Narrator [00:00:04]:

Welcome to Supply Chain Now, the voice of global supply chain. Supply Chain Now focuses on the best in the business for our worldwide audience, the people, the technologies, the best practices, and today's critical issues, the challenges and opportunities. Stay tuned to hear from those making global business happen right here on Supply Chain Now.

Scott W. Luton [00:00:32]:

Hey, good morning, good afternoon, good evening, wherever you may be. Scott Luton with you here on Supply Chain Now, welcome to today's show. Now, folks, today we have an outstanding show teed up, which we're going to be talking with an innovative entrepreneur and supply chain technology leader that is helping organizations move mountains in new ways out across industry. So today we're going to discussing a variety of what I think is really interesting topics, from supply chain startup lessons learned to how to better mitigate risk and proactively eliminate disruptions, powered in part by AI and machine learning. We're even going to touch on how buyers are the unsung heroes in procurement. All of that and a whole bunch more. Stay tuned for an informative, enlightening, and entertaining conversation. So with all of that said, I want to welcome in our guest here today Tom Kieley, CEO and co founder with SourceDay.

Scott W. Luton [00:01:24]:

Tom, how you doing?

Tom Kieley [00:01:26]:

I'm doing great. Excited to be here and appreciate your time, Scott.

Scott W. Luton [00:01:29]:

Definitely. I've had my eye on y'all over at SourceDay, and y'all continue. The hits keep on coming from you and the team, and it's been a cool story to watch from afar. So I'm glad you're here to tell us more in person today. But, Tom, before we get to the SourceDay story, we got a couple things to cover. And I want to start with a little fun warm up question, because pre show, I uncovered a little factoid about you and your family that some folks may not know. So you shared about this family tradition called the Great Race, which may or may not involve two Camaros, a 68 Camaro and a 69 Camaro. You got to tell us more about that.

Tom Kieley [00:02:08]:

Yeah, it's actually an incredible family event for us. My father and I have always had a passion for cars and classics, and so we've brought together the whole family. My sister and her family and my family and my three kids, my mother and father. And every year in June, July, do an eight or nine day trek across the country on a closed course with about 150 other cars participating in the great race. All cars have to be over 50 years of age and mostly original. It's a test of endurance, both of us and the cars. It's a lot of fun how come.

Scott W. Luton [00:02:45]:

I have never heard of the great race before? 150 plus cars. They've got to be older cars, which to your point about it being an endurance, I mean, you're talking cross country. It's probably a mix of driving skills as well as logistics and planning skills, as well as maybe maintenance skills too, huh?

Tom Kieley [00:03:04]:

It's a significant test. I mean, so my, my sister is my navigator, her husband is my father's navigator, and my father and I drives. And the cars break all day, every day. And you've got timed locations that you need to be at to the second or you have time delays and lose points. It is a endurance test of the mind and body, and more importantly, the vehicles and your mechanic ability to keep them running.

Scott W. Luton [00:03:30]:

Plus, you gotta get along with your families for eight or nine days straight. I'm kidding. I'm kidding. Mom and dad. I'm kidding.

Tom Kieley [00:03:37]:

It certainly can be a test. We're a great close family.

Scott W. Luton [00:03:41]:

I can tell. I tell you, some folks say family tradition, and they mean that in a cliche way. This is really a full family tradition. We're going to have to get some pictures next time we get together. One last question about that. That. What time of year again is there.

Tom Kieley [00:03:54]:

A great race generally falls at the end of quarter for, for my business. So last two weeks of June every year.

Scott W. Luton [00:04:02]:

All right, June each year. All right, we'll be looking for you to zoom through Atlanta, maybe in June 2025. But hey, moving right along, we're going to talk about soar state in just a second. But another thing I wanted to kind of dive into a little bit is you and your co founder, Clint McCree published a book about a year or so ago, which is entitled startup lessons learned along the way. Our SourceDay journey, which you can find Amazon and probably every other bookstore out there. I wish we could dive in the whole book over the next hour, but we gotta get some of the topics. But I wanna ask you one, one of your favorite specific lessons that you hope supply chain founders take away from the book itself?

Tom Kieley [00:04:42]:

Yeah. My co founder and I have been incredibly fortunate for the journey that we've had and the opportunities that have been in front of us and we've created. I think from a tech founder standpoint, specifically in the supply chain world, the team is what matters the most in bringing in industry specific, knowledgeable team members that understand the nuances of manufacturing and supply chain and distribution is critical for our industry. If you're just bringing software people in to solve problems with software, they don't truly understand why we're doing it and what we're trying to accomplish, then the outcome will be diminished. So for us, we've always sought out leadership all the way down to support personnel, training, sellers, everyone throughout the organization, individual contributors alike, have experience in supply chain one way or another as best we can. And so we've got trainers on our platform that have been in supply chain. We've got customer success managers that are supply chain backgrounds and that helps them relate better and helps us really be able to solve problems.

Scott W. Luton [00:05:52]:

Love it. I love that. And speaking a few others that I looked at really quick as I cheated, I may have looked at the Cliff notes version I'll be reading, I'll be adding to my bookshelf behind me soon. But I, I love the culture and community are forever linked. I love that mantra that y'all live out every day and this other one that hopefully a lot of our viewers out there will appreciate there is more to success than money. And that is so true, I found personally. So folks, check out startup lessons learned along the way. Our SourceDay journey, which again, you can find at Amazon, all the other book carriers out there.

Scott W. Luton [00:06:28]:

One other quick question. As a fellow startup and entrepreneur and founder, I can remember some of the moments in my life with family, with co workers, you name it. Some at the highest of the highs, some lowest of the lows, right? Takes all kinds. What's one of your favorite startup life anecdotes you might mention in the book?

Tom Kieley [00:06:49]:

One of the biggest ones is to fail fast and learn and pivot your first idea and maybe your 10th idea in the idea or as a whole idea is not always the best, and you got to be willing and open to learn from mistakes and pivot quickly, and we didn't do that best early on. My first company I launched in 2008, and I did a really poor job of it then. But learning to recognize and use data to pivot quickly and make sure you're always listening to customers and learning and growing and improving every day.

Scott W. Luton [00:07:24]:

Tom, well said. And I really appreciate that transparency, authenticity. When we reflect back on when we do things well and then when we don't do things so well and we learn from them and apply them in later chapters, I bet that's a big, at least one of the list of items that have made you all so successful today is learning from past things that didn't go so well, huh?

Tom Kieley [00:07:49]:

Absolutely.

Scott W. Luton [00:07:50]:

But the good news is, man, things are going really well at SourceDay and I really appreciate this opportunity I have to plug in with you and learn more and that's where we want to go next. For the handful of folks out there across our global audience that may not have heard of source, say, tell us what the company does in a nutshell, especially as it relates to how you help organizations mitigate risk in their supply chain operations.

Tom Kieley [00:08:13]:

Yeah, excited to share that story and the journey that it's been. It was not an overnight success, and we owe it to our team and our customers. The vision of SourceDay has always really been around, enabling better communication between manufacturers and distributors and their suppliers. Organizations that produce and manufacture and distribute finished goods have to rely and buy parts, pieces and finished components from suppliers, and generally they need to treat them as partners, and doing so bring them closer to their organization. So our customers use ERP systems. Think SAP, Oracle, Microsoft, Netsuite, there's hundreds of them. Those systems do a great job predicting and driving demand and procurement and inbound supply to keep production lines running where we come in. And our vision was to extend the purchase order demand for all those critical components that go into production and assembly into a cloud solution that drives collaboration.

Tom Kieley [00:09:17]:

So SourceDay is a network of over 100,000 suppliers globally and 260 customers that are using SourceDay to buy from their suppliers. And we drive very prescriptive automated workflows that make sure a supplier doesn't miss a single part on a single PO line. When they're managing thousands or tens of thousands of PO lines, we're able to show them the risk, or the red, if you will, in predicting and sensing risk, or having short shipment collaboration, so that production and shipping schedules are aligned to what's coming inbound, and that the ERP is consistently maintained as the system of record to drive production, predict revenue, keep costs and operations efficient, and continually driving better data quality from outside your four walls with your supply chain, creating efficiencies. There's a lot more to it around data and supplier performance and supplier reliability that we can get into later.

Scott W. Luton [00:10:16]:

I love it, and we are going to touch on, especially that supplier reliability. That is such an important thing for so many organizations right now, as we've learned last couple of years in particular, I love the picture and the aspect of your vision that's better communication across the whole ecosystem. I love what you talk about, the opportunity that is not approaching your supply base or the ecosystem on a transactional basis, really making it win win relationships where they're really part of the ecosystem, an active part of the ecosystem, not just a transaction to make. And then near the end of your response there you touched on all the disruption and friction and surprises you can eliminate, you know, on the front end of the relationship before you even get to making stuff. Right. And there's a tremendous opportunity there. Is that right, Tom?

Tom Kieley [00:11:09]:

There's a significant opportunity. Our data shows that the majority of inbound supply misses happen before the parts ever shipped from the supplier. And it's disruptions in PO changes, both on the buy side, which can come in the form of expedites, meaning I've got a PO lines that I want you to move in earlier, maybe a sub quantity of a line that I need you to move in earlier and ship faster, or a push out, a cancellation, a move out. So, move outs and cancellations impacts cash flow and working capital, and increase inventory levels that you don't need. And so wanting to get that information into the hands of your suppliers in as near real time as possible, so they can react at the lowest cost possible, and then you have supply disruption, you've got all kinds of supplier inability to meet demand, missed items, you have production level issues, you have freight and logistics issues, but ultimately, a supplier having the most critical and relevant real time information as possible every single day enables them to perform at a higher level. And so our platform enables the collaboration of real time PO changes. And our data shows that over 52% of purchase orders change up to two and a half times on average. Last year, we captured 103 million po changes across our 260 some odd customers.

Tom Kieley [00:12:34]:

That sheer amount of data and change in capture cannot happen in spreadsheets and email.

Scott W. Luton [00:12:40]:

Well said. I tell you, where were you in SourceDay? Back in my manufacturing days, Tom, we spent, to your point, on the front end, whether we were the supplier or we were bringing parts, components and assemblies in, there's so many things that can go haywire that creates so much friction and stress and lost days and lost production time before you even get going. And so I love you're speaking to the choir. You're preaching to the choir in so many ways here, and no wonder you are finding a tremendous amount of success. And one other point, if you can't ship parts, you can't send invoices, you can't make revenue, right? So let's get all that right so we can send good parts on time more quickly, huh?

Tom Kieley [00:13:22]:

I can add one more ank, though. My co founder and I both have supply chain manufacturing backgrounds, and the number one thing from his history was, where are my parts? Where are the parts that I can produce and ship production today to deliver revenue so that I can invoice and, you know, continue to grow as a business. And so we solve that problem through collaboration in a single platform that brings it all together in a automated fashion.

Scott W. Luton [00:13:51]:

Love it. And gosh, 103 million po changes just last year. And that's just across y'all's ecosystem. Man, imagine what goes on elsewhere around the entire world. And that really, I think one of the many ways it projects the opportunity, that is, we need a t shirt. No more bad pos or something like that. Tom. Right?

Tom Kieley [00:14:14]:

We got a lot of t shirts. This one actually says stop misses at the source.

Scott W. Luton [00:14:17]:

Oh, I like it.

Tom Kieley [00:14:20]:

What's scary more so is, you know, most of those changes go uncaptured, even outside of SourceDay, just because of the inability to recognize the risk until it's already too late.

Scott W. Luton [00:14:32]:

Folks, y'all gotta learn more@sourceday.com before we move on deeper in this conversation. We'll make sure folks go there. I love Tom. As I was checking out your website earlier, you've got it kind of broken down. You got what's in it for the head of supply chain, those leaders out there, you got what's in it for head of operations. You know, who doesn't want, especially if you're manufacturing, manufacturing leadership, a leaner, smoother operation, right? That's some sweet dreams. And then you got, of course, the head of finance that wants a more predictable and a more profitable bottom line. So, folks, you have to learn more@sourceday.com.

Scott W. Luton [00:15:04]:

dot Tom Quick, before we get into supplier reliability, any comment you want to make there about how you all broken down the Personas?

Tom Kieley [00:15:12]:

Absolutely. This has come over nine years in SourceDays life, but also just from a practitioner ourselves, is that supply chain and operations and supplier inbound parts impact the entire organization. When you think about buying as a role, they're communicating with suppliers, but what they update or don't get updated into the ERP system has a downstream effect all the way through to inventory finance and operations, supply chain sales and revenue and shop floor production. So it literally impacts the entire organization. And it's dollars, it's wasted efficiency, it's overages and expedites and freight and inventory carrying costs. It's missed revenue and its excess spending across the organization. So we have Personas and stories from customers, from each of those Personas on how we've impacted them in a real hard dollar value way to drive revenue, drive bottom line working capital improvement, and truly make them better organizations.

Scott W. Luton [00:16:17]:

All right, so I want to go next. Now that we've got, I think at a minimum, working level definition of the cool things you are doing over at SourceDay. I want to touch on supplier reliability, because that certainly is one risk that has been on many organizations radars in recent years. The pandemic has taught us many things about, really, across industry, right, and across global supply chain, but they've taught us a lot here when it comes to supplier reliability. So I want to share a little factoid with you, Tom, and then I'm going to get your take on some things you're doing here. Recent Gartner data shows that almost 40%, I think 38% to be exactly, of chief supply chain officers worried that their supply chains cannot handle challenges over the next two years, I wonder, I bet that's still a pretty high number over the next six months. You know, disruptions, name of the game, who knows what the next curveball is going to be. So I want to ask you, Tom, what impacts have you seen when it comes to supplier reliability? And how can we address what we like to call the trust factor across the supply chain ecosystem?

Tom Kieley [00:17:20]:

I'd like to go backwards a little bit because I think the challenges are much more significant than organizations have really correlated. To. Most organizations we speak to end up carrying two to three x or more inventory and safety stock levels than they would like to. And they're doing that to protect the downside of inbound supply confidence and accuracy and on time delivery. Keep production running, have excess inventory on hand so you don't run out of something that's going to stop production. And that all is a result of disruptions through the procurement lifecycle, process of parts and really through the inbound supply accuracy. Where we lead off and where organizations need to focus is connecting the dots of we're having to compensate for performance in the supply chain by over buying inventory, because we're not giving our buyers and our supply chain team members the tools to make them as effective as they can be. They're typically living in a tactical day to day of manually emailing pos one by one to every single supplier every day.

Tom Kieley [00:18:25]:

Most our customers say that takes them six to 8 hours a day as a buyer. And so your buyers are tactically sending paper back and forth where they should be spending time, is collaborating on lead times and inbound risk expedites that need to happen, pushing out, creating short shipment schedules so that they can keep production lines running, getting multi sourced parts done so that they can eliminate some of the disruption and risk by having multi sourced suppliers that they can trust in different regions, and then additionally quality. They need to make sure they have suppliers with quality they can trust. And so where SourceDay is helping us customers eliminate all of this risk and disruption is the very first thing a customer needs is automation. In the most tactical sense. We eliminate the need for a buyer in the manufacturing world to ever send a purchase order to a supplier manually ever again. When there's a new purchase order created, or a change to an existing po being an expedite or a date change, or a push out or cancellation, we immediately deliver those changes to a supplier in a consumable way that they don't have to adopt a technology. They can meet the supplier using source data as passively or as in depth as they wish.

Tom Kieley [00:19:39]:

But the data all feeds back into the buyer's SourceDay dashboard that shows them all of the risk and disruption that's coming their way. And before that risk and disruption, to your point, would live either in unknown territory, across thousands of emails or conversations, or wouldn't show up until the parts didn't arrive at the door on the day you expected them to. And now you're scrambling to keep production running.

Scott W. Luton [00:20:03]:

That's right.

Tom Kieley [00:20:04]:

It all starts with automating the most tactical sense of every day to day role.

Scott W. Luton [00:20:09]:

I love that. Catching all that upstream where you've got more time to do something about it or eliminate it proactively, which sounds like you are doing a lot of that as well. Two quick things I want to pull out on what you shared there, starting with kind of a broader point. What it sounds like to me, Tom, is, you know, one of the great big builders of trust is when everybody can see the data, right, and there's no, oh, I'm hiding this over here so I can leverage it this way. That can create mistrust just within a single organization that I've seen and certainly across the ecosystem. So it sounds like that's one way that you are really building a whole bunch more trust. Would you agree with that, Tom?

Tom Kieley [00:20:50]:

Without any doubt. I liken that to my salesforce days and I and being in a sales role, you cant forecast sales if you dont have visibility to the pipeline, and the same is true in reverse. You cant forecast inbound supply if you dont have visibility to risk.

Scott W. Luton [00:21:04]:

Thats right. Well said. I love it. Were going to touch on how the buyers are the big heroes across industry in a minute, but I love how youre eliminating that mundane manual work of sending pos where youre getting feedback that was taking six to 8 hours a day, and you're automating that which unleashes their expertise and their skills and their creativity into things. That's probably not only more fulfilling work for the buyers and other team members, but there's tremendous value you can unlock for organizations, right?

Tom Kieley [00:21:38]:

In my view, the buyers are unsung heroes and they've been left with no tools or systems outside of the erpental to really drive supplier visibility and collaboration and really hone in on their craft. And where we give buyers the ability to be strategic is eliminate all of those tactical issues and just show them the red. Here's the 20% of your inbound supply that's in a crater risk and that's where they can dig in and start to add their strategic value. And how can we get creative using the data that we know historically from these suppliers and both currently in the platform to start to determine what is the best path forward to keep production running? How can we continually keep that inbound supply as accurate and as confident as possible, therefore increasing supply reliability? And it begins with systems and processes.

Scott W. Luton [00:22:33]:

I love that phrase you use to hone in on their craft that is so relevant across this automation imperative that the industry has been experiencing. Right, because you're allowing the beautiful human factor to do what they do best and hone in on that craft. Such a well, well said perspective there. Okay, I want shift gears again because you are doing a lot of work across a variety of sectors and, you know, sectors from industrial machinery to packaging manufacturers, sporting goods and a whole bunch more. But secondly, you mentioned a bunch of ERP providers earlier. A bunch of them. And I think infor, speaking of all the ERP folks you're working with out there, that's one of your big partners as well. Is that right, Tom?

Tom Kieley [00:23:18]:

It is, yeah. We're excited earlier this year to announce that infor is officially reselling and going to market with SourceDay as a collaboration platform for their customers.

Scott W. Luton [00:23:28]:

Man, the hit do indeed keep on coming for the SourceDay team. All right, variety of sectors, a variety of technology partners, ERP partners, and a whole bunch more. I want to ask you, when you think of some of your customers that you and the soar stay team work with, day in, day out, week in, week out, you name it. What are some of your favorite stories and results there?

Tom Kieley [00:23:52]:

Yeah, there's some really incredible ones, but two always generally come to mind. And one was one of our earliest customers and Clint and I were doing all the roles then, so we would speak to customers every single day, all day. And there was a woman that was in a buyer role, and six months after adopting SourceDay, she called and told us we had changed her life, and that was her literal words. And so that became a mantra in and around SourceDay is we need to continue to make sure that we're changing lives at that personal level. And her story was that every day at the end of the day, 05:00 she would have to stay in office and manually key in purchase order changes from suppliers that came in via email or otherwise. In that time, it was fax, email, phone, voicemail. And so she would get those messages and she would key the updates into the ERP so that overnight the planning engine, when it ran the MRP, it would actually run an updated schedule based on new, relevant, accurate supplier data overnight. By implementing SourceDay, we eliminated that task for her.

Tom Kieley [00:24:58]:

She told us she was able to get home and go to her son's baseball games and able to get home to make dinner and spend time with her family. So she truly said we changed her life. Some of our shirts actually say change lives. That is something we truly live by in all the innovation we do.

Scott W. Luton [00:25:12]:

I love that story so much for a variety of reasons, but most importantly, most importantly, in that one buyer's example, you're talking about the quality of life that y'all afforded to her. Who wants to stay after a full day, right, where you're chasing fires, putting fires out, doing big things, handling all the just problems that come with life and global supply chain. And then when you're ready to go home, spend some time with your family, you know, break bread, decompress. Oh, no, you got more work to do. As you were talking, as that buyer mentioned in that example, you're staying past five and doing some things that you probably shouldn't have to do because you could automate it. That is one of my favorite recent examples of, really, the power of technology these days. Right. Especially when you leverage technology to not only make life easier on all the human team members, but you empower them to do so much more and more meaningful work moving forward.

Scott W. Luton [00:26:15]:

So hopefully y'all captured that buyer. And wherever she was, was she here in the states or elsewhere?

Tom Kieley [00:26:22]:

She was, yeah, she's, she's here in the midwest.

Scott W. Luton [00:26:25]:

Oh, man. Okay, well, that is a wonderful story. So you've already set a high bar. What else? When you think of some of your other customers you've worked with over the.

Tom Kieley [00:26:34]:

Years, yeah, it should have led in reverse. I mean, this one is equally as high, but, but less emotional. Right. There's less of the pulling at the heartstrings. But I think whats really exciting in this one is its a business impact that was really meaningful. And it was a tier two automotive manufacturer whos been with SourceDay for many years now. But one of their first anecdotes to us was the reason they were looking to buy SourceDay is because they were continuously having to charter private jets to overnight or as quickly as possible get parts to their customers because there were significant penalties from the auto customer than if they had any delays. And so those delays were a result of supply chain breakdowns.

Tom Kieley [00:27:16]:

And post SourceDay she was able to confidently say that they had not ever chartered a private jet to overnight or expedite parts to a customer. And, you know, we all know how expensive flight is. Imagine doing private charters last minute for small components. And so we saved them tens of thousands of dollars every single month just on that alone.

Scott W. Luton [00:27:40]:

Oh, undoubtedly. And folks, if you don't know, for our friends across the globe listening man, when you shut down an automotive production line, oh goodness gracious, the fees are big. And if it tells you anything, chartering a Gulf stream to get some small parts somewhere, that's a perfect illustration of what those fees could be. But the other cool thing about that, Tom, beyond the bottom line, savings and the operational efficiencies, because I'm sure that just added logistics headaches. But again, I focus on the human side. That takes stress out when we're got late parts, got bad parts, you name it. That creates stress on the human component of our organizations. And that's one of my favorite things to relieve.

Scott W. Luton [00:28:25]:

So. All right, love those two examples. Before we shift over, we're going to dive a little deeper on the buyer role here in a second. Any other story you want to share before I do?

Tom Kieley [00:28:34]:

I think I'll add to the human element. I think one of the most critical things manufacturers in really any industry and supply chain related is the generation coming into these roles is not going to live in Excel spreadsheets and email. And they generally don't pick the phone up and want to chase people down. They want automation, they want data, they want tools at the palm of their hands and technology that can make them more strategic and give more value to the organization beyond email, spreadsheets, manual processes. So I think it is crucial to give your team members the tools to be successful beyond the known spreadsheets and manual things that just kind of get you by.

Scott W. Luton [00:29:18]:

Well said, tom. Folks, you're out there waging this supply chain talent war not just to get new talent, but to keep your team members happy and fulfilled and developing, right? It is. I'm with you it is. That's one of the most intriguing dynamics out there is newer generations in the workforce, they don't just want a better way of doing things. It's expected. So excellent, excellent comment there, Tom. I've certainly seen that front and center so many different ways. All right, let's shift gears here.

Scott W. Luton [00:29:51]:

I want to talk to own this big old light that's been shined on the procurement world and I in the last few years. Procurement's cool again, as me and many friends have been talking about for a couple years now. In a recent interview, you mentioned how buyers are the unsung heroes in procurement. You just touched on that a second ago. We have already answered some of the question here, why you think that? But I want to get, I want to kind of go back and pull on that string a little bit more. What else would you like to mention about that?

Tom Kieley [00:30:21]:

Yeah, I mean, this is a super exciting one for me because they're the users that work in and out of our platform every day and give us the good feedback and the constructive, not so good feedback. And it's what makes SourceDay better for them and for us and for the industries we serve. And what I think is truly great is as a buyer in all of our customers and the organizations we sell into, when I meet with them, their immediate reaction is, can I have this yesterday? And it's really that pain of they've been living in manual uncertainty where if you can imagine sending 100 purchase orders every single day in an email and not knowing if someone on the other side received it, if they opened it, if they downloaded it, if they're taking action on it. So all the unknowns just by the black hole of email, it also not being a very secure protocol to send PO data, we are now automating and giving visibility to these buyers that serve such a crucial role to our customers and to industries that consumers that we enjoy so much. And the effect is when you adopt SourceDay, the buyers now have visibility to the PO was delivered or it was bounced, meaning 1.7% of the Pos that we see get delivered have a bad email or a bounce, a hard bounce, a soft bounce that is generally unknown to the buyer until there's an issue or some rate red flag raised with SourceDay, we show that immediately that here's your 1.7% of Pos that bounce, here's how to take action on them and fix them. And then here's pos that are due in two weeks that are going to be delivered late because they haven't been acknowledged by the supplier yet. Here's risk. And so we're able to highlight risk using data and true AIH across the 100 plus million PO changes we capture every single year to start to detect incense and get into some of that more later.

Tom Kieley [00:32:23]:

But where I really believe is the buyers have so much cursory knowledge of suppliers and parts and unique factors that impact production that can't be always in a platform, that we need to automate all the tactical components that they do so that they can use their knowledge, their strategic ability to go impact where there is risk and where we sense risk, and so driving their ability to remove the tactical and make them strategic and give them the ability to be the hero of the organization rather than the one that's always being asked, where are my parts?

Scott W. Luton [00:33:00]:

Well said. When I think of conversations I've had over the years with so many of the incredibly talented buyers, I think of going to the gimba, right? Going to where the value is created. Because buyers, they are oftentimes subject matter experts, and not just in this little part. Oftentimes buyers kind of know how the greater system works, right. And where there's opportunities and where there's traditional snags and where oftentimes, unfortunately, many humans out there have to wear capes and fight fires, you know, put fires out every day. But buyers, I love it. The unsung heroes, as you put it, in procurement, I would just add maybe in the greater supply chain world. Okay, one other thing.

Scott W. Luton [00:33:43]:

You touched on how your technology alleviates uncertainty, what I'll call operational uncertainty. When you think of the uncertainty out there that might be associated with economic this or that or elections or whatever, right? You think more like it at the sea level maybe, right? And big investments, capex, whatever. But what I love how you described, when it comes to just knowing whether or not someone got your PO or your invoice or whatever, or not, that operational uncertainty is often not talked about. And I think there are massive opportunities there that can, we can make days easier for our teams. Your last comment there before I shift forward. Yeah.

Tom Kieley [00:34:24]:

It's significant inefficiencies that exist in supply chain today that impacts organizations, but also just impact the global economy by overbuying, over, producing, overcarrying excess inventory, expediting parts constantly. That has an impact in fuel and energy, and just the efficiency of our infrastructure in and around the supply chain. So every single component or little piece that we can drive in efficiency throughout the supply chain is going to have an exponential multiplier throughout the global scale. And so where I love to look at is our customers are seeing efficiencies in significant ways. That is, reducing inventory. One such customer just recently had a 22% reduction in inventory that eliminated their need to go add a million dollars per month in inventory warehousing. And so that reduces their footprint, that reduces their carrying costs, that reduces working capital impact. And so it just spreads through the supply chain in such broader ways when you can really focus on driving that inefficiency through disruptions.

Scott W. Luton [00:35:39]:

Well said there. 22%. Man, that dog will hunt, as they say in South Carolina, Tom. I bet they say that in Texas, too. All right, let's break out our shades. I should have had my shades handy here, because we're going to be looking at a very bright future. And one of the things, I'm going to get some predictions from you in a second, but before I get there, you and the team launched the SourceDay intelligence platform here not too long ago, which is powered by, of course, none other than machine learning and artificial intelligence. If you would tell us about this development and how you see organizations benefiting from source state intelligence out in the market in the months ahead, and this.

Tom Kieley [00:36:17]:

Is one of the most exciting innovations that we've ever had. We have patent pending technology as a part of the backbone behind what we're delivering to customers today. And it really starts with the old world didn't allow you as an organization to capture all this transactional PO change data that was happening at a 52% rate, two and a half or more times per po. When you're cutting tens of thousands of PO lines per year, sometimes per month, for some customers, that is a volume of change that is uncapable to capture. And so putting all of that into a platform, and with nine years in business, with over 260 customers and over 100,000 suppliers, we now have a massive scale of data that has reached a point where we have confidence in our source data intelligence model to predict risk throughout the supply chain before anyone can detect it, before a supplier even knows that there's a delay or an impact to the PO. It all comes around our ability to historically capture transactional data and using current real time PO demand data to show a customer and a supplier. In the same view, this percentage of your current open purchase orders we're sensing are going to have x many weeks of delay based on these principles and these drivers, and then driving a supplier to take action on that, to let the buyer know the shipment is going to delay 50% of the order, we're going to have a new shipping schedule or there is no issue, everything is fine at that point. The buyer now knows and has communicated back and forth with the supplier what the risk is and what the impact the business is going to be.

Tom Kieley [00:38:03]:

And we've updated their ERP system in the same vein. And so the real driver behind our intelligence is the 100 million PO changes we capture on average. Being able to use that real data to drive intelligence and to drive predictable sensing risk throughout the supply chain that then can drive better improvements and better results.

Scott W. Luton [00:38:27]:

So, Tom, basically, your supply chain superheroes, you're enabling the ability to see around corners, is what you're telling me. Tom, one of the things, is that right?

Tom Kieley [00:38:36]:

I mean, that's absolutely right. I mean, if you're a buyer, you know, your inbox is constantly chaos and you're constantly putting out fires and you're constantly having to get suppliers to respond, but they've got other customers and, you know, they're also putting out their own fires. So we have the ability to really use data and automation to deliver intelligence that's never been seen in supply chain.

Scott W. Luton [00:38:59]:

No wonder this sounds like one of the biggest developments since y'all started the company. This would be exciting to see how it kind of plays out. Also, one thing you touched on, you know, data is like the lifeblood of artificial intelligence. And here we are in the golden age of AI. I hear that source stays po life cycle management database that you all have that you touched on a couple times. Our conversation is the biggest one in existence, so you'll have, as you mentioned, an immense amount of data to help power this soar state intelligence platform. So looking forward to seeing where that goes in the months ahead. Speaking of the months ahead, Tom.

Scott W. Luton [00:39:40]:

All right, so you got to break out your crystal ball. Mine's been broken since about, I don't know, 1989, I'll call it so. But I'll check and see if yours is still registering and spitting out of good predictions when you think about 2025. And, folks, we're recording this episode. We've broken into September. Temps have gotten a little bit cooler in the Atlanta area. Thankfully, Tom, things might still be hot in Austin, but cooler weather, football weather, better. That's right.

Scott W. Luton [00:40:09]:

It's around the corner. You'll be able to check out those aggies since you're a big Texas A and M fan in some nice, crisp, cooler weather in the months to come. But when you think about 2025, what's one or two supply chain topics or issues that business leaders just got to keep on the radar?

Tom Kieley [00:40:27]:

I think there is a significant number of options there that are always going through my head and trying not to be a doomsday prepper here, but if you look at the continued impacts the economy and the global economy are having on supply chains and manufacturing right now, the manufacturing PMI is at its second all time lowest it's ever been and it's in recessionary levels. And I think there's a significant amount that's driving that in terms of labor costs continue to increase, infrastructure costs continually increase, real estate costs are continually increasing, insurance costs, I read, are going to two to three x for these organizations in the coming year. And all of these costs are going to have a significant compounding impact on improvements in health and manufacturing if we don't get ahead of them by driving efficiencies and really reducing costs and overhead where you can. Some things are uncontrollable, some things are very much controllable. If you adopt technology and adopt automation and look to the future in terms of how can you be a more efficient, scalable organization, I challenge and I predict that in 2025, organizations are continue to multi source suppliers continue to look at other regions, hopefully nearshore and domestic, to start to reduce disruptions and costs and impacts to their supply chains. And in doing so, you're going to need to adopt a technology, not just source data, but other technology as well, that's going to drive efficiencies and your ability to multi source, your ability to collaborate and communicate with not just your key suppliers, but second and third option suppliers for those components so that you can keep production running at an efficient level. And so in 25, all of that compounded, you're also going to continue to see younger generations enter into the workforce that are going to require technology and innovation as a part of their day to keep you competitive in your hiring practices, to keep you competitive and getting better talent and being more efficient. I still continue to believe that we're in the beginning days of supply chain tech innovation.

Tom Kieley [00:42:43]:

I think we'll see a significant amount of consolidation in technology, but adopt it fast and thoughtfully.

Scott W. Luton [00:42:51]:

Well said, Tom and I share your optimism and it's a good thing because I think the disruptions, name of the game, right? I tend to go have some concerns around geopolitically. We've already seen a tremendous amount of negative impact there, as we all know, the last couple of years. And unfortunately, it could, uh, based on global conversations and politics and a whole bunch more, it could get a whole bunch worse. And the guys you start talking about disruption on an even greater, massive global scale. Uh, but I am optimistic cooler heads should hopefully will prevail. And I think you're right. We've got a tremendous opportunity in this continued supply chain, uh, technology innovation era that we're all living through. And the positive certainly outweighs the negative.

Scott W. Luton [00:43:42]:

And what I see two other quick things that you touched on in your response here. Adoption. All too often, adoption, especially in this, in this era, doesn't get talked about enough. And gosh, everything we implement in our organizations and all the money that's spent, all the time and elbow grease that's invested, if there's no adoption, man, why do we do it? So, I love that you touched on adoption and then secondly, that visibility. You know, I think a lot of folks, and what I see across industry visibility is fast becoming table stakes. However, as study after study will tell you, and I bet you agree with me, Thomas, my hunch, I know you'll disagree. You'll say if you don't, but visibility deeper across all tiers, we still have some big opportunities there, right? Big opportunities. And of course, the old saying goes, our supply chains are only as strong as the weakest link.

Scott W. Luton [00:44:38]:

And I think there's still a lot of organizations that don't know their weakest link just yet. But that's getting remedied by the hour. And that's also good news. But Tom, before I make sure folks know how to connect with you, I'm gonna give you the final word on my meaning. Make that a soliloquy. You bring a lot of thoughts to my head between my ears here. I'll give you the final word before I make sure folks know how to connect with you.

Tom Kieley [00:45:00]:

I really appreciate the time. I think it's just so crucial for organizations large and small, in the manufacturing, any vertical, any industry distribution alike, look deeper at technology. And what I see in organizations is they're starting to embrace them more. And that the ones that do continue to persist and thrive and scale at a much faster pace in a much more profitable, efficient way. And we're helping organizations do that with our network of suppliers and collaboration that we deliver and drive. And the one thing I'll say is our customers use our platform and it's less about adoption for them. On the buyer side, it's more about enablement and change management and really embracing technology. So let it do the tactical pieces for you and then you do the strategic.

Tom Kieley [00:45:54]:

I'm excited for the future SourceDays. Innovation is still just beginning. What we've done this year was some of the biggest we've ever seen in the industry. And I'm confident with what I know we have coming next year, it's going to be even more exciting.

Scott W. Luton [00:46:07]:

Outstanding. That's great news, man. Great news. Congrats. All the growth and innovation and success. And I love what you kind of implied at the end there. Let innovative tech do what tech does best and let's empower the human factor to do what they do best and what they find to be most fulfilling. That's a beautiful intersection right there between those two, those two approaches.

Scott W. Luton [00:46:30]:

So congrats, Tom. Now you're traveling the world sharing the gospel that is SourceDay. Speaking at a lot of conferences, you and the team are getting out to a lot of places. How can folks connect with you and the SourceDay team? And I think you've got a great event coming up in particular in October, right?

Tom Kieley [00:46:48]:

We do. Yeah. I mean, the best way to keep up with me and the business is on LinkedIn. Just my profile. Tom Kieley, k I e l e y. But in October 23, I'll be in New York at the Julian Lucky tech conference on a panel that I'm excited to be speaking about on supply chain and manufacturing specifically.

Scott W. Luton [00:47:09]:

That is outstanding. So, folks, if you're up in New York City in late October, maybe at this event with Houlahan Loki, make sure you go up and introduce yourself and connect with Tom. Maybe have a delicious slice of pizza or whatever. Whatever will be atop your culinary list there, Tom. But check that out. And folks, you can learn more. You connect, connect with Tom on LinkedIn. And of course you can learn more@sourceday.com.

Scott W. Luton [00:47:35]:

Tom Kieley, man, big fan. What you are doing. Appreciate you spending time with us here today and share with our audience. And hopefully, like you did for me, at least provoke a lot of thoughts into what we are doing, what we should be doing, and what we got to get to soon when it comes to global supply chain. Thanks for being here, Tom.

Tom Kieley [00:47:54]:

Absolutely appreciate the time. And thank you, everyone.

Scott W. Luton [00:47:57]:

That's right. That is right. All right, folks, I've been talking with Tom Kieley, CEO and co founder with SourceDay. Again, connect with Tom. Be sure to learn more sourceday.com. folks, here's the deal, though. Tom shared a lot of good stuff, both related to SourceDay and what they're doing and then kind of in a greater sense when it comes to global supply chain leadership. So now your mission is to take at least one thing from what Tom shared here today and put it into practice.

Scott W. Luton [00:48:26]:

Your teams are ready to do business different and you know what? It's becoming a greater and greater imperative, not just for our organizations, but for the global supply chain industry. So with all that said, hopefully you enjoyed the episode as much as I did. Scott Luton and the Supply Chain Now team challenging you to do good, to give forward, and to be the change. We'll see you next time. Right back here at Supply Chain Now. Thanks, everybody.

Narrator [00:48:51]:

Thanks for being a part of our Supply Chain Now community. Check out all of our programming at SupplyChainNow.com and make sure you subscribe to Supply Chain Now anywhere you listen to podcasts and follow us on Facebook, LinkedIn, Twitter and Instagram. See you next time on Supply Chain Now.