Production — Developing an efficient supply chain

At Springwise we have interviewed a wide variety of entrepreneurs over the years, each with their own logistical hurdles to overcome when taking the first steps in their new business ventures. Here, we want to share some of their key learnings with you.

This is the first of five articles written by Springwise and brought to you by UPS. At Springwise we have interviewed a wide variety of entrepreneurs over the years, each with their own logistical hurdles to overcome when taking the first steps in their new business ventures. Time and again the issue of how to achieve an effective distribution work flow comes up – whether it involves getting stock out of the warehouse and on to peoples’ doormats, or delegating work outside of the organisation in the production process. Here, we want to share some of their key learnings with you. No matter the type of business, the common consensus seems to be that by keeping as much of the supply chain as possible in-house, a business can minimize complications and delays. Founder of music platform Pikup, Daniel Noonan, learnt early on in his entrepreneurial career that it was best not to rely on freelancers. ‘I know many people use freelancers a lot but I’m not sure I will ever again. Time is very important at the start of a business and the freelancers I used missed deadlines on a number of occasions. If you are deciding between using freelancers or learning how to do it yourself then do it yourself. You will learn something new and it will probably be quicker than the time the freelancers would have taken.’ Of course, Daniel’s negative experience isn’t necessarily applicable across the board and many entrepreneurs rely heavily on freelancers to deliver particular skilled aspects of their work. However, it is worth business owners bearing in mind the timescale they wish to work to when factoring in the work of freelancers. Allowing some leeway for delays might be a good idea to avoid working under pressure when coming to the end of the production or distribution process. Efficiency in the distribution process can rely heavily on the type of business in question. Philip Wilkinson, founder of coffee mail subscription service Kopi, was keen to keep the majority of his business’ logistics online in order to minimize paperwork and unnecessary time delays. He looked at a number of more traditional industries and tried to learn from their weaker areas – specifically the slow transportation of physical stock. He said: ‘When you start speaking to box manufacturers, injection moulding companies, publishing houses, and commodity brokers – you realize how far the digital sector has really come in terms of speed and innovation.’ Philip also shared an anecdote from the early days of Kopi, to demonstrate how important it can be to have an effective distribution process in place: ‘In the first month, we hadn’t got our head around how the post office system worked for businesses (believe me it’s a minefield) and I had to go down to the post office, weigh one of the boxes, and ask for 300 custom stamps to be printed. The owner very kindly agreed but I had to come back in four hours while he fed each one through the stamping machine individually.’ While there are many advantages to a DIY attitude, if an entrepreneur decides to keep as much of the production process as possible under their premises’ one roof then space can become an issue. This is when business minds can get creative, and one particular founder we came across has recognized and confronted this problem. Nicolas Leschke, the founder of Efficient City Farming, which offers rooftop farms to individuals and businesses, said: ‘Considering that by 2050 over nine billion people will live on this planet and most of them in cities, transportation routes will increase tremendously and so will all the negative side effects like increased CO2 emissions. We have to start looking creatively at the space available and that is why we choose to set up farms on rooftops.’ Production and distribution aren’t the most exciting aspects to consider when setting up a new business, but they can prove crucial in determining a startup’s success or failure. Men’s outfitting mail subscription service, Trunk Club, provides a good example of how effective a good distribution network can prove to be. The company was originally floundering, with a strong business model but no practical plan for implementation. It was only after a new CEO took over, Rob Chesney, who had experience in overseeing the successful growth of eBay Motors from a small operation into a global business that they worked out their distribution process and saw their profits increase markedly. Working out a clear and efficient supply chain from the outset can save delays and anxiety further down the line, freeing up time for focusing on the more creative and fun aspects of the business. A key lesson to learn at an early stage.