Supplier Management Made Simple, with Daryl Hammett

 

Dawn Tiura: Folks, this is Dawn Tiura, and I am so excited to spend a little bit of time today here in our podcast with Daryl Hammett. Daryl is the Connxus Chief Operations Officer. And I know a lot of you don't know about Connxus and we're going to spend a little bit of time getting to know about the company because it truly is amazing. But even more amazing is Daryl and his journey to where he is today, and what drives him and his passions.

 

Daryl Hammett: Thank you, Dawn. Glad to be here.

 

Dawn Tiura: So, Daryl you've got a really interesting background because I have never—you don't typically find someone in such an extreme sourcing role that came out of retail. You were the Senior Vice President and General Manager of Sears Optical of North America. And when people say Sears, this is not Sears stores, this includes brands like LensCrafters, Sunglass Hut, Pearle Vision, Oakley. 25.5 billion, publicly traded company, and now you're at a startup. Talk to me about this journey.

 

Daryl Hammett: Wow, well that's a great question and actually a very good point. I have to start by saying I've had a very good experience working in a lot of different areas. And when I came out of college I went into the military, where I worked a lot in finance. And when I got out of the military and had my master's. my first, or what I call my real corporate job was training with a food service restaurant, and that was called Whataburger, and I don't know if you're familiar with Whataburger, but that-

 

Dawn Tiura: No, I know it. 

 

Daryl Hammett: You know it, okay. I started there, five-and-a-half-inch bun and a great burger, and they really taught me the operations and sales, because I was in training and I had to train other people and I enjoyed it. So I moved quickly to head of franchising, and also into sales and operations. Because one day someone challenged me and said, "You know what, you're training and you're doing all this great training in a nice comfortable office, why don't you come out here in the field and learn the field?"

 

Daryl Hammett: So that's exactly how I actually got into operations. And learning operations and learning sales, dealing with supply chains and procurements, and food, and all of it, it takes to run a business, was really my first experience of getting a real General Manager, owning my own business type of mindset, which is from the customers, to the food, to the supply chain.

 

Daryl Hammett: And then I was recruited by Luxottica about 10 years after being there and they brought me in based on that generalist experience, having training and all the other disciplines of running a business. And I quickly moved up there. I got promoted every year and went from operations into general manager and managing a huge, five-billion-dollar brand in Luxottica. What can you say about Luxottica other than ‘number one in glasses’, and they've grown exponentially over the course of the years, from Sunglass Hut, to buying Oakley, to buying Aspen, to going all over the world owning the number one brand in the world in glasses, which is Ray-Ban. So, I had a wonderful experience there and also what it taught me building on my general management type of experience was—how to purchase products; how to forecast [your] planning; what procurement was really about from the buying cycle for a customer; and buying your glasses—there we had to buy glasses about a year and a half in advance. So, what are the fashion and colors that people are going to want? Because it takes such a long lead time to actually make molds and glasses and all the whole process, and then have them shipped from Italy to the US.

 

Daryl Hammett: And then also coupled with that, I had to learn and build on my franchise experience, which is working with inside Sears. We were a licensed kind of franchise business within Sears, a corporate store. So I was able to pull and draw on all of my experiences there at Luxottica and grow the business and we set all kinds of records and did a lot of great stuff. And after being 14-15 years there, I decided to go into full time executive coaching and use all of my experiences actually to help others CEOs and leaders be, one more visionary, hire better people and identify talent, and actually grow their businesses. And one of the CEOs that I met was Rod who actually started and founded the Connxus, and he talked me into making an investment and coming on board. So that's how I got here.

 

Dawn Tiura: So executive coaching to the president of Connxus? And then you invest, so you're actually a co-owner of that company now?

 

Daryl Hammett: Yes.

 

Dawn Tiura: Wow. I just have to take a little bunny trail. How many pairs of sunglasses do you own?

 

Daryl Hammett: You really do not want to know that answer, but it is well over 200 of sunglasses and I have about 100 pairs of reading glasses. So, I'm getting now to that age where I'm getting presbyopic and I'm going to end up having to invest in some multifocals pretty soon.

 

Dawn Tiura: Oh, I wish I knew you back then. Sunglasses is one of the things I collect, and oh my gosh, I'm just sitting here going, “Oh, I wish I knew you when.” But let's get on to today. Connxus, not a lot of people know what you do. So tell me who is Connxus?

 

Daryl Hammett: First of all, Connxus is a software company. And that's probably the thing that people don't know a lot of first, Dawn, is that we're a software development company. We have in-house developers here in the US, in our Mason, Ohio office banging out and writing code every day. So that's number one. And we started this company approximately eight to nine years ago with the focus on really creating great opportunities for corporate buyers by bringing great, qualified vetted suppliers to the table. And that business grew, and as we grew and doing a great job of bringing diverse suppliers to corporate buyers and creating opportunities for those diverse suppliers, we found through the conversations that, "Hey you guys have a great solution for diverse suppliers, but why don't you open this up and take care of all of our suppliers?"

 

Daryl Hammett: So, hint, Connxus went from supplier diversity made simple to supplier management made simple. So we pivoted and we grew, and we've grown. Now we have customers all over the world today and taking advantage of our platform that we designed and built for diverse suppliers to do business with corporation buyers, to really now we manage all suppliers. The diverse and non-diverse supplier. And we've grown from contract management to market place, to tracking spend and verifying spend in the procurement cycle. We do it all when it comes to being a great supplier relationship management platform.

 

Dawn Tiura: Oh, all right. So right now, suppliers who are not small, diverse, veteran-owned can be listed on your platform? You accept all suppliers now?

 

Daryl Hammett: Yes, ma’am—that is correct. Absolutely.

 

Dawn Tiura: But you do have a—when I talked to you earlier—you do have a passion for these diverse suppliers. Where does that passion come from?

 

Daryl Hammett: Yes. Number one, I have a passion for those diverse suppliers because I used to be one. So sometimes you experience drives you passion. So I remember trying to get in and meet with corporation buyers to sell my goods, which was at that point executive coaching or executive development. So, I understand the woes and the challenges of knocking on those doors. Or what we call the fish bowl syndrome, where you know, drop your card in this bowl and you may get a call, and it kind of goes into a black hole. So I recognize from my own experiences where a lot of the disconnects were in the process of really creating an environment that was holistic, that the buyer could have his or her needs met by being able to have qualified vetted suppliers coming to the table. Because again, what's most important is the buyer's know who the suppliers are, and also they understand the supplier's backgrounds.

 

Daryl Hammett: And so we are creating a platform where a supplier can fill out their profile, put in all their risks. Put in their insurance, put in their sales, put in their history. Get a risk score card. So when they end up engaging buyers, the buyers are much more informed and it doesn't have to be several emails back and forth. Doesn't have to be several phone calls back and forth. We've helped make the process more efficient. And those are one of the things that I recognized as a minority supplier is that: if the process could be more efficient, because my time is so important as a supplier, that allows me to focus on being innovative, to be strategic in cutting costs for buyers, which creates more value for the buyers looking at me as a potential supplier.

 

Dawn Tiura: But you say you vet the suppliers. And are they self-reporting or do you actually vet them?

 

Daryl Hammett: So, we do a combination of both. So, our platform vets the suppliers from validating if they are a small business, for example, Dawn. Let's just take a business who comes in, let's say, Acme Corporation. Acme Corporation says they are a women-owned business. We can actually validate that through an algorithm that we've created and pull data in from many different resources to validate that, that Acme company is woman-owned business. That we pull data in from several different resources to validate that wen she says it was created in 1999, we can validate it was created in 1999. So, we can pull in several resources that would typically have taken that buyer before, Dawn, weeks to validate tax ID number; to validate this business is actually located where it is; to validate that it is actually a woman-owned business, and it started when it started. We now make that a basically one click process in our platform. So some are self-reported, we validate those, and some are what we consider to be supplier registered, that is registered owned portals that we support and we validate them within those portals as well.

 

Dawn Tiura: So, if I am a buyer, and I have hundreds if not thousands of companies that I need to make sure they have their insurance certificates up to date, and their WBENC or their diversified supplier certificates up to date. Do you hold all of that information for me, so I don't have to keep going out to them every year, and hundreds of companies, thousands of companies don't have to go out to the same supplier for the same information?

 

Daryl Hammett: Dawn, that is correct. Our platform can allow you to scan in and track your certifications. All types of certifications and all type of documents that those buying organizations may need are stored right on our platform under that suppliers profile.

 

Dawn Tiura: And do you ping them when their insurance requirements are out-of-date or have end of life?

 

Daryl Hammett: Yes, ma'am we sure do. Our system sends automatic notice out 90 days, 60 days, and the day before and the day after that certificate expires.

 

Dawn Tiura: Wow. There are so many people that need to know about this. So I'm glad we're talking about this. How about, do you integrate with existing ERPs or E-procurement systems or do buyers have to upload files to you and keep them maintained? Or are you an integrated part of the platform?

 

Daryl Hammett: Yes. We can do either. So in our platform, Dawn, you can either have a standalone as a cloud-based solution outside your existing ERP system, or we have a universal API which can plug into your existing platform. So we can do it whichever way the company prefers. We can do it both. And then on top of that have single-sign-on as well, which makes it easier for the user to not have to put in multiple passwords as well.

 

Dawn Tiura: Okay. So Daryl, I don't know if you know but SIG has a Sustainability Sourcing Thought Leadership Group, and I know your company talks about sustainable sourcing. Can you talk to me about what does it mean to have sustainable and an inclusive supply chain, and how can you help me with that?

 

Daryl Hammett: Sure Dawn, and I will keep it real simple, and you can ask me more questions to go more in depth, or get more triangular if you would like. So, number one, when we talk about ‘sustainable first’, that means establishing you baseline. So what we do for our typical buying organization, just call it for all intents and purposes, The Brown Company. When The Brown Company says, "Connxus, we would like help creating a more sustainable supply chain," we first ask for them to share all of their existing vendors with us, and the spend of those vendors. So we establish a baseline. So then we go through and say, "Based on your spend with your current suppliers, you're heavy in this category, heavy in that, light in this category. When you look at diverse suppliers, here's where you're heavy, here's where you're a little light." And we give you basically what we call a spend analysis.

 

Daryl Hammett: And so from there, Dawn, we identify where your opportunities are with your spend. So, if you want to create a more sustainable supply chain: are you too heavy with certain suppliers? Should you diversify? And then we make recommendations based on our platform, we can go and find diverse and non-diverse suppliers that can also meet that same need. So you don't have to be too heavily dependent on one or two suppliers in a certain high-end, or high-spend category. So, we talk about diversifying your base, to make sure you're not too heavy in one area or not, because that's not a sustainable supply chain. If something happens or that buyer goes out of business, or something happens, do you have enough backup or have you diversified yourself enough to have had some experiences with diverse suppliers? And when I say diverse, not necessarily ethnic diverse, but diverse meaning in a different stage. Diverse meaning it could be veteran-owned, woman-owned, LBGT. Diverse can be used in a myriad of ways. But in this case, we're using diverse meaning where we can help you diversify and make recommendations to people that meet those same needs, because you may not have known that they were out there.

 

Daryl Hammett: And then when we move from sustainability to responsible and diverse supply chain, we're now saying, when you have identified your baseline and where your opportunities are through your spend analysis, now let's create an inclusive strategy around making sure those suppliers that we bring to you get included in the process. So are your RFPs; RFIs; RFQs going out to people that are different from your normal rhythm of who you sent those RFPs, RFQs and RFIs to. So you're including different suppliers to give you different and innovative ideas so that you can have a more inclusive thought process around the product that you're trying to get, or the solution that you're trying to create.

 

Daryl Hammett: So by creating a sustainable strategy and looking at your spend you can then identify your opportunities, and then once you identify those opportunities you're responsible and inclusive to include different suppliers to meet those said needs that you identified in your baseline results. So, I hope I made that simple, and you can ask more questions if you would like.

 

Dawn Tiura: I mean it does make sense that you would help identify where there're areas at risk or too much dependence in a certain area. Or if you want to have a nice broad base of diverse suppliers how you can help. So, you can actually make recommendations then of other suppliers. Do you vet the quality or do you just state that they are vetted to say that they deliver the same product or service?

 

Daryl Hammett: We can look at what other companies are doing or have done with suppliers in our platform. So we have about 1.8 million certificates, or certified businesses in our platform, Dawn. So, basically we can source by category. We can source by NATE code, or zip code, or UNSPS code. And so we can look at our platform, and Dawn you may say, "I would like to have another widget maker in Texas because we just got hit with storms and the widget maker I have in Florida—there's a lot of risk if I don't have another supplier outside the state of Florida." So we can go to Texas and find a widget maker in the area that you need. If you want diversity we can recommend a diverse supplier. If you want ethnic diversity, gender diversity, we can make those recommendations.

 

Daryl Hammett: But we also can source based on who our other companies use to do that widget as well. Because what we found is that there's a lot of cross-pollination between the Fortune 500. A lot of companies do business with the same suppliers. We can make recommendations on suppliers that we recommend who are doing business with the other buyers in our buying organization, or people who are registered on our platform and have filled out core files. Because we can only vet up to the point where they're still going to have to do the interview and also go through the RFP process.

 

Dawn Tiura: Let's talk about the clients or customer engagement you have. Is this for what size company do you focus on with Connxus? Is this small to medium? Is it medium to mid-cap? Is it mid-cap or is it high-cap?

 

Daryl Hammett: Who are our current customers?

 

Dawn Tiura: And who are you going after in the marketplace?

 

Daryl Hammett: Okay so very good question. Today, I think Shannon would agree with me and my marketing team, and I wouldn't be speaking out of turn; right now we're really focused on the Fortune 100, Fortune 500 and Fortune 1,000, because all of their needs are very different, Dawn. We have a lot of the top 50 companies right now that they're actually clients of ours today. And so, what we recognize is their needs are very different than, for example, companies in the Fortune 1,000. A lot of companies that do business with the government have certain requirements they have to meet around diversity and inclusion of suppliers. So if you don't directly do business with the government, when I say government that means states, local and federal, that you do not have the same requirements to do reporting of your diverse spend. So, we find that the needs of the Fortune 100, Fortune 500 are very different than, for example, the top 5,000 companies in the US. So, what we tend to find is that all of our solutions, including search capabilities for sourcing, our spend tracking, our tiered tracking, our portal and registration, and basically our compliment or suite of products, typically are going to go in the Fortune 500 and above group because they have multiple needs, with multiple divisions that are reporting globally.

 

Daryl Hammett: And then what we see towards the end of that spectrum, which, I just call it the top 5,000 companies. So you look at that other 4,500 companies they're typically going to be in one or two of our solutions, which are they want to do a spend analysis of their data, they want to scrub and verify and validate that who they're doing business with are diverse. So we recognize that there are going to be multiple needs. So, all of them are our customers; they just have different products that they need based on their requirements or need to do business.

 

Dawn Tiura: Ok, so you certainly can support the Fortune 500, Global 500. That's the important thing there.

 

Daryl Hammett: Yeah. And we have a lot of them currently that we do business with today. We have the top five companies in the world. I think we have three of them right now in terms of size.

 

Dawn Tiura: Oh that's great. And no wonder you're part of SIG, because we have the rest of them for you. Tell me, risk is one of the biggest topics that people talk about today. Is there any way through your vetting process that supplier risk can be included as part of the sourcing process? Do you do anything around supplier risk?

 

Daryl Hammett: Yes, we do, Dawn. In fact, that's been one of our big, big focuses over the last nine to twelve months. Because as I shared earlier, when we started Connxus, we really wanted to focus on the supplier diversity and the needs of the diverse supplier, and the needs of the buying organization for those diverse suppliers. And we recognized as we grew that the expectations and the needs of our buyers were to also asses and determine what the risks were of doing business with these diverse suppliers.

 

Daryl Hammett: So what we did is we started last year, and we built in a risk score card, which is basically where you can go in and select any supplier in your buying organization and order a risk score card, which is basically kind of a credit report or credit history for that said supplier. And that will pop up right into their profile and it will have whether, and it's a gradient scale, so red, yellow, green. And it will say green, hey go, because all the history that is on this supplier is great. It may say yellow, we may not have as much history because they're a startup, there's not as much information out here, so proceed with caution, but there's no red flag. And it may have a red, because a supplier may have had a recent issue or run amok around credit or only in cash, these challenges may have forced them to do some different things. But we basically give you a preview to what the current state of affairs is with this business. And so now you can go and make an educated decision on what questions you want to ask.

 

Daryl Hammett: And then also we can go into what we call from risk score card to procurement card, where it actually gets more into the financials. The companies can upload their audited financials and things of that nature. So that the buying organization can look at those as well. So, you have the risk score card, and you have the procurement score card as well.

 

Dawn Tiura: That's awesome. So can I look at suppliers if I'm a buyer that I'm not doing business with today and see their profile?

 

Daryl Hammett: Yes. You sure can. You can invite them into your platform by using what we call our smart search capability today. You can go through our platform, Dawn, and look for... Hey, like we were speaking about a minute ago, that widget maker. You can say, "I'm looking for a widget maker in Texas." And you can say, "I'm looking for a widget maker that is a woman-owned business." You can look for a widget maker that meets a certain category or meets certain diverse needs if you have them. Or you can just put in, I'm looking for a widget maker and then from there invite that widget maker into your buying profile and say, "Hey I think I may want to do business with you, come in and register on my platform and fill out your profile and get it 100% complete." And then once he or she registers on your platform, Dawn, and then you can order actually a risk score card as well.

 

Dawn Tiura: Oh all right. That's great. I understand how you can save me a lot of time. But do you actually save me money as well? Is it a cost savings, or is it risk mitigation; is it a speed to market…what exactly is your…how do you sell yourself to your customers?

 

Daryl Hammett: Dawn, all the above. So let me check the box. We on average will save any client 40-50 hours a month in terms of man or woman hours because we're going to have and give you everything you need within two to three clicks on our platform to get any information around your supplier. So one it allows you to be more efficient and saves you time around hours and hours spent. Then next one we're going to create more value, because you're going to be able to see everything in one place. So you don't have different links to pull up data on a supplier, you're going to have it all in one place.

 

Daryl Hammett: Oh, and also by the way, we make supplier management simple, so we are constantly adding different configurations, so any buying organization can have 69 to 70 different configurations of our existing platform without any customization. So that's going to save you a lot of money as well not having to pay any customizable cost. Because pretty much it's a configurable platform and we can do a API, which is going to save you from efficiency and we don't charge currently for APIs or single sign-on. So, that saves you as well because we're trying to make the process simple. We want buying organizations to have access to great qualified vetted suppliers and if you're not doing business with Connxus you have to ask yourself, “why not?” Because it really allows you to be efficient, it allows you to save money and it allows you to find those vetted, qualified suppliers right there in one click.

 

Dawn Tiura: I love that. in closing you've had an amazing career and it sounds like it's not going to be ending anytime soon. It sounds like you have some really big plans for Connxus, but if I was starting out and I was starting my career in sourcing today, what kind of recommendation would you have for a young sourcing professional?

 

Daryl Hammett: Which is really a great question because my team and I talk about it a lot. First of all recognize that sourcing has really evolved over the last few years. And it is constantly evolving now. Number one what's really impacting sourcing and procurement is technology, so are you familiar and you're aware of the technology. I would tell any young sourcing professional person that was converting from different fields, are you aware and have you learned about blockchain technology? And do you understand about sourcing technology? Do you understand the risk of risk mitigation process of suppliers first?

 

Daryl Hammett: Then also determine what side of the equation do you want to be on? Do you want to be on the buying side? Do you want to be on indirect or direct? Because things are changing and evolving as procurement organizations evolve. So then if you are looking for a career in direct, and if you're looking for a career in sourcing or buying, make sure you understand what's impacting that field so that you can go in fully informed around the technology and the needs of that particular field, so you get the training. So, do you need to sign up at SIG and go through some classes, like I'm going to be doing soon, to become a sourcing professional? Because you're going to meet certain needs that I want to have in my team. We want to have under our wheelhouse. Are there other organizations like SIG or needs that you may have or conferences that you may want to attend so you can continue to educate, because as this space continues to evolve the education you need to have needs to evolve as well. Because six months ago there are different things that are impacting sourcing and procurement than there are today. So things are constantly evolving and you have to stay abreast of those things.

 

Dawn Tiura: You know Daryl, it's so refreshing to hear that because ‘status quo’ is not acceptable in sourcing any longer and if you want to just keep doing the same old thing, you're not going to even get the same old results, because the world has changed so quickly. So, I'm so glad that you recognize that insatiable curiosity and the constant need to educate yourself is so critical if you want to be successful.

 

Daryl Hammett: Couldn't agree with you more, Dawn.

 

Dawn Tiura: Well, Daryl I can't wait to see a demo of your product, and to share more about Connxus with the SIG members. I know they are going to be thrilled, for those who aren't doing business with you today. But as you continue to evolve, I’d love to invite you back to the podcast for a version 2.0 and in the meantime, I just want to thank you for spending time with me today. It was fantastic and your enthusiasm is wonderful. It makes me, well I believe in you, and it's makes me believe in Connxus and I think this is a great opportunity for the market place moving forward. So thank you for your time today, Daryl.

 

Daryl Hammett: No, thank you Dawn. And looking forward to meeting you soon.

 

Dawn Tiura: Thank you. So, folks, this is Daryl Hammett, Connxus COO, Chief Operations Officer. Connxus. Daryl Hammett. You've got to look him up. You've got to reach out and get to know him. I'm sure going to. I'm sure going to keep watching his journey because I think all of us are going to be excited to watch him into the future. And I hope you come back and join us again soon. Thank you everybody. Bye-bye.