What Padhu Raman, CEO of Osa Commerce, Learned from 17 Years in Supply Chain

the customer and the employees as the two highs, right? You have
both are equally important. You cannot choose between left or right. Both are
important. So taking care of customers no matter what. Even if it has to go
down the gross margin, whatever it takes, the customer has to be successful.
Welcome to the Know Your Ship podcast presented by E-Hub. I’m your host,
Frank Dolce. Well, welcome. Thank you, Padu. Thank you, OSA Commerce. We’re
so excited to have you here today. What an what an opportunity to speak with
one of the trailblazers in the in the logistics industry. I’m very excited to
be here. Thank you. Thank you for the opportunity. Absolutely. I have been
listening to a lot of interviews uh and podcasts and I’ve read some of your
material and it just feels like you have such a pulse on what is happening in
the industry all the time. Is that just because you feel like you need to do
it? Do you have this deep interest in understanding what’s happening in the
logistics industry? I want to understand your passion about about this
particular industry. It’s a good question. I mean just that I only the only
industry I know and the only industry I’ve been is supply chain. So I always
believe that whatever you’re doing you have to go deep. Mhm. understand in
and outs and offer the best value to whether it’s going to be a internal team
members, customers, investors so that whatever maximum you can output is what
I try to do. So that’s maybe the motivation to go always deep in the field
I’m working and that’s that’s the reason I like this field from the time I
started my career and I have continued to be in this field and hope I retire
in this field. So once you got into supply chain that was it you’ve not
thought about going elsewhere? No. No. Yes. Only supply chain. Only supply
chain. Okay. Well you started elsewhere. You started in India. Which which
part of India? I grew up in South India. Uh Chennai, you about Chennai. So I
I started my schooling in Chennai. Then I finished my mechanical I graduated
as a mechanical engineer out of college in Quimto which is still south
Chennai. Then I got an opportunity to actually got a recruiter to Bosch. Um
so they Bosch actually they make multiple different things. They make the um
consu consumer goods. They make the engines as well as the furization pumps
and everything. So somehow I got they recruited me into the sales and
distribution. Um at that time from a college as a mechanical engineer. I
thought I’m just going to do a mechanical work. I’m going to work on an
automated lathe and I’m going to design an XCAD and everything. They said uh
no we we wanted somebody good with me mechanical and knowledge to help in
actually the sales and distribution and logistics area. So actually I got
recruited as a on a technology to support a technology implementation in that
department and uh and also Bosch had a thesis that we’ll start somebody in
one department and then rotate to different departments so that they get a
better management overview. Mhm. But I just loved the job from day one from a
logistics and I was probably doing well. They kept me there for almost three
and a half years. Three and a half years. three and a half years and that’s
actually my first opening into supply chain and logistics. Gotcha. And that
actually put me into uh an opportunity that came up. uh Manhattan Associates
was actually looking for recruiting people and they came to uh India to find
um technical talent and uh since I had the combination of both technical and
logistics that landed me a job in Manhattan and I directly came to Manhattan
just in case people don’t know tell us about Manhattan Associates so
Manhattan Associates primarily uh I would say the leading provider of supply
chain technology I would say to the top fortune thousand or maybe th fortune
2,000 customers. Mhm. Focusing on the entire order life cycle, transportation
life cycle and planning life cycle. Um so so I would say Manhattan is the um
company I think any um fresh graduates who want to learn supply chain a great
place to mature, learn, develop and graduate out of it. M they uh it is I
mean I would say majority of the the Manhattan alumni are probably leading in
different supply chain entities. So if you’re in the finance world people say
you need to spend two years on Wall Street and and then you can go go and do
many different things. Is this the same for supply chain with Manhattan? This
is the man the wall street of for supply chain technology s right if you want
to say supply chain business processes and commercialization Amazon
technology I would say man so tell me let’s go back to your experience with
Bosch in India what are some of the like you said you came out as a
mechanical engineer you stepped into this role that maybe wasn’t completely
aligned with that what were some of the things that you learned about the
industry about yourself from Bosch that transferred over to your experience
at at Manhattan. It’s a good question. So the my my my role was primarily on
three aspects, right? So how is that manufactured product whether it’s a fuel
fuel pump pumps or the bloom radio or the different things that Bosch used to
produce and mainly out of the Bangalore factory they used to produce the fuel
pumps is to make it available at every location of the dealership at the
right time. Mhm. The right place, the right location and the right quantity.
Right? That was the first aspect of to plan it out. Understand the demand
where the demand is. Okay. Work with planning to derive the sales and operation
planning. Understand okay what product is needed and when it is needed and
how do I deliver it. Mhm. That’s the first aspect of the learning I got out
of that. Second is okay now that the manufacturing process is handed over
from a demand how is that going to be packaged and logistically delivered and
on on time in a and and and at that time BCH was also following the Japanese
model of just in time and um all this uh concepts that was coming in in a
very big way from industrialization perspective. So how do we do that right
from an uh assembly of it and because dealership also was moving towards that
model say if a car comes for a specific change and and replenishment of one
unit when is used how is that rep replenished on time and sometimes it could
be a next day deliver right so if you think about the entire process it
involved planning of what is the need demand making sure the demand is being
fulfilled or rendered through the manufacturing working with the
manufacturing creating that planning aspect of it and then postmanufacturing
finding a way to deliver it at the right time right place right way and also
Bosch was shipping to international as well so then complexity of now the
relevant topic of tariff also comes into picture complexity of how do we
deliver internationally what are the customs requirements on each country
planning that entire aspects of in a technological footprint. So that’s what
I learned in the sales and distribution. So if if Bosch is trying to produce
uh a filtration system or some water filtration system, let’s just say sure.
Okay. So how many departments how many areas does that go through until it’s
finally delivered to the consumer? It’s a good question. And I mean uh I
would say at least minimum 10 right because you start from your sales
planning then you have your manufacturing planning team then you have the
sourcing team then you have the actual workshop shop floor teams and uh then
you have the packaging team then you have the corresponding u marketing aspect
of some level of marketing is involved in future marketing perspective then
you have the uh warehousing and logistics and distribution team. Then the
actual carriers coordination. So there are transportation teams. Then there
the financial teams then the commercial teams. So to make one aspect of it
minimum 10 we go through but at that time my role was more specific on the
sales and distribution technology side but still the users I would used to
cater to were a broad range. Yes. Okay. So are you at that point are you
recognizing the well you you mentioned it before this complexity in in the
product producing making something and delivering something which sounds easy
but you just said there’s a minimum of 10 steps in there. Okay. Are you are
you recognizing the complexity in that system and are you thinking about how
to make it more efficient or are there efficiencies that can be gained? Is
that where you started this idea of making complex more simple? It’s a very
great question. Absolutely. Right. So if you think about all those complexity
of working within an company and think about Bosch everything was done
inhouse. Mhm. So at that time outsourcing was there but not to that level of
uh penetr didn’t penetrate to that extent. But within an enterprise itself
you have so much different departments complexity complex systems then that’s
the reason you had all this ERP MRP systems uh sales and planning system so
so much complications within enterprise and data was siloed uh and and and
fragmented decision was delayed sometimes then you have because of sudden
change in demand then you create this bullwhip effect right I mean one system
one department is although it’s we interact with multiple different
departments still data was siloed and think about this is within an
enterprise now fast forward 25 years later you look at now e-commerce omni
channel it is not an single enterprise entity work it’s a multi-enterprise
entity work so the complexity has now just increased 10 20 30 times right so how
do you make A simple brand or retailer who wants to just market their
products, get the products sold and ship to the customer. They cannot handle
this level of complexity, fragmented data, data silos, complexity in the
technology and keeping the advancement in technology. And that is the genesis
to say okay, how do we simplify this? Mhm. And keep those retailers and
brands one step ahead. Yeah, I it you mentioned data data being siloed and uh
I I think that’s a big part of what you’re doing today with OSA and we’re
we’ll get to that point because I think that’s really interesting. You know,
I I was walking around the the manifest show several weeks ago and I got to I
got to talk to one of your one of your team members. Uh, and as I was walking
around Manifest, I saw, you know, there’s 10 WMS platforms and there’s, you
know, 10 AI companies and there’s 10 of this and 10 of that. And I thought,
as a consumer, how am I like, how do you pick? And and once you make a
decision, are they all going to communicate appropriately together? And
anyway, I think that’s I think that’s where we’re headed. Absolutely. W with
with with with OSA. Okay. So now you you you you’ve had this great experience
with Bosch. You get recruited to to go to work with Manhattan and and not
only So now a a new experience, but but also geographically a brand new
experience for you. Where is Manhattan located? Manhattan is located in
Atlanta. Um it’s a US-based company. Mhm. Now they are global. At that time
Manatan was only in US and um so it when I moved to Manatan I did carry over
some knowledge of sales and distribution but again it was more as you said
geographically within an Asian paradigm view but when with Manhattan it
completely opened up right because at that time uh the the the warehousing
concept was really penetrating at a very faster rate People are building
logistics and because the two things were happening manufacturers were trying
to find an outsourcing partners. The 3PL concepts was growing bigger. First
manufacturers wanted to focus on manufacturing and not deal with sales and
distribution and logistics. So they wanted to outsource them in a bigger way.
Technology was not built to do to do that to to that extent. Then Manhattan
was the right place at the right time making solutions specifically niche in
a niche market catering to uh logistics industry and also Manhattan the
advantage was it was attached to Georgia Tech which is the point I mean
leading institutions in logistics and industrial engineering innovation. So
that academic and the business entity merge was a great value addition. So
did did the founders of Manhattan did they come out of the academic world or
did they just combine the the founders of Manhattan actually saw they they
came from different backgrounds. They were all technologist. They actually
were working on a project. They were doing supply chain consulting and
everything. They were actually working on a project at Jockey International
and they saw a need that okay there is a pro there is a problem. Mhm. There
is a logistic solution. There is a pick ticket orchestration pickp pack ship
problem here. We are developing a solution for Jockey International. But this
could be there for every retailer and brands because all retailers and brands
are also outsourcing the manufacturing to outside uh uh country to China,
Vietnam, everywhere. There’s a big logistics problem. So people are building
wareouses to get the finished goods out. How are they going to store and
operate at a scale? So in ’94 199394 they started the company they built this
pack technology package and uh that how it it started and so they came out of
the consulting start company solving a specific logistics problem and there
are very few competitors they were able to execute well and grow. So uh just
one more thing about Manhattan that was you started with Manhattan 25 years
ago about 25 years ago. Correct. Okay. And uh so they they saw a need in the
market. They provided a solution with the market. I’m I’m sure they’ve kind
of innovated with the market as well. But at this point Manhattan is is at
least 20. You said they started in 93. So at least 20 25 years old. Like
right now it’s the 30 30. Yeah. 35 years. Okay. So, is it and and this is a
really interesting look supply chain is like constant change. Constant
change. And does does Manhattan still have a place in the supply chain
industry? Absolutely. I mean, they are if you think about Manhattan is the
pioneer in leading technology and innovation. And again the way I look at
industry is industry is broken into three broader segments. You have the
small retailer brand segment. Mhm. Um whom I would say maybe less than 50
million in revenue or even less than that. Right. And then you have the
medium where they are 50 million to maybe billion dollar in revenue. Right.
It’s a broader segment. Maybe you can we have small medium medium one medium.
Yeah. Sure. And then you have the enterprise segments, right? A billion
dollar plus. Manhattan actually fits very well in the billiond dollar
enterprise in a single enterprise environment like targets or Walmarts and
all those are their customers, right? Those are the bigger players. They fit
well because those are solutions implementation. Gotcha. and they really fit well
in innovation the and I always joke around and tell other people as well.
Maserati or Porsche is not for everybody. Many people need Teslas. Yeah.
Right. Tesla is innovation new entity and there are separate segment for
them. So, so that’s a different segment is a different segment. From that
segment perspective, you think Manhattan is the number one uh provider. They
provide solutions for all the life cycle of supply chain and omni channel and
uh there are lot of offshoots from Manatan who have learned and developed and
grown. So absolutely they are number one they’re leading and they’re going to
grow more. Not not going anywhere. Not going anywhere. Okay. I mean they have
5,000 plus customers. Yeah. Well, it’s it’s interesting because uh there have
been times in the in the industry when people have been down on Manhattan,
but that doesn’t seem to be the the reality. Not real nowhere to the reality.
They are a great company, great people, and they’ll continue continuously to
innovate. How long did you spend with Manhattan? I spent almost 17 years at
Manhattan. 17. And did you work in different roles within Manhattan? What
what did you do while you were there? So I started as an um Manata had
different verticals of solutions. One of the verticals was I vertical where
they focused on the traditional IBM IC00 version. So there are WMS on that.
So I started my career as actually as a programmer or technical person. Mhm.
So I worked on the top retailers as part of the journey. Then actually I
moved to an R&D where I actually did develop some R&D work because of
they wanted to bring in some professional services input into R&D to
mature the product more. So I spent some R&D in work focusing on
optimization labor optimization and improvement slotting optimization
improvements. So I focused on those optimization uh problems. Mh. Then I
actually moved back to services was what I developed to go back and
implement. So started doing a lot of implementations of WMS. Then I moved to
order management to play a different role and sometime in a little bit
planning. So that way it gave me a broader perspective entire supply chain
from the planning to optimization to execution and and little bit of
transportation delivery as well. Not because this itself is a big ocean.
Yeah. So I played over wherever the overlapping was little bit I played and
then um moved to a more of a solution architect and when I finally left
Manatan to look at broader enterprise digital transformation and uh supply chain
transformation projects uh and a bigger conglomeate across network across
enterprises and also e-commerce journey started more uh around uh when Amazon
really penetrated the market so uh helping brands to get into the e-commerce
journey. So those are my responsibilities in uh leading those initiatives. So
at Manhattan you have all of this all of these different experiences in all
of the different facets of the business verticals of of the business at this
point are you developing so so it’s interesting because Manhattan saw a need
in the market and then built this product. At this point, are you developing
a thought about a where there might be a need in the in the supply chain
market? Absolutely right. So as I was working with the customers, small
medium customers, enterprise customers, uh sorry, I definitely saw a big need
especially in the small medium segments uh and especially when they’re
working the e-commerce and omni channel coming into a bigger play
multi-enterprise multi- ecosystem connectivity that was a big gap in in in
providing that complete a 360deree solution. So the thought process always
there and um so that actually was my genesis as well of thinking through okay
we need to do something different here especially catering to the small
medium to to scale up and the one ultimate model if you think about it Amazon
was the only model that offered to that mh but again you have to pay 35% 40
40% or 50% of your total mileage on Amazon number one number two there’s also
Amazon basics competing with you on a daily basis. So that was a challenge.
So there was those aspects that really I learned those things as part of the
journey. So yeah. Yeah. Uh at Manhattan, what are the things? So a aside from
this experience that you had and learning the supply chain industry, what are
some of the other things that Manhattan did really well? Sir, I’m talking
like kind of business principle sort of things like strategy, leadership,
culture. What are the what are the other lessons that you learned that you
were able to take and then transfer into creating your own business? The
first thing is focusing on the customer every day, every employee, every
customer. Right? So that’s the u moto Manhattan took, right? So Manadan
treated the customer and the employees as a two highs. Right? You have both
are equally important. You cannot choose between left or right. Both are
important. So taking care of customers no matter what. Even if it has to go
down the gross margin, whatever it takes, the customer has to be successful.
Even the challenging customers, they would put all the effort to make the
customer’s journey successful. That’s a big learning I took it from them.
Second is stand by employees. Take care of employees. If you take care of the
employees, customers will already be taken care smoothly, right? So that’s a
and creating the accountability cascading from the top to the bottom. Mhm. So
that c those two business culture pro processes is I would say it’s a
paramount for any business, right? Focus on your customer, listen to your
customer and focus on your employee. And even from a business product
perspective, they will align the road map to what the customers want rather
than competition. The competition may bring some new new features, new
capabilities and they may have some sales challenges and everything but their
focus was always focus on the customer and if you see Benatin that’s reason
they always will almost 90% of the deals they fire they compete. Focus on the
customer. Focus on the customer. One thing I’ve heard you talk about, and I’m
curious if this is something inherent in Manhattan, your experience in in
Manhattan as well, is you’ve talked about surrounding yourself with
best-in-class talent. Is that something that you took away from Manhattan as
well or how did you gain that experience? So, um I think Manhattan looked at
people who are focused on three broader categories, right? Talent is swan.
Mhm. Uh when also believed in attitude. You may have the best talent but if
it’s not combined with right attitude Mhm. then the talent doesn’t help in
solving the customer problem. Right. And third is the day-to-day ethics,
right? How you be transparent and how you are able to honest and sincere,
right? Be upfront with the customer. Be transparent. say exactly give the
right picture so that they can make a better decision based on the input. So
they focused on having the right talent but with the right attitude and right
work ethic com combined them to be the great differentiator. Mhm. So that’s
definitely something I took it from an culture. The culture absolutely
absolutely got it. Okay. So, so from the Manhattan Wi-I by by the way, which
is a like that’s a we hear that all the time on this podcast is the
importance of culture and having the right not just the most talented people,
but having the right people on the team because that’s going to just make
every everybody better. Collaboration. I mean, end of the day, if you don’t
collaborate, nothing else. And that’s something big with like that that’s a
core a core competency for for OSA is this idea of collaboration. Got it. And
and so you know that’s even why we’re we’re having a visit today. So that’s
that’s amazing. Okay. Did you from Manhattan did you immediately create OSA?
Is that what you did right after? No. As I was working with Manhattan, I got
an opportunity to work with as with working with Manhattan, I used to work
with a lot of uh uh hardware vendors, robotics vendors and canab many other
aspects. As I was working on working on a designing a complete uh digital
transformation for one of our customers, I got an opportunity to work with a
robotic company helped them to build because they were new in the industry.
Uh it was like a good stippers and robots. They helped to build them to the
next level of the market while implementing Manatan because the customer
wanted it. So helping them bridge that and I at that same time I happened to
the robotic company also got an opportunity to work with sort of investors who
are looking to create an alternate Amazon model because they saw the retail
space they were all from real real estate uh enterprises. They saw real
estate shrinking down at that time 2017 and they wanted to see how to build
another enterprise or what it is and they looked at the P value of Amazon.
Amazon P value was 195 or something. Okay. Six other companies can easily fit
in into that model. But Amazon has actually be became the uh the role model
there from a because what Amazon if you think about retail and e-commerce
journey in the ’90s you had more focus on experience in the stores. If you go
to a store, you have malls, you have big malls, right? With Amazon coming in
the 2000s, they focused on convenience. Mhm. So it was all customer convenience
and customer experience, right? So they they added that additional flare of
convenience because I I can sit in the couch, I can order something, I can
get delivered. That didn’t really penetrate too much, but it started
acceleration, right? E-commerce becoming a model and everything, right? M and
then it it the second third aspect was as use mature in in the late 2020 and
the iPhones and all the smartphones coming into a picture engagement became a
major part quick commerce came in picture Tik Tok and all those channels
coming in right so now the journey if you think from an econvenience
engagement and experience combining these all these together um so that’s al
also happening in parallel uh and that also also thought process and I got an
opportunity so retail was shrinking, physical retail was shrinking. So 2017
um got an opportunity to meet a set of investors to say okay we want somebody
to come and put together a blueprint of an entire 3PL 4PL business for small
medium enterprises. So it was like an opportunity I couldn’t refuse. I didn’t
leave Manhattan but I just got an opportunity to build an complete uh aspect.
So they wanted to be me a co-founder to come and help them to build an
vision. I said okay had something I can find interested and investors there’s
a there’s you don’t get an opportunity where a founder is searching for an
investor on the day one you have you you were thinking about an idea an
investor comes in directly and says I want to do something here what do you
suggest so that was a genesis so at that point did you did you immediately
think this is what I’ve been I’ve had this concept for a long time and now I
can execute. Okay. So it wasn’t it wasn’t like you really had to think about
it that much. You were already the thing what happened was they were asking
some questions right what to do with Amazon model retail spaces the questions
were raw questions right hey my retail space is shrinking Amazon is doing
something very interesting they are a real estate player they are building
lot of fulfillment centers how do we connect these things those questions
came in from very generic business questions right so as part of the journey
I already was thinking about the gaps in the industry about the challenges
the small medium enterprises are facing because when I used to interact with
my customers and their suppliers who are already brands or any other players
like if you take Walmart they have millions of suppliers and those are also
brands but they had to meet Walmart’s guidelines but at the same time they
wanted to sell in Amazon they wanted to have their own Shopify store they
were asking simple question is how do I do it so I saw a gap up and challenge
is there. Okay, I we need to do something here. I would say alignment of
stars. When I was thinking about doing something in this journey and vision
of creating a technology footprint and everything and somebody else came and
say there is some set of investors they want to just talk and understand
since and this robotic company basically they approach this robotic company
in one of the events or so they say you know you can can you come and talk
for 30 minutes and explain what is happening in the market. Mhm. So I just
put together a presentation deck. I it was not a like as if I’m presenting to
an investor. I just said okay conceptually what needs to happen. Mh. So I
articulated my thoughts in a I would say maybe eight eight eight slide deck
giving them the design approach the technology footprint the business model the
commercial aspect say this is what a typical thought processes with no
intention of starting a company at that point or raising money it just it was
a dialogue you could do that in eight slides I mean that so I did it on like
he asked me on a Thursday it was a Sunday 30inut meeting I scheduled I flew
to New York uh because at that time I was traveling back and forth Chile so I
said okay let’s do it and I created this deck and presented them it was 30
minute meeting but that meeting ended up to be almost 8 hours it started
around at 1:00 and we finished tonight 11:30 and and so those slides were so
compelling that they just kept digging in digging in digging in that’s really
fascinating. Do you still have that slide deck some? Yes. Oh, we we should get
a copy of that. Just take a take a look. So I Where Okay, so you have this
idea and you’re talking about all of these multiple channels now that we’re
dealing with and and for the small to mediumsiz business because that like
Manhattan’s expensive like they can’t go Manhattan’s not a fit. They can’t go
to Manhattan and get this enterprise level solution, but they need that kind
of solution. Go ahead. If you think about uh uh the way I looked at it was
okay because I saw problems in the field interacting with my Manhattan’s
customers, suppliers, customers, customers, right? All those things. So if
you think about a simple brand, right, at that time I mean right now also
right a brand wants to sell in an e-commerce way in a cheaper and easy way to
connect with the end customers and deliver. Mhm. They want to be able to sell
in their take a product sell in their Shopify store. They may create a store
in Shopy. At that time they had Magento. There are many other uh content
management sites that was there and Shopify also was building at that time
really coming up. So they wanted to create a simple store and sell their
products. Mhm. Two, they wanted to be reaching mass entity, go to marketplace
like Amazon and take the risk of being competition by Amazon basic but still
try to sell and get the market share. Mhm. And grow from there and then
potentially they may get one or two orders from the big retailers. The
complex it increases with the retailers. You had to have retail compliance,
purchase orders, B packing, right? So many compliance, different shipping
types and everything. So all those complexity from a brand perspective,
right? Two, where do they store the inventory? Can they build a bigger three
warehouses and manage or if they have a couple of stores, can they fulfill a
lot of stores? It it’s okay for when they starting they can do all those
manually. They can create Excel sheets, they can maybe have a store, manage
in two different places, all those things. But once they cross a threshold
say even a 2 million revenue 3 million revenue it becomes impossible for them
to handle post complexity. Mhm. Right. And especially if they want to
distribute the uh deliver the fulfillment through a 3PL because they are much
better in equipped in delivering the product than they themselves fulfilling
it the labor problems challenges sourcing so many other aspects. So if you
think from brand and if you break the supply chain into four different cycles
from just a brand’s perspective they have to look at inventory life cycle
they have to think where I’m going to sell set up the pre-order capture
processes they need to think okay where I need to how much inventory I need
to position what products what SKUs which marketplace so there’s a inventory
life cycle they need to plan out then there’s order life cycle post orderer
capture after somebody is able to understand find the product place the order
now comes the way of fulfilling it, delivering it, doing it. Mhm. Third is
they need to look at back order management. Okay. Somebody calls and says I
want to cancel the order, change address. If somebody can order in one
marketplace or somewhere say okay I want to change address to deliver. So you
need to think from that perspective. How do I manage that back order
capability? They need to manage the fulfillment capability. How do I consume
the order, fulfill it? Now the fulfillment is it with complexity? If the
customers are ask for additional validated services, gift wraps, monogram and
how do I make it more efficient in the line put my branding then fifth is how
do I deliver it the carrier management delivery tracking now sixth is how do
I track if the customer doesn’t like it is returns how I’m going to consume
the returns mh think of a like a a brand is upcoming they they want to focus
only on innovation creation of the brand, focus on marketing but not worry
about the complexity and everything. They want to keep it simple and because
they can do those things much better. So if we provide a solution and
technology