Digital Supply Chain Solutions in Warehousing and Distribution with Hatio’s Bernard Hor

Patrick Daly (00:10):

Hello, this is Patrick Daly and welcome to Interlinks. Interlinks is a program about connections, international business, supply chains, and globalization, and the effects these developments have had on our life, our work, and our travel over recent times.

Patrick Daly (00:24):

Today on the show, we will be talking to Bernard Hor, founder and group CEO of the Hatio Group, who joins us from Kuala Lumpur in Malaysia. The Hatio Group is a technology business based originally in South Korea specializing in digital warehousing and network distribution.

Patrick Daly (00:41):

Since 2012, Hatio has a proven track record of envisioning and delivering major transformational change, cost reduction, and operational improvement programs. And at Hatio, Bernard currently leads a strong team of software engineers, project managers, designers on large scale digital transformation projects in the telecommunications, healthcare, supply chain, and logistics industry. So thank you very much, Bernard, for being here with us today. You’re very welcome.

Bernard Hor (01:09):

Thanks, Patrick. Thanks. Thanks for having me on the show. How’s it going for you?

Patrick Daly (01:13):

Very well. Very well. And you’re very welcome. So maybe just to kick off, Bernard, could you tell me in overview about your career today, particularly the international aspect and how did you come to be where you are now as CEO of a technology business?

Bernard Hor (01:31):

Sure, absolutely. So I guess a lot of people ask me how did I come to the technology business and eventually how do I come to the supply chain and logistics space? And my simple answer has always been, very humbly, logistics and supply chain found me.

Bernard Hor (01:53):

I’m a marketer. My base is basically in communications and, in fact, I started as young as when I was 21 in PR and events management. And then, I eventually moved into corporate comms. And we were basically designing corporate communications programs and projects for publicly listed companies.

Bernard Hor (02:21):

And one thing led to another, and I think we were very much pushed by the market changes, and as things got more and more digitalized over at this part of the world, and that’s where the opportunity came by for us to pivot ourselves, our business model, into the digital part in technology. And it was really as simple as [inaudible 00:02:49] development, and then of course, eventually, the whole mobile app thing boomed.

Bernard Hor (02:55):

And it was at that point in time, and I remember at one point in time, we had a problem with talents because, as you know, in Asia, especially in this part of the world, in Southeast Asia, there’s a lot of unicorns, the Grabs and the Lazadas and all that. And they were grabbing, they were paying good money to all the software engineers.

Bernard Hor (03:16):

So it left small, medium SMEs like us, and we were like, “Where do we get these talents?” And that pushes us to our first acquisition in Vietnam. And that’s where we, I remember going, booking a flight ticket, I was telling my partner, as we were scratching our heads, “How do we solve these problems of software engineers, and getting the right talents to work on stuff?”

Bernard Hor (03:40):

So we said, “Hey, let’s book our first ticket out to Vietnam to… ” I remember it was to Saigon to Ho Chi Minh City, and we didn’t even know who to meet there. And it was really going in there, and we Googled, we just Googled “top 10 mobile development companies in Saigon” and there’s these guys, these are the top 10 companies that you should meet.

Bernard Hor (04:01):

And we contacted a couple of them and very quickly. And this is one thing I learned about, and this is one thing I learned and I strongly believe in is it’s all about the relationships, right?

Patrick Daly (04:11):

Mm-hmm (affirmative).

Bernard Hor (04:13):

And it’s all about the culture and how you make relationship matters. So we quickly became very good friends to the Vietnamese. I remember [Gabriel Tuan 00:04:23], and we became really good friends, and it was the following day in day two in Saigon, they’re like, “Hey, come to office, let us host you.” And, yeah, that was a long story short. A couple of months later, we acquired these guys, and we became their co-founders and partners.

Bernard Hor (04:40):

And here you go, all of a sudden we are like, “Hey, I’m a full fledged technology business owner,” and we have a setup down in Vietnam. And then, the projects grew. We were capturing more and more digital transformation. Because, at that time, Southeast Asia, especially where I was in Malaysia, it was really going through a fast pace of change as far as digital is concerned.

Bernard Hor (05:04):

And one thing led to another, and the whole interlink of how we eventually started working on a project with Korea, a Korean company. And that is the thing that led me to my connection with Korea. And there, we started, again, it was all about the relationships, people we meet, companies we connected with.

Bernard Hor (05:28):

And one thing led to another, and it was really in one of those trips that I have with my family in Korea, and of course, through a couple of friends, through a couple of my current friends, and we connected to each other, and that’s where I met my co-founders of Hatio at that time. And that’s how we started.

Bernard Hor (05:49):

And fast track to 2017, 2018, the leadership of Hatio says, “Hey, look, I think it’s time… ” Because we were having good traction. We were having good fun in South Korea with CJ Logistics, with Amorepacific, with iHerb.com, setting up their regional distribution hub. We were even working with Lazada, the Lazada group in Shenzhen, kind of optimizing all their consolidation centers down in Shenzhen.

Bernard Hor (06:22):

And then it was really in 2018, the leadership decided, said, “Hey, you know what? It’s time to get out of the comfort zone, and let’s go into a new region.” So I’m the Southeast Asian kid, very naturally, they’re like, “Let’s go there.” And, at that time, there was a huge push by the software and government to help software businesses expand to Southeast Asia.

Bernard Hor (06:46):

So there I was, which is why I always say logistics found me. I really believe logistics found me. Technology found me first, and then it was connected to logistics and supply chain. And here I am, with very-

Patrick Daly (06:55):

You’re back home in Malaysia, yeah?

Bernard Hor (06:58):

I’m back home. Yeah. I’m back home. In my business card, I have my Korean name. It’s a direct translation from my Chinese name. So I have a Korean name, and it’s worked wonders in terms of a [inaudible 00:07:14].

Bernard Hor (07:14):

And because the way we look, so when we are in Korea, people are, “Oh, Hey, you’re a Southeast Asian guy, right?” And when we come back to Southeast Asia, where I am right now in Kuala Lumpur or Singapore or in Vietnam, and every time I share my business card, and there’s the Korean name called Young-Jae, and they look at me, “You’re Korean,” and it’s a good conversation starter.

Bernard Hor (07:33):

It’s been a good journey. It’s been a good journey, very fun going all over. And really, that’s the one key thing I learned really is it’s really all about the culture and the people you’re connecting.

Patrick Daly (07:45):

What are the cultural differences between you as a Malaysian, you’re a Chinese-Malaysian, right?

Bernard Hor (07:54):

Yeah, yeah, that’s right.

Patrick Daly (07:55):

And then, say, Korean or mainland China. So what are the distinctions that maybe Westerners would not necessarily pick upon?

Bernard Hor (08:03):

We’re very different. Okay, so key factor number one is this, the Chinese in Malaysia, the Malaysian-Chinese, most of the time, or all the time, we are a proud Malaysia, and we don’t really call ourselves Chinese. We are just Malaysian, and Malaysian, it’s multiethnic and multi-race, right?

Patrick Daly (08:25):

Yeah.

Bernard Hor (08:26):

The mainland Chinese is like the super loyal Chinese factor. We’re China, we’re China, all right? They’re China, they’re not Chinese. They’re China, all right? So that’s one. Although I never really had the opportunity to really to immerse myself in the China culture before.

Bernard Hor (08:48):

But I can tell you, however, in Korea, I guess the culture really, where it’s different from, is because number one… And I always love this part of the Korea story, how they got out from the war between the south and the north. They weren’t really advanced nation.

Bernard Hor (09:10):

And if you actually look at the Samsung story, how Samsung started as a mini market, and it’s not even television or mobile phones of what we look at Samsung today, at smartphone and all that. And the motivation, the inspiration behind Samsung story of the reason why they started Samsung and why they grow Samsung is to basically help save a country. And look at where they’ve come from and where they get to today, which is really they’re one of the very few advanced nation in Asia.

Bernard Hor (09:51):

Malaysia probably achieved their independence many years longer than where they are, but look at where they are today with Kia, Hyundai, LG, and the likes that you have. So, really, that’s where I find it really interesting, and that has basically driven the behavior of the people, whether it’s Koreans or whether it’s Malaysians. And that has also…

Bernard Hor (10:17):

I don’t like to say that Korean are more cultured people. I think everybody has their own culture, and we should respect it. But the fact that I have the privilege to leave and immerse in these two different set of cultures, I guess it has sort of, in a lot of ways, made me a very hybrid culture kind of kid.

Bernard Hor (10:38):

Yeah, so even here where we expand in Southeast Asia, the one very interesting thing here is that when we expanded into this region, the one, the first thing, in fact, the first thing that we told ourselves among my co-founders was, “We got to keep and we got to preserve the strong culture that we have brought and put together when we are operating out in South Korea.”

Bernard Hor (11:02):

A lot of hard work, a lot of respect, the respect beat, how to stay respectful, at the same time, stand firm. It’s one of the hardest things [crosstalk 00:11:14]-

Patrick Daly (11:13):

It has broadened your mind.

Bernard Hor (11:16):

Yeah.

Patrick Daly (11:17):

So maybe I’ll ask you about you describe Hatio as a digital supply chain platform. So could you explain to us in simple terms what that is and how it works?

Bernard Hor (11:31):

Sure. It’s basically a cloud… So what would we do is that we run a cloud supply chain platform. Where we started really was… And it’s really thanks to Southeast Asia. In South Korea, we were all about warehouse controls and execution systems, so automation, robotics, IOT, and all those stuff.

Bernard Hor (11:48):

When we came to Southeast Asia, we thought those would work here. But, however, after a quick, a considerable amount of time that we spent studying the market, we kind of learned and realized that the market wasn’t ready for this yet, this level.

Bernard Hor (12:02):

But, however, at the same time, we realized a huge opportunity and a huge addressable market of local SMEs who is in need of digitization. So that’s where we started with a very simple mere warehouse management software, a WMS.

Bernard Hor (12:17):

And, Patrick, let me tell you this, we’ve got our first two customers in Malaysia. The first two customers bought a WMS from us before we even have a WMS proper. So we don’t have a software, and they gave us the contract. And so, we did, we used the capabilities that have from all the work that we’ve been doing with CJ Logistics and all those guys, and we put together a quick WMS, and we delivered.

Bernard Hor (12:41):

And we saw the major transformation. So, from a WMS, and then what happened then very quickly was fast forward to 2020 was COVID and the pandemic lockdown everybody. And I think it has upended the entire global supply chain. And one of the key things that happened in Southeast Asia very actively was eCommerce. So eCommerce took the fastest pace ever, lightning speed. It was moving at a lightning speed.

Bernard Hor (13:06):

And we pivoted very fast from a mere warehouse management software, and here’s how the whole cloud supply, how the whole platform comes together. From a mere WMS, we pivoted the product into connecting with first connecting with the ERPs of the world like Oracle, SAPs, [inaudible 00:13:21] and API ready. We were connecting to all the major marketplaces very quickly.

Bernard Hor (13:26):

Basically, the plan to connect the marketplaces was basically fast tracked two years, 24 months, imagine product timeline, fast tracked 24 months. We connected, and then we connected with the last mile delivery guys. We had our own last mile delivery model. And before we know it, and then we came out with a… We basically developed into our product roadmap, a new product that manages the marketplace. So it was a marketplace management and intelligence.

Bernard Hor (13:52):

So when you put these four, when you look at them and put these four things together, eCommerce marketplace management, orders management, we’re doing B2B and B2C, inventory management, and warehouse management, so these four key modules of the logistics and supply chain world, we unified it in one technology.

Bernard Hor (14:10):

So instead of selling it as four different products, we kind of saw that, hey, the only way to go seamless and the whole cost saving and all of that is to basic unifying these four technologies together and make it look like an orchestra. So that’s what we did.

Bernard Hor (14:27):

And we said, we didn’t know it would look like that, but I guess, what was really interesting was we were co-creating this product called the cloud supply chain platform with the local players in Southeast Asia. So remember, we didn’t build something and sold to them. We sold offers to customers before we even have a product. And we were just downloading notes, “What do you need? Why? How do you do this? How would you like to change this?” And then, we put all these things in and like, “Okay, what do we do from here?”

Patrick Daly (14:55):

What kind of companies are your client companies?

Bernard Hor (15:00):

Yeah. So our primary target companies that we work with are the retailers. And, yes, the last 20 months, the eCommerce retailers has been a fast growing market for us. It’s amazing. That’s the first market. The second market are the distributors. So we are working with the distributors distributing into thousands of points daily on a daily basis. So we are powering up all these guys.

Bernard Hor (15:28):

And then, the third segment that we’re working with, and we are also working with them very closely as partners as part of our network distribution, are the third party logistics players. So we’re powering up a lot of third party logistics warehouse operators.

Bernard Hor (15:40):

And when I say powering up, a lot of times people just thought, “Oh, so you install a software in the warehouse?” I say, “No, it’s not as easy as that.” Installing a software in the warehouse, most of the time, you have more damage than good.” So we’re like, “No, no, it’s not about that.”

Bernard Hor (15:56):

It’s really about powering up. And it’s not only in the software, it’s not only the technology, but also the operations. You know what I’m talking about, right? The whole end-to-end transformation. And people and operations and machines have got to work together.

Bernard Hor (16:09):

I’ve seen a lot of cases here, Patrick, just to share with you, where they are local, the bigger voice, the slightly bigger, medium, the bigger voice, and they deploy automated guided vehicles, the AGVs. So deploy like 10 AGVs in their warehouse, but they don’t use a WMS.

Bernard Hor (16:25):

So how does that work? I mean, ASRS, and they don’t have…. They have whole investment in ASRS, it’s a pharmaceutical company here, whole ASRS investment world for about 10 or 15 million dollars. And their biggest challenge today is they don’t have a visibility on their inventory. How does that work? That doesn’t make sense.

Speaker 3 (16:48):

93.9 Dublin South FM.

Patrick Daly (16:50):

I’ve heard you talking about the supply chain as first mile, middle mile, last mile.

Bernard Hor (16:56):

Last mile, yeah.

Patrick Daly (16:56):

Your slice really is the middle mile, right. These players-

Bernard Hor (16:59):

The middle mile.

Patrick Daly (17:00):

Retailers, distributors, LSPs, they’re in the middle mile, right?

Bernard Hor (17:05):

Yeah, yeah, very much in the middle mile. We do attract the first mile, especially the manufacturers right now. And what is really interesting… Oh, yeah, speaking of which, what is really interesting right now, over the last 12 months that I’ve been having that conversation with the manufacturers… And these are guys that’s looking at D2C, the direct to consumer approach.

Bernard Hor (17:28):

So they’re basically shifting their gears. They’re saying, “Hey, look, we’ve be working with all these distributors and dealers, but because of COVID, because of all these retail lockdowns, we have been forced, we have been forced and pushed to basically look at and consider strategies of how do we get our product closer to our customers, our consumers?”

Bernard Hor (17:48):

So we’ve been getting a lot of conversations around this area. We are actually working on one or two, a couple of projects directly with the manufacturers where they have basically shift… They’re starting to shift gears and their decision is, “Hey, look, moving forward, we don’t know what’s going to happen.” I mean, today we have what? Omicron, right? Maybe next week, there’s now the new variant called Decepticon. But we don’t know what’s going to happen next.

Bernard Hor (18:12):

So they’re really future-proofing there. And it’s very encouraging to see this right now within local SME space where they are looking at really future-proofing their supply chain as a manufacturer. So they’re saying, “How do I deploy a strategy to do a direct to consumer?

Patrick Daly (18:27):

Yeah, yeah.

Bernard Hor (18:27):

And that’s where we’re coming from.

Patrick Daly (18:30):

Okay. And will you or can you provide solutions to companies outside of Southeast Asia?

Bernard Hor (18:37):

Yeah, we do have our customers, of course, in Korea so far. And we are in all the key markets in Southeast Asia, like Vietnam, Singapore, Thailand, Indo-Asia, of course, Malaysia. We are currently studying the visibility of deploying it out of Southeast Asia somewhere in the Canada space. So we are talking.

Bernard Hor (19:01):

Because we are a SaaS model, we could do remote deployment. Also, thanks to the lockdown, the last 20 months, we thought we were going to go out of business, but it has really pushed us to digitalize all our stuff, and we could now do remote deployment. So we’re definitely looking into that.

Patrick Daly (19:18):

Say I’m a retailer and I have a distribution center, and so I’m a middle mile player. And maybe I have several dozen retail outlets, and I’ve experienced a huge surge in eCommerce orders direct to consumer, and I’m kind of struggling with the physical operational challenges of that. How might I use your digital supply chain platform and your services to improve my situation?

Bernard Hor (19:42):

Sure. First things first is basically the visibility to inventory. So it’s a very common case that we have now here and that we’ve been helping and working with a lot of… Most of our clients in this case, where, like what you just mentioned, multiple channels, multiple sales channels, brick and mortar retail’s falling back on eCommerce.

Bernard Hor (20:06):

And when they go on eCommerce, the one thing, Patrick, the one thing very interesting that I observe and realize is when they fall back on eCommerce, first, they always think that’s easy. And then they start having more and more stores in the marketplace, and every marketplace is like a sales opportunity.

Bernard Hor (20:21):

And that’s where the nightmare starts because they will go in overselling, out of stock, and all that. So that’s where we come in and we say, “Hey, look, first it’s basically to streamline.” So sign up to the platform, we’ll set you guys up. First is to streamline all your channels, whether it’s B2B web store, brand.com, multiple marketplaces, or even your retail outlets.

Bernard Hor (20:47):

So you streamline all this and you centralize, so you’re looking at it like a control tower view. So you centralize where all these orders, centralize all these orders into [inaudible 00:20:58], which is a cloud supply chain platform, to the platform. And then, basically these orders get kicked into the fulfillment process.

Bernard Hor (21:04):

So the fulfillment process, one of the things that we have been getting more and more of these cases is where they have multiple distribution points, and it’s also multiple distribution points, we also have multiple distribution points across border, so one in Singapore, one in Malaysia. It’s the same brand. It’s the same retail guy. And he’s saying, “How do I streamline this right now?” All that’s coming from Singapore, the orders goes into the Singapore fulfillment.

Bernard Hor (21:27):

So what we’re doing, we’re doing this right now, we’re helping, I think, I guess the easiest way to put it is we’re helping our partners, our clients on the retail side to basically first streamline the [inaudible 00:21:41] channels, move it all towards consolidating all the orders, centralized it, and then put it in back to their fulfillment based on all their inventories space, and how they pick, pack, and ship it out to their end customers. And all this is done in one single platform, like a control tower view.

Patrick Daly (22:01):

Yeah.

Bernard Hor (22:02):

Yeah, so that’s what we do.

Patrick Daly (22:03):

So that’s the information side of it. In the operations of your clients, are clients moving to automate their fulfillment centers, or are they mostly still conventional, manual order picking and so on?

Bernard Hor (22:19):

It all starts with conventional, manual. So there’s a lot of manual labor. There’s a lot of human decisions.

Patrick Daly (22:29):

[crosstalk 00:22:29] eCommerce, there’s lots of implications for that. It makes it more [crosstalk 00:22:33].

Bernard Hor (22:33):

Yes, yes, huge implications because it comes in so fast that you totally… And thanks to the lockdown as well, because of the lockdown now, we used to only have like 11/11 and [inaudible 00:22:45] as the big sale day, the Lazada days. But today, because of the lockdown, there’s 2/2, 3/3, 4/4, every Monday, people just take opportunity of that. And there’s going to be a… The flat gate of all this is going to open, and it’s going to just come in, and that’s where the nightmare begins.

Bernard Hor (23:02):

So, yes, huge implications. And right now, what I’m observing here is a lot of eCommerce retailers, especially the retailers in eCommerce, a lot of eCommerce retailers are really moving very fast. They’re really moving real fast to ensure that right from the other point and all the way to the ship out point is all streamlined. It’s all streamlined, it’s all controlled, and there is a clear visibility of how the SKU move from point A to point B, and the pick, pack, ship process.

Bernard Hor (23:36):

So we are looking at, I shall call it the first level of automation, if you like, where they moved out from manual labors into a system guided operations. The next level, which we are starting to see also, is where they are now less dependent on human decisions.

Bernard Hor (23:56):

So one of the jokes here is basically always on a daily basis is we always tell the bosses, “You can go play golf now. We don’t need your decisions. The data makes the decisions.” So it’s fine, the system makes a decision. Yeah, so we are seeing the shift from human decisions to making decisions based on data. Because now there’s more and more people looking at data.

Bernard Hor (24:17):

And then, of course, well, hopefully, hopefully I would say that maybe the next two to three years, we will start to see more and more of the automation moving far more towards the side of AGVs, IOT, pick-to-lights, pack-to-lights and all that, yeah.

Bernard Hor (24:32):

But as of now, I guess, of course, the other parameter to consider is basically the volume of orders. If you don’t have a big volume of orders, you can’t make sense of the ROIs of all this investment, yeah.

Patrick Daly (24:46):

Very interesting. So as we come into the last few minutes of the interview, we might just change tack slightly. And I might just ask you a little bit about yourself. So when you’re not thinking about digital platforms and eFulfillment and so on, what kind of things do you like to do in your spare time? Or do you have any spare time, given time [inaudible 00:25:11]?

Bernard Hor (25:11):

Oh, no, no, no, no, no, no, no. Over the last couple of years, as I grow older, over the last couple of years, Patrick, I have two boys. I have two boys, Zachary and Thaddeus. One is seven and the other one is five, five years old. And it was really when my second son was born, and I told myself, “You know what? It’s time to… Not slow down. At my age, there’s no such thing as slow down. But it’s time to make time and intentionally and purposefully make time.”

Bernard Hor (25:41):

The key word there is to be really intentional with things. As much as I’m always intentional in work in my business, there was a point in time when my second son was born, and I say, “Hey, look, it’s really time to be intentional with the family. And this is not just play, play.” It’s like, hey, there’s two boys and a wife. You got to take this seriously, dude. So I make time for the family.

Bernard Hor (26:02):

And, to your question, I’m a triathlete, so I swim, bike, and run. It is only when I’m in a pool doing my two kilometers of laps or on my bike when I’m anchored to the [inaudible 00:26:15], and doing hundred kilometers, that’s where I don’t think about work. That’s the only…

Bernard Hor (26:21):

Okay, apart from cooking, apart from making dinners, that 15 minutes, because I’m a lazy husband, so I make very quick dinners. So apart of cooking, swimming, bike, and run, training for a race is really what takes me off work totally, and I don’t think digital, and I don’t bother whether someone is going out of stock or over sale.

Patrick Daly (26:43):

That’s a good balance. Are you reading anything or listening to anything at the moment that you find particularly inspirational that you might like to share?

Bernard Hor (26:51):

There’s one that I’m reading, which is Start with Why by Simon Sinek, a very simple book. The other one that I am currently reading is Robin Sharma recently published a book, and it’s called The Manifesto of the Everyday Hero. And it’s a very nice, a short chapter, small little nuggets that one day, every reading session, you can pick about three chapters on the go. And it kind of like puts your mindset at a proper… Yeah, so Manifesto of the Everyday Hero by Robin Sharma is really good. Yeah.

Patrick Daly (27:23):

Excellent. And where can people find out more about you and your company and your services?

Bernard Hor (27:30):

Sure. I’m available on LinkedIn, Bernard Hor. You can find me there on LinkedIn. Or you can visit our company’s website at hatio.asia. Yeah, that’s hatio.asia. H-A-T-I-O.

Patrick Daly (27:42):

Hatio is H-A-T-I-O dot Asia.

Bernard Hor (27:44):

That’s right. That’s right. H-A-T-I-O dot Asia. Yeah.

Patrick Daly (27:47):

Excellent. And then, your name on LinkedIn, you’re Bernard. Hor, H-O-R, isn’t that right?

Bernard Hor (27:52):

Okay, wait. On LinkedIn is my Korean surname, which is H-O-R.

Patrick Daly (27:58):

Okay, very good.

Bernard Hor (27:59):

Yeah, okay.

Patrick Daly (28:01):

Well, thank you very much, Bernard, for being here with us today. It was a pleasure, as always. And I wish you the very, very best for the future, both professionally and personally.

Bernard Hor (28:13):

Thank you so much, Patrick, for having me on the show. And I really, really look forward to learning more from you.

Patrick Daly (28:18):

You’re very, very welcome. Thank you also to our listeners for tuning in. And for any comments or questions, just drop me a line on pdaly, that’s P-D-A-L-Y @albalogistics.com. So keep well and stay safe until next time.