890: AI Meets Manufacturing Reality: Lessons From Catalyst Detroit W/ Jim Cahalan

0:05Hi there, my name is Philip Ideson. I want to welcome you to the Art of Procurement podcast, the podcast that helps you, a forward-thinking procurement professional, position yourself and your team to proactively take advantage of the revolution that's taking place in procurement today. By interviewing industry trailblazers and sharing insights from our own experiences, my team and I pull back the curtain and shine a light on the strategies, tactics, and tools that procurement teams are using to elevate their impact. And today on the show, I'm delighted to welcome Art of Procurements Director of Events, Jim Cahalan.

0:39Earlier this year, Jim and I talked about what we're trying to build with the Catalyst Event Series. And since then, we have held Catalyst in San Francisco, and then most recently in Detroit. So today what I thought we'd do is actually look back at what actually happened in Detroit, what we learned from the leaders in the room, and what the lessons mean for our next catalyst, which is in New York City in November, and then the series in 2027. So first of all, Jim, thanks for coming back on the pod and welcome to the show.

1:08Jim Cahalan: Yeah, happy to be here. So before we go into kind of individual sessions, we just came after our Detroit event. It was the first event we did actually for Direct Materials Procurement. What was your overall reaction coming out of Detroit? Did they kind of play the way that you thought it would do? Yeah, well, as you just said, this is our first time doing something that was mostly focused on direct materials and manufacturing procurement. Normally, we're fairly industry agnostic. So I think it went really well. The theme of the day was when AI meets manufacturing reality. So that kind of gave us a nice test.

1:47Jim Cahalan: Would the Catalyst model still work when we're kind of narrowing our audience just slightly? And from my perspective, it went really well. We were still able to bring a really solid group of procurement and supply chain leaders. And that narrower focus actually made the conversations more candid, a little more specific, and probably more relevant for people in the room. Yeah, I think so. And because going in, I wasn't sure, you know, when we looked at Detroit and looked at something that was very industry specific, you know, it's always a, the question is always, you know, how can we bring as many people as we can in the room, but in the constraints that we set for Catalyst, which is, we don't actually want too many people in the room, because we want it to be as safe a space as possible.

2:29And you mentioned that kind of theme about when AI meets manufacturing reality. Where did you find that reality differed, I think, from the AI conversation that we often hear at a lot of conferences? Yeah.

2:45Jim Cahalan: During the conversations, we were really moving beyond, well, what can AI do? What are those use cases? And getting actually into how do we go about operationalizing this inside a complex procurement or supply chain environment, right? A lot of the conversations I've seen and been a part of at other events and with other organizations is still really just focused on, okay, what's the technology? What does it do? And what are the use cases for procurement? Which is useful, but we really need to get past that. So I thought we did a good job of having those conversations move to what are the actual choices we need to make about operating models, governance, supplier behavior, and how are we actually making those changes compared to just what's the current state?

3:29Yeah, I think that that's definitely one of the things we're trying to do is make, as the listeners to the podcast will know, we've talked a lot over the last year or so about operating model, probably even longer than that. and we're attacked with a lot of technological solutions today, but I think that the impact of those is rooted in how you're changing your operating model, not necessarily around them, but that is enabled by new technology. And so that requires us to talk, I think, a bit more in-depth around those themes rather than just the technology alone and how the technology fits in and definitely how we kind of build a day, I think, when it comes to what, you know, an experience of being at a Catalyst event looks like.

4:14Yeah.

4:15Jim Cahalan: And obviously operating models was a huge piece of the conversation throughout the day. But I'm kind of curious your thoughts as well. You know, you were facilitating a lot of conversations. You were part of this discussions. What other themes or conversations did you hear kind of echoing throughout the day? Yeah, I think there's probably a couple of things. One thing that's really interesting to me this is very specific to direct materials procurement you know i started my career in direct materials um in the automotive industry and that's one of the reasons why i was actually interested in as going to detroit and running an event in detroit not that it was specific to automotive but um you know that's where a lot of best practices are for manufacturing procurement but i think that most of the folks in the room would probably admit that direct materials has been an area where it's probably a little bit behind in terms of investment in digitization versus indirect procurement.

5:11And there's a lot of really valid reasons for that. I think chief amongst them is the risk of doing it wrong, you know, the risk of having problems of breaking things. You know, it's a different magnitude of risk when your, you know, an implementation doesn't work and it forces one of your clients to shut down in the manufacturing facility and you're on the hook for half a million bucks a day and penalties for doing that. So there's such a different risk profile and also the interconnectedness of systems related to manufacturing. So I think that what's really interesting to me is how that's changing.

5:46That I certainly see a lot more interest now from direct procurement leaders in how they start to invest in probably a more modern tech stack and what that looks like. And so there's more interest. But also on the flip side is there's the, and we see this in the work we do in Procuratech 100, is there's now a really growing ecosystem of procurement-specific providers who target direct materials. And that didn't exist, I think, in past years as well. So some of the things that we did in Detroit and the bringing together of kind of both sides is probably something that wasn't possible five years ago because there wasn't necessarily the product ecosystem, but there wasn't the buyers who were interested in exploring what digital technology might mean and how they can kind of leverage it for direct materials.

6:40And then when it comes to some of the topics, I think there was a lot of discussion about speed. You know, we know that sourcing cycles have to move faster, but that speed cannot come at the expense of things like supplier quality, you know, delivery. That's something that I think that was probably an unexpected through line through a lot of the different sessions through the day was this idea of speed. You know, there was a lot of discussion around the value of human judgment and how, yes, technology is important, but at the end of the day, we really need to be explicit about where the role of the human begins ends, what it does in the middle, and kind of the governance around that.

7:27And really interesting because I think this is an area where, again, in manufacturing, we've struggled a lot, probably because just the way that we're pigeonholed in procurement is probably beyond savings. And of course, that savings is kind of a given, but there was a lot of discussions around how do we influence revenue? How do we help make product decisions? How do we help bring products to market faster, which goes along with speed as well? And it was kind of refreshing that that's where the leaders in the room were thinking about how they evolved their operating model to support as opposed to, I need to get a bit of, I need to find a way to get another 3 % in my savings goal over the next five years, which when I was in direct materials procurement was kind of more the prevailing wisdom.

8:14Jim Cahalan: Yeah, and I feel like what you brought up, speed, being focused on that human AI judgment nexus, are all kind of subtopics around that question, what is the value that procurement and supply chain brings to the enterprise? enterprise. So along with thinking about those operating models and how are we actually being thoughtful about redesigning those, yeah, I kept hearing over and over topics and questions around what are we bringing to the table? What is our value in this age of AI? Yeah. And I think what's interesting from the leaders in the room is kind of breaking down the barriers of what we think procurement is into, if we started with a blank piece of paper, what would that look like and how could we support our organizations in a different way and just having that you know unlearning the things that we we we accept as being the givens in what procurement is um is powerful you know it's powerful to rethink therefore okay so if i take away the constraints of the box i was trying to build you know procurement in how does that change what how i think about what we can do and how i think we can interact with product teams or with sales teams or the marketing teams.

9:29You know, all the teams that come together in manufacturing, of course, to bring a product to market rather than us having this fixed, defined role. And I think that's exciting for a lot of people that were there to just start thinking differently about what we can do.

9:43Jim Cahalan: Yeah, it kind of adds to procurement being a fun place to be because you get to be more creative. If you're forward thinking, you can be more creative about what we're actually doing. Yeah. and I think the conversations around judgment was really interesting because there was nobody in the room that was saying hey AI is going to come here and replace all of my team I think that this mirrors what we hear not just in our events but that we're so overwhelmed with things to do we need help and um and uh and ai is obviously a great way to do that and you know if we use it effectively to bring efficiencies to our process um but um how do you ensure that you know if you bring if systems start to automate you know a lot of the processes and execute on the processes how do we make sure that we still not only maintain the kind of judgment that you need when working with suppliers, but how do you develop it?

10:50How do you make sure that we don't pull up the ladder, so to speak, and not support the next generation of, like not provide the opportunity for the next generation of talent to come into the profession, I think is a big question on people's mind.

11:04Jim Cahalan: Yeah, absolutely. I'm glad that we were able to touch on that and really spark that conversation. It's on everybody's mind. What do we do? But it's helpful to actually talk with your peers and think about, well, what are those next steps to ensure that that doesn't happen? Yeah. And we talked about the fact we brought together folks from automotive, they were industrial manufacturing, we had life sciences, and a lot of other industries that are manufacturing first. As we heard to leaders from each one of those different industries, did anything surprise you about how similar their challenges were and what they're dealing with?

11:42Jim Cahalan: Yeah, I don't think it was surprising. I really think it was validating for leaders in the room to realize that they might have lots of fairly different operating environments, various challenges. But especially you're thinking about someone from pharma compared to a tier one automotive supplier. But those leadership questions were remarkably similar. Things like how do we get better data? How do we get procurement involved in our processes sooner? you know how do we use ai in a way that's not just slapping it on top of poor processes that we already have they all kind of had similar questions so i could see that you know it was palpable in the room that people are looking around going oh i'm having similar challenges even though we're in different industries or have different operating environments so i think that revelation in the room helped reinforce for me that cross industry is actually helpful at these types of events instead of having just a very narrow functional focus.

12:40Yeah, and it's difficult and that's where some of the art comes into curating these rooms and bringing people together that are from different industries and thinking about how do we think about that from a content creation and a facilitation and how we curate different people coming together in different environments to talk with each other. And I think for us, that's always, I mean, that's nothing you ever claim to have won. You know, it's something that is, you kind of look on an ongoing basis and you take lessons from each one of the events that we do and think, okay, so next time around, this is how I would do that.

13:22And that's the beauty of running these events and kind of having the experiences and figuring out what works and what doesn't. And I know that when we talked on the podcast before, I think it was before San Francisco. So you had only really just joined out of procurement. And we kind of talked about the concept of what Catalyst was and our experience of building Catalyst events last year. But since that conversation, you've obviously led the production of San Francisco Catalyst events. You have in Detroit. We've got New York that's coming up. as you reflect on those experiences of being in those rooms what's what what have you found that's

14:01Jim Cahalan: worked the best yeah so after a couple of these events you know a few things have really stuck out to me so the first is something you just touched on phil which was that it's it's just as much about curating the agenda but also curating the room so making sure we have the right people in the room so making sure we have the right seniority that it's really peer level that it's practitioner focused. So really we have people doing procurement and sourcing and supply chain work in the room. And also we have the right attitude, right? That people join Catalyst wanting to participate in the conversation.

14:39Jim Cahalan: They don't want to just come to a conference to sit back and listen. And so that's worked really well. I definitely want to keep doing that and making sure we have right folks in the room. And then doubling down on those small group sessions, right? We have a number of opportunities throughout the day for people to work together with their peers to help solve a challenge or to really dig into a specific topic all of the feedback we get is that that's the best part of the day we want more of that so i i definitely can see do focusing more on that as we get into planning for 2027 yeah so you know i shared kind of what i am looking to take away and move forward with for future catalysts but i'm curious phil you know you started doing these in 2025 you have four successful events under your belt.

15:24Jim Cahalan: I'm curious, is there anything you've changed your mind about since designing the series? It's a really good question. I will say that two things. One is that everyone that we've done has so exceeded my expectations. It's kind of a, it's as you know, better than anybody. It's very stressful to bring together these events and pull these events off. But the high, the dopamine hit, you know, afterwards of reflecting on how the event went, how we brought people together, what people are talking about. And, you know, it's very fulfilling and gives us a lot of confidence to go ahead and continue to build and expand the event series going forward and make in-person events an even bigger part of what we do at Art Procurement.

16:08On the flip side, I don't want to pretend that everything's perfect. You know, I think we come away from these events with pages and pages of notes about lessons learned. You know, this is what I could do. or we could do differently or this is something that we'd never thought about. And so it's always going to be a work in progress as well. And I think that's a good thing because you never want something like this to get stale. And so you're always kind of looking and thinking, how can we iterate? How can we improve? And so I'm always excited for the next one to see kind of how the next one goes and what we can learn and what we can add to that.

16:47I think that my intention in setting Catalyst up is, I've been to a lot of procurement events in my time and I continue to go to a lot of procurement events like most of us have. And I just thought there was an opportunity to create something that people felt as being a bit of a safe space. An environment where there is so much change going on as we all know and we all talk about. There's so many unknowns, more unknowns than there's ever been before. And there's also places, a lot of small places where you can go and kind of find out information at a high level of what's going on without necessarily getting into the weeds of how you actually do it.

17:28And so that's really what I wanted to try and do is create this space where it's about peer-to-peer experience and what works, what doesn't work, the pragmatism, the being vulnerable, all you know creating an environment where people are confident and comfortable enough to be vulnerable about what's working what's not because that's how we learn from each of the most and and of course events like this are frankly you know no surprise to anybody they're funded by sponsors so how do we think about that relationship how do we think about it in a way that brings providers and and practitioners together in a way where it's to it's it's experts you know sharing real life experiences rather than a buyer and a seller and you're trying to get time from each other and just kind of creates that environment which isn't necessarily comfortable for anybody and how do we break those barriers so I'm really I'm very excited about what we've done and what I feel that we've done around that and I think that if I reflect and it kind of ties into something you said about the more impactful parts of the day are those where people are just getting real time to spend talking to each other.

18:41I think it's really easy to want to fill a calendar of a day where this happens and this happens and this happens and this happens and then this happens and you're going in and you're kind of really structured in terms of what it looks like. and perhaps not leaving some things to chance, but creating more opportunity for connection and more facilitated ways that people can talk to each other versus, you know, in less time watching the main stage. That's probably our takeaway. But I'm just so, I'm very passionate about the fact that I think there's a, that our profession needs, you know, rooms like this, if we're to figure out, you know, how to take the next steps that we need to take to, to take on, to give us all this disruption and make it to our advantage rather than disadvantage.

19:40Jim Cahalan: Yeah, I definitely agree there. So we mentioned that we've got New York coming up, you know, we've, we've had Detroit, we've had San Francisco this year we have our third event in New York on November the 17th you know reflecting on all the things and the experience and the lessons learned that we've that we've seen and we've talked about today what are you taking from that and kind of applying to New York yeah I mean I mostly echo things that you just said which is we're continuing to keep the emphasis in New York on participation so we'll have a mix of stage conversations but also those small group working sessions, those peer led round tables.

20:20Jim Cahalan: So we're also going to be a little more deliberate. I think every iteration we get more and more deliberate about connecting the content to decisions attendees are actually going to be making or need to be making inside of their organization. So really calling that out and leading the attendees to start that process of helping making those decisions. And then last thing, continuing to use the rooms themselves as part of the experience, right? I've been very deliberate about that. So, you know, again, it's a small group of senior leaders, but we want to be in a place that doesn't feel stodgy, that doesn't feel like a hotel ballroom.

20:58Jim Cahalan: So in New York, we're going to be at an urban winery and that's on purpose. Yeah, I think that was, when you look at the venues, that was a big thing that I've taken from events in the past is the setting matters. the setting matters for um you know taking you out of somewhere that's familiar and um and hopefully coming away from from rooms that just feel as though um performative isn't the right word but it's um as you said the hotel ballroom it's somewhere where it's kind of familiar you go there and you're already in kind of conference yeah mindset you know we don't want you in a conference mindset.

21:41We want you to come in an environment where, you know, the, the, everything around you is kind of stimulating your, your thought processes and the openness and, um, and the venues are such a big part of it. Um, but that's one of the things I love the most, uh, about it. It's not cheap for sure. You know, when you kind of do that, but I think, uh, everything we do is with a view of what's the experience, you know, uh, for everyone that's going to be in the room, because that's where everyone will get the most out of these events.

22:08Jim Cahalan: Yeah. And yeah, you, you said it just as the way I would. It's about getting the folks in the room to be more candid, but also to think outside the box and environment really helps shape that creative thinking overall. Yeah. So what are some of the conversations that are taking shape for New York? Yeah, I'm really excited. We have some new AOP and HFS research examining what happens as AI moves from experimentation really into the day-to-day reality of procurement. So really digging into how roles are changing, where newly created capacity is going. And again, going back to how are teams updating and changing their operating models.

22:48Jim Cahalan: We're definitely going to dig more into agentic procurement, kind of what does it mean when AI actually begins to take over more work to make those decisions. And yeah, again, we're going to have lots of more specific conversations at those round tables and those mastermind sessions where folks in the room can really bring their challenges, their ideas to their peers and get really candid feedback. So we're looking forward to more of those conversations. A quick plug, I guess, but if anyone's interested in coming to New York on November 17th, who is it for and how do they kind of connect with us to explore whether it's for them or not?

23:30Jim Cahalan: Yeah, just like all of our Catalyst events, it's for senior procurement leaders who are really making those decisions. So not just there to observe trends. So generally, we're looking for CPOs or CPO minus one levels within procurement or supply chain. So if you're a head of procurement, a head of your center of excellence or heads of transformation or indirects, those are really great roles because those are the people really making those strategy level decisions and trying to make those changes in their organizations. And as I mentioned, we're looking for people who are willing to bring real problems into the room, contribute to the discussion and really learn from their peers.

24:05Jim Cahalan: So yeah, we have a few seats left. We'd love to have a few more people in the room. And again, this is industry agnostic. So we're going to have people from pharma, from CPG, from manufacturing, retail, finance, you name it. So there's no specific kind of subset that we're looking for. It's really just the right level and the right kind of attitude in the room. And of course, you can find out more information on the Art of Procurement website. We have a specific one for New York. You can always reach out to myself or you, Phil, on LinkedIn to get more information or just shoot us an email at jim at artofprocurement.com or phil at artofprocurement.com.

24:48And I will say that when you say there's limited spaces, sometimes that's just the marketing ploy to get more folks to come into the room. there's always limited spaces but we do deliberately you know have a fixed number of spaces here because we actually don't want it to be bigger than a certain level because if you make it bigger than a certain certain kind of size especially a certain size for the room that you know the the event space that we have then it because it takes away from what we're trying to create um so rooms the the number of people in the room and the limits the number of people in the a kind of a deliberate design limitation, if you will, of the event series to try and create the environment that we're wanting to create.

25:34Jim Cahalan: Yeah, it's really a sweet spot, right? If you have too few people, it's hard to maybe get candid. If you have hundreds and hundreds, it's easy to sit back. But if you have kind of those 50 to 60 people in the room, that's when people actually start to open up, be candid, and start to have those more deep conversations. So we're already planning for 2027. What does 2027 have in store when it comes to events for us procurement as well? Yeah, really excited. We are returning to San Francisco. That was quite a successful event. We loved the venue, the Commonwealth Club. So we're returning April 27th.

26:11Jim Cahalan: Again, Detroit as well. We want to continue to have a little bit more of that manufacturing focus in a city like Detroit. So we'll also be returning to Book Tower on September 22nd next year. And of course, we do plan to be back in New York, probably November again, and we'll announce that final date and venue after we get through this year's New York City event. Yeah, and it's probably going to be the kind of 16th, 17th, 18th of November is the week that we go for for 2027. And also we have Founders Circle events as well. So it's a different type of event, but Founders Circle is one that we partner with our insights partner mckinsey um where um that one is super limited in terms of um numbers we basically look for 15 practitioners practitioner leaders again that same kind of um role profile of cpo head of digital procurement um head of center of excellence time to roles and 10 senior executives on the provider side, afternoon, this is essentially an afternoon event, to really take down those barriers, again, between buyer and seller and have a chat about, well, what's working and what doesn't on the technology side.

27:29What technology is coming that we may not have thought about from a procurement perspective, but also from a procurement perspective, hey, provider, you may be thinking about going and doing this, but not really sure if that's going to work, or you haven't really thought about the realities on the ground and me trying to implement something like that. And we have four of those through the next 12-month cycle. We have one in Zurich, which is already sold out. That's in December. We have one in London in February. We have one in Dubai, which will be in August. And then it's one in the middle there in New York, isn't there?

28:08I think New York is in May. Yeah. Yeah.

28:11Jim Cahalan: And the founder circles are exciting because they allow us to branch out into some other parts of the world. So again, getting to Zurich, to London, to Dubai as well. So kind of expanding where we can hold these intimate gatherings. Yeah. And honestly, you know, for anyone who's listening and thinking, well, I wish that a catalyst would come to my city because catalyst is built to be something which goes on the road. You know, I think we very deliberately took a path of we'd rather come to you than you, then everybody have to come to one location somewhere. And obviously we're limited on the number of these that we can do just by, they are big productions to be able to pull off.

28:46But also we want to be comfortable and confident that there is community in the places that we want to come so that we have the right number of people who are able to attend. So, you know, if you hear a founder circle in your city, please do come support it because that kind of gives us the signal that there's a larger community here that could support a Catalyst type event. But also if you're in the city and you'd like Catalyst to come to you, then we're all ears. Let us know. And we're definitely open to kind of figuring out where Catalyst can go next. So just to wrap up, Jim, I want to give you one last question.

29:23It's just on really the outputs. Like what should somebody do? What do we hope when we're designing these events that somebody who attends a Catalyst actually does different in the next morning? You know, that actually comes to an event and takes action based on it versus going to an event and kind of passively consumed content.

29:43Jim Cahalan: Yeah, exactly. So many people, you go to a conference or an event, you kind of get excited. You feel inspired for about 48 hours, right? What I want from someone joining a Catalyst or a Founders Circle event is that they'll take one idea, a challenge, a decision, and kind of make a commitment on it to act. So maybe make one choice about what they're going to do about that challenge or that topic. So really, I'm looking for them to leave with a clear picture of what they're going to do next. So it's a lot more about being action-oriented than just simply inspired. Yeah, well, I'm excited for our events.

30:20And Jim, I want to put on record, you've taken them to a next level. So I'm very thankful and appreciative as well of all your help in doing that and helping kind of bring the vision to life. Because I think that there's a big place for these kind of events, especially in an AI world where we're all craving human connection more than ever. So I'm excited to see what's to come. And also, I'd say from our listenership, I am more than certain that most of our listeners have been to a lot of procurement events in their time and have ideas about what they liked and what they didn't like. And, you know, I'd love to hear that because we're all kind of, we're definitely open to how do we continue to design these experiences that give something a little bit different, you know, to procurement leaders as they're thinking about their operating models and thinking about what's coming next.

31:07So if you have any ideas, you know, suggestions, then please send them over because we'd love to hear from them.

31:14Jim Cahalan: Yeah, absolutely. All right. Well, Well, Jim, thank you so much for your time. Thanks, everybody, for listening in to today's Art of Procurement podcast. Again, if you are interested in learning more about Catalyst, we'll put the links to our New York event in the show notes for today's episode. That's going to be artofprocurement.com slash podcast. Of course, you can always search, as Jim mentioned, search out Jim, search out myself on LinkedIn. Ping us or shoot us over an email too and we'll be happy to respond. So thanks, everyone, for listening. and we'll be back again next week with another Art of Procurement.

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32:30You can do that at artofprocurement.com slash subscribe. That's artofprocurement.com slash subscribe. Thank you for joining us today and I look forward to seeing you again soon.