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, hey. Good morning, good afternoon, good evening, wherever you may be. Scott Luton here with you, along with special guest one only, Mike Griswold here on Supply Chain Now. Welcome to today's show. Mike, how you doing today?

Mike Griswold [00:00:44]:

I'm doing great, Scott. Great to be back. Great to talk to everyone. I know we've got three really good topics, so I'm excited.

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

We sure do. And we missed you last month. But, gosh, Lauren Rainier, I think I'm seeing her last name correctly hit it out of the park. And I look forward to having her back and we'll dive into the top 25 soon. But, folks, today, back by proper demand, one of our longest running and most popular serious supply chain today and tomorrow with Mike Griswold with Gartner. So Mike, of course, serves as vice president analyst with Gartner. Today's episode, as Mike mentioned, we got three interesting stories that we're going to be diving into. A big toy company is making some really big reorganizational moves to keep up with market trends.

Scott W. Luton [00:01:26]:

A real transformer, you could say. Yes, sorry, Mike, had to. Uh, the next up, we're going to be talking manufacturing and really share some eye opening components of the global battle for market share, I believe. Then we're going to be diving into the intriguing grocery industry where there's plenty of change in there. And of course, you always get, you will always get here, Mike's expert take on all these stories and more. So stay tuned for a wonderful, intriguing conversation with me and Mike. Okay, but, Mike, before we get started, fun warm up question. We've covered a lot of ground over the last three or four years.

Scott W. Luton [00:01:59]:

We've established many things, including where you're from and in New York State. We've talked at length about your love for golf and basketball, especially women's basketball. I think the USA team, women's team's playing right now, if I'm not mistaken. But I want to zoom in on one thing, because it's, we're recording this in that back to school session time of year, not just here in the states, but really around the world. So when I ask you, when I think of back to school, I've got three kids now, but I'm going way back to when I was in grade school, those new school supplies. Oh, man. Including the big box of Crayola crayons. If you're really lucky, that 64 count box with the crayon sharpener in the back, man, you like, you're living really high on the hog if you got that one.

Scott W. Luton [00:02:44]:

A new trapper keeper. Freshly wrapped books. Back when you wrap books, remember that? My dad would always wrap my books with army national Guard, the free things. And then every couple of years, because they were expensive, they'd last a long time, is maybe we'd get a new ll bean book bag. Those things were indestructible, so. But those are some of my memories. What do you think of when you think of Batman school season?

Mike Griswold [00:03:10]:

Yeah, certainly it was for me. I was going to lead with what you led with, Scott, which is the Crayola Crayons. Yeah, there, there was, while it may not appear to be a big difference between, say, the 24 and the 64, obviously it's like 40 crayons, but it was the sharpener. It was the ability to be self sufficient when you needed your crayons a little bit sharper than your neighbors. So that was one. The other one, and I'll date myself, is lunchboxes. So being able to have the kind of the aluminum with a little latch with the thermos, you know, all decked out in the latest, whatever the latest tv show was, whatever the latest kind of fad was, being able to go and then take your, your lunchbox to school, where I think the art of negotiation is honed in preschool and middle school lunchrooms. Right?

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

Yes.

Mike Griswold [00:04:06]:

The ability to trade a sandwich for something else. You know, there's a whole black market that emerges in middle school lunchrooms around, you know, the value of an Oreo versus the, you know, chips Ahoy and homemade cookies were like, they were the premium. You could basically ask for anything you wanted if you had some of your mom's homemade baked goods. So those are some of my early memories. Scott.

Scott W. Luton [00:04:32]:

Mike, yours were a lot better than mine. Lunchbox is a good one. I had a fall guy lunchbox. Not the fall guy, the movie that came out, you know, a year or so ago, but the one back in the eighties with, who was the guy that played a $6 million man?

Mike Griswold [00:04:45]:

Lee Majors.

Scott W. Luton [00:04:46]:

Yes. Lee Majors was the original fall guy. Good times. Good times. Okay. Well, gosh, we could spend next couple hours reminiscent there, but we got three great stories to get into. And I want to pop up this graphic as we get into the first one, because kind of on a related note, we're going to be talking toys, right? Really kind of close to some of those cool lunch boxes. So interesting read here from our friends at retail brew who report on the big changes that major toy company Hasbro is making to the organization.

Scott W. Luton [00:05:15]:

Now, folks, you may not know, Hasbro's impressive portfolio includes some of my favorite toys as a kid, transformers. That's where the dad joke came in earlier. Nerf, GI Joe, Monopoly, the board game, and many others. But the company is dealing with a mix of old and new challenges. So, like many companies, it's still dealing with big inventory challenges that came with the pandemic. Right? Or at least that was a scapegoat for a lot of poor inventory management practices, I'll call it. And then in a new wrinkle, though, Hasbro is seeing a ton of demand increase in digital toys, but seeing a considerable drop in demand when it comes to physical toys. Think video games versus Nerf footballs, so to speak.

Scott W. Luton [00:05:56]:

Hasbro's been focused on finding cost savings and reorganizing its supply chain management approach. Some of the moves that Hasbro is making. Outsourcing the manufacturing of some of its toys via outbound licensing. Right. Having small manufacturers make the toys under that license. Moving some production out of China for a variety of reasons. Hiring new supply chain leadership. Also re examining raw material costs, tooling, packaging, shipping, and warehousing.

Scott W. Luton [00:06:22]:

Is that sound familiar? Sounds like what every other supply chain team has been doing here lately. But, Mike, what is your take on what Hasbro is doing and maybe the toy industry?

Mike Griswold [00:06:32]:

Yeah, it's interesting that you picked this graphic, and I wondered where you were going when you teed up the fact that you had a graphic. And the reason this one is particular, I think poignant for me is I spent yesterday for kind of personal reasons. I needed a mister potato head and a misses potato head doll, and I went to my local Walmart, and I had no trouble finding misses potato head. But I literally went be either physically or online to every target Walmart, Fred Meyer, and two specific toy stores in our area. None of them had a mister potato head doll, really. So I understand the physical inventory challenges. So, I mean, so where did I go? I went to Amazon, and I should have a Mister potato head tomorrow. So I think it's ironic to a degree, Scott, that you've got Mister Potato head on that graphic.

Mike Griswold [00:07:30]:

But when I read that article, I think there's, if I'm Hasbro, I think there's certainly challenges. But I think there's a lot of good things that they've done in that article. I think there's. And there's three in particular, and I'll take them kind of in what I think is somewhat of a logical order. The first is, if you go through the article, they talk a lot about how they've been using data and analytics to really hone in on the problems that you describe really well. The fluctuation between, let's call it, virtual inventory for digital toys and the physical inventory that they've had for quite some time around. Things like Mister Potato head and the challenge that is not Hasbro unique, which is when you have excess inventory and you want to monetize it to some degree, and you push it into these discount channels, you devalue the product. So if I can go to Ross and let's.

Mike Griswold [00:08:30]:

We'll just use Mister potato head, and I can buy Mister potato head for dollar ten, why would I ever go to Hasbro and buy it for 18, right. I would just never do that. So you start that cycle where you start to devalue your own brand. I think their use of the data was really good in identifying where their problems lie. But I think even more importantly, and I'm sure you and I both have examples of kind of the emperor's new clothes, where we've gone through the exercise of the data, but we still will not come to terms that we have a problem. And I think that's what Hasbro has done really well, is say, hey, look, we recognize that we've got these challenges. Yes. To some degree.

Mike Griswold [00:09:13]:

I think the playing the COVID card is probably a bit old. It's in the rearview mirror. Now. I don't know that we can continue to blame Covid for things now in 2024, but I think they have been very open and transparent about some of the challenge that they have and some of the ones they've had and what they're doing about it. And then the last thing which will. Which somewhere Greg's ears are going to be burning, right? Because it always comes back to demand and supply. And there was some very, I think, good language in that article about their focusing on demand and supply planning. And that's everything from shifting your mindset around.

Mike Griswold [00:09:56]:

How do I potentially forecast for things like video games and those digital products versus how do I forecast for the physical types of products that people still want? Right. There is no substitute for a good nerf gun. There just isn't. There's no substitute for being able to take the transformer and transform it into its other kind of alter ego. There are no substitutes for that if I read between the lines, Scott. I also think there's elements of the other topic we spend a lot of time here talking about, which is sales and operations planning. Because that definitely now becomes nuanced when you think about planning for those physical versus, let's call them, less physical types of products. So I feel for Hasbro because they're kind of a microcosm of the Toys r us story.

Mike Griswold [00:10:51]:

Right. The toy market in general has had challenges. But I was very encouraged and very excited for Hasbro when I read that article. Because to me, it seems like they're. They're embracing the challenges. They know the challenges. They're not, you know, making apologies for those challenges, and they're tapping them head on.

Scott W. Luton [00:11:14]:

Yeah, well said. And they're making strides, if I'm making strides.

Mike Griswold [00:11:17]:

Yeah.

Scott W. Luton [00:11:18]:

Last quarter, or one of the earlier quarters here recently, they found $40 million in some of these savings that they were after. I'd call that making a big stride. And two quick points based on what you shared there, a lot of good stuff. You mentioned transformers, folks, go. Bots is not a suitable replacement for transformers. Just keep that in mind. And then, more seriously, you're talking about when you take that excess inventory and find new channels. In some cases, these discount bins, that poses a tremendous problem because customers have long memories.

Scott W. Luton [00:11:52]:

In some cases, you know, if you train them, that they can get Mister potato head or. Or Megatron or you name it in the discount bin at a certain price point, it's going to take a while to win that battle back. As you look, you know, have to make eventually new channel decisions. So it's. Excellent point there.

Mike Griswold [00:12:10]:

I think the other thing that, again, I'm reading between the lines here in that article. I mean, again, you and I have had these conversations before. Wherever people see that inventory number get pressure from finance, and all of a sudden, the pendulum swings too far. And all of a sudden, you're making all these inventory decisions. And then you wake up some morning, and now you don't have enough inventory. You don't have the right inventory. And now you're trying to. The pendulum is now you're always chasing that inventory number.

Mike Griswold [00:12:44]:

And I got the sense from that article that Hasbro is taking a very mindful approach around how they tackle that. So they don't end up in a case where the next article is about them is they have all these out of stocks and they have all these shortages. I feel pretty confident, based on some of the language around demand and supply planning and some of the other things in that article that I think they've got a good plan to systematically narrow the inventory down as they need to, but not put them in a spot where they're really struggling now for sales.

Scott W. Luton [00:13:21]:

Well said. So, folks, we're going to keep our finger on the pulse of what Hasbro is doing. I agree with Mike wholeheartedly. He offers some great takes. There's a lot of goodness to the story of this new chapter they're building. And, folks, great reporting over at retail brew. Appreciate you all sharing. Hey, one more quick thing for move on to manufacturing and China and the global battle.

Scott W. Luton [00:13:41]:

Some fascinating stuff we'll get to in a second. But speaking of that discount, Ben. When I was a kid, Mike, think early eighties, you know, Atari came on the scene, early generation video games came on the scene. And then there was a big crash. And of course, at the time, when I was six or seven years old, I didn't understand all the economics. But what I saw at KB Toys in Augusta, Georgia, is I saw a huge bin of intellivision games, which I think was a Coleco product, for $2 apiece. And that meant where I could afford maybe one game prior to that crash, I walked there with like ten games. I thought I was like, big time Mike.

Scott W. Luton [00:14:22]:

So the toy industry is a fascinating one to look at. Lots of supply chain and leadership lessons, but we'll circle back. Okay, so, Mike, with this next story, we want to talk more. You know, as Hasbro is doing, one of the things that they were to reportedly doing is moving production reshoring out of China and other places. Certainly in that neck of the woods. Vietnam has been a big winner when it comes to production being moved from one place to another. India has made some big gains, but this story that came out in the Wall Street Journal just in the last couple of days, I find it is absolutely fascinating. Right.

Scott W. Luton [00:15:01]:

And so, we're gonna dial it in on the global manufacturing market. It's important to note this is a deep read with lots of. I mean, you were talking about the global manufacturing market. Lots of moving pieces. So we're going to have to offer just a tip of the iceberg. But the fight is on across the globe to capture as much onshore manufacturing market share as possible. That's not new. But in light of some of the shifts we've seen the last three or four years, that's the newer element here.

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

In particular, I find that it's been interesting to see some of these shifts between players, such as I mentioned, China, US, India, Vietnam, Germany and many, many others, South America for that Mexico rock and roll market down there. So data released in last few days point to a bit of what I'll call a manufacturing malaise here in the US, as many CEO's and CFO's are keenly interested in potential interest rate cuts. Some would argue we wish we already had them in place, and some would argue even further they should have already been made. But the other thing that we're trying to get past here in the states is getting past this presidential election. The power of certainty cannot be overstated. So let's look at this. This is where this is back to the article looking at China's approach. Here's an interesting factoid.

Scott W. Luton [00:16:13]:

One estimate, as reported by the Wall Street Journal, claims that China invests some 5% of its annual national income toward supporting its domestic manufacturing industry. Now, according to that same data, the second biggest spender by that measure is South Korea, which spends just under 1% of annual national income. Goodness gracious, massive gap. The Wall Street Journal also points out that after decades of the west embracing the free market to compete against China, many governments are taking pages out of the chinese playbook and putting more muscle to help spurring their own domestic manufacturing growth. For example, some point to the Biden administration's $53 billion it is investing into the semiconductor industry in the US. Did you know the US accounted for 37% of the world's semiconductor production market back in 1990. Now the US makes only about 12% of global chip supply. Folks, check out this article.

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

We'll include a link in the notes. But Mike, there was a lot to unpack here, but a lot that I think a lot of folks out there are not aware of when it comes to some of the dynamics in that global competition. What were your thoughts here?

Mike Griswold [00:17:26]:

So I had a lot of thoughts, and I will probably struggle to articulate them. Scott, to be honest. And I think I also want to preface all this by saying I'm not an economist, nor will I ever be an economist, nor will I ever understand all of that. But here are some of my takeaways from that. First of all, it was a very sobering article from the standpoint of the disparity between what China does in their economy for their companies and what we are able to do here in the United States, I think there was a factoid in there, Scott. 99% of chinese companies get some types of, some type of subsidy from the government. Now, part of me wrestles with we have two very different economic, social and political models between China and basically the rest of the world.

Scott W. Luton [00:18:28]:

Right?

Mike Griswold [00:18:29]:

So the fact that the government controls as much as it controls around the country, resources, manufacturing, all types of economic controls that the government has over that entire country is unlike any other, let's call it capitalistic organization country in the world. And with that, I think, come some inherent advantages that. Let's just call it the west is going to have to acknowledge that we currently don't have, nor may we ever have, around being able to do for our internal manufacturing what China is able to do for its manufacturing. I'll just use one cost element. Let's use labor cost. I find it very hard to believe that China's labor cost to make a chip is the same labor cost that we have to make our chips, or frankly, any other country in the west. So if China is going to give semiconductor company XYZ $30 million as a subsidy, most of that does not have to go to cover labor. It can go to things like R and D.

Mike Griswold [00:19:48]:

It can go to things like mass production. If you were to give a western company $30 million, they do not have the luxury of divvying up that 30 million the way China does. So part of I think our internal reflection is what can we actually do as a country? As a western country, what can a western country actually do that is going to put them with the ability to compete? So now we're talking things potentially like speed to service. We're talking things like quality. We're talking things like reliability, which are hard to necessarily put a price on. But it will become, if it hasn't already, very obvious that because of the chinese economic model and the things that they have to take care of or don't take care of, competing on price has always been a challenge, and I don't see that going away. Just think about, while we don't hear about it much, think about all of the environmental things that we have to deal with. And I'm not saying they're bad.

Mike Griswold [00:20:59]:

I'm just saying that's the reality in the west. It's highly unlikely those considerations are front. I don't want to say China doesn't care. That's probably a bit too harsh. But where the environment is in the list of priorities when it comes to manufacturing, I think it's safe to say it is much farther down the list than it is for western companies. So I think for us it's about, okay, what can we do from a lobbying perspective to get more governmental resources into our manufacturing? And when I say our, I'm thinking North America. So let's say us, Canada, Mexico, what can we, maybe even Latin America, how can we as a group, band together and try to form some type of ecosystem amongst all of us that can mirror to a degree from some of this funding and subsidy work that the Chinese are able to do? Because I don't think any individual country is going to be able to do that. Europe is going to have to figure something out.

Mike Griswold [00:22:13]:

I think North America is going to have to figure something out. Maybe even South America, Asia Pacific, outside of China. So it's those conglomerates they're going to have to figure out. How do we pool our resources such that we can do some of those things. But I think we also just have to say the words out loud. Their whole social economic model is different. We've made decisions to not emulate that, both politically and socially. So we've made those decisions.

Mike Griswold [00:22:49]:

And by those decisions, there's some manufacturing decisions that come along with that.

Scott W. Luton [00:22:53]:

That's right. And all those decisions have good and bad repercussions. That's just the reality. So folks, I'm going to tell you all too, I'm not an economist and I'm only about 15% as smart as Mike Griswold. I want to pick up on something shared there. Because if you love manufacturing, and if you realize the juggernaut that manufacturing is in the global economy, in any of the big, any, really any country, but especially the big established economies, check out this read because it is really an eye opener, sobering, as Mike called it. And Mike picked up on the labor piece there. Excellent.

Scott W. Luton [00:23:31]:

I want to add to that in terms of how chinese government helps support. Cause Sardik reported on real estate ease and inexpensive real estate for these plant builds ease and cheaper access to state owned steel plants. So steel in China loans with highly, very friendly terms. There are some of the other advantages in addition to what Mike shared. So check out this read. It's a eye opening read, especially again, if you love all things manufacturing.

Mike Griswold [00:24:03]:

I mean, I think, Scott, real quick, I think it's interesting, the points you made are excellent around things like the loans, things like real estate. When you as a government control all of that, it's very easy to say in the states, for example, people will raise their hands, say I don't want that. Fill in the blank. In my neighborhood in China, my guess is it's going in that neighborhood, period. And you could figure out what you're going to do about it. The other element about the interest rates. Yes, they're low, which I think is great. But at the end of the day, China is used to running these operations.

Mike Griswold [00:24:46]:

So if that particular company can't run it, the government will step in and run it. And I don't think, I will try not to make this I think is a politically agnostic statement. I don't think we want the government running anything because our government has its hands full just running the government. So if we were offered loans and people were to default on those, and now we're going to say the government's going to run this steel mill, I don't think anyone would raise their hand and say that's a great idea. So again, to your point, Scott, there are so many advantages that China has relative to their, their social and economic governance models that the rest of us have said that's not for us. And now we have to figure out by, with that decision what other decisions do we need to make.

Scott W. Luton [00:25:35]:

That's right. Well said. That whole story, the whole conversation deserves its own series. It's just so moving parts.

Mike Griswold [00:25:43]:

It does.

Scott W. Luton [00:25:44]:

And the other call out you made is the importance of these regional plays, both establishments been around and some newer ones. I may get this acronym wrong, the USMCA. Right. The update of the old NAFTA agreement that really, from what I've seen, what's played out has further made North America such a special trade and economic zone. Across the african continent there is a free trade agreement that's continuing to take shape. I think there's been one or two countries, they're still working on joining forces. And we all know the tremendous opportunities for manufacturing, many others to be there in african countries instead of sending resources elsewhere. Manufacturing can create so much economic wealth for so many folks, and having it there in your country creates jobs and so many other economic drivers.

Scott W. Luton [00:26:34]:

So fascinating story. I appreciate your take on that, Mike. And we're going to wrap on an interesting story that impacts all of us, whether we're supply chain pros and certainly if we're consumers. And interestingly enough, Mike, before you got, before your highfalutin days with Gartner and, and helping so many organizations, really sharing all the goodness, you spent a chunk of your career in the grocery industry doing big things. So I can't wait to get your take here. Now, Mike, pre show I said one of my three images was generated by AI. And I think you can probably tell.

Mike Griswold [00:27:12]:

As I, this looks like the one.

Scott W. Luton [00:27:16]:

I asked one of our AI services to give me a image of grocery wars and this is what they came up with.

Mike Griswold [00:27:23]:

Anyway. Fantastic.

Scott W. Luton [00:27:26]:

So great read. Here from our friends at grocery Dive, part of the industry. Dive publication family. Good work over there. So this focuses on some burning topics and questions for the grocery industry. Now, here's one interesting and astute observation they make right up front. When you say grocery shopping, that doesn't mean the same thing. It meant that we all took it to mean 20 or 30 years ago.

Scott W. Luton [00:27:47]:

Think about it. Walmart's, tons of convenience stores, big discounters like Aldi, all sorts of new players in the grocery business, in some ways, big or small. To that end, if Kroger and Albertson, at that merger, goes through, creating what I think is at last count, that would create the second biggest grocery retailer in the US. What changes might that bring now? E commerce and shop from home. As finally stuck in the grocery business as online sales are still higher now than they were before the pandemic.

Mike Griswold [00:28:18]:

Right?

Scott W. Luton [00:28:18]:

That was. That was a code that the industry had been trying to crack for a long time. The pandemic helped one of the silver lines there helped, you know, find. Find a way to make that happen. And hasn't that impacted the supply chain needs of most of the big grocery players? One other hot button, and, Mike, kind of tongue in cheek here. One other hot button that seems to have passionate shoppers on either side. Right? It's kind of like black licorice. You love it or you hate it.

Scott W. Luton [00:28:43]:

And that is self checkout. So, Mike, I'm in our local Kroger all the time. Way too much, in fact. But I love self checkout. And it's been a few years, I bet, since I had someone else check out my purchases in and out. You don't hardly have to talk to anybody. But there's other folks, include some of my dear friends and relatives that hate self checkout, and they demand their customer service. Right.

Scott W. Luton [00:29:08]:

But that brings me to my question for you. So be it, Mike, from a supply chain perspective or a consumer perspective, what fascinates you the most as to the current and future state of the grocery industry?

Mike Griswold [00:29:21]:

Yeah, I think, Scott, as I read through this article and was trying to think about, the seven issues are, again, similar to the manufacturing and even the Hasbro story, probably its own show at some point, there were a couple things that stuck out at me. One was the Kroger Albertsons and the constant back and forth and back and forth. And I think one of the things that I know you and I talked about during the pandemic, and we've got a ton of research that we started during the pandemic. And I. This idea of risk management is a very hot topic for us at Gartner, across the supply chain. But if you think about one of the elements of the risk management work we've done is around this idea of scenario planning. And I think that particular bullet in this article I think was very well written in terms of pointing out what could happen in terms of the different scenarios. I think as food retailers, this is one of those things where I think you need to keep an eye on it.

Mike Griswold [00:30:25]:

I think you need to have some plans in place about what to do depending on which direction it goes. But this can't be an obsession. This can't be. Every day I'm looking at the news to see which way the wind is blowing. I think this is, organizations that are going to weather this storm are going to need to say, okay, if the deal is approved, and now we have this second, this new entity, to your point, second largest food retailer in the states behind Walmart. And, oh, by the way, we've got this emerging wholesaler in CN's who's going to pick up the divestitures. What does that now mean to my organization if I have to compete against someone that's got that kind of scale? What are some of the things I need to be thinking about now in terms of maybe pricing, in terms of maybe service? I think it does feed into the conversation around e commerce. But you need to have a plan.

Mike Griswold [00:31:21]:

And there's really, I think in one way this is a bit simpler because it's kind of binary. Right. It's either the merger is going to happen or it's not. There's not a whole lot of in between. So if we think about the world we have been living in, it's a luxury to have only two scenarios. So I think we should spend some time around. If the deal goes through, this is what we're going to need to do. If the deal ultimately doesn't go through and I still have to compete against Albertsons and Safeway separately, where I am kind of the environment I'm in right now, what am I going to do differently? And then start working on and refining those playbooks kind of over time.

Mike Griswold [00:32:00]:

But it should not be an obsession that you're focused on this every single day because it will distract you from the business you have every day, which is taking care of customers.

Scott W. Luton [00:32:12]:

That's right.

Mike Griswold [00:32:13]:

So that's kind of my first observation, Scott, around that one.

Scott W. Luton [00:32:17]:

And so not to be preoccupied with whether the merger happens or if it doesn't happen. Right. But focusing internally on your plan to compete in either scenario and taking care of your customers and looking for opportunities within the market to build more value and grow more value is kind of somewhat I'm hearing there, Mike.

Mike Griswold [00:32:38]:

Yeah, this is, this is a great example of the application, say, of the serenity prayer, which is basically, let me worry about the things I can control. Let me not worry about the things I can't control and let me know the difference, because unless someone is in the, you know, the Federal Trade commission, no one has the ability to influence this. If I'm running a mom and pop store in Atlanta, my ability to impact what happens between Kroger and Albertsons is zero. So I shouldn't be expending energy around that. Other than thinking about the two scenarios and what might happen. The e commerce one is a fascinating one because I think to your, and you said it, Scott, I think we have reached the point where everyone now realizes this is not going away. It's not a fad, it's not a trend. It's something I need to deliver.

Mike Griswold [00:33:39]:

I think the challenge now is really understanding what do I need to deliver for whom, relative to things like speed and convenience. I also think there is still an opportunity, from the things that I've read and even my own personal observations, I think there's still an opportunity to get better and deeper into the fresh food area when it comes to e commerce, whether that's home delivery or whether that's click and collect. I think there's work for us to do to gain some more trust in that area with our consumers to be able to leverage the entire store for that transaction. And I think it's really important that, because I know there's still a lot of third party partnerships that are happening that certainly are successful. And I at some point, Scott, will very likelihood be proved wrong on this. But I still feel that the retailer needs to own that transaction. When Instacart delivers crushed tomatoes on behalf of Kroger, I'm calling Kroger and saying, what the heck happened to my tomatoes? I'm not calling Instacart. So that's my personal belief, Scott, like I said, I certainly could be proved wrong on that because I still see a lot of those partnerships happening.

Mike Griswold [00:35:07]:

And then lastly, let me touch on self service because that's been a fascinating pendulum to watch. If you remember when Tesco came in all those years ago, that was their only checkout vehicle. You've got the Amazon to go stores, which is that that's their only real vehicle is self checkout. To me, I think it's foolish to put all of your eggs in one basket. It just doesn't seem to make sense because you've got so many different types of customers with so many different needs that providing an opportunity for those that don't want any or need any interaction, to me, is foolish to force everyone to go through a cashier, and it's foolish to force everyone to do their own. So to me, finding the right blend of how many you need of each, to me, is the way to go. I mean, my wife's a perfect example, unless we have a significant order, which we usually don't because the Walmart is close enough that we can go pretty much whenever we want. She's very meticulous around how she wants things bagged, right? So she wants all the fresh stuff in one bag, all the frozen stuff in a different bag, you know, the light stuff, the heavy stuff.

Mike Griswold [00:36:27]:

And you're just not going to get that with a cashier. Right. Because they're not incented to do that. They're incented on how many pieces they can ring through, how many customers can they get through in an hour. So. And that with all due apologies to cashiers out there in the world, right. That I know that's it. I know that's a gross over simplification because I do know there's cashiers that do a great job of scanning it, put it in a bag, spinning it, spin into another bag and spinning it back.

Mike Griswold [00:36:58]:

In general, that's not happening. So to me, the model needs to be a little bit of both. And then to me, the secret sauce is that balance of how many in a certain demographic do I skew more towards people that want a high touch service, that maybe I have a few more band registers. If I have a demographic that just wants to get in and out, maybe have a few more self checkouts.

Scott W. Luton [00:37:24]:

I knew your take was going to be intriguing, all three of these, but especially this last one with your time in its industry. Now, I didn't spend. I was a summer cashier at a by low. My first ever job was bagging groceries and stocking and taking groceries out at my local Winn Dixie, where my granddad and my dad both worked in their earlier years. So it's a fascinating study to see how it's evolved. And to your point. And by the way, I took a very scientific poll research, exhaustive poll of our team here, and almost 100% are in the category of I love self checkout. I can get in, get what I need, don't talk to anybody, and that was almost 100%.

Scott W. Luton [00:38:08]:

So that's interesting. But the other thing is going back to the e commerce, and we just interviewed another drone company called Drone Express. They got, their FAA was at part 35 one, a handful of companies, and it'll be fascinating. And, you know, groceries are already being delivered some markets by drones. Right. But when that really, when we reach that tipping point and it's. And we're. We've all gotten a drone delivery of groceries, or you name it, uh, that rotisserie chicken, that's going to take this fascinating and intriguing evolutionary tale to the next incredible level.

Scott W. Luton [00:38:45]:

It's going to be absolutely fascinating. I hope we both can come back here and talk about that when we reach that tipping point, Mike, but your thoughts there about.

Mike Griswold [00:38:55]:

I mean, I'd be interested, part of me that the sarcastic side of me said we'd be better off for. Most people send it letting the chicken fly to them and let them cook the chicken the way they want, versus having a drone drop off a rotisserie chicken. But there's logistics around how do I get the chicken to the right house and all that kind of stuff. Yeah, I think where I've seen drones, that whole concept be successful, is really in remote, you know, remote areas where you're either, you know, it's a. It's a town on an island somewhere or, you know, deep on the end of a peninsula where it's hard to get to. I struggle to see a world where we've got tons of drones flying around New York City just for lots of different reasons.

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

Right.

Mike Griswold [00:39:40]:

But I also think, though, that it is indicative of people keeping an open mind, being able to try and pilot some of these to see what works. Because to me, that's what's going to keep companies kind of sharp, is just not summarily dismissing a product or an idea, but being able to try it and see what happens. And similar to the Hasbro discussion, let the data kind of guide us in terms of what we want to do. Yeah.

Scott W. Luton [00:40:15]:

Well said. Well said. One last thought before we find out what's coming up next at Gartner. We've had friends from Walmart join us, and we're talking specifically about some of their drone expert experimentation. And this was a couple years ago, but still, one of their most delivered products as part of that phase was literally rotisserie chicken. And it makes me think how fast those drones have to be, because there's folks probably after the smell of delicious rotisserie chicken. But anyway, we'll get an update from later on. A lot of good stuff, folks.

Scott W. Luton [00:40:49]:

Check out this article again from our friends at grocery dive and give us your take. Only seven burning questions facing grocery industry. Whether from a supply chain perspective or as a consumer, I think we have plenty of lessons learned either way. Okay, Mike, you'll never have any shortage of resources. Market intel gathering, I hate to use the word best practices because you also talk a lot about what's coming, right? New practices, I guess I'll call it, of course, some of the best networking. What is coming up next at Gartner, and how can folks connect with you?

Mike Griswold [00:41:21]:

Yeah, so the usual email, Mike Griswold, gardner.com comma LinkedIn. I think for us right now, we're putting all of the work into content for our two planning summits. October, I believe it's October in London. November in Denver. If that's in fact true, I should be able to remember that mnemonically, right? November, Denver.

Scott W. Luton [00:41:46]:

That's right.

Mike Griswold [00:41:47]:

But yeah. So what? Real quickly, our summits right now, they're planning, are designed to be the next level type of experience from our symposium, where our summits are very, very role focused, and in this case, everyone from leaders of planning organizations to demand planners themselves. We have a significant technology presence there as well. So think of that solution showcase you might see at symposium. We have a solution showcase geared around planning vendors. So if anyone has any interest in planning, any background in planning, those summits are very worthwhile in attending.

Scott W. Luton [00:42:32]:

Completely agree. And it seems like the planning summits have really grown in terms of popularity and attendance. Our mutual friend, who's one of our dear, wonderful, talented co hosts here at Supply Chain Now, Corinne Bursa, I think will be attending one of those excellent Douglas London. Cause I bet that's what a great trip to London. Yes. But regardless, of course, Mike shared his email. You can learn more there. And Gartner.com, right, Mike? Yes, that's the clearinghouse.

Scott W. Luton [00:43:01]:

To learn more about all of that, Mike Griswold, vice president analyst with Gartner, the star of the show, one of our longest running series here. Always a pleasure each and every time. And I appreciate how you provoke some thoughts again here today. Thanks for being with us, Mike.

Mike Griswold [00:43:18]:

Thanks for having me. Look forward to next month.

Scott W. Luton [00:43:20]:

That's right. All right, so, folks, you got the challenge on you, though. Hopefully you've enjoyed this conversation as much as I have. But you know the challenge I'm gonna throw out there, Mike shared a ton of expertise, right? He's got his finger on the pulse of many leaders and leading organizations across industry. You gotta take one thing he shared with you, go do some homework on it and then put it into action. Your teams are ready to do business differently. And by the way, I told you I love his take on the toy industry and especially the grocery industry. So we have to follow up next time Mike's with us.

Scott W. Luton [00:43:50]:

But whatever you do, folks on map, our entire team here at Supply Chain Now, Scott Luton, challenging you do good, give forward, be the change that's needed, and we'll see you next time right back here at Supply Chain Now. Thanks, everybody.

Narrator [00:44:03]:

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.