Optimizing Supply Chain for a Data Focused Future with Padhu Raman of Osa
In this episode of PayPod, host Jacob Hollabaugh sits down with Padhu Raman of Osa to discuss the changing landscape of the supply chain industry and the key factors affecting its evolution. Osa Commerce is an innovative technology company on a mission to tackle the data chaos in the supply chain. Watch this episode for a fun and interesting dive into this latest development in payments and fintech.
Payments & Fintech Insights In This Episode
- Social commerce, through platforms like TikTok and YouTube, has become a significant factor in consumer engagement and purchasing decisions.
- Google has shifted its focus from Google Marketplace to YouTube-based purchases, highlighting the importance of engagement in the online shopping experience.
- Osa helps brands and manufacturers connect to various marketplaces and manage their inventory and fulfillment centers efficiently.
- The lack of standardization and data silos in the supply chain industry is a major challenge that Osa aims to solve.
- The integration of AI and blockchain technology can significantly enhance visibility, synchronization, and cost optimization in the supply chain.
- AI plays a crucial role in collecting and analyzing data in real-time, providing valuable insights and driving better decision-making in the supply chain.
- And SO much more!
Padmanabhan Raman : Osa
Osa Commerce is an innovative technology company on a mission to tackle the data chaos in the supply chain. They specialize in connecting, unifying, and automating commerce operations for retailers, logistics providers and their customers. With their advanced AI-powered Collaborative Visibility Platform and intelligent decision-making capabilities, they power supply chains to sell wherever their customers are so they can focus on scalable growth—and be one step ahead.
Featured on the Show
PayPod is the leading voice in the payments and fintech industry, covering payments, risk management and new technology. Host Jacob Hollabaugh interviews leaders who are shaping the payments and fintech world, as they discuss the latest developments in the payments and fintech industry.
Jacob: Welcome to PayPod, the Payments Industry podcast. Each week, we’ll bring you in-depth conversations with leaders who are shaping the payments and fintech world from payment processing to risk management and from new technology to entirely new payment types. If you want to know what’s happening in the world of fintech and payments, you’re in the right place. Hello, everyone. Welcome to PayPod. I’m your host, Jacob Hollabaugh. And today on the show, we’re going to be diving into the backbone of a business. It’s supply chain payments going to and from materials coming in, products going out, managing vendor, customer relations. There’s a lot of moving parts for almost any business out there. And therefore so many areas where efficiencies or advantages could be gained or lost. One company on the forefront of making sure you realize those efficiencies and advantages is Osa, whose commerce platform is your one stop shop to power your entire supply chain? We’re fortunate enough today to be joined by co-founder and chief product officer of Osa Padhu Raman, who will be helping us break down some of these supply chain related topics. Padhu welcome to the show. Thank you so much for being here.
Padhu: Thank you very much, Jacob. I’m very happy to be here and talk about supply chain.
Jacob: Yes, I am very excited. It’s one of those topics that as a pretty payments heavy and focused podcast, we touch on all parts of the business and kind of tangentially, but it’s fun to then hop over to one of those other tangential parts and in this case, a pretty big part of the business, like I said, kind of the backbone of the business and talk about it and then some of its relations back to the financial and payments world. But before we kind of dive into Osa itself and some different supply chain related topics, because this isn’t a super common topic on this, I want to set the stage for everyone a little. Some of the terminology we probably are going to end up using during this conversation, maybe terminology some listers aren’t as familiar with. So the two that really stand out to me that I remembered back from different jobs I’ve had and back in school and everything supply chain classes but thought would be good to clarify before we get too deep is could you fill us in on what three plus and four mean? And then just kind of overall how things traditionally speaking worked within supply chain, what the kind of basic framework was up until companies like yours came around?
Padhu: That’s a very good question. And I think the entire world started talking about supply chain after Covid.
Jacob: When they couldn’t get their stuff, they were like, Oh, wait a minute, what’s going on?
Padhu: Yeah, even the boardroom didn’t understand what a supply chain. Now you see there is a lot of boardroom changes you’re getting chief supply chain officer. There are a lot of evolution happening in that aspect. So that’s changing, right? So in summary, what traditionally used to happen was you had your manufacturer or a retailer or a brand. They actually design the product. Think about innovation, manufacture that product. Found a way to market to sell. Find add their own After manufacturing, it used to go to a distribution. They found a way to weather sell locally within their country and outside internationally and the evolution of supply chain started. Most of the retailers and brands used to confine their own distribution centers, their own fulfillment centers, their stores, their own fleet of trucks. Right. And that’s how they used to deliver. But ultimately, when they went to international, they can’t own their own ships and own ports. So slowly that outsourcing concept matured. Right? And that’s what we used to call as one first party logistics. When the retailer brand, they themselves did all their end to end supply chain business that formed the first party logistics, right? And then they matured. Okay, now I can’t own my ships. I cannot own all the fleets.
Padhu: Wherever it’s going, I need to outsource it to a carrier and do it. Then the evolution of second party logistics came into picture. Then they realized, okay, now I’m manufacturing, my demand is going up. I really cannot store in my warehouses. I need to find external warehouses. So now it came to a dedicated third party warehouses that’s are the three third party logistics came into picture. But what happened after Amazon and Covid and all as we matured realized that, okay, we cannot put enough concrete and there are already a lot of other distribution centers. How do we create an ecosystem model, a cooperative model? And that’s where the fourth party logistics come into picture, where I outsource to a consolidator, that consolidator will be already pre connected to multiple third party logistics, public warehouse providers, multi providers and carriers. So that I’m not dealing with thousands of people, I’m dealing with one. And that one is actually dealing with others to make the journey simple. And that’s where three pillars third party logistics for is for party logistics. And now we are going into five, which is fifth party logistics, where handle the entire supply chain strategy. I hope that clarifies the journey and the definition of that.
Jacob: That was absolutely fantastic. Thank you for synthesizing that down into such a nice little historical perspective there. You touched on a few of the inflection points over the years going international, et cetera, that have kind of led to some of these changes. Do you think with Covid having been such a monumental moment of shift and change within the industry, do you think all of that was going to happen anyways and this just sped it up? And how much do you think it kind of sped it up? Do you think it would we’d still be stuck where we were in 2019 right now without it, or we’re most of those changes in growth areas in Motion and Covid just simply told you instead of five years, this needs to happen today.
Padhu: Yeah, it’s a good question. The changes in the supply chain and the method actually did actually have started a journey well before. Right? If you think about the 90s or early 2000, everybody was focused on the customer experience, right? And the experience was, okay, I need to have a better store. How do I have the inventory in the store? So when a customer comes in, he gets the inventory. It’s always available, number one, from a service standpoint and also providing a better engaging you had a better malls, better stores, you had a shopping malls and everything evolved with the advent of e-commerce and Amazon penetrating the market, the convenience happen really accelerated, right? Still, you had options of ordering it, getting delivered to your doorstep and you added more of the store visits, more for the luxury or specialized products, regular product. I’m ordering a Ram or a two GB memory chip, or I’m just going to order an Amazon. I’m going to go into a deli. Why do I need to go to a store for that? So that mindset, the experience has changed. So with what happened after Covid, that accelerated further the convenience, right? Because now people found better way to find a way to deliver to the customers, buy online pickup in store or deliver delivered at the doorsteps.
Padhu: Now, not only for the electronics or specific products, even grocery penetrated and changed. Right? What used to happen in most of the Asian countries in US started seeing here. We started seeing that people are ordering groceries, getting delivered. The the convenience really matured. Now the evolution is it’s going to continue, right? It’s not that it’s going to stop there. It’s going to continue. Now, the biggest point is how do we engage? The engagement becomes a major point, right? Because now differentiation is now social commerce has come. People are using TikTok videos to look at it and by people are engaging with YouTube. In fact, Google shut down the Google Marketplace and focusing on YouTube based purchase. So engagement is becoming a major factor. So the journey is continued. The Covid actually made everybody realize that, okay, I can do a different aspects of actually accelerate this further from an convenience to engagement to experience all combined together and then that’s going to accelerate. And finally, it’s also sustainability. Focus on sustainability as well. Right. So that’s the trend certainly.
Jacob: And yeah, it makes total sense that we were on a long, mostly gradual transition into the world of don’t go to a store, it’s delivered to my home and how fast can you get to my home? And then Covid came around and was like, We need to finish that transition now. It’s no longer slow and gradual. It’s today Every single person, every single purchase wants to be delivered versus going to get it. So let’s talk then about Osa specifically. Within all of this history and this big transition, when did the idea to start this company come about? You are one of the co-founders and what were you trying to either solve or do differently within the supply chain world that led you to think this company, this vision was the right thing to pursue?
Padhu: Yeah. So going back to the previous point, the idea to connect people because now your people are customers and people are everywhere, right? I want to shop in all the different marketplaces, whether it’s Amazon, Etsy, wherever, and then social commerce, engaging, right? So that’s the one primary aspect. Now, it’s not just your traditional retail store. People have multiple ways to purchase a product. So you have a brand or a manufacturer wants to be in every marketplaces that the customers are. Right. Becomes a product journey, right, number one. So the idea behind Osa was to which is one step ahead and the stands for one step ahead in supply chain commerce is primarily to enable connectivity of all these marketplaces. Number one. Right. Make it simple, because otherwise a brand has to manage all the different demand channels and how it has to be done. The second is, going back to the question about outsourcing logistics. Now your inventory is distributed. It’s not just in one warehouse. It is in multiple different warehouse. You need to be closer to the customer to optimize on the transportation. So now how do you connect all the demand channels? How do you connect all the fulfillment sources and also driving better transportation and optimization cost, looking at the cost optimization, revenue management, increasing the growth and overall challenges of the labor and everything, right? So primarily the Osa was formed with the idea behind solving the complexity in the supply chain, which is one better visibility of what’s happening.
Padhu: Where is my order? Were my customers, where is my inventory, what inventory I need to order, how do I manage it better visibility. And then once I have a visibility, how do I actually build on on that, providing insights, providing actions. So we provide a collaborative visibility platform. We came up with a concept almost. We have we all worked with another company previously. That’s where the original genesis came in. We started Osa in January and the platform was already built, so we inherited the platform and then focused primarily on connecting all the players in the supply chain, establishing communication, providing collaboration and then enabling coexist and co thriving and solving the complexity in the supply chain.
Jacob: And so who are some of the early adopters or the first industries you’re going after with this? You’ve mentioned retailers and merchants a lot. Is that kind of the best use case or the first customer group you’re going after or which industries make the most sense to for your offering?
Padhu: So we are primarily focusing on the retailers and brands and the logistics providers were supporting these retailers and brands, right? So let us say a simple use case, right? So if I have a brand they are manufacturing, say in China or in Mexico, doesn’t matter. They basically give the product information, they inherit this platform, connect and put their product information. We facilitate that brand in connecting to all the different demand channels at the same time, provide the manufacturer and or the other. If they outsource the manufacturing visibility to say, okay, which channels are selling well, how well it is selling well, and then providing once the order comes in, okay where the inventory is, we connect all the fulfillment centers. So basically the the potentially the brand may have their own distribution centers or a logistics providers. They may have we connect them and then fulfill the order and then get it delivered. So if you go to Amazon or Etsy, you order it from the post order, we take over. So we support the brands, we support the logistics providers, we support the carriers, and we form an ecosystem model. So once we are in, we can keep on increasing the ecosystem.
Jacob: Amazing. And you’ve given me the answer to something I wanted to ask about, which seems to be the necessary. It is the value proposition, but I’m going to still ask this just to double check and double click down on it. One of the things that stood out to me when doing the research on the company and everything is the commitment to integration is that on your website it says you have a philosophy of being tech agnostic, 440 plus and growing integrations, and I’m taking from those previous examples. That’s the whole point. The more complex this web gets, you want to be able to connect all parts of it, but is there anything beyond that? Or. That you hadn’t already said. That’s the thought behind that philosophy and the reason it’s so important to be able to work with everyone else when in a world where there are some that say, Hey, this technology is great, we’re only going to partner with like a Shopify. There’s a big enough market of people that are using that channel. So that’s going to be the one channel you’re open to. Everyone Again, tech agnostic is the philosophy behind that just that is the entire value proposition or is there something beyond that?
Padhu: I think you answered most of my answer, but yes, the philosophy is to be tech agnostic and the primary challenge today, the entire supply chain facing is the data problem, the siloed data. Right. Because traditionally, as I said, they all did everything in-house. They had their own enterprise systems. But today’s world, it’s actually driven by connecting across the enterprise. How do you connect across the enterprise? How do you exchange information in real time to drive it? If am having a disruption, say, in Suez Canal and it’s affecting my 20 shipments that is coming in, how well I can react faster because traditionally people used to order six months, nine months before and then store the inventory and the channel directly. Right. But now the demographics are changing. If you think about California’s market before Covid and now it’s completely different. The people are moving to Austin, people are moved to Florida, people are moved everywhere. So what you use to historically plan and do it. Okay. And next eight months, next ten months now, people are planning next six weeks. Next four weeks, Next three weeks. Demand is changing. The customer engagement is changing. The delivery models are changing. Customer is demanding more.
Padhu: Right. And then how do you satisfy? So one, the aspect is solving the problem is to with all these preset integrations and tech agnostic is breaking the siloed data and there is a lot of lack of standardization, right? Somebody is on different level of technology maturity. Somebody is adopting TikTok to do Shopping. If you go to still traditional retailers, still you have to go to a store and they don’t have an e-commerce site. I’m still surprised in this modern age, there are retailers who still don’t have an e-commerce website that’s how the lack of standardization and the clarity and the confidence that trust is not there. Right. Because people are still not understanding sharing of data. What’s the benefit? In fact, Transportation Secretary two years or three years ago said, very well, right? If you want to really be successful in the future world, you bring in data to get more data. So that’s how you can actually improve your business cases, right? So what we are trying to solve, breaking the data silos, increasing the visibility, driving actions, building a trust, right, and then driving better synchronization and reducing the cost, increasing the revenue and better customer experience.
Jacob: Yeah, wonderful. And I want to come back to the data part here in just a minute, because I’ve got a couple of questions around that and the importance of it in today’s world. But before we do, one other thing you just mentioned, which brings me to kind of tie in the payments and financial side that we’re used to talking about on the show is one thing that’s common amongst supply chain. The financial world. All worlds at this point is speed is what wins speed and convenience is what is driving the change across every single industry right now. It comes up every time we talk, every payments company we talk to, every fintech company we talk to. It’s just how can we get people money faster? How can we make transactions faster? How can we do accounts receivable faster, better, that sort of thing. So I do have to ask to get the little payments tie in here is with the supply chain. A big part of that is you’ve got a lot of product moving back and forth, material moving back and forth, a lot of money being transferred from a lot of different players within this web that you’re putting together. How do you incorporate the payments on your platform? Are you actually running and be the payment provider within all of this, or is that another integration aspect where you’re integrating the proper payment providers in or using the ones that whoever your the different people you’re touching points with, whoever they’re already using? Is it integration? Is it in-house? How’s the payment side of things work within this?
Padhu: It’s very good question. It’s a combination of both, right? So aspect of supply chain. There are two types of if you think from a fintech payment perspective, right? It’s a front end commerce payment where you are capturing the actual money from the customer and managing the payment cycle, and that is being handled at the demand channel level. In that instance, we integrate with them once the back end operations of payment is where we as a supply chain, we provide capabilities around that. One of the aspect is with the data, we know the time the manufacturer has shipped the product, it has come to the port, it has gone to a distribution center and then it has been stored in a warehouse. Then it’s available for to sell in the marketplaces or ship to a store and demand. Today, if you think about that entire cycle and the payment cycle aspect from a supply chain perspective, it’s called supply chain finance. It takes 60 to 90 days for the seller or the manufacturer to get paid for the product he has sold. Now it becomes more challenge because if the manufacturer brand needs a cash flow, they go and do an. Invoice factoring and factoring or a purchase order factoring with a bank to actually get the cash flow and then run through it.
Padhu: All those things depends on very slow phased data model. So what we are trying to do differently is put that entire journey. It’s already tracked. We already know how long it’s going to take. Put it in a blockchain. So what happens is once it’s in the blockchain, any entity, whether the bank, the seller or the purchaser, is able to see the real time movement of goods so that we can shrink the whatever the process is not changing. The bank is still going to pay the seller or manufacturer and give the factoring and everything instead of taking 45 to 90 days, reduce it to 4 to 5 days because the information is available real time in blockchain. It is secure, it is transparent, it is foolproof. So that is one what we have offering or developing as part of the solution in the ecosystem. So as the ecosystem increases, the financial back end financial transaction problem is solved in a much easier way and that’s where the supply chain fintech plays a major role. And in front end already said we integrate this, we are developing that, we are integrating. So that’s the ecosystem beauty of IT ecosystem model, right? Some will offer on the platform, some we will integrate across ecosystems and make it a collaborative ecosystem model.
Jacob: Yeah, love it. Providing the best path, whatever that path is that as fast as it can happen and with with the proper data to know when it can and could happen. So this is the point of the podcast where typically I make a really bad joke that I’ve repeated dozens of times already this year on the podcast about having to ask my guest about AI being required to. But in your case, actually do feel like I have to ask you about AI because it is a big part of what you do. And we’ve started talking about the data behind everything and that’s where that comes in. You’re using AI machine learning lots of new technologies to work with that data to be able to provide those solutions. So can you give me an overview? You’ve touched on some areas already, but some of the different use cases for AI within your offerings right now?
Padhu: Perfect. So in fact, supply chain is the best industry where AI directly applies, right? With very simple use cases. Today a brand wants to sell everywhere the customers are, which could be an Amazon marketplace, Etsy, their own website. They’re selling in a store, and then they are also selling in the Commerce Engaging Channel. How do you actually collaborate this amount of data to understand where actually I’m making profit? Somebody may be purchasing lot of products in Amazon and also tied to a returns as well, and that’s where maximum returns is happening for the same product. Whereas say somebody purchasing in TikTok Zero returns, maybe their TikTok customers are more attractive. So you have to look at the data in real time and understand and create a pattern with a lot of parameters in play. That is one aspect of it. Second is I’m connecting with multiple different carriers. I need to understand which customer, where they’re ordering, how do I reduce my optimization of the cost. Now the beauty of it is as the data is building, every body in the ecosystem can view the data in real time. So I can give a manufacturer a real time visibility to a summarized view based on the data analysis to say, Hey, this is a demand two months ago, this is a demand three months ago, this is where we are changing pattern now. Change your manufacturing aspect, right? Looking at all the parameters where need to shape out, need to ship. So that is where you’re looking at what the customer needs or demand, looking at how much to manufacture from a factual perspective, the same information being looked at by the transportation to optimize.
Padhu: How do I reduce the cost by optimizing and delivering the most efficient way? All these things involve amount of data, synthesis of the data and providing a better visibility and visibility. You’re able to make those decisions. I’ll give you one simple use case the trucking industry, because the entire supply chain is also depend on the trucking industry. They were actually losing close to, I would say, 1.1 to $1.3 billion every year. Right. They did everything and the drivers were actually frustrated. They are leaving because they’re not getting paid and all those things happen. But once they all connected and looked at the data and understood what’s happening, they found that majority of the time, the reason of the trucking industry losing money by paying over the drivers and everything is they are waiting for products to be unloaded in multiple distribution centers. And that actually was a lost time in terms of the detention time. And by just reducing the detention time, they increase the efficiency in the transportation, they increase the morale of the drivers because they’re able to do more loads and then they’re able to do better. That’s the beauty of it. Once you’re connected, you’re able to have a good visibility, able to provide insights and then drive actions based on that. And that is what the AI will solve in this entire supply chain.
Jacob: Fascinating. Yeah, and I guess I hadn’t thought about it, but it seems so obvious that the number one industry that would have the most. To use for this is the supply chain world because of how much data, how many different points of interaction are happening. So that makes total sense in with every industry. Part of the AI conversation is like what jobs or roles would it replace or what jobs or roles would it maybe enhance or change what the function of that role is, What the key characteristics you’re looking for in that role is? So how do you see the role of, let’s say, a supply chain manager, a warehouse manager, inventory manager of the past at Company X oversees a large part of the supply chain for a business. How do you see roles like that changing in this new world as they are forced to adapt to technology like yours and all the new ways of operating? How do you see the roles of or is there some that might be fully replaced, or is it a kind of changing role of what a supply chain manager might look like for a company, for a merchant or a retailer?
Padhu: Yeah, it’s a very good question. One thing I just want to highlight here is the AI itself is not transformational. The AI is, unless it is a part of a specific ecosystem or a specific process or a specific area of where they are impactful, there’s a benefit there, right? Still, your actual intelligence is very important. So the combination of actual intelligence and the artificial intelligence is what is going to drive the benefit. There is going to be change in the job in certain some areas, in some areas where you don’t want humans or an actual intelligence wants to do the job, will be tried to be automated through an AI, basically more of an automation where I want to bring because I don’t have certain capability or don’t want to do it, I’ll automate certain areas. The benefit is where you have a collaborative AI, which is basically a human and an AI work together and collaborative. There are three factors to that, right? One is the interoperability, right? Because every system is different. I may not I may have not have that many people to take all the calls. I may have an AI and a chatbot at take all the orders and interact with the five questions. The five questions doesn’t have to be a human. On the other side can be a robot, can be taken on automation can take that and then do it.
Padhu: It could be applied in a simple picking process in a warehouse where you want to speed. At the same time, you don’t want fatigue level for people to walk. 65% of the warehouse operations people walk picking, walking, how to reduce that and increase productivity, right? So that way not increasing fatigue of the associates, they are in one. There are a lot of automations there, like AI based automations, example goods to person where the goods actually come to the picker and the picker picks and completes it. There’s that level of automation come into picture and then there is an transparency of the data, right? Wherever there’s a transparency has to be done and decision has to be made. You will see the coming there. So overall, I’ll summarize is that wherever there’s a very challenging demand for labor, you will see a more increased in automation using AI to complete the job. That will be still a lot of cooperative association, mutual learning with actual intelligence and intelligence where it’s like the calculator, right? When calculator came in, everybody said accountant job is goes away, but actually accountant job is accelerated more with calculator. That’s how it’s going to be right? There will always be a collaborative aspect where majority of the work will be done by the actual intelligence and then with supported by the AI. Right. And that’s how I see in the entire industry.
Jacob: I love the calculator analogy. It’s one I’ve heard before and I like to say myself because I think this answer is similar for almost any role. I’m in the creative field in the podcasting world, making a lot of content, different things, and there would be a lot of people that would ask, AI is going to remove editors and AI is going to remove this, that. And I’m like, No, the same thing is with the calculator. Like you said, it didn’t remove the accountant. It actually asked more of the accountant. We’re like, Hey, you have this incredible tool. You could do more things, you can make better decisions. And for me, it’s like you can make more content, you can do more. And so in the supply chain world of being able to, you still need to make the decisions. Now you don’t have to go gather all that data that would be super tedious for you, but you need to be able to look at, hey, this sales channel, our margin is actually this, even though sales are way higher compared to over here, someone needs to be able to look at that and actually interact with it and make those decisions. And if anything, it enhances their role. And so, yeah, I think that analogy is a perfect one and a great place for us to wrap up this conversation. So it’s been absolutely fantastic to have you. Padhu For those listening who may want to follow you or learn more about Osa the company, keep up with everything you’ve got going on, where would be the best place for them to go to do so?
Padhu: Yeah, they can definitely follow our company on LinkedIn and also me, padhuraman at LinkedIn. And if they want to have any specific questions, they can always reach out to my email, email@example.com and happy to address anything in the supply chain collaborative ecosystem.
Jacob: Wonderful. We will link to those and more in the show notes below. Padhu thank you so much for your time and knowledge today. Hope to speak again sometime soon.
Padhu: Thank you Jacob.
Jacob: If you enjoyed this episode and want to hear more, head on over to soarpay.com/podcast to subscribe on your podcast listening platform of choice. That’s s o a r p a y.com/podcast.