Kerim Kfuri: Thriving Through Chaos-Supply Chains, AI, and Strategic Calm

0:00Mick:Hey, everybody, really excited for you to check out this episode with me and my good friend, Kareem Kfuri. You know, Kareem and I actually met on set at Shark Tank together. We both are mutual friends of Dame and John. In this episode, we're really going to go into supply chain. That's the business that Kareem is in. And we're going to talk about how important supply chain is to leaders, to entrepreneurs, and to businesses. We're going to talk a little bit about how AI is important and vital in that industry. We're going to go into a few things about how and why you need to have strategic calm in chaos.

0:39Oh, thank you so much for that intro. Really appreciate it. And great to see you. Of course.

0:44Mick:Great seeing you, man. You know, we got to spend some time together out in L.A. A couple of I guess it's right at a month ago now. And I really got to know you and really became honored to be in your circle, man. Like you're one of the smartest people that I know. But what I think I love the most about you, Kareem, is just that calmness that you have, right? Like we're in some chaotic times in the world that you're in and we're going to get there in a second. But just the calmness that you display and the elegance that you display, man, is amazing, brother. Thank you so much. I appreciate it. And you're 100 billion percent correct.

1:22We are in some very chaotic times and cooler heads prevail. And, you know, it really comes down to some very, very simple wisdom that we need to all employ in the way that we run our businesses, the way that we run our lives. And it all works out. You know, I'm a supply chain optimist is what I would call myself. And I think that that's a word that is rarely used when it comes to supply chain today. I mean, think about it. Everything you hear is just negative headlines about this. But the reality of it is, is that through challenges and obstacles and chaos is where the opportunity exists. And that's where you really start to be more of an optimist when you start to realize that.

2:11But we need to know how to get to that place. And so I try to talk to businesses and entrepreneurs and people about that approach, that mentality. Yeah.

2:22Mick:You know, Kareem, you're exactly right. Like supply chain is wild right now. But a lot of folks don't understand the everyday person out there doesn't understand the complete circle of supply chain. Can you walk us through exactly what supply chain is, why most of us in our everyday lives are impacted by it, whether we know it or not? Sure, absolutely. And I'm going to try to make it as simplified as I can. But because my goal is, as you said before, is to really try to make this relatable. How does this impact everything that we do and need and use every single day? So essentially, supply chain touches every one of our lives every single day.

3:09Let's talk about the things that we eat, right? We go to the supermarket, we need to buy produce or we need to buy different kinds of products. Well, there was a process that got that produce on those shelves and it started way back, you know, in growing and fields and farmers and then refrigeration and transportation and got to warehouses and distribution and trucking and delivery to then finally get it on the shelves in a timely fashion where products are not expired. They're there when you need them. They're at a cost which is affordable. And it's the supply and demand mechanism. And that's just a very brief example of just what we put into our bodies every single day.

3:50Right. Because if that doesn't matter, I don't know what does matter. I mean, basically air and water are just there, too. And so when we talk about global supply chain, we're really talking about this end-to-end mechanism from A to Z that allows consumers to have what they need when they want it. And that essentially there's a balance of supply and demand in basic economics, right? Consumers have a demand and there needs to be a supply to feed that demand. And the chain is all of the steps, one after the other, the other to ensure that it meets that demand and that the supply is adequate, not over surplus or under surplus.

4:36And that as long as it's there at a timely fashion and at a price point that everybody can sort of afford and consume, then we have a thriving economy where consumerism continues to grow and develop. So generally speaking, when we're talking about the manufacturing space, and that could be everything from your computer to the shirt you're wearing to the things that you buy every single day on Amazon Prime that show up on your doorstep in two seconds, right? There's a supply chain to all of that manufacturing. And that's a big part of what we do at the Atlas Network. We help entrepreneurs, small, medium, and large-sized businesses with their manufacturing supply chain.

5:17And what that starts with is having an idea, right? Yeah. Picking the right supplier, making sure that you have good visibility and transparency into the manufacturing process. Either you're there or have hired guns or groups like ours that are there, eyes and ears on the ground. Quality control process to ensure that the goods meet the industry standards or the needs of a customer, client or marketplace. When that's all done, logistics to basically get the goods packed up, taken to a port, put on a container or a ship vessel, transited. Customs clearance when the goods come through the ports to ensure that everything is cleared appropriately.

6:02Trucking to take it to some level of a customer site or delivery warehouse for fulfillment. Distribution into the market where you basically have it in the market. then you have sales that occur and then you go right back through the whole process again through reordering. And that's really the steps, at least with regards to the manufacturing process of supply chain. So as I just laid out for you, eight, nine, 10 key steps, anything that disrupts any one of those steps disrupts the supply chain and disrupts you being able to have what you want when you need it at a price point and timeframe that is adequate.

6:43Now, we're in a convenience world, a convenience culture where essentially we want everything faster than that.

6:51Mick:Yes. And that is where disruptions end up causing a major havoc. We have disruptions that you can control and disruptions that you cannot control. It's the uncontrollable disruptions, the acts of God and nature and political environment and global conflicts and pandemics and force majeure and all of these things, strikes at ports and so forth that you wouldn't have seen that happening until it ends up happening. that adequately disrupts just as much as the things that you can control, which is your relationship with your suppliers and communication and timeliness and defect rates and quality control.

7:35So it doesn't matter whether it's things you can potentially control through risk mitigation processes or the things that you can't control that just come out of the blue. Either way, it impacts what we need and what we use every day. And that's what I try to, again, communicate through kind of having a relatable voice in this complicated space that touches every one of our lives.

7:57Mick:Yeah, there's so much, Kareem, that I want to unpack in that process that you talked about. But I want to start with this. What's your because? And I call your because that thing that's deeper than your why. Like when did this version of Kareem, what you're doing become you, but more importantly, again, what's your because? Like, why do you do the things that you do that keeps you driven every day? I think the things that I do that keep me driven is my want and need to make an impact on this planet while I'm here. And I think that that's, you know, an important motivator to try and want to leave a mark that is yours.

8:47One that long after you've gone away, you have either created a better way forward for humanity and and for those at large that benefit from what it is that you do. because we all are in it for the basic needs to just beat ourselves and enjoy a life that we can, you know, be proud of with our family and friends and everything else. But beyond that, you know, what really drives you? And I think for me, it's always been that idea of leaving a mark. So through history, you know, I look at people like the Alexander the Greats and, you know, these people that shaped continents and created things like, you know, the first public libraries and innovators like Benjamin Franklin.

9:33And these people in the world that we speak about today, years after, hundreds of years, thousands of years after, because they were transformative, that is inspirational to me. And it shows to me what the human being is truly possible of. When we dream it, we can achieve it. You wanna put somebody on the moon, enough technology resources, we get there. You want to build a computer that makes all of our lives more simple? It happens. You want to develop some new way of running a society or a democracy and so forth? That happened through thousands of years and things of that nature. So we have such greatness within us all.

10:20And it all starts with the basic belief that we can all be great. Right. And I've always subscribed to this idea of a limitless mindset. Right. People talk about a growth mindset. I believe in a limitless mindset that we are only restricted by our own selves and the boxes that we put ourselves in. society is going to put us in all kinds of boxes, but then it's up to us to then say, regardless of what's happening around me, my surroundings, my education, my background, I am going to do something that, you know, motivates, drives me and pushes me forward. And that's, that's at the crux, the foundation of what I do and, and who I am.

11:04It just happens to be in this business area, this industry, but it's all motivated on this concept of just really wanting to make a change.

11:13Mick:I love it, dude. I love it. And I know one of your mantras is strategic calm and chaos, right? Like if you follow Kareem, you're going to hear him say that reference that a hundred times a day, right? And sometimes Kareem, I think you're talking to me because I need that every once in a while. I need to hear, Hey Mick, as a leader, you're going to see chaos pretty much all the time because that's what makes us leaders, right? But that strategic calm, and I want to break those two words down individually, strategic and calm, right? Because a lot of times when there's chaos, when there's disruption from the leader perspective, we know we need the strategy and we focus on the strategy, but we're doing it with that same disruptive mindset, right?

11:57Mick:Or sometimes it's a reactive mindset. And usually that's the worst thing that you can do. What I learned from you, Kareem, is this, and I speak and teach emotional intelligence all the time. And so I'll kind of put this into my framework a little. I borrowed it from you, Kareem. So thumbs up to you. It's take a moment and find calm, right? Find your peace and then go dominate. And you don't say that verbatim, but that's how I take it when you're talking to me. It's, hey, you know that something has to get done, right? Find calm and then go do what it is that you do. So can you break down in your words, strategic calm inside of chaos and what that means to you and how we can go get that?

12:42Yeah, absolutely. And I think you said it very, very well, but it's the importance of, of knowing that you need to take a moment. You've got to actually, when you are in these complicated scenarios, whatever they may be, you got to go inside, you got to go inside and you to basically meditate on it for a minute and think through it calmly, you know, play some music, eat something, you know, disconnect a bit to then see things transparently. And it's in those moments that you're really able to think with a rational mind, because there's always going to be this scenario of let me just kind of solve this thing as quick as I can.

13:25And by doing that, you lose out on the perspective and you lose out on the opportunity to really get to the best outcome. So you have to sit back in the moment and you need to, you know, really fathom what is happening, you know, the challenge you're being faced with. And when you have calmed down is when your strategic mind turns on. You start saying, okay, now there's three ways to do this. A, B, C, and you start playing through these different scenarios. If I did this, then these five things would happen. If I did that thing, then these two things would happen, so on. And as you start to formulate this or even write it down, journal it, or however you tend to kind of come to decision-making process for yourself, some people use grids, decision matrices.

14:14It just depends on how you work. You end up coming up with the rational thought that will allow you to feel good about what you're suggesting or going to go forward with. And at the same time, probably will be the most impactful. But you've got to get out of the moment to really be able to get back into the moment is the way I would put it.

14:41Mick:I love that. So now let's take that that philosophy and let's talk to the small business owner that's listening or watching this right now. And let's go through supply chain, right? How, when something goes wrong, right? You ordered a product or you're, you're building a product and it's the, it's your first order. And you're so excited. Like you're going into Walmart, right? And you're so excited. And Kareem is going to tell you when you consult with him, be prepared because it's not going to go as smooth as you expect, right? Walk us through an example of the strategic calm for that small business owner that has that product that they're waiting for the delivery of and how they can put that into practice with what they do.

15:32All right. So here is where the mindset has to shift in the beginning, where you have to be negative with a positive intention. So what do I mean by that? Assume from the beginning that everything's going to go wrong. That sounds terrible because as an entrepreneur, all you want is everything to go right. But the problem is, is that the supply chain is so complicated and there are so many variables and steps that you need to say, what am I going to do if the delivery doesn't come on time? What am I going to do if the quality isn't where I need it to be? What are we going to do if, you know, basically define the fail points, define the areas that could be a challenge or a difficulty towards you being successful and assume that if any one of those things happen, how you're still going to pivot, adapt and move forward.

16:28So you're preparing for the worst case scenarios. So you have the best case outcome. And this is a very difficult thing to say to entrepreneurs and small businesses because they have to be their own cheerleaders every day. They have to assume that everything is going to go right. But the moment that you do that is the moment that you set yourself up for real disruption. Disruption where you have no choices, where you have no options anymore, and you're just kind of, you know, sitting at the whim of things hopefully going correctly. Unless you own that factory, unless you own that boat, unless you own that fulfillment warehouse and all those different facilities, you are at the mercy of these third parties that work and manage your supply chain.

17:19so each one of those areas needs to be thought through carefully understand where there could be challenges and so forth so that in the end you hopefully can have the best outcome or plan for scenarios where if there's a disruption you'll be ready for it now so so that's where it really starts and that's how we do everything on our end we no matter if we did a production a hundred times with the same factory, great quality results a hundred times. I always educate our teams on the fact that every production is the first time. And you have to think about it that way because any number of things could change.

17:58A different person working the production line, a different environmental condition, something that's another kind of level of challenge that makes that production a little bit different than the other hundred before. And manufacturing and supply chain is not about getting a defect free scenario. It's about understanding what the defects are and managing them in a level of tolerances that are okay for that industry or for that production and so forth. Because will your customer stop buying from you if the color of your blue is 2 % different from one piece to the next? Probably not. But you as an entrepreneur, all you care about is that your baby is perfect.

18:46And that also can create scenarios of analysis paralysis where you don't basically put anything out in the market because it wasn't 100 % perfect. And it may never be 100 % perfect. There are variances, there are tolerance, so on. So the advice to these businesses are expect challenges and disruptions do it with a a positive intention but thinking about it in terms of some scenarios that could possibly happen be willing to be flexible and adaptable to the process itself and the other main part is is learn from the process because there's so many businesses and entrepreneurs that may have like never made a particular product before, well, guess who you can learn the most from?

19:31The suppliers. You know, interview them and say, hey, here's the product. What do you think are going to be all the challenges that we're going to face on this thing? If they're a good supplier, they'll give you a list. If they're a bad supplier, they'll say it'll be perfect. It's in those scenarios where they say it's perfect or they yes you to death, run away very quickly because that is the scenario that is going to set you up for absolute breakdown and failure it and it's a kind of a difficult challenge but i do say oftentimes that one of the one of the big red flags during the supplier selection process is being yes to death everybody who says you know can we you know do this you know on this infinite you know infinite way and the answer is yes, then run away quickly.

20:21Mick:Yes, sir. So at the Atlas Network, the work that you do, I don't want to say the perfectionist that you are, but the gold standard that you are. I'm going to call you the gold standard. That means you have a lot of standards, right? And you hold not only yourself and your team, but the people that you work with, the clients that you have. You hold everyone to a standard. And I am the same way. And I talk to people all the time. I don't set goals. Goals are personal. I set standards. So can you talk about the importance of standards for you at the Atlas Network and why that's so critical in the supply chain world?

21:01Yeah, absolutely. So in order to have good standards, you have to have a good process. And this is where it starts for us. So we've always had the same three-part process, no matter what we're making, completely agnostic on product or industry. And it is pick the right supplier, have eyes and ears on the ground, have third-party attestation. These three columns are basically what holds up our house. Picking the right supplier is this mechanism of both quantitative and qualitative factors, right? How many years in business, what kind of certifications, how many employees, what's their levels of revenue exports to the markets that you're working within.

21:45You basically have a list of 10 or 12 different metrics that give you an idea on paper how good they are. The qualitative factors are professionalism, timeliness, responsibility, accountability, these things that, you know, the communication process that allow you to understand how the dynamics are going to be with the actual supplier. Then we have eyes and ears on the ground because you need to have your own visibility and your own transparency into your process or hire people to do that for you. Because a factory is always going to want to cut corners. They're always going to want to just move along to the next project.

22:23You need to have some group to hold them accountable so you have your own mechanism in place. And then finally, the third part is third party attestation, literally hire people that are paid to find mistakes. They are paid to find mistakes. And if you do that, you really get a good level of visibility across the entire spectrum that will give you a much better level of outcome. And you talked about setting standards. My goal and focus always is, is that if the industry standard is 1%, let's say as a defect rate, we're saying we're not accepting anything less than a half a percent. So basically, we will look to fail the industry standard, knowing that I'm sorry, we will look to fail our own standards, knowing that it's well below the industry standard.

23:14And in this way, we also safeguard that if there are variances or tolerances that were well within the industry standard, although we may not be exactly within our standard. And so this is the way that you really appropriately manage standards by having formulaic strong processes. Yep. Yep.

23:37Mick:I love that, dude. I love that. I want to give you another shout out, another quick praise, because in your book, Supply Chains Ups and Downs, I find that is one of the most impactful leadership books out there, right? Like, yeah, it reads specific to the supply chain industry, the niche that's there. But brother, you have this one part of the book where you talk about the importance of contingency planning. And I talk about that so much. you know a lot of times people come to me and they're like Mick what's your plan A and what's plan B C and D and I'm like plan B C and D to make sure plan A works like I'm not switching I have a lot of contingency planning that I do to make sure that plan A is gonna work yeah like plan B is still a part of plan A I just might have to get to plan A a different way but there's no such thing as a different plan.

24:35Mick:And you reiterate a lot of that same mindset in this book. So I'd love for you to share a little bit about the importance of contingency planning for the business leaders and entrepreneurs out there. Yeah, absolutely. And I mean, we'll talk about it in terms of supply chain, but really it resounds to your life. And as you said, I kind of like what you said, that it's always a plan A. It's just that there are different options to make a plan A work, which is the plan B becomes the plan A or the plan C becomes the plan A, but it never was not a plan A and plan A, maybe to just kind of get that thing to where you need it to be at a certain time and place and so on and so forth.

25:16But, you know, supply chain specifically as the book is titled ups and downs is a roller coaster ride. It's a tumultuous environment where anything and everything can happen. The best outcomes and the worst outcomes can occur. And so with this in mind, to be ahead of disruptions, to be ahead of the fact that, you know, the worst case outcomes can and do occur, you must have alternatives. But those alternatives support your overall goal. So your goal is X and your alternatives, A, B, C, D, all support that overall goal, which is X. um one big area for sure is in suppliers you know don't have all your eggs in one basket you need to have supplier a b c and d prototype with all four of them and be ready that if supplier a has an issue that b c and d are just waiting in the wings to take over so you don't really have some major disruption but you would not believe like how many how many companies do not have those redundancy plans they basically just have used the same supplier for years and years and years and when that supplier says hey the costs are going up by 10 or 20 percent they just deal with it or when they say we're going to miss the time frame by one or two or three months and your customer is going to have to you know deal with it they just manage it as opposed to looking for a better way you need to always be looking for better options and we We maintain a network here of almost 2 ,000 suppliers.

26:59That is our network across commodities, textiles, and innovation products, many different areas. And we're consistently putting in and taking out suppliers into this network, looking for the brightest and the best who is doing it in the most efficient way and removing those that are doing a bad job too. So it is important to know when to draw the line on behavior and quality and timeliness and know when a supplier just isn't the right supplier anymore. Sometimes they may be the right supplier for today, but they aren't the right supplier or in the past, but they're not the right supplier in the future as you're scaling or growing or entering new markets or whatever it may be.