Supply Chain in a COVID World

Andre Persaud

Vice President of Retail at Rite Aid

Learning Objectives

Join us for an Executive Interview with the Executive VP of Rite Aid. We will discuss what shifts Andre Persaud has seen in the supply chain and how that will affect business in the supply chain and with suppliers going forward.


Key Takeaways:



  • How do you see relationships with suppliers moving forward?

  • What norms will be changed moving forward in supply chain?

  • What are some of the major shifts that need to occur to improve supply chain readiness?

  • What concerns you on the go forward economics of supply chain?

  • How would you describe the last year in supply chain?


"I think the first thing is, what this pandemic taught us is meeting consumers' needs outweighs working capital needs. "

Andre Persaud

Vice President of Retail at Rite Aid

Transcript

Britt Erler

Hello, everyone. Welcome to the SCOPE Supply Chain Virtual Summit hosted on Quartz Network. My name is Britt Erler, QN Executive Correspondent. Thank you so much for joining us. Today’s executive interview will focus on the future of Supply Chain and how the industry has changed due to the COVID 19 pandemic. With more insights on this topic and advice for other Supply Chain leaders, I would like to welcome our guest speaker here with us today, Andre Persaud, Executive Vice President of Retail at Rite Aid. Welcome.


Andre Persaud

Thanks, Britt. Glad to be here with you. Happy New Year to everyone.


Britt Erler

Happy New Year. Absolute pleasure to have you here as well. I want to kick off and start by having you give us a little explanation about your role at Rite Aid, and how it’s changed due to the pandemic.


Andre Persaud

Let’s start with the role. My official title is EVP of retail, what does that mean? It means that I have responsibility across the organization, anything retail, which includes supply chain stores, loss prevention, facilities, etc. How the role has changed? That’s a pretty interesting question because I joined Rite Aid a month before the pandemic started. So apart from getting to new company, make building those relationships, and jumping in, I think there’s three things that I would say. One is, from a more of a personal perspective, I have noticed a deep appreciation of what our teams have done both in our supply chain and in our stores. It gives you a completely new perspective of what it means to take care of consumers and customers. As far as how the role has changed., I think it’s two things. One is, you have to really throw out the playbook that you were coming in to do and they’re really pivot to really understand what do you need to do to move the business forward. Nimbleness was two. I think it’s also about just having an understanding that knowing when to push and when to pull. It’s such a difficult year as far as all the extraneous circumstances on the organization. In any industry, just having that fine balance is really important.


Britt Erler

I couldn’t agree more. I think that’s something a lot of industries and a lot of other departments across the board are experiencing as well. Now, I want to dive in and really talk about supplier relationships, because I know that’s an area that’s gotten hit the hardest. How do you see relationships with suppliers moving forward?


Andre Persaud

It’s a great question. I think there’s a couple things. One is that, it really means that you really do have to shift to what I would call true partnerships. It really becomes less about a financial first discussion, more about nimbleness together. Also, contrary to maybe how no folks who may have looked at in the past, it’s not about narrowing your suppliers, it’s probably about broadening your suppliers just because of the need for nimbleness. Their thing, which I believe is changing, is cost sharing. To help that nimbleness, how do you have more cost sharing, which really leads to the big seawork. Collaboration and being a lot more collaborative with your suppliers moving forward.


Britt Erler

Absolutely. As far as the Supply Chain industry as a whole, what norms have you seen change? And what types of trends do you see emerging?


Andre Persaud

Well, I think the first thing is, what this pandemic taught us is meeting consumers needs outweighs working capital needs. What that means is that, as you think about going forth, how do you’re going to make sure that you are prepared to meet consumers needs because they change so quickly, which comes back to this whole concept of nimbleness and strongly supported by data and how quickly trends shift. In our industry, for example, and this is across the industry, we’re not agnostic to this at all, is that more recently, with folks social distancing and staying at home, we’ve seen a significant shift is the consumption of cough and cold products, for example. Historically, how you flow that through your supply chain, how do you partner with your suppliers on that, that’s changed. Now, you have to really think about that differently. That’s just one example of many that has shifted, but the broader part here is that certainly the pandemic has identified pain points. Ever wonder [unintelligible] supply chain? Some that people knew and just were wanting to work through, and some that they didn’t know. So it’s really brought forth the need to move supply chain forth with pace, and nimbleness [inaudible] forth.


Britt Erler

Definitely. No one can be 100% prepared for a pandemic such as this, or any major kind of world change, but there are steps that companies can take to get ready, or to at least be prepared and strategies they can have in place. What are some shifts that you believe need to happen specifically in the supply chain industry to increase readiness?


Andre Persaud

I think the first thing is this continued digitalization. That’s everything from how do you get the last mile there much more quicker right through to how to do more in channel fulfillment through your your distribution centers. The harder part is anticipating unintended consequences. Today, I think everyone in supply chain is living with this backlog of freight coming out of Asia right now, which has meant that your costs have doubled. So fast forward, what’s the next unintended consequence that comes out of this? So it’s really about really anticipating those. The other thing, I believe, is going to be having much broader contingency planning in place. Not necessarily what happens when a building shuts down, but more broadly about where you bring in product from, how much you’re going to have, where you’re going to—really think about placing big bets going forth. Some of that’s gonna be intuitive, but I think every organization has to really think through, what are they going to stand for, and where are these big bets going to be placed? Lastly, I think flexibility really outweighs everything in this process. You have to be able to be flexible moving forward.


Britt Erler

Flexible and being able to adapt quickly. Now, as far as everything going digital, as you mentioned, and this new virtual world we live in, are there certain technology disruptors within supply chain that you think need immediate attention?


Andre Persaud

It’s a great question. Just like every other part of technology, the traditional route of building infrastructure, CapEx, and technology investments have shifted significantly. You’re getting a lot more niche players, more startups that are coming in with really solutions that are really weak, you can wrap your head around real quickly. Maybe, in the past, where something may have taken a year to stand up and get implemented, how do you get that cycle down to a couple of months on a test and learn and really moving forth? In a modular perspective, that’s one. Two, is is this ability to really think that from the shifts, where do I go next with this? Meaning, how do I continue to think about the integrating the business across all assets digitally?


Britt Erler

Right. I want to take a shift as well and talk about economics of supply chain. Do you have a lot of concerns there?


Andre Persaud

I do. I think every company is looked at supply chain differently, everything from it’s a cost center right through to a profit center. Every company is also prioritized or deprioritize supply chain in their history. From my perspective, there’s a significant need for technology and CapEx investments moving forth. The organization’s have placed those bets five years ago, clearly have won more than others in the last year—that’s very evident. I think part of this though, is that the traditional IRR modeling of return probably gets thrown out the window, because some of these investments now really become table stakes. So it’s not that it’s nice to have, it’s nice to have. Simplest example I can think about is, you know you don’t think twice about putting your brake system into a car—it’s a must to have. I think that’s what some of these investments means, which also means that there is no time more than the current, that supply chain needs strong partnerships with their CFOs to really help bring this to light, bring this forward, and get the necessary CapEx to move supply chain forth to pace?


Britt Erler

How do you ensure that those strategies that you’re working with hand in hand with the CFO and other departments, how do you make sure they’re aligned to meet the business needs?


Andre Persaud

I think, like anything else, you have to demonstrate what this means for the organization over the next three to five years. More importantly, to me, it’s the other question—what happens if you don’t do it? What happens to the organization, if you don’t make these changes? So it’s helping, really model that out. Some of these big bets can have really big returns. So it’s a matter of prioritizing capital. It’s a matter of prioritizing where do we place these big bets. It’s a matter of really understanding that, without some of the stuff happening, five years from now, when something else happens within the industry or with the consumer, we, as a supply chain, for any organization needs to be ready to manage through that process.


Britt Erler

I couldn’t agree more. Now, we’ve seen a lot of shifts in the industry itself, and every company has experienced something different based on where they were at in the process when this pandemic hit. Talk to me a little bit about your experience last year with supply chain as a whole?


Andre Persaud

Let me start with saying that, I think supply chain in the last year are really the unsung heroes. The folks that have been working long hours, in our distribution centers, and every company’s distribution centers to get product to the retail outlets, it’s certainly there, they are the unsung heroes. The resilience that they’ve brought in this process. Ihink it’s also, based on my my earlier comments, it’s been a year of reckoning. It’s really to take a step back. For organizations, which have not necessarily hedged their bets on supply chain, is how they move forward there. It’s also exciting, in a weird way, because you really get supply chain to where it really needs to be in many organizations, which really says that you’re able to really demonstrate the value of supply chain in the overall organization in the system. I think, for the organizations to the last year that have been able to really be nimble and elevate their supply chain, have won more than others. Let me say that way. The last thing is this last year has really shown the importance of having those really strong supplier partnerships ongoing. So when you need something, it’s not that difficult to get something done—really working with them in concert to be as nimble as possible in this process.


Britt Erler

I really appreciate that you did find a silver lining in all of this by saying it’s exciting to see now where this industry is going. It’s forced a lot of companies to pivot and to excel in areas that they may not have done before if they weren’t forced to do so. It’s really pushing the industry forward, both virtually, with all the new technology we’re seeing. Also, as you mentioned, really making it so important to have the strong partnerships with suppliers, which many companies may not have focused on before. I really do see a lot of great aspects that will be coming forward in this industry, even though it was one of those industries that I think was probably hit the hardest. Now, in your opinion as a leader, what are some of the priorities that have changed for you, but also not just as a leader, but personally as well? Because I think that’s something that this pandemic was brought out. Even though we’re still in the workplace, we’re still in a professional setting, most of us are working from home. So our priorities are not just based in the office anymore.


Andre Persaud

I think, from my personal perspective, it’s spending more time in or distribution centers that maybe I would have historically spent, that’s one. Just being there thanking people. Two, really working with my head a supply chain to make sure that our three year roadmap, we can execute against that to do the things necessary to continue to be nimble. Then, three with our merchants is continuing to push towards these top to top supplier relationships to make sure that not only we are part of their solution, but we can help them through the solution also. think that that’s my three that I need to be really focused on going forth.


Britt Erler

What other recommendations, final pieces of advice do you have for other supply chain leaders moving forward?


Andre Persaud

Two things. One is that this year has really demonstrated the value of supply chain for many organizations. So I think everyone should really be proud of the work that they’ve done. For some, having a supply chain coming more front and center. Then two, building upon that is that how exciting Supply Chain can be, and should be for everyone also [inaudible].


Britt Erler

It is. It’s a crucial part of our life. I don’t think people maybe realized it or appreciated it until this pandemic hit, and they realize how big of a deal supply chain is in every aspect of the business. Fantastic advice, Andre. Thank you so much for being here and providing these insights. Hopefully, we’ll kick start some other companies that are just beginning that process and really stretch striving to make changes into 2021. Thank you to everyone that joined us here as well and tuned in to watch. If you have any final questions for Andre, there is a discussion board below. Please feel free to comment and ask any questions. I hope that everyone enjoys the rest of the summit. Please stay safe and stay healthy. Thank you so much.


Andre Persaud

Thanks, Britt. I appreciate it.


Britt Erler

Thank you.


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