Supply Chain Transparency with Tech Startup Silq


Emily Lane, Bret Schnitker, Ram Radhakrishnan


March 21, 2022


Emily Lane 00:09 

Welcome to Clothing Coulture, a fashion industry podcast at the intersection of technology and innovation. I'm Emily lane. 

Bret Schnitker 00:17 

I'm Bret Schnitker. We speak with experts and disruptors who are moving the industry forward 

Emily Lane 00:21 

and discuss solutions to real industry challenges. 

Bret Schnitker 00:24 

Clothing Coulture is brought to you by Stars Design Group, a global design and production house with more than 30 years of experience. 

Emily Lane 00:35 

Welcome back to another episode of Clothing Coulture, we have once again found ourselves in the beautiful Hollywood Hills, Laurel Canyon, and great views behind us. So if you're listening to the podcast, you can always go to our YouTube to take a look at the scene that we have 

Bret Schnitker 00:50 

And turn on the fan on low, kick back wherever you're at you know. 

Emily Lane 00:56 

Absolutely. Well, it's a great setting for a pretty serious topic we're gonna dive in today, you know, it's everyone in the industry is experiencing supply chain breakdown. There's issues all over the place that there's talks about it being 18 to 24 months for the industry to actually reset. And there's just conversations, people just saying, Well, really, the reality is, the whole system just needs an overhaul. So to explore this conversation, we have invited Ram Radhakrishnan to the table. He is the founder and CEO of Silq, which is a wonderful tech startup out of Silicon Valley. And Ram is using his background in manufacturing freight logistics to create a data driven system. And we're excited to be partnering with Silq and thought, you know, this would be a good time to dive into this weighty topic. 

Ram Radhakrishnan 01:48 

Thank you, Emily. Thank you, Bret, for having me. It's an honor. And I guess we met six months ago. Yeah. And it's it's been a true pleasure. Just getting to know you guys, and working with you. So thank you for having me. 

Bret Schnitker 01:58 

You're dealing with kind of a crazy topic or crazy niche in this business at a crazy time? 

Ram Radhakrishnan 02:05 

Absolutely. It's probably it's like selling torch lights in the middle of a blackout. That's, that's what it feels like when you're talking about visibility in today's landscape, right? Everybody's struggling to know what's happening on the other side of the ocean. And when they're going to get their inventory. And they're going to get it the way they wanted it and when they wanted it. So it's it's we we are probably the right place at the right time, I would say and we're glad we found the opportunity there. 

Bret Schnitker 02:30 

So why don't you fill people in on what Silq is what what your what your vision is for the future? What you're doing today? 

Ram Radhakrishnan 02:36 

Absolutely, thank you. So maybe I'll maybe give you a quick spiel about myself where my story is, and that'll kind of sync along and make a lot more sense. So I grew up in India, if you couldn't tell already with my long name and my appearance. But yeah, I grew up in India, my family's been in manufacturing, my parents were one of those kind of entrepreneurs who were constantly you know, tinkering with different kinds of products that we've that we've manufactured over the years across automotive components, apparel home, furnishing all kinds of different spectrum, right? It's a pretty big, typical Indian family without vast manufacturing, exposure. Having worked in the factory environment, it was a very, very fulfilling experience when you see, you know, you have this many people moving production and getting things out and shipped out on time. And the biggest challenge we faced, you know, over the years when we're manufacturing in India was achieving maximum asset utilization, just being efficient in your production, planning, production out giving visibility to both your teams and to your customers and delivering on time, that was the most important thing that we cared about. Right that's that's what we're promising our customers and over the years, obviously, the businesses you know, evolved and I moved to the United States pursued my master's to do an MBA in New Jersey and stumbled 

Bret Schnitker 03:56 

You had the chance to get out of this business [laughter] 

Ram Radhakrishnan 03:58 

I did I did had a chance but now it brings you back in right it brings you back in it's it's it's a very alluring business to be in. Stumbled into freight forwarding supply chain logistics, essentially then that was a whole world in and of itself, just trying to, you know, move goods in a seamless way give visibility to customers, and help them understand where things are and moving in a cost efficient way. And what I realized over the last 12-13 years living in the United States working with customers in the US is the anxiety around you know, buying merchandise overseas is significant. you're placing orders, you're you're wiring money, large sums of money, and you're sitting here with your fingers crossed that you're going to get the goods out delivered on time and the way you want it and that is what I wanted to address, that anxiety, right when you're when you're buying merchandise overseas, having you know confidence with the quality with compliance with with with on time performance, the world is a different place right now. You want to make sure that that you're being responsible. And you're you're trading with the right partners and giving that visibility is what Silq is all about. 

Bret Schnitker 05:06 

Yeah. And the experience to deliver on that promise globally is an ever increasing challenge. You, you know, I think people simplify manufacturing overseas, they think I'm going to go on some site, I'm going to place it with some guy, and he's going to deliver it. And it's absolutely not the case. It's, that's where the anxiety comes from. People kind of go down that path and realize it's, yeah, sometimes the results aren't so positive. 

Ram Radhakrishnan 05:30 

No, absolutely. I mean, it's, it's if there was a, you know, a magic wand that you could wave and just say, Hey, I, you know, you go to Alibaba, and you find a factory. But that's not how business at scale works. You could do a small project, you could, you know, you could probably go a little further, but not very far. Yeah. This at the end of the day is a people business, there's a lot of cultures involved, there's a lot of intercultural challenges that need to be overcome, you need to understand who you're trading with, you need local boots on the ground, who understand that culture, to manage your production to manage the quality, it's, it's taken very lightly, a lot of times, 

Bret Schnitker 06:05 

And when I walk people through these, from the beginning steps to the point that they actually get the product, it's amazing how many hands Yeah, involved in this process from beginning to end, 

Ram Radhakrishnan 06:15 

It's called a supply chain for a reason because there's a lot of links in the chain and one weak link can make it impossible. 

Bret Schnitker 06:21 

Yeah, you're right. And, and, you know, being in the, in the apparel side of the business, you know, technology, business, you know, appliances, all the way up to fine technology. So much of that business has been automated over the years, years. And even within that, you know, there's challenges, but in automation, there's less anxiety in our business, it has always been heavily dependent on people to manufacture now, automation and technology is making its way all over the world as labor costs increase. But we still rely on people. Yeah. And so you know, the challenges that exist globally and the hiccups that can happen, even you know, I've been in India 30 years. I mean, India file I love India, of all the countries. 

Ram Radhakrishnan 07:04 

I'm glad to hear that. 

Bret Schnitker 07:05 

But in my experience, even in India, there's so many things that can go wrong. Yeah. In the supply chain. Yeah. And it's just sometimes you look and you go, wow, yeah, actually got through that.  

Emily Lane 07:17 

What are some of those biggest challenges in the supply chain? 

Ram Radhakrishnan 07:20 

Maybe going back? It's a great question, by the way, right? I wish it was a simple answer, I could give you in a single sentence. It's a very, very complex and a very hot topic right now, be honest with you. But to put it very simply, the analogy I used earlier, right, selling torch lights in the middle of a blackout, what really needs to be fixed is you need to fix the electric grid. Like that's the problem. Yes, you can't just distribute torch lights and just say this is going to solve itself, right? It's not you got to really get to the data. Initially, when you made that intro, you mentioned that right? We are focused on getting the data from the factory floor and giving that visibility now how we get that is a people solution. Okay? I'm not waving a magic wand sticking cameras in factories and trying to use VR and something fancy like that. I'm not gonna, I'm not going to give you that the answer is pretty simple. We leverage people, experts who know what's happening, who can kind of decipher what's happening, show up at factories, help factories, move production along, be their partners, give them that support they need and gather that data into a platform. Now once you have data at a large scale, take for example, right? A customer makes performance polos, we work with at least about eight customers who make performance polos right now in China, just like one region in China. And I can tell you that we have managed production for at least over 150,000 200,000 pieces of polos, I we have a certain understanding of what this graph would look like, where things are going to break down. When you get a timeline from the factory, how much authenticity can you give to that? How much integrity does the data have? That's how you fix the electric grid. And that's kind of what we're trying to fix here. But yeah, simplifying it, the problem is electric grid is broken. There's no data communication that's going on between different stakeholders in their supply chain, which is what makes it inherently weak, right? The factory does not communicate with the forwarder. The factory does not communicate with the supplier, and just that breakdown that is a very carefully choreographed dance. And if you don't do that, well, it's not going to look like a pretty performance. 

Bret Schnitker 09:16 

Well, and there is communication in different countries. Some countries don't communicate at all, you really have to pull it out of them. Some communicate quite a bit, but the information may not be totally accurate communication. Yeah. So you know, it is a little more complex than just simply communication. Yeah, verification of the accuracy of those communications. How do you how do you see overcoming that? 

Ram Radhakrishnan 09:38 

So I think right, visibility is a term that's been thrown around a lot, especially pandemic, right, transparency, visibility, we can create solutions for that. I think at the end of the day, what is the outcome that you're creating for that customer with the visibility, you can have all this data? How does that actually tangibly make add value to my business? So that's kind of what we're essentially coming down. Using all this data, we want you to be able to guarantee your landed cost. So if you're buying something for $5, just say for sake of argument, you need to know what are all the variables that can impact it. And I need to know what is it going to land in my warehouse in the United States, that's what you need. Right? So all this data that I'm collecting is ultimately to help you predict that and guarantee that. So that is how we essentially deliver value to our customers, we help you predict your landed cost with accuracy. And we essentially deliver the service to make sure we deliver at that price. 

Bret Schnitker 10:29 

So that's a big tall bill today with everything that's going on with logistics. 

Ram Radhakrishnan 10:35 

It's a very ambitious, audacious goal, which 

Bret Schnitker 10:38 

is you can pinpoint the boat you're going on, you can pinpoint where the boat travels across the ocean, but how long it's going to sit in a port here today, impossible to know 

Ram Radhakrishnan 10:49 

No, it's very, very, very fair question at the end of the day, right? The same solution would I set for what happens to factories? What goes down to predicting how long the boat is going to sit outside the Port of Long Beach? Right? 

Bret Schnitker 11:00 

So it's gonna be kind of like AI gathering that information and saying, look, the average wait, time is x. And yeah, ultimately, this is what we think that timing is exactly right. And as that supply chain hopefully resolves itself, to a degree, you know, freight and logistics has been, you know, teetering on collapse for so many years demand as far exceeded supply, you know, freight and port, you know, technology and labor has always been problematic. Yeah. Right. And so we see this wholesale collapse, we see this need for this change in that. And, and that's interesting that by analyzing the data, we're going to give you the ugly truth, whether you know, whatever that's going to be, but it helps people anticipate, you know, when it's going to arrive. 

Ram Radhakrishnan 11:47 

Yeah. And then sorry to be the bearer of bad news, right? This isn't going away. I mean, there is a lag effect between the pandemic and what's happening with supply chain, right? We're probably in the peak of it right now. You're all feeling the pain the most? Yeah, most of our customers are, we're trying to essentially help them navigate through the next 18 to 24 months, just That's how long it's going to take, as you said, two years is how long it's going to take from today. Yeah, to reset, just to kind of put some macroeconomic impacts, it's going to come away in July, that is a big negotiation and the Port of Long Beach, the labor negotiation for the unions, that's going to drive down costs, that's going to drive down productivity, yeah, then you essentially have in January, when the IMO regulations come into play, that expect boats to reduce their emissions by almost 50%. So that's going to mean that boats have to move slower. That's how you reduce emissions. So your capacity is going to dwindle further. Yeah. So there's a lot of things that are coming our way, it's gonna take us at least two years to normalize this. In the meantime, all you can do is predict better and better. 

Bret Schnitker 12:49 

So you know, in a world, you know, I've been doing this business for 10s of years, as we talked about in other episodes, and we kind of analyze, you know, I've kind of been in 70 countries, every country has its own culture, 

Ram Radhakrishnan 13:02 

I want to see your passport someday. 

Bret Schnitker 13:04 

Yeah, I got a few of those. As you know, every country kind of has its own cultures that relates to business. And, you know, our job helpmate to brands and retailers, is to understand the dynamics and the cultures, that country work with them, and ensure that, you know, ultimately, the product arrives on time, much like what you're talking about, a lot of that comes in understanding that delays occurred, understanding that there's a certain amount of communication that, you know, is flawed. So within the system that you're working in, and you're you're looking to employ it across a lot of countries, India works pretty differently than China and China works differently than Vietnam. And so when you're trying to employ this data and system across all these different countries, how is that going to work when you're, you know, putting that information in and expecting the same result? 

Ram Radhakrishnan 13:55 

Yeah, I wish there was one size fits all there. Yeah, that's just as I said earlier, right? The cultural differences are radical, you need to adjust to each country you're in. And that's why we're like, that's kind of the whole thesis of our business saying, Hey, this is just not a software solution. It's not just a platform. Yeah, those days are over to expect saying, Hey, I'm going to send this piece of app, and it's on somebody's phone, and they're going to use it in China and Vietnam. You know, I wish the world worked that way. Yeah. The company I used to work for previously, which I'm, you know, who are also investors, my current company Flexport. You know, we've essentially done this and we've, we've been in these countries for many years now trying to essentially improve standardization, adoption of platforms. It's a very difficult problem to solve. Yeah. That is the main thesis of why we said hey, people are core to our solution. We need people who are very, very proficient in what they do. They should be able to sniff out what's happening in a factory won't show up right and they're able to essentially, not only help the customer understand what's happening a lot of times even help the factories understand what What's the outcome that don't end up happening? If they don't make corrections in the plans, right? So that's, that's the people are core to our difference over there, right? We hire locals in each country, we hire, we operate. And so we operate in five countries right now, China, India, Vietnam, Indonesia and Pakistan. And we've essentially hired locals in those markets who have deep domain expertise. And we teach them the technology piece to use our applications, certify them in our processes, and essentially, then go about saying, hey, in India, it works differently. So you essentially have to adjust your workflows to support those requirements, things are a little bit more slower, the infrastructure is a little bit more weaker compared to China, just to be candid. And you have to adapt to those those realities, right? Customers make a conscious choice to buy from these countries, they are not surprized. 

Bret Schnitker 15:49 

I think the success of buying from those different countries is understanding those unique differences. And we who've kind of produced in all those countries all the big way in the industry, kind of walk in, and we've always played this game, we're like, well, we kind of know we need it on this date on this side of the water. And based upon the individual countries in efficiency, we put pressure, yeah, at various parts of that supply chain pre dating needs, knowing they'll ultimately slip because the culture is so deeply ingrained with, okay, it'll be here, but it's going to be 10, we consider 10 to 15 days on time, or I've been in countries in Africa, we consider 30 days on time, you know, all these different places. And so when you're employing a system that creates transparency in that chain, and there's deadlines in the system with people having to update that, how do you overcome that? Hey, we know we need it on time, if you know, are the factories going to see that same transparency? Are we going to have a changing culture within a factory relationship where they're going to be like, well, here's the true dates, is that going to improve that system? How do you manage some of those unique dynamics, that we've all played the games and you know, everybody knows, you know, the dynamics? It's, you know, it's been going on for years. But now you're saying, we're going to have this complete transparency, it's going to be uploaded in real time? And it's for all to see, right? 

Ram Radhakrishnan 17:15 

Yeah, no, I think it's a very fair question to ask, right? It's like, you know, we're not some we're not inventing, you know, and you a new world sorts of, right, we're playing a 

Bret Schnitker 17:26 

different to change a culture, 

Ram Radhakrishnan 17:28 

Exactly. There's a lot of legacy practices that need to be addressed over here, right? Naturally picking the right kind of customers help, right to want to see that change, because there has to be motivation, which is why I'm really happy we found SDG. Right? We were super thrilled about working with you guys. Because you are pro, you know, adapting to change, you want to move to the new world order 

Bret Schnitker 17:49 

Evolution not revolution my friend. 

Ram Radhakrishnan 17:51 

Exactly. Right. So what it's, it starts with picking the right customers, you want to see that change, there are customers 

Bret Schnitker 17:58 

I mean, the voice of our consumer wants to see transparency in the chain. Yeah, you know. 

Ram Radhakrishnan 18:03 

Yeah. So it helps to have people who value this who are willing to say, hey, you know, what, if it means I'm going to have to spend an extra hour on the phone to just convince my factories to play ball, I'm going to do that, because I want this visibility. Yeah, it's not like we can just go in and break down the door and get the visibility we want. We need people to support us. Now, on the other hand, we are also incentivizing these factories, we're creating value for these factories as well. So obviously, access to capital is something that all these factories in developing countries struggle, of course, and that's something we have, you know, access to. And so essentially, enabling that creating financing solutions for these factories has been incredibly useful. It's been one of those very powerful tools, 

Bret Schnitker 18:44 

Especially to them when the pandemic there was what $4.2 trillion canceled. Yeah, that's all the pandemic and I have to imagine that stress the financial 

Ram Radhakrishnan 18:53 

I hate to say it, if you have cash, you get to cut the line. It's it's it sounds gruesome, but that's just the fact. Right? I mean, is pay for play at the end of the day, you need to make sure you pay to make sure you get you get the goods out on time. Yeah. And the customers who keep their honor, they honor the commitments, the factories honor, theirs, so we help them out. Obviously, that's a value add we've been giving them. Now obviously, as you initially pointed out, there a number of times shipments are late. Now the question of who's shipping air freight, who's gonna pay for this, that always comes into struggle, we help them a lot or when they're given our logistics experience, giving our given our network and locking down again, their landed cost and just not open ended saying, Hey, you have to ship it at all costs, we help them mitigate a lot of the risk over there. And that has helped us kind of gain a lot of the trust with these factories, and they're like, Hey, we're in it for you to win. Silq does not get paid a dime if the factory doesn't ship out on time. Yeah. So I'm in it for you to win. If you don't win, I don't make money. Right. So aligning our incentives is finally the biggest thing that made sense. And that that kind of resonated with these factories. And that's how we're driving change. There's there's no rocket science to it, giving them access to capital, helping them and their downtimes. And essentially aligning our incentives with theirs. 

Bret Schnitker 20:08 

Big, big, large goal here. 

Ram Radhakrishnan 20:11 

It helps to have some venture capital financing. 

Bret Schnitker 20:14 

You just got some good financing. 

Ram Radhakrishnan 20:16 

We did. Yeah, we got some amazing investors, Fidelity, F- Prime Fidelity's venture capital, they led around a Series A, we raise 17 and a half million wonderful and was co led by Flexport. My previous company 

Bret Schnitker 20:30 

They just got a big raise 905 million or something. 

Ram Radhakrishnan 20:33 

This is this second almost billion dollar raise. The first one was a billion second one was almost a billion. I was I've been there since they were we were 15 people equal to four men and a dog. Yeah. rinky dink office and in questionable parts of San Francisco. 

Bret Schnitker 20:50 

Yeah, they're questionable parts of San Francisco. That's the $5,000 a month rent versus the $20,000. Yeah, exactly. 

Ram Radhakrishnan 21:00 

So yeah, I mean, I've seen that company evolve over the last, you know, eight years, and they had pretty ambitious goals, and yeah, nothing short of what they've achieved, right, I was so fortunate to have been there at that early stage. And when I was a trainee, great training ground. That's where you get to make these audacious claims of what you're going after. That's where I get the confidence to do that. 

Bret Schnitker 21:20 

Well, you set the goal and you're trying to achieve it. 

Ram Radhakrishnan 21:22 

Going after it with everything I got, 

Bret Schnitker 21:24 

What do you see is going to happen the next three years for you and Silq? 

Ram Radhakrishnan 21:28 

So the next three years for Silq is going to be all about essentially expanding our footprint going into new countries, essentially 

Bret Schnitker 21:34 

Buying ships to get stuff delivered on-time. That's another raise. 

Ram Radhakrishnan 21:39 

No, I think I'm gonna let Flexport play the logistics game. So they're investors in us, as I said, right, they've invested 5 million, so we're going to essentially partner with them to let them buy the ships and the planes. Right. They bought a bunch of planes again yesterday, right? So let them buy the ships and the planes and move all the goods and we'll just partner with them. We have the data. That's the goldmine, right? Yeah. Leveraging visibility, and translating that into tangible outcomes. 

Bret Schnitker 22:03 

Do you see that being sort of an informational overview for people looking to source worldwide than, you know, selling the big data, you know, each country's sales strengths and weaknesses as it relates to data also? 

Ram Radhakrishnan 22:16 

Selling data is almost like a cardinal sin as like I'm trying to take it's not about selling data, it's about essentially using that data to make your supply chain better. Yeah, right, I'm going to have to collectively use 

Bret Schnitker 22:27 

Well big data. I mean, not individual private data, but big, aggregated data, is, I think, information for people, you know, we, in America, especially, we abdicated, manufacturing years ago, there's so many people in this industry that really don't understand manufacturing supply chain, they're just relying on partners to do that. And so, today, the world's ever more complex, we've got, you know, China with tariffs, and you got, you know, issues and different provinces, and you've got, you know, political dynamics, and they're the largest supplier, you know, to the world, probably for apparel, but certainly to the US, when you see these changing dynamics and shifts, and people are saying, Should I be in Myanmar should I run off to Africa? Yeah, the data that you would compile on nations to say, hey, overall, on time shipping rate overall cost metrics, because a lot of people, you know, when they explore different countries, they look at labor cost, absolutely begin and end with labor costs. They're like, Oh, you know, the labor cost is affordable, and they don't look at productivity. Yeah. So I think the combination between some of these metrics can be a very important play down the road, for, you know, informing, yeah, people on different decisions for countries. 

Ram Radhakrishnan 23:41 

Absolutely right. I think at the end of the day, what we're gonna do with all this data is one, beside making our customer supply chains better build it into essentially a supply chain index of sorts, right to start manufacturing index is kind of what we're working towards, which will have to take into a number of factors, not just labor, productivity, look at shipping costs, look at infrastructure, look at Geo for calculations. All of that needs to be and not to mention, you know, where do they have preferential customs duty exemptions? Right, right. All of that comes into play. I mean, you have companies manufacturing leaps and bounds in Egypt right now, Egypt is a very small country compared to China or India. And yet they have a very big manufacturing presence. So there's a lot of factors that go into play, building, that index is going to be crucial to help customers make more informed decisions. 

Emily Lane 24:28 

Yeah, we have always mentioned that not every country does everything well, you know, so having a resource like that I think can be really valuable towards helping people make decisions. I think what you're developing is really, really transformative and, absolutely audacious and awesome. So congratulations on pursuing this venture. It's clear with your, your recent venture capital that a lot of people believe in what you're developing as well. So we're very happy to be partnering with you and And thank you for joining us on this conversation today. 

Ram Radhakrishnan 25:02 

Thank you very much for having me. I really, really appreciate it. 

Emily Lane 25:06 

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Supply Chain Transparency with Tech Startup Silq