Supply Change episode 5: an interview with Justin Dillon, founder and CEO of FRDM

June 13, 2019 Matt Vermeulen

How many slaves are in your supply chain?

 

Welcome to another edition of supply change. We’re excited to host our first guest, Justin Dillon, the founder and CEO of FRDM. FRDM is a business platform used by Fortune 500 companies to measure and mitigate the risk of forced labor in supply chains.

On how FRDM got started

Years ago, before I even got into activism, I was in the entertainment industry and the music industry, and making a living by writing and performing songs on record labels. I grew up believing that you're supposed to leave the world in a better place than you found it and you're supposed to use whatever you've been given to make the world a better place. I learned about human trafficking and modern-day slavery through newspaper articles and books. And I decided I needed to make a contribution to ending it. I wanted to bring what I was good at—which at the time was music, and eventually film—to the table. I just started walking into this space saying, “how can I be helpful?” So I started going to all of the musicians that I was working with or knew from Moby to Natasha Bedingfield to the Cold War Kids. I asked them to be in a film to help drive awareness. And then I got celebrities like Ashley Judd and Cornel West. We all just got together and created this film that ended up going into theaters.

I thought that was going to be the end of my journey into this, I thought “I'll make a film, I'll get back out. I've been helpful, I did my job.” What ended up happening was the film kind of took off. And it took me with it. I found myself being an accidental spokesperson for this movement. Then more and more opportunities came my way to be helpful, which led to me working with the State Department, the Obama administration, Google, and the United Nations. So that was the journey that led me to enterprise software.

On seeing firsthand the appalling problems in the supply chain  

What I've seen in the last 10 years of working in this space is that you can get the government involved, civil societies involved and media involved in fighting the problem, but the marketplace has probably the best chance to impact change.     And so for me, the journey to building the best software in the world was understanding how to connect the dots for companies by going to the source and understanding what the problems look like. I’ve done raids with police into textile mills, documented child labor in the sparkle mines of India, and documented kids getting rescued on boats in Lake Volta in Ghana.

 

One story in particular that resonates was when I went with an undercover group into some textile mills outside of Delhi. I posed as an American buyer of textiles and walked into these mills that had four or five-year-old children working in them. And then we worked with the police the next day to go and get these kids out of these mills who were working there 16 hours a day and then sleeping underneath the tables.

 

When we can allow children to be in charge of their destiny, they will do amazing things and change the world. People talk about disruption, scale, changing the world, and transparency. If we can connect the world's purchases, and actually start to disrupt the people that would enslave somebody, we can change the world and we can change our businesses at scale.

On building enterprise software that inspires action

I built enterprise software the same way I've built songs, movies, documentaries, and movement campaigns. Everything is built with the same device, which is, we're not the hero. FRDM is just here to give you the tools to be not only heroic, but successful in your business.

The big lie is that people think they can't change the world and do well in business. But we have this hidden power with procurement that allows us to shape the way that the world works, where we can bring our values of freedom, diversity, and sustainability to the marketplace.

 

It's almost like a forgotten tool for companies. FRDM helps them use it to achieve their values in the supply chain. We’re able to bring companies supply chain visibility, so they can tell their suppliers, “this is what we believe. And we want the companies we buy from, to share our same beliefs, and we're bringing the power of our procurement to the deal.” That's the most incentivizing way of creating change that I've ever seen, because everyone from your first tier suppliers to the guy that was controlling that mill has to change.

On the FRDM tool and how it works

It’s a predictive analytics tool that can give you a 360 view of where any kind of risk, whether environmental, social governance, human trafficking, etc. is entering your supply chain, and roughly where it enters. Most companies with their first-tier suppliers have a sense of who they're doing business with, how much they're spending on that supplier, what industry that supplier’s in, the location of that supplier, and also what products or services they sell. And bonus points if they know if it's tied to the US PSC taxonomy. With those five data points, we’re able to build or offer our customers access to a platform that can give them a view of where risk might be entering. There are all kinds of reports that are out there that are just disparate and all over the place. And they're very hard to read and synthesize. It’s hard to know where and if they impact your supply chain. So we do all of that, including anything that we might be seeing in the world. And we give you an easy way to look at all that data to measure your supply chain and see where the heat maps are for risk. You can see which companies or verticals you need to push further, which may just be classic due diligence, any type of audit reports, and anything that you might have on those particular suppliers that allow you to either investigate or push a little bit further to get that information.

On vertical and business hotspots

We call ourselves social tech: we're here to solve both social and financial problems in the world. Our biggest customers are financial services, healthcare, and aerospace — almost all indirect spend. These are companies that need to look at these kinds of challenges that never had a target on their back before because consumers weren't really asking for it. And what we find is some of the greatest impacts happens when you start getting the financial services companies of the world asking their suppliers these questions. But the industries that have the most problems in their supply chain are pharmaceuticals, mining, apparel, and electronics have had challenges for a while. And anything with palm oil, which is in something like 60% of the products you buy in a grocery store. So these are all things that you don't really think about when you're buying either as a business or as an individual. They have these deep back stories that would make every human want to stop them and avoid their products. So that's why we built an enterprise software company: to be able to help companies and help those people.

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About the Author

Matt Vermeulen

Matt Vermeulen writes about B2B commerce for Tradeshift. Whether he's writing about Accounts Payable best practices or debunking AI myths, Matt enjoys making complex topics easy to understand and fun to read.

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