Several e-commerce executives shared their thoughts on what it takes to manage the supply chain at an e-commerce startup during a Fireside Chat at the 2016 Leadership in Supply Chain Management and Procurement Forum in New York on Nov. 16. The chat, titled “Managing and Operating Supply Chain at an E-Commerce Startup,” featured insights from:
Vice President, Operations
Senior Vice President, Supply Chain
Vice President of Manufacturing
Several key supply chain management topics were discussed during the chat, including:
1. Key Challenges Related to Controlling and Scaling Operating Costs
Operating costs can add up quickly, particularly for a startup that lacks extensive time and resources. However, dedicating the necessary time and resources to understand operating costs may empower organizational leaders to minimize business expenses both now and in the future.
To understand operating costs, a systematic approach may deliver long-lasting benefits. Deploying systems that enable organizational leaders to evaluate cost data and identify cost data trends ensures organizational leaders can make more informed decisions to drive their companies forward without having to worry about breaking their budgets.
“In our world, it’s very, very complex. … It’s important to be able to see everything systemically and manage everything systemically in order to scale,” Wendzicki stated. “Systems is really our focus.”
2. Best Practices for Increasing Efficiency and Reducing Costs
For a startup to succeed, optimizing efficiency and controlling costs is paramount. Conversely, determining the right investments may seem impossible at times, especially if a startup fails to identify and address all of the cost data at its disposal.
“We want really smart, nimble people who can adapt to an environment easily.”
Agarwal pointed out her company remains committed to improving its internal processes day after day. She said this approach has enabled her business to streamline its day-to-day operations and bolster its efficiency.
Furthermore, Agarwal stated automation technologies can deliver exceptional value. These technologies may make it easier for a startup to perform various tasks quickly and effortlessly and allow this company to reallocate resources to other areas of its day-to-day operations.
“We have to be really smart about where we make investments,” Agarwal said. “We have to figure out where our business is going to be in five years and … know if that is going to be the right area where we want to invest.”
3. Finding the Right Talent
Discovering and acquiring talent can be difficult, but a startup must consider its mission and goals and find talent that can help it accomplish its short- and long-term aspirations.
No two startups are identical, and the approach one startup takes to attract and retain talent may differ significantly from another’s approach.
For example, Wendzicki noted her organization frequently offers internships to attract Millennials and searches for ways to retain young professionals who can deliver long-lasting support.
“Recruiting people to come to New York is very different from recruiting people to come to Chicago or Pittsburgh. It’s very difficult,” Wendzicki said. “It’s hard to find people who have experience that’s relevant, and it’s almost harder to un-train those people and retrain them than it is to just train them on our [supply chain] systems and processes.”
Comparatively, Agarwal noted her company uses a combination of young and experienced professionals to drive ongoing growth.
4. The Skill Sets Needed to Thrive in a Startup Environment
Flexibility and agility represent two key traits that employees need to thrive in a startup environment.
“We have to figure out where our business is going to be in five years and … know if that is going to be the right area where we want to invest.”
Ultimately, remaining open to new ideas and adapting to changes on the fly could help a worker deliver consistent results in a startup setting.
“We want really smart, nimble people who can adapt to an environment easily,” Agarwal stated. “We look for people who have been in production … and manage a lot of different schedules and a lot of different people.”
5. Training and Education for Supply Chain Partners
Supply chain partners can play an important role in a startup’s success or failure, and finding the right supply chain partners is paramount for a startup in any industry.
Wendzicki said her company often uses vendor portals to connect with supply chain partners and provide training. Also, she stated her business searches for supply chain partners who are flexible and agile and are able to change course at a moment’s notice.
With this approach, FreshDirect has been able to foster long-lasting partnerships with a broad array of supply chain partners, Wendzicki stated.
“We try to pick companies that are agile, have speed and are flexible,” she noted. “Our world changes so much, and we need the flexibility on their side to be able to change also.”
Pooja Agarwal is responsible for logistics, supply chain, subscription operations and web production for Birchbox, a leading beauty & grooming retailer offering a monthly subscription of personalized samples. Prior to Birchbox, Pooja spent 6 years at Gilt.com working on business strategy and creative operations.
Connie has over twenty years of experience managing high change / high growth environments in Management, GM and Director level positions primarily in the consumer products and food service industries for different companies including Fresh Direct, Amazon, Alcoa and International Paper. Connie trains, develops and hires teams that make step change improvements in performance / profitability / systems / capacity as required to support growth while delivering products on-time, on-quality at the lowest delivered cost. Her primary strengths are operations management and supply chain planning. Her secondary strengths are systems implementation & finance. Most of her experience has been in start-ups, turn arounds, expansions or acquisition integrations. She managed three divisions that went live on Oracle and two that went live on SAP.