with Aaron Prather
In this episode, Tee Ganbold sits down with Aaron Prather, Senior Advisor for the Technology Research and Planning Team at FedEx Express, to talk about how to set your people (customers and teammates) up for success in order for your organization to remain competitive and adopt automation.
Topics in this conversation include:
Automating The Chain bridges the learning gap between business executives and their technical counterparts. In each episode, we learn from CTOs and experts in industrial automation as they explain their technology in an accessible way. For more information, or to subscribe, please visit https://www.automatingthechain.com/.
Tee Ganbold 0:10
Welcome to Automating The Chain, the weekly podcast and webinar specifically engineered to support and educate executives as they explore the potential of industrial automation. Each week we sit down with an executive leader or their technical counterpart of an international organization to discuss how they plan to leverage industrial automation to advance their business, who also have startups focused on automating the supply chain, explain the technology in an accessible way. Experts in the field will color in historical and current case studies. Without further ado, let’s get into the show.
Thank you so much for coming on Automating The Chain. Let me just start off by introducing you. You’re the senior advisor for the technology research and planning team at FedEx Express. You have been at FedEx for an overwhelming 25 years. I don’t think I’ve met anyone who’s been at a company for over 25 years. I don’t want to give away my age, but I wasn’t born that long ago. Welcome to Automating The Chain. I’m really grateful to have you on. Can you tell us a little bit about yourself, what you’re doing at FedEx, your team, and why you guys exist as a team within FedEx?
Aaron Prather 1:44
Thank you, Tee Ganbold. As you stated, I started here 25 years ago. I was actually offloading trucks while still going to university. I definitely started on the ground floor and have worked numerous jobs here at FedEx. A couple years ago, I joined the technology research and planning team. I am the Senior Advisor for the team, which means I set strategy, I look at planning, I do forecasting, and I try and set the stage for the new technologies the team is going to go after. We are the tip of the spear when it comes to new technologies here at FedEx Express. We take new technologies, we run them through their paces and see if they’re ready to enter the FedEx enterprise network. If they are, we then work with the team that will own it for the rest of its life, and then we move on to the next project. It’s a great job to have. I get to work with great folks and get to see so many great new technologies. It’s really a dream job.
Tee Ganbold 2:44
FedEx is in the news every day. It’s obviously a company we all use on a daily basis, so it’s a household name. Coming from the enterprise, data analytics, and technology world from a marketing perspective, I came across your name multiple times in the supply chain industry. You’re known as an evangelist for FedEx within and outside. Can you tell us how you got this evangelist role and how it came about?
Aaron Prather 3:27
As I said, with our group being the tip of the spear, we get to play with so many new technologies. For us to be successful, we need to find those new technologies and advocate for them because some of these are brand new technologies that are just being birthed by the industry. With FedEx being that big gorilla in the room, to say the least, we can help push those technologies to the forefront because, when we start using them, everyone wants to start using them. Maybe we won’t use them right away, but we can at least be that advocate saying “this is something great, it just needs to get off the ground.” If we’re not the one that can fully get it off the ground, we can still advocate for it and help a smaller or medium-sized enterprise say, “Hey, FedEx really likes this, I should pay attention. And oh, by the way, I can start using that technology right now.” What we sometimes need when it comes to these brand new technologies in the supply chain are those small and medium-sized enterprises to be the first ones to start using it and giving that ground motion to get moving because, as they build those deployments, they build their credibility. They grow their teams and, by the time they’re getting that big, that’s when a company like FedEx or a Fortune 500 company can start working with them because they’ve established themselves. That’s where I always say I’m an advocate and evangelist for this kind of stuff because it at least gets it moving into the enterprise.
Tee Ganbold 5:10
That’s incredibly helpful. Anyone who’s listening is probably thinking, okay, you’ve got FedEx and you’re an evangelist for FedEx, but how are you guys adopting robotics and automation within FedEx? What are you adopting and how are you guys leveraging these technologies and automation?
Aaron Prather 5:35
We’re on both sides, the software and the hardware side. On the hardware side, we’re very much deploying robotics into our systems. We’re one of the companies that have partnered with drone companies to make the last mile delivery. On the software side, we’re very heavy on Blockchain because our customers need to see their packages, not just when they’re in our network, as they enter, leave the factory, and go into a warehouse that FedEx may or may not control. As the package moves into the FedEx network of express or ground or freight, customers need to see that trackability all the way through the system and after when we hand it off to another warehouse or customer. You want to establish the rest of that chain—especially with what great things Blockchain gives to customers now—so that if the story of how a part got to a customer needs to be told later down the road, you’re able to track it all the way back through the supply chain and find out if there was something that changed. A great way of looking at this is like with the vaccine distributions. There is a lot of technology going into that from them leaving the floors of Pfizer and Merck and Johnson & Johnson, moving through the network, and all the way into customers’ arms. We have cold chain facilities. Not a lot of folks talked about cold chain logistics two years ago. They’re really big right now because of vaccines and I think they’re going to be big going forward with numerous other products. Then there’s sensor-based logistics, which my team works on, of actually being able to track these packages beyond the barcode, as we like to say, of being able to actually know exactly where that package is every 30 minutes. It can be on a truck or it can be on a plane or at someone’s location already. Then there’s also monitoring if it’s staying cold, especially for vaccines like the Madonna and the Pfizer vaccine that need to be kept cold at all times. We’re able to do that through sensors in the package. Our founder Mr. Fred Smith, who founded FedEx back in 1971, realized that data is becoming so critical to our customers it’s almost more valuable than the package itself. This is some of the great stuff we get to work on here at FedEx with my team, from robotics to Blockchain to sensor wear, and I love doing it. I look forward to the next technology around the bend.
Tee Ganbold 8:18
I share your enthusiasm. I worked with the co-founder of Aetherium and helped the European Commission understand Blockchain. It is so fascinating that you’re working with it on a daily basis, and everyone can see the value of sensors. The team that works with IoT is now the most popular guy or gal in the room now. On that note, let’s move to how automation does not and cannot work without people. Robots prevent some people from doing what you refer to in a lot of your articles as the three Ds: dull, dirty, dangerous jobs. Robots do these tasks to allow people to focus on higher-value activities, so what kind of investments are you and your team making to make sure that your workforce and your customers are well prepared?
Aaron Prather 9:16
I’ve always said that if you’re going to be an advocate for technology, you first need to be an advocate for people. When it comes to introducing new technology—regardless if it’s in the four walls of your business, or outside of the four walls of the business—you have to take the people aspect of “how’s that technology going to impact them?” How do we plan for that internally? Before we even deploy a lot of our technologies, we get all the key people and stakeholders on board. That can be anyone from IT, to engineering, to mechanics, to the guy actually touching the package. We get their buy, make sure the technology is actually needed, and then we make sure they fully understand it. Then—as you roll it out and you roll out the training programs around it and make sure all the employees understand how they’re going to use it—if you already had that buy-in within the team early on, the rollout becomes so much easier because the people bought in. They might not have even touched the technology beforehand, so having that buy-in is critical to those kinds of successes internally. Externally, if you’re going to deploy a technology that your customers are going to use, you have to think about what we like to call “zero credit hour training.” It needs to be so seamless to them they don’t have to take a training class, per se. It should come naturally, like when we rolled out sensor-based logistics. That involves a customer putting that chip onto the package. That has to be a very simple process for them to make that association. “This is my package with the vaccines and I need to put this sensor on it. This is what I do.” It has to be short and simple. Think through that process of zero credit hours. The process not being hard for your external customers to do leads them to buy it for them. Make the process as simple as possible.
Tee Ganbold 11:21
From a customer perspective, you’re making sure it’s seamless. From an internal perspective, do you have a large product team? Immediately, my startup tech brain says, “How many product managers do you have to make sure that process is as seamless as possible for your customers?” How many technical folks do you have now at FedEx? What is the makeup of your technical organization within FedEx?
Aaron Prather 11:52
The magic sauce around my team is we’re not a big team. My immediate team is about a dozen people and we have the technical skill sets. We know this technology inside and out. You have to have that to be on my team. You also need to know the layout of our company. You need to know who all those key players are. Actually, I think that’s where my team’s biggest success is: we know the rest of the enterprise. I have a diverse team. I have guys that started their careers in IT. I have some guys that started their careers as mechanics, but they know everything about our vehicles now. They’re on our team. We are sort of a rogue band. Why is this group of Misfit Toys put together? Because we know all these different groups. As a new technology rolls out, we know exactly where to go in this huge bureaucracy of a company. FedEx has 600,000+ people around the globe and my group of 12 people has to be able to figure out who the key players are that we need to bring in on a technology. That’s our superpower when you think about it. It’s not our technical skill, even though that is very high on my team. We talked about how I’ve been with the company for 25 years, but I’m still middle of the pack when it comes to my team and experience level within the company. This is why we always stress that folks should be on LinkedIn: to help build your network of experts. Sometimes you need that within your own company and sometimes you need to be able to reach outside of your own company to find the experts that might have a great skill set. That’s the thing I really like about social networking like LinkedIn because I know a lot of key folks and I can pick up the phone and call up to pick their brain saying, “Hey, what do you think about this? Did your company do something like this as well?” That helps build the chain of experts that are out there.
Tee Ganbold 14:13
I love that one of the skills you must have is being the guy or gal that knows everyone in the organization. Do you make sure they call everyone on zoom in the first week?
Aaron Prather 14:27
We have had some very big Zoom calls within the company. It is COVID and we can’t meet face-to-face, but we’re a global company, so we had to use tools like Zoom and all that before COVID to get folks on it. That’s the new norm now. Coming out of COVID, if you were not a Zoom expert or a Team’s expert before, you are now. Leverage that new skill set to your advantage as we exit COVID and can meet face-to-face. If you want to grow your network beyond your city, beyond your own country,—which is needed now—use these new tools that you learn during the pandemic. Utilize them to the fullest advantage, internally to your team if you’re a big company like FedEx, but also leverage your external network because there are some great folks out there that have some great ideas. Have a virtual coffee with them and pick their brain because that’s how we move the industries we’re involved in further. I’ve learned so many things from folks outside the logistics and warehousing industry. I have a lot of followers on LinkedIn that are in agriculture and manufacturing, but that shared knowledge can go a long way regardless of what industry you’re in. Take some of these new skills that you learned during the pandemic and apply them post-pandemic.
Tee Ganbold 16:06
This leads me to my next question, which is what has been driving automation within FedEx? And please, please, please, don’t say COVID. It’s always COVID.
Aaron Prather 16:22
No, actually, what was interesting is that some of these initiatives were underway prior to the pandemic. We had a lot of plans for our Pick And Place robots in our server facility prior to this because we were already starting to see two major lines forming. One was that eCommerce was going up already before COVID and the workforce was shrinking as baby boomers are leaving the workforce. They’re still customers, they’re still buying stuff, they’re just not working and they’re no longer available. We were seeing this pre-COVID and actually, we were projecting a lot of things happening two, three, four years out that COVID actually accelerated to the modern point, so I’m actually happy we were planning all this. We already had so many things in the work. COVID accelerated our timelines, but we knew what we were wanting to do already. That’s where COVID changed the supply chain: it sped up the timeline. Now going forward, we’re going to have more eCommerce, so our systems have to be able to handle that. We can buy more plants, we can buy more trucks. People wise, however, we don’t have access to a lot of people. The populations are shrinking around the world. We’re already seeing certain countries like Japan that are already having negative population declines, and that’s just going to keep happening all over the world, so we need to automate both with robotics in the physical world and also through software to make things easier. AI that can help us predict our network better. We’ve looked at how we can better plan out our networks, not just how to handle volume flows around the globe. What happens if you have a major storm as we did here in the United States a couple of weeks ago that shut down the middle part of the country? Having AI and machine learning templates to use to run simulation after simulation after simulation, we could reroute our planes and our trucks around that and keep the packages flowing, an influx that’s never going to stop. COVID accelerated the timeline, that’s all I’m going to say. Hopefully, you had some plans before that. If you didn’t, you have to have plans now because post-COVID is a new world of eCommerce and shrinking workforces.
Tee Ganbold 19:01
The big elephant in the room is the Amazon-nification of the entire global supply chain. If you’re not part of the Amazon network, you have to be part of another network. This network is now made up of all the other SMEs in the world that are having to quickly upgrade, quickly automate different parts of the supply chain. This is why Automating The Chain exists, by the way, the idea that everyone else needs to work together in a global community, needs to find each other to deliver their goods efficiently. In turn, I’m curious as to what sort of software and hardware companies you are able to talk about. Obviously, the ones that are public that you think are driving some of the automation within the supply chain of FedEx for your customers.
Aaron Prather 19:57
We’re great partners with Microsoft. We have a great partnership with them that was actually announced during the pandemic. That was in the works for a long time. Microsoft is a big company, we’re a big company. Something that is critical when it comes to these technologies is FedEx can work with other big companies well because we’re sort of on that scale of equals. That’s not to say we don’t have a place for the smaller and medium companies, the startups that are out there, but this goes back to my earlier point: sometimes for those smaller and medium enterprises, it’s getting to working with a FedEx on a regular basis, a bigger company. You sort of need to prove yourself. A long time ago, I was an official for a small hockey team that was considered “a league,” so I got to see all these new players coming in. I could tell right away which ones were going to move up and which ones were going to go home. The goal was always to move up, but you always needed to develop your skills, you needed to build out and make sure you are ready for the next level. For a lot of these smaller and medium companies—regardless if it’s robotics, or it’s AI, or it’s other specialties within the supply chain—they need to be able to prove themselves and get a foothold, get those deployments to show that their team is ready to take on a FedEx because what you don’t want is, for lack of a better term, an “Oprah effect.” We hear about this. If Oprah recommends your product, you’re about to have a lot of sales. That might be great if you’re an author because your publisher can crank out the books. However, if you’re a small business that makes a great food, chocolate, beer,—something—and Oprah recommends you, you’re about to get slammed. So it’s great that Oprah recommended you, but are you ready for what Oprah is about to unleash on you? So the same thing: if you’re a small business—if you’re 10, 20 people—are you ready to take on a 600,000 employee company like FedEx? Are you going to be able to hold into the demands that we are going to throw at you? As I said, my team is only 12 people, but I have the ability to go get a lot of other folks that you’re going to have to answer to in some kind of proof-of-concept or early stage of development. This is why I always stress: if you’re small, work, get, build those deployments. Get those skills developed. Build out your team. Then come talk to us.
Tee Ganbold 22:53
In terms of the companies that you do work with, when are the proof of concepts successful with you? Is it when the relationship has been developing for a long time? When they’ve got multiple, as you said, case studies under their belt and deployments? When is it a time when you can start working together?
Aaron Prather 23:14
Everyone’s different. There is no magic sauce. I wish I could say there is an equation that we use, but a lot of it is looking at the number of deployments you have. How big is your team? What are your technical competencies? What are your financials? That is us doing our due diligence for the company. Do you even have the financial backing to last with us? Then, as we move into a proof of concept stage, again, each one’s a little special. I’ve done proof of concepts that have lasted one month and it works! You guys are moving on. You’re being deployed. Some I’ve had last years, so it is a little bit different. It depends on the technology, it depends on the maturity of your team, the maturity of your financials, and there’s still that human element that we have to be able to trust each other to make this relationship work. We will get those questions from our leadership. “What are your personal thoughts on this, Aaron?” That could be me, it could be anyone else on my team. “Do you feel comfortable that this company is ready to move on?” We’ll give our honest assessments. As I said, we’re the tip of the spear. We work with these teams on a daily basis. This also helps make it successful because we are that single point of contact, even though we might have numerous other departments involved, we’re that single point that helps get them through the bureaucracy of FedEx. We are the champion for that startup or that smaller business if we see them as ready to come into the FedEx ecosystem.
Tee Ganbold 25:12
Are you “build” or “buy”? I don’t want to be so explicit. I know one of your competitors is very much “build” internally. Are you “build” or “buy”?
Aaron Prather 25:23
We’re a little bit of both. We buy our aircraft and trucks because those companies do those kinds of things. We build a lot of our own software, so I would say on the hardware side we’re very much more on the buy-side because we don’t want to build a lot. We don’t want to build our own aircraft. We don’t want to build our own trucks. We just want to build from the experts that are making that. Software, we’re more on our side because we know what we need when it comes to our unique place within the supply chain and what our customers are requesting of us. We can move faster in that space on our own. That’s not to say we don’t engage on both sides. Hardware, very much buy. Software, we’re more on the build side.
Tee Ganbold 26:17
Got it. Thank you. Now moving on to customers. Customers are the lifeline of every enterprise. From FedEx’s perspective, what are they asking for from an automation perspective? Have you had customers turn to you and say, “Can this process be a little bit more efficient?” Because we’re all using you today, how much feedback are you getting from your customers? What are they asking for?
Aaron Prather 26:47
There are two things they’re asking: (a) they would like their stuff faster, so how do we add things within the four walls of FedEx that speed up that process? They don’t care how we get that done, they just want it done and they don’t want to pay a lot for it. No one does, so how do we make those kinds of enhancements to our systems economically viable internally? Again, they don’t care how we’re doing it. All they care about is if it’s showing up at their front door, at their office on time, when they need it. When it comes to their data around that, they want it as simple as can be. They want to be able to go on the FedEx website, put in their tracking number, and find everything they want at that time. They want their bills (those are our larger customers for who we do huge shipments). They want it streamlined as best as possible. They want it as easy and simple as possible to use. Where there might be an intersection between those two is when we might be on a customer site, especially for our large shippers where they want us there but they don’t want us there kind of stuff. They want us to help them get stuff picked off off their dock faster, but they don’t want us taking up any of their space. That’s where my team works on some cutting-edge technologies to help them address that so they can get stuff picked up faster and dropped off faster and that can be a nice, seamless intersection. There’s a lot of interesting things in that middle play of how we can introduce software and hardware elements that allow those types of customers to speed up because at the end, for those types of customers, they’re selling to you and me at home or to our businesses so that goes back to the original thing. We want those things faster so, if we do have to integrate with the customer, that’s where the hardware and software parts might be more of “what makes sense for you if we’re going to put something on your dock to speed that up?”
Tee Ganbold 29:05
I really appreciate that. I give so much to your company. As a customer—I’m asking from a growth perspective, the frontier markets—the rest of the world is growing so rapidly. Want goes as quickly as everyone else and goods from the other side of the world. Where are your growth markets and, if anyone is listening, where should they be focusing their attention? Where is FedEx going to be going next?
Aaron Prather 29:33
During this pandemic, we have been able to highlight our Life Sciences Division. That group was always here. We actually built our first cold chain facility here in Memphis numerous years ago and thank God we invested in that years ago because it came to the forefront with the pandemic. The cold chain is going to continue to grow, not just for pharmaceuticals and all that, but this now allows us to move foods, flowers, any kind of shipment that needs to have a temperature-controlled environment through its travel through the chain. We have those capabilities built-in now. We have the tracking technology, the sensor base logistics to support that, so that’s going to be an area we’re going to focus on as a global look because we’re still buying stuff globally, be that medicines or foods or other types of products. That’s where the FedEx global chain that touches 99% of the world’s economy is going to come into play. On the flip side, you now have localization: you don’t want to stretch your supply chain too broadly if you can because of events like the pandemic. For us, that means having more operations built into more areas that can help speed up those deliveries. Amazon can deliver goods very quickly because they have distribution centers almost everywhere in the world now. It’s almost the McDonald’s model. You’re never so far away from an Amazon distribution center as you’d think. Other customers are going to duplicate that and they’re going to team up with companies like FedEx, UPS, and DHL to be able to transport those goods locally, as quickly as possible. There are newer startups in that space as well but, when it comes to scale, it’s going to be a lot of the bigger players who are going to have the strength to do that. We’re going to be building a lot of new facilities over the coming years so we can be as close to customers as possible so we can tap into localized distribution networks easier and not use our aircraft as much, but use our ground networks more.
Tee Ganbold 32:01
Thank you for that. Finally, big picture future, what does that look like? What are you excited about in the global supply chain? Could be in the next year, can be in five years, it can be by 2030. What are you most excited about?
Aaron Prather 32:19
Where I’m most excited is—even though there’s a lot of talk about globalization, maybe taking a few steps back—the globe is still always going to be at your fingertips. If you want to order something from anywhere in the world, we’re going to be able to do that for you. As I stated earlier, FedEx touches 99% of the global economies. I’m hoping we get to 100% one day. If there is something you want to buy in the world, you will be able to find it quickly with several technology searches and then a company like FedEx will be able to get it to you as quickly as possible with geographic travel time limits. The globe is still at your fingertips. If you want to support local businesses and those small/medium enterprises, maybe you go on a trip after COVID (finally) and you discover this great chocolate shop on one of your trips and you find out they deliver. When you go home, if you still want to get that chocolate, you can go on their website, place an order, and FedEx will have it to your house in a day or two days, right away and you will know everything about that trip along the way. Who knows, you could be able to find out who is making chocolates from a certain place in South America and you want to support that local farmer. You could support how that farmer’s chocolate goes to that chocolatier here and then to your house via FedEx.
Tee Ganbold 34:14
What’s amazing about web traceability, the focus on traceability and getting the right goods to the right place at the right time, people are going to buy directly from live streaming in the future. It could be on Tick Tock and they say “I want this from this place” and there’s going to be integration with Shopify and FedEx and others going to streamline. I’m really, really excited Aaron to have spent time with you today. I think we can speak all day. If we were in the pub, this would be a very long time. I’m really pleased to hear about your focus on educating your people, your entire team at FedEx, the 600,000 people, and also your customers. My hat’s off to you. Thank you very much for coming on Automating The Chain. I am sure you’ll be back on very soon.
Aaron Prather 35:25
Thank you, Tee Ganbold.
Tee Ganbold 35:27
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