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Characteristics of Successful Startup Operations

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Characteristics of Successful Startup Operations covers five areas to ensure your operation is able to scale with the growth of your organization.

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Characteristics of Successful Startup Operations

  1. 1. Breaking Bad RV
  2. 2. Initial Startup Characteristics COST CENTER FOCUSED JOB SHOP OVER THE WALL CARE TAKERS GETS THE JOB DONE!
  3. 3. A Reliable Operation PLANNING RELIABLE EXECUTION PARTNERSHIP
  4. 4. Strategic Advantage COMPETITIVE ADVANTAGE LEADING EDGE CONCEPTS R&D / TRIAL AND ERROR
  5. 5. OPS Progression
  6. 6. Gus Fring – Owner “Los Pollos Hermanos” Oh.. And most prominent Meth Distributor In the Southwest. What Would Gus Do?
  7. 7. What’s at risk? • Canceled Orders • Shipping Partial Orders • Unreliable, Disappointing Service • Lost Sales • Culture Disconnect What happens if you stay in the “Support” quadrant?
  8. 8. EXAMPLES OF UNSUCCESSFUL OPERATIONS WHAT DOESN’T WORK
  9. 9. Canceled Orders “Company A” • Pure online retailer • Women’s Apparel • Over $80M annual sales Canceled Over $100K Orders each Month
  10. 10. Partial Orders “Company B” • Pure online retailer • Over $60M annual sales Cancels Over $15K each week shipping partial orders Inventory needed for an order.
  11. 11. Disappointing Service “Company C” • Pure online retailer • Over $130M annual sales • “Fortune” Most Creative Company Still struggles to get it right!
  12. 12. Lost Sales “Company D” • Pure online retailer • Over $40M annual sales • Manufactures 90% of inventory Lost $18K daily due to non- saleable inventory.
  13. 13. Culture Disconnect We’re People, Not Robots! • Office personnel get’s uncomfortable when FC associates are present • “We have a great culture, but the FC needs to work on it”. • Weekly Strategic Meetings – Is FC Leadership Present?
  14. 14. WHAT IS A FULFILLMENT CENTER? UNDERSTAND WHY YOU’RE DIFFERENT
  15. 15. Warehouse
  16. 16. Distribution Center
  17. 17. Fulfillment Center
  18. 18. CHARACTERISTICS OF SUCCESSFUL STARTUP OPERATIONS WHAT WORKS!
  19. 19. 5. Culture Characteristics of Successful Startups
  20. 20. 5. Culture Is this your Office Chair? Then let’s not make it theirs. A lot can be accomplished with 8.5’’ X 11’’ paper and scotch tape. When safety and quality are at risk, SPEND THE EXTRA $$ Here are the “Essentials”..
  21. 21. 5. Culture Not happy with the culture in the FC? No worries.. You can fix it! • It starts with you! • Make sure other business units get “clearance” from the FC. • Build an Employee Brand • Is there a seat at the table for the FC? • Everyone “picks” • Spend a week of training in the FC. • Listen and Invest! • One on One Meetings • Skip Meetings • Discipline – Address Process Issues First • What’s your internal service SLA?
  22. 22. 5. Culture Leadership Support runs down hill. Everyone feels it! • Let leaders do their job. • Find someone you can trust. It’s the best thing for everyone. • Evaluate the Org Chart every quarter • Make changes to prepare for • Meetings
  23. 23. Inventory Control Manager – Cycle Count, Damage Standards, Process Audits Business Analyst – Data Collection, Reporting, Budgeting Facilities Manager/Technician – Electrical, Network, OSHA, PM, Non-Inventory Systems/IT Manager – Network, Desktop Support, Systems 5. Culture STARTUP KEY HIRES
  24. 24. OPS Progression
  25. 25. 4. Reporting – FC KPIs 5. Culture Characteristics of Successful Startups
  26. 26. 4. Reporting – FC KPIs
  27. 27. 4. Reporting – FC KPIs
  28. 28. 4. Reporting – FC KPIs
  29. 29. 4. Reporting – FC KPIs No Systems, No Problem! • Track All Paid Hours • Track By Process • Track Support Separately • Measure Direct Rates • Measure Dept. Rates • This is the foundation! • Staffing Plan • Process Improvement • Capacity Planning • Budgeting Comprehensive KPI List @ www.risefulfillment.com
  30. 30. 4. Reporting – FC KPIs
  31. 31. 3. Packaging 4. Reporting – FC KPIs 5. Culture Characteristics of Successful Startups
  32. 32. 3. Packaging Over 80% of startups use FREE packaging supplied by the carriers when appropriate. Why wouldn’t you use Free Packaging? 1. Specialty Items 2. Hard good items 3. Brand awareness 4. Customer Experience
  33. 33. 3. Packaging When purchasing from a distributor or manufacturer: 1. Don’t assume a manufacturer is cheaper. 2. Ask for warehousing. 3. Pay as you receive the product. 4. When designing custom packaging, make sure you fully understand the process. a. Printing inside vs. out b. Minor flap printing c. Multi Color 5. Take advantage of purchasing power from current customers. 6. Look for a partner – Not a pricing war.
  34. 34. 2. Flexible Systems 3. Packaging 4. Reporting – FC KPIs 5. Culture Characteristics of Successful Startups
  35. 35. 2. Flexible Systems Fulfillment Center Systems 1. Warehouse Fulfillment Management System 2. Shipping System/Platform 3. Controls System – Only needed for automated material handling
  36. 36. 2. Flexible Systems Shipping Platform / Systems
  37. 37. 2. Flexible Systems FMS – Fulfillment Management System What’s the right strategy? 1. Keep order fulfillment in house and develop your own FMS. 2. Keep order fulfillment in house and purchase a third party FMS. 3. Outsource order fulfillment all together (using 3PL’s FMS). I prefer “Option 1.” and here are five reasons why:
  38. 38. 2. Flexible Systems Reasons to keep your order fulfillment in house and develop your own FMS (Fulfillment Management System). 1. Flexibility – changes and inv. storage 2. Real Time Inventory 3. Quality 4. Reporting 5. Continuous Order Flow to The FC
  39. 39. 1. Keep order fulfillment in house and purchase a third party FMS. 2. Outsource order fulfillment all together (using 3PL’s FMS). When choosing a 3PL or outside FMS/WMS vendor have a clear understanding of expectations. 3PL PROS • Turnkey solution • Initial Cost • Quick fix • Allows you to focus on growing your business 3PL CONS • Missed learning opportunity • Lose some control of service (internal and external) • Costly exception processing • Potentially “Locked” in to a system 2. Flexible Systems
  40. 40. 1. Correct Storage System 2. Flexible Systems 3. Packaging 4. Reporting – FC KPIs 5. Culture Characteristics of Successful Startups
  41. 41. Rules For Starters: • Don’t sell it if you don’t have it (in a saleable location) • NO RESERVE INVENTORY • Identify the proper storage method • Implement a routine cycle count program to avoid need for physical inventory. Correct Storage Medium
  42. 42. Putaway Reserve Prime Odd Example Odd Locations Problem Solve Canceled Orders Prime Receiving Putaway Replen Picking Pack/ShippReplenReceiving Putaway Picking Pack Ship What Locations Are Saleable? Traditional Distribution Center Process FlowFulfillment Process Flow Correct Storage Medium
  43. 43. Correct Storage Medium – Each Picking
  44. 44. 1. Correct Storage Medium – Case Picking
  45. 45. 1. Correct Storage Medium – Flexible Storage
  46. 46. 1. Correct Storage Medium – Flexible Storage
  47. 47. 1. Correct Storage Medium – Pallet Storage?
  48. 48. 1. Correct Storage Medium – Pallet Storage? 1 2 3 4 5 6
  49. 49. 1. Correct Storage Medium – Bin Sizing
  50. 50. 1. Correct Storage Medium – Bin Sizing
  51. 51. 1. Correct Storage Medium – Bin Sizing
  52. 52. 1. Correct Storage Medium – Footwear
  53. 53. 1. Correct Storage Medium 2. Flexible Systems 3. Packaging 4. Reporting – FC KPIs 5. Culture Characteristics of Successful Startups
  54. 54. Questions?
  55. 55. Things To Remember Technology – “Easy Does It”
  56. 56. "A good plan violently executed right now is far better than a perfect plan executed next week." -- George S. Patton Things To Remember
  57. 57. Thank You!
  58. 58. Anthony Vicars anthony@risefulfillment.com 859-582-9196 T: @risefulfillment www.risefulfillment.com Thank You!

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