The Podcast: Making Manufacturing Connections with David Klein of Inspectorio

By March 30, 2022

David Klein, President & Co-Founder of Inspectorio, spoke with Alexander Skjong from The Podcast about the future of manufacturing in the consumer goods supply chain.

The Podcast is dedicated to championing the people behind the technology and startup community in Minneapolis. Listen to the full episode with David and Alexander below:

David KleinDavid Klein
President & Co-Founder at Inspectorio
Alexander SkjongAlexander Skjong
Content Manager at
The Podcast


Podcast transcript:

David Klein: 00:00 If companies don't start recognizing they have to start making those changes and transitions today, the demand for their products are just simply going to come down. It's truly a competitive advantage.
Alexander Skjong: 00:18 Hello, everyone and welcome to The Podcast. My name is Alex. I am your host and I am flying solo this week. Shacarria Scott was on vacation when this episode was recorded, so it's only me. Our guest this week is David Klein, the co-founder and president of Inspectorio. We talked about a whole wealth of things in the manufacturing world. Why some companies still use pen and paper to track their manufacturing process, which is bonkers to me. How Inspectorio is trying to help companies be more eco-friendly and ethically minded when dealing with supply chain issues. A lot of very fascinating stuff. And David is probably the most global guest that we've ever had on The Podcast. He's lived all across the globe. He's worked all across the globe and he was actually calling in from Quito, Ecuador. So, very cool stuff, very cool conversation, and a very great guest. So without further ado, here is David Klein, co-founder and president of Inspectorio.
Alexander Skjong: 01:18 David, thank you so much for being on The Podcast today. How are you doing?
David Klein: 01:22 Hi, Alex. Thank you so much. Doing great. Always a pleasure. Appreciate the invitation and looking forward to our conversation.
Alexander Skjong: 01:29 Absolutely. Now, where I want to kick off is we were just chatting before I hit the record button here and on your LinkedIn profile, it says Ho Chi Minh City, Vietnam. And I was like, "Oh, are you in Ho Chi Minh City?" Because I think it's very late or very early there, depending on if you're a night owl or a morning person. And I was like, "Oh no. Am I keeping you up?" But you're actually in Quito, Ecuador, right?
David Klein: 01:53 Correct. Yes. That's actually the place that I'm born, and actually my co-founders as well. I was living in Vietnam where we have a part of our product development team for almost five years. I was living there. Beautiful city, beautiful country, a lot of opportunities. And then just recently, really taking advantage of the work from anywhere policy that we have. I said, "Let's take advantage of that." And my partner and I just decided to start touring the world. And we started by getting close to family first and then we'll see where we go next.
Alexander Skjong: 02:31 That's fantastic. Now, I was also looking at your LinkedIn profile and you, sir, are quite the global person. I saw Shanghai, France, New York, some other states, some other countries, some other cities. How has that global perspective kind of shaped your professional outlook?
David Klein: 02:51 Oh, that's a very interesting question. Well, I think from a very early age, I do want to recognize the type of values and principles that I think my family, starting from my parents, of course, but also my grandparents really shaped me, which was to really be proud of where you come from. Recognize your roots, but always know that there's a much bigger world out there from where you come from. And that the world's there up for grabs dependent of where you come from. So I've always had this curiosity to travel the world and to do great things for the world. So, I think that exposure to meeting different people and understanding a lot of different forces and phenomenons that are going on around the world just, of course, always made me very curious. And I think curiosity and this kind of willingness to make an impact has been present in all my professional career and definitely is a huge feel for what I do right now.
Alexander Skjong: 03:57 As kind of a side note, how has it been in the past two or three years or so with COVID going around traveling back and forth? Have you had to sideline some of your travels and kind of put your roots down a little bit more or were you able to kind of navigate that?
David Klein: 04:13 Yeah. Well, actually, before COVID, I was spending every week on a plane.
Alexander Skjong: 04:18 Wow.
David Klein: 04:19 And that takes a massive toll on your body, on your mind. And I think that the first impact on a positive side was like, "Wow. Now, I don't have to travel." But then second once you start recognizing that the world is shifting to this remote work culture, you start to recognize that perhaps we will never get back to that amount of travel. So that's definitely something that I welcomed. I do not miss traveling. And I also do want to recognize that I think we've been very fortunate for those that stayed in Vietnam. I know that different parts around the world, it was very hard and still is very hard for a lot of people. Luckily in Vietnam, government took very drastic measures and we had very little cases and for two years, we could move around freely. I'm a massive fan of motorcycles and traveling. So, to grab my bike and did Vietnam, up and down, left to right, with very little tourism. So that also was very nice that I connected to the beautiful side of the Vietnam countryside as well. Taking advantage of that.
Alexander Skjong: 05:30 The United States did exactly the same thing. We responded quickly. We responded in the right way. Everybody did their part. It was great. That's how I'm choosing to remember the past two years. Yikes. Let's talk about a little bit of your professional journey. You've worked for some big organizations. United Nations, I believe. And you kind of made a switch to a little more scrappy entrepreneurship lifestyle with Inspectorio. Was there always kind of a seed in the back of your mind where you said, "You know what? I want to strike out and build something from the ground up." And when did that idea kind of first start gestating?
David Klein: 06:07 Yeah. Well, I think the underlying common thread across, I think, my professional, I don't want to call a career just evolution, has been this connection with two things. One thing to build things, to create things. And then second, that those things that you're creating, that you build are impacting the world positively. From an early age, I've always had this dream of working in the development sphere, which is why I ended up working in the United Nations. And what's interesting is when you work in post-catastrophe environments, I was in Haiti after the earthquake, you can make a lot of parallels with what it's like. Believe it or not, I know it's crazy, but like working in tech because, one, you have a lot of changing circumstances. It's very fluid. Every problem is unique and you cannot apply the same type of approach to solving a problem that worked in one place against another. The types of projects and policies that work in the scope of development need to take into consideration really the root cause of the problem and the points of view and context of the local environment.
David Klein: 07:26 When you look at tech, if you don't listen to the users and you don't listen to the problems and you recognize it truly, be obsessed with that, and take the theory and take the best practices and take the experiences of other places, but truly localize it to your own experience, that's when you build great products, which is also... That's how you rebuild great communities instead of having a group of people making public policy in United Nations sitting in the headquarters in New York when the problem is happening across the board, right.
David Klein: 08:01 That was an incredible experience. I've always also had an attraction for Asia, which is what took me to China. And I worked very closely with the co-founders of Inspectorio today. Continued doing my masters in development, but when the whole idea of Inspectorio started coming about, it kind of ticked all the boxes because, one, it was in Asia. Two, it had a massive impact for the world, for the good, which has always been important for me. Three, it was all about creating and building from the ground up. And then four, I think the future of our generation in anything that you take a look at that will make this world better from the environment to health, to population, to social economic, technology plays a huge part. And being able to be at the heart of that and understand how to leverage technology and be a creator through technology, I recognize that it was an opportunity that I couldn't not take.
Alexander Skjong: 09:10 So do you feel like you're having more direct impact and more direct opportunity for change in this role than your previous roles?
David Klein: 09:19 I think it's a different type of impact. I really praise the work that people in the development space do. True admiration and they're really unsung heroes and incredible professionals. I just think that the speed in which you can make decisions, the speed in which you can implement, and the level of reach that you can have and measure that impact, it tends to be at a very different pace. That's as far as I can say. And I think both... Private sector has a huge opportunity for impact, and I think the public sector as well. Sometimes when you work together, it's also another avenue, but one thing you cannot deny is the private sector works a hundred times if not a thousand times faster, right. So, the speed in which you can make impact is definitely at a different level.
Alexander Skjong: 10:13 I'm sure people are saying, "Get to Inspectorio. Get to Inspectorio." I'm getting there, listeners. We're getting there. And we're there now, actually. That was my little tease. Inspectorio, from a bird's eye view, a very condensed explanation, what is Inspectorio and what does the company do?
David Klein: 10:30 So, Inspectorio, we are a tech company that creates products and the products that we create or the products that we do are aiming to solve the inefficiencies that exist today when it comes to the main pillars of the production of consumer goods. And an example of a consumer good would be the clothes that you're wearing today, the chair, the desk in which you're sitting or the plates that you're eating on. And those pillars are quality, right. Everything that you wear, that you consume needs to go through process of validating and reviewing quality, monitoring quality. Same thing for the compliance of regulations for the facilities where your products are being produced. That is environmental standards, social standards, and also the production of those goods have to take place in the right timeframes to be delivered on time.
David Klein: 11:33 All of those operations are extremely inefficient, very manual, very time consuming, little transparency, little automation. And Inspectorio has truly changed the way in which these activities are being done by bringing digitization. Through digitization, we're able to automate a lot of these activities. Once you start leveraging all of the data that you're now capturing because you've digitized it, you can start turning that data into a lot of actionable insights that then allow you to make better and faster decisions. And with the beauty of machine learning and algorithms, we basically allow for predictions to take place so that you can start already identifying early quality issues, environmental, social issues, or even eventually preventing delays.
Alexander Skjong: 12:23 Now, it is 2022 right now, but I want to take it back to around 2017 when Inspectorio participated in the Target Techstars accelerator. And I'm just going to kick this off by reading a little excerpt from A Bullseye View, the Target blog, which chef's kiss to that name there, Target.
Alexander Skjong: 12:44 "It happens a thousand times a day, all over the world. An inspector walks into the factory to inspect a brand's products, paper and pen in hand. They complete their inspection, and a few days later, the retailer or vendor will get the reports. The work gets done, but it can take weeks for the info to get back to everyone involved."
Alexander Skjong: 13:02 Now, we're almost five years after that was initially written when you began the work with Target Techstars accelerator and Inspectorio has introduced new products. Yeah. I'm sure that the company has grown. I think you have over 150 employees right now, somewhere in that realm. How has the company changed that process, that slow process? And what kind of market share or penetration do the [inaudible 00:13:28] products that you're building have in the distribution space?
David Klein: 13:31 Specifically to that example. So, let's narrow down the conversation specifically to quality inspections, which was the case that you presented. Yes. You had Target sending inspectors that would've to travel to the facilities. When they're doing an inspection of the goods, they're using pen and paper, taking their camera with the photos. They will then go home, upload the photos into their computer, write down the notes into either Word or Excel document. Then send that either the day after or two days after depending on the amount of reports that they have to do. Then it would have to be approved and shared via email. And after several of these activities, you would have to have a team that basically just processes, tabulates all of this data, processes it to then start trying to get some level of insights.
David Klein: 14:20 Fast forward that to today, specifically on that activity, first by digitizing that operation and by bringing the different stakeholders of an inspection activity, which are the inspectors, the suppliers, the factories, we have cut down the time that it takes for the data of that inspection to get into the hands of all of those stakeholders at the same time.
David Klein: 14:45 And the way that we do that is that all of the data that was before captured in pen and paper is now captured on a mobile app. Photos are taken through the mobile app. So as soon as that inspection's done, instead of the inspector having to go home and work and update that, now they just simply finish and from the factory floor, just upload it, which allows them to do more. And also when they get home to actually spend time with their families, data gets automatically generated into a report. You can access it anywhere around the world. The data also gets transferred into analytics. So the time that it used to take, to your example, weeks to start understanding trends, performance, benchmarks, that is also done automatically.
David Klein: 15:27 In addition, the beauty of doing all of this digitally is that who needs to do the inspection, when do they need to do it, how do they need to do it, all gets automated. And you can trust the information so much more that now that you have all of that information being studied and evaluated, you can then use risk. And that's what Target and many of the lead brands and retailers are doing is you start having profiles of risk, thanks to that data, that then allows you to say, "Actually, this facility is so low risk objectively that maybe I don't need to send an inspector anymore." So you're saving a lot of costs, and you're also empowering the factories and the suppliers to actually do the inspections themselves instead of having to send your own inspectors.
David Klein: 16:18 And so, from that manual process that we talked about, to having machine learning algorithms that evaluate the data, provide you a risk score that gets updated continuously so that you can have a program that's adaptive to levels of risk, saving money, and reducing risk, and ultimately improving quality, has been game changer for sure for not only the brands and retailers, but also for the vendors and factories where they recognize that that true sense of empowerment and self ownership is finally granted.
Alexander Skjong: 16:49 2016, five, six years ago, something like at that, no one can do that small math in their head. That's impossible. And a lot can change over five or six years, but it's not like that was the stone age or the pre-internet age or something like that. So to hear that some of these tasks were still being done with pen and paper, and then scanned in and written in a Word document, that seems just bonkers to me because it seems like there should have been some digital solution to that in the early aughts that slowly evolved. Was the distribution supply chain world still in that kind of pen and paper realm for a long time? Is most of it still?
David Klein: 17:30 Yeah. You're spot on. You'd be surprised, but today, most leading companies that you know, during the time of COVID, didn't know what was the status of their product on the facility floor. Sometimes, and a lot of them, actually don't even know what's the extent of their supply chain. Who's manufacturing their products? Still happening today. And I think what's been clear from COVID is that it's truly been a stress test to supply chains around the world and the pains of this fragmented... I'm even willing to use the strong word, archaic operations. Those pains have been truly felt across the globe, which is why today you're starting to see a lot of these companies realizing that if they don't accelerate this digitization process, they're just simply going to stay under. And a lot of transformation has to happen to stay resilient to potential situations of phenomenons like COVID that will disrupt supply chains in the future. So, truly right now, it's a matter of survival. And decisions that before in terms of digitization would take five months, a year to discuss and potentially eventually implement. Here, you have to do it in a matter of days.
Alexander Skjong: 18:57 Now, something you said struck me there that some of these big companies and these big distributors don't know exactly who's manufacturing their products. Is that right?
David Klein: 19:09 Yes, sir.
Alexander Skjong: 19:10 And my follow up question is that, how? How is that possible? That seems to be a major information gap, especially in terms of quality control like we're talking about in terms of ethical production, all of that kind of stuff. Is it just so big that at some point some of that stuff gets muddied in the water or how does that information fall to the wayside?
David Klein: 19:33 I think there's a lot of things I don't want to over-simplify it or over-complicate it. An operation of the scale of a manufacturing is especially... Let's keep the example simple of apparel, clothing. You have thousands of suppliers and you have dozens of thousands of factories. You have seasons. We were just talking before the podcast about the seasons in Minneapolis and how it's called, right? And when you go into the shops, you go through four or five, six different seasons. And so, you're already producing many seasons ahead of time so that you could be able to ship them at the right time. All of this, it's a very complex chain of decision making and a lot of different players. And at the speed in which this needs to take place, things fall through the cracks.
David Klein: 20:30 And I think that ultimately consumers haven't necessarily been so diligent in terms of the expectations that they have on certain quality compliance standards. I think governments also depending on the fight for cheaper prices, things also fall down the cracks. I think there's more and more pressure today. There's a greater sense of an ethical responsibility that companies have that comes from consumers just being a lot more strict in their expectations. I think there's also just general consciousness about the impact on the world. And governments are also becoming a lot more strict. I think never have we been in a situation where legally there's been so much pressure for this, which is also one of the drivers why more and more changes in the supply chain are starting to happen today. But yeah. I mean, originally, you're producing in so many different places around the world with massive amounts of stakeholders, so many different processes happening at an extremely fast pace fighting for margins.
Alexander Skjong: 21:45 Now, you mentioned about the ethical production angle that more and more consumers are being more and more concerned with where their products are coming from, how they're being created, what working conditions are present when those products are created. Is that something that you've seen kind of turn a light bulb on and distributors and manufacturers be more concerned about that because of the consumers? And does Inspectorio kind of help that process? Will Inspectorio help a manufacturer be more ethical in their production?
David Klein: 22:14 We have three products. One of them, Inspectorio Sight, is specifically focused on supporting the activities, managing the quality activities end to end. Our second product, Inspectorio Rise, serves precisely that purpose of helping factories, helping vendors, helping brands and retailers to manage compliance. And compliance understood as the need to be at par with the regulations connected to the manufacturer's operation when it comes to environmental standards, social standards, even the technical aspect of how things are being produced. Because as consumers become aware, as governments put more pressure, companies need to have greater means to be able to deliver that, right. If you, as a consumer, start demanding that transparency, then companies need to be able to give you that information.
David Klein: 23:14 And again, when you look at the size of the operation, the global footprint, the amount of stakeholders, the amount of data, the coordination and orchestration that is needed to be able to do that at scale, efficiently, and effectively, you need to have technology and you need to a platform that can help you do that. And that takes into consideration the reality of the facilities that are producing, the reality of the suppliers, and the reality of the brands and retailers, and even to the reality of that consumer. So, Inspectorio is indeed facilitating and accelerating that process, and ideally continue to really become the leading platform to reach that goal.
Alexander Skjong: 24:01 A logistical question. From these different products that you're providing to your clients, I don't think the world has been more aware of the Supply Chain than they have been in the past two years because it got so messed up and people who ordered a new stove 12 months ago are still waiting on their new stove now. And there's a lot of different links in that chain. When one of your clients opts into Inspectorio, becomes an Inspectorio client, how does that spread throughout their own production chain? Do their partners have to then become Inspectorio clients as well?
David Klein: 24:37 So, in supply chain, it's truly a collaborative effort. You have the buyer, in this case, the brand and retailer that collaborates very closely... Let's go from the early process, right. You have the design process of your collection, which is done in a very strong, collaborative manner with these suppliers. And you have PLM systems that were built for that very same reason to collaborate on the design process and the manufacturability that is, "How are we technically going to do that?" And once that process is done and you have to go into actually producing, that order gets assigned to a set of suppliers and then, of course, to a set of factories.
David Klein: 25:24 And therefore with Inspectorio to manage your quality activities, to be able to track your production status, to be able to manage compliance across all of these facilities, indeed all of your suppliers that are in the matrix of the buyer, of the brand and retailer, as well as all of the facilities that are in that matrix, have to be onboarded.
David Klein: 25:45 And so, typically, once you do... Let's say, have a brand or retailer that has decided to adopt Inspectorio, we work very closely to understand, how are we going to roll it out to the brands and retailers? And it could be prioritized by regions or by particular product lines. And then the activities basically start taking place. And we sign a contract and we have direct client relationships with not only the brand and the retailer, but also with the supplier and the factory. Why? Because the supplier that might work, to your example of Target, might also work with Walmart or might also work with Carter's or with Mango. And same thing for the factories, right. Supply chains are very much interconnected.
David Klein: 26:28 And so that vendor that works with Inspectorio, they have their own goals and their own problems that they need to solve. And they're accountable for a lot of these quality operations, compliance operations to each of these customers. So we at Inspectorio, need to truly understand what are those problems that we're also solving for the suppliers and the factories, and when they do purchase Inspectorio, they need to recognize that there is a perception of value that they're receiving and they need to have their own instance to be able to be working with all of these clients in a single place, right.
David Klein: 27:00 Inspectorio is built as a network platform. So each vendor, each factory, each brand or retailer has a unique instance, a unique account, think of LinkedIn, and you just connect to your different stakeholders which you work with on your corresponding supply chain operation.
Alexander Skjong: 27:19 Now, when something has been driven by pen and paper for so long and fax machines and carbon copies and everything like that, is there friction in adopting a new kind of system like this, a new digital system? And does Inspectorio provide training or post contractual customer service as the time goes on to help these clients kind of get up and running with the modern world?
David Klein: 27:47 Products that are built from the ground up, understanding the end users really well, are the ones that are going to also scale really well. And we are operating in a sector where unfortunately there hasn't been that much of technology. The tech savviness of a lot of our users is not really high. And the way in which they've been operating for so many years has not contemplated the use of technology.
David Klein: 28:10 So, first, from the very way in which we design our product, we focus a lot on making it as intuitive, as simple, as easy as possible, and as independent of the need for these external resources. Nonetheless, we also recognize that in order to drive a greater and faster adoption, the right level of support in terms of resources is extremely important. And we have an Inspectorio academy, to give you one example, where we have a dedicated team of instructional designers and technical writers that we create very interactive online training materials so that when organizations are being onboarded, companies are being onboarded, they can follow that.
David Klein: 28:54 We also have a best in class help center and support center that is continuously being updated because it's not only about learning how to use it, but we are evolving the product on a daily basis, right. We release features on a daily basis. And we need to make sure that our users are being updated of that, and that also learn how to leverage that. So we also use our help center in that matter. We have in-app popups and interactive guides. And also it's interesting because if you look at the world of systems or digital solutions for manufacturing like ERPs and PLMs, there's never even been a consideration of having a live chat support.
David Klein: 29:41 When we were just about to launch Inspectorio, I remember very clearly our first large onboarding. We were onboarding thousands of facilities, and we were having this conversation. Should we have live chat support or not? And we recognized that that level of support that we could provide, would truly mean the world to the people that would be using it, and we made the decision. Today, one of the greatest pieces of feedback that we actually get from our users is that they love the fact that we have live chat support, and it's a very large team today. And we recognize how important that also has been on being able to provide the level of service and support that our users really need for how business critical their operations are.
David Klein: 30:32 It's funny when sometimes people get so frustrated when they're having trouble uploading a photo on their Instagram. That's not business critical, but it's like the end of the world. Here, it's like if you don't know how to send a certain report or upload something, that might represent thousands, if not millions of dollars, because that means that the product might not necessarily be shipped, right. So, having that level of support has a true, real business impact.
Alexander Skjong: 31:04 That's amazing. I would argue that some people on Instagram do feel like it is a business critical emergency if their photo does not get uploaded.
David Klein: 31:15 Very true.
Alexander Skjong: 31:16 Those influencers, man. Now you mentioned the environmental impact of Inspectorio, and we're talking about ethical production as well. And kind of going on that similar thread, the company recently participated in the Apple Impact Accelerator. It was chosen as one of 15 black or brown owned companies. And Apple said that the 15 companies are "on the cutting edge of green technology and clean energy". What is Inspectorio's role in environmental change going forward? How does the product drive a more green production of products?
David Klein: 31:49 Very interesting question. So first going back to our conversation of, in order to be able to manage... And that's specific to a case of environmental aspects. Companies that have to produce with the right level of ethical standards that have a massive footprint around the world, and we're talking about thousands of suppliers and thousands of factories, you need to be able to understand, proactively and efficiently, very quickly if those standards are being met, right. You need to have the mechanisms to evaluate. First, to set the standards at scale, and then to be able to evaluate so that you can proactively identify when perhaps some of these standards are actually not being met, right. Now, in order for you to do that, you need to first know who you're producing with, right. This question of some companies not knowing who are their suppliers and who are their factories. So, first, Inspectorio helps you to map that supply chain and go as further down into the different tiers, right, if you go to mail and so forth.
David Klein: 32:58 Once you have that, you need to start setting the standards, the regulations, the expectations. For, in this case, let's say environmental production. What are the standards that each of these different players need to meet? So once you've mapped them, you then need to set those standards, and you're doing them in a centralized platform. Depending on certain standards and expectations that you have by regions, you can then automate which of these entities and manufacturers, depending on the regions they need to fulfill, right. What are the documents that they need to provide? You can set your different assessments and questionnaires and checklists that you can send that scale to validate that. So you're capturing all of that data in real time. By capturing that data, you're then able to identify when and where are you perhaps not having those standards met. And it's not just about saying, "All right. These standards are not being met here." But how can I actually work with these facilities to ensure that we close the gaps and improve in those areas that perhaps need that improvement? Right.
David Klein: 33:57 So we have very powerful mechanisms to work on those corrective actions and in those preventative actions to follow up and work very closely with those suppliers whilst everybody's actually looking at the same source of truth. And then when you're starting to use that data to understand trends, "Are we improving? Are we actually meeting the goals holistically that we're setting for ourselves or not?" What we're seeing is that more and more companies start putting stricter goals on their facilities in terms of water consumption, energy consumption. And in order to know whether your facilities are meeting the goals or not, you need to be able to set the goals and you need to be able to track those goals, right.
David Klein: 34:38 And so, that's where Inspectorio comes in. And one of the most exciting things about working with Apple is that we could truly understand how Apple sees the future when it comes to carbon neutral production. They have a very ambitious goal of being carbon neutral by 2030. So, for us, it was a huge privilege to be able to understand firsthand, how is Apple viewing the problems? And how is Apple also viewing the way in which we could solve these problems? So from a product perspective, that is a goldmine in the sense of being able to talk to experts, understand the pains firsthand, and to be able to brainstorm together how we can resolve this at scale.
David Klein: 35:23 And so, we currently have our Inspectorio Rise product that does some parts of what I've just shared, but truly the vision is to continue to work on all of these fronts to be able to provide companies that means to be able to manage their environmental and even social goals moving forward. And similar to Apple, to be able to have a true carbon neutral production chain.
Alexander Skjong: 35:47 Now, does Inspectorio encourage clients to create those standards in their supply chain? If there aren't any right now, do you encourage the increase in an environmental responsibility or is it built into the system in something that they can do, but it's not like you don't push it? How does that work?
David Klein: 36:07 Yeah. I think every company has different levels of digitization and levels of just modernization. And what's great is if you look at our early adopters, they've truly been at the forefront of starting early in that digitization and modernization journey. And they're a lot more further into that realization of the vision, but we started with companies that were actually really early, right. And so, because we cover that span, we're able to help companies that are at the different stages of their modernization or digitization journey and our account management and customer success team, precisely the role is to be able to work very closely with other companies or clients, understand where they are, what their goals are, and how they could leverage our product to be able to be reaching those goals and to set milestones to eventually move to a direction that they want, and that truly the industry is going to.
David Klein: 37:16 A huge privilege, and we also take with a massive amount of responsibility, is that when we work with so many clients, and we are today the largest network platform, we have the largest number of clients, is that you can really start identifying where is the industry going, right. How are these companies thinking? They also start asking us a lot of questions on where do we see the industry going and how are we thinking. So there's a beautiful aspect of a pre-competitive collaboration that takes place when you have all of these players working together and almost a holistic brainstorming that takes place on how to move the industry forward, right. So, in a nutshell, we can help companies that are at all of these different stages of their modernization journey, and we partner very closely with their thought leaders to truly shape together the future of supply chain.
Alexander Skjong: 38:12 This is broadening out a little bit beyond Inspectorio and kind of diving into the minds of these people. So, I'm not sure how answerable this question will be, but I'm curious from your perspective, for these very large companies who are dealing with so many partners and so many factories and producing so much product that maybe traditionally haven't been on the cutting edge of environmentalism or ethical production, what incentive do they have to change right now? If their product is getting made and it's going out, and the money is flowing in, what incentive do they have to disrupt their supply chain to make things greener, to make things more ethical? (silence)
David Klein: 39:03 ... that will start producing the similar types of products that do have the level of expectations from those standards that you're mentioning from the demand side. So, I think it's truly a matter of brand reputation. I think it's truly a matter of also being compliant to be able to commercialize your products in the countries where you're looking to enter. Yeah. I think ultimately it's purely a competitive advantage.
Alexander Skjong: 39:48 Do you have a positive outlook on that? Do you think more and more companies are going to become more and more environmentally and ethically friendly as time goes on because of that demand?
David Klein: 39:57 One because of that, but I think also, two, because now there's technology that allows you to do that, right. I think if we look at in the past, you could have had the whole world come together in a massive strike and revolt, but it would've been impossible for them to deliver. Purely. Just simply impossible, right. So now we have the means to be able to deliver on that. And that's why it will eventually no longer be a matter of... There won't be any excuse. You know what I mean? Yeah, I think right now we're at a point where all of the forces that are required to be able to move the industry forward to much more ethical production, are there more so than ever before.
Alexander Skjong: 40:43 Bringing it in here, just a few more minutes, we've been talking a lot about green in terms of environmentalism. Let's talk about another type of green. Some money. Recently, Inspectorio secured a $50 million Series B led by Insight Partners, and also included Techstars, Flexport, Ecolab, and Matchstick Ventures. In the press release, your CEO said, "By raising and expanding our investments in the current and future products, we will expand product capabilities to go further upstream in the production chain." What does going further upstream in the production chain look like specifically, and how is that $50 million going to get you there?
David Klein: 41:22 So when you look at the way in which products are produced and therefore evaluated, we're going to go downstream to upstream, right. So, downstream is you as a consumer receive the product and you might generate feedback about that product, right. If you like it or if you don't like it, if you have a certain issue and you want to return it, that's very valuable data related to that product that if you put it into the right types of insights... I mean, if you turn that data into the right type of insights, you can start working on ensuring that those types of issues don't happen again further down the line, and that you have happier and happier customers. Then the customer had to buy it at a shop. And before it got to the shop, it had to be at a warehouse where it was inspected. Before that, it had to be shipped. And right before it was shipped, it had to go through different processes of production where many different quality checks had to take place.
David Klein: 42:28 And Inspectorio, we started going from further downstream and slowly start working ourselves up. So if you look at, for instance, inspecting a product right when it's about to be shipped, that's a downstream quality activity, or when it gets to the distribution center. But when you are trying to truly limit and reduce your quality problems, as much as possible, the earlier that you catch them, the earlier that you identify them, the better. And so, a lot of the efforts that we're doing right now is to go all the way into, for instance, material testing, right, a component testing, a fabric inspections so that at the time of you being able to identify that, it's early enough in the process that you're then able to take action quickly and then mitigate potential further downstream issues that you might have. But also pair that with being able to pull in, for instance, customer reviews, customer feedbacks, that voice of the customer so that we can truly have a holistic end to end understanding of quality to build truly the smartest, predictable, algorithm to identify risk as effectively as possible, right.
David Klein: 43:48 So if you can imagine, what does that mean to unlocking the future is? As soon as that collection or a good is designed, and you decide where you want to place it, we would already have had so much data of the historical performance of those similar products in a particular facility that the system will be able to autonomously recommend what are those types of quality checks that you need to do in order to ensure that you have a good quality product?
David Klein: 44:20 And as more and more data continues to get through, that risk gets dynamically adjusted, and therefore your level of oversight also gets dynamically adjusted. So instead of being in this situation of how traditionally you're policing everything and having a one size fits all of a oversight program, you're just having a management that's done through exceptions.
Alexander Skjong: 44:45 How long does it take the program to digest all the data that's coming into it and start making those kind of risk suggestions, and start offering feedback that'll allow companies to make those changes in the quality production line?
David Klein: 44:59 Yeah. So, if we have companies that have very good standardized data already, we can basically already start training our algorithms, so by the time that they can onboard it to Inspectorio, we can already provide those insights. For companies that have not, then there's a certain level of a minimum amount of data that will be required. And depending on how quickly they onboard their organizations, it could be from a matter of three months to six months. So, part of our fundraising is going to be going to working on these further upstream and downstream activities, but also to continue working on the evolution of our newly released product, which is our Inspectorio Tracking to the point of resolving the problem of companies not knowing where the status of production is. Inspectorio Tracking allows companies to be able to track in real time across the globe, what's the status of every single item of production, and ultimately be able to have them be produced on time, and with the data that we'll be able to capture to also even predict delays.
David Klein: 46:04 And then continue to expand on this mission to be able to allow companies to manage their environmental, social, sustainability, compliance really into the future, right. So a lot of traceability, for instance, is becoming a very key, hot topic and important need. And that's also a very strong focus that we're going to be focusing our funds on is to expand our Rise product offering to a traceability solution that meets the needs of the markets today.
Alexander Skjong: 46:42 Well, David, thank you so much for taking the time to chat today. A fascinating talk. This is kind of the second supply chain-ish talk that we've had on The Podcast and I'm continually blown away about how complicated the things are. The average consumer goes to Target or whatever store, and grabs something off the shelf, and that's kind of where the journey ends in their mind, but it takes a lot of work and a lot of products and a lot of data to get that thing on the shelf. So, thank you so much for bringing some insight into the whole production chain and Inspectorio directly. If people are interested in following along on your upstream journey or if they're interested in getting in contact with the company, where can they find you?
David Klein: 47:23 First of all, thank you, Alex, for this invitation. It's been a huge pleasure. If anybody's interested, please, I welcome you to visit our website,, and you will be prompted with bots and there will be contact us forms. You will definitely not get lost, and you'll be able to know how to reach us. And again, thank you for everyone that's listening. Yes, indeed. Supply chain is a complex place, but that also means there's incredible opportunities for change and for innovation. And we continue to push forward really hard on that mission to make the production of goods more beneficial for people and the planet.
Alexander Skjong: 48:09 Enjoy the rest of the weather in Quito right now. I have to imagine it's slightly better than what we're dealing with in Minnesota.
David Klein: 48:15 As long as there's sun, everything will be all right.
Alexander Skjong: 48:18 That's good. That is a good positive message to end the podcast on. I love it.
New Speaker: 48:18
Alexander Skjong: 48:22 Thank you so much.
David Klein: 48:23 Thank you so much. All the best.

Learn more about Inspectorio. Let’s talk!

Contact Us

Solicitar una demostración