Bob Honer 0:00:07.8:

My name's Bob, and I help lead the supply chain business at Anaplan. I've been in this space quite a while now, in selling and implementing and developing supply chain solutions, but my education is actually in supply chain and finance. So, this concept of combining supply chain management with finance is something that I've been excited about quite a while now. The two are just meant to go hand-in-hand, in my opinion. With me today is my special guest, Dilanthi. You've also been in the supply chain space for quite a while, but on the finance side of things. Could you tell us a little bit about that?

 

Dilanthi De Alwis-Mummert 0:00:50.1:

That's correct. So, I'm Dilanthi De Alwis. I am the CFO at TRAFFIX, transportation and logistics brokerage company. I've been in the logistics space for my entire career, and if I tell you how many years, you might know…

 

Bob Honer 0:01:10.1:

Notice, I didn't tell them how long I have been in this space, as well [chuckles].

 

Dilanthi De Alwis-Mummert 0:01:14.8:

Yes, Bob mentioned, always on the finance side, but more and more we can see that the two intersect, and that's what we're going to talk about a little bit more in detail today.

 

Bob Honer 0:01:27.3:

Awesome. To the people in the audience who don't know, could you just tell us a little bit about the company? Then, we also have a video I think that we could play, as well.

 

Dilanthi De Alwis-Mummert 0:01:36.4:

Absolutely, yes. So TRAFFIX is, as I mentioned, a transportation and logistics company, and it's headquartered here in Toronto, and they, basically, move goods for our customers seamlessly across Canada, US, Mexico. We do full truckloads, less-than truckload, drayage, which are really port services, managed trans, warehousing, so everything that you need in the supply chain. I think we have a video.

 

Bon Honer 0:02:18.3:

Yes. Could we play that video now? I think it's only like a minute long. 

 

[Video playing 0:02:23.7:

Since 1979, TRAFFIX team of supply chain experts has been leveraging experience, industry-leading technology, and a trusted carrier network, to tackle the most complex logistical challenges with precision and expertise 24 hours a day, 365 days a year. At TRAFFIX, we prioritize quality, safety, and fraud prevention, focusing on the right capacity over the most the capacity. Make TRAFFIX your strategic 3PL partner, so you can focus on what matters most: growing your business.]

 

Bob Honer 0:03:15.0:

Awesome. Now is not the time I want you to be humble, so can you give the audience a little additional detail into what you do as CFO?

 

Dilanthi De Alwis-Mummert 0:03:23.2:

Yes, absolutely.

 

Bob Honer 0:03:24.7:

At a logistics company that's so cutting edge.

 

Dilanthi De Alwis-Mummert 0:03:27.5:

Yes, so just to finish out the logistics company, we are very digital-forward as a company, and we have a platform which is called Atlas platform, and then we have also apps, that we call TRAFFIX apps. These programs were developed to give visibility to our customers and help them scale their businesses seamlessly. So that's a little bit about the company, and then, as CFO, I lead financial strategy for our organization. I'm responsible for capital structure, [?and many 0:04:07.1] FP&A. I oversee accounting, audit, tax, treasury and cash. I'm also responsible for our pricing strategy and margin management for all our service lines, and I also direct the growth in Mexico and our Mexico cross-border. That's a recent responsibility I took on. It's very exciting, and talking about supply chain, with the nearshoring trend becoming very apparent, it's something that is keeping us very busy with scenario-planning and so on. 

 

Bob Honer 0:04:57.5:

Awesome. You also own the Anaplan installation as well.

 

Dilanthi De Alwis-Mummert 0:05:02.5:

Yes. I'm responsible for all of the initiatives, such as Anaplan and initiatives that drive analytics.

 

Bob Honer 0:05:12.7:

I'd like to shift now and get into this connection between supply chain and finance. In the old days, supply chain was always thought of as a cost. It was something that we had to spend money on. You've got a kind of unique and novel take on that, which I like. Could you tell us about that, but also how you came to that point at UPS Supply Chain Logistics?

 

Dilanthi De Alwis-Mummert 0:05:39.1:

So, prior to coming to TRAFFIX, I was working at UPS. I was the CFO of UPS Supply Chain Solutions, and there, I learnt firsthand that it's not just about cost, and it's not about resilience; it's both. At UPS, it was a multi-billion-dollar organization, which operated globally. We had logistics and brokerage, and transportation brokerage, all the modes, and there is where I really started connecting the decisions we make on the supply chain with capital. So that was one discipline that they always had, was every pricing decision we make, every decision to spend the dollar, will all tie back to capital and cash.

 

Bob Honer 0:06:49.4:

I love that. In a quote that you mentioned to me, that I want to see that the audience gets, is that you made supply chain into a capital engine. So not a cost, but that something that became a competitive advantage, and you did that by combining it with that financial visibility, and as you alluded to, and we'll get to in a minute, some of that what-if and simulation capability. That's kind of what Anaplan's been saying since its inception, this concept of combining, not just finance and supply chain, but all of these business functions. So, I think that's a nice callout. Could you now go into - that was at UPS - could you talk about some of the success and things that you've done at UPS to extend that concept of a capital engine in how - again, a quote that I've got that you said - was how finance is in these meetings and discussions at the beginning. It's not a me-too and, 'Oh, well, what about the financial implication?' but it has a seat at the table of these planning and execution-level decisions.

 

Dilanthi De Alwis-Mummert 0:07:51.6:

Yes, so as I mentioned, every pricing, routing decision ends up having an impact on cash, and so that's a discipline I've brought into TRAFFIX, and I use that in my day-to-day, and we're coming to the situation on day-one. So, we want to be involved when we are making decisions regarding customers, we want to be involved when there are decisions regarding investments, so finance is almost a key player where we interact not only with all the players in the supply chain, but also with the commercial team, so that we can drive this engine.

 

Bob Honer 0:08:43.3:

It makes complete sense, and I think the fact that you identified that even back at UPS, is what's given you a competitive edge today, as well. Speaking of today, all you have to do is put on the news - in fact, you don't even have to put on the news, you can just talk to people - and you find all the chaos going on, all the changes going on. Things change not week-to-week, month-to-month, in some cases not even day-to-day. That, obviously, affects the companies that you deal with, it affects the business that you have. Could you tell us a little bit about how you manage that in Excel in those types of situations?

 

Dilanthi De Alwis-Mummert 0:09:24.6:

In the logistics industry, chaos is like our everyday. Millions of dollars can get impact overnight with policy change, or with some weather event, so we really started looking at how do we build resilience, and also look at the cost to serve, and something that we do quite a bit is scenario planning, because we have to build a network with options. If something happens in a port here, on the West Coast - I know I'm on the East Coast - what are the alternate options that we have for our customers? So, what we build into our networks and supply chain are really flexible options, so that people can pivot when things happen, because we are dealing trade policy changes that change virtually every day. Then, we have currency fluctuations that have been swinging in different ways - I'm talking even Canada, US and USD, and the peso - so we have all those swings, and then you have the shocks that come along. Like, you'll have a drought in the Panama Canal, and that impacts all of us. Even though we only operate in North America, the ships are stranded, and the volume is not coming in. 

 

Dilanthi De Alwis-Mummert 0:11:05.3:

So, it's our day-to-day, and logistics companies thrive on chaos, because chaos equals opportunity. It absolutely does, and we just have to, not only plan for it, we have to jump ahead, and also, again, through tools like Anaplan, where we can do scenario-planning, we have analysis and answers within hours, not weeks, so we can make decisions, pivot quickly, and help our customers with the chaos.

 

Bob Honer 0:11:47.9:

I love that attitude, and a lot of people, in logistics especially, would see that chaos as a headache, and you haven't done that. You see it as the potential, since you positioned well, to be able to excel in those situations. What an awesome, not just business lesson, but life lesson. You gave some examples at UPS as well.

 

Dilanthi De Alwis-Mummert 0:12:11.2:

Yes. One of the biggest examples was, when I was at UPS, when we were going through the pandemic, what could have been a complete catastrophe and crisis was, again, very quickly turned it into an opportunity. We made sure that we went and addressed our pricing models, we made sure that we went and contacted our carriers and secured capacity, and so at the end of the whole process, we ended up growing market share and also improving our margins, while our competitors actually scrambled during that time. 

 

Bob Honer 0:12:58.0:

I think that's so compelling, and when we think about the benefits of combining supply chain and finance, and not keeping them in siloes, not having them act independently, but having finance at the table on day-one, like you said, I think that is the benefit, the ability to do these end-to-end modelling, these end-to-end simulations, and be able to see not just the supply chain impact, but also the financial impact. It allows us to come up with not just feasible solutions, but the most financially valuable options, and I think that's a shift that we haven't done in the past. In the past it's, typically, been, I've got a situation, I just have to do anything that I can to make it happen. So, I liked those examples that you've given of those things functioning hand-in-hand. Just as we close out that topic, the next thing I'd like to go to is, if you could talk about some specific use cases - you've given a lot of good examples - but specific use cases that you've been using today. Maybe some of the decisions that you help companies make, what locations shall we put DCs, any of those types of actual tangible use cases that come to mind that you'd like to talk about.

 

Dilanthi De Alwis-Mummert 0:14:14.9:

Yes, one thing that comes to mind is, I'll give an example of how, again, finance, analysis, helped a company save millions of dollars. We had a solar panel company that was recently subject to the UFLPA laws that were being really enforced, and what that means is that their solar panels would be retained at customs at the ports, and then they would spend a lot of time - like it would take weeks - to clear these solar panels out of the port. So, our customer, who just does transportation for us, approached us and asked us, 'What can we do? This is millions of dollars of demurrage detention charges,' and very quickly we were able to do an analysis to determine, okay, what if we move those solar panels to a bonded facility? So, it's still under the umbrella of customs, and then it's controlled, customs can do their work, and then we can release the shipments from there, and now there's some planning around it too, because you have the inventory. We did the math, and it was a no-brainer. We did this within an hour. The customer green-lighted it, we were good to go, and we got the bonded facility. I have so many examples. 

 

Dilanthi De Alwis-Mummert 0:15:57.5: 

On our website we try to get the testimonials from our customers, and a lot of those testimonials pretty much say the same thing, 'We thought that you were just a transportation company, and now you have become a strategic partner,' and that's where you're going up the value chain with your customers, and it's not about cost anymore. You're helping them grow, and you're bringing value to them, and that makes a big difference in retaining and keeping our customers. 

 

Bob Honer 0:16:30.0:

What a fantastic example of the benefit of speed, the benefit of being able to do these calculations and simulations on the fly. When those issues come up, it doesn't just affect the one client that you deal with, it affects all of them, and so being able to make those decisions and analyses quickly, those bonded DCs fill up quick. You've got to step in and take advantage of that.

 

Dilanthi De Alwis-Mummert 0:16:59.5:

That's a great point, Bob. I mean, we, basically, were able to move so fast and secure the space, and space is not unlimited. Especially, this was Long Beach, so you can imagine all the… It's a scarce commodity. So, we were able to get the customer in, and by way, give them a competitive advantage over their competitors.

 

Bob Honer 0:17:23.5:

Yes, good point. I don't know if you caught it, but you all have a potential assignment. Dilanthi's got tons of examples, but she also just mentioned the website which has a lot of additional examples, so if you'd like to follow-up with those, you absolutely can. Speaking of some of those examples, the sweet spot with you is companies will typically spend, what, between $10 and $50 million, maybe, in logistics?

 

Dilanthi De Alwis-Mummert 0:17:50.7:

Yes, that sounds right. 

 

Bob Honer 0:17:52.4:

So, could you talk about some of the challenges that those companies have, like big enough to deal with issues, but not big enough to have all the people and tools they need to be successful?

 

Dilanthi De Alwis-Mummert 0:18:05.3:

We do have quite a few enterprise accounts as well. However, with that said, you're correct that we can create a huge advantage for customers in the middle market, because they have the same problems that the enterprise customers have. They have to deal with the same chaos that I talked about, but they don't have the resources, the teams, the analytics, to be able to navigate through those. So we have almost become like an outsourced adviser when it comes to transportation logistics, because we are able to give them that advantage, that Fortune 500 companies, they have teams and planners and technology, and so they've kind of started relying on us to be able to provide them the same level of analytics so that they can make the decisions. Companies that size, a disruption hits their P&L hard. They can't absorb the shock of some of these things that we're dealing with from the chaos. That's where we come in. So, we've had a lot of success in that segment.

 

Bob Honer 0:19:32.4:

When you can unlock that level of value, and companies can depend on you, you take away the commoditization aspect. We talked about supply chain in the past being a commodity. It's not a commodity when you can show that kind of value. So, I love that mindset. You've given tons of examples. I know you could go on all day with examples, but let's switch a little bit now and talk about people heading down this same path of connecting supply chain and finance. We often talk about finding that balance between the efficiency and the cost, and also having a supply chain that is tough enough to be able to deal with all of these shocks that we've mentioned. Can you talk about finding that balance and what makes that successful?

 

Dilanthi De Alwis-Mummert 0:20:26.6:

Yes, and I touched on it a little bit, earlier, but again, is it resilience or is it cost, and it's really both. Again, I think the pandemic took it to an extreme, where everybody realized, okay, we have to find that balance when it comes to cost to serve. I think where we really excel, and what resonates with our customers is, again, the scenario planning, the options. Of all the things that are happening right now on the news, as well as everything that we know historically has happened, we are able to map out those options so that customers can pivot, and then they will also real-time know how much that will cost them. I'll give you another example. Like, when we had the West Coast congestion in the ports, we were able to give customers alternate port options where they can receive their goods, and then also calculate and let them know what that cost is. So, ultimately, our customers, their goods get moving, and we got them a cost-effective solution, and we also created new business out of it.

 

Dilanthi De Alwis-Mummert 0:21:59.8:

I think it is all about pivoting. You talk about resilience. There is this new trend of nearshoring, because, again, during the pandemic, everyone was stuck. Everything was coming from Asia. So that's a very big trend that we are really getting ahead of. We have a thriving office in Mexico, and so that's a part of clients trying to build that resilience into their supply chain and have inventory closer, and take advantage of the USMCA, which is under review in 2026.

 

Bob Honer 0:22:47.1:

Yes. Oh boy. 

 

Dilanthi De Alwis-Mummert 0:22:49.7:

So, we are doing scenarios for that too.

 

Bob Honer 0:22:53.4:

But again, it doesn't have to be a negative. As we've discussed, it could be a positive to companies positioned well. Just going back to that Long Beach example and the slowdown, I loved that one, because it was so timely and just something we all saw on the news, these 90-some ships just backed up in the distance. It's the same type of thing that we saw at Anaplan. Even though we don't compete specifically in the logistics space, obviously, but at the planning level, being able to give companies visibility into the chaos that was happening on the execution level, enabled them to go back and plan and come up with options based on what can we do now that Long Beach is not an option, or at least not a timely option, if you will.

 

Dilanthi De Alwis-Mummert 0:23:42.0:

Yes, I just wanted to add, I actually saw those ships parked, because I'm based out of Orange County, California, so it was really quite the sight. You could see them in Newport, and Laguna Beach. Yes, that was a time. 

 

Bob Honer 0:24:00.5:

You're showing what a small, connected space this is. My boss at the time was also based out of OC, and he would send us photos of the ships backed up, just to make it tangible of what we do counts, and this is the impact. Dilanthi, I loved these examples. I bet the audience has too. You've, obviously, been successful in making supply chain a capital engine, as opposed to a liability. Could you tell us just a little bit of how you've achieved that success?

 

Dilanthi De Alwis-Mummert 0:24:37.3:

Again, I think this stemmed from my experience at UPS. There was a lot of network economics that we would study and understand, and the cost to serve was also something that we would really look at, and the whole idea was, everything we did was related to cash. Ultimate outcome is cash. So, we did have to have the finance people at the table to be able to understand all the decisions, and then, even better, to have a model that they can use, so that you could actually get ahead of all the decisions that we were making. Everything we are doing from even deciding to place our Mexico headquarters in Guadalajara, that decision was also done with analysis. We had to analyze, okay, what's the carrier base in that location, the logistical location, what are the benefits of having it there, the talent availability. So, all these things were looked at before we made those decisions. Just tying all the decisions that we make to the impact it has on cash, those are the models that we try to refine. It's not a guess anymore. You have the confidence that you know what you're doing. 

 

Bob Honer 0:26:17.1:

Well, we spend so much time thinking about the what - what should I do? - and sometimes we lose the why. Why am I doing that? In all the examples you've given, it's because you had the why to back up the what, and I think that's impactful as well. I've saved what I think is the best until last. Now, I've set myself up to - well, I've set you up to be disappointed - but I don't think I have. We've, obviously, got people in the audience who haven't begun down this path. It's always easiest the second time you do something. So, if you had the chance to do this again, if you would be advising people who haven't begun down this path, what advice would you want to give to them?

 

Dilanthi De Alwis-Mummert 0:27:03.1:

I would say, treat it as a business transformation, and think of the ROI. So, it's not technology implementation. You're talking about down the path of…?

 

Bob Honer 0:27:18.4:

Connecting finance, supply chain.

 

Dilanthi De Alwis-Mummert 0:27:20.0: 

Connected finances, supply chain, yes. So, it's about also having cross-functional engagement. Going down this path, you have to make sure that you're not doing this alone, you have all the right parties at the table. We had a steering committee, so when we rolled out some things like Anaplan, and other analytical tools and planning tools, we brought in the operations, the commercial team. We had early-adopters, superpower users, and really, almost got them to own the decisions, and even adopting the tool, our tools.

 

Bob Honer 0:28:16.3:

I think that's spot-on. Once we talk about connecting these functions, it extends outside any single domain, by definition, so having that top-down executive level buy-in is absolutely key, because this lies outside any single line of business. I think that's a key takeaway. Dilanthi, I've loved this discussion. Thank you to the audience. I'd like to give a special thank-you to you, Dilanthi. I've enjoyed this discussion, as well as the discussions that we've had leading up to today.

 

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