Sean Riley:
So with all the fancy introductions out of the way,welcome to the podcast, Rebecca.
Rebecca Marquez:
Good to be here Sean.
Sean Riley:
Oh, the pleasure is all ours. So we're talking verticalstartups, and for those who aren't aware and there's going to be some of themout there, what are we referring to when we're talking about vertical startups?
Rebecca Marquez:
Well, vertical startup in manufacturing refers to a rapidand efficient initiation of production processes. The concept really aims toachieve full production capacity in a very short amount of time with minimaldisruptions. Some people I've heard say that it really can't be achieved.Generally when there's a new implementation in a manufacturing facility, thereare a lot of disruptions, so you tend to see a startup as a gradual approach tofull production. Whereas a vertical startup, as the name would suggest, isalmost a straight line-up to full production if you're looking at it on a linegraph.
Sean Riley:
Right. Interesting. So I know it was a topic that wasdiscussed at top-to-top, correct?
Rebecca Marquez:
Yes.
Sean Riley:
So that brought together our CPGs and our OEMs. What didyou learn was needed for a vertical startup to be achieved? What came out ofthat discussion basically?
Rebecca Marquez:
Actually a lot came out of that discussion. It seems asthough it was a pretty contentious topic when we were talking about it attop-to-top. And one of the first things that people were talking about on bothsides, was transparency and the need for transparency. This is a groupcollectively, who has in some cases competing interests, I guess you could say,and so they want to know from each other that each side is transparent in whatthey're communicating to each other. So in order for a true, truthful collaborationto take place, and that's the only way you're going to get to a verticalstartup, there has to be absolute transparency on both sides. And that was oneof the big, big things that came up during the discussion at top-to-top.
Pre-planning and preparation. There has to be extensiveplanning before this happens. You have to involve a lot of people in this, onboth sides, and it has to be the exact correct people that are involved. Itcan't just be anyone. It has to be absolutely the right people that areinvolved in the process. You have to have your scope very well articulated. Ithas to be perfectly explained, and your outcome needs to be well articulated.Everyone has to be on the same page in order for this to happen. Goals have tobe clearly communicated and everything needs to be documented clearly. There'sa lot of things that actually need to happen. I mean, when you talk about thestars being aligned in order for achieving a vertical startup, that is true.Everyone needs to know what their role is. All the key players need to knowwhat their roles are. And that's the only way you're going to achieve it.
There's also process optimization. You want to optimizeany process or any technology that you're using. Coordination andcommunication. You want to ensure that all communication on both sides iseffective, efficient, and you want to get everyone involved early too. That wasanother thing that people really talked a lot about, is the early involvementof OEMs. This is a tricky one because in some cases, I think, CPGs maybe don'twant to involve the OEMs early. They want to just have the machinery, get to theSAT, make sure that it's just implemented and get some training for theirinternal staff, the CPG staff, and then have the OEMs get on their way. Andit's not necessarily that simple. I think that the OEMs really need to beinvolved early and often, for a vertical startup to happen. And it does happen.We had a panelist at top-to-top from a big company, a big cheese company, whohad achieved it, and she really had a lot of things to say. She was a greatpanelist and she shared a lot about what it took to achieve that verticalstartup.
Sean Riley:
Now, would you say when it was contentious, was it morefrom the OEM side or more from the CPG side?
Rebecca Marquez:
Both sides.
Sean Riley:
Really?
Rebecca Marquez:
It was both sides. Yeah, because we had an interactiveplatform where we asked the audience, both sides, CPGs and OEMs, to say whatthey thought it took to achieve a vertical startup, and both sides, of course,were saying ... The OEMs would say, "Well, it would help if the CPGs didthis" and the CPGs would say, "Well, it would help if the OEMs didthis." And there was a lot of finger pointing and really comes down to theneed for transparency on both sides. As I was saying before, there are someperceived competing interests, and I do say perceived because I don't know ifthat's always the case truthfully, but at least that's the perception, and soclarity and transparency really has to be communicated on both sides. It has tobe a solid relationship, and a lot of transparency has to be in place in orderfor a successful vertical startup.
Sean Riley:
And you've touched on a bunch, with transparency being abig one, a partnership, are there other specific parts of planning that canhelp facilitate the vertical startup? That can help make it go as smooth as Iguess, as possible?
Rebecca Marquez:
Well, one of the panelists at top-to-top was talking aboutmodeling risk. They went to great lengths to model out the risks associatedwith their implementation of the new equipment, and I don't know that everyonedoes that. You're going to do some risk assessment naturally, but they, Ithink, took it a couple of steps further by modeling out scenarios. And shesaid that was integral to their success in getting a vertical startup. Sothat's one thing, in planning, that was one thing that I think was a stepfurther than what is usually done. As far as other things like other types ofplanning that I think are different than the things that people usually do, Iwould say that that was probably the most unique one that I've heard.
Sean Riley:
Then I guess from the opposite side, what are some of thethings that, I mean, I guess there's obvious ones, whether they're perceived orreal. What are some of the things that get in the way of vertical startups andkeep them from being accomplished? Were there people that could speak to, weattempted this and it didn't work, or we tried this and this is where it wentwrong.
Rebecca Marquez:
We didn't have anybody who said specifically, we did thisor we tried this and it didn't work. Some of the things that were brought up ina more general way as being things that would contribute to a failure, werejust lack of communication or lateness in communication; keeping things fromeach other; not working towards a partnership. Those are very detrimental togetting this to work. I mean, really those are going to be things that reallywill get in your way of achieving a vertical startup.
Not proper documentation and not getting the buy-in thatyou need. Buy-in is essential to this as well, from all the appropriateparties. Buy-in is huge, so if you don't have it, you're going to be shootingyourself in the foot before you even get started. So I think those were the bigones that can really get in your way.
Yeah, I would say that's it. Just really lack ofcommunication and just kind of keep it, I don't want to say hiding things,because that suggests some malice, and I don't think that's always it. It canjust be things that are overlooked perhaps, by one side or the other. I don'tthink it's malicious. A lot of it can have to do with not having the properpeople involved, and just not documenting things correctly and not planningwell, and just overlooking things. That can really, really cause some problemsand that can really stop you from success or keep success from happening.
Sean Riley:
I guess the thing that I keep thinking of is, and maybeit's obvious and I'm missing it, what would be the benefits of not beingtransparent or not being ... I know that you said that sometimes it's becauseof competing interests and stuff like that, but why wouldn't you want to beupfront from the start about a vertical startup?
Rebecca Marquez:
I've thought of that too, and I don't know what it is thatkeeps each side from wanting to form a deep partnership in order to get this tohappen, aside from competing interests. I don't know if it's that the sidesfeel that they're giving up too much information about themselves by formingthat partnership. I honestly am not sure.
It does seem a little strange, but I'm also not an OEM ora CPG, so one party is trying to sell a thing to another party and the otherparty is trying to buy a thing from the other party and that is ... atransactional relationship can be kind of fraught, and so perhaps that's whatthat is and that's why there's some reluctance around being transparent, andparties feel that, well, if I share too much, I am giving something up. I ammaking myself vulnerable in some way. And that's more than likely the case. Buthonestly, every time I go to one of these meetings or every time we have eithera Vision 2030 session or a session at top-to-top where it's an interactive sortof workshopping session, more and more I hear about the importance ofpartnership and how it's essential in making things work.
I honestly believe that, and maybe there is an element ofvulnerability that has to happen, but I don't think we're really going to reachsuccess unless partnerships do occur. And whatever that has to look like, ifyou feel you're giving up too much to the other party, it's going to have tooccur in some other way. That partnership is going to have to be formed in someother way because you're just not going to arrive at success without being ableto work with the other party in some kind of way where you're sharing. It's notgoing to be successful. That doesn't mean that you have to give up all of yourinformation on pricing or innovation naturally, or trade secrets, but you dohave to form a partnership, and that means letting your guard down to some extentand really getting in there and working together. It's true collaboration.That's the only way to make it work
Sean Riley:
When you even reference it being like a transactionalrelationship, it seems that, and you've touched on this, that we hear so muchnow that both sides want a partnership or want a collaboration, so it's likeit's there that they know that this is the way to go. There's just some oldhabits that are sort of blocking it from happening.
Rebecca Marquez:
Very much so. I mean, it's not as simple as I'm going tothe store to buy a pack of gum.
Sean Riley:
Exactly.
Rebecca Marquez:
It just not. I mean, we're talking about huge pieces ofmachinery that do a lot of things or could do a lot of things that are verycustom, that have to serve multiple purposes or have to do multiple things andwork in different capacities or different applications. There's a lot ofinvestment involved, and this is not purely transactional. I mean, these arepieces of machinery to solve problems. These are solutions and it cannot bepurely transactional, is what I'm trying to say. You do have to have a relationshipbecause you're creating something together, and I think it's truly important.We do hear it from both sides, yet there remains some reluctance. And that pullreally did show itself during this conversation at top-to-top. It was thefriction made itself evident during this conversation. It wasn't, nobody wasthrowing hands or anything like that, but it was definitely a spicyconversation and it was fun, and I think we really got somewhere with it, butit also uncovered a lot of places where challenges still exist.
Sean Riley:
Interesting. Very interesting. Well, I've already takenmore than enough of your time. We just want to thank you again, Rebecca, fortaking time out of your day to come on the podcast.
Rebecca Marquez:
Sure. Thank you for having me.
