Advanced AUTO-mation with Adolfo Rodriguez

DJ: You are listening to The Art of Automation Podcast with your host, Jerry Cuomo.

Jerry Cuomo: Hey, hey, thank you, DJ. And Welcome to The Art of Automation, a podcast that explores the application of automation in the enterprise. Folks, my first car was a 1972 Ford Mustang. I think I paid about$ 900 for it, used of course. It was the coolest car in the world, but it did have its fair share of issues. Fixing my Mustang became my obsession and it really fueled my engineering genes, which serve me well later in life. In fact, I remember going to my favorite auto parts stores in New York, where I grew up, to buy parts to rebuild my carburetor. And to also give it a quick tune up sometimes with a new FRAM oil filter, AC Delco spark plugs, and of course a new DieHard battery. I remember it was never obvious what part would actually fit my car, but thanks to that helpful store worker and his huge book that had inventory of seemingly every part known to mankind. I always walked out of the store with what I needed. Ah, the good old days. Well, in this episode today, my guest and I are going to discuss how today's auto parts stores are completely digital, data driven and our bonafide technology companies, where of course, AI powered automation plays a big role. In fact, my guest happens to be one of the finest technologists that I've had the pleasure to work with, who happens to also be the technology transformation leader at Advanced Auto Parts. So let's get right into some advanced automation with Adolfo Rodriguez. Welcome my friend, to The Art of Automation.

Adolfo Rodriguez: Thank you, Jerry. It's great to be here. How are you?

Jerry Cuomo: Doing well. Good to have you. If you don't mind, we got some questions here I'd love to ask you. So let's get right to the first one.

Adolfo Rodriguez: Awesome.

Jerry Cuomo: Hey Adolfo, why do you love doing the things you do at Advance?

Adolfo Rodriguez: Jerry, you and I, we go way back and you know that I'm a big fan of technology. I like to work on really hard problems and I like to innovate and I like to work on things that other people haven't done before. And that's certainly what I found here. Advance is really invested in making our customers' lives better by delivering value to them, by delivering high quality product to them. And it turns out, there's actually a lot of really cool technology problems to solve within that.

Jerry Cuomo: Hey, Adolfo do I have this right? Last time I checked, you're a software guy, and Advanced Auto is a world renowned seller of auto parts, which is hardware. How does an auto part company make use of all of that technology talent?

Adolfo Rodriguez: I'll say this. When you think about this space at a high level, most people have that reaction. What, auto parts retail? What's innovative about that? And the reality is that there's a little bit of a mystique associated with the industry, mostly because it got a little bit comfortable. The auto parts, retail space, first of all, it's a hard one to be involved in. And the reason why it's hard is because of what we call the fitment problem. We carry a million parts for 200,000 vehicles. So it's a sparsely connected graph of what fits what vehicle. And actually in some cases, certain parts fit certain vehicles in different locations. So it's actually a difficult problem to get, right. And because of that, there's a few of us, our peer companies that have gotten it right. And it's been a protected industry. What we've seen now is, that is actually starting to fade away, solving that problem has become easier. And so, there's a lot of other companies that have been able to have some impact here. And so, what got us really here, won't get us there. We know we need to innovate and be more efficient and drive bigger customer value. And that is really the heart of why I'm here. It turns out, there's an incredible amount of innovation in our systems all the way from corporate systems, through systems of engagements, eCommerce, data processing, all sorts of problems there that I'm sinking my teeth into. And quite frankly, I'm a dog with a bone at this point.

Jerry Cuomo: Wow. Okay. You've convinced me that there is some very rich computer science problems to solve and systems problems. So cool. Hey, Adolfo, this is The Art of Automation Podcast as you're well aware. Talk to us a little bit about automation.

Adolfo Rodriguez: Yeah. And Automation is something that we view as a tool that really helps us become more efficient at delivering the value our customers expect. As I mentioned, our company has had not the best technology footprint when we began our big transformation. There were many manual processes involved, even for the most basic things. And so, certainly in terms of being able to allow our people to focus more on the problems that matter, and less on the mundane tasks of getting everyday life working, automation plays a huge role there. And what we're starting to see is, that really is the way that we've liberated our employees to start thinking about a new way of doing things and to think about what are the best ways that we can drive more innovative values to their everyday life. That's really exciting. And I see that in every part of our company, I see it all the way from the finance sector to the customer support center to essentially every group.

Jerry Cuomo: Yeah. And Adolfo, I think in a prior conversation you shared with me that not only do you have your typical back office workers at Advance, but you also have front office workers, some of them are in physical locations in stores. And the diversity of how you serve, one group might be servicing some IT systems, the other may be sitting behind a cash register, one might be fully digitized, whereas maybe the front office is still using paper invoices. I think you even shared once that some of the paper invoices sometimes have oil stains on them. And how do you automate in those conditions? So can you give us a story or two around automation with that diversity?

Adolfo Rodriguez: Think about it this way. So first of all,$ 11 billion revenue company, you can look us up, our financial reports and see that, 75, 000 or so employees, over 5, 000 stores. It's a big group. And in that group, in order to get things done, we have a lot of employees in a number of different roles to be able to affect what we do each and every day. We have incredible people at our stores that help our customers. And there have been cases certainly where orders that come in actually take a series of manual processes. We've had certain stores that weren't really fully digitalized and had previous multi- step, manual processes that we were able to automate and get some from high value off, but also in the way that we support everyday life. You can imagine there's a lot of executives, they need to have reports to be able to know how their business unit is performing. In one such area, in our finance areas, we look to automate the creation of reports, which itself used to be a mundane set of tasks, a lot of spreadsheet manipulation. Hey, these are ways in which we can actually free ourselves by leveraging automation to drive the attainment of insights. It's full gambit, all the way from our distribution centers, to corporate, to stores.

Jerry Cuomo: Now tell me a little bit about the role of artificial intelligence at Advance.

Adolfo Rodriguez: Yeah. This is an area where we've been growing lately and we've done a number of projects in this space. And really for us, it represents a unique way to get insights. I'll give you one such example, where we looked at ways to better spend our marketing dollars. If you think about it, it's a pretty difficult problem with multiple dimensions. What GOs do you spend dollars? What's the medium? Is it TV? Is it internet? Is it radio. What products do you go after marketing? Are there weather patterns? What type of year, what time of year do you invest that money? And so, if you look at a coin operated model, you put money into a marketing machine, you get something out. We need to really finally tune that. And so with tools like AI, it allows us to really analyze and get insights that drive decisions about where to place our investment. It's a highly complex technical industry. People come to us because we know cars and we know parts and we know jobs that leverage parts to be able to fix and improve your vehicle. And that takes a considerable amount of technical knowledge. And we feel the role of AI there, is a massive differentiator as we move forward.

Jerry Cuomo: Hey, Adolfo, this all makes great sense. I would love to hear an example, a story. I know you have a bunch of them. So can you drive this home with a bit of an example?

Adolfo Rodriguez: Yeah. If you look at automation in general and the role that we played here, obviously it's about helping free us up to be better at serving our customers. One great example is in our customer support center. Actually, we have an online chat and as you can imagine in this automotive space, like I mentioned, it's highly, highly technical. And so, sometimes we need to give advice. Sometimes we have to interact with the customer regarding their purchase, or whether it's, hey, it's a return or warranty topic or whatever it is. How do we better serve that customer? We took an opportunity to automate that interaction with our online chat. And it turns out, we were actually able to automate, get this, 25% of our chats. Completely avoiding our online agents, which before the project, we're spending the time to give answers that we could have easily given. That's a pretty big return for us.

Jerry Cuomo: And Adolfo, have you seen an impact on your net promoter score?

Adolfo Rodriguez: Yeah, totally. They love that aspect and they love, certainly being able to reach out to someone, but getting the answers that they need quicker. The reality is that getting those answers took longer before. And so, we certainly see a positive impact, not just in terms of how they respond to the MPS question, but really more importantly, what they give us with verbatims and what they tell us and what we hear. And it's just a start. We want to continue going down this path of being able to provide that additional value.

Jerry Cuomo: Perfect. Hey, Adolfo, one of the trending topics is sustainability. I suspect strongly that sustainability has an intersection with your day to day and what you all worry about at Advance. Can you comment a bit on sustainability and your views there?

Adolfo Rodriguez: Yeah. Absolutely. And when you look at this space, us and certainly many other Fortune 500 companies have certain initiatives that have driven around improving overall sustainability. Now, we will say that we are actually on the forefront of this. We have world famous, DieHard batteries, which perhaps you've seen the commercials. We're actually the first ones to be certified with a sustainability label on our DieHard batteries, essentially committing to, hey, how do we maintain sustainability through environmental initiatives all the way down to the product level. Now we, of course, are thinking about this from a long term perspective. You know there is a heavy, heavy emphasis around the evolution towards electric vehicles, you yourself own one.

Jerry Cuomo: Yes.

Adolfo Rodriguez: And you've talked to me about what you love about it. That places some really interesting opportunities for companies like us, to be able to really go after not just sorting the right parts and being able to evolve towards sustainably focused initiatives. So it really is an end to end practicum, certainly in terms of the products that we source and how we interact responsibly from a sustainability perspective with those source product vendors, all the way through to what it is that we're going to do to help interact with the electric vehicles of the future.

Jerry Cuomo: Wonderful. I know personally, you have a crystal ball. Would you mind looking into it and telling the audience what you see for the future?

Adolfo Rodriguez: Yeah. Awesome. I really think that there's a couple of different factors at play here. When you look at it from a possibilities perspective, there is the do what you do, but more efficiently aspect. And I feel like it's a race to leverage automation in the best possible way. If you look at those million parts and they have, by the way, a very long tail, certain vehicle parts are rarely used, but when someone needs them, they need them. How do we distribute, deliver that product through our supply chain to be able to get the part to the place where it makes most sense, to be able to really deliver it to our customers that need us the fastest possible way? That represents some considerable automation problems that we should leverage. Every aspect of the customer experience really lends itself to leveraging AI, be able to gain insights on who your customers are and what is it that they need. And when you marry that in terms of the typical retail problems, but you marry that with the complexity of automobiles, the other auto, it represents some really unique areas to drive additional insights, to marry those two in a very personalized way. And so, we feel that placing those two things together, really bringing those two things together, is going to be where the industry heads. And it's really up to us to define who drives that value differentiation first.

Jerry Cuomo: So it sounds like Advance has advanced to being a technology company of sorts. Can you then tell me and share, are there any obstacles in adoption?

Adolfo Rodriguez: Super glad that you also mentioned the cultural aspects of evolving towards being a technology company, because they're significant and it, and it's happening in a time where I think in our society, we're experiencing an awakening of sorts that really places, a heavy, heavy emphasis on diverse perspectives. It's something that we take to heart very much so, as you know, in product centric and technology centric organizations. The way those software world evolved, those diverse perspective leads to globally optimized solutions to problem. As you often said, you put a salesperson and an architect, a marketing person, a supports person in a room and outcomes beautiful things. You get some really unique solutions. And that's exactly what we're starting to see, that product centrism view really coupled with our emphasis on diverse experience, to help round out and deliver globally optimal solutions. Now, that being said, nothing is ever perfect. There is a reluctance sometimes to try new and different things. It is imperative for us to ensure that we really leverage the right models to be able to articulate the value of technology, so that we can bring everyone with us. And sometimes those folks aren't the most technology savvy users. When you have 75, 000 employees, not everyone knows how to cope. And so, it's important to meet them on their terms and obsess really over their user experience in terms of how you present the technology to them. What we do is, we recognize that our customers aren't just our external customers, our professional independence and our consumers, but also our team members. They consume our technology and we need to empower them.

Jerry Cuomo: Makes a lot of sense. Great. All right. Well, looks like time has been ticking on, so we're going to have to wrap this one and I'd like to just say thank you so much, Adolfo, it's always a pleasure. Thanks for joining me on The Art of Automation.

Adolfo Rodriguez: Thank you, Jerry. Thank you for having me and really appreciate it all. Thanks for automating and keep on rocking.

DJ: Well, that's it for today. And some of you probably know this, but as Adolfo alluded to, we go way back and our collaboration goes well beyond technology and automation. In fact, we've been in a rock and roll band for the past dozen or so years. So we thought it would be fun to also record a short bonus episode, to talk a bit about our band. If interested, please tune into that bonus episode to hear about Mind The Gap. Oh, and if you enjoy this podcast, you will also likely enjoy The Art of Automation book, which is now available. You can find a link in the description section of this podcast for that book, and royalties from The Art of Automation book are being donated to the American Cancer Society. Okay. Once again, I'd like to thank Adolfo and of course I'd like to also thank you all for listening in. This is Jerry Cuomo, IBM fellow and VP for technology at IBM. See you again on an upcoming episode.