156. Order Management, Forecasting, and AI

Order Management, Forecasting, and AI

Jordan Buckner: [00:00:00] For emerging brands, as your sales begin to grow, get into more retailers, you start getting an influx of both orders from those retail partners, along with needing to forecast how your sales will be in a couple months down the line. So you can line that with your supply chain. It's all a mess to kind of manage.

And from my own experience, it was kind of touch and go as we were trying to figure out how to make sure we plan for everything correctly. So. I'm excited to have on Ian Leaman, who is the founder of Pantry to really talk through how he's thinking about brands are managing their ordering through retailers and forecasting their sales so that they can be best prepared to manage the supply chain challenges and opportunities that come with it.

Ian, welcome. 

Ian Leaman: Hi, thanks for having me.

Jordan Buckner: So, you know, we've talked before about really kind of forecasting for brands and trying to figure out how founders can really understand what their sales will be in the future. But it's interesting because I know you've recently found out [00:01:00] founders are having that challenge of figuring out what their sales are going to be like right now and how to manage that.

And so I'd love to hear from your side, like in talking to brands, what are some of the challenges that they're experiencing around managing orders? 

Ian Leaman: Really good question. I think it's interesting because this world of retail, it's like everyone's kind of selling in a lot of different places. Like you got some Shopify customers, you've got some like fair, you've got a bunch of retailers that go through distribution.

It's usually different people. And what we noticed is that particularly for e commerce, they're kind of like living in the year 3000. Ecom brands kind of have it figured out. You can outsource more or less everything, but your product and the marketing, 

which is essentially like what a brand should be.

And then you can kind of dip your toe into the world of wholesale. And all of a sudden you get hit with like a thousand paper cuts from like every different side of the world. It's really funny. I talked to one brand. There were. Very large, like 200 million in revenue. And they do 95 percent of their business e commerce and 5 percent wholesale, but they spend 25 percent [00:02:00] of their time on wholesale.

And it's just pretty bonkers how that works. And like, I think a lot of it is you're kind of putting humans at every step of the process. So there's a lot of like. You kind of have to be very flexible which, which makes it very hard to set up a system in place that can allow you to, like, kind of just get your product to where it needs to go easily.

Jordan Buckner: Yeah, you know, it's interesting because, just to think about when I was writing TeaSquares, we were working with Whole Foods and, right, getting orders in from Whole Foods via email. And, like, that was fine because we were just in, like, a dozen stores or so. But right, like we had to make sure we didn't miss the email.

We didn't like misrepresent what was included in there. And then when we started working with companies like KE and UNFI, we get these orders that come in. It was like, we didn't really know what was happening, like how, what the order quantity would be, the turnaround time would be quick. And we were kind of just like taking it as we went and didn't really understand like how that would impact our business.

And, you know, a lot of it came down to like, just. [00:03:00] People behind the scenes, like, making decisions without including us in those conversations. We weren't yet on, like, a EDI system to automatically kind of get those orders coming into a system. And it was a little chaotic, just to say the least. And it was kind of a wild to experience.

Ian Leaman: Yeah, that's what we've seen. It's actually kind of crazy. It's kind of bonkers. We got pulled into it from the forecasting side, because people were kind of asking like, Hey, like we know the forecast, like, is this order too big? Is this order too small? And kind of, as we dug into it, we realized even with EDI, like the PO revision process, it's just like, there's a lot of steps and a lot of balls to juggle for somebody who's, it's not your full time job until the company gets big.

And even once it become like a logistics person. Like, once that job exists, it's kind of a thankless job. Like you can, like, you can't take, like, you can never take any time off. When things get busy, like, you're literally just in there, like, entering data into a bunch of different systems, like, approving stuff and checking rules.

It feels, there's a lot of paper cuts in the process. 

Jordan Buckner: Yeah, I mean, right, like, you think about e commerce and just the industry itself. But it's still sales, it's still [00:04:00] building a relationship with the customer between suppliers, but it was built with this mindset of being as streamlined and data driven as possible.

Whereas a lot of retail was built almost with like inputting as many people and as many processes in there as possible so that you're like all these people have jobs and they need to get paid and so if they're not needed, then they won't have a job so they need to keep things complicated so they can still exist.

Ian Leaman: Totally, totally. I know it's interesting because that like the big metrics was like revenue per employee. Like I think ecom brand is crazy. Like how much you can do with so few people. And like, I, people are definitely like trying to do more with less, especially with like it being so hard to raise.

But like the things that people are spending their time doing aren't strategic right now. There's like, not always it's like every person that you have in your company should be like hyper focused on like things that are gonna help you win. Not like, how do I, you know, transfer data from one place to another?

And how do I remember to respond to the warehouse confirming this order? Like it, it's kind of wild to me actually. 

Jordan Buckner: Yeah it is. And so. Yeah, I'm curious to know, kind of, as you're talking with brands through Pantry, like, [00:05:00] how are you thinking about starting to make that process easier for companies as they're, like, managing their orders coming in right now?

Ian Leaman: Yeah, no, it's an interesting question. I think there's, like, a couple different parts of, like, order flow, and, like, all the way down to sustainability. And you kind of have to remain flexible like the system there's so many different parts and there's so many different people and like everyone has different levels of like compliance to technology so it's like the perfect solution is everybody just uses one like marketplace that's never gonna happen so figuring out how to get order taking right and then figuring out how to get the po validation right i think is really important Or and figuring out how to like make that flexible as things change because you like you can set up edi for everything But then like you get a new customer or like customer changes and all of a sudden like things are kind of thrown into chaos so figuring out a way to like set up edi in a flexible way and then having a process for dealing with All that email orders coming in, I think it's really important and I haven't seen a great way out there to do it yet.

It's kind of why we're here. 

Yeah, you know, 

Jordan Buckner: I love that [00:06:00] and love how you think about it. It just brings to mind two stories. One is there's a company, Modest Coffee, who wrote about it at the beginning of last year, who's working with. Got an order through KeHe for a new product a new kind of launch for other retailers and their forecast was originally in terms of like how many units they needed to make.

And then the retailer was thinking, or the distributor was thinking in terms of how many cases they needed to make. And they're just like that unit measurement that they were preparing for like one, six of the orders that the retailer needed to make. And so they need to like overnight manufacture six times the amount of inventory and like took out extra loans, all these things to do so.

Then once the product actually got into market, they realized the distributor like overordered and then it was basically like, Hey, we actually don't need this product. You can, like, have it back or we'll dispose of it. Right? In that sense of, like, there's just this miscommunication in terms of how much they thought they were making, how much the distributor thought they were ordering, and [00:07:00] how much the retailer could reliably sell in that time period.

And it cost them a lot of money to be able to go through that process. 

Ian Leaman: I'm sure it did. That's wild. I know, I've heard that story, actually, so many, so many times. Like, I feel like, especially because the distributors aren't, like, responsible for selling all of your inventory, like, You have to be hyper focused on like, what is my velocity?

How much do I really think is going to sell through? And as where you can making sure to like fight the orders. Sometimes people don't over, like sometimes people don't order enough too. It's like, then you're out of stock and then everyone's upset. So it kind of goes in both directions. I feel like.

Jordan Buckner: Yeah, no, it completely does. And then right, like on the other end, I talked to two brands. In the last two years and like they're growing to be in the like tens of million dollars in sales and they actually stopped fulfilling orders to smaller independent stores because it was just like too much work like the little like POs here and there like on their own they're like we can't do it like we're only shipping like a pallet minimum and only really to distributors who can do that because it's too much [00:08:00] of our time and energy and it's You know, as you kind of mentioned, there's a right in a company who is doing 25 percent of their time on managing the retailers because of just how much work it was.

Ian Leaman: Right, exactly. And it really shouldn't be that way. It should be as easy as selling off like a Shopify. 

Jordan Buckner: So as you're learning through this, like, are there problems within there that you see in terms of like how we can streamline this process? We can't have this, like, large marketplace, but is it like having all the data in, like, one place, ways to validate it?

Can the, where, where are you looking to kind of build out things to test? 

Ian Leaman: Yeah, I kind of view it as, like from what I was saying in the beginning, and at the end of the day, brands should be focusing on other things that are essential for their brand and taking an order and like the film and the logistics just like should be considered like outsourced the same way that it works in e commerce.

It's like , you work with like a shitbob who will literally just take it from end to end. That's kind of how we're thinking about it in the same way. It's obviously we're not going to be the warehouse. But like functionally thinking , what we're spending a lot of time thinking about is like.

How can we make it feel [00:09:00] as automated as it does in e commerce? Even if you're working with a number of, warehouses who may not have EDIs set up. Or even if they do, like, maybe they still have manual confirmation, or maybe they have, like, a warehousing system. It's like, how can you, it literally just be like, you log into OnePlace, you see your list of orders, put them through the approval process, and like, it just works.

Like, there's no emails back and forth, like, the product gets to the customer quickly, you get paid. Deductions are a whole other story that we 

Jordan Buckner: This sounds too easy, Ian. A lot of people are going to lose their jobs if it's that streamlined. 

Ian Leaman: No, no, they'll have, they'll hopefully, hopefully they'll have an opportunity to work on other things that aren't quite so mind numbingly tedious.

Jordan Buckner: And I know one thing that you and the team are really excited around are the integration of AI models in this as well. How can those begin to help both like the ordering process, but they can use net data to create more accurate 

forecasts. 

Ian Leaman: Yeah, totally. I mean, I think this kind of solution can only really exist now with some of these new AI models that are coming out.

I'll take the forecasting, the ordering separately, but like one very specific example is like. I can't tell you how many people I've talked to who [00:10:00] basically say like, yeah, we need a human to take the orders because like customers will order with description or they'll use part of the item number.

Or like, it's like basically these very fuzzy logic that like only people know, but you know, not to use chat GBT, but like, there are a lot of new technologies out there that like, can read that kind of understand it, map it back. In a way that just like didn't exist before. Yeah. So you start to streamline a lot of that stuff.

Without going super into like large language models or LMs or like transformer stuff, like that kind of the same technology that's powering like this whole AI revolution also does make forecasting a lot better because you can kind of start to pool data together and you can go in with external knowledge of how the world works.

So a lot of the new stuff that's coming out is it's kind of like busting open like every use case. 

Jordan Buckner: Yeah, you know, I think , when AI , first kind of rolling out, I think I had this tension in my mind at figuring out the difference between the previous kind of paradigm and, and, and where we are now in terms of a lot of times people do [00:11:00] forecasting basically by creating formulas, right?

It's like, Oh, if a customer's ordering this volume 5 percent that we can just put that into a static or dynamic formula that just kind of changes. every month to kind of put out the forecast, right? And they're like, it'll usually be off just because all forecasts are, especially in humans are doing the ordering.

How is AI kind of starting to transform how we think about moving beyond just Like creating a formula that's like pretty good to creating something that's like more accurate 

or dynamic. 

Ian Leaman: Yeah, totally. The honest answer is if you know, your in store velocities and the number of doors are in for many people, that's probably going to be enough.

Especially if you have a stable product where it gets hard is if you're expanding into a large number of accounts, you don't have visibility into like, Your doors are like the ordering cadences of like distributors. You can basically use AI to more accurately predict like when the distributors will be buying and like how much they're going to be buying.

And like, I think [00:12:00] that can help tremendously because it's like, it's not just like, okay, like what do we think consumers are buying at one end? It's like literally like, okay, we think KeHe is going to buy this much next month. So like having that kind of information can be quite valuable because that's like what actually comes in on the invoice.

Jordan Buckner: Yeah. I'm excited about things to where like. I know as a running money in my own CPG company, and even just the business I'm doing now, right? I'm just like constantly thinking about questions, right? Like When, how is our business affected by seasonality and maybe like in different regions and thing like if like this ordering platform has like all that data, it can potentially spell like, Hey, sales typically increase 10 percent in the, you know, summer because you're an ice cream brand or something like that, or decrease in these regions without having to like go in and manually Look at all the data every time and just be able to start sending out information.

Are you looking at things like that and like making that like data analysis more conversational 

Ian Leaman: it's a really interesting question. We for sure are. , like, there's no [00:13:00] doubt that like BI in general it's gonna totally change. I think like, I mean, you can imagine a world where you just kind of ask plain language, like, yeah, what's my seasonality in this region?

How much inventory do I have in stock in this other spot? So we're definitely thinking about that kind of stuff as well.

Jordan Buckner: Okay. Yeah. I mean, I think that's exciting it's interesting, right? Like, because a lot of times the amount of work that it takes to create that data might be like.

Four hours or like eight hours. Sometimes there's someone like, doesn't have to go clean up the data. But oftentimes like you'd be happy with like a one sentence answer, that's like pretty reasonable. And so I could see a lot of value for founders just being able to like do that. And then even get.

Ideas on like, Hey, these are the questions as a founder that you should be asking to the journal while your business is performing and then being able to make strategic decisions from that. And as you kind of mentioned, it's like moving that founder more into a strategic position where the data is kind of there.

They can get the answers to questions that they have, but then they are able to make those strategic [00:14:00] decisions. 

Ian Leaman: Yeah, I mean, totally. Like, if you think about like how competitive it is for like literally everyone these days, like. Do you really think your time should be spent doing anything that's not like moving you bored out?

Jordan Buckner: I mean, it's big, right? Like I talk to a lot of founders and one of the big things and to our listeners, if they haven't talked to me recently, it's all around how do you create processes for your business where things can, as much as they can run without you, if they had to, right? Like what are the, the, you know, some things might be automated.

Some you might have. People or virtual assistants or, you know, offshore resources that are able to like do some of these things that are process oriented that will free you up to do other things. Cause I think one thing in talking with founders is they like love to be busy. One founder I was talking with recently as well, like just left a full time job to focus on the business.

Full time they're like, I thought I would have a lot more time, but my time just got filled with all this other stuff. And I love what you're doing because you're [00:15:00] like trying to give those founders back like more time by, by making time 

as we can give them. 

Ian Leaman: Yeah, well, it's crazy. I mean, and this is one of those things not to bring it back to e comm, but like I talked to like a hot sauce company that always sells e comm.

The guy like literally just sets it and forgets it. Like he doesn't do anything. It's like it's manufactured in one spot. It gets shipped out to, like, a warehousing partner who handles all the logistics of the fulfillment, gets sold on the Shopify site, and it's like, he, like, he's been doing it for a long time.

So, like, he kind of has the marketing dialed in as well. So, it's like, literally, he can do whatever he wants. He goes surfing all the time. That's kind of how it should be, I feel 

like. 

Jordan Buckner: Yeah, I mean, I think that's amazing. I think that's where a lot of founders hope to get into. I think part of it as well is, like, designing The business to fit the lifestyle that you want and knowing how that affects things, right?

Like, even that company that's doing 5 percent of their sales on retail, they might even decide like, hey, you know what, like Maybe we shouldn't even bother with retail. Like maybe it's good because it's like our next growth avenue, there's volume that's gonna come there. But at the same time, it's like, is this gonna [00:16:00] just disrupt our lifestyle?

Like it's just not fun anymore. 

Ian Leaman: Yeah, no, that's so true. And I feel like, like, especially like food and beverage brands, it's like, usually it's founded on like a dream with like a lot of passion as well. So it's like, to what level do you want to go? But it is interesting too, I'm, I'm sure like Omnichannel is kind of like a beat, a drum that's like beating super frequently, but I, I read a stat somewhere that like 73 percent of consumers are buying in multiple channels.

So like, for the people who do want to go like really big, I almost feel like it's like essential, like you kind of have to meet the customer where they are. 

Jordan Buckner: Yeah, especially for certain categories that like. Right, and it varies based on like what it is. There's certain categories that people will only buy in store.

Maybe there's a price point. If there's a low usage to get to the thresholds of like e commerce purchasing where like the volume makes sense, it covers shipping and all the other costs. There's a lot of products you're like, I'm only going to use it, you know, four times a year or something. I don't need to buy 36 of these [00:17:00] things.

Yeah, totally. But I think that's interesting. Well, , I'm really excited every time I talk to you just in terms of like uncovering problems that founders are, are dealing with. what are you looking for coming up? I know with your platform, you're like constantly helping founders uncover.

Yeah. Problems with both order management and forecasting. Is there anything you're looking for from our community that would be great for them to reach out to you for? 

Ian Leaman: Oh, that's a great question. We're always just interested in helping people think about things. Like if, obviously if you have like order management or forecasting issues, like hopefully we can help. But if you just want to, like, we've talked to like 300 brands at this point. Like, but I can just be helpful on sharing literally what I've learned and like how to build a forecasting spreadsheet or like take orders.

One thing I've been thinking about a lot is, like, you mentioned virtual assistants. I feel like they're everywhere. I feel like they're kind of annoying to work with. And, like, I feel like this is an example of, like, where more things should be, like, automated. So if people have ideas of things they'd like to do with virtual assistants, I'd honestly just, like, love to hear them.

Cause I feel like that's kind [00:18:00] of going to become a bigger and bigger thing. 

Jordan Buckner: Well, you know, it's interesting just as thinking about that. I talked to one founder who has a virtual assistant that manages their like retail account managers essentially, where they'll call their retailers asking like, Hey, how are things going?

How's our product selling? Are you having sales or promotions coming up that we can participate in? And like, so I'm like on the phone calling those companies and then also someone else who has a virtual assistant who's doing like paperwork right behind the scenes, like, and then they train them, like, here's how to do the paperwork and now that you like understand it, you can go through and like take this, this work on to, to do those things.

So it's part like data entry, but it also be like, has to be like trained data entry so they understand like all the different parameters. So. Oh, yeah, really say about all those things. So if any of our listeners, if you are interested in getting help with order management and forecasting definitely reach out to Ian.

I'm going to put his contact info in the show notes and check out Pantry as well. Ian, thanks for being on. Yeah. Thanks for having me.