Why an IMS May Not Fix Your Finance-Ops Disconnect
Episode Summary
In this episode of the Free to Grow CFO podcast, Jon Blair and Arjun Aggarwal discuss the challenges faced by DTC brands in managing inventory and landed costs amidst current market fluctuations. Arjun shares his journey from finance to founding Mandrel, an AI-powered inventory automation platform. The conversation delves into the importance of accurate inventory valuation, the interdependence of finance and operations, and the differences between ERP and IMS systems. They highlight how Mandrel aims to automate inventory workflows, providing real-time tracking and reporting capabilities to help brands save time and improve their financial health.
Key Takeaways
The connection between finance and operations is crucial for accurate inventory management.
Many brands struggle with tracking inventory valuation due to fragmented data sources.
Real-time tracking of inventory helps brands respond to market changes quickly.
Episode Links
Jon Blair - https://www.linkedin.com/in/jonathon-albert-blair/
Arjun Aggarwal- https://www.linkedin.com/in/arjun-aggarwal-18049436/
Free to Grow CFO - https://freetogrowcfo.com/
Mandrel - https://www.mandrel.tech/
Transcript
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00:00 Introduction
02:52 Arjun's Journey and the Birth of Mandrel
06:12 Understanding Landed Costs and Their Importance
08:54 The Interdependence of Finance and Operations
12:12 Challenges in Inventory Valuation
14:55 ERP vs. IMS: Understanding the Differences
17:55 The Role of Mandrel in Inventory Automation
23:50 The Importance of User Compliance in Inventory Management
26:01 Automating Inventory Tracking and Cost Management
29:11 Integrating Email and Document Management for Inventory
32:38 Building a Comprehensive Inventory Ledger
35:59 Understanding Costs and Inventory Movement
38:00 Maximizing Efficiency with Mandrel
Jon Blair (00:00)
Hey everyone, welcome back to another episode of the Free to Grow CFO podcast where we dive deep into conversations about scaling a DTC brand with a profit-focused mindset. I'm your host, Jon Blair, founder of Free to Grow CFO. We're the go-to outsource finance and accounting firm for eight and nine figure DTC brands. And today I'm here with my pal, Arjun Aggarwal founder of Mandrel Mandrel is an AI-powered inventory automation platform for consumer brands. And I'm stoked to be chatting today. What's happening, Arjun?
Arjun Aggarwal (00:30)
Hey, how you doing Jon? Thanks for having me on today.
Jon Blair (00:33)
Yeah, crazy day to be talking about this. So as of today's recording, April 4th, 2025, I believe it's the day after or two days after the big tariff announcements from Trump. There's all kinds of trade war stuff happening, retaliation from different countries like China and the stock market is, I don't know, I checked today in the last 48 hours, I think the NASDAQ was down like another 10% and like it's like,
Arjun Aggarwal (00:58)
Crazy. Yeah.
Jon Blair (01:00)
over 20 % off its recent high, so it's in bear market territory. It's like crazy, crazy stuff. anyways, tariffs strike again, and guess what we're talking about today? We're diving into landed cost of goods sold and inventory automation, which is like, couldn't be more timely. And so before we dive in and start chatting, I think you have a really cool, unique background and journey that led, that ultimately was the experience that led you to start Mandrel So I'd love for you to run the audience through that briefly.
Arjun Aggarwal (01:29)
Yeah, awesome. So background on me, I actually started my career in the finance world. I was a banker and then investor. And I actually spent a lot of time, unlike the majority of investors who focus primarily on software, I spent a lot of time around like industrial technology, which involved working with hardware businesses. And I ended up joining one of those hardware businesses, a 3D printer OEM called Desktop Metal. We manufactured and sold industrial 3D printers for automotive, for consumer electronics, for oil and gas, et cetera. So these big kind of six, seven figure printers. I ran product there for about five or six years. it was a really interesting place that kind of cut my teeth on the operating side of the world. It's actually where the story of Mandrel starts because running product there, obviously you're managing hardware, physical goods and a big part of I think being a product owner is understanding all the economics of your products. And so, you know, especially as rates went up post COVID and in 21, the company really started to focus a lot more on margins and cash flow understandably. And so it became a big part of my responsibility and my team's responsibility to get down into the nitty gritty around our products. I think we all at the business thought we had a good understanding for what the margin profiles look like. But we found that upon digging in, we were a little bit further off from what I think that the general understanding on the team was. And a big part of, think, that miscalculation is not properly taking into account all the different components of costs.
So there was freight, there was customs, there was warehousing, there's all these different costs that contribute. And especially when your products are of a certain complexity or of a certain size or weight, these things can add up. But even across the board, it's important to really take into account these full costs. So we spent a bunch of time looking into all these external costs beyond just straight from the manufacturer.
And I think the other thing that kind of led to some frustration was just like, where are the numbers coming from? And we had a great ops team and a great finance team. Each team was kind of in their separate tool sets, where ops is a lot more obviously focused on the actual products and building those and making sure they're high quality and delivering to consumers. Finance is a little bit more transactionally oriented. And they're sending in ERPs and AP/AR tools.
And the net of it all is that the numbers rarely seem to line up. You get some numbers from ops and some numbers from finance, and we were kind of stuck in the middle trying to figure out what was what. And so all of that in combination with just trying to generally understand where was our inventory, not just quantities, but dollar amounts, how much cash did the company have committed, whether it was on the balance sheet or off the balance sheet and all these things and the challenges with doing that and
the data adventures that me and my team had to go through to kind of wrestle this all together ultimately was inspiration for what we're building now at Mandrel
Jon Blair (04:55)
Cool, I'm excited to get into kind of the nuts and bolts of what Mandrel does, you mentioned something that I think we should dive into first, which is the connection between ops and finance. And we'll talk about it in the context of landed cost. know, landed cost is for, mean.
If you listen to the show, you've heard us talk about this many times in kind of like other discussions, but landed costs is like your true fully loaded cost of the product that you sell, right? So that's the supplier cost plus freight plus duties, and that's freight into your fulfillment center. We see, as we've talked about a lot on the show, issues with varying incorrect ways of accounting for landed cost. Most commonly, brands are just you know, basically expensing to cost of goods sold just the supplier cost and they're either expensing freight or duties straight to cost of goods sold in the month they get billed for or they come up with some sort of amortization over time. Either one of those is wrong and incorrect. But what is the challenge? What I see time and time again and what you just mentioned and I want to dive into is like, is that finance alone does not manage all the data, right? To ultimately calculate landed costs and not just calculate landed costs at any point in time, but at the right time, right? And all throughout the process. so talk me through a little bit about like the way that you view the challenge and the interdependence between finance and ops on like accurately tracking landed costs all the way through the purchasing and life cycle.
Arjun Aggarwal (06:20)
Yeah. Yeah.
Yeah, I
think that you can look at this from two lenses. One is like the straight up accounting lens, which is you got to close the book so the numbers have to be correct. And the other is more of like a strategic finance or strategic ops lens, which is how do we use these numbers to actually improve the business? From an accounting lens, you want to have these landed costs because it helps you accurately recognize your cogs within a period.
Jon Blair (06:44)
Mm-hmm.
Arjun Aggarwal (07:06)
And you want to accurately kind of record the value of your inventory on the books at the end of a month, say. You know, we we see brands lose a huge amount of time in back and forth between ops and finance, whether finance is in house or outsourced. And what ends up happening is there's a bunch of scrambling, a bunch of time wasted digging through folders, Google Drive folders, Dropbox folders, or digging through emails, looking for documentation. Yeah, usually it's emails. Looking for documentation just on what has shipped, what has been received, what has been invoiced, and matching all three of these up. And it's more than just your through a match if I want to make sure I paid for what I actually got. I need to understand what has been received and what hasn't been received and how that compares to what the invoices are so that we can appropriately account for it. The challenge comes when you have these costs that are not direct costs, freight, duties, et cetera, because they usually get billed on a per shipment basis. And it's really hard to allocate them out at the individual SKU level, which is important so that I understand, my SKU-A has a value on the books at the end of the month of $10 and SKU-B has a value of $20.
That's needed. when you sell those the next month, you can accurately account for the cost of those sales. And so what we see a lot of times with brands is Ops has this spreadsheet that's pretty messy, that requires a lot of manual data entry for every shipment, you know, where they take the freight cost decisions with that, they allocate it out, they do some, you know, some math in the spreadsheet, and they have a link to a Google Drive folder or to an email.
And then finance at the end of the month is looking at the spreadsheet and inevitably stuff gets dropped. Not every document's in there, not every shipment's in there, not all the costs are calculated correctly and things don't make sense. And so that's where a lot of the back and forth comes in. And it can be a huge time suck for brands, whether you're on the op side or you're on the finance side to actually reconcile all of this at the end of the month. so finding a way to automate this and reduce the back and forth between ops and finance can be a huge ROI just from time saved for a brand on a week to week basis.
Jon Blair (09:29)
Yeah, I wanna go a little bit deeper on this from the finance perspective. So first let's talk about why does the inventory valuation on the balance sheet matter? Well, for like a DTC brand, right? And then we'll kinda segue into talking about prepaid in transit versus on hand. But like just from a high level, everyone needs to have an accurate inventory valuation because it's one of the biggest components of calculating the cash conversion cycle and also just liquidity and solvency health metrics, basically cash flow health metrics, right? And when you have that number wrong, you don't have a true picture of basically inventory turnover or days inventory on hand and ultimately the cash conversion cycle, which for those of you who haven't heard us talk about that on the show before, the cash conversion cycle is key for a DTC brand. It's the number of days it takes for you to spend a dollar on purchasing inventory and get that dollar back into your bank account from selling that inventory. The longer that cycle is or the higher the number, the higher the number of days the more days your cash is sitting somewhere besides your bank account. And so you want a smaller number. Guess what one of the biggest components, or actually for DTC brands, the biggest component of measuring that number is, is inventory turnover. And you can't do it if your balance sheet valuation of inventory is inaccurate on a month to month basis. But you brought up something else, Arjun, or you kind of, you were like tangentially touching on something that's really important that absolutely, like it has to have, collaboration from finance and operations and it's tracking in transit inventory, right? And valuing that on the books at any given point in time. What are some of the complexities or challenges that you're seeing brands experience there?
Arjun Aggarwal (11:17)
Yeah, I think part of it is just knowing what's in transit. We talked to lot of brands who have in 10 different varieties a PO tracking or shipment tracking spreadsheet. And again, it comes with a lot of these challenges that really at the root of it is data entry. And a lot of the data is coming in via email. And so it's incumbent on someone in ops usually to actually take it out of email and put it into a spreadsheet to understand this is what's actually in inventory. The problems that come with that is that when goods are in inventory, you haven't necessarily been invoiced for all the costs associated with that. You haven't necessarily been invoiced for the products that were manufactured and almost certainly you haven't been invoiced for the freight. And so if you have product and inventory at the end of the month, you may not have all the documents. But more importantly, your cost and your inventory value doesn't reflect that. So the next month, you may be, or one month to the next, you may be way over billing to your costs, all of that inventory, or you may not be including any of that inventory at all of your costs. And so now you get huge swings month to month in what your P&L actually looks like that makes it hard to understand really what the performance of your business is.
Jon Blair (12:35)
Totally, yeah, so to explain what Arjun was just talking about in different words, like it's very uncommon, especially for brands that have overseas supply chains, but just generally speaking, it's very uncommon to have all of your landed cost bills from all your vendors received and recorded on the general ledger at the time that the product is received in your warehouse, which is really the time that you need to receive it at full landed cost. Why? Because the second its in your warehouse, it may go out the door to fulfill an order, right? And so, what Arjun is, well here's what I see happen most often is, we've got the supplier invoice, usually, sometimes not, but you at least got the supplier invoice, right? By the time the inventory hits your warehouse, but you likely don't have the duties invoice, and you likely don't have the freight invoice.
Arjun Aggarwal (13:11)
Yeah, it could get sold. Yep.
Jon Blair (13:30)
And so if you only receive the inventory on the day that it arrives at your warehouse at supplier costs, whether you're using average costing or LIFO or FIFO, it's going to actually incorrectly calculate that layer of inventory until you introduce the landed costs components, in this case, freight and duties into the actual SKU costs. so you actually have to, that's where accruals come into play from an accounting standpoint, which we've talked about on the show is like, that's where your accountant,
And, again, you have to work with operational data because where do you go to get estimates for landed costs, right? And duties. There's usually documents that the operations team is managing, right? Yeah, exactly.
Arjun Aggarwal (14:09)
Yeah.
There's quotes, there's like a variety
of things. You can look at historical data, there's quotes, all these things. Ultimately Ops is the one, especially when it comes to like logistics related costing. Ops is where, you know, is the source of that data.
Jon Blair (14:19)
Totally.
Totally, yeah, right, like, let's say the controller is the one recording bills, the controller's not getting freight quotes. I mean, there's some companies that happens in, but that's not common, right? So like, someone on the ops team went and got a quote for that freight move. They're usually keeping an eye on what the duty rates are and the HTS codes that are being used upon import. That's not something that the finance team is doing. So the point that I'm trying to draw out here is as Arjun, you know, keeps like bringing up solid examples for,
Arjun Aggarwal (14:34)
Yeah.
Jon Blair (14:55)
You can't do, finance can't do this in the silo. If they do, they're gonna miss something, right? And there's going to be some sort of incorrect cost that ultimately, from a founder's perspective, what does that mean? It means one month, your COGS is gonna be too high and another month, the COGS is gonna be too low. Because effectively, in some form or another, your freight and your duties are gonna be recorded on a cash basis or on like some, using some allocation method that isn't actually aligned with selling that inventory. So I actually want to go into something a little bit deeper here on, well I want to talk about Mandrel a little bit more because Mandrel is a tool that, so oftentimes when brands are struggling with this, right, managing their landed costs, generally speaking it's like ERP, ERP is probably the acronym that comes up more frequently. I think some people, know what an IMS is, some people confuse it with an ERP. Before we get into like Mandrel and inventory automation, like let's talk really quick about ERP and IMS. Like what are those two things and how are they different?
Arjun Aggarwal (16:09)
Yeah, everyone has a different perspective on this. I'll share mine. And Jon, maybe you can agree to disagree. I kind of view IMSs as a subset of ERP, really. The difference between the two being that an IMS doesn't always have a general ledger component to it, but an ERP usually does. The primary functions of those tools, both an IMS and an ERP in the context of working with brands, is
Jon Blair (16:13)
For sure for sure and I guess I'll share mine after yeah
Arjun Aggarwal (16:38)
to help you track your inventory and get all of the costs associated with your inventory into the right place at the right time and record all the revenue associated with selling that inventory in the right place at the right time. If you have an ERP, it's also recording to your basically your accounting statements. Where an IMS, maybe it's not doing that. Maybe it's plugging into a QuickBooks or similar. I think these tools, have a lot of functionality, a lot of people that end up adopting these tools don't make use of like over 50 % of actually what the tools offer. But aside from that, I think that one of the big challenges with these tools, especially as brands are trying to stay lean and grow, you know, while being efficient is the amount of admin that is required both in the initial implementation and
Jon Blair (17:13)
Yeah.
Arjun Aggarwal (17:33)
on an ongoing basis. There's a huge amount of data entry, data upkeep, and data admin required to take advantage of these tools. But that's kind of my perspective on ERP, IMS, what they do. They do their job. They do a good job. It just requires a lot of investment and time from a brand to actually benefit from them.
Jon Blair (17:55)
For sure, yeah, so like in a nutshell, the way that I've heard ERP pitched a lot of times is like ERP is a quote, fully integrated kind of closed loop system that includes GL, IMS, WMS oftentimes, which is warehouse management system, HR and time tracking and CRM. And like Arjun is saying, if you go through all that, like that's a lot. What I see used most frequently is some, part of the IMS, not even the full IMS, right? And then the GL, maybe some WMS, but rarely do I see a company using all of them, right? And so, those are made more, I was listening to a limited supply podcast a number of months ago, and they were interviewing the founder and CEO of Fulfill.io, which is an e-comm focused ERP system, and he said, and I think this is a very great way to explain it, like,
Arjun Aggarwal (18:32)
whole thing. Yeah. Yeah.
Jon Blair (18:51)
What's the use case for ERPs? Like when your brand has reached sufficient complexity, right, in multiple of these areas, that it truly makes sense to put in the effort and the cost, right, to implement. And so what, this is a generalization, but what I tend to see, ERPs tend to make sense when you have...
When you're truly omni-channel and you've got heavy B2B and B2C and maybe multiple B2C or multiple B2B channels, right? And you're doing more complicated inventory management that includes some form of manufacturing transformation, right? I call that complex manufacturing, not assembly and kidding. Like you're maybe taking metal and machining it. Yeah, exactly. So you have like, and so when you have, we have complex manufacturing.
Arjun Aggarwal (19:36)
like turning raw into finished. Yeah.
Jon Blair (19:44)
multiple sales channels and a solid mix of B2B and B2C, right? And you run your own warehouse, maybe, maybe you've reached sufficient complexity for ERP, right? On the IMS side, like Arjun said, IMS is a module within ERP, but they can stand alone as well, right? And have no integration to GLs, some of them have like third party integrations to QuickBooks and other GLs. But let's now talk about like the lens through which you think about Mandrel and this concept of inventory automation, how that differs from an IMS.
Arjun Aggarwal (20:17)
Yeah.
Yep.
Yeah, so I think as I kind of alluded to earlier, our view on where the existing set of software tools fall short is that they require a lot of investment from the users, from the brands. In many ways, they're not really that different from a well-built out spreadsheet where you have to enter in all the data into that spreadsheet, and then the spreadsheet does all the calculations for you across 50 different tabs or five different worksheets. Functionally, the software is no different. You have to enter in a bunch of data into the software, and it does all the calculations for you across different UX. I think the main benefit of using these tools is they work on top of a database, and so there's a little bit more persistence. You can maybe be a little bit more sure that the data is going to be correct or accurate. You don't have to worry as much about a finger problem in a calculation or something reffing out in a spreadsheet. But fundamentally, your workflow doesn't change. You're still spending all that time. You're still spending all the resources on keeping those updated. And we see brands that end up having to hire one, two, three heads, depending on the scale or the complexity of the product, just to admin an IMS or an ERP. And they cost a lot of money.
Our view is that the main problem to solve for here is not like a UX or UI necessarily. It's really that that time element where there's so much manual work required, whether it's entering in data or changing statuses, you know something like receiving a shipment in your ERP system. That's something that you have to actively do. And so where we see kind of a new opportunity to build is to build with automation. You know, that's kind of what we're putting Mandrel into is a bucket we're calling inventory automation. Where really the goal is to take your existing set of inventory workflows. That is everything from creating and managing POs, know, looking at the inbound shipment tracking, costing all of your inventory as it comes into the warehouse, tracking it in and out of the warehouse, and then calculating the COGS and your inventory values on the back end for accounting. All of these different workflows are things that you may be doing in an IMS and or spreadsheets. Usually we see a combination of these things. We want to take those workflows and one by one, we want to automate them using a combination of AI, straight up kind of software automation and third party data that we're bringing into the fold as well.
Jon Blair (22:51)
Yeah.
Arjun Aggarwal (23:06)
In many cases, I think we could be an alternative to an IMS or if you want to adopt software in a more wedge or use case specific way, I don't know if we'll get to speaking about how brands adopt software, but there are modules of what we've built that you could adopt one by one. You could think about it as replacing your spreadsheets one at a time, your costing spreadsheet, your item, PLM spreadsheet, your inventory tracking spreadsheet, your PO management spreadsheets. You could adopt any of these and Mandrel could easily take off the, know, whatever two, three hours a week that you spend updating each of those spreadsheets independently or collectively as a system.
Jon Blair (23:50)
For sure. Yeah, I mean, you and I have talked about this a lot. I've worked with Arjun and had some conversations about like, you know, product feedback and product development. And one thing that I've, the terms I've always used to describe this is like, an IMS can be great, but it requires compliance, user compliance, right? Like the user, it's garbage in, garbage out. If the user is not super disciplined about
entering in transactions as they happen along the way.
Right? You don't have accurate snapshots along the way. And like you can even, let's even take this a step further and let's talk about like, let's say you close the IMS monthly. So let's say you like save everything up, right, to enter and you're closing the IMS to get your numbers for the month. Well, if you pull a snapshot at any point in time throughout the month of where's my, how much do I have in transit? What's my current landed cost? Any other, the other data that the IMS tracks.
Arjun Aggarwal (24:26)
That's right. Yeah.
Mm-hmm.
Jon Blair (24:50)
You can't because you have not been complying with the system. So, like if you think about something like, let's say mid-month, you need to cut a PO, right? But you're not accurately tracking how things are going from on PO to received but in transit, and then some is going from in transit to received in the warehouse. If you're not tracking that as a user the whole way through, you...
Arjun Aggarwal (24:53)
throughout the month,
Jon Blair (25:14)
the IMS won't even calculate your inventory requirements properly, right? And so what Arjun is building here at Mandrel is something that captures these inputs, right, in a more automated way and tracks the movement of these transactions and the changing of status. Trying to create this transactional table or tables, if you will.
Arjun Aggarwal (25:18)
Yep. Yep.
Jon Blair (25:37)
automatically through reading documents and third-party data which we can talk about a little bit more but so that you have this real-time feed right of the movement and costing of your inventory amongst other things but with minimal human intervention and it's not so it's not completely in a hundred percent Reliant on user data entry compliance
Arjun Aggarwal (25:42)
Yeah even in a wrench.
Yeah.
We, you know, I don't know if it's a unique insight or what, but fundamentally what we realized is all of this data sits in kind of about your inventory movement sits in one of two locations. For the outbound side, it's usually exists in a third party platform, whether it's a warehouse management system that a 3PL is sitting on top of, or it's your Congress platform or EDI for selling, you wholesale. You can usually grab like, has this item what items have been ordered and what items have been shipped from those platforms. The inbound side is a much bigger mess. Brands use various freight forwarders. Sometimes they're using a bunch. They have 10 different suppliers, whether it's for raw materials or finished goods. It's all over the place. And what we found is that the place where all the data ultimately ends up in some way, or form is in email.
Jon Blair (26:39)
Yeah.
Yeah.
Arjun Aggarwal (26:59)
And so we sit on your inbox. You can forward emails to us or we have an email integration that is kind of scope limited to the vendors that you put into our system. And we'll look at your documents coming in and your documents going out and use those to assemble as Jon kind of said, a real time up to date ledger of everything that's happening to your inventory, not just how it's moving from place to place, but also how costs and invoice are coming into the equation so that we can understand the value of your inventory in every state that it's in. And I should add at the SKU level, which is really important as well.
Jon Blair (27:35)
Yeah, so.
For sure.
Totally, yeah. So like for listeners to kind of visualize this, think about a software platform that's grabbing from whatever email inbox or inboxes in your business are managing the workflows of the movement, ordering and movement of inventory, right? It's going in, it's identifying those documents, POs, bills of lading, packing lists commercial invoices, entry summaries, whatever, like all, I'm just listing a few that come to mind. And it's going and it's saying, hey, this constitutes a movement or of a piece of inventory and it's relating it to the other documents and saying,
Arjun Aggarwal (28:04)
receipt notices, yep, everything.
Jon Blair (28:20)
we're calculating that this is the landed cost at this point, right? Or the estimated landed cost at this point. And it's moving your, using this document recognition, it's building your landed cost and moving those SKUs through, transactionally, through the system and telling you where, effectively what stage it's in. Now, additionally, there's other integrations, like if you're in the e-comm world, it can be connected to your Shopify or to your 3PL. So it's also tracking orders and outbound. So when Arjun says documents and third party data, this is what we're talking about. It's like connecting to the different systems that have your warehouse transactions outbound or inbound, but it's usually outbound and inbound using this document flow, right, which is extracting from emails to effectively put this inbound inventory ledger into place.
Arjun Aggarwal (29:11)
Yeah, it's pretty magical. We have customers where they plug in their emails and all of sudden they come in without doing anything and they see their purchase orders and invoices. We extract all the document level data, vendor information, payment terms, delivery and shipment information, all the dates that are involved.
And then we get down to the line item level and we're extracting all that data as well on every SKU, quantities, lock codes, unit costs, et cetera. We do all this data extraction, we present it in our system. And one of the great things that we do, and this is where we go above and beyond, like if you uploaded a PDF to ChatGPT, it could pull out some data. It has challenges as the format starts to vary, it doesn't always know what fields to pull out.
We have kind of built the system so you don't have to do any of that configuration. We automatically bring it all in, capture all the relevant fields. And on top of that, what we do is we actually map it to all of the objects in your database in Mandrel. So if you have your items list in Mandrel, we will create a two-way link between that line item on an invoice and the item in your system. So when you click on the line item in your invoice, it will take you back to the item and vice versa.
So everything in the system becomes interconnected from your documents all the way to your items. It becomes really easy to navigate. But more importantly, you get all this data that is able to be filtered, searched and sorted by the items, by the vendors, by the locations, all automatically without you having to actually enter in any data or even forward emails or save them to a file storage. We handle that all automatically for you as a brand so you can get out of the spreadsheets.
Jon Blair (31:03)
Yeah, so it's not just the transactional ledger that's actually tracking the status. It's what bucket of inventory SKU sits in, whether it's prepaid or in transit or on hand and the actual accumulated costs up to that point. But it's also because it's capturing and relating all of these data points together across tables, you can also kind of run your own reporting on whatever view it is that you need to see because you're building all these relationships that otherwise like all like a perfect example that I see often times is like if someone wants to if someone wants to look up like say the actual transit time for like a given SKU or on the last shipment or or the production lead time you know like you guys are building all these connections that ultimately are gonna be able to calculate what those metrics look like, the time between PO and shipment, the time between shipment and arriving at the warehouse, like there's just gonna be a lot of rich, you know, reporting that people are gonna be able to grab from this.
Arjun Aggarwal (31:56)
Yeah, all the data. Yeah.
All the data comes into the platform and ultimately can be manipulated. And we can do some pretty cool stuff as a result. I mentioned we map all the data from your documents to items in your system. We also intelligently link your documents together. So we can come up with a shipments table that shows all of your shipments and all the documents attached to those, the costs for every shipment, the items on every shipment. And we use this to automatically allocate freight, automatically allocate customs costs, whether it's a split shipment or a consolidated shipment, you as a user don't have to do anything. The system kind of handles all of that automatically. So what you get is your inventory value in Mandrel. I can see, you know, how much do I have on hand of every SKU at which location, what's the quantity, what's the value. You could see it in transit. You could see it on order.
Jon Blair (32:53)
Yeah.
Yeah, see it's interesting because like the root problem, like what's the reason why this inbound tracking is so hard? In my opinion, it's because the freight forwarding, one of the drivers is that the freight forwarding industry is so fragmented, everything is subbed out. like, you know, depending on like when I used to run supply chain for Guardian Bikes, depending on the freight forwarder that we use. And look, sometimes we got forced to use a freight forwarder. Like we don't wanna use those guys, but they're available and our go-to is not available. And guess what, guess how those guys look up statuses of stuff. You email them, they get on the freaking phone and they call someone who calls someone who calls someone, right? And so like Flexport is trying to solve that problem by, like they're realizing they have to just like own the whole.
Arjun Aggarwal (33:34)
Yeah.
the whole thing. Yeah.
Jon Blair (33:45)
logistics chain, right? And so that is a solution, right? It's super capital intensive. And they have to like, they have to have basically ownership over ships and trucking and trains and all this kind of stuff. And they can feed all that data in their platform. But in order to get that you have to use Flexport on every single shipment. And I'll tell you right now, like we loved using Flexport at Guardian, but there was numerous times when for one reason or another it didn't make sense to use Flexport. So we had to actually have a Rolodex of kind of go to freight forwarders. If we had something like Mandrel, it wouldn't matter what freight forwarder we're using as long as we had access to the documents that signify a move from what kind of one stage to another. And then we can feed it all into Mandrel and it can be our one source of truth of how the supply chain is performing, tracking landed costs, inventory valuation, all of those things. So I'm just trying to explain some examples for the audience to kind of wrap their mind around the problem that Mandrel is like is solving here.
Arjun Aggarwal (34:24)
One place to the next. Yeah.
Yeah.
And what's so funny is, you know, we're like getting into the weeds and all this operational and logistics stuff. You know, this is a Free to Grow CFO podcast. We're finance people here, but it just goes to show you how like interconnected the op side of house is with the finance side of house. And it's not just on closing the books. It's like, Hey, if I'm a brand, I want to know SKU ABC. I want to be able to see every shipment that I've made the breakout of all the costs for that shipment for that SKU.
Jon Blair (34:58)
100%.
Arjun Aggarwal (35:10)
and how those are changing over time. It's really hard to do that today in any software, in any kind of automated way. And so that's a level of intelligence. If you put the accounting part aside, that's a level of strategic finance or strategic ops intelligence that as a brand you can really benefit from. You can understand, know, our costs for freight have been steadily increasing or decreasing, or we had a huge spike, you know, in the first three months of January, that was the result of ABC Reason, or maybe there's some macro factors that led to it. And so it helps you understand, what are the things that are leading my business P&L to look the way it is, to be able to go in and at the SKU level, look at the breakout of all of your costs for every shipment of your products.
Jon Blair (35:43)
Mm-hmm.
Totally, totally. look, I mean, with, you know, with tariff changes front and center, right? Like tracking the real time changes in your product costs and the movement of your inventory has never been more important. And I would even say like, yes, tariffs are this big kind of black swan event right now, like affecting landed costs. But in the Ecom world, freight spot rates, supply chain delays, that stuff is changing all of the time, right? And so having the ability, having this intelligence, this stream of transactional intelligence and reporting capabilities that you're talking about is super important to being nimble, let alone to nailing your accounting. So look, before we land the plane here, like if there's one thing that you want,
Arjun Aggarwal (36:34)
Yep. Yep.
Jon Blair (36:55)
brand founders listening to this podcast to take away from like what Mandrel is doing and how you're changing the face of managing supply chain and finance. What is it?
Arjun Aggarwal (37:05)
Yeah,
I would say look the reason to use us is to get back a lot of time that you're you know wasting maybe not the right word, but that you're spending on entering data into your operational tools, whether it's spreadsheets or IMS is or equivalent. We can kind of be a standalone solution that saves you that time gets you to understand not just your costs, but where your inventory is, you know, for every SKU.
without you having to really do any manual data entry. And so that is potentially, if you're submitting five to 10 POs a month, if not more, across one to two people, that's potentially 10, 20 hours a month and tens of thousands of dollars of ROI up for the grabs that Mandrel can come in and save all that time for you so you can get back to actually growing the business. But you still get to understand
all of the costs and the qualities and the locations of your inventory.
Jon Blair (38:05)
That's massive, that's super massive. Where can people find more information about you and Mandrel if they're interested in learning more about that?
Arjun Aggarwal (38:13)
Yeah, you can come check out our website. It's Mandrel.tech or check us out on LinkedIn or feel free to kind of shoot me a note on LinkedIn as well. Happy to reach out any of those ways. Yeah, we'd love to chat with brands, learn more about how we can help you, especially kind of today, two days after a big shock to the system. I think understanding costs and being able to track kind of inventory
in a more audit ways is more important than ever.
Jon Blair (38:45)
So before we land the plane, I always like to ask a personal question at the end of every episode. what's a little-known fact about Arjun that people might find shocking or surprising?
Arjun Aggarwal (38:50)
Yeah.
man, a little known fact. This may or may not be embarrassing and may lead to some folks looking up at YouTube. But I actually was on a dance team in college. And so that's where I got all the moves that I show off on weddings, which I've got one coming up this weekend. But that's a little known fact. I was on a dance team in college. And it was a good coming out experience to like
Jon Blair (39:13)
Heck yeah.
Arjun Aggarwal (39:28)
find myself and have a fun. And I had a great time learning that. that's the thing that a lot of finance people don't necessarily have. So I'm proud of being able to say I was on the dance team.
Jon Blair (39:39)
Yeah.
Dude, I love that. People sometimes when I ask that question will turn it back around on me and I've got some possibly embarrassing videos on YouTube you could find as well. I was in a thrash metal band that got signed to a record label right out of college with a bunch of business school dudes and that toured and...
Arjun Aggarwal (39:50)
Hahaha
Jon Blair (40:01)
Yeah, you can find some videos of me playing thrash metal on YouTube if you search hard enough. But hey, those kinds of things are important, Life is not just about business. Business is a part of life and it's important to have those kinds of things, you know? But man, thanks for chatting. I think what you guys are doing at Mandrel is super awesome. If any of this stuff piqued your interest, anybody, definitely reach out to Arjun, check out Mandrel, get a demo.
Arjun Aggarwal (40:04)
Hahaha
Yeah.
Yeah, of course.
Jon Blair (40:31)
when you see it yourself, the concepts we talked about here become much more tangible and really brought to life. And look, don't forget, if you want more helpful tips on scaling a profit-focused DTC brand, consider following me, Jon Blair, on LinkedIn, and if you're interested in learning more about how Free to Grow can help your brand increase profit and cash flow as you scale, check us out at FreeToGrowCFO.com, and until next time, scale on. Thanks, Arjun.
Arjun Aggarwal (40:59)
Awesome. Thanks, Jon.
