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Hospitality.
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40% is your strategic sourcing.
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Where you work with somebody, you come up with options, you come up with a fantastic proposal that's going to drive a lot of value back to properties.
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60% is deployment or convincing every single property.
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Do you think that that is a good place for people who are interested in procurement to start their career, or do you think that's a better mid-career move?
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You don't study procurement, you don't take schooling for it, especially in Canada.
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So you kind of fall into it.
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Yeah, no, definitely.
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I guess maybe it's better to kind of start on the bottom and show us where I am right now.
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So yeah, I it's one of those things where I always say, you don't, especially in in Canada or the folks that I've been around with, you don't study procurement, you don't take schooling for it, especially in Canada.
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So you kind of fall into it.
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So in earlier career of the you know 10, 12 years, I was uh part of a company that did a lot of contract manufacturing.
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It was a Canadian company.
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We grew really uh successfully and we started doing contract manufacturing for a lot of big OEMs around the world.
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That's where I started getting to, you know, more from supplier engineering, which I was actually hired to, more into commodity management.
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And I was actually setting up supply chains around the world and mostly because I had the expertise from the engineering side on supplier relationships and supplier supply chain.
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So that's where I kind of honed in some of the, without me knowing it then, the background of how to work for suppliers, how to understand costs from suppliers, how to understand how they go from new product introduction to like uh full stability.
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As I kind of grew my career at the content manufacturer, and they said, well, we need somebody who who can actually get now the business sense and actually work formally on sourcing.
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Not just, you know, understanding the the uh technical aspects of it.
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So from that, I kind of grew the bones of the fundamentals of sourcing procurement commodity management without knowing all the different acronyms.
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And then what's funny is you know, I took a little time away to do an MBA to kind of get the credentials of what I've been doing because the higher education, because you may have done it, but you don't know how it's reframed.
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And I thought the MBA, like a lot of post-secondary education, helps you talk the same language so that you all your experience is credible and actually you know how to decode it in a way that other people understand it so that you can actually use it more purposely.
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I think my greatest learning period was from the MBA and that country manufacturing that I parlayed, and was asked to join Accenture, which is a consulting company who was doing a lot of source procurement.
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And that's where I really born.
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We went through the education of the formality of sourcing and procurement and the different kind of steps you go through in working with probably 10 different clients, how each one is a bit nuanced, but they all use the same underlying process and terminology and how to look at how to become like a true expert in that area so that we can pivot across different steps.
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Because nobody wants to go through an elaborate, diligent spreadsheet, seven steps that would take anybody like a long time to go through.
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You have to be able to navigate.
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And that's where I think where you start developing while I start developing true expertise, where you know enough of every single step of what you could do from end to end, where you're able to navigate based on experience, based on what that company wants or what their appetite is, how to navigate and make it more efficient, right?
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Because you don't need to kind of go down and do a whole market exercise of every single supplier where that may not be what they want.
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They may need to look, I have a very finite need.
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I think I've got like three or four things I think would be credible.
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Then you go exit, you don't need to waste a month doing a whole market insight.
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Well, here's a question for you, Danny.
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What do you feel?
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So you you were at Accenture, and so this is like a bit of a consulting firms can be a little bit like a boot camp.
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You know, you get exposed to you do these different deployments, you get exposed for a few months to six months to a little bit longer at a time to different clients.
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Do you think that that is a good place for people who are interested in procurement to start their career, or do you think that's a better mid-career move?
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And do you notice a difference, you know, as you've worked in all these different organizations with the caliber of procurement thought or work quality of people that have just been in industry consistently as a practitioner versus folks who have did their tour of duty at a consulting
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firm with that sort of high intensity?
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No, it's a great question because you can take two paths.
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You can go out of school, do consulting.
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And I think the path that worked out for me is that because I had the experience of what actually is pragmatic in industry and work suppliers, that helped me accelerate my career path within consulting.
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Because now of just following blindly through a template, I could actually navigate it and have a decent discussion with an equivalent stakeholder who actually knows procurement, who's not a consultant, but industry procurement, and talk the same language and saying, here's how I can add value from from a consulting sense.
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I think I've seen people go the other route where they come up the grounds and have like such a you know, a much better perspective than I do in terms of all the different consulting templates, all the rigor, all the data analytics, all the things you could do about it, but then they lose sight of the outcome sometimes where they say, okay, but I've done 90 hours of this work where now, if I really understood the outcome, what that what the client wants, I only need to do probably right.
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It's like boiling the ocean and analysis of paralysis, where I think sometimes consultants go into because they've never lived on the injury side or understood right how to implement it.
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And that's one thing I think probably gave me an advantage is that I had to implement the solutions I put forth.
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I mean, when you implement something, you can see that not everything works out.
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It's like hard treatment, oh, I planned of all these things, but only 50% worked out.
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And then how do I do it better and better?
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So I if I was gonna recommend this to somebody else, I would say, I would, well, it's hard because consulting companies like to hire right out of school, so you don't have any bad habits.
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Interesting.
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If you don't develop bad habits, and if you work with a very reputable company that is known for source procurement, I would always say, do a few years there.
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And if you really want to have diversity of experiences and go to different clients and stuff like that, then join consulting because then you get the real formality and you get both perspectives, the best of both worlds.
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And like even after a century, I joined Walmart, I joined Can of Goose, and like I did stinton hospitality, which I'm still doing hospitality today.
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And now I'm I'm part of like a great consultant company called Oficio.
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I can see all that
stuff, it's like going back and forth.
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We see, okay, what did I lose out?
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What did I gain?
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I'm biased.
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I think I did the right way.
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Because even going back into consulting, I see now the higher sophistication of processes and templates.
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But the fundamental experience that I've garnered outside of consulting is irreplaceable.
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It's invaluable because now you know how to look at the outcome and say, okay, this template, this process is good, but this is what we really need.
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So let's run those through every single aspect.
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Let's like focus on what's important still.
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And then you with, of course, AI, it's like accelerated for everything, right?
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You could now fast track with the use of AI.
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Have you ever had a situation, Danny, when you were at Canada Goose or Walmart where you interacted with when you were in the seat, in the practitioner seat, where you interacted with consultants that had been brought in and you just totally disagreed with what their perspective was because of that difference between like the boots on the ground versus the abstract theory?
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I wouldn't say disagree.
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I would say I would understand their intentions.
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You know, even today when I work with this year of folks and uh a lot of great SMEs, a lot of great you know, consulting power that they have, I now I can appreciate the intention of what they want to do and how they want to do things.
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And then I can balance that with giving say feedback to them, just like what I did at Walmart or Canon Goose when I work with all consultants saying, I get you got to follow this process, but take my perspective into account where this stuff here that you're gonna spend a lot of time analyzing, not as meaningful to what I think the outcome will be.
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Try it your way, and then when you know realize that the outcome is much simpler than what you had done beforehand, then let's work together.
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So I think it's it's appreciating, like I would never because like I would say the majority of consultants, they can drive a lot of value if they're given explicit direction or given an understanding of why sometimes you just can't follow a hundred different steps in a way.
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So when you think about that and think about sort of what you're what the client or myself are trying to get at to, I had to take more time to explain to them what I really want.
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Then they can internalize it and say, oh, you know what?
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Yeah, I don't need to waste my time scouring a hundred different suppliers because you've kind of given me enough Russian that I can only have to find like maybe 20.
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Yeah.
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So maybe a bit more concretely, you know, if you had to say like there's some things that consultants overestimate the value on, and some things that they are underestimating the value on, you know, what are one or two examples of things that you think, you know, consultants generally overestimate the value of, and then you're like, hey, these are the nuts and bowls things that I actually care about.
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What are the one or two things that they underestimate the value of?
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And it sounded like maybe supplier discovery might be one of those things that they're overestimating, or maybe it's like PowerPoint deliverables.
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I'd love to just get a sense of like, you know, just some insight to for the audience.
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PowerPoint deliverables are definitely uh a key aspect.
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I've worked for so many different consulting firms, and even, you know, my work today uh with officio, for those folks who have been in industry, they rely on the professionalism of PowerPoint because that's their only deliverable.
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Someone, you know, at the partner level at a center told me this.
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Imagine that if you're not implementing anything and you're not visiting factors, stuff like that.
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When you leave, you're leaving behind this PowerPoint, and that's all they're gonna remember you by.
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Yeah.
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And that's why they think about I'm gonna make it so perfect, and I'm gonna make sure that it's so jam-packed of information, it's convoluted.
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That's why it's a different approach where if you think of, I love the use of PowerPoints, but I use PowerPoints to streamline my communications.
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Right.
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I don't use it to throw everything at the soup, you know, the soup, nuts, and bolts in the kitchen into saying this is my my deliverable data, I'm gonna leave behind.
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It's a different perspective.
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Um, so I think that's one thing where consultants spend a long time curating it when I say, okay, all I care about is a tagline and a few key metrics.
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I don't care about it, shouldn't take me more than two minutes to digest a slide.
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I have so much information.
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There's like, I gotta choose my adventure by following this thought, this thought, this thought, and this thought.
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Maybe it's just me, but as from what I was a
client or industry perspective, I wanted to keep things so simple that I could sell it to anybody else.
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If you make it too hard for me to understand, okay, then I'm not gonna be able to effectively sell that to somebody else.
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So that's where I think slide work needs to be curated and bespoke upon the needs of whoever you're using it for.
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Because you could have a different product, you could have needs for communication versus needs as a appendix that you will keep reference back, right?
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That's one thing.
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And then I think what's the other point you had, you had about another example of oh, yeah, things that basically are you think are underappreciated by consultants that you're like, hey, look, if I could bring you in at a quarter of the cost and all you did was one and two, yeah, that would be a home run for me.
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Yeah.
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Well, I don't know about a quarter of the cost, but maybe let's use this example from Canon Deuce.
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So when we are finding exploring new supply bases, right, there's three things that I really kind of thought about.
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And it was it was kind of specific, it may not work for all apparel brands, but for them as saying if you're gonna find a new supplier, the three tenements, right, that I think about.
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Number one is who do else do they work with?
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If they're working with other credible brands that we think are comparable to us or close to comparable to us, that's already a nice filter.
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Yeah.
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If we're not working with a bunch of these other folks, then let's not waste our time.
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And that's one thing where a paper, like what they could say in a spritch and in RFI on paper, may not actually be true because anybody can say anything on paper.
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And without visiting the factory, you don't know.
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So one of the things I put in place is let's understand what other brands are working with, right?
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Let's understand also what type of product portfolio they're working with those other brands without breaking confidentiality, right?
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Because if there's a match on those two aspects, then high reasonable that they're gonna be a match for you.
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And number three, of course, like obviously, you know, their their quality, their competence, all the kind of things that you would normally get.
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But I focus on that first as the strongest filter.
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And that's where, you know, think about where maybe some consultants would say, okay, I'm gonna RFI all these
suppliers and do this comprehensive RFI with a hundred different questions and really focus on equipmentless, focus on materials, focus on all these things, but then they say, Oh, the last thing is like customer referrals.
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And can you dip it typically what's the best source of information to understand who else's supplier is working with?
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Is it just to ask them directly and how often do you think it's accurate?
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Do they kind of goose the numbers up?
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Uh, do you then go check with those customers?
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Like and real practical, like what's the best way to figure out?
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And I love this idea, by the way.
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If they are supplying a high caliber customer, they'll probably be a high caliber supplier.
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Best and foremost thing that sometimes consultants are hard to do with, and but in this where you can, is you have to visit these factories.
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That's when you can tell what's really happening because you can see the products.
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Because to your point, a supplier could have worked with all these brands five years ago.
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Right.
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They're not lying.
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So you have to like say, okay, tell me within the last two years, who have you worked with and what have you worked with them on?
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Where within the realm of you know not breaking confidentiality.
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That gives you a paper up audit to say here's a paper filter, and then you got to go visit the factories because in the apparel, it's a role where it's based on really on experience and name dropping, right?
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Because there's only so many great suppliers that are well known.
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So you have to kind of build that reputation.
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So it's a lot based on reputation that okay, if you can talk the same parameter of good suppliers, then that builds some credibility.
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But that's why I think one thing with consultants, sometimes if they don't have your experience to me, like myself, you've never visit the factories.
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So you're taking somebody's word for it?
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Like, how much can you validate?
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Why can't consultants do that work?
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Why can't they visit the factory and see for themselves if they're running a project, like, hey, we're gonna build a new supply base for a given category?
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Is there some reason why they can't go and fly to it?
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The projects for the from consultants do feel they are they're high value, high cost engagements very
often.
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And so the cost of the flights and the hotel and spending a day on site, it doesn't seem that big to me, but maybe it's just not what your consulting firms are charging a lot.
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But I see the trend right now where people are moving away from that because they're saying, well, how do you justify these fees?
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Right.
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So you have to go more practically.
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So if we're true sourcing and procurement consulting firm, the ones that actually do it and are pragmatic and are execution based, those folks are very efficient and economical.
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They're not gonna have a lot of buffer to fly people.
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And that's why on the right, I think if you can justify it, it's basically okay, we can fly somebody to accompany, you know, the stakeholder to kind of visit these factories and kind of reconfirm what we know.
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Uh, but imagine like you're not gonna have a dedicated SME like myself 100% to one project or another project, right?
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It's gonna be costly for me to go visit the world with a client.
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So it's trade-offs, but that's where you have to find the right consultant firms who actually have that experience space.
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And to my earlier point, if they're industry hires, they come with that.
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Yes, of course.
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Are there any like third-party service providers that you've seen where that's like their only bread and butter, where they just maybe have, I mean, I'm imagining a business that I don't even know if it exists, where they have, you know, one person who's like a supply industrialization engineer, like an SIE or a category manager in each region, and all they do is do like you know supplier visits by the No, and that's where that's where you have some of these Asian brokers, where because they work with so many different clients, they built up this experience of visiting every single battery in a certain region.
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But yeah, like a broker, they're charging overhead on top of that, right?
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And with a broker, what they're suggested for you could be the same as somebody else.
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So it may not be aspoke, but in the historical days, even with contract manufacturing electronics and even in the parallel, you have still these entities that are massive brokers that connect you with the right suppliers because they've used them, because they've visited them.
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So, but you have to pay for that.
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Of course.
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And I guess what about the uh certification groups?
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Like, for example, if someone has an ISO 9000 certification, you know, it's a piece of paper that says, like, okay, you know, someone from ISO has visited our factory, they've verified that we have, you know, quality process, that that process is being adhered to, that the equipment that we say we have, you know, how much do you rely on those certifications?
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Is that a is that a must-do when you're when you're evaluating new suppliers?
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That's a deep question because I used to I used to use that as part of my audits for a lot of suppliers.
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So let me give you an analogy.
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Okay, it's like an engineering degree.
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So you have a hundred engineers, they all have an engineering degree.
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How would you say that one engineer is better than another?
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Because it's so dependent upon the scope, so dependent upon that discipline.
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So for ISO, think about ISO, there's no standard in terms of the breadth of that company.
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So if that company has one little process and they document it, you're ISO certified, right?
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It doesn't speak to saying, oh, can they do 10 different types of products?
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Do they do designs?
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So is the whole thing about ISO, as long as they document what they do, they're ISO because they've documented it.
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But it doesn't talk to the breadth and the component that they have.
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Interesting.
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Are there other certifications beyond ISO that you think do speak to this a little bit more directly?
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Or is there no because I imagine the certification would be, could be like a proxy for the on-site visit.
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Like if I could pay somebody to go and do the certification, then they may already be a they might be doing that role of the on-site visit, of the inspection, of making sure that the company is what they say they are, that they have the same the right DBA doing business as name and that matches up with their legal entity and that their bank account is verified.
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Like, you know, is there is there something beyond ISO that like maybe SAE standards or something?
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I'm just I'm thinking out loud, like where somebody could say, Hey, I can just check the box.
00:17:43.279 --> 00:17:56.400
Well, what usually happens, like any manufacturing field, if it gone through a manufacturing audit by a reputable brand, I will lean on that too, because that would error command, but it has to be a bespoke audit, right?
00:17:56.559 --> 00:18:04.880
Like let's say even at juice or even at my previous contracts, you know, Mammy Patrick, we had our own special audit because we had
our own products.
00:18:05.039 --> 00:18:11.279
So we had to make sure that we had to kind of audit to our standard of quality, our standard of customer service, and all these kind of things.
00:18:11.359 --> 00:18:16.640
So there isn't there isn't a generic one other, and then no company right now would actually rely on a generic standard.
00:18:16.720 --> 00:18:17.839
It could help augment it.
00:18:17.920 --> 00:18:19.680
You'd always have to be customized in one way.
00:18:19.759 --> 00:18:26.960
So that's why the different ISO certifications are great to have because it says, okay, I don't have to go through that deep that they've got a paper trail.
00:18:27.039 --> 00:18:29.119
If they've done ISO, here's aspects.
00:18:29.200 --> 00:18:33.599
They've got a bare minimum that they have some sort of compliance to documenting things.
00:18:33.839 --> 00:18:38.720
But now I gotta make sure that what I want to audit against is it going to be quality level?
00:18:38.880 --> 00:18:40.559
Is it gonna be the competence level?
00:18:40.640 --> 00:18:41.839
Is going to be the expertise level?
00:18:41.920 --> 00:18:42.960
How do I audit that?
00:18:43.279 --> 00:18:43.920
Interesting.
00:18:44.079 --> 00:19:04.079
And and how much would you rely on if you're at Goose, you know, I don't know what would be a good alternative, but if if a supplier, for example, is supplying to Arctteryx, you know, I imagine that's a company that's in the same is it enough to be like, you know, they're supplying a meaningful SKU that is similar to ours, but at Arctterics, do you ever share information between companies?
00:19:04.240 --> 00:19:09.599
Does that ever happen or is that when you approach a supplier, you know, they're allowed to disclose who else they work with.
00:19:09.839 --> 00:19:15.519
Simply put, if it's a raw material supplier who supplies that this fabric is fabric, it's not as complicated as a finished garment.
00:19:15.759 --> 00:19:22.480
Supplier of fabric, and they say, look, I supply fabric, not telling you exactly what fabric, but I supply fabric to these 10 comparable brands.
00:19:22.640 --> 00:19:26.000
I would look at it saying, Yeah, I recognize all of them, they're very comparable.
00:19:26.079 --> 00:19:27.759
I know their quality standards are pretty good.
00:19:27.839 --> 00:19:31.680
I'm comfortable that you go to the next stage of an on-site audit.
00:19:31.839 --> 00:19:45.680
Because then we can go deeper into terms of their culture of it, in terms of the dedicated account team they would have for me, in terms of the competence of let's say seam sealing, perhaps, or some like some new thing that I would need for my products, then I can go down.
00:19:45.759 --> 00:19:47.440
So it's basically that reference point.
00:19:47.519 --> 00:19:50.240
It's like going like getting an NBA from Harvard.
00:19:50.319 --> 00:19:52.319
Just because he has an NDA from Harvard, you're gonna hire him out.
00:19:52.400 --> 00:19:57.920
Strike, you'd have to say, okay, my first filter is anybody who has a degree from good school, I'm gonna entertain the resume.
00:19:58.000 --> 00:20:00.559
If they don't have a good degree from good school, I'm not even gonna entertain it.
00:20:00.799 --> 00:20:01.279
Right, right.
00:20:01.440 --> 00:20:03.839
But then you still have to do the check yourself.
00:20:04.000 --> 00:20:05.519
I mean, ultimately that's the way it works.
00:20:05.599 --> 00:20:10.640
And and I mean, I guess there's also just thinking about it, there's ways to dip the toes in without going whole hog, right?
00:20:10.799 --> 00:20:15.759
You could start with a small program or maybe a 10% of volume, and that could be the test.
00:20:15.839 --> 00:20:22.559
Like, because if they don't deliver, it's not catastrophic, and then ramp up eventually to, hey, this is a core preferred supplier.
00:20:22.720 --> 00:20:23.839
What about the tiers?
00:20:24.000 --> 00:20:31.839
This is always, I think, one of those topics that gets a lot of conversation, but I'm not sure if if folks really end up doing a lot of action against it.
00:20:31.920 --> 00:20:36.559
But how do you think about trying to understand the tier two, tier three supply base?
00:20:36.799 --> 00:20:43.759
Is that something that when you're awarding a supplier, you're already asking about does the supplier feel at liberty to give you that kind of information?
00:20:43.920 --> 00:20:44.880
How important is it?
00:20:45.039 --> 00:20:46.880
I love to sort of get it, get your two says.
00:20:47.359 --> 00:20:57.039
Very important, especially with what happened with uh supply chain transparency and traceability in the last couple of years with all the ESG initiatives and all the all the labor concerns that people had.
00:20:57.200 --> 00:20:58.640
This is what started it.
00:20:58.799 --> 00:21:15.359
And similar to what food went through many, many years ago, hacked nearly every single part of who does what and what who supplies what product for you to be assured that the last quality aspect fulfills all the regulations for for ethical sourcing, ethical behavior, that kind of stuff.
00:21:15.519 --> 00:21:19.839
So if if you're looking at new providers, they have to provide you that transparency.
00:21:19.920 --> 00:21:22.480
If they're not, then I would not touch them with 10-foot pole.
00:21:22.880 --> 00:21:28.880
Here's a question, because I know that in certain industries, traceability has gotten a lot more, I would say, focus.
00:21:28.960 --> 00:21:30.160
So food makes sense.
00:21:30.400 --> 00:21:32.720
Certainly the apparel industry is a huge one.
00:21:32.799 --> 00:21:43.440
I mean, we've talked about traceability many times, people wanting to make sure that there's no forced labor in certain regions, that you're not getting materials from a country that's in a sort of a sanctioned list.
00:21:43.680 --> 00:21:49.680
But in my experience, when I was in automotive, you know, you'd ask a supplier, hey, can you disclose
your your tier one, our tier two?
00:21:49.839 --> 00:21:53.119
And they'd say, like, no way, because that's our proprietary info.
00:21:53.200 --> 00:21:59.359
And they don't want you to go to the tier two at some point eventually yourself and try to quote them out, right?
00:21:59.519 --> 00:22:02.640
Get their prices to try to negotiate away their margin.
00:22:02.720 --> 00:22:14.720
So in a way, I feel that something about the fact that traceability has come from a regulatory perspective with Garment, you can look at the supplier and say, hey, look, it's not that I'm trying to get secret intel.
00:22:14.960 --> 00:22:23.599
It is literally just a requirement for me and for anyone that you work with that we collect this level of traceability, batch level traceability information, in fact.
00:22:23.759 --> 00:22:29.759
So I'm kind of curious like how did how has that conversation gone in Garment versus in other industries?
00:22:29.920 --> 00:22:41.519
How much has the regulation been actually a benefit for the OEMs to be able to ask that question without appearing to want to I think the other big factor thing is tariffs, overcome tariffs.
00:22:41.680 --> 00:22:45.200
You're going to have to know exactly the raw materials and where they're coming from, right?
00:22:45.279 --> 00:22:51.200
And who who provides that value out of putting things together manufacturing because that's it's going to be complicated in tariff calculations.
00:22:51.519 --> 00:22:51.759
Right.
00:22:51.920 --> 00:22:53.680
Well does that give you well here's the question.
00:22:53.839 --> 00:22:55.279
What's the level of info that you need then?
00:22:55.440 --> 00:23:03.440
Because if so if I was a tier one and someone said hey I need to know your tier twos for tariff purposes I might say sure I'll tell you where they're located.
00:23:03.519 --> 00:23:07.680
I'll tell you what they supply us I'll tell you the dollar value but I won't tell you who they are.
00:23:07.759 --> 00:23:12.160
You know and I don't want you talking directly to them because that's my proprietary info.
00:23:12.240 --> 00:23:15.680
And I don't want you sharing my supply base with my competitors for example.
00:23:15.839 --> 00:23:23.599
So what's the level of information that you really feel it's fair to ask suppliers I think it's dependent on the company because that goes into trade compliance.
00:23:23.759 --> 00:23:37.440
They're right not only for me as G but from a trade compliance aspect as things got more complicated for tariffs and costing and also for exceptions because of special country to country percentages of what you can ship you know greedy free versus non-duty free.
00:23:37.519 --> 00:23:38.799
How do you verify that information?
00:23:38.880 --> 00:23:44.000
So the thing we'd always go back look it's fine that you have a generic loss I that things are manufactured here.
00:23:44.079 --> 00:23:45.359
But how are you going to validate this?
00:23:45.440 --> 00:23:47.039
Because
if you can't validate it, guess what?
00:23:47.119 --> 00:23:48.960
It's stuck in custom and we'll never get it.
00:23:49.119 --> 00:23:50.319
Who's going to be viable for that?
00:23:50.480 --> 00:23:57.440
So that's why trade compliance is important that you need enough details of that supply chain and they have to they have to find some way to provide that transparency.
00:23:57.519 --> 00:24:06.640
The easiest thing is is that agreement where I'm not going to go undercut you because I don't have the sophistication to go and buy directly from that sub tariff because I'm not going to be putting together guess what?
00:24:06.960 --> 00:24:08.799
You're the subassembly you're going to put it all together.
00:24:08.880 --> 00:24:10.640
I'm not going to create my infrastructure to put it together.
00:24:10.799 --> 00:24:16.480
So there has to be a whole lot of understanding and partnership that's saying I need this so we don't get in trouble with trade compliance.
00:24:16.640 --> 00:24:21.680
I can get as much benefits or leeway from tariffs for ESG, for tariffs and everything else.
00:24:21.759 --> 00:24:40.079
So I think it's a conversation and quite frankly if if a supplier is very hesitant and automobile it may be different because it's so tight margins therefore for other industries it's hard to replace if that person is doing such a viable subassembly role right and if they're not gouging you and that's why if they're refusing to give that information what else is happening?
00:24:40.240 --> 00:24:41.759
And that would raise alarm bells.
00:24:41.839 --> 00:24:48.079
You know gouging is one thing but I'm not as worried about that as I am about are they really getting it from that supplier?
00:24:48.319 --> 00:24:48.480
Yeah.
00:24:48.559 --> 00:24:50.079
Well how do you I guess here's the question.
00:24:50.160 --> 00:24:55.839
Let's say they do tell you and if we're in the world of are they really question mark, do we need to audit that as well?
00:24:56.000 --> 00:24:56.160
Right?
00:24:56.240 --> 00:25:00.000
Like is that something and where does the practical reality end right?
00:25:00.079 --> 00:25:05.359
Because in theory maybe I should be like hey you know who where are you getting from your suppliers different materials?
00:25:05.519 --> 00:25:08.240
And now that you've told me I also need shipment records.
00:25:08.319 --> 00:25:11.039
You know I want to see the bash level information.
00:25:11.200 --> 00:25:18.079
And then eventually it just becomes like hey like you know we're doing 10 times the amount of work that we were before because we're trying to audit all this stuff.
00:25:18.240 --> 00:25:36.400
So where does the threshold kind of end and and I'm also kind of curious could this be if the issue is really customs could you just say hey look either we do Xworks and you give me that information or we do DDP and I don't need as much because then you're responsible for but I think in some in it's an issue specific.
00:25:36.559 --> 00:25:44.000
I know food and apparel they they actually have tools in place now because they have different certification standards that automate that through AI.
00:25:44.319 --> 00:25:53.039
Basically work with third party third party certification houses that for you to actually get the certification that something is organic or recyclable or something.
00:25:53.200 --> 00:25:59.680
You have to do it anyways and the automation is it scans a certificate and verifies it's a legitimate so it's all automated.
00:25:59.759 --> 00:26:03.279
So there's not a lot of burden because they're already using third party certifications.
00:26:03.599 --> 00:26:04.000
Interesting.
00:26:04.160 --> 00:26:10.960
So so here's a question does the third party element make it easier you know for this kind of data sharing?
00:26:11.039 --> 00:26:18.160
Like I'll give an example we had a customer that wanted to see our financial statements you know and we don't we're a pot private company.
00:26:18.240 --> 00:26:25.920
We don't share financials with anyone but we wanted to get this deal done and so what ended up happening was we didn't actually share it directly with them.
00:26:26.079 --> 00:27:02.559
They worked with a third party called Rapid Ratings which is just one of many sort of companies that have yeah and so I felt as a as a founder right I'm like okay I'm not sharing our financials directly with the customer I'm sharing with a third party who doesn't really have an interest in this and all what I did was I sent them the full financials and then they sent just the digest you know what's the you know where are they A on the balance sheet they're a plus on this that's why third parties are are always going to pace for third parties because they're going to be the mediators they're going to be the ones that the holds the sense of information and give the output that's required by that other party.
00:27:02.640 --> 00:27:10.160
And a lot of times whether it's consulting or industry source and procurement groups always ask for more than they should because they because there's no harm in asking.
00:27:10.400 --> 00:27:33.599
Sure of course as a vendor because you don't know what's the nice to have what's the have to have right and so and that's where you have to go and for the more sophisticated you know suppliers you have to really understand what are you trying to get out of this and if you discover more financial viability and health and we have a healthy balance sheet okay I can give you some of that stuff or well how about third party validate us because you would trust a third party rating system without disclosing the numbers.
00:27:34.000 --> 00:27:51.039
It's funny I'll tell you a story like we um when we were doing this this thing you know we're we're we're a growth stage company right and so the way that our business works is that we raise outside private equity VC funding, we invest in growth and then when we get close to needing cash
again we go back to the market and raise.
00:27:51.119 --> 00:27:52.880
And ideally we've made a lot of progress.
00:27:52.960 --> 00:28:09.920
And so it's funny because in this case I mean it was just a little personal story but I remember we were like hmm like we're about to do this huge fundraise with Lightspeed and Bane as you may remember from earlier this year we raised a one of the biggest sort of Series A financings of all time 33 million at 130 million valuation.
00:28:10.160 --> 00:28:15.359
By the way you were like one of the first people that on and I ever met when we started this journey.
00:28:15.440 --> 00:28:24.079
So like you remember when it was like Megan making the intro to be like hey like these are two two kids in a garage so just be aware of that.
00:28:24.240 --> 00:28:30.640
But it was funny because when we're doing the rapid ratings we're like okay if we do this in a week we'll have a totally different balance sheet than we did.
00:28:30.799 --> 00:28:50.720
Good timing because we were able to be like okay here's our financials and then it was intercorder so I did we did like an adjusted financials and we were like okay here's our financials now and all of a sudden the metric looked like their balance sheet cash coverage was like insane because all of a sudden we had this like lump sum more cash than than most large companies even do.
00:28:50.799 --> 00:29:00.000
And so that was really funny change in our financial metrics but um the business itself didn't change it was just that we had a big cash infusion but but no I mean it it's it's really interesting.
00:29:00.160 --> 00:29:08.799
You know I'm kind of curious so like going back to the topic of like asking questions to suppliers I feel like there's always this implication of the power dynamic, right?
00:29:08.880 --> 00:29:14.960
Like if you are a more powerful buyer you can ask more questions more of your supplier than you can otherwise.
00:29:15.039 --> 00:29:23.119
So I'm you know but then again like I remember even at Tesla like early on when we were just getting started and we were doing the model S and X, we're doing a thousand cars per week.
00:29:23.200 --> 00:29:24.240
So we're a small player.
00:29:24.319 --> 00:29:26.319
We're a rounding error for the automotive industry.
00:29:26.480 --> 00:29:31.039
We would have to almost sell the opportunity to suppliers to be willing to work with us.
00:29:31.119 --> 00:29:36.000
And then by the model three it's like okay we're making 10 million vehicles much more substantial program.
00:29:36.319 --> 00:29:39.920
I can imagine the same might be true for you know for when you were at Walmart.
00:29:40.000 --> 00:29:49.920
You know I'm kind of curious like because there it's like Walmart famously has, well, one, it's a very sophisticated supply chain org it's you know it's the the New York Yankees of supply chain org in many ways.
00:29:50.000 --> 00:29:51.200
But there's a lot of buyer power.
00:29:51.359 --> 00:30:03.440
And so there's a lot that you can ask of the suppliers than when you go to Canada Goose, amazing like high equity brand brand equity like very but it's luxury and so you you're not doing the same kind of volume that you are at Walmart.
00:30:03.599 --> 00:30:19.359
So I'm kind of curious did you notice a difference in like suppliers willingness to give you that extra cut of information to bend over backwards because I remember when I was a Tesla there were certain tier ones you know that I I you know where they would just say we'd send them our quote breakdown sheet and they'd say that's very nice.
00:30:19.440 --> 00:30:23.519
Here's our price list and there was like no way to get it in that additional level of detail.
00:30:23.680 --> 00:30:28.240
90% of our suppliers would but there were always a few that were just they were bigger than Tesla.
00:30:28.319 --> 00:30:29.680
So they actually had the leverage here.
00:30:29.759 --> 00:30:38.480
So I'm kind of curious how you find that buyer size versus supplier power uh dynamic coming into play, especially going from a place like Walmart to Canada Goose.
00:30:38.640 --> 00:30:54.240
Well Danny, I know we're just about at time I've got one last question for you and this is a little bit of a fun brain teaser, but is there any company with a procurement organization that you just respect so much you've never had a chance to work with but you know that they're great and you'd love to work with them.
00:30:54.559 --> 00:30:56.640
I think the only one that comes to mind is Costco.
00:30:56.720 --> 00:31:01.200
I've heard of of what they do and I I've heard stories of how well they manage programs.
00:31:01.279 --> 00:31:06.319
And you know I go to Costco myself and I shop there and I'm saying man some of this stuff is really good and so affordable.
00:31:06.480 --> 00:31:27.920
I understand all pricing but how do they get access to like the fresh fruits and vegetables how do they get access to this stuff so that's one area where you know maybe it's just a fable thing where that's one area that I've never been able to really talk to anybody who who actually is within the resourcing group of Costco say how do they do things and but I think of liquor they are the number one buyer of liquor around the world Costco.
00:31:28.160 --> 00:31:33.599
Wow it's amazing well Danny thank you so much for the time I I really appreciate your coming on the podcast.
00:31:33.759 --> 00:31:39.200
I had a ton of fun um I always love our conversations even more now that we get to share it with some other folks.
00:31:39.440 --> 00:31:40.880
Yeah definitely