The Covid pandemic roiled supply chains around the world, fueling inflation that the global economy is still grappling with. Fortunately, there is signs of "stabilization," according to Manhattan Associates CEO Eddie Capel. "We're seeing inventory levels stabilize. I certainly would expect to see a pretty good balance of demand to supply in the upcoming retail peak season," Capel tells Yahoo Finance Live.
Video Transcript
- Supply chain issues became a major focus during the pandemic, and many factors were at play with access to everyday items-- from toilet paper and coffee to timber and roofing materials, you name it. It was an issue making sure it arrived on time, in good shape, and with enough stock to keep up with demand. Manhattan Associates is a leading expert in helping companies manage their own supply chain, inventory, and omnichannel setups just released its quarterly earnings today seeing a beat on both revenue and earnings per share.
Let's now bring in Manhattan Associates' CEO Eddie-- excuse me-- Eddie Capel. The current state of supply chains. We've been talking about this a lot over the last few years. Please tell me what you're seeing with your boots on the ground there.
EDDIE CAPEL: Well, stabilization, I would say, you know, to begin with. We've gone from, you know, the struggle to find inventory, the supply side being impacted by-- you know, by the pandemic. And then overbuying to try to overcompensate. And we saw, you know, inventory-- inventory levels rise, you know, beyond, you know, where consumer demand was, particularly on the-- you know, on the soft goods side. But today, I think we're seeing inventory levels stabilize. And I certainly would expect to see a pretty good balance of demand to supply in the upcoming-- you know, in the upcoming retail peak season.
- Any challenges remaining as a holdover from the prior era, or anything you have or you're seeing on the horizon that might present obstacles in the future that you're dealing with?
- Not so much obstacles. Look, you know, consumer expectations, all of ours continues to rise, speed of delivery, ease of purchase, ease of access to products. So the focus on that front end of customer acquisition, maintaining customer loyalty, and servicing the customer wherever they want to be-- their orders they want them fulfilled from, whether it be, you know, buy online, pick up in store, curbside pickup, deliver to their office, deliver to their home as quickly as they can possibly get their hands on those-- on those products. And so opportunity, I would say, versus obstacles.
- Gotcha. And I'm just reading some of your notes here. Your platform moves 150,000 pairs of shoes every hour, 300,000 tons of food every day, 90% of all prescription drug fulfillment done by you. I'm wondering what are some of the technological advances that have allowed you to develop this system, specifically I'm talking about the new buzzword AI, artificial intelligence?
- Yeah. Yeah. Well, a few years ago, really starting in about 2014, coming to market in 2017 and over the last 5 years, we've completely re-engineered what were already at market-leading solutions to be cloud native. So we give immediate access to new innovation now every single quarter to our customers. We're delivering new capabilities-- new capabilities to help them satisfy their internal efficiency needs, help them service their customers better, and in today's ever-changing world, this immediate access to new innovation is simply imperative.
As we move into the world of integrating generative AI into cloud native platforms, we're pretty excited. We're pretty excited about the possibilities. It's early for sure, but there are opportunities on both sides of the fence. There are opportunities for us to improve the efficiency of our company and pass those benefits on to our customers, whether it be access to voluminous amounts of data-- voluminous data sets, asking very simple questions and getting very specific answers back, using large language models to be able to actually write software, develop code in a much more efficient way.
On the other side of the fence, being able to deliver capabilities for our customers and their end consumers. Being able to interact with systems in very different ways. Being able to interact pretty much the way that we are versus navigating through graphical user interfaces in a very cumbersome-- in a very cumbersome way to be able to service the customer, the end consumer in a very self-service way through, you know, text-based dialogue. It's an exciting time. When you think about bringing together best-in-class supply chain capabilities, modern technology platforms, and generative AI, it's a pretty exciting time. That's for sure.
- I would second that, for sure. We've got time for one more. The changing consumer, we've seen a lot of behaviors morph over the last few years. You're saying retailers need to create a yes culture to build and maintain customer loyalty. Can you explain what that means?
- Yeah, sure. I mean, look, I think we're all used to going into a retail store-- do you have my size and color? No, I don't. But if you come back on Saturday, maybe I will have received it between now and then. And there's a lot of no that happened. Through no fault of anybody, any fault of the sales associate, but there was a lot of no. Today, it's imperative that the retailer move to a yes culture. The answer is yes, I can get that for you. If I don't have it here today, the answer is still yes.
You want me to ship it to your home, ship it to your office? Do you want to come by and pick it up tomorrow? Do you want me to-- do you want to pick it up for another store? So move from that, no, I'm sorry, we don't have that, but maybe we'll have it tomorrow to yes, just tell me how you want to get it-- me to get that product to you. And that's a big objective of ours to be able to provide the technology to move from that no culture to the yes culture.
- Exciting times indeed. Definitely going to echo that. Thank you, Eddie Capel, Manhattan Associates CEO.
