But I generally think the decisions they are able able to
help us with will get them bigger and more useful.
I also do believe humans will still be there and will be
absolutely needed. Hello and welcome to the Retail
podcast. As part of our deep dives into
supply chain, following the Doctor Richard Wilding's
fantastic episode where we were talking about bimodal Zoomodal's
supply chain, I thought it would be interesting to take a look at
what one of the largest, oh, sorry, the largest retailer in
the, in the UK is doing and also one of the largest across the
globe. And I'm fortunate enough to be
joined by Doctor Oliver Wok from who is the CEO of Transcend,
wholly owned company of Tesco's. Is that right, Oliver?
That's right. And and do I refer to you as
Doctor? No, please go on.
I'm Oliver. OK, fantastic.
Well, welcome to the show, Oliver.
Your ex Amazon, you were, but you've been at Tesco's.
But maybe if you can just take us through your career, what's
LED you to this moment? And then we'll talk about
Transcend. Yeah, so thank you for having me
and really excited to be here. I spend most my, my working life
in this space, right? Start my background, this, you
know, in, in statistics and economics.
I, I got the, the, you know, the retail back when I started
working for Amazon and spent many, many years there in
fulfilment and supply chain. But then joining, you know,
Tesco in one of the the leaders in in grocery and grocery is
always regarded as the most, although the the most complex
operations in supply chain. And it's been a fantastic
journey within Tesco ever since I had multiple roles in here.
But my, you know, the the most excited 1 to date is the CEO of
Transcend. Transcend to say business.
We, we launched a little while back, we only, you know, talked
about it now since 2-3 months in the public, but we are offering
the the tried and tested solutions which Tesco has
developed over many years to other retailers in the world.
So when when you're talking about this, what's the lens that
you're using to talk about supply chain?
We like like to focus on on data on having really, really good
systems in place and, you know, having the best visibility you
possibly can on what is actually going on and supporting the
people in in the supply chain. Now, what do I mean by that?
Supply chains are alternatively operated by people and people
make decisions all the time. I am a great believer of
supporting those decisions with the right systems, with the
right tools. Take as much as those decisions
away to make, you know, remove the cognitive load and let you
know machines where that you know that's possible make make
those decisions for them. Quite often those are better
than many, many hundreds of thousands of individuals taking
certain decisions which are non coordinated.
Having the right data to support that decision making is critical
though. I am and the big believer that
if you have these things present, you can have a far more
standardised outcome, which ultimately we would for more
predictable supply chains, more predictable operations.
Then the results will come, the the accuracy will get better,
then the execution is better. And you know, it all starts with
data and having the great, great systems in place to to support
people. I got you.
And one of the things I've noticed is how obviously
different SAS providers, you know, whether it's your
fulfilment centre, whether it's picking from store, whether it's
the final mile or, or the OR even micro fulfilment centres.
Sometimes you see as a retailer, I'm challenged because I've got
15 different softwares that I'm running for each each component
of my supply chain. How, how does that?
How's that for Transcend app or what?
What is it? What's the secret that Tesco's
has cracked in that space? Tesco has been in this space for
so long that you know, we you know, we look at our online
operation. We our claim to fame is that the
first online order was placed in 1984, a lady called Jane
Snowball who placed a, a grocery shopping through the TV through,
you know, dial up version of the TV at that time, right.
So andtesco.com is, is online since 2000.
So it's, it's been pretty much near 1/4 of century that we've,
you know, been in this space, you know, with, with ever
growing volumes and the systems were never readily available for
us. It was of such critical
importance to have the right tool.
So we ended up developing many of these ourselves.
The moment something is at the core and it makes sense, we want
to own the, the logic and, and the software ourselves and the
systems solutions ourselves. And that over time has developed
into, you know, quite a, quite a extensive landscape of solution.
Tesco operates all over the, you know, the supply chain stores
online network. It's about putting, you know,
your, your, your very specific grocery knowledge and, and
taking it into your own hands. Grocery is very specific.
And if, if not the right tools are out there, then it was very
important to us to build it ourselves.
That then has, you know, LED us away from, you know, having such
patchwork of many, many different solutions and starting
to tie them more and more together, which is what we are
now quite proud about and and want to share with others.
What's top of mind right now? What are those big things that
are top of mind? I think most retailers have this
conundrum of growing further in a very, very competitive market
and Gross quite often comes from an online channel.
Online is a is here to stay. It's been growing, you know, in
most countries across the world. If you look at the UK, it's a
very, very prominent vocal market when it comes to to
online shopping and very predominant here.
How that is something you can and want to grow seems to be a,
you know, a headache because quite often the online
operations are not that easy. They're not very
straightforward, yeah, but they might not have the best customer
experience. They might not be very, you
know, cost efficient. And growing something like that
is a need, but something people don't want to do because it is
so challenged in so many ways. So for many people, I think the
question is how, how can you relieve those issues?
How can you make a much better customer experience?
How can you step change your cost base so that growing that
business is fun again? Because if you don't, other
people might, you know, take that online share and eventually
that might even hurt the, you know, the total growth of the
business. You know, the growth has got to
come from somewhere and getting it through the online channel is
usually one way forward and the predominant way forward at the
moment. So when you marry up, obviously
normally when I ask leaders, what do you want to do in your
business? Are you looking?
Obviously pre inflation, it was all about saving money, right?
That was like, because I, I sorry, it was about making money
before the inflation crisis or cost of living, I would say to
CEO, do you want to make money or save money?
They'll say, well, I'm not going to be famous for saving money.
I want to make money, right? I want to grow the business.
Then obviously inflation hit and everyone was like I need to find
another than 1215%. So efficiency sort of came up
in, in the ranks. Did you see them balanced in
terms of for example, I don't know last mile delivery, driving
efficiency in that or driving more better and shorter delivery
times? So Mike, because what you were
saying there, happy customers, more customers spend more
because obviously we're providing a better experience
than that. Where is it?
Is it, are they 5050? Are they?
You can definitely get both. I'm, I'm, I'm a firm believer
that if you get the efficiencies right and if you're never
satisfied with where you are and continuously improve your
systems, your processes, it will be the enabler to further
growth. And now how, how that's invested
depends on, on, on, on, on every single situation.
But, but broadly, you know, everything can be more efficient
and particularly in in the online space, there's huge
efficiency still to be had. Yeah.
And, and reinvesting at least some of this into your growth is
for sure the right thing to do. My worry is that if you don't go
after the growth, someone else will take it because it is a
highly, highly competitive market.
What's your opinion on fulfilment?
I just I'm just curious on your opinion in what what's better?
Do I allow picking from store or should I be looking as a as a
retail organisation building more of my dark stores or or my
fulfilment sensors? There is a place for all of
those things. The beauty of a dark story is
that they are close to the customers.
So having short lead times, same day or even faster is usually
only enabled at scale across the whole country.
If you utilise your stores, you have got other great benefits.
I mean the people already there, the inventory is already there.
But as you say, it's about how to use that and effectively so
you know that with labour cost, particularly labour
availability, you get the most out of that store.
Having the right tools to do that job, having the right
solutions can and will make your stores a great way to fulfil.
However, in larger urban areas and in big cities, having, you
know, perhaps a, you know, a stand alone facility, perhaps
even automated facility can absolutely make sense just
because of the sheer volume. Eventually you can overload a
store, I guess too much volume coming out of it.
Eventually you might end up not having enough labour to keep
picking manually from store. And then in those selected
cases, in those select locations, automating that
journey I think is absolutely the right thing to do.
However, you'll have to have enough volume to do it.
So for for a handful of orders. Usually the balance does not
stack up in order to to invest into the capital outlay you'll
need for some of these these solutions, you'll need a big
enough problem to to solve. Until then, a manual operation,
I think is the right thing to do, particularly when you talk
immediacy, right. So when you talk now, right, 30
minutes, 20 minutes utilising, you know, the smaller stores
which you know many retailers have got many of very, very
dispersed across the countries and and cities gives great
fulfilment points to deliver, you know, pick an order in 10
minutes, deliver it in 10 minutes, something which as you
know, a standalone single facility in a larger city could
never do. They're great for saying next
day volume in the vicinity. They are not great for
immediacy. That's why there's a place for
all of it. There is there has to be a
balance. For most retailers, having a
very, very efficient and in store operations step, changing
that is a good way forward into the growth until you're very
sure of your volumes and then you can start automating into
more centralised other facilities if needed.
Well, one of the things I've been super impressed by Tesco's
compared to, you know, I won't name the US sells food, but main
food is not its main business. It's a big box retailer.
Is the fact that out of stock at Tesco seems to be managed so
well, right? You're, you're fulfilling, I
don't know, like 1.3 million weekly orders online.
But when you go into store, yes, there there's always a there was
always that product that that may be out of stock.
I'm just curious in terms of Transcends, because you said
it's about the data, how much, how deep do you go into that
like in terms of shelf edge availability, is that like
another system you're, you are all about the logistics about
the, the, the products? Yeah, where does it start and
stop and the data outcomes? I'm a, I'm a great believer that
every, you know, system you have, let's say, to pick the
items. Yeah, has to be 100% embedded
into the store environment into into these operations.
So if your operational clock is not aligned right and you'll
start picking because before you've replenished, you know,
these are very easily avoidable, all guards.
So what we typically do is not only provide a software
solution, but to embed this solution into the stores in a
very, you know, purposeful way. So an, an operating clock is, is
one of them, right? Training for the colleagues is
another. And obviously then providing the
right data as a, as another very, very helpful tool to, to
make the store better. What we see is that stores with
an online operation usually are better performing stores as a
whole because they get better information from your online
customer, right. If an in store customer doesn't
find a certain product, they might not tell you about it.
Your online customer will. And as you get this information
because your picker can't pick the item, it is on to you.
How you manage that will provide all of this information and
ultimately the in store customer will have a better customer
experience, installs with an online inspiration because you
provide the store manager and the local team with more data.
How do you utilise that? What you make out of it and all
of that comes with it. Any you know the greatest
software in the world is never as good as it could be unless
you embedded properly into the environment, and that's where
all of these things come to line.
So then do you maybe I should have we should have qualified
this early on the conversation. So it's transcend then you're
looking at the strategy as well as like, you know, best practise
as well as technology, right? It's not just pureplay
technology then is that is that is that I understand that
correctly? That is right.
We can help with strategic thinking in this space and and
can consult retailers on on their journey and you know how
they want to develop over time. That includes 510 year plans.
That's going to be an investment plan that you know, that can be
bought packs. That can be all the things you
need to consider as you embark on this journey.
As much as we provide, you know, software solutions, hardware
solutions for micro fulfilment, right, and all these things
along the whole and all of that underpinned, where is
operational consulting. We'll train the people, we'll be
with you install, we hold the hand along the whole journey.
It is not just software by any means.
Tesco's has done such a fantastic job globally and you
know, is a beacon that people look to, especially in these
areas. What's that one metric for you
that's a sign of success? As you know, maybe looking back
in your old supply chain, what was the one thing that you
always try to achieve? Is this speed of delivery?
Is it is it a data point that people haven't thought about?
I'm just curious. Customer action CSAT stores What
is the sort of. Measures cumulatively, it's the
customer focus, right? You, you have to have a, you
know, and whether you measure an NPS, whether it a seat, whatever
number you're looking at, the customer satisfaction will be
what the, the most telling outcome of it or now there are
many leading and lagging indicators and all these things.
But alternatively, if your customers like what you do day
in day out, your business will grow.
And starting there with, you know, with a customer in mind,
working backwards through the proposition into the execution,
you know, every single day if the customer is happy, you can
manage the cost along the process, you have the right
tools to do the job, the growth will come.
What I'm curious about is a vision of the future over the
next five years with robotics. With so much different positive
technologies and solutions coming into the retail space,
what's your vision of the future if you were to paint it rather
than not? Not where will would be, but
what what the possibilities? What do you think?
We, we spoke at the beginning over supporting the individuals,
the humans in this process. And I think that is already
something we do quite well by supporting with the right
decision making so that the execution day-to-day can be so
much more streamlined, standardised and so much easier
for the people along the supply chain.
And I think the tools will be more and more capable to level
up the decision making and supporting individuals.
The people will never go away, but having a better foundation
for making, you know, decisions. And eventually, you know, the,
the degree of strategicness of those decisions will increase as
we get into a world where the tools can be ever more capable
of making larger decisions. So that it isn't just a yes or
no, this or that question, but a, a more broader approach on,
on, on strategic. Now that might be 5-10 years
out, but I genuinely think the decisions AI will able to help
us with will get a a bigger and more useful.
I also do believe humans will still be there.
And yeah, human in the. Loop, the word that I learnt
that I love. I never knew that phrase human
in the. Loop OK.
So, Oliver, one of the things that obviously has been on my
mind as we've been talking is about my data as a grocer.
That's my business, right? I live and die by the data my
business is creating. And you know, whether it's in
Europe and USI don't think Tesco's will will be a direct,
maybe some sort of some places in Europe you may be a direct,
but what's your approach to data?
How do you protect me as a retailer and my my data as a
retailer? So, so it is really, really
important to us that data and all degree of information is
absolutely safe. It is 100% kept away from Tesco.
We are a separate legal entity, separate systems.
We will provide you with your own computing cloud instance.
So your data is hosted separately, not shared with
anyone else. So no other retailer can can get
access to those to this. And you know, we'll, we'll take
take great care of your data for sure.
So then any of the efficiencies, any of the learnings that I'm
getting from my data remain mine.
Absolutely. They remain yours and we keep
developing the solution and and any improvements we'll do, we'll
share with you as we go along. But your data is yours and is
not being shared with any other retailer.
Fantastic. Thank you so much for that.
But where? Where can I find out more about
you guys? So you can look at
transcendretailsolutions.com where you find more information
about us. You're very welcome to come and
visit us in the UK and have a look at our solutions.
Get in touch, we'll talk more about how you can see what we
are doing. You can also come and see us at
the NRF. We will have a booth and we
bring a bit of a demonstration with us so.
Yeah, see the booth at NRF. Sorry.
I don't remember to booth and and we can show you our
solutions there and we'll have a, you know, a live
demonstration going. So yeah, do come and visit would
be great. OK, well, I'll, I'll, I'll
definitely come and pop by and say hi, Oliver.
Thank you so much. Good.
Good luck and all the best for 2025.
Thank you very much. Thanks for having me.