Chakri Gottemukkala Of o9 Solutions On What We Must Do To Create Nationally Secure And Resilient Supply Chains

An Interview With David Leichner

Consider nearshoring: Given the geo-political risks for supply chains that are so far-flung, there is a big need to understand how to nearshore supply chains. That’s a complex task due to policies in place and infrastructure issues, however, it would lead to shorter lead times and more resiliency.

The cascading logistical problems caused by the pandemic and the war in Eastern Europe, have made securing a reliable supply chain a national imperative. In addition, severe cyberattacks like the highly publicized Colonial pipeline attack, have brought supply chain cybersecurity into the limelight. So what must manufacturers and policymakers do to ensure that we have secure and resilient supply chains? In this interview series, we are talking to business leaders who can share insights from their experiences about how we can address these challenges. As a part of this series, I had the pleasure of interviewing Chakri Gottemukkala.

Chakri Gottemukkala is co-founder and CEO of o9 Solutions. He is a technology visionary and the driving force behind o9’s cloud-based platform that is driving digital transformation and helping global companies make better and faster supply chain, revenue, and P&L decisions.

Thank you so much for joining us in this interview series! Before we dig in, our readers would like to get to know you. Can you tell us a bit about how you grew up?

Before I talk about my childhood, let me share more about my background. I am the CEO and co-founder of o9 Solutions, a technology company currently valued at $2.7 billion. But this phase of my life began by taking a big risk in 2009. I saw an opportunity to create a company from scratch that could address big problems for big companies. Our clients today are some of the largest companies in the world. But those types of companies don’t usually do business with startups. When we started, we were going up against big, established competition in the supply chain software space. It was a big gamble to do so, but it was based on the conviction that me and my new team had the know-how and the technology that could help businesses solve their biggest planning problems. I’ve been asked before: Where did that conviction come from? It goes back all the way to Hyderabad, India where I grew up and started with my parents. My dad was an entrepreneur, and I got a lot of inspiration from him. In India at that time, there were limited opportunities for young people like me who were interested in engineering and technology. Early on, I managed to get accepted into the Indian Institute of Technology Madras, which was the country’s premier engineering institute. That then gave me an opportunity to come to the U.S. on a scholarship to the University of California, Los Angeles. I essentially made the journey to the U.S. with that scholarship and about $500 in my pocket. To me, the U.S. is the ultimate promised land for opportunity. If you work hard, you can succeed. At i2 Technologies, my first job after graduating from UCLA, I always approached my career from an entrepreneurial perspective. It’s what helped me take risks there and rise up through the ranks. I started as a young consultant, and when I saw problems we could help our clients solve, I would go straight to i2’s founder, Sanjiv Sidhu, who then became my mentor. I carried that attitude throughout my career. To circle back around to the start of my response, that entrepreneurial spirit and willingness to work hard, qualities that my parents instilled in me is what gave me the ability to create o9.

Can you share the most interesting story that happened to you since you began your career?

At o9, we had the opportunity to present our technology to a very large industrial and medical equipment manufacturer, who was evaluating software to transform their supply chain planning. We were ready to demo o9’s software platform, but we didn’t have any references in that specific industry. It was me and our Chief Product Officer presenting to a room of 50 people during a two-day workshop. At one point, they asked us how our platform could address a specific requirement that’s unique to the medical device industry. But how could we show that our technology could handle it if we didn’t have any references of industry experience? After the meeting, I went to a whiteboard with the conviction that our platform could meet the needs of the manufacturer — even if we were going up against long-established competition with direct industry experience. So, that evening after sketching it out on the whiteboard, we modelled how the industry requirement would be addressed using the o9 platform, took a video, and then sent it to our contact at the company. Against the odds, we ended up winning the deal. When I asked our client why o9, he said, ‘You guys showed me that you’ll put in the extra work required to make it happen. We know this is going to be a tough transformation and that’s the kind of partner that we want.’

That story has stuck with me throughout the years. Today, one of o9’s key values is leadership and execution. It’s about passion and the willingness to go the extra mile. The lesson we learned from that experience became a big part of how we have continued to win over some of the world’s biggest companies.

You are a successful leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?

Curiosity and the desire to always learn is an important trait. I am a systems thinker; when I see a problem, I try to abstract the problem, look at it from all angles, find patterns and learn how to solve it in a much broader way rather than in specific terms. I think this is key to designing a great product because it will have a bigger impact. That fundamental aspect of my nature is what led to the creation of o9. With just a single platform, we are able to help solve supply chain problems for companies in many industries — from the largest retailers to the largest industrial and consumer product goods manufacturers. If I didn’t think of solving supply chain issues more broadly, we would have developed a platform just for retailers or just for manufacturers or a single industry segment — but the impact of o9’s technology would be significantly limited.

I think another trait that is instrumental as a leader is not being afraid of failure. When I launched o9, I was often asked, “Why would you leave a cushy job and dive into the deep end by creating a startup, which can fail?” I never saw the potential to fail. I could go back to working for another company, and I wasn’t afraid of how people would perceive me if I did. Even after I made the decision to take the leap and start my own company, I was questioned about why I was taking on the challenge of helping large enterprises solve their toughest supply chain problems. It’s such a big and broad issue, why not focus on this or that? But I held on to my conviction that I wanted to and was able to solve complex planning issues. I think people often overestimate the fear of failure, and it gets in the way of success.

Hard work is the third most important trait in my leadership style. There really is no substitute for hard work. Building o9 from the ground up, creating this product or that, working with great teammates — although it’s something I enjoy, am passionate about and continuously inspired by, it still comes down to putting in the work.

Are you working on any exciting new projects now? How do you think that will help people?

I’m working on several personal and company projects currently. On the personal side, I never lose sight of my journey and utilize the lessons I learned to find ways to give opportunities to talented young people who might not have the resources I did. Without getting into the specifics, they work so hard and grab onto opportunities like they’re a lifeline. The results are truly amazing. From a business perspective, I continue to be inspired by helping companies digitally transform. It’s a major endeavor for any company to undergo, especially those that have been around for decades. Currently, it takes a really long time for such companies to make the decisions they need to get to that point. But, at o9, we believe there’s no greater mission. Let’s take a big company — a multi-billion, multinational retailer or manufacturer, for example: We often find that they are losing huge amounts of money per year in terms of value leakage due to poor, siloed planning. But, it can take them three to four years to make a decision to bring on new technology or initiatives to help them solve the issue — that translates to a lot of lost value over time. As a result, we’ve got a couple of projects we’re working on that will fundamentally transform the speed with which we can educate decision-makers about the cost to the business.

Ok super. Thank you for all that. Let’s now shift to the main focus of our interview. Can you help articulate what the weaknesses are in our current supply chain systems?

I think that the pandemic has exposed the weaknesses of the overall supply chain system. Decision-making is extremely siloed and whenever there is a lot of demand and supply volatility those siloes get exposed and you have big issues. Historically, those issues have been papered over a little bit by inefficiencies and by putting more inventory and extra costs into the supply chain. But the pandemic has shown that the siloes can no longer be tolerated. Therefore, the need for integrated planning and collaboration across the supply chain has become much more important than ever before — not only at the supply chain organization levels but at the CEO and board level. Companies that transform and address the uncertainties in demand and supply in the future are going to grow many fold. At o9, we’ve been talking to the market about this for a long time, but siloed planning has become an extremely urgent problem for companies to solve in the wake of COVID-19.

Can you help define what a nationally secure and resilient supply chain would look like?

There is always the need for balance between customer service, inventory levels and cost in any supply chain. In general, as consumers, we expect to get the right product when we want it — with very short lead times — and we also want to have a lot of product variety. This is tough on companies, especially if demand is uncertain. It means they must have a lot of inventory on hand, which translates to a lot of cost in the supply chain in order to meet customer expectations. Resilient supply chains will strike a better balance between those three supply chain pillars. Companies still need to meet customer expectations in order to grow, but historically, this has resulted in a lot of inefficiencies in planning and decision-making, which were masked by extra costs or too much inventory in the supply chain. So, a resilient supply chain comes from being much more agile in how companies respond to changes in demand and supply, which includes planning processes that can immediately evaluate leading indicators of how — and if — demand is changing and the impact of that on supply chain costs and risks. If companies can evaluate that quickly, then they can estimate what amount of risk they’re willing to take to meet customer service expectations. That’s the key capability companies need to ensure their profitability.

Ok, thank you. Here is the main question of our interview. What are the “5 Things We Must Do To Create Nationally Secure And Resilient Supply Chains” and why?

• Address the lack of supply chain visibility: Although supply chains are widespread across the world, most companies are only familiar with their first-tier suppliers. The reality is that a company’s supply chain also extends to their suppliers’ suppliers’ suppliers — what we refer to as the multi-tier supply chain. Visibility into all layers of the supply chain is becoming extremely important because problems often occur two tiers deep. For example, a semiconductor supply issue that arises today will have an impact on a manufacturer six months later. If enterprises are not watching that, they’ll encounter surprises way too late in the game to preemptively resolve them. But, for U.S. companies, getting access to that data is not easy. As a nation, we need to develop a way — perhaps putting policies in place — to make it easier to get this kind of information.
• Consider nearshoring: Given the geo-political risks for supply chains that are so far-flung, there is a big need to understand how to nearshore supply chains. That’s a complex task due to policies in place and infrastructure issues, however, it would lead to shorter lead times and more resiliency.
• Understand talent and capacity constraints: When I speak to chief supply chain officers at large corporations, they express that there’s a dearth of talent — at all levels across organizations — but capacity is constrained right now and it’s compounding existing supply chain issues. For example, many supply chain leaders are saying, ‘Hey we don’t have a lot of people who want to work in the factories and warehouses anymore.’ Supply chain leaders must figure out what is driving that because a lack of talent is becoming a huge issue for managing global supply chains. In particular, traditional companies are finding it hard to recruit and retain talent to work in the factories and warehouses, as well as hire for positions in supply chain planning and operations.
• Embrace digitization: When it comes to adopting digital operating models, I think that there are companies that are moving fast in that direction and others that are lagging behind. The latter comprise mostly of companies that have relied on traditional operating models for decades if not hundreds of years. The Amazons, Ubers, Netflixes of the world — who are referred to as digital-first companies — are dominating in today’s market. Leaders at traditional companies must ask themselves, ‘What does our digital operating model look like?’ Digitization is a very effective weapon for developing a resilient supply chain — there’s no doubt we must find ways and put policies in place to help companies quickly move in that direction.
• Focus on ESG: There’s a big push for companies to adopt ESG practices and reduce waste. It’s forcing companies to really think about both the resiliency and the sustainability of their supply chains. That’s why focusing on better planning and decision-making is more crucial than ever — doing so ensures that both the Earth’s resources and the organization’s resources are better utilized. This is not just a feel-good trend: There are a number of sustainability-focused regulations that are being implemented across many regions in the world that will directly affect global companies. As such, companies need to have complete visibility of their supply chain to understand the impact planning decisions have on their ESG objectives and to be able to navigate sustainability-focused policies and regulations.

Are there other ideas or considerations that should encourage us to reimagine our supply chain?

I think the move to more sustainable supply chains is key. People are more aware of supply chain disruptions and the impact that it has on product availability. For a long time, supply chains were running efficiently or inefficiently, but people would still get the product that they wanted all the same. Then, there was an explosion of consumer choice; we want the product when we want it, we want a wide selection to choose from, and we want it instantly. All of that comes at a tremendous cost and leads to significant waste. Company stakeholders — including customers — are becoming increasingly aware of this issue and are demanding change. Companies want to win more market share by offering a wide variety of products, but they also need to own up to the impact of doing so from an ESG standpoint. Since the pandemic, people have gotten really comfortable with receiving information via QR codes. What if that same technology allowed consumers to receive information about how a product was made, where the product was made, and accurate information about its carbon footprint and/or energy usage? How would access to that type of information change consumer behavior? Would it drive more demand for sustainably made products, even if the price increased? What if a company sourced different, more sustainable material to make its product? Would consumers be willing to pay a higher price if information about its environmental impact is made visible to them? When it comes to all of the things that make supply chains less efficient or less friendly to the planet, bringing the customer into that equation could potentially transform how supply chains operate in the future.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

There are a lot of big problems in the world to solve. I believe everyone needs to do their part. In my sphere of influence — given that I have visibility into today’s toughest supply chain problems and understand the deeply connected nature of sustainability, optimal supply chain performance and technology — I’m focused on helping organizations gain visibility into the impact of their planning decisions. Not just their P&L, but also on the planet. As we say at o9, planning is not only good for the P&L, it’s also good for the planet, and I just want to make that happen. That would have a huge impact.

How can our readers further follow your work online?

Readers can follow our journey at o9 on LinkedIn.

This was very inspiring and informative. Thank you so much for the time you spent with this interview!

About The Interviewer: David Leichner is a veteran of the Israeli high-tech industry with significant experience in the areas of cyber and security, enterprise software and communications. At Cybellum, a leading provider of Product Security Lifecycle Management, David is responsible for creating and executing the marketing strategy and managing the global marketing team that forms the foundation for Cybellum’s product and market penetration. Prior to Cybellum, David was CMO at SQream and VP Sales and Marketing at endpoint protection vendor, Cynet. David is the Chairman of the Friends of Israel and Member of the Board of Trustees of the Jerusalem Technology College. He holds a BA in Information Systems Management and an MBA in International Business from the City University of New York.