When asked what he thinks about claims that the world is now flat, Chainalytics President and CEO Mike Kilgore turns pensive.
“I guess it depends on your definition of ‘flat.’ The concept is that businesses are going to operate everywhere as opposed to just in a single country or regionally, and the ability to do so and the access to information required is more and more available,” he said.
But Mr. Kilgore eventually lands on a simpler answer borne out by more than a decade leading an Atlanta-based supply-chain consultancy.
“It is not easy to operate everywhere. It’s not easy to move across borders,” he told Global Atlanta in an interview at the company’s Vinings headquarters.
Mr. Kilgore is mindful about definitions. He calls his outfit a “boutique” operation, a label that some colleagues feel implies “small.” But he says it’s referring more to specialization than size.
Indeed, the company works regularly with the likes of Procter & Gamble, Pepsico andClorox. Typical customers have more than $500 million in revenue and more than enough wrinkles that need ironing out in their global operations.
To serve them, Chainalytics operates maintains a network of human talent and electronic databases across three continents. The Freight Market Intelligence Consortium helps shippers understand the drivers for the pricing of freight movements, while the Demand Planning Intelligence Consortium measures the effectiveness of their forecasting capabilities. Members pay to access each, and the resulting revenue stream makes up just over 10 percent of revenues.
But the firm makes the bulk of its living helping companies figure out how to best deploy goods, people and capital to plants across global networks with different currencies, climates and time zones. That’s gotten harder as the world has gotten more complex, even as online communication has hastened the pace of commerce.
Mr. Kilgore cited India, where even crossing state borders can lead to heavy tax burdens, forcing manufacturers to put separate distribution points in nearly all states.
Another example is the strengthening of the dollar: A Malaysia-made product might be cheaper for American consumers, but the savings might be eaten up in a more expensive machine imported to the factory from the U.S., Mr. Kilgore said.
“There’s this constant rebalancing. Supply chain is about tradeoffs. I’m trading off working capital or inventory against transportation. I’m trading off fixed costs against variable costs. I’m doing this at the strategic level in terms of how I design the footprint of my infrastructure, and I’m making these decisions at a daily level,” he said.
Chainalytics has faced a similar balancing act in its own operations. It now has 52 people in Atlanta and a total of 182 in nine offices around the world, from Helsinki, Finland, toBangalore, India, and from Singapore to Milan. Some offices— Sydney andMinneapolis, for instance — were inherited through acquisitions, while others were opened strategically to serve customers.
That was the case with Singapore, which serves as the Asia hub for many multinationals. There’s no shortage of arguments why; Singapore is a shipping and transport hub for Southeast Asia, a market of 600 million people with a growing middle class that is also quickly becoming a manufacturing counterweight to China.
Chainalytics’ targeted outposts are vital because they represent localized talent that can respond to clients quickly and competently.
“It’s impossible to stay on top of everything. While certainly access to information makes the world smaller, at the same time the world has gotten much bigger. Really what it comes down to is having people who know what information they need and where to get it when they need it on behalf of a client.”
With a new head of European operations and recent promotions of its executive team, Mr. Kilgore is confident that the company he founded in 2001 will continue to help clients make sense of an ever-changing world.
“One of our corporate values is confident humility. It’s really knowing that we’re good at what we do, but we engage our clients in a very humble manner. We’re very respectful. We understand that they know a lot about their business, and they’re often very good at what they do,” he said. “We’re not there to tell them what to do or tell them how to run their business. We’re there to help them make better decisions and more rapid implementation of these decisions.”
For more information, visit www.chainalytics.com.
Global Atlanta highlights Chainalytics’ global growth in this interview with +Mike Kilgore http://bit.ly/Global-ATL
