Tim Linsenmeyer, CTO, Clover Imaging Group, and Michael Walton, industry solution executive, manufacturing industry, Microsoft, talk about how Clover Imaging is leveraging Microsoft Azure technology to advance artificial intelligence and machine learning to help disabled adults gain meaningful employment. More specifically, they discuss the benefits of a machine-learning sales forecasting system that has helped right-size inventory and labor all while reducing multiple job functions in the warehouse to just one.
Below is an excerpt from the interview. To hear the entire interview on The Peggy Smedley Show, visit www.peggysmedleyshow.com, and select 07/27/2021 from the archives.
Peggy Smedley: Well, gentlemen, I’m pretty excited about the conversation today because not only are we talking about manufacturing, we’re talking about the supply chain, but we are talking about helping a very unique and very important set of the workplace and a group that we need to get going, which most people I don’t think give enough attention to. So, Tim, I’m going to really ask you to start us off and tell us a little bit about Clover Imaging and what it’s doing and what your passion is all about.
Tim Linsenmeyer: Thank you. Clover Imaging Group is the world’s largest collector of remanufacturing imaging supplies in the world. Our model is centered around sustainability and innovation. We are a remanufacturer. We remanufacture, we take goods that would normally go to the landfill or to be thrown out, millions of units and millions of pounds that would be going to the landfill, copiers, printers, imaging supplies, and we remanufacture them and we sell them as OEM (original-equipment manufacturer) compatibles or OEM refurbished products. We don’t sell them to the end consumer, but we sell them to resellers and distributors, things like that.
Linsenmeyer: What we’re really passionate about also at Clover is being able to leverage technology, specifically machine learning and artificial intelligence to help adults with disabilities gain meaningful and empowering employment at a lot of our manufacturing and distribution companies that we interface with in our supply chain. So, it’s something that we’ve been working on for years, and we’re very proud of our ability to be able to do that. But again, just to get the word out on creating jobs for this untapped workforce of helping these young adults get meaningful jobs and just feel empowered and be contributing members of society.
Smedley: Well, it’s interesting, Tim. I have to tell you, we’re talking today on the radio show, and here I found out we’re in the suburbs of Chicago, you guys are in the suburbs, and I didn’t even know it. So not only we were talking about helping the workforce, but we find out how small the world is. We’ve had this pandemic, and everyone talks about, they all understand the supply chain. And we all understand it now because we’ve all panicked about toilet paper, we’ve all heard that. But what’s really important now is we’re talking about resiliency.
I’m finding out that you’re my neighbor, so to speak, you’re in the suburbs, we’re in the suburbs. It takes a pandemic for us to understand we have to help each other. And that’s what you’ve been talking about. You’re talking about how we all have to be more resilient. Walk us through that, walk us through why you’ve learned so much and why everybody else has to learn that we have to be more inclusive, we have to be more helpful to everyone.
Linsenmeyer: Well, in 2017, we were really struggling with our supply chain. And we’re a manufacturer, a packager, and a distributor. And if your sales forecast accuracy isn’t right, and you’re planning and supply chain lays out a manufacturing plan and a packaging plan and a distribution plan, and your sales forecast is wrong, you’re going to use a lot of extra labor, a lot of extra money, a lot of extra inventory, a lot of extra demand for a product that may or may not be there. So, we were really struggling with that. And like I said, in 2017, we built a machine learning sales forecasting system.
And what that did to our business would just put us on the right track. It really rightsized our business. We were way overvalued in inventory, and our labor was out of control because we had more inventory than we knew what to do with. We were busting at the gills in our locations. So, we turned to machine learning and Azure to help us. And what we did was we built a sales forecasting system that allowed us to determine what we’re going to sell and who we’re going to sell it to and where we’re going to ship it from.
And if we had accuracy in that, then we said, “Okay, where do we need to make the product? How much do we need to make? How much do we need to buy in our supply chain so we can do just-in-time manufacturing and then just-in-time packaging? And then we have distribution centers around the U.S. Where is the most efficient spot to put the product into distribution centers so that when the order comes in and we pay freight, that we can ship it to the customer in one to two days and meet or exceed our service levels?
So, when we leveraged our sales forecast, we just backed into everything else. And now it manages our supply chain, generates POs, generates manufacturing plans, packaging plans, and distribution strategies. And then we took it to the next level. Not only do we want to have it in the right location or right warehouse, where in that warehouse is the best place to put it based upon FIFO, based upon picking strategy, based upon minimal travel time, based upon floor picks versus machine picks, just leveraging every possible bit of data to right size our inventory, but more importantly is to right size our labor. And when we did that, by accurately predicting demand, it really just turned our business around.
Smedley: Are we talking about, because when I hear you talk about just in time, everybody gets nervous. They think about, did that create problems in the supply chain? You’re talking about flipping that upside down and saying, “No, it helped us gain revenue. It helped us be more profitable. It helped us see data, interpret things.” Was that in a way that you were able to see things that maybe others didn’t because you were able to do it in a way that enabled you to make more money, enabled you to get the right profitability when you needed it?
Linsenmeyer: Well, one of the things, as we were going through this transition and leveraging technology, we met with the senior leaders, we polled them and we said, “What do we need to do to make our business even more efficient? And how can we leverage technology to play a bigger role in what we do, stay competitive, get out in front of our competition, and leverage this technology to grow our business?” And when we met with the senior leaders, the biggest thing was analytics and understanding the data. We had Excel models that were old and antiquated, and again, we needed to refresh. So, we built data warehouses for every pillar that we have, manufacturing, packaging, distribution, sales, quality, engineering, and R&D. We built data warehouses in Azure, we trained each pillar, two people on Power BI so that they could write their own reports.
We educated our users on their data. And then we built the business model using AI and ML to predict business outcomes. Like to give an example, cashflow and cashflow needs for finance and accounting, stocking strategies, transportation plans, manufacturing plans. And when we did that, the teams really worked together and they leveraged data from pillar to pillar, and that data feeds from one pillar to another one, how manufacturing, packaging, and distribution affects sales. Our business really just leveraged data, leveraged to ML, and it really changed the whole company. We call it tech-tensity. We just focused on technology, we focused on data, and we built models around it to help that.
Smedley: So, I got the idea of how you, from a technology standpoint, I’m going to ask Michael to talk about that in minute, because I want to talk about how you’ve leveraged technology here. And then I want to talk about how are you able then to leverage this to empower your supply chain, to optimize your employees. Because now you’re talking about taking it to the next level, not only just the supply chain, but now you said you’ve been able to leverage it for using the right employees who have cognitive disabilities, so it’s a two-pronged approach that you have here saying, “Not only did we optimize our supply chain, but we are able to optimize our employees.”
So, Michael, do you want to talk a little bit about why technology is important? I guess maybe I’ll ask you to jump in, but then I really want Tim for you to dive into why now employees are so important to this element.
Walton: So, let’s talk first, the technological component. So, the technology stack had to be able to fit Clover’s approach in the way that they wanted to do business and their business culture. So, it’s always about at Clover, they have two sayings, image is everything, and can you do more? And in this, can you do more, kind of attitude, it’s about empowerment. If you empower the organization, if you empower it to the lowest levels possible, people will try to do the very best and the right things for the organization. So, a technology stack in this particular case needed to be empowering, meaning it was easy to learn, easy to deploy, easy to support, low code, no code, kinds of approach.
I’ll give you an example just on their manufacturing lines, instead of trying to solve world hunger and going after everything. And the first way is simply put, how can we scan some barcodes for downtime and hit the easy button that alerts everyone? That was really that easy. It took less than a day to do it. And people really gravitated to it, to now where their system is far more complex than that, but to be truthful, it was not a Herculean effort, it was mostly driven by the employees and the leadership within Clover. Same is true when you look at the ability of what they’re doing inside their warehouses, when you go up in the stack.
Again, from a technology perspective, bite-sized chunks, leadership driven at the lowest level, and the results were outstanding and have continued to be. That’s what I mean by a technological stack. Technology has advanced so far that you really can do this in a way that grows with the organization. And it’s very empowering. Now, on the people side of it, everyone is strapped for people. It’s just that simple. Everyone’s trying to do more with less, but in particular with Clover, they had an interesting situation where they couldn’t hire… there was not enough people to hire pre pandemic, let alone during the pandemic.
So, this empowerment was absolutely key for them to be able to make a difference in the technology. They went out looking at all different technologies on the market. We were very, very happy they selected us and the ability to be able to grow that within their organization. I would argue, and Tim, you can validate this, your IT organization is half of what it was in size, I would say three and a half years ago. Is that not, correct?
Linsenmeyer: Yes, it’s absolutely correct. Absolutely. And so was our warehouse and labor force as well, because we optimized the systems and processes through technology, Mike, you’re right.
Walton: So Peggy, I hand this back to you to have this conversation with him in depth, but what was a problem that they couldn’t solve in terms of hiring enough people and even with as many people as they get hired and couldn’t produce enough, we turned that into producing with the people you have, but the right inventory, at the right time, with internally the right costs, in the right geography. That is not all that hard to do from a resiliency perspective, but people make it out so hard because they’re always looking for some big bang instead of empowering the organization. And I would argue the right technology and empowerment culture is what really led to a lot of their success.
Smedley: So, Tim, let’s talk about that because you have to have the right technology, the right partner that you feel can enable you to now look at the right employees. You couldn’t even have felt comfortable that you could do the things without having the confidence in the technology. Would that be correct?
Linsenmeyer: That’s absolutely correct. Our business processes were very complicated. Even in manufacturing, distribution, packaging, they were very complicated. And I’ll just give an example. We had seven job functions in our warehouse, today we have one. So, we had seven job descriptions, seven positions we had to interview for. Today, we have one and we use technology, like Mike said, we simplified every aspect of our business, “What could we automate? What could we eliminate the decisions they have to do?” Everything is electronic, everything is monitored.
Our goal was, when somebody hits our warehouse, they can start working the same day. There’s zero training. That was our goal. And using technology, we streamlined and simplified and optimized our business processes in manufacturing, packaging, and distribution. And it’s really helped us stay competitive. It’s really helped us, not necessarily reduce our workforce, but optimize it, optimize our workforce because it’s really hard to hire people today.
Smedley: So, walk us through that. How did you do that? How were you able to find this new workforce that you were able to optimize? And now looking at that, thinking outside the box, so to speak, to say, “Look, if we can’t find the workforce we need, but we can open up the opportunities for a new workforce that can actually get up and running right away without all this extra training?”
Linsenmeyer: Well, Clover partnered with an organization called GiGi’s Playhouse. They’re the world’s largest organization for people with down syndrome. And they take care of them from prenatal all the way through adulthood. And as we partnered with them, and we help them out on a lot of other IT stuff, but they were struggling with, as they grow and develop these adolescents and the young adults into adults, to find employment for them, and they were struggling with that. And they came and talked to us about, “Hey, can you help us give an even playing field, help us find and create empowering jobs for the adults with disabilities?”
And we looked at our systems and processes, and they were very simple because we had already gone through that model, and we never really thought about leveraging this technology on adults with disabilities until we met with GiGi’s Playhouse. And we took a group of adults with down syndrome, we rented a bus, it was a lot of fun. We had Microsoft and speech therapists, physical therapists on the bus, and we went down there, and we had people picking in our warehouse within 15 minutes, we had all of them picked through our warehouse. We got some feedback from them.
It was just amazing how easy it was to use, they said, and they felt like superheroes. It was very rewarding for the IT team when we were there watching this because we didn’t build it with that intention, we just wanted to simplify it. And then when we simplified it, we found out that it would work with the adults with disabilities. Now, we needed to make some changes to help it out and help them compete on a level playing field, but we made some changes, we optimized it and we took them down again, and it really worked out well. Unfortunately, our warehouses are not in anywhere near a location of GiGi’s Playhouse, so it was a long time to get there.
But the concept of what we had was, we’re going to take this technology, we’re going to give it away, we’ll publish it on GitHub, and then we’re going to help companies create an inclusion program using AI/ML for accessibility. Because Clover can only hire so many. And again, you have to find the adults with disabilities around your warehouses, and it was a little bit challenging, and we did partner with some groups, but the more important thing was we didn’t build this just for Clover, we built this tool to help adults with disabilities work in any environment, manufacturing, retail, packaging, distribution. It doesn’t matter. And we’re giving it away, we’re showing companies how we did it.
It’s been a great feeling of having people call us, companies call us, asking us how we did it. We tell them how we did it, we help them adopt that technology. It’s been very rewarding for the IT team. We have extremely low turnover in the IT team. And part of that is because the company gives us this ability to do and develop these kinds of technologies.
Smedley: Maybe I could take a step back here because what I’m hearing from you is you’re helping these individuals who have cognitive disabilities and you’re partnering with an organization. So. You’ve created this on the supply chain that they can have something… you can walk them through tasks that are very simple, that are repetitive. That’s what I was hearing you say. And what I liked about this is that you could do cycle counting or routing or picking. And those are a lot of tasks that they can contribute to because I think what I’m hearing you say, what made it so exciting is that companies who don’t realize this, that can actually participate, and that’s the industries.
You’re giving this tool away. And again, correct me if I’m wrong, but what I like about this is, any industry, and that’s what I want you to help me understand is, it’s not just in manufacturing, anybody that might have a service industry or whatever they might do, have repetitive tasks, you’ve created a tool that enables these individuals to be able to pick it up and adopt it right away. It’s easy. It’s something that they can do because there’s a lot of repetitive tasks that these individuals can partake in. Is that correct?
Linsenmeyer: Yeah. We didn’t realize it until when we simplified and streamlined our business processes in the warehouse, then we brought the adults with disabilities out there to work in that warehouse. We thought it was really simple, but again, we wanted to take it to the next level. And these adults with disabilities helped us understand their needs and some of their cognitive skills, we changed the tool completely. We even brought our accounting team out there, our sales team, our executive leadership team, our legal team. And they used this tool, and they were surprised that they could walk into the warehouse and be able to pick right away.
And I’ll just give you a brief overview of the tool, the adults with disabilities wear a headset with noise canceling and one near and high-definition microphone, and the other ear is open so they can hear all the bells and whistles and other things in the warehouse. There’s facial recognition login, and it walks them through. They put on a wrist band for a scanner, they just click their fingers together and it scans, and they have a shopping cart that they log into. It’s got a Surface Go device on there, and it shows them turn-by-turn navigations as to where they need to go in the warehouse.
It talks to them realtime, voice to text and text to voice. It shows them a picture of the item that they’re going to go pick, it shows them the bin that they’re going to go pick. As they’re approaching the bin, it says, “Hey, you’re approaching the bin, it’s on the left.” If they pass it, it’ll tell them, if it’s on the other side, it’ll tell them. They scan the bin. If they scan the wrong bin, it’ll tell them if it’s up or down, left or right. Then it’ll tell them to scan the product and pick the product. And then it’ll have them tell us when they’re done. And we were able to train 14 adults with disabilities in about 15 minutes in our warehouse, how to go in and do it.
And when we realized that they could do this, then we looked at other functions in our warehouse that we could use this technology for like cycle counting. And then we looked at other industries as we got more and more feedback from other companies like the retail industry, like stocking shelves or taking orders at a restaurant or cleaning hotel rooms, using custom vision, which we’re working on, is being able to monitor what they’re doing realtime. And if they need assistance, they can just say something. If they don’t say anything, we send somebody over right away because we know their location.
So again, it’s just leveraging technology and seeing countless hours of adults with disabilities working in our workspace to see where we need to change the tool. And then working with other companies to say, “How can we adapt this tool to be of use in more and more industries?” And it’s just been very exciting for the IT team and Clover.
Smedley: What I like what you’re saying too is, the idea is you’ve applied a lot of sensory to this, for those that have down syndrome or other disabilities. Your addressing, whether it’s their ability to be able to react quickly or tell them they shouldn’t go a certain way in the manufacturing facility. Are you finding that this is opening opportunities for a new workforce? Is that what you found? It’s not only that you just worked with an organization, but now maybe some individuals might say, “Look, I have opportunities that they didn’t know were out there for them now?”
Because you’ve created a new tool that says, “Look… “They have family members who take care of them and now they say, “Look, there’s some new ways and they can get excited about getting up and going to work.”
Linsenmeyer: Well, a couple of things there. One, we initially tested with adults with down syndrome, but then it expanded to adults with autism. And we tried look at other cognitive disabilities. And the more that we worked with these groups, the more we learned about how we could leverage this technology. And again, really, the technology is industry independent. One of the things we learned, which was the most shocking thing that the IT team learned is, adults with disabilities specifically autism and down syndrome, maybe their speech isn’t as fluid. Some of them have speech difficulties, they stutter, they stammer, they talk low.
And what we found out was when they were talking to the bots, their speech was actually better than when they were talking to us, which really amazed the speech therapist as well. And what our model tries to do is, if Susie is working and she’s always talking to the bot and she has speech difficulties, the bot tries to learn what she’s trying to say and it leverages that, and it keeps history of that. And it uses voice to text and text the voice to make sure that what they say, the bot understands, and what she says, it goes both ways. And over time, the more people that use the system in theory, the better the speech recognition tied to the person would be.
And that was challenging, and Microsoft was an enormous help with that. When we worked through that, we just realized that this is industry independent. This technology can be used in almost any industry where people can work. The key for us was that we built empowering jobs, not that they have to be monitored all the time, but the system monitors and will let us know when we need to reach out to them, but they want to be empowered, they want to work. They want to come in and work just like everybody else, get their job done, and go home. And this technology allowed them to work independently.
The feedback that we got from the parents and from the social workers and from the physical therapist and speech therapist was, they get to work by themselves, they get to feel empowered, they can communicate, they can talk back and forth. They feel comfortable. It was easy to do it. It wasn’t too hard. And again, when we saw all of this, we realized that it could be applied to any industry. We did not go into it with that mindset.
Smedley: I love the way that you’ve talked about, not only empowering those have down syndrome, but those also who are autistic. Autistic children, the way that they have open opportunities is they get the ability to work. I think the idea is we use more and more technologies to help these individuals who have cognitive disabilities or other things because I know, and we have an employee, one of her children is autistic. And so, she was very excited about this interview because she said, “This is a wonderful way to open up opportunities for children with disabilities.” And I know you have been very passionate.
Michael, you and I have talked about, in manufacturing, we’re going to run into this problem of right now like four million unfulfilled jobs as a result of unskilled workers. But I think as baby boomers retire, as we find individuals who lack any desire to want to work in manufacturing, it seems Clover might have figured out a great way to tap into some new excited individuals who might want to say, “I want to be a part of an industry that’s really very exciting in general.”
Walton: No, I don’t disagree at all. I believe that Clover has created a culture that has drastically increased retention. Rather than being a company that others recruit from, I would argue that their employees are now recruiting on behalf of Clover and pulling in new talent. So that’s the type of paradigm you want to be in. I do want to point out to you though, that this is no longer a silver wave, this is a silver tsunami. All facts are proving that because of COVID, this tsunami is occurring right now. And I think that management and other companies really need to get their focus on this in the very short term, because it’s simply going to happen.
Clover is in an extraordinarily positive position versus where it was three and a half years ago in terms of tribal knowledge, that won’t walk out the door now. And so, I strongly encourage others to do this. It’s not only the right thing, it’s the far more beneficial thing. Nobody wants to walk out the door with all the knowledge and see the love of their life as far as their career not become dysfunctional because they’ve got to keep going back to fix it. I’m sure like anybody, when they retire, they would like to see the company they worked for years actually really put the hard work the knowledge they’ve generated so that when they walk out the door, they’re operating at a sustainable level forever.
I just want to point it out because that’s a very real and near thing that is happening right now. I’ve seen many articles now pointing strongly from economists at the number of people that are turning in their retirements and retiring at a quarter point or a year in for the company employees that they’ve been working for. And very large numbers, primarily because of the COVID situation where they’ve had a break. So, they got a taste of some freedom, so to speak and they’re going to capture on it.
Smedley: Let’s think about that here, because if that’s what we’re looking at, and we have to think about things a little differently, and I think Tim and Clover hit on something though. If we’ve got the tsunami and we want to look at the market differently, is there a way, and Tim, this is personal to you and this is why I think you really haven’t shared with us why, but we talked about this. Prior to our interview, we had a call and we found out personally, and maybe our listeners need to understand that, but I think we can get into that. But I think the other part of this is you’ve tapped into something that maybe you really haven’t engaged in is getting others to understand there’s this coalition you should form to get people to understand you’ve created something that…
You could talk about, “We want to give this away. We want people…” I don’t think they’re going to understand that this is something, maybe you’re doing something that will help them to understand it’s more than just giving it away, you’re helping an industry that’s in trouble in a different way by saying, “Look, we’ve got something, that’ll give you new workers in a way that they’re not thinking about it.” And I think Mike’s just said something there that maybe people need to open their eyes a little wider to this. Maybe we should be talking about that a little more. I hadn’t thought about that until I just heard what you said, Michael.
So, I think maybe we need to be talking about not only why we need to be thinking about what you’re offering, but pandemic has made us think about things differently, but I think passionately, why this is so important to you, Tim, I think maybe we need to understand that. It’s not just, “Hey, we’re giving this away,” it’s very important to you from a personal perspective.
Linsenmeyer: Well, I have so many things I want to say on the manufacturing side, and I’ll go to that first. We can’t keep doing what we’ve always done in the warehouse, in the supply chain, in distribution, in packaging, in sales. We can’t keep doing the same thing. You have to keep reinventing yourself and you have to leverage technology because it’s changing so fast. And everything that we did was not that hard. It really wasn’t. It was there, anybody could do what we did, but when we streamlined and simplified our business processes, that opened up our eyes to a different group of adults that we could potentially help and hire.
And by hiring, we realized that we could only hire so many, and we realized with this technology, there’s thousands of other jobs and potentially millions of other people that we could help. The adults with disabilities unemployment rate is significantly higher. I don’t know the exact number, but it’s significantly higher than the regular employment rate. It’s hard to hire all of our facilities, it is very difficult to hire and retain the workforce, but if we can streamline and simplify the business processes, make it so that anybody can do any job like we did, and then leverage other various workers out there and untapped potential, I think it solves a lot of business problems and it really helps the company. And it really makes us feel good about what we’re doing.
And speaking from a personal perspective, my son, Jeff, sorry I get a little emotional when I talk about it. My son, Jeff, he has autism, he has diabetes, he’s got epilepsy, but he’s just the greatest kid and just so happy and just enjoy his life. And he works at Lowe’s, and he’s been working at Lowe’s for 13 years. And he cleans the garbage, and he empties the carts, and he sweeps, and he does returns. And I’m so grateful to Lowe’s for hiring him. And it’s just been fantastic. And when I see what he does, I see other opportunities, because he’s so happy to go to work. He works four to six hours a day.
He works maybe 38 hours a week. He walks to work, he walks home rain, sleet, snow hail, but he just loves what he’s doing. His work is the most important thing to him. It’s just so amazing he gets to do that, and he feels so empowered, and he gets to spend his money. And it really opened my eyes to how he’s just so happy at work, and it’s so much fun. And then my daughter, her and her husband got special education degrees from University of Illinois, and they were teaching kids with down syndrome, and then they got married, and then they adopted a baby with down syndrome. And that’s what really turned me on to GiGi’s Playhouse.
Clover was already dealing with GiGi’s Playhouse, and I really didn’t know much about it until my granddaughter’s started going there. And again, Ellie is six years old now, we got her when she was three months and she’s just the light in our lives and just lights up the room. And I always tell her that pop is going to help your friends. And we’ve been working with GiGi’s Playhouse, when they educate them and they teach them all these life skills, the next thing is to get them into workforce, and we can help with that. And this technology can help with that. And it’s not just about adults with disabilities in autism and down syndrome spectrum, but almost any spectrum.
And again, the more we can get companies to realize that and to see that and to be able to simplify and streamline their business processes so that they can make the process as simple to use. Mike mentioned it about people leave with proprietary information, but when you streamline and simplify everything and you have the job that anybody could do, it makes it really easy. And they enjoy doing it. And it’s just been, I can’t say enough about it, it’s just been so rewarding and so emotional for our team and for the whole Clover community. It’s just been fantastic. And the response that we’re getting from our suppliers, our customers just leveraging that, it’s just been great.
Smedley: I think what you just did, for those listening, we all like Lowe’s right now, Lowe’s just went up a point or two because we said, “Look, if they did, they did something great for your son.” But now, GiGi’s Playhouse, we all learn something new. We all have to share and be a better world and a better community for that. We make our community wider when we learn and brighter. And that’s what’s so exciting about this. Clover’s doing something really special and other companies have to do that. So, I guess the idea here is, how do we as a society work to tap into this excitement?
I think that’s what we have to do here. And I guess, Michael, what’s your thoughts as we continue to talk about this and attract workers, because I think you made a really good point, as data walks out the door, this knowledge walks out the door, we can use knowledge to be power. This is where we’re all sharing power, and information is power. How do we now use this to be better, to be a better society and all the things that we’re talking about right now?
Walton: Well, I think it’s starting out with being a better society, the younger generation wants to work, but they want to work somewhere that’s sustainable, responsible, attractive, self-empowering. And I could say that I’m fully confident that the early adopters of this technology and this approach have already adopted it and are well underway. The fast followers, they’re underway, not well underway, but certainly underway. For those in the main state, the rest of the 70% of the manufacturers out there, you’ve got to take a serious look at this, you’ve got to compete this way, because if you don’t, you’re not going to get the younger ones.
The older generation is vastly retiring in a big way. So, there’s going to be a big gap. There’s going to be a lot more jobs, open people are going to have a lot of options. So, you need self-empowering, attractive technology, attractive, and a sustainable and responsible type of corporate culture and products that you produce. It isn’t just the future, it’s a now thing. It’s not a tomorrow thing, it’s very much a now. And for those that are coming out of the pandemic, I got to tell you straight up, the economy’s hot, and the one that makes the most often is going to win, but if you’re not going to be able to recruit and retain that talent, they will leave, if you don’t make an environment like this for your company.
Smedley: Tim, why did you feel it’s so important to want to get other companies to really share this right now? Why is it so important to you for other companies to really see what you guys are doing and to embrace specifically what you’re doing right now?
Linsenmeyer: Well, we know that 2017 we were struggling, and we used this technology to get through it. And then this technology helped us, ML and AI in the supply chain really helped us get through COVID as the system would adjust as fast as it could base upon the data. And we were lucky, and we offered that solution, creating additional revenue streams for Clover, we offered that solution to some of our suppliers and customers to help them, because if your suppliers go out, that’s tough, you’ve got to find other suppliers and different bombs, and it’s very challenging. So, we partnered with our customers, we partnered with our suppliers, and we leveraged this technology to help them make them more efficient.
And we all partnered together. And the more you partner together with people, the more you win together, and you create those sticky relationships that makes it hard for a customer or a partner to leave or a supplier to leave because you’re offering them things that maybe other companies can’t offer them. And so, we want to get the word out, it’s not doom and gloom. You can leverage this technology, you can streamline and simplify your business processes, you can optimize your workforce, and you can leverage this technology to create an inclusion program, AI for accessibility program.
But more importantly, is you can use it to regenerate and rejuvenate your team and motivate them and get them excited because you’re doing more with less is one of our core values, is do more with less. And we have less people that are working in our warehouses manufacturing and packaging, but they’re doing more because we’d leverage this technology. And we just want to get the word out for all the manufacturers and distributors and packages out there, it’s out there, you can do it. And we’re proof of it, and we’re stronger because of it.
Smedley: Do others feel it’s a little unusual or do they believe that’s the way they have to think now, because that’s not, if you go back to the early ‘90s, that sharing was not, everything was proprietary, we don’t want to share. Is it a different mindset? So, you have to open up people’s mind and saying, “Look, we all have to share?” So, in the initial discussion, people are a little bit, “I’m not sure I believe this is all sharing.” Is it people believe that? Or do you have to convince them or no, they’re all welcoming to the idea?
Linsenmeyer: Well, Lincoln said it best. He said the easiest way to beat your enemies is to make them your friends. And so, we’re all competing for the same customer base, and we’re all making products that somebody else is making, and I get it. And there is competition in the marketplace, and I’m not saying that that’s going to go away, but if you partner with our supplier and we make them more sustainable, more profitable, because they’re not over buying their inventory, over making their inventory, but not only doing it for what we buy from them, we’re doing it for what they sell to everybody else.
So, we’re building that stickiness with them to show them that we want them to be in business for us, but we’re not just doing it for us, we’re doing it for all their customers and then our customers. We’re helping them with managing their supply chain. So not just what they buy from us, but what they buy from anybody, because we want that to get out there. And it’s a win-win for everybody. And again, we’re all competing, and we’re all challenged with labor and challenged with supply chain issues and pricing, and you have China. And again, the more that we work together, we partner, whether it’s from the same industry or not, the more we leverage the solutions that are out there, the better we can win, the faster we can win.
And the more we can stay in the business, and the more that we can grow and develop a business. And like I mentioned before, Clover’s created additional revenue streams because of this technology, and it’s been really cool. When the pandemic started, we leveraged our supply chain to manage our PPE supplies that we were selling, and we never sold that before. So again, it’s just leveraging this technology to help grow the business, generate revenue, increase the EBITDA, and lower costs. Everybody needs that.
Smedley: Is that something too that you discovered that you had a shift a little bit, new products came out of this that you didn’t think about because the pandemic has one of those things, you just said PPE, you didn’t think about things. So new things came about that you didn’t think you’d be producing, creative, revenue. Is a lot of creativity had to come out of this?
Linsenmeyer: The bigger thing that came out of it, Peggy, he told us that we had way too many brands. He told us that we were making too much product. It really helped us understand our business and optimize our business. We have too much inventory, so it helped us manage our inventory and helped us become more stewards of our business. And then when we did that, we started looking at other industries. And then you start partnering, and then you look at how quickly can you get a supply chain solution together? Well, if you’re using machine learning, it’s a lot easier than using Excel and a team of supply chain analysts to manage it.
Again, offering it as a service to our customers and our suppliers really helped, but more importantly, it also helped them stay in business and buy from us, and we buy from them, and it keeps our business sustainable. So again, it wasn’t just about us doing it for Clover, and we started out that way, but when we realized we just opened it up to, like I said, adults with disabilities and our customers and our suppliers, it really made us a much healthier organization.
Smedley: Is there one piece of advice that you would leave someone listening to this and saying, “Look, if you had to start this, you have to really understand it. Where would you direct them? Would you direct them to the employees? Would you direct them to looking at their inventory?” Where would you say, “Look, this is where you should start,” because someone says, “Okay, I understand what you’re telling me, but where do they begin?” Because someone always has that feeling about, “I don’t know where to start.”
Linsenmeyer: Well, one of our core values is embrace and drive change. Another one is challenge your peers. So, we can’t just leave things status quo. And when we had the problem with supply chain, we pulled the team together and we came up with an idea and we ran with it. You have to keep reinventing yourself. And how to get started is like we did, we pulled our senior leaders together and we said, “What’s our biggest problem. If we could wave a magic wand, build or buy a solution, what would we do?” And ours was inventory. Every organization may have something else.
So, you agree that the biggest problem you have, and you may have 100 problems, who cares. But the biggest one you have is probably 50% of the problem, and that’s what it was with us. So, if you kill that first one, if you slay that dragon, it goes away. All those other ones seem so much easier now. Most people like to start at the bottom and pick the easy ones, the low hanging fruit, and that’s not how we operate here. Kill the biggest one, kill the biggest dragon in the room and the other ones will run, and the other ones will be easier to tackle.
And so that’s what we did. We tackled the hardest problem, and we didn’t have any skillsets. We didn’t have Azure team, we didn’t have an MLP team, we didn’t have a security team, we didn’t have a strong database team, but we built it. And we built this tool with the help of Microsoft, and we leveraged it in a very short period of time. We met, and it doesn’t take long to do this. We met in January of 2017 to do a design session; we went live in July of 2017. So, it took us seven months and took four Clover people and Microsoft. And it wasn’t that hard.
And when we did it, we didn’t realize how big a dragon that we had just slayed, but it wasn’t that hard, and it didn’t cost insane amounts of money. And the cost that we reduced from implementing this solution, it far exceeded any money that we spent. So again, I would start with the biggest elephant in the room, but you have to get buy-in from the senior leadership team. You can’t have accounting want one thing, and sales wants another one, and manufacturing wants another one, and logistics wants another one. You have to agree as an organization, what is the biggest problem that you want to solve that would help almost every pillar in the organization.
And when we did that and we solved that one, then we just went through the next biggest one, and the next biggest one, and it wasn’t that hard. When that first one falls, all of them will go like dominoes.
Smedley: Michael, what’s your final thoughts on working with a company like Clover that has management buy-in, that has employees that are looking to do this. Any thoughts you want to wrap up with?
Walton: The results are extremely strong and positive. World Economic Forum has commissioned many of these findings. I do strongly believe that it works. I don’t think that organizations should feel threatened by this. They should embrace it, because just the results speak for themselves. It’s just that simple.