LoadProof Video Testimonial – Rick Olson, Sealed Air

 

Kenco Logistics Innovates TO Slash Customers Chargebacks. We have 3 speakers. Christy Montgomery, Vice President Innovation, Research and Development, Kenco Logistics Services. Christy is responsible for leading innovation in the supply chain through value generation, research and development of new solutions. She has 27 years leading supply chain technology and innovation initiatives for a top 10 North American 3PL.

She Sharon heard bachelor’s in organizational management from Covenant College. We have Rick Olson, executive director of Logistics North America Sealed Air Corporation. Rick is responsible for leading internal and 3PL logistics operations in North America. He has 28 years leading supply chain execution for 3PL and direct operations in consumer goods, building materials, packaging, medical, aerospace, and industrial sectors. He earned his bachelor’s degree in business administration from Ferris State University.

Puka Sankada, Principal Smart Gap Gladiator LLC. Puka is responsible for bringing disruptive technology into into market to mobile enabled supply chains, founding and building smart Gladiator into a niche tech company playing the CEO role. He has 20 years of supply chain system design, development, deployment, process improvement experience. Fugger founded Smart Gladiator in 2014 after earning his MBA at Georgia Tech. Please join me in welcoming Rick, Christy, and Puga.

Thank you, Glenn. Well, welcome, everyone. Thank you for coming to our session this afternoon. Wanna make sure everybody’s got plenty of caffeine, and we want you awake. We’re gonna talk about some exciting stuff that I want you to be awake for.

So we wanna talk today about a solution that Kenco Innovation Labs, which is a a division of Kenco Logistics Services created called Globe Proof at the behest of our customer, Sylvia. So, Glenn has already introduced us, but there are names and titles for for your notifications. Sylvia, Kymco, and Smart Gladiators. So this product was created as a partnership between the 3 companies. The customer bringing us their problem, us coming up with a solution, and then outsourcing that to Smart Gladiators to develop a solution.

So as you sit through this session today, there are few things we’d like for you to take away with you. Innovation has to be customer centric. And those are that’s one of the things that I wanna talk about. It’s one of the reasons why we formed PIMCO Innovation Labs. Then we wanna talk about how we’ve leveraged a start up to see the success of Loadproof.

We’ll talk about how we utilize rapid prototyping with a minimum viable product to bring this product to market. We’ll talk about how we commercialize the innovation of Loadproof, and then we will talk a little bit about what we plan to do with the future of load proof. So with that, Rick, why don’t we talk a little bit about who Sealed Air is? Thank you, Tracy. So Sealed Air is a packaging company and recently just sold off one of the the divisions, about 1 third of our company.

Actually, since we put this presentation together, we couldn’t announce it at that point. But, we’re about $4,600,000,000 in revenue, servicing the food packaging industry and the consumer packaging goods, industry. I guess, our most recognized brand, you’ll you’ll know, is Bubble Wrap. The original inventor of the bubble wrap was our founded founder of, Sealed Air. We have about 23,000 employees worldwide, which is down to about 19,000 now.

So couple of the, warts that we see on the right hand side, you can look down those. So, Priscilla, we’ll have you talk a little bit about who Smart Lineator is, and then I’ll come back to him. Thank you very much for the opportunity to present the president in front of this audience and thank you very much for the opportunity to proceed to Christy. Basically, Smart Gladiator is a technology company that’s based out of advanced technology development center within Georgia Tech. I know many, many people don’t know about ATDC unfortunately.

That’s one of the largest incubator in the south. It’s like the Y Combinator of the south. And with this, you know, so many companies have not only raised money but grown so big, you know, starting from that incubator. So we are there and we are recognized as top 40 innovative companies in Georgia as well. Mission of smart gladiators to mobile enable supply chain.

We know we are all, you know, since 2,007, 2,008, I mean, the Apple iPhones and Android devices have changed our life upside down, right? We are constantly sending text messages, receiving text messages, taking pictures and sharing it to our friends, you know, friends and family and we are, you know, taking videos and uploading them to, you know, YouTube, Facebook, so forth. So, the mission of smart learning is to bring all those capabilities into the supply chain, into the distribution center. So, you know, it’s not just about data collection, but it’s also about collaboration. So that is, you know, really the mission of smart learning trend.

We’ve got tremendous reception for our product in the market and people love using our product and it not only just improves productivity, it’s so easy to use. It, you know, can onboard new employees so much faster and, you know, bringing all those capabilities into the supply chain and making life easier for operators, supervisors, managers, executives. That is the mission of Smart Life A to learn. But that’s a quick introduction. Thank you.

So I’m here representing Cango Logistics Services. We are the largest proudly held, woman owned 3PL in North America. And we are very blessed to have, year over year double digit growth. We’ve been in business since 1950, founded in Chattanooga, Tennessee. And we have a number of customers in the top of which in 500.

As you can see, some of the stats there are 30,000,000 square feet, 90 plus facilities across North America. We move about $75,000,000,000 product through our facilities every year. We have a little over 48100 employees. I won’t read all of the awards that we have won, but we were very privileged to be in the top 10 inbound logistics to PO providers again this year. So, that’s a record that we’re pretty proud of and we continue to maintain.

So, that’s a little bit about the companies that were involved in this, development. I’ll talk a little bit about now about why we do this. So Kimco formed our innovation lab about 2 years ago because we realized our customers were facing a problem with innovation being a buzzword, not an executable solution. And we wanted to bring them a solution that could answer their pain points. So I would I would caution that if you don’t have a problem, you don’t need to innovate.

Right? And I think everybody in this room has some sort of problem that you can take a look at and say, how do I innovate around that pain point? How do I look at that challenge differently? So when you look at how we do customer centric innovation, this will make sense. And then when Rick starts talking about his challenge, our role in this was to to help our customers innovate around their supply chain.

They spend all of their money, time, effort, resources innovating around their product or their service that they offer. They don’t have a lot of dollars to spend around innovation in the supply chain. So that’s where we come in. And we we provide that supply chain innovation for them and drive value to their bottom line. And then we bring those vendors to the table, whether they’re startups or they’re long term vendors in the software space or the supply chain space to deliver on those options.

Our mission is not necessarily to invent something new, although you’re gonna hear about Woodbridge today, which is new, but it’s to find those solutions that are innovative and bring them to the table for our customer. So we have a supply chain focus. We are customer facing. Most everything I do in my group is focused on our customers, not on our own internal business at Kimco. And we’re looking for that win win win result.

So as we look at that, we talk about what we’re gonna talk about today, which is load proof. Here’s a little bit of an agenda on how we’re gonna go through this. We’re gonna talk about the challenge that Sildair specifically was facing and how that translates to the industry and what the industry as a whole was facing, customer chargebacks, retail chargebacks, customer complaints. We’re gonna talk about the solution that we developed called Loadproof. We’re gonna talk about the results of that solution and what we’ve seen so far in its short 6 month life on the market, and we’re gonna talk about the benefits and where we’re going with the future of labor.

So with that, I’m gonna ask Rick to talk a little bit about the challenge that Sylvia was facing. So, several of the, problems that we had, revolved around the customer claims. And some of them are real claims, and some of them are probably not so real claims as we all probably know in this business. And, either way, you end up having a return of some sort, a credit, and or damage on the way back, those types of things that you have to deal with. So we had high customer complaints, pretty much resulting in in large credits coming back.

You can take a look at, one thing being un packaged incorrectly, refusing an entire truckload, and you’ve got an $80,000 claim, those those areas. And so, it it becomes fairly frustrating when you don’t know whether the 3PL is executing to the SOPs to how they inspect our products before they go out, Or is this a customer mishandling it and replace it, you know, and, sending it back after mishandling it in their own operation, or is it a transportation plan? And you’re kinda stuck in the middle where either way, if you can’t prove where the damage happened or if the damage even happened, then, you end up with with a much larger problem, which is need the whole bill. So we’re looking for ways to hold people accountable, and it’s not just about reducing the claims. It’s about holding people accountable to what, what is real.

So the shortest claims, were all the pieces there? It seems really basic that people take pictures. But as as anyone that’s tried to take pictures in a large distribution center and where you access those pictures and how you go back and fight a claim later. Just the information is hard to get to. The one you’re looking for, you don’t have those types of things.

Sure. We’re following the process, but we don’t have the details to be able to find it. So, that that’s kind of panning the problem. Our internal departments, in IT have larger fish to fry. So we we turned to our 3PL and said, hey.

We need some help here. And that’s that’s how this works. So I’ll talk a little bit about the industry challenge as a whole. When we took Rick’s problem and we started doing some research on just what are our other customers facing and what are we seeing in the in the other warehouses that we have out there, we found that there were probably 80% of our customers facing the very same problem, that their customers were charging them back. And for those of you who aren’t familiar with charge backs, so that’s when Rick ships his product to the customer, the customer accepts that and then knocks off $20,000 on the invoice and doesn’t pay them because they feel like there was either a compliance issue or something was damaged or the pallets weren’t stacked properly.

The label wasn’t on the right corner of the pallet. It wasn’t shrink wrapped after. There’s a number of different reasons. Right? So that’s a chargeback.

It’s when the customer actually takes a credit off of an invoice that that you already have and you have no way to prove Did you do it right or did they mishandle it when they got there? So when we looked at it at it, this is a a recent survey, by a consumer goods company that that put this out there and worked with Gartner to get these results. Charge backs are 13% of retail account revenue. Now think about that. Walmart, Target, Walgreens, all of your major retailers are generating 13% of their revenue based on these chargebacks that they’re passing through to customers that they have no way to dispute.

And so why they brought us the challenge. They said, look. You don’t see our invoices. We see them. But we have a major problem here.

Something’s going on in the warehouse if you guys aren’t shipping it properly or our customers are passing chargebacks to us that aren’t aren’t actually chargebacks. And so we need to figure out how we help you and help ourselves at the same time. So we took on this challenge. We, we interviewed a number of our customers and we said, how are you doing this today? And as Rick alluded to, what we found is every single warehouse facility had a digital camera.

They were taking at least 50 pictures per load, and then they were storing those pictures on the laptop. And as you all well know, when you have a digital camera and you download that little card into your computer, all of those those pictures come through as dsc_1034. Dsc_1035. And they have a date stamp and that’s all you know. And those charge backs happen 3 to 6 months after the fact.

And so 3 months from now, my customer, Rick, is coming to us and saying, Hannah, you can look back at the load that you loaded 3 months ago on this particular date to this particular customer and find this shipment number. Guess what? That was either gonna take a ton of clerical time, 2, 3, 4 days maybe to find that, or we just weren’t gonna find it at all and he was gonna have to accept the chargeback. And every single facility was doing this. First it was like if they found the digital camera to take a picture before the shipment went out because they needed the shipment to go out on time.

So just inherently a lot of problems with the current process as it was happening. So what we did is we put together some focus groups with our warehouse employees that were dealing with this problem today. And we said, what what are you facing? How are you handling it today? And what would you see as the ideal solution?

And then we wireframed that out. We simply did a PowerPoint presentation on paper and said this is what the solution would look like. Does that work? The focus groups gave us some amazing feedback and said, you know, yes. This works.

No. That doesn’t work. Before we ever coded anything, they gave us a lot of feedback. This all happened within about a 2 week period of time, by the way. And then we created what we call the minimum viable product.

So I’ll explain that by saying, if the customer wants a doughnut, initially, build a doughnut. Give him the doughnut and see if he likes it. Don’t put one with sprinkles on it and icing and, you know, put cherry on top and all that. Build the minimum viable thing that he’s asking for and figure out if that works. Right?

So that’s what we did. And it took us about 90 days to prototype that with 5 of our different customers. One of them being Rick’s facility. Took about 2 weeks to develop. In 90 days, we tested that.

And so this is what we came up with. It’s called load proof. And what it is, it’s an image capture app that runs on Ios or Android. It simply allows our warehouse workers to capture the pictures, input some information about those pictures, and quickly upload them to the cloud when they’re done. They get lost.

Then the carriers, the customer service folks, our customers, our customers, invoicing group, whoever it may be, have the ability to go into the cloud, take a look at those pictures, search by date, by shipment number, by load number, by bill of waiting number, whatever choice those fields are configurable that they want and find that information. Puka’s gonna walk you through exactly how the app works, but it’s very simple. Seems like it was a no brainer. Right? But the system didn’t exist.

In fact, we have a patent pending for this solution right now. So I’ll tell you a little bit quickly about why we chose to outsource it. Kimco Logistics Services, as the name indicates, is a logistics services provider. We’re not a software developer. We’re not a software marketing company.

We’re not a software sales company. It’s not our core competency. It’s not what we do. So if we chose to go to market and find the right partner that could take this solution, and as you heard Puka talk about mobile enabling supply chain, doesn’t that sound perfect for a mobile app? So we found those guys.

And for those of you who don’t know, China is about 2 hours more than Atlanta. So reaching out to the Atlanta ATDC was was an easy move for us. So we we knew that we couldn’t develop this and release it to the market. We also knew that we wanted it to be available to our customers for their sites that weren’t necessarily operated by Kimco. We didn’t wanna restrict them to you have you have to put in that Kimco site only.

We want them to have the ability to make it broader within their network. So if you look at the timeline, it seems longer than it should be. However, the idea was generated in January. That’s when CILAIR came to us, January of last year. In February, we formed the focus groups, built a prototype, and then did a 90 day pilot.

And then in June from June through December, we in June through June through December, we chose Cougus Company. And we’ll talk a little about the commercialization of that in a little bit. We applied for the patent and we developed the solution, and then it went to full release in February of this year. And on the website as well. So so it’s a it’s a very simple app.

I mean, it’s not whole lot of, you know, rocket science to it. Right? I mean, what is the problem that we’re trying to solve? Right? We are trying to, you document pictures, document scenarios, document, you know, any exception with pictures.

And we want to, you know, make sure that we can go back to those pictures, you know, in the future, right? So it’s important that, you know, we don’t the last thing we want to do is add a bottleneck, you know, when the all these LTL pallets, all these add a bottleneck, you know, when the all these LTL pallets, all these shipments need to go up. So we made it very, very simple. I mean, it’s a app that you folks can go to the website, lowproof.com, and then download it. I mean, the link to both the iOS app and Android app is in the website itself.

So it’s download the app and then, I mean there is a little bit of an admin work that needs to be done in the browser portal. So, you know, set up your corporate, set up your site and create your users very, very basic. Because, you know, we gotta we gotta have that right? Only then we can appropriately give access to the users and managers and anybody that needs visibility at a different level. So there is a really nice hierarchy that’s been designed as well.

So you folks could have visibility at the corporate level. That means, you know, all the, for example, a VP sitting at a corporate level can have access to pictures on all the sites. And then there’s also a network level. There is a VP or account executive that’s managing relationship, you know, for a specific customer that’s operating multiple DCs or using multiple DCs in chemical. You know, they can have access to all the sites specific to that customer that forms a network.

And then we’ve got a problem. They could have, you know, packaging livestock, red meat. We have about 90% of red meat market. And if we’ve got a packaging a bunch of packaging going out there, it’s all preprinted. It’s for the, let’s just say, 4th July launches, beef ribs or something like that, and, we’ve got a packaging problem.

We’ve got to jump in a hurry to make sure that we’ve we’ve got this taken care of. When we can hold our 3PL warehouse company, our 3PL transportation company accountable accountable to make it sure that our product stays in pristine condition and and we’ve got some tools that we never had before. So and then, of course, again, it’s just the LTL claims that our internal auditors, department, departments, and our and our external auditors also enjoy the fact that we we have pictures in in to be able to prove the way things are in our facilities. So if you think about this and the broader implications of of the holy grail of supply chain, which is visibility, we all hear it all the time. Right?

I can’t solve all of it with this one tool, but I certainly can solve the condition of the product from the moment it leaves the manufacturing floor to the moment it arrives at the customer facility. So if I’m capturing the photos of the product as it leaves the manufacturing plant, as it arrives at my warehouse, and as it leaves my warehouse, as it then arrives at a pool point or at a at consolidation facility, and then as it arrives at my customer’s distribution center and then finally at potentially my end customer. If I can capture those pictures along the entire supply chain, I can now provide visibility to the state of that product as it traveled along and potentially, identify some areas for opportunity there for us, whether it’s in the transportation line or it’s in the warehousing process or wherever the case may be. Even be able to go back to our customer and say, you know what? This packaging that you’ve changed to, which company has great packaging that oftentimes we find our customer makes a packaging change not understanding how it’s gonna impact the supply chain.

Right? Now we have the ability to prove along the path as it moves and moves and moves every touch now causes us to have additional damage. And so, potentially, they should rethink that packaging. It’s not a supply chain issue. It’s an upstream issue, and we have the ability to help our customers identify that.

So if you think about that kind of all the way through the supply chain, one has the ability to provide visibility to that product status as we go along. So I’ll give you some examples of additional customer benefits that we’ve, had with Bloodproof outside of just Rick’s operation. So, you’ve heard a little bit about the customer satisfaction portal. I can’t tell you how many comments I’ve received from customers saying this is such a great tool. I go in there and I log in myself and I’m gonna have to call the warehouse a 1000000 times a day and say, what happened to this shipment?

What does it look like? Mine’s damaged? I have that ability to say, just log in and search for that particular shipment number, and they can find and look it up for themselves. So it’s reduced a lot of clerical, time within our facilities for people calling and asking for proof of information. We had one particular customer who ships an awful lot of their product to Home Depot and Lowe’s as a consumer goods, durable goods customer.

And, the constant complaint with that is your documentation is not right or it didn’t come with the product. And we’re now able with blood proof to show them that, yes, the documentation was there and it’s accurate this one was loaded on the truck. And so we can push them directly to the portal, which they do. They send their their person to the portal and say, yes. We did.

Here it is. And so, we’ve had that customer save a pretty good amount of money doing that. We’ve avoided some fines with DEA compliance in that. We’ve been able to prove that we have the licenses to ship into the states that we can ship into again. We’re able to send people directly to the portal.

They can see proof that the license exists. Oftentimes, we have trailers arrive at the warehouse that are already damaged as they’re an inbound empty trailer coming in. We’re able to take pictures of blood proof and avoid as well. So there’s a lot of opportunity here, compliance of international shipments. I don’t know how many of you ship into, international markets, but we’ve had a particular customer who’s really struggled with the product, status as it arrives after a container on the ship.

So we can prove that we loaded it on the container properly so that, again, it doesn’t come back to a charge against the customer or a charge against us at our warehouse facility. So and rollout. And I put these 2, quotes on here. I’m not gonna read them to you. But what I wanted you to understand from this was, as Puna referred to it earlier, it’s just the simplicity of the use from a warehouse user’s perspective.

You know, it enables them to be accountable. It enables them to hold their teams accountable for what they did. And at Redpoint, sometimes find opportunity for coaching their associates on how to do things better. They’re not quite following the proper procedure. So these are a couple of our supervisors, operations operations managers who have really found the solution to be useful in helping them streamline processes, reduce man hours, and, coach their employees about how to use the system.

And, I’m not sure Rick made this point, but one of the, one of the points on his slides was just that it was So, it’s been a great process. So here are some things we are talking about doing with Assisted in the future. All of these are, in the patent application. The first two, I’m happy to report are one of them is done. The second one will be done in the next few months, the, Excel export of the the picture files.

So we’re well underway with with adding functionality to the system. We’ve talked about a number of additional things. Puga referred to integration with your supply chain execution systems and and how do you do that to mobile enable supply chain? So we’re working on that. We’ve also had a number of customers request, hey.

We don’t wanna use it on our mobile app. We wanna have a fixed map camera that’s just capturing information that we can go and key in the the photos, which is a little bit difficult, but it’s something we’ve talked about. And positioning within the warehouse. What zone of the warehouse are you in when you took the picture? And then can we upload videos?

We’ve had a number of customers ask that question. Instead of just a picture, could we actually video what the lift driver is doing as he loads it? So you can see that as he loads it into the, the container or into the trailer, he’s loading it properly and stacking it properly. So a lot of additional functionality that we’re talking about adding to the system, and it’s all customer driven as they are seeing it, using it, finding the value. They’re coming back and saying, hey.

We’d love to have this functionality as well. So let’s talk a little about the barriers that we faced and the lessons we’ve learned as we rolled this solution out. A lot of our warehouse facilities being in the 3PL market, it’s our customer’s warehouse management system. It’s our customer’s Wi Fi network. And a lot of them have really stringent security requirements.

So we, we had to either do it in batch mode, which the system is capable of doing, or we use a cellular connection, which can eat into a lot of data requirements. So and his team did a really good job of making those uploads extremely small from a cellular data usage perspective. So we’re not talking about a lot of money and time and effort to upload that information. We we have it where they can we can set at the network level how large the pictures are from a from a, size perspective. So that as the manager or the administrator of the site, I can say, you know, all my pictures will be small because we know they’re gonna be selling.

Or if I’m on a WiFi network and I don’t care about bandwidth, I can make it a huge file. So, we’ve also found it, interestingly enough, as much as customers want to push back on the chargebacks, if they’re in a soft market with their customers, then they will say, I I I don’t know. I don’t wanna make them mad right now. So it’s not a good time for us to be pushing back on our customers. So, they oftentimes will be reluctant to use the product without.

We initially did not necessarily create an online demo because we thought this was such a simple solution. It should be fairly easy to grasp from just going to the website. However, we’ve had a lot of requests for that. So I’m pleased to announce there is an online demo now. And then it’s interesting the the impact that this has had on the clerical staff and the folks who actually process claims.

So now now, to Rick’s point, customers know we’re doing this and so they don’t push as many claims through. So the claims adjustment staff is going, you’re gonna put me on the job. And so they’re not terribly happy about this sometimes. So, and then we’ve also found that we were really targeting that chargeback issue. That was where we thought we were gonna really, have a product that was gonna solve the problem.

What we found, and I think Rick Rick mentioned it as far as this quality of internal audit group, is that there’s almost as much value for compliance and regulatory compliance and and auditing as there is for being able to prove that you don’t need to be charged back for something. So side effect of having the solution is we’ve had an awful lot of quality uptake on on the usage of this product. So, which is great. Love it. But it was a little bit unexpected.

So, not as much a barrier, just a challenge as we looked at it. We didn’t really build it to that solution, so we’ve had to add a few features to make it really work better for an audit functionality. So I’ll talk a little bit about, how we leverage the start up to do this and how we commercialize that agreement. So as we as we looked at the market and said, we have to find somebody to build this for us because that’s not who we are. That’s not what we do.

We realized that we needed that partner out there. We chose a start up company specifically because they could be more agile, they could be more flexible, and they were also more innovative, quite frankly. They were willing to think, bigger picture and how could they build this to to take it to market in a very different way than traditional software products go to market. So, there were 3 kind of key elements of the success. And the first, I would say, is not in this order, but was master services agreement.

So we created an agreement with the Goodness Company where we have the ability to now add on SOWs as much as we want to. And we can create more products by just simply adding a statement of work for a brand new product. And so that agreement’s in place between us, and we understand how we can go to market with pretty much anything we want to do from now forward. And we we also outlined in that SOW. What’s the product life cycle?

What’s new releases gonna look like? What support gonna look like? All of those things are commercialized in that agreement between us. And then we developed a joint marketing plan because Phuga has a lot of customers in that space of mobile enablement that’s watching, and we have a lot of customers as a freebie. So we said, how do we go to market with this?

So, it was a great partnership leveraging a startup to do an innovative new technology release. So with that, I would like to ask Pruvat, since he’s the primary marketer. What are the benefits as you’ve seen him of the system so far? I think I mean, even though we started this just for the load proof, you know, problem. Right?

I mean, initial problem that we solved was to provide proof for all the loads that were loaded in the truck. But but, I mean, you know, we all know, right, a picture is worth 1,000 words. And and and when we, you know, talk to other people that have general issues, I mean, that’s part of our standard customer discovery process wherever we go. We sit at least an hour with a supervisor, with a operator, with a end user and understand, hey, you know, what can we do to make your life better, right? That’s a standard question that we ask.

And some of the things that came up were related to pictures. Hey, if I can show picture when I have a client situation, if I can show picture, the problem is solved right away, no questions asked. It just makes my life so much easier. So, you know, where in all, you know, there is opportunity, you know, my life so much easier. So, you know, where in all, you know, there is opportunity to use pictures in your bathhouse.

So if I, you know, there is a tool that is readily available either in the form of a mobile device or something else that I can, you know, leverage in my, you know, job, in my, you know, daily function, all the