Full Transcript for Danny Wang, former SVP at Canada Goose on Consulting, Sourcing, and Supply Chain Trust

firm with that sort of high intensity? 00:04:15.439 --> 00:04:18.079 No, it's a great question because you can take two paths. 00:04:18.240 --> 00:04:20.240 You can go out of school, do consulting. 00:04:20.399 --> 00:04:32.079 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. 00:04:32.240 --> 00:04:48.160 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. 00:04:48.399 --> 00:05:11.279 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. 00:05:11.360 --> 00:05:20.160 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. 00:05:20.240 --> 00:05:24.959 And that's one thing I think probably gave me an advantage is that I had to implement the solutions I put forth. 00:05:25.040 --> 00:05:27.839 I mean, when you implement something, you can see that not everything works out. 00:05:27.920 --> 00:05:32.240 It's like hard treatment, oh, I planned of all these things, but only 50% worked out. 00:05:32.319 --> 00:05:33.680 And then how do I do it better and better? 00:05:33.839 --> 00:05:41.600 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. 00:05:42.399 --> 00:05:43.040 Interesting. 00:05:43.360 --> 00:05:51.040 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. 00:05:51.120 --> 00:06:01.199 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. 00:06:01.279 --> 00:06:09.439 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. 00:06:09.600 --> 00:06:13.040 And now I'm I'm part of like a great consultant company called Oficio. 00:06:13.279 --> 00:06:15.680 I can see all that

stuff, it's like going back and forth. 00:06:15.759 --> 00:06:17.600 We see, okay, what did I lose out? 00:06:17.839 --> 00:06:18.639 What did I gain? 00:06:18.800 --> 00:06:19.439 I'm biased. 00:06:19.519 --> 00:06:20.399 I think I did the right way. 00:06:20.480 --> 00:06:26.480 Because even going back into consulting, I see now the higher sophistication of processes and templates. 00:06:26.639 --> 00:06:31.519 But the fundamental experience that I've garnered outside of consulting is irreplaceable. 00:06:31.600 --> 00:06:38.720 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. 00:06:38.800 --> 00:06:41.360 So let's run those through every single aspect. 00:06:41.519 --> 00:06:43.600 Let's like focus on what's important still. 00:06:43.759 --> 00:06:47.120 And then you with, of course, AI, it's like accelerated for everything, right? 00:06:47.279 --> 00:06:49.519 You could now fast track with the use of AI. 00:06:49.759 --> 00:07:08.720 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? 00:07:08.959 --> 00:07:10.800 I wouldn't say disagree. 00:07:10.959 --> 00:07:13.600 I would say I would understand their intentions. 00:07:13.759 --> 00:07:24.879 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. 00:07:24.959 --> 00:07:41.519 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. 00:07:41.759 --> 00:07:49.439 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. 00:07:49.680 --> 00:08:04.560 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. 00:08:04.720 --> 00:08:12.240 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. 00:08:12.639 --> 00:08:15.439 Then they can internalize it and say, oh, you know what? 00:08:15.600 --> 00:08:23.279 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. 00:08:23.600 --> 00:08:23.839 Yeah. 00:08:24.000 --> 00:08:42.080 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. 00:08:42.159 --> 00:08:45.200 What are the one or two things that they underestimate the value of? 00:08:45.360 --> 00:08:51.519 And it sounded like maybe supplier discovery might be one of those things that they're overestimating, or maybe it's like PowerPoint deliverables. 00:08:51.600 --> 00:08:55.039 I'd love to just get a sense of like, you know, just some insight to for the audience. 00:08:55.360 --> 00:08:58.720 PowerPoint deliverables are definitely uh a key aspect. 00:08:58.799 --> 00:09:09.120 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. 00:09:09.360 --> 00:09:12.320 Someone, you know, at the partner level at a center told me this. 00:09:12.639 --> 00:09:17.600 Imagine that if you're not implementing anything and you're not visiting factors, stuff like that. 00:09:17.840 --> 00:09:22.639 When you leave, you're leaving behind this PowerPoint, and that's all they're gonna remember you by. 00:09:22.799 --> 00:09:22.960 Yeah. 00:09:23.360 --> 00:09:29.120 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. 00:09:29.200 --> 00:09:35.919 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. 00:09:36.000 --> 00:09:36.240 Right. 00:09:36.399 --> 00:09:43.840 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. 00:09:44.000 --> 00:09:44.879 It's a different perspective. 00:09:45.039 --> 00:09:53.039 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. 00:09:53.200 --> 00:09:57.840 I don't care about it, shouldn't take me more than two minutes to digest a slide. 00:09:58.000 --> 00:09:58.879 I have so much information. 00:09:58.960 --> 00:10:03.279 There's like, I gotta choose my adventure by following this thought, this thought, this thought, and this thought. 00:10:03.440 --> 00:10:09.919 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. 00:10:10.080 --> 00:10:15.519 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. 00:10:15.679 --> 00:10:22.080 So that's where I think slide work needs to be curated and bespoke upon the needs of whoever you're using it for. 00:10:22.320 --> 00:10:29.840 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? 00:10:30.000 --> 00:10:30.559 That's one thing. 00:10:30.720 --> 00:10:46.080 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. 00:10:46.320 --> 00:10:46.639 Yeah. 00:10:46.799 --> 00:10:51.840 Well, I don't know about a quarter of the cost, but maybe let's use this example from Canon Deuce. 00:10:52.080 --> 00:10:58.240 So when we are finding exploring new supply bases, right, there's three things that I really kind of thought about. 00:10:58.399 --> 00:11:06.799 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. 00:11:07.039 --> 00:11:09.519 Number one is who do else do they work with? 00:11:09.679 --> 00:11:16.720 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. 00:11:16.799 --> 00:11:16.960 Yeah. 00:11:17.279 --> 00:11:20.799 If we're not working with a bunch of these other folks, then let's not waste our time. 00:11:20.960 --> 00:11:29.759 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. 00:11:29.840 --> 00:11:32.480 And without visiting the factory, you don't know. 00:11:32.559 --> 00:11:36.480 So one of the things I put in place is let's understand what other brands are working with, right? 00:11:36.639 --> 00:11:42.000 Let's understand also what type of product portfolio they're working with those other brands without breaking confidentiality, right? 00:11:42.159 --> 00:11:47.600 Because if there's a match on those two aspects, then high reasonable that they're gonna be a match for you. 00:11:47.759 --> 00:11:53.679 And number three, of course, like obviously, you know, their their quality, their competence, all the kind of things that you would normally get. 00:11:53.759 --> 00:11:56.080 But I focus on that first as the strongest filter. 00:11:56.320 --> 00:12:12.320 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. 00:12:12.639 --> 00:12:18.159 And can you dip it typically what's the best source of information to understand who else's supplier is working with? 00:12:18.320 --> 00:12:21.679 Is it just to ask them directly and how often do you think it's accurate? 00:12:21.919 --> 00:12:24.240 Do they kind of goose the numbers up? 00:12:24.320 --> 00:12:26.399 Uh, do you then go check with those customers? 00:12:26.559 --> 00:12:29.440 Like and real practical, like what's the best way to figure out? 00:12:29.600 --> 00:12:30.720 And I love this idea, by the way. 00:12:30.879 --> 00:12:36.399 If they are supplying a high caliber customer, they'll probably be a high caliber supplier. 00:12:36.799 --> 00:12:42.879 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. 00:12:43.279 --> 00:12:46.080 That's when you can tell what's really happening because you can see the products. 00:12:46.320 --> 00:12:50.480 Because to your point, a supplier could have worked with all these brands five years ago. 00:12:50.639 --> 00:12:50.799 Right. 00:12:50.960 --> 00:12:51.759 They're not lying. 00:12:51.919 --> 00:12:57.279 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? 00:12:57.440 --> 00:13:00.960 Where within the realm of you know not breaking confidentiality. 00:13:01.039 --> 00:13:11.279 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? 00:13:11.360 --> 00:13:14.480 Because there's only so many great suppliers that are well known. 00:13:14.559 --> 00:13:16.080 So you have to kind of build that reputation. 00:13:16.159 --> 00:13:22.559 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. 00:13:22.720 --> 00:13:29.679 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. 00:13:29.759 --> 00:13:31.519 So you're taking somebody's word for it? 00:13:31.600 --> 00:13:32.720 Like, how much can you validate? 00:13:33.039 --> 00:13:34.559 Why can't consultants do that work? 00:13:34.639 --> 00:13:41.519 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? 00:13:41.679 --> 00:13:44.480 Is there some reason why they can't go and fly to it? 00:13:47.519 --> 00:13:54.559 The projects for the from consultants do feel they are they're high value, high cost engagements very

often. 00:13:54.639 --> 00:14:04.240 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. 00:14:04.559 --> 00:14:09.600 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? 00:14:09.679 --> 00:14:09.840 Right. 00:14:09.919 --> 00:14:11.200 So you have to go more practically. 00:14:11.279 --> 00:14:21.919 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. 00:14:22.000 --> 00:14:24.799 They're not gonna have a lot of buffer to fly people. 00:14:24.879 --> 00:14:35.919 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. 00:14:36.000 --> 00:14:42.159 Uh, but imagine like you're not gonna have a dedicated SME like myself 100% to one project or another project, right? 00:14:42.240 --> 00:14:45.679 It's gonna be costly for me to go visit the world with a client. 00:14:45.840 --> 00:14:50.960 So it's trade-offs, but that's where you have to find the right consultant firms who actually have that experience space. 00:14:51.120 --> 00:14:55.120 And to my earlier point, if they're industry hires, they come with that. 00:14:55.360 --> 00:14:56.240 Yes, of course. 00:14:56.480 --> 00:15:30.240 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. 00:15:30.399 --> 00:15:34.320 But yeah, like a broker, they're charging overhead on top of that, right? 00:15:34.480 --> 00:15:38.799 And with a broker, what they're suggested for you could be the same as somebody else. 00:15:38.879 --> 00:15:51.519 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. 00:15:51.600 --> 00:15:52.879 So, but you have to pay for that. 00:15:53.200 --> 00:15:53.600 Of course. 00:15:53.759 --> 00:15:57.039 And I guess what about the uh certification groups? 00:15:57.200 --> 00:16:16.240 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? 00:16:16.399 --> 00:16:20.240 Is that a is that a must-do when you're when you're evaluating new suppliers? 00:16:20.559 --> 00:16:26.159 That's a deep question because I used to I used to use that as part of my audits for a lot of suppliers. 00:16:26.320 --> 00:16:28.320 So let me give you an analogy. 00:16:28.559 --> 00:16:30.159 Okay, it's like an engineering degree. 00:16:30.320 --> 00:16:33.279 So you have a hundred engineers, they all have an engineering degree. 00:16:33.360 --> 00:16:35.440 How would you say that one engineer is better than another? 00:16:35.600 --> 00:16:39.120 Because it's so dependent upon the scope, so dependent upon that discipline. 00:16:39.279 --> 00:16:44.960 So for ISO, think about ISO, there's no standard in terms of the breadth of that company. 00:16:45.120 --> 00:16:49.440 So if that company has one little process and they document it, you're ISO certified, right? 00:16:49.519 --> 00:16:52.639 It doesn't speak to saying, oh, can they do 10 different types of products? 00:16:52.799 --> 00:16:54.000 Do they do designs? 00:16:54.080 --> 00:16:59.679 So is the whole thing about ISO, as long as they document what they do, they're ISO because they've documented it. 00:16:59.759 --> 00:17:02.080 But it doesn't talk to the breadth and the component that they have. 00:17:02.399 --> 00:17:02.879 Interesting. 00:17:03.120 --> 00:17:08.000 Are there other certifications beyond ISO that you think do speak to this a little bit more directly? 00:17:08.160 --> 00:17:13.839 Or is there no because I imagine the certification would be, could be like a proxy for the on-site visit. 00:17:13.920 --> 00:17:34.240 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. 00:17:34.400 --> 00:17:39.119 Like, you know, is there is there something beyond ISO that like maybe SAE standards or something? 00:17:39.200 --> 00:17:42.880 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