American Eagle exec works to modernize the supply chain

NEW YORK — From his perch as American Eagle Outfitters’ chief supply chain officer, Shekar Natarajan is taking a page from shared ride service Uber to modernize the supply chain for retailers.

Since Natarajan joined American Eagle almost four years ago, the teen retailer has acquired two supply chain businesses for several hundred million dollars, as Natarajan makes the supply platform shareable with other companies and thus more efficient and sustainable. They form the core of the company’s supply chain platform, which operates independently from the retailer.

Natarajan, whose resume includes stints at PepsiCo, Walmart and Target, believes that small companies can’t compete in logistics with the likes of Amazon and Walmart and should instead pool their resources together. The end game: a model that will take all the packages coming from different distribution centers and then funnel them to a consolidation center with one package delivered to the shopper.

Natarajan’s mission comes as the pandemic has upended the global supply chain, forcing retailers of all types to scramble to unclog goods from all points of the distribution network, while facing spiking transportation costs.

So far, over 100 partners have signed up to use the platform, including 14 retailers like Kohl’s and Steve Madden, six large tech companies and 42 carriers. It will start to consolidate packages by year-end, targeting the nation’s top 25 cities, which face the biggest congestion of packages. Natarajan is also working on a bioplastic collapsible container that consolidates packages from different retailers in different locations to ship to a customer.

Associated Press recently interviewed Natarajan in New York to discuss his model, why it matters and how his personal background shaped his mission. The interview has been edited for clarity and length.

Q. What’s wrong with today’s retail supply network?

A. They’re nonlinear, inflexible and inefficient. We’ve certainly learned over the past two years how little visibility companies have into their end-to-end operations and how much information is siloed. Unfortunately, most supply chain leaders continue to be chained to the legacy infrastructure they inherited when they took on their role. Our opportunity is to help companies unchain their supply chains by evolving to a new, network-based model that’s open, interconnected and more dynamic, so they can respond more quickly and efficiently to changes in the consumer and…