- 9/15/2023
Arkestro is the leading Predictive Procurement Orchestration platform. Built to amplify the impact of procurement's influence, Arkestro helps enterprises deliver a 2-5x lift on cost savings attributed to everyday purchasing and sourcing cycles. Top enterprises leverage Arkestro's behavioral science, game theory and machine learning to predict and win faster value across every category of addressable spend.
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00:00 (upbeat music)
00:02 - Hey everyone, it's Jordan Robertson with Benzinga
00:04 and joining me today from Arquestro is Edmund Zagarin,
00:07 founder and chief strategy officer
00:09 and Dr. Arash Zadigan, PhD professor and vice chair
00:13 of the supply chain management department
00:14 at Rutgers Business School.
00:16 How are you?
00:16 - Doing great, thank you.
00:17 - Doing great, happy to be here.
00:19 - Amazing, so starting with you Edmund,
00:21 can you give us an overview of Arquestro?
00:23 - Yeah, so Arquestro is the leading
00:25 predictive procurement orchestration platform
00:28 that helps enterprises amplify the impact
00:32 of procurement across all of their different
00:34 spend and supply categories.
00:36 We use a predictive model system
00:39 to simulate procurement processes before they begin
00:42 and then embed game theory and behavioral science
00:44 in those processes to help reverse engineer
00:47 optimal outcomes.
00:49 We primarily work with large manufacturing enterprises
00:52 in industries ranging from automotive, chemical,
00:55 food and beverage to consumer goods.
00:57 - Now, Dr. A, let's start with you.
00:59 Can you tell us about the Museum of Procurement?
01:01 What is it and can you walk us through
01:02 some of the highlights?
01:03 - Sure, the Museum of Procurement essentially
01:06 walks us back through human history
01:09 and the interactions between individuals and organizations.
01:13 We kind of think of supply chain and supply management
01:15 as a novel new matter that just hit the headlines
01:20 but we don't realize that it goes back
01:23 since the beginning of everything.
01:25 So it is about exchange of goods and services
01:28 and it offers some highlights with regards
01:31 to ancient Babylon and the way they exchanged
01:33 goods and services and how they kept track of it.
01:36 The museum essentially has pictures and descriptions
01:42 of some of the professions and professionals
01:47 that were involved in maintaining ledgers,
01:51 maintaining records of how items were procured
01:55 and shared with others.
01:58 And it really highlights the importance
02:00 of this discipline, this function throughout history.
02:04 And of course, it becomes quite important
02:06 as we move forward because of the nature
02:08 of supply chains across the globe.
02:10 - And Edmund, do you have anything else to add to that?
02:12 - You know, I'd just say that great supply chain managers
02:16 are kind of magicians in a sense.
02:18 And it's a long history of this type of wizardry.
02:23 Again, as Dr. Isatagan said, back to ancient Babylon.
02:31 So it's a 6,000 year history and the museum
02:36 is really designed to draw through lines
02:38 from some of the early purchase orders
02:43 that we have written in clay and cuneiform
02:47 through to the general ledgers that are in,
02:50 enterprise resource planning systems today.
02:53 And then looking ahead to the way
02:56 that companies are rethinking supply chain,
02:59 especially since COVID and the role that,
03:02 just being in a more chaotic world is going to play
03:07 in all of our lives when we think about supply chain.
03:09 - Absolutely.
03:10 And Dr. A, can you tell us more about your partnership
03:12 at the museum and the exhibit?
03:13 Why is Rutgers a prime place to host the museum?
03:16 - Well, we're very excited to be partnering with Arkestro.
03:20 Arkestro is at the leading edge
03:23 of incorporating the newest technology
03:26 in the form of artificial intelligence with procurement.
03:29 And so this is quite a delight and fun.
03:34 And objectively, it actually puts our students
03:39 at the forefront of being competitive out there
03:43 in this discipline that really defines
03:47 some of the competitive strategies
03:49 that firms have for their future.
03:53 But for Rutgers, the supply chain management in particular,
03:58 it was created not too long ago, just over a decade ago.
04:02 And our growth has been phenomenal here in the Northeast.
04:07 New Jersey is rich with pharmaceuticals
04:09 and other manufacturing, and they've been able to tap
04:12 into some of the talent growth that we've had,
04:15 both in terms of undergraduate and graduate.
04:18 We're well-ranked in the top five
04:20 and the number two in the nation
04:22 in many of the ranking, U.S. World Report, Gartner, et cetera,
04:25 which I won't go through the details of.
04:28 But both in terms of teaching, in terms of service,
04:33 in terms of the community, and particularly
04:35 in terms of research for our faculty,
04:38 it has put us in the forefront.
04:41 And I'm very delighted that Edmund and his team
04:45 at Orchestral recognized the potential
04:48 of collaborating with us on this.
04:49 - Absolutely, and what do you hope
04:50 will come out of the exhibit?
04:52 Why do it?
04:52 - Well, I would say, just to echo Dr. A,
04:56 it's a real pleasure just to collaborate
04:58 with operations research folks,
05:02 and especially the people in Rutgers Business School
05:07 who are doing work in the supply chain.
05:09 Not just because, if you think about
05:11 artificial intelligence and machine learning,
05:13 we're naturally partnered with our peers in academia
05:17 just because of how the research gets done.
05:19 So we're always reading journal papers
05:22 and looking into kind of novel techniques,
05:25 whether it's from predictive modeling or data mining,
05:27 a whole host of different topics.
05:31 And I think that we're just excited.
05:34 I mean, if you could have seen,
05:37 we had hundreds of students there this morning
05:39 walking through, interacting with the exhibit,
05:42 seeing some of these ancient artifacts
05:46 of procurement and supply chain throughout history,
05:48 and saying, "Wow, if I can understand
05:52 "the grand tradition of this profession,
05:54 "this is a profession I'm excited to be part of,
05:56 "I'm excited to make a mark on."
05:59 And Rutgers has this great series of programs
06:03 that allow students who wanna pursue a career
06:05 in supply chain to realize their dream.
06:08 And so it was cool.
06:12 As a supply chain nerd,
06:13 it was great to meet other supply chain nerds,
06:15 even those that are at the student level.
06:19 And I think just the excitement is really palpable.
06:22 - And Edmund, in your post-pandemic world,
06:25 there's been many disruptions in the global supply chain
06:27 and the role of procurement is certainly growing.
06:29 What do you want people to know about the influence
06:31 that procurement has in our everyday lives
06:33 and how is that being represented through the museum?
06:35 - Well, I think it's a good question.
06:37 And I think that the post-pandemic world,
06:41 the pandemic didn't create fragility in supply chains,
06:46 but it sure exposed quite a lot of them.
06:48 We've had decades at this point
06:51 of what's known as just-in-time manufacturing
06:53 with supply chains being managed
06:55 to be as efficient as possible,
06:58 which in many cases has created single points of failure
07:01 and supply chains that are being run
07:05 at as low of a cost as possible,
07:08 at as high of a speed as possible.
07:10 So when you have that combination
07:12 and then you have something like the pandemic,
07:15 which closed borders
07:17 and really just turned a lot of assumptions on their head,
07:20 it's been an incredible transformation
07:23 of a lot of different paradigms of thought
07:26 and management within the profession.
07:29 And so I think that,
07:32 and this was something that we heard
07:34 with the students earlier,
07:36 everything that we interact with on a daily basis,
07:42 like if I look around this conference room we're sitting in,
07:45 we see a table, chairs, walls, computers, technology,
07:50 all of this material,
07:52 all of these products moved through a supply chain.
07:55 In many cases, hundreds or even thousands of miles.
07:58 The food we eat, the clothes we wear,
08:00 the medicine that we take for our most significant ailments,
08:05 these come through a supply chain,
08:08 they're touched by a procurement process.
08:10 We cannot access modern life, modern civilization
08:14 without a robust, resilient, well-functioning supply chain.
08:19 If there's one thing in the post-pandemic world
08:21 that I think a lot of people have woken up to,
08:24 it's that our supply chains are fragile.
08:26 They're fragile as a result of decades of decisions
08:31 that have created some fragility.
08:35 And in many cases, it's the next generation's job
08:40 to understand the history so we can imagine a future
08:43 that's more resilient and less prone to catastrophic risks.
08:48 And I think, Dr. A and I were just talking about Morocco
08:52 and the quake that happened in Morocco.
08:55 The mountains in Morocco are hard to get to,
08:58 the challenge of moving food and medicine into that area,
09:01 the humanitarian supply chains,
09:04 that is a critical, urgent need.
09:07 And I think when you think about, when you read the news
09:12 and you see the things that are happening,
09:14 supply chains are part of every one of those stories,
09:16 but so few people acknowledge the critical role
09:19 that it plays.
09:20 And so, I don't know, Dr. A,
09:22 if you wanna say something about some of that.
09:24 - Yeah, I mean, as far as the future is concerned
09:27 and future of humanity,
09:29 there are some overarching aspects of humanity
09:34 that become critical on this.
09:37 Earthquakes are unfortunate, disasters are unfortunate,
09:42 but there are some overall patterns.
09:44 There's a refugee migration crisis
09:47 from, let's say, the South to the North.
09:50 That means that we need to redefine
09:53 the way we are providing goods and services,
09:56 medical, even education.
09:59 Well, all of those are not a single point of generation.
10:04 Everything from the chairs and the tables
10:06 that Edmund was just talking about
10:08 come from a supply chain.
10:10 So, the future of humanity relies on redefining
10:14 and optimizing supply chains,
10:17 be it in terms of refugees,
10:21 be it in terms of pandemics.
10:23 Unfortunately, they're not going away.
10:26 We're seeing different strands of COVID
10:28 showing up again and again with different forms.
10:31 And for heaven's sakes,
10:32 I don't wanna be a doomsayer tonight,
10:33 but the fact is that that's not going to be
10:36 the last pandemic.
10:37 I know, by the way, we have other factors
10:40 that we haven't really paid attention to.
10:42 Cybersecurity is one element of it.
10:46 Running short on minerals is another aspect.
10:49 And all of these, no matter which button you push
10:53 or which side of the whack-a-mole you think about,
10:56 whatever issue pops up, guess what?
10:58 There's a supply chain behind it
11:00 that would cause even further concerns.
11:04 So, the future, frankly, is dealing with supply chains.
11:09 And the genie's out of the box.
11:11 And not to get digressed too much,
11:14 but be it regionalization and localization,
11:16 it doesn't really matter.
11:17 We're still going to need folks that manage the supply chain
11:21 in an intelligent form with as much information,
11:25 viable information as possible.
11:27 So, we're excited because I think
11:28 with the artificial intelligence aspects of things,
11:31 we're going to be making smarter decisions
11:34 that perhaps we didn't do in the past.
11:36 And as we saw during COVID,
11:38 some really, really silly mistakes were made,
11:41 and which had big ramifications.
11:43 - And Edmund, I have a hot take here for you.
11:45 So, as AI tech matures,
11:47 how will the role of procurement evolve?
11:49 - Yeah, well, this is the hot question of the day
11:52 insofar as people are wondering,
11:55 is AI going to take jobs away
11:57 or transform the jobs that exist?
12:01 And talking to students, we said, "Show of hands."
12:06 Who's interested in supply chain?
12:09 And show of hands, who's interested in AI?
12:12 And there are a lot of students,
12:14 they think about their careers and what they're going to do,
12:17 who are making decisions based on how AI
12:21 is going to change things.
12:22 You know, I would say that a lot of the work
12:26 that goes into procurement involves data,
12:29 involves working with data, taking data,
12:32 transforming it, cleaning it,
12:34 measuring different aspects of a supply chain,
12:38 whether you're measuring costs,
12:39 you're measuring inventory, you're measuring demand.
12:43 There's all of these different tasks.
12:46 Today, you need a very advanced understanding of Excel
12:51 and a few other tools in order to really be proficient
12:55 and performant at those tasks.
12:57 What I think is going to happen
12:59 and what we're seeing in the market is that AI,
13:02 especially the new generation of generative AI
13:06 that enables you to just type a question in plain English
13:09 and get a very detailed, very precise
13:12 and very fast answer to that,
13:14 is going to democratize access
13:19 to some of these more mathematically intensive professions
13:22 like supply chain so that more people
13:25 will be able to enter the profession than before.
13:31 And it will change what makes people
13:34 really, really stand out.
13:36 Yes, analytical skills are always going to be valued,
13:39 but I would actually say, just to give you a hot take,
13:42 that soft skills, people being able to form
13:46 and build relationships with their colleagues,
13:48 with suppliers, those have always been valuable,
13:50 but I think they're going to,
13:52 especially as so much more of the analysis
13:55 can be done automatically through artificial intelligence,
13:58 especially predictive artificial intelligence,
14:00 that you're going to see the roles of the future
14:04 are really going to be based in human connection.
14:08 Amazing, and last question.
14:09 The museum depicts the evolution of procurement
14:11 from ancient Babylon through today,
14:13 where we have technology like predictive procurement.
14:16 Can you tell us more about what predictive procurement is
14:18 and how it fits into the larger history of procurement?
14:21 So predictive procurement orchestration
14:23 is really a very simple idea.
14:27 Simulating a process before it begins
14:29 to identify all possible outcomes,
14:32 ranking them, and then reverse engineering
14:35 the steps of a process to achieve
14:38 the better of the possible outcomes.
14:41 And so, if you look at the history of procurement,
14:46 a lot of the standard technology in one form or another,
14:51 if you go back to the abacus, is a form of a ledger.
14:54 It's a form of a system of counting and reckoning.
14:58 In other words, reconciling transactions
15:01 that are part of an exchange of typically currency
15:05 for materials, goods, and so on.
15:08 And if you think about what predictive
15:11 procurement orchestration and where it sits
15:13 in the history of procurement,
15:15 it's really this idea that if we know
15:18 what an exchange is gonna look like
15:20 before we begin the process of negotiating,
15:24 of asking for pricing, of getting into the details
15:27 of a transaction, we can really eliminate
15:30 many, many of the steps that go into
15:34 kind of exchanging and pushing and pulling
15:38 and going back and forth.
15:39 And the history of procurement and the history of commerce
15:43 is a lot of going back and forth
15:46 and then documenting that back and forth
15:48 in a ledger format.
15:50 Again, going back to the abacus,
15:52 going back to ancient Babylon,
15:54 and then even today in Excel and SAP and Oracle
15:58 and those ledger systems.
16:00 And so I think predictive procurement orchestration
16:04 really represents a fundamentally new way of doing things
16:08 that is as different from traditional methods
16:13 of procurement and supply chain
16:15 as something like Google Maps or Waze
16:18 is from the type of map you'd find in your glove box.
16:21 It's always up to date, it knows where you're starting,
16:23 knows where you're going,
16:24 knows the fastest way to get there,
16:26 and it can give you real visibility
16:31 into what the risks are and where the opportunities lie.
16:35 - Wonderful, thank you guys so much.
16:37 That's all I have for today.
16:37 Hope to see you guys back soon.
16:39 - Thank you.
16:40 (upbeat music)
16:42 (upbeat music)
16:45 (upbeat music)
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