Expanding Globally and Taming Complex Supply Chains With Mobile-First Solutions With Secrid’s Thomas Boogert

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A podcast about the low-code shift & the makers bringing ideas to life.

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Episode 4

Expanding Globally and Taming Complex Supply Chains With Mobile-First Solutions With Secrid’s Thomas Boogert

Synopsis

Do you need to graduate from Excel and build a more robust application to handle internal processes? Secrid previously managed vendor relationships with dozens of spreadsheets, but recognized the risks associated with disparate data sources. Find out how Secrid created a solution quickly to address these issues, increasing the speed they can respond to vendors while maintaining an ability to scale as their business goes global.

Transcript

/ Mark Manning /
Welcome to Make/Shift. Mark Manning here, Customer Evangelist at Mendix. We’re here to explore how your peers have adopted low-code, and the pain points they’ve addressed to the platform. We’ll take an authentic, unfiltered look at the solutions our customers are building to digitize their processes, to deliver much-needed solutions to market more quickly, and to cut down the cost of development.

On today’s episode, we chat with Thomas Boogert, ICT Product Owner at Secrid, about how low-code has been mission-critical to their growth across both B2C and B2B channels. How they manage a complex web of dozens of material and manufacturing suppliers with mobile-first Solutions, how low-code has guided his 10-year plan and expanding their business globally despite limited resource capacity. And finally, how Secrid has enhanced their E-commerce experience by tapping into their growing fan base. So, Thomas, could you introduce yourself and what you do for Secrid?

/ Thomas Boogert /
Sure thing. I am Thomas Boogert. I’ve been at Secrid for longer than seven years now, which makes me one of the dinosaurs at the company actually. I started out in a data analytics job. It’s kind of a side job during my university time, and it kind of got out of hand, and I started doing some larger IT-related projects as a product owner. And currently, I’m still doing the product owner role. And I also have some work as a strategic planner now, so a bit more broad than just the IT projects.

So basically I spend most of my time figuring out what’s blocking the business from growing or finding new opportunities like new markets to sell to with a webshop, for example, finding a solution for those problems and then running the projects.

/ Mark Manning /
Could you talk a little bit about your organization and your growth over the last few years?

/ Thomas Boogert /
Sure. So Secrid is a wallet brand from the Netherlands. We shifted our focus from being a design agency to a product-focused company during the financial crisis of 2008. All the work was stopped and was basically trying to figure out how to market a product for ourselves or go bankrupt. Fortunately, we were able to come up with a nice solution. We invented a cardholder. That’s also a wallet because it’s mixed with leather. So in a way, we mixed two existing categories of leather wallets, and cardholders together and created a new wallet type.

We, from the start, chose a strategy of manufacturing the whole process in the Netherlands. Our founders had some experience with production facilities overseas and felt like that was not something they wanted to contribute to, which is funny enough now becoming a larger point of focus for most organizations with supply chains being disrupted in the whole coronavirus crisis. But we were kind of ahead of that a little bit. So we set up a whole supply chain and production chain in the Netherlands using specialized manufacturing partners.

So basically we only handle finished products, but managing the supply chain and doing the design of the wallets is still in-house. So we make the wallets in Holland and we sell them globally through a network of distributors and retailers. We do some promotional sales, and we have a small but present B2C channel through our own webshop. And we’re expanding the countries that we deliver to. It’s only 7 countries now, compared to 70 countries for our B2B network.

And one final thing that we’re doing now is, even though we’re at 150 employees now, we never implemented the traditional management hierarchy. And previously we had no other system in place. So it was a bit chaotic at times. But recently we started implementing Holacracy, which is a model for self-organization as a company. And that’s going pretty well, I think. So those are the basic facts about Secrid.

/ Mark Manning /
And the growth has been pretty impressive over the last few years. So year over year growth, geographically speaking, both with your direct E-commerce model and your B2B model. Could you talk about the role technology has to play in maintaining or even accelerating that growth?

/ Thomas Boogert /
Yeah. So in terms of figures, we are shipping to over 70 countries now, and we’ve grown to €40 million in revenue in 10 years of being a business, which is similar to a growth path of, for example, Nike in the first couple of years. We find a very similar growth path, funnily enough, but it’s going quite well.

And the role that technology has played in this growth path is … personally, I felt it like a mission to not let the number of people that work in the operation grow the exact same amount that we’re growing as a business. So selling twice as many wallets, we shouldn’t have twice as many people running the same process doing manual order entry or manual labor that’s repetitive, etc. So we have to automate some of that a little bit. And I think technology is a great way to make sure that you don’t duplicate all that work.

/ Mark Manning /
And I imagine this is … not that E-commerce is easy, but there are tools that you can use to go out into market and various pieces of software you can purchase. But with respect to that supply chain, keeping it onshore, dealing with a web of suppliers especially as your business grows, could you describe at least what you’ve built or how you’re managing that complexity right now?

/ Thomas Boogert /
Sure. So what you’re saying is correct. We have this web of suppliers that are doing either unique tasks or doing kind of similar work but in a little bit of a different way that ultimately lead to the same products in our warehouse. So it became quite a lot of administration to handle, I think in terms of coordination, it’s still quite doable. That’s one of the advantages of having everything in the Netherlands, because we’re such a small country, basically that every single supplier we have is in a 150-kilometer radius around our office.

And we have a good network of roads in the Netherlands, so that means that I think, that the farthest away suppliers is two-hour drive by car. So it is doable to cooperate with all these suppliers, but what was getting a little bit more complex was the administration, because you do want to have a good cost price calculation for each wallet. And sometimes a single product can be made by, let’s say 10 different variations, depending on which set of suppliers they use to make the wallets. And of course, they don’t make it for the same price. So the cost price differs as well. So you need that for your financial administration.

And keeping up with that in a weekly changing supply chain was getting a little bit harder. And the situation we had was where basically all those suppliers filled in the information in Excel forms that were shared in a Dropbox file on what they had produced, what they had received, and what they were shipping away through to the next supplier basically because it’s always a chain. And that was a little bit prone to error, let’s say. And also, then we had to input it in our system, they still have to put it in their system because they have to send it us an invoice for all the work they’d done.

So it was basically three times the administration necessary, and we are still building in Mendix, a platform that will make all that in administration take place in one single mobile-first solution. So it’s not an app yet. We haven’t built a native app yet. We’ve filled it in a web version for the first version. But the idea is that all our suppliers can see, this is what Secrid is expecting from us. This is what we’re receiving in terms of … for that supplier of raw materials. That is what we’re supposed to put out.

This is when we are supposed to ship it so we know how long we can take to do our work. And then basically report back to us in the app, what they have done, but also how many quality issues were in the process. So either with products they receive, hey, this sheet of leather, we can only use 9 of the 10 square meters we’ve received because one square meter has something out of it that is not fit to our quality standards. So it’s basically the normal process, but also the non-happy flows we build into the platform, all for better coordination.

/ Mark Manning /
Just to follow up on mobility, why a mobile app? What will the supplier or an employee of a supplier do on a mobile app rather than sitting down at their desk and use your web app?

/ Thomas Boogert /
So, first of all, most of our digital projects we’re doing now, we’re doing mobile-first because our products are all in your pocket. And what’s also in your pocket, your phone. So we’re trying to design every single digital platform we do now from scratch, we’re trying to design it mobile-first because it fits the brand, but also because it’s way easier to upscale your digital design than to downscale it. Once you’ve designed for desktop, it’s a little bit harder to fit it back into a mobile phone than the other way around.

And for this specific solution, we figured most of the … so the operation has become so large that there might be a separate warehouse operator and a separate manufacturing operator and a separate warehouse operator for outbounds. And we just decided we’re not going to have need to use their computers for all of this. We want to have something in your hand, so you can check the grids you see, okay, I should receive, let’s say 2,000 pieces of cut leather. The operator could count it and then say, okay, now it’s not 2,000, it’s 2,010 or 1,970. So you’re basically on the spot that you can do your administration right away. You don’t have to go through your office, sit down at your desk, boot up your computer. So we just figured it will be easier anyway.

And then we’re also looking into building complete traceability in the supply chain. Probably it also means that we want to scan unique identifiers to either single products or batches. And that would also be easier if you have a mobile application because then you already have a scanner, which is your mobile phone camera. And you can basically, with a QR code or whatever on the backing snip, and then have your identification for that batch registered in the system automatically. So we thought it fits our brand better, but it’s functioning also, in our opinion, a little bit more scalable. So that’s why we chose a mobile-first solution.

/ Mark Manning /
And to back up into the motivation for the project itself. So it sounds like sort of the before state here was a web of Excel spreadsheets across dozens and dozens of suppliers, which I think would infer at least a level of risk and inefficiency. What was the motive for starting this project? Was it efficiency? Was it risk management? Was it hindering the growth of the company, significant growth you’ve had? Could you delve a little bit into that?

/ Thomas Boogert /
I think a little bit of all of the above. It is a risk if you depend on this information to make weekly decisions and you have an Excel sheet where just filling out an extra zero or one zero to little, and you can basically mess up your whole supply chain, even though it’s basically a closed system because most of the suppliers we have in the system don’t purchase the raw materials themselves. They receive it from somebody else.

So let’s say we buy a sheet of leather, and let’s say it’s 10 square meters. The first step would be to cut the leather, which is done by a machine. And from that point on it’s a closed system. And if we have, let’s say from that 10 square meters, we have 200 sheets of leather. If the next supplier says he received 100, that’s impossible already.

So in Excel, it’s a huge risk, but in fact, it’s really a closed system. So you can make it really easy for the user because you already know what he’s supposed to receive or what he’s supposed to build. So it’s basically just confirmation of what we already know. But then on the other hand, you have your quality process as well because something can always go wrong in the production process.

So let’s say you received 200 sheets of cut leather, and the next step is stitching the leather back together. And something goes wrong in the machine, or a fire breaks out or whatever, you need to write off all these wallets. And we need to know about it ASAP, because the rest of the supply chain is also dependent on the work you’ve done. So it’s also a speed issue.

I mean, you can call our support if something goes wrong, but then it’s not really in the right administration forms right away. You just want to write off those wallets that have been lost or those sheets of leather that have been lost and then move on. So it’s a speed issue. And also it’s more scalable. We think if you know exactly what’s where for 40 different locations, you can do it for 80, but if you have 40 different locations in 40 different Excel sheets, it starts to get a little bit out of hand that you almost need to have somebody dedicated working on those excels to figure out if they’re right. So it’s also about scalability of our business, definitely.

/ Mark Manning /
Now, to follow-up on scalability, it looks like the company has grown pretty significantly over the past few years, to the point where I can walk out of the Mendix office in Boston for five minutes and right down the street, there’s somewhere I can buy one of your wallets. What would you say this project contributes to continue growth? When you say, growing at the clip you’ve been growing, would it be possible had you not digitized your supply chain?

/ Thomas Boogert /
Well, I think it’s more of … it’s not hindering us currently because we’re still able to grow a little bit, but it’s more like a platform that will help us grow the next 10 years. So if we continue on the growth trajectory, which to be honest right now with COVID-19 is taking a big hit, but we are expecting some form of recovery within the next two or three years back to the level we were last year. But I think these platforms, the investment is so large. You don’t do it for just the one year. And I think we were doing it in time.

So doing the administration in excel was not yet such a barrier to the growth that we had to do this, but I think in the next one or two years, it would have been. So I think we did the project just in time, and I think it’s going to help us grow the next 10 years and maybe support even more complex business use-cases because it’s built on Mendix.

So it’s more flexible than your average code-based solution, in my opinion, because it’s way better readable, all the different parts that lock into each other. And you have your dependencies all mapped out nice and easy. So if you lay down to work for three months, and somebody who hasn’t worked on a project yet, will pick it up. You can still read what the business logic is supposed to be doing and then start working on it again. So I think it’s more of a 10-year plan, this platform.

/ Mark Manning /
Apart from supply chain, what else are you building in the platform? What other parts of the business have you been able to support?

/ Thomas Boogert /
So the first platform we built in Mendix was also kind of a test for Mendix as a platform, but it’s a bit more a business-facing. It’s our corporate brand, products portal, and promotional sales portal. So without ever saying that we do ship wallets to companies with their logo on it, so they can give it away at a trade fair or for some other promotional reasons.

We do receive a lot of requests, which is a nice branch for us. It’s a nice stream of revenue, but that process was also quite complicated because if you have no visual tools, it’s very hard to communicate where a company wants the logo on our wallets. We have to explain, we can’t engrave the leather. We just engraved the aluminum on the inside. It’s these types of colors. So if you have a … you can’t engrave color, it’s basically a couple of shades of gray and that’s it.

So you have to explain that, and it’s a very complicated ordering process as well because you have the possibility for volume discounts. You have people that want overall discounts. So it’s kind of a negotiation the whole way around, but there was some logic to it. So I thought it will be a great use case to build at Mendix, a custom order portal, including the visual representation of the logo on the product, so the customer will basically be able to drag and drop the logo on there. So I want it at the bottom left corner. I want it this big, play around with the volume so you can see if they’re falling prices or discounts or not. So I thought it would be a great use-case for first try-out with Mendix, basically. That has been live for, I think, two years now, and it’s running quite nicely. So that was our first use-case.

/ Mark Manning /
So it sounds like there’s an emerging sort of body of proof that even apart from your E-commerce solutions, technology has a pretty significant role to play in the growth of the company. What’s next? What’s your vision for low-code and your company?

/ Thomas Boogert /
So a company as a whole, we have been, let’s say 99% focused on business-to-business. And I think the last couple of years, we’ve already with a smaller group within the company, focused on the consumer more or end consumer, which has an effect on our branding, but also the way you do logistics, the way you do customer service. I mean, if you do business-to-business, it’s very okay that your customer service team basically just responds to emails within, let’s say a 24-hour window, and you’re meeting expectations with the customers.

But if you’re in a B2C environment, you have to be on Facebook messaging, replying to the customers. You have to be on Twitter, you have to be on Instagram. People are commenting below your posts saying, Hey, I bought this wallet from you and the bottom broken or whatever. I want a warranty request. So it’s a whole different service level you have to give.

And I think as a company, we are behind in that in our journey. And I think if we want to implement that on a scalable level, we have to do it using the assistance of technology as most larger companies are doing as well. So think of portals to do your returns in. So if you have a warranty issue, we give two year manufacturer’s warranty on every single wallet. And if you registered your product online, you get three years.

So basically digitizing that return process is going to be a big one for the next one or two years. We want to expand, let’s say digital, MySecrid environments. We think it’s cool if people … we built for some reason, a fan base of consumers using our products. And they really liked to tell us about how much they love using their wallet and how much it has changed the way they carry cards. And I mean, if you design a product, that’s not something you think about, but for some reason we’ve accumulated part of the fan base, and we want to get that place as well.

So we want to welcome those people to our family as well in some way. And I think since it is global, it’s very hard to do that physically. So digital is a nice solution for that as well, so expanding the MySecrid environment. We’re still, I think, small enough to use for most problems, SaaS solutions, which is, if you face it a lot cheaper to implement and run than even a low-code platform. So as long as we fit in the box neatly, it’s good enough, but then you have some other propositions where mostly it’s consumer-facing, but on the backend, there’s a very complex business process with Secrid specific rules that create extra value for customers.

And I think low-code fits right in that spot because you can do like we did with the supplier platform, we hired an external UX design company, aside from the Mendix programmers. And we basically had the UX team design the whole flow, and then, only then implemented it in Mendix. And it was a little bit of a co-creation cycle, just so they knew what was possible, etc. But in the end, I think we got pretty much everything we wanted. So that proves to me that we can also do, if that’s supplier facing, that we can also do consumer-facing, complicated processes.

And I think that the most valuable for us would be if we figure out a way how to customize the wallets online in a scalable way, and we’re already doing this physically. So in our brand store in Rotterdam, we have a laser engraving machine, and it’s possible to choose your own carpet texture, which is the inside of the aluminum of our wallets, choose your own leather type from a variety of samples we bought over the years.

So these are leather that we usually don’t even have in production to really create a unique wallet. And I think translating that into the digital world is quite a challenge. If you don’t do it, well, you’re going to spend a couple of million euros on building a solution to do that. And I think we could try to do that with a low-code platform like Mendix.

And it would also be a nice case to see because we already have the configurator for the promotion of sales portal, to see how well you can actually copy-paste elements from Mendix app A to Mendix app B, and kind of develop it further. And then, because I think it needs a little bit more work to be consumer-friendly enough. It’s already quite good. But I think if we spend a couple of more development sprints on it, it will be really good. And then also use those developments back in the promotional sales as well.

So I’m really curious to see what will happen if we try to use that as a building block for another app. So that would be, I think the biggest one. Consumers always love customizing their product. Almost every event we do with laser engraving and all our types of customization is always a success. So I think that’s a huge opportunity for us we’re not currently capturing, and it also fits nicely into the business to consumer, direct to consumer, strategic narrative that we’re trying to enforce. So that would be a big one.

/ Mark Manning /
Lots of fascinating possibilities ahead it seems.

/ Thomas Boogert /
Definitely.

/ Mark Manning /
Well, Thomas, thank you very, very much for your time. We’re truly looking forward to seeing what you build next.

/ Thomas Boogert /
All right. No problem.

/ Mark Manning /
Thanks for listening, and be sure to check out Mendix.com/MakeShift to subscribe and stay updated with our latest episodes.