Aligning People, Processes, Technology, and Data Can Help You Do More and Do Better
For the latest episode of our manufacturing podcast, Data In Depth, we sat down with Mendy Ezagui with Nucleus Technologies and Rapid Logistics Couriers. Mendy digs into automation strategies manufacturers can employ to streamline internal processes and increase productivity. He also discussed the importance of aligning people, processes, technology, and data in order to meet company goals
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Transcript
Announcer: Hi and welcome to Data in Depth podcast where we delve into advanced analytics, business intelligence and machine learning, and how they're revolutionizing the manufacturing sector. Each episode we share new ideas and best practices to help you put your business data to work. From the shop floor to the back office, from optimizing supply chains to customer experience. The factory of the future runs on data.
Andrew Rieser: Welcome and thanks for joining us for season two of Data in Depth, the podcast exploring data and its role in the manufacturing industry. I'm your host, Andrew Rieser. Today we are joined by Mendy Ezagui, Co-founder and Chief Product Officer of Nucleus Technologies and CTO for Rapid Logistics. Welcome, Mendy.
Mendy Ezagui: Hey there, Andrew.
Andrew: Glad to have you. We've crossed paths quite a few times especially in the Salesforce ecosystem, but super excited to learn a little bit more about your background today. So before we dive in, if you don't mind, could you just share a little bit about not only yourself and kind of what brought you into this industry and space but more importantly the evolution of the cool things that you've been doing at Rapid Logistics and then how that evolved into Nucleus Technologies.
Mendy: It'll be a pleasure. My background, I'm gonna go a little far back if you don't mind.
Andrew: Please do.
Mendy: I started out, thank you. My professional background started in real estate sales. I was browsing Craigslist for listings attempting to play matchmaker with our buyers. And I immediately started organizing my data with an application called Sage ACT. It's an interesting application, completely customizable desktop application. And I'm not sure if it was meant for this industry, but pen and paper I knew wasn't cutting it and I needed something to keep record of who I was calling and how often I was calling them. So Sage ACT really did a great job. And within the year I notice that real estate isn't where I belong. And sort of using software and creating efficiencies with software was far more appropriate. Fast forward a couple of years, I joined a global nonprofit based out of Brooklyn, New York in 2010. This nonprofit provided services to approximately 3,000 worldwide centers, with all their needs, including website and email marketing. I was hired on the customer success side. And interestingly enough I recall within the first month I spoke to my manager and I asked, "Where is the CRM?" You have the web, you have email marketings, there's all these forms and subscriptions. There's gotta be a foundation, sort of a great unifier. Where's your CRM? And at the time he had mentioned that it's something that was considered, it's in the works. But finally in 2013 I actually got my dream to be tapped to develop a CRM solution and bring that unification which we ended up choosing Salesforce as a partner, which is great. We developed several Salesforce nonprofit applications on the platform including document generation, a comprehensive CRM, and payment processing. We introduced a whole host of features that these guys would use to make them far more efficient at their business which is fundraising and engagement, and ultimately bringing good to the people they engage with. In the nonprofit space, we were initially met with significant skepticism. There were competitors in this space. Most of these nonprofits were using Microsoft Access and Excel, and just telling them to move to the Cloud just seemed to be such a major leap. And there therefore was a lot of skepticism from internally and also externally. From the users, it took us a little while to play catch up there. But really we didn't have that much time. There's an annual conference in November. So we had approximately six months to make an entrance into the market. Shortly before the conference, we executed what I would say was a pretty brilliant marketing campaign. They had some great marketing people. And to our pleasant surprise, when we launched our alpha, nearly 40% of our nonprofits attended the live launch. So we immediately got the memo that these nonprofits really wanted change and they were ready for it. In the following three years we developed these applications. By the end of the three years when I was ready to exit the organization, there were more than 200 centers on the platform. And by now I think nearly 80% of centers using a CRM are operating in the Cloud. So this number is significant because these are nonprofits. The sector typically lasts a significant change. They aren't the last space or sector, you know, as you'll hear momentarily there's another vertical still dragging their collective feet. I'll get to that in a moment. But before I get there, in 2016 I moved out West to join a sales acceleration company. Sales acceleration is a pleasant way to say our software will help your sales agents know who to contact, when to contact them and the best way to make contact. Working with this complexity exposed me to advanced logic and conditions when dealing with the fine human process, like you're dealing with a bunch of agents and you need to help them out. So you have a bunch of humans involved there and we're giving them information. And you're distributing information to them and changing things up between various agents. So there's a lot of information and there's a lot of technology. And technology plays a critical role. So after the sales acceleration company, I landed at Rapid Logistics. A brief description of what they do. They have two primary offering which is fulfillment and distribution and final mile delivery. They've got many trucks on the road and they have got warehousing to fulfill from. So considering my background of bringing the Cloud to Excel users and applying data information and technology to processes to bring efficiency, this logistics seemed the right place for me to be. And the first order of business actually was to move our business from Excel to the Cloud in 30 days. Customers require that visibility immediately. I accepted demos of some large brand names. But many companies expected dedicated teams and had to basically lengthy everything, specifically onboarding and customization times, integration. Many of these companies, we knew integration was vital. And at the time many of these were not integration friendly. As a startup we really needed a solution yesterday and we wanted the world of flexibility as well. So we ended up devising our own solution. And for the first years, tech was pretty light. And sometime late 2018 we realized we're pretty good at software. And the industry has a real need. We had a couple of warehouses. We had many users and we figured out some of the challenging parts of fulfillment, with complete visibility, transparency and automation which is a pretty big deal. So we thought to ourselves, we should sell this as a SaaS, you know, software as a solution. In mid 2019, mid to end 2019 we became Nucleus Technology as completely separate division. And since it's been really fun, and also there's a level of efficiency by eating our own dog food so to speak is we developed and we tested in house. We test our own solution in house which is really great. In the last three years, I've learned that this industry is really slow moving. I'm pretty optimistic this is gonna be a critical decade where we'll see a lot of these laggards move forward into an integrated Cloud. I'm pretty excited about that as well. And I'm excited to be part of this mid early revolution and help companies understand it's not just information. We're not using software as a repository but rather to empower our users and to make them smarter, give them the right intelligence that they need and make them supremely efficient at what they do. And it's not just a nice to have but it's a necessary as we move forward.
Andrew: Perfect. So, really appreciate you spend that time there 'cause I think your background merged with the challenges that you were able to uncover and ultimately solve leveraging software and automation, I think, really helps us dive into the conversation today.So, some of the keywords that kinda jump out as you were explaining that are obviously around automation and process improvement, but also around data and the importance of data. So the major buckets that I always think of when you talk about transformation are people, process, technology, and data, and the orchestration of those four components.
Mendy: Sure. I do think that people, process, technology, and data are critical in today's day and age. And I think that anyone without the other, you're missing a critical part of this puzzle. I recently spoke to someone who works in a freight forwarding company who, they're doing tremendously well and they have a ton of investments. And I ask them what their secret recipe is, what their secret sauce is. And she had mentioned that on their application that they provide to their people, to their users, which are truckers, they've applied a special algorithm, their special secret sauce, that presents to the user opportunities that apply to them specifically. So if we think about that for a moment, they learned about their people, they have applied processes that they know work well, and they're using the technology to provide that critically, they have the information that support the process and support the people and support the technology. So just to review that one more time, these all work in concert together. You need to have the people. We will always have the people. And in this case over here where we speak about logistics, we're talking about warehouse users, we're talking about truckers, we're talking about admins, we're talking about billing assistants, 3PL billing. There are so many humans that are critical for this process in the logistics flow. You need to have a business process in place that makes all these people work well with one another, that brings cohesion. And a lot of people skip that process step and jump to technology. And they're like, "Hey, how do we get the best software?" And if you're choosing a software that helps you understand your process, maybe that's an angle. But you can't skip knowing what your process is or where you have challenges in your process that need to be optimized. And you can't just choose a software without having that. So that's a critical part that people miss out. And the process isn't formed with data. So if you look at this four pillar, you can look at the people who inform the process. You have people actually applying the processes right now, whether it is rules, whether it is reviewing your labor efficiencies. All that comes together with technology and data that informs that. So I think knowing these four and not skipping over any of these four steps is critical. I think what's changed over the past couple of decades is that, well, before there was a big investment in people, and only the person who were the inventory was, and only the person can handle the inbound. And they knew how to distribute labor appropriately, distribute inventory appropriately, and ship orders efficiently. That was a human's job. That's kind of moved up the ranks. That same human now is defining a process, the technology can then apply, that the data could then support or not support. And then you need to review all of these. So these pillars are critical. Do not skip any of these pillars when you're jumping over, when you're trying to optimize your tech or when you're trying to optimize your data you need to have a process in place or your data is worth nothing as well. So I think all of these work together to support each other. And there's a much greater focus on technology today as it pertains to process and people because technology and data can optimize those. But you do need to have the appropriate people in place and you do need to have the appropriate process in place and continue iterating on that for efficiency. So this is a perfect opportunity to talk about those use cases.
Andrew: Absolutely.
Mendy: A short while back we visited a company out in Canada. These guys were doing several hundred million dollars of revenue just to place that in some sort of category. And while we visited their facilities and learned about their software, they initially called us because they were doing really well. But they realize that there's some major cost that is their software in ops that was consuming a lot of their profits. And they're trying to figure out what's going on here. So we actually went to visit their facilities. And we realized that just one example, which was receiving inventory at the warehouse, took several hours for each palette. They received their inventory. And there was a lot of manual effort, a lot of printing PDFs, a lot of humans circling stuff, checking boxes off, scanning it back to somebody who input it back into the system. This was just one step of their flow. A very successful company. That's how they receive their merchandise in their very large warehouse. And let's talk about outbound. We notice that the outbound for an ecom work could take anywhere between five and 10 minutes on average per ecom order which was staggering given the fact that this was within the last year. So as we speak about people, process, technology, and data, as we speak about user experiences that are seamless and they're beautiful. And as we speak about integration, this is key, our pitch to them. And I think to all your listeners is that every second counts. We were able to prove that if we shave off a second, we're shaving off 15 to $17,000 a year per second we could shave. And we assume that we could do much more than that. And we assume that with the proper technology, people could do much more and be substantially more efficient. Of course proper technology and proper processes and people in place as well. So that's a specific example of a low hanging fruit. And I think that this is far too common. There's inventory sitting in the warehouse for many of us. Millions of dollars of inventory sitting in the warehouse. The flow is a little broken. And it's really eating up at the profits in a significant way. And just applying better integration, better user experiences and better technology and of course reviewing that with information, you really have yourself a golden edge here to reduce these costs exponentially. And of course to make your customers happy which you're gonna take into account. And that's sort of one example of a low hanging fruit. And on the other end of the spectrum for one of our customers who are shipping out thousands of mugs, just reviewing their shipping rules and automating that. So just some background on shipping rules, you could find that in most modern e-commerce shipping software, the ability to choose conditions and choose which shipping rule to apply. So whether or not it's UPS, USPS on track FedEx, you can have that selected automatically given a certain set of conditions. The problem is that most people, it's one and done. You set it up and you walk away from it. Part of having a useful technology is being able to automate the review of that and having a proper dashboard and then looking at this and saying, wait a second, this is not helping us. Well, these rules are not never being used. And in that specific example we were able to save 40% of the shipping costs for these one particular item, forget about the rest of their inventory. With just specifically this one item, we were monitoring it and we're able to shave that much cost without increasing loss or breakage as significantly. So obviously it was an extremely net positive example of proper usage of technology. And using a little bit of analytics, using a little bit of data and using a streamline user experience.
Andrew: Yeah, I think that's a fantastic use case that touches on where automation is best suited, right? So when you think about an organization like that and the ability to scale once they implement these types of systems and processes, somehow you no longer have to really invest much time in training of the individual because the iPad or the iPhone, mobile device that they're using has all the information in their fingertips, the process that they have to go through when you incorporate like barcoding, other things that eliminates the need for the manual entry. So all that I think to me just rains, yeah, makes sense and has immediate value. But the greater good of all this is now you can scale much faster and you can now also start showing the results on our return on investment by some simple examples that you just showed like inventory but also being able to be more accurate and confident because you're confident in your data.
Mendy: The only thing that keeps on nagging at me is the user experience part. When we speak about user experience, it's funny 'cause people don't understand what a proper user experience is and underestimate the value of a system that when you engage with it, it speaks to you and it speaks to your users and it's simple. And it supports clean, accurate data entry. That's something I think people underestimate when they shop for software, like, "Can this do this?" And the answer is, yeah, possibly you could do this. We'll have to tweak it. And then they buy the software and they use it in their hands. And their users have a frustrating time engaging with it, or the users quickly find a way to work around certain problems that they're having, so they skip adding certain information. I think when you review a software, you put it into the hands of some of your users and say, "Hey, check this out. "Is this simple? "Are you getting your job done much better "than the way you're doing it right now? "Is this efficient? "Can you walk through your steps "far more easily than you have up to this point? "And can you put in the information that's important?" Obviously in the backend of that, as an admin, as an operations leader, as a manager, as an executive you wanna review that information almost immediately and see if it's accurate and monitor that and make sure that's happening. But it shouldn't be underestimated the incredible importance of a user experience that's intuitive to the user who's using it 'cause that is really where much of the bad data comes from, the users that are using it. I mean, you can get a developer to design your integration and you wanna make sure you get a really smart one and they're doing a really good job and then you're set and done basically. But the users on the front end, those are the guys creating chords of data. Everything we spoke about before, the truckers, the warehouse users, the warehouse leaders, biller, the billing and accounting, they're all engaging with your system. And these guys need to have seamless experiences to provide accurate, clean information to your system going forward with all of these pieces together. User experience integration, your people, process, technology, and data are actually useful. And they're actually making sense and you're efficient. You're reducing your costs and of course increasing your profits and customer satisfaction. Those are the things I think are important.
Andrew: Yeah, I think that's a great point. I think in the industrial space, as businesses evolve and grow through acquisitions, there's often more and more systems that kind of come into the fold and then data and integration becomes almost this overwhelming task because as you could imagine, like now we have four different ERP systems, a couple of different warehouse management systems, point of sale systems, you name it. And the task of something as simple as just what's our customer master, I think becomes overwhelming. And then I think it just kind of often gets pushed to the side, and to your point I think more analysts or office administrators, et cetera, they throw people at the problem instead of really taking a step back and thinking about an integration strategy to get on that scale. So I think you're spot on in some of these assessments that you've shared. One other question that I had that has come up as you're kind of talking about this is just the notion of APIs and creating this open API environment for all elements of the business. And so a lot of the companies that we talked to have actually started talking in terms like this where, like a textile manufacturer is an example, refers to all the systems and processes and data that they're putting in place. They wanna open it up across their value chain. They want their partners, their dealers, distributors, their end customers, all to be able to tap into their information that they had because the more information that could be shared, the more valuable that becomes and the more streamlined each of those previously disjointed or manual processes now becomes much more automated. So can you maybe share a little bit more about the notion of open API and how you guys approach that?
Mendy: Absolutely. Every company today needs to integrate out, an easy way to integrate to other companies and other vendors because you don't live in a vacuum. Many software are competent in certain specific areas. And you need to integrate with those software. And maybe today you're only integrating with two companies. You don't wanna be limited to those two companies. If you choose a different vendor tomorrow or if you choose to have a CRM integration or you wanna have support integration or financial integration, you should certainly have that ability to integrate out quickly. So I think a focus for most companies today should be on their integration, should be having a competent integration that could connect to multiple endpoints quickly. And that's certainly something, if you haven't brought the most of your business into one platform, that is certainly something you should increase your diligence on like ensure that that's an utmost priority for you and your company that you have an open API, and that your partner and vendor that you're choosing has a true open API that you can integrate with.
Mendy: I find first in this industry that there's a tremendous amount of software providers. And I think listening to your prior podcast, it's really not always possible to have everything integrated into a single system. There are companies that are extremely good at what they do. So to establish as a baseline, you're gonna have disparate pieces that have to talk to one another. When you have a lot of vendors in this space as well that are competing for the same customer base, many of them choose to keep their APIs closed to protect their customer base. And I think I've seen in the last year many companies abandon that model to the more open model. And the significant difference between an open API and the company that has API is that one of them is, hey, we can integrate with you in a week. And another is we could start a conversation. It takes six to eight weeks and we'll have a long conversation about that and we'll figure that out. To your point, the more open the API, I think the better it is for everybody in the industry, the customer, the vendors, to have that ability to communicate one with another. As we know there are so many platforms and so many features and so many products. You need to have that open integration to be able to seamlessly communicate. And we've seen that with the large marketplaces. You have a company like Shopify. I think their first focus was how do we make our API completely transparent and open so people could talk and out. And I think it's really been tremendous for them not just in terms of external systems but they built an entire app exchange similar to Salesforce app exchange. Shopify is this entire app marketplace. They've made it super simple for others externally and internally to talk to the information that's on their platform. And I think that's really critical for every company to recognize where their value is as a company, what their mission is as a company, what they're trying to solve. And then how do we communicate in and out of our system. And I don't mean that only as a customer who's purchasing software. But I mean that as software providers as well. We have the responsibility to our customers to say, "Hey, how are we gonna be able to communicate out to your system "and feed you that information that you require?" And I think that was really important for us right at the get go. Everything we built we had an API for it immediately. An API internally to interact with features within our system, and externally so that customers could communicate directly into our system. And one such example, this seems really simple, but build material, kitting, this is something that we recently introduced. And I think this is, to be fair, we are a younger startup and our focus has been primarily on automation and integration thus far. So as we create new features on our platform, we immediately expose this to our customers. And our customer has an endless amount of kitting requirements. And they have this little, let me give you a little background of our customer. They have an inventory store and they provide swag to every major or many major software companies out in the Silicon Valley and on the East Coast. And you could just come on to their store and choose any type of variation of items in their store and create a kit from that. So they're logging on an employee at X company logs in to their platform, chooses any variation, creates a kit, and now wants that kit to be fulfilled to their employees which means an endless amount of kit creation and as a fulfillment business and as a software company you need to be able to identify what these kits look like. Of course everyone is aware that you have kits, you have components. Everyone's aware that you can do this, and every fulfillment business can create kits. But the question is how do you automate that in a way and how do you integrate with companies in a way that they can easily send to you automatically. So we've just created a kit. Someone came into our store, created a kit with the following variations, small, medium, large, following the items in it. And we need this to be created as soon as the goods arrive at your warehouse. So now everything is talking to one another. We know the goods have been ordered. We know the kit is going to be created. And we know eventually orders are gonna come to fulfill for those kits. And this may seem like a small little feature, but it's a significant time saver for all the people involved to be able to have the software team I want. I just write a line of code that does that, talk to an API endpoint to get that done. And one the warehouse level, no one's making mistakes. They're just getting a printout of a PDF that says this is what it looks like. This is what needs to be done. And that happens only when all the goods arrive at the warehouse. So everything is nearly completely automated and a significant, significant time saver, significant reduction in mistakes in creating these kits. So it's been a really helpful piece of technology to introduce, and immediately open API, the second we introduce it, we created the documentation and shared that with the public. And it was very well received because it's completely useful.
Andrew: Yeah, no, that's fantastic. I think that's the absolute right approach to be thinking about. And so your example of Shopify but also just having the business value of what it is that I think these vendors are after to your point, you don't wanna spend weeks and months defining how you're gonna talk to another system. You wanna have APIs that kinda define here's how you can interact and engage and provide value nearly immediately. So those wins that you're talking about, you wanna see those over weeks, not months and years. So I think the pace of change is absolutely picking up faster and faster. And I mean we always joke about the Amazon effect I think that's driving a lot of this sense of urgency and access to information and data because customers and consumers have much higher expectations now about how they're gonna engage with the brands that they deal with.
Mendy: That's right. And I think there's a couple of tricks I provide to folks who are looking for a software. Some of them are very basic. Check out their help sections, see their prioritized list of features that they're working towards and how active their community is, how active their portal is. But aside from that, I like asking for a demo of the product. Like, can I log in myself? Can you give me access to a sandbox so I can play around? And another thing as well, I really like asking for their API documentation. I think it's a useful window into the features and functionality that the company offers and how clear they are about that as well. When you look at the API documentation, I mean it takes some work and it takes a commitment to put that together from a technical perspective and from just a business perspective. So they need to have identified what they're confident with doing, what the process is, how it looks. And therefore the API documentation is kind of like a secret window into their system and what's supported and what isn't supported and how that behaves. So I'm a more technical guy, but even your regular business guy could look at this documentation and say, huh, that kinda makes sense. And this is what the order looks like. It's kind of educational to some extent that you can get a feeling of what is, what's available, what isn't available and how this thing is gonna work.
Andrew: I think that's fantastic advice and I got a pretty funny story for you along those lines. It wasn't in a software evaluation but it was rather an integration project where we needed to connect a system of engagement with an ERP system, and the ERP system was touting the APIs that they had and all the use cases that we talked through. And, oh yeah, we can solve this, we can solve this. Absolutely. And so when they sent over the API documentation, the first thing that jumped out at me without even going through and turning the pages was the last revision was like in 2015.
Mendy: Oh yeah. Yeah.
Andrew: I was just like, oh, a red flag here.
Mendy: That's a common thing. Yeah, that's really interesting you say that 'cause if you do see the date as well as you'll notice modern companies won't send you PDFs. So there's a lot of little tell tale signs. Some of them will give you, they'll show you access to it online. It's completely publicly available online. And something else I noticed, a long funny story, is when I got into the space, forget about EDI, and as we talk about API, for me, I came from an API background. And the second I was introduced to the concept of EDI, this was really shocking to me. I didn't quite get it. And when I expressed to people that I would go at it alone, I'll figure it out. They had a hysterical laugh. They thought that it was pretty funny that I thought I could solve for it with APIs. And I think they were kind of right. But then while I was exploring this, I started getting contracts from companies that had transactions on peak hours, off peak hours after seven p.m. per character. And I thought that as well, this industry is a little older. So when you see these kinds of contracts that are written up to talk to off peak hours and you get discounted rates on off peak hours. I think there's a lot of tell tale signs that you gotta look somewhere else to solve for your problem. It's not exactly, that was an EDI integration job where we were trying to connect to another system as well. So I think to your point before, if you do have a revision that's from 2015, 2016, you really have a big problem. If the company isn't sending you a DocuSign signature and you have to fax it back, you got yourself a little bit of a problem. If you see peak and off peak hours, you got yourself a problem. And I think it's kind of still pretty common in the industry but hopefully we'll see all these issues gone in the next couple of years.
Andrew: Yeah. I agree. And EDI is a whole another podcast, but that's funny you bring it up. Mendy, definitely appreciate you joining us today. Any last thoughts or topics of where you feel the future is going? I know you've kind of alluded to some of this. But wanting that stood out to me that maybe you can wrap up with is just your viewpoint on deep learning and artificial intelligence and kind of how you see that playing, and not only for Nucleus but for the industry as a whole.
Mendy: We just spoke about EDI and we were talking about the software in the space and how they're evolving. In the same way I saw EDI a couple of years ago, I think machine learning, deep learning is extremely important. So we've heavily invested in building conditional rules engines and automation based on how we think things should behave. And we write these rules up when we speak to our customers and they provide some direction in some of their business processes. But I feel like we're behind on what the future really is which is deep learning. I think the magic of artificial intelligence, deep learning, is that these algorithms create themselves. And if we really wanna become efficient and if we really wanna be customer first and we really want to do all the things we're speaking about right now which is complete automation, quality information, bring it all together in a big boat and deliver it. You need to start considering seriously deep learning. All software providers really have to take that into account as they try to provide their customers with the best value.
Andrew: Very cool. Hopefully in a couple of years we'll have a more in-depth conversation around that as this evolves.
Mendy: Hopefully less time. There are big players in this space. And I hope they're working on it as we speak right now because that's extremely important. We can invest endless amounts of time just trying to figure this out ourselves. But really you have the machines to do that right now. And I think the big players in this space really have the tools, capabilities, to be able to do that. And they have the data. So that's really an important part of this is having all that quality information in one place that you can actually use to provide that real insight.
Andrew: Agree. Well, Mendy, I appreciate you joining us today. And for those that are listening, if you'd like to learn more about Nucleus Technologies and their solutions, I'd encourage you to visit nucleustech.com. That's N-U-C-L-E-U-S-T-E-C-H dot com. And if you'd like to connect with Mendy, we'll be sure to provide relevant links to his online profiles in the show notes. If you enjoyed this episode, please take a moment to rate the episode and subscribe to Data in Depth available on iTunes, Google, Spotify, Stitcher and pretty much anywhere else you might consume your podcast. Thanks again for joining us today.
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