Scott Matthews With Verusen

Intro: Broadcasting live from the Business RadioX studio in Atlanta, Georgia. It’s time for Atlanta Business Radio. Brought to you by Kennesaw State University’s Executive MBA program. The accelerated degree program for working professionals looking to advance their career and enhance their leadership skills. And now here’s your host.

Lee Kantor: Lee Kantor here, another episode of Atlanta Business Radio, and this is going to be a good one. Today on the show we have Scott Mathews with Verusen. Welcome.

Scott Matthews: Hi, Lee. Thanks for having me on.

Lee Kantor: Well, before we get too far into things for folks who aren’t familiar, can you tell us a little bit about Verusen? How you serving folks?

Scott Matthews: Sure. Lee, we’re a supply chain company based on artificial intelligence, and we go after the indirect side of the supply chain and trying to automate the way maintenance, repair and operations is done without increasing any business risk to the company that we serve.

Lee Kantor: And for folks who aren’t as familiar with supply chain as as you are. Can you kind of paint a picture of what supply chain means for a regular person?

Scott Matthews: Sure, absolutely. Thanks. Um, so there’s two sides of a supply chain. The direct side of a supply chain are the raw materials and finished goods that are in ports, warehouses, people’s, um, you know, uh, shipping facilities. What Verizon does is we look after what’s called the indirect side of the supply chain. And what that is, is all the, the maintenance and engineering and manufacturing facilities inside of your wall to make, uh, something that we may buy at this point, like John Deere as an example, as a customer. And we look after all the spare parts and all the inventory inside the factories where they make the big green tractors, and usually that’s a couple of hundred thousand parts it takes to make, you know, a tractor as an example. And that’s what Verizon does, is we try to automate that side of the supply chain inside the four walls of a plant or a warehouse.

Lee Kantor: And is this kind of a Russian nesting doll situation that within each customer there’s a supply chain. And within each of their customers there’s like it just never ends, right? The supply chain is involved in every aspect of every business.

Scott Matthews: Yeah, it’s a good point, Lee. So, um, the challenge that most customers have is data is stored in different systems and in different formats. It might be in an accounting system, it might be in an asset management system. You know, it might be on a spreadsheet. It might be different across different plants, across different geographies and in different locations. And it’s hard to make sense of that incongruent data to figure out what’s the right part. I should have an inventory. Where should I store that part? How much should I pay for that part? From whom should I buy that part? And how do I maintain the minimum amount of inventory without increasing any risk to the business? Ever having a manufacturing facility go down or a line go down? So that’s actually the problem that Verizon solves. Is that incongruency of data and recommending what the inventory level should be, given the business risk profile of the customer that we serve.

Lee Kantor: Now you’ve been named one of Atlanta’s 100 fastest growing companies. Were you? Um. Growing because it was just expanding, like with the supply chain, especially during the pandemic. There was obviously issues there, and then people kind of got caught and and they, I guess, weren’t as intimately involved with their data that they couldn’t kind of protect themselves from that. Is was that kind of an engine for your growth?

Scott Matthews: Yeah, that’s a good point, Leah. That’s part of it is, you know, people overordered, you know, during the pandemic because they just didn’t have visibility into when something would arrive, especially if it’s a critical part. It might have, you know, a four month lead time, you know, versus a washer or a nut. That is, you can get, you know, in a day. So that did create some issues. Um, you know, the real issue is, you know, the people that run the plant make their own decisions, and procurement tries to buy what they want on a contract. And the problem was really hard to solve. And Verizon at the beginning of the company had to create the need to solve this problem. And now major companies, fortune 50 companies are coming to us saying, I have $400 million of inventory. That is not moving. Well, it’s slow. It might be obsolete. How do I figure out the right inventory management policy given the risk profile that we have? So we’ve seen a huge influx of business where people have a budget, they have a problem they want to solve, and they’re looking for the right technology. And those are the catalysts for growth for a company like Verizon, because, you know, we’re an enterprise, um, software package, which means many people get involved. It’s six months, nine months, 12 months to have a major fortune 50 or fortune 100 companies. Um, make a decision on the types of problems that we solve.

Lee Kantor: Now, um, this kind of. Attention and the need. I guess more people realizing there is a need for this kind of a solution has opened up some new verticals for you.

Scott Matthews: Yeah, exactly. So, you know, we’ve done really well in process manufacturing and that just means it’s, you know, something that happens in repetition and there’s a lot of inventory and spare parts that’s needed. Uh, we do well in pulp and paper and things like that that are and that’s the heritage of our company. And recently with the hires that we’ve made and the investments that we’ve made, um, oil and gas, you know, we’re about to sign a really large customer and that oil and gas sector. Um, energy, you know, one of the companies based here in Georgia is our largest customer, the one that we all buy, uh, power and electricity from is a large customer of ours. And mining, mining is actually a huge vertical that has a lot of assets when they mine, you know, the precious metals and things that that are components and the products that we buy. And those are huge industries that the three people that I support, that we signed on with Verizon, have 40 years collectively of operational expertise, domain expertise, and it’s helping us to solve those problems easier and faster. When I can speak the language of oil and gas, I can speak the language of mining versus process manufacturing or, you know, um, CPG and companies that we’ve done really well in, in the past.

Lee Kantor: We now are these verticals, primarily US based companies or are they global?

Scott Matthews: They are not. Um, you know, we have a top three, um, food and beverage company in the world that we use that they use us in four continents around the world. We support 40 languages, 40 currencies. It’s a worldwide problem to figure out inventory management about what part do I need, where in what plant, what factory, and how do I balance inventory on a worldwide basis across multiple languages, across multiple currencies? So Verizon is blessed to have a bunch of customers that are global, um, in nature.

Lee Kantor: Now, how has kind of the acceleration of AI tools impacted your business? Is this something that you’re kind of always looking for more and more talent in that space in order to stay in the forefront?

Scott Matthews: Yeah, it’s AI is a continuum. And when you take incongruent, data incongruent systems, it’s a perfect problem for artificial intelligence to solve is how do you make that a common data set? How do you make that actionable when the data is stored in all different formats and in different systems? And where are the benefit of being a young company and basing our data acquisition and data manipulation tools, all based on artificial intelligence. And once we have that data in our system, we look at the data to years of history across suppliers, across manufacturers. We normalize that data, and then we make recommendations for what should be the stocking policies for every single SKU SKU across someone’s plant floor. What should be the minimum you have in stock? What should be the maximum you have in stock? What are duplicates? How should you share parts? And the goal is to drive down working capital without increasing any risk, um, in the manufacturing process. And that’s all benefit of artificial intelligence and large language models and generative technologies. So, you know, we spend a huge 57% of every dollar, um, in our company goes to technology and artificial intelligence because it makes a huge difference in customers outcomes for what they hire us for.

Lee Kantor: Now, how difficult is it to implement your software into somebody’s system if they if they don’t have this right now and they say, okay, we’re going to flip a switch, do they start normally in one area and then it eventually kind of expands as they see the benefits? Or is it something that they got to make this kind of major change? No, it’s.

Scott Matthews: Actually a it has to be a wide decision. Lee. It can’t just be piecemeal because you won’t get the benefit of it. So it’s generally the plants that you want to control inventory. And the benefit of being based on artificial intelligence is we can be live within 30 days of of starting a project because of modern technology, because of AI. And customers can start to see value in 45 days of us starting. Gone are the days of six months, nine months, years of implementation to get value. That’s what artificial intelligence has brought to our customers is time to value. On buying software like Verizon. It happens really, really fast.

Lee Kantor: Now in the companies that you serve. Are there some times when the different groups within the organization are siloed and they don’t have, just as a culture, good communicative policy?

Scott Matthews: Now your audience can’t see me smiling. But that’s actually a problem that we solve is I’ll call it organizational alignment. So people in procurement, right, who are spending hundreds of millions of dollars in dollars to keep those plants operational, want everything under contract. They want everything to be planned. They want it to be consolidated across certain suppliers because it can drive down unit costs in acquisition. People on the plant floor don’t care about that. They just want to have insurance because they’re paid on availability, they’re paid on production. So it’s opposing agendas between manufacturing and procurement. And Verizon is the glue that puts those two departments together by showing evidence and science for why and how should you make inventory recommendations. So both parties win both manufacturing wins when they always have the right part at the right time. Procurement wins when you can drive down inventory costs without increasing risk. And Verizon is the balancing act between manufacturing and procurement. And generally those two departments are misaligned as organizations.

Lee Kantor: So who in the organization makes this buying decision?

Scott Matthews: It’s actually split. Um, procurement is often the sponsor, but manufacturing has to buy in and say, yes, this will work because manufacturing in the plant floors are the users. They’re the ones taking our artificial intelligence recommendations, and they have to accept it. They have to accept it. And then once they accept it, we update the systems of record like, uh, SAP, it’s an accounting system and a manufacturing system that runs many, many plant floors. So it’s actually a circle of inventory management that happens. But I need both parties to be involved for Verizon to be successful.

Lee Kantor: So how do you kind of demonstrate to the skeptical party that this really is going to make their life easier? This isn’t another one of these, you know, mandates from up high who don’t understand what it’s like to be the boots on the ground.

Scott Matthews: So it’s an excellent question. So risk mitigation is really important when you make multimillion dollar decisions to change process. So um we have ways to take in data in a sampling sense. Put it into our algorithms and show prospects not customers prospects evidence, quantitative evidence that our algorithms work, our science works. So it really does minimize the risk of buying, uh, software from Verizon. And we’ll do that as a pre-sales effort because I also want risk mitigated. I want to make sure that we sell the right software to the right customer that will be successful, and then they’re able to build the business case, quantitative ROI about how much they’ll save versus qualitatively saying, gosh, I might save $10 million. I might save $40 million. It’s hard to get a business case justified in today’s economy without quantitative evidence that it works.

Lee Kantor: So what’s next for you? What do you need more of and how can we help?

Scott Matthews: So what I’m in the process of doing is, um, building out, you know, the worldwide aspect of our company by hiring, you know, three people in sales. It sounds like a small amount, but for us, you know, it was a good investment. And then to build out, you know, people that are outside of Atlanta, outside of New York to hire in, you know, appropriate geographies. The other aspect of what we’re doing is building a partner network for complementary services that add more value than Verizon can independently. And I’ll give you an example. So you might have in your factory lead $40 million of inventory that hasn’t been moved in a while. And if you’re the financial person, how do I get that off my balance sheet? How do I get that that expense, uh, liquidated in an appropriate way. So we’ve integrated to two different disposition companies that will look at slow moving inventory and either buy it or consign it for resale. So customers are able to get more value than just what Verizon can, can supply. As one example, we have another partnership with recurring spare parts versus buying new. So we have third parties that integrate to our solution, and it might cost $0.30 on the dollar to spare to repair a $24,000 motor versus buying something new. So again, offering a a better way to spend money versus always buying new and dealing with supply chain issues. Why don’t you fix what you have? Because it’s just less expensive. And mean time between failures is not, uh, high on this. So those are some examples, um, of partnerships that we’re building.

Lee Kantor: So now the new verticals that you’re working in, that sounds like it was kind of customer driven, like there was a need. And then you decided to put a body on those verticals.

Scott Matthews: Yeah. So, um, I’ll give you again another really good example. Um, there’s a top ten oil and gas company that we haven’t signed the contract yet, but it’s imminent. Um, you know, they have a billion and a half dollars of inventory on oil rigs out in, you know, the ocean and and different warehouses and plants, you know, around the world to produce the oil that ultimately goes to the refineries. And they wanted to reduce that inventory without increasing any risk, right, of production. Uh, at this point. And Jeremiah, you know, Jeremiah Woodford knew the decision maker and ultimately positioned us for, you know, in our world, a very large deal. Um, and we think we can decrease inventory by $50 million for this customer, which is a huge, um, amount of value that we would have. And we can do this within a year of, of signing. But that’s an example of how the new people we’ve hired have got us in to verticals that we didn’t participate in because they knew the decision makers, they knew the processes, they knew the language, and they knew how to get around, um, that type of an account to show our value in the same way we might have for, you know, a top ten, uh, you know, company here in the States that produces paper products that you and I are buying at a grocery store or a beverage that, you know, we’re buying and, and in a grocery store or a bar or something like that.

Lee Kantor: So if somebody wants to learn more, uh, where should they go? What’s the website?

Scott Matthews: Um, it’s it’s the dub dub dub dot Verizon. Verizon.com. Um, there’s a sales link. There’s a, you know, all kinds of, uh, FAQs and questions. Um, you could, um, you know, engage with, but, you know, that’s that’s we that’s how we generally speak to someone who’s interested in what we’re doing today.

Lee Kantor: Well, Scott, thank you so much for sharing your story today. You’re doing such important work and we appreciate you.

Scott Matthews: We thanks for the opportunity and thanks for letting me talk to your viewers. All right.

Lee Kantor: This is Lee Kantor. We’ll see you all next time on Atlanta Business Radio.