be on time because we want to be on that store shelf 00:16:29:04 - 00:16:32:04 for when any, any consumer goes to that retailer, 00:16:32:09 - 00:16:35:11 our product is available for them to make that purchase selection. 00:16:36:01 - 00:16:36:02 And we're we're here to meet those needs. 00:16:36:02 - 00:16:39:12 It seems a bit like a paradox that you're 00:16:39:12 - 00:16:43:05 trying to take a lot of inventory out of your, network. 00:16:43:05 - 00:16:46:23 So help us kind of hold those two thoughts together where, 00:16:46:23 - 00:16:48:19 you know, you're taking supply down.

00:16:48:19 - 00:16:53:09 Basically, but wanting to improve service levels or fulfillment levels. 00:16:53:22 - 00:16:56:11 Yeah, that's that's the art of supply chain manager right there. 00:16:56:11 - 00:16:57:06 Yeah. Yeah.

00:16:57:06 - 00:17:00:18 So you know and what we want to do is, 00:17:01:14 - 00:17:04:22 over time gradually reduce our inventory levels, 00:17:06:14 - 00:17:09:14 and, and optimize. Why? 00:17:09:14 - 00:17:10:22 For a variety of reasons. 00:17:10:22 - 00:17:14:14 You know, maybe over time, we were more efficient at our factory.

00:17:14:14 - 00:17:19:04 Or maybe we have a product, that's made in a different location. 00:17:19:04 - 00:17:21:19 We're able to make it closer. 00:17:21:19 - 00:17:25:08 But, you know, whatever we can do to make the flow of goods more efficient, 00:17:25:21 - 00:17:30:00 we ought to be able to then have some offset in in via inventory reduction. 00:17:30:13 - 00:17:33:22 It could be for our production cycles, for our production plan, 00:17:34:17 - 00:17:37:23 product placement, in other words, what warehouses we have it at and where 00:17:37:23 - 00:17:41:16 and where and why, how we replenish those warehouses.

00:17:41:16 - 00:17:45:02 So so you basically have to look at every flow step in the process 00:17:45:17 - 00:17:48:16 from materials through manufacturing 00:17:49:04 - 00:17:52:04 to warehousing and storage and getting it to our customers. 00:17:52:19 - 00:17:58:07 And we know that the best in class, if you look at the 00:17:58:16 - 00:18:02:16 Gartner analysis each year where they, you know, they rank, 00:18:03:15 - 00:18:06:15 manufacturers, top 25 manufacturers, 00:18:06:16 - 00:18:10:04 and then they have a small cluster they refer to as the masters.

00:18:10:21 - 00:18:15:12 You know, these companies have worked year on year looking for ways to optimize 00:18:15:12 - 00:18:20:11 their flow of goods, materials, processes and bring and free up cash, 00:18:21:12 - 00:18:23:09 And the best, 00:18:23:09 - 00:18:26:11 you know, are operating at 30, 40 or 50 days. 00:18:26:11 - 00:18:30:04 Well, our, our job is to continue to work in that direction. 00:18:30:15 - 00:18:33:19 And, sometimes the, the best in the industry, 00:18:34:09 - 00:18:37:11 from a supply chain standpoint, is inspiration and, 00:18:37:22 - 00:18:40:22 we have some work to do to bring the inventory level down, that's for sure.

00:18:41:05 - 00:18:41:10 Yeah. 00:18:41:10 - 00:18:44:10 We are very familiar with the Magic Quadrant. 00:18:44:13 - 00:18:47:17 I was going to say DHL is up there in that master class of Magic Quadrant, 00:18:47:17 - 00:18:50:05 so I think we relate quite well to that. 00:18:50:05 - 00:18:54:14 But, you know, to, to Michael's point, that speed to market is difficult 00:18:54:14 - 00:18:57:12 in life sciences, right?

There's a there's a lot of complexity. 00:18:57:12 - 00:18:59:01 And I know we might get into that a little bit, 00:18:59:01 - 00:19:01:22 but there's a lot of things that happened that need to be checked 00:19:01:22 - 00:19:03:18 box you in your quality hold 00:19:03:18 - 00:19:07:07 I believe Michael if I'm not certain, but do your Myerstown release 00:19:07:07 - 00:19:10:23 quality holds within 4.5 days, which is incredible like that. 00:19:10:23 - 00:19:13:05 But that is first in class.

00:19:13:05 - 00:19:14:07 Thanks for that. Point. 00:19:14:07 - 00:19:17:17 We we worked really hard on that when I, took over the factory, 00:19:18:05 - 00:19:20:20 our production to release record from a quality 00:19:20:20 - 00:19:23:19 standpoint was closer to to eight, nine days. 00:19:24:08 - 00:19:26:11 We've we've cut that in half.

00:19:26:11 - 00:19:29:04 It really helps with our flow of goods. 00:19:29:04 - 00:19:32:04 I will tell you that, you know, we have a number of, 00:19:32:15 - 00:19:34:23 CMO partners where that that time 00:19:34:23 - 00:19:37:23 clock is more like 25, 30 days sometimes. 00:19:38:03 - 00:19:40:21 So, that's really helped us tremendously. 00:19:40:21 - 00:19:43:02 It's coming through a lot of hard work.

00:19:43:02 - 00:19:46:17 We've done some things optimizing processes in our laboratory. 00:19:46:17 - 00:19:50:07 We've done some laboratory automation, upskilling. 00:19:50:07 - 00:19:53:04 It's it's a number of factors that all come together. 00:19:53:04 - 00:19:57:21 But what helps it the most make a quality product the first time, every time.

00:19:58:12 - 00:20:02:08 And it makes all of your quality release cycle time, much more effective. 00:20:03:07 - 00:20:06:03 While you're transforming the organization. 00:20:06:03 - 00:20:10:09 Michael, there's a lot going on in the supply chain industry around, innovation 00:20:10:09 - 00:20:13:17 with data analytics, which James talked a little bit about earlier. 00:20:14:13 - 00:20:18:10 There's, interesting automation technologies coming into market.

00:20:19:16 - 00:20:20:17 Two questions. 00:20:20:17 - 00:20:25:03 How do you sort of weave those into the overall transformational journey? 00:20:25:14 - 00:20:29:02 And, and how do you find the talent to support 00:20:29:06 - 00:20:32:19 some of these emerging areas that are, that are new or, 00:20:33:09 - 00:20:36:09 well, let's just say new, in the supply chain industry. 00:20:36:15 - 00:20:40:10 Look, the, digitization, AI, 00:20:41:07 - 00:20:44:18 systems, your tech stack, these are all, 00:20:45:10 - 00:20:48:10 essential now, in these industries 00:20:48:12 - 00:20:51:03 and every segment 00:20:51:03 - 00:20:55:17 of our supply chain for materials all the way through, our customer, 00:20:56:11 - 00:20:59:08 has a digital aspect to it, whether it's 00:20:59:08 - 00:21:02:08 how we communicate with our raw material suppliers, 00:21:02:08 - 00:21:05:12 whether it's our manufacturing execution system.

00:21:06:06 - 00:21:08:21 Well, we're we're we've taken paper records, 00:21:08:21 - 00:21:11:21 and now we're doing everything electronically, 00:21:11:21 - 00:21:15:00 whether it's, you know, tracking and tracing of our, 00:21:15:02 - 00:21:19:20 our transportation activities, the all these things have been, 00:21:19:20 - 00:21:22:20 you know, digitized and there's much more to do. 00:21:22:20 - 00:21:26:14 I think we are in the very early innings of, you know, 00:21:26:14 - 00:21:29:21 getting deeper understanding of AI and how to apply it.

00:21:29:21 - 00:21:35:02 And, there's gonna be more great tools developed for us to consider and access, 00:21:36:04 - 00:21:39:04 as we continue to evolve our tech stack. 00:21:39:07 - 00:21:41:02 But these are, these are, these are 00:21:41:02 - 00:21:45:17 these are essential tools now for, for any, manufacturer 00:21:46:15 - 00:21:49:12 and, from a, from a skill standpoint, 00:21:49:12 - 00:21:52:10 we really have two challenges. 00:21:52:10 - 00:21:55:05 One, you know, we have an existing workforce 00:21:55:05 - 00:21:59:16 and technology is changing rapidly, which have with AI in the last 24 months.

00:22:00:08 - 00:22:04:05 And so, you know, we have an an obligation to train 00:22:04:05 - 00:22:09:12 and upskill our organization, help them develop new skills, along the way. 00:22:10:01 - 00:22:13:07 And we also, hiring talent just like DHL does. 00:22:13:07 - 00:22:16:15 We, we bring in number of college recruits, 00:22:17:09 - 00:22:21:01 to come with more of a digital native, but beginning 00:22:21:14 - 00:22:24:18 and so they've been great assets and additions to our organization.

00:22:24:18 - 00:22:27:18 So it's a it's a both we'll bring in talent, 00:22:27:23 - 00:22:29:07 but we also have to upskill. 00:22:29:07 - 00:22:32:07 And I think that's the magic for any company right now. 00:22:32:14 - 00:22:34:08 Is we need to do both. 00:22:34:08 - 00:22:38:16 But while it's, it's a evolving, rapidly evolving environment 00:22:39:05 - 00:22:42:01 and, AI is added complexity in some ways 00:22:42:01 - 00:22:45:06 and it's going to make some things easier, but we we all have a lot more to learn.

00:22:46:07 - 00:22:49:03 The biggest obstacle was that your companies to invest, right. 00:22:49:03 - 00:22:51:15 So we invest in those people as well, like you did. 00:22:51:15 - 00:22:53:14 And we actually have programs, right. 00:22:53:14 - 00:22:56:04 Because, you know, they're self-funding at this point.

00:22:56:04 - 00:22:56:11 Right? 00:22:56:11 - 00:23:01:06 So, we have our own AI platform that we kind of keep together. 00:23:01:06 - 00:23:03:23 It's got a lot of, you know, cybersecurity and things on it. 00:23:03:23 - 00:23:05:11 So the outside world can't get in there.

00:23:05:11 - 00:23:06:20 But we use all the data from, 00:23:06:20 - 00:23:09:03 you know, different customers to kind of look at some things. 00:23:09:03 - 00:23:10:10 So it's in its infancy. 00:23:10:10 - 00:23:14:01 But we do have a great staff that's working on it, in our innovation as well. 00:23:14:01 - 00:23:14:07 Right?

00:23:14:07 - 00:23:17:21 We have an entire staff that comes in and looks at all the different things. 00:23:17:21 - 00:23:19:18 You know, they look at hundreds of different, 00:23:19:18 - 00:23:23:09 you know, specs that we could look at that may fit into Bayer or may not. 00:23:23:09 - 00:23:25:05 So I think that the, the biggest thing for us is just that collaboration that we do 00:23:25:05 - 00:23:28:03 So I think that the, the biggest thing for us is just that collaboration that we do 00:23:28:03 - 00:23:32:02 especially, you know, you see that in your QBR on a daily, weekly basis 00:23:32:02 - 00:23:35:05 where our two teams are kind of really kind of looking at it 00:23:35:05 - 00:23:36:01 where our two teams are kind of really kind of looking at it 00:23:36:01 - 00:23:39:04 and say, hey, you have a gap here, we can fill that, and then we have a gap.

00:23:39:04 - 00:23:40:03 So we ask you, right. 00:23:40:03 - 00:23:42:07 So it's a it's just really a good team effort. 00:23:42:07 - 00:23:44:21 And I think that the fact that both companies understand 00:23:44:21 - 00:23:47:10 that this is a necessary it's not going away. 00:23:47:10 - 00:23:49:00 There's great advantages to it.

00:23:49:00 - 00:23:50:09 We both invest on it. 00:23:50:09 - 00:23:52:21 So I think that, you know, with that relationship 00:23:52:21 - 00:23:55:06 moving forward, we'll have, you know, more opportunities to come. 00:23:55:06 - 00:23:56:04 On the innovation side. 00:23:57:04 - 00:23:58:07 We, we 00:23:58:07 - 00:24:02:01 built a, our own large language platform.

00:24:02:01 - 00:24:05:02 which is given our internal employees, 00:24:06:00 - 00:24:09:00 you know, like a safe, protected environment, 00:24:09:13 - 00:24:13:13 in which to utilize AI tools, which, which is, which is really fantastic. 00:24:13:13 - 00:24:15:21 It's helping us, a lot. 00:24:15:21 - 00:24:19:01 And, you know, I think where we start 00:24:19:01 - 00:24:22:00 some interesting challenge ahead is data, 00:24:22:11 - 00:24:25:00 because not all the data we want is in the right place.

00:24:25:00 - 00:24:29:04 You know, for example, sometimes it's hard to marry together 00:24:29:04 - 00:24:34:11 if we have a delivery issue, how do we marry that together was why. 00:24:34:11 - 00:24:36:23 And where's the data around the, you know, the defects. 00:24:36:23 - 00:24:39:23 And how do you trace that back to actionability? 00:24:40:04 - 00:24:42:23 Or if we have a issue with a delivery 00:24:42:23 - 00:24:46:21 and we get some feedback on that or, an over or shorter or damage.

00:24:47:05 - 00:24:49:14 Well, how do we trace that back to the order? 00:24:49:14 - 00:24:52:14 So I think we still have some interesting challenges ahead, 00:24:53:06 - 00:24:56:20 with getting the data, because not all the data is, is in 00:24:57:02 - 00:25:02:09 is in any one party in some cases, other cases, it's hard to mesh it together. 00:25:02:17 - 00:25:06:10 All the way back to, for example, maybe an original order, 00:25:06:19 - 00:25:09:03 and then it makes it a little more difficult to research.

00:25:09:03 - 00:25:10:16 So I think we've got some 00:25:10:16 - 00:25:14:11 interesting spaces we can get into as we as we keep working forward. 00:25:15:14 - 00:25:16:23 So, both of you have 00:25:16:23 - 00:25:18:16 long, long careers and supply chains, 00:25:18:16 - 00:25:20:05 and you just went through some really exciting 00:25:20:05 - 00:25:22:18 things that are happening in the industry overall. 00:25:22:18 - 00:25:26:06 As you look ahead, where do you think things will be 00:25:26:16 - 00:25:29:16 in the next fiveish or so years?

00:25:29:22 - 00:25:34:01 Or, you know, what kinds of developments or, are you most excited about? 00:25:34:15 - 00:25:37:16 Well, I'll tell you, five years is now a long time frame. 00:25:37:16 - 00:25:38:22 Yeah, yeah, yeah. 00:25:38:22 - 00:25:41:23 You know, I think about five years in reverse.

00:25:43:00 - 00:25:46:03 You know, we went through pre Covid, Covid, 00:25:47:00 - 00:25:51:05 I, so much, so much has happened as five years now become a long window. 00:25:52:04 - 00:25:55:16 But I think clearly, acceleration 00:25:55:16 - 00:26:00:13 of digitization, acceleration of AI, is here to stay. 00:26:00:13 - 00:26:03:06 You know, I heard this in comparison the other day. 00:26:03:06 - 00:26:06:06 If you look at how long it took to build out the internet, 00:26:07:01 - 00:26:12:06 15, 20 years, maybe maybe it now it's maybe a hit its peak or peaking.

00:26:13:14 - 00:26:13:18 We're 00:26:13:18 - 00:26:16:18 just at the early, early innings of AI, 00:26:16:21 - 00:26:19:10 and so that's got a lot of legs. 00:26:19:10 - 00:26:23:14 And that could take us a lot of places, to help us going forward. 00:26:23:14 - 00:26:26:09 And I hope it helps us to optimize. 00:26:26:09 - 00:26:30:06 I hope that helps us find spaces to take cost out.

00:26:30:06 - 00:26:33:06 I hope it helps us discover new products. 00:26:33:21 - 00:26:38:00 So I think the spaces we can get into with AI will be just really exciting. 00:26:39:00 - 00:26:40:08 I don't think it's just a buzzword. 00:26:40:08 - 00:26:43:08 I think it's been proven it's not just a buzzword anymore.

00:26:43:17 - 00:26:45:20 But at the end of the day, I think we have to. 00:26:45:20 - 00:26:48:09 We have to keep in mind is that 00:26:48:09 - 00:26:50:11 products, manufacturing, 00:26:50:11 - 00:26:53:14 supply chains, they all operate with people. 00:26:54:07 - 00:26:58:02 And, we have a very important human component to all of this. 00:26:58:14 - 00:27:02:10 And so we have to continue to develop people, develop culture, 00:27:02:22 - 00:27:06:07 strive to make the best product every single day, 00:27:07:00 - 00:27:09:08 and realize that the employees are why we're here.

00:27:09:08 - 00:27:11:20 The consumers are why we're here. 00:27:11:20 - 00:27:14:09 At the end of the day, if we serve them all well, 00:27:14:09 - 00:27:17:19 we'll have long term businesses, not five years, but 100 years from now. 00:27:18:07 - 00:27:19:08 Right, right. 00:27:19:08 - 00:27:22:00 Great answer.

Thank you. James, what do you think. 00:27:22:00 - 00:27:25:17 I would say we look at Bayer's having a little bit of a renaissance, 00:27:25:17 - 00:27:29:03 right, with their DSO strategy and really kind of streamlining. 00:27:29:11 - 00:27:31:16 So we want to be the provider that helps do that, right?

00:27:31:16 - 00:27:34:02 That'll be a long partnership. 00:27:34:02 - 00:27:37:19 You know, not every company is is expanding and growing as fast. 00:27:37:19 - 00:27:41:13 Some are kind of, you know, settling back in and getting ready to move. 00:27:41:13 - 00:27:41:21 Right.

00:27:41:21 - 00:27:44:22 So, so this transition with Bayer is exciting. 00:27:44:22 - 00:27:46:19 You know, we want to see what, you know, costs 00:27:46:19 - 00:27:48:14 we can take out and how we can, 00:27:48:14 - 00:27:51:06 you know, improve that customer, end customer feeling. 00:27:51:06 - 00:27:51:12 Right. 00:27:51:12 - 00:27:54:19 So, we just want to align and with with Bayer's 00:27:54:19 - 00:27:58:04 objectives, we want to make sure we streamline what you're looking at.

00:27:58:04 - 00:27:58:10 Right. 00:27:58:10 - 00:28:00:16 We want to look at our cost to serve and drive 00:28:00:16 - 00:28:03:08 all those things out that they don't need today. 00:28:03:08 - 00:28:04:06 And then move forward. 00:28:04:06 - 00:28:04:14 Right.

00:28:04:14 - 00:28:08:20 So, you know, hopefully we have another 25 year plus relationship after this. 00:28:09:12 - 00:28:10:22 Terrific. That's great. 00:28:10:22 - 00:28:11:12 Well, thanks.

00:28:11:12 - 00:28:13:19 Thanks both of you for joining me today. 00:28:13:19 - 00:28:18:00 And telling us a lot about where Bayer is headed and how DHL is supporting. 00:28:18:19 - 00:28:23:02 And Michael, thanks for the the insights into, you know, supply chain career. 00:28:23:17 - 00:28:25:15 You certainly have a an interesting one.

00:28:25:15 - 00:28:28:15 It doesn't sound like it's coming to an end anytime soon. 00:28:28:18 - 00:28:32:05 So, look forward to catching up with you, in the future 00:28:32:05 - 00:28:36:00 and seeing how, your transformation journey 00:28:37:11 - 00:28:39:01 goes in time. 00:28:39:01 - 00:28:40:15 Very good. Thank you very much.

00:28:40:15 - 00:28:42:12 Yeah, thanks Will. Well, thank you, James. Thank you. 00:28:42:12 - 00:28:46:06 Michael, have a great, rest of the week and look forward to crossing paths soon.

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