Episode 4 - Understanding supply chains in todays world
This episode features Aaron Alpeter on the Ready.Set.Glo! Podcast 💫
In this episode, we cover a rarely discussed topic: supply chains.
What exactly does supply chain mean and how does it affect you? Why is it so important and why have we heard so much about it?
Well, today Aaron Alpeter is going to share with us everything he knows about supply chains. Aaron comes from a background of studying supply chain as part of his education. Which landed him working for some pretty big companies such as Unilever and Hubble Contacts. He realized there was a hole in the market for smaller companies, such as start-ups to understand supply chain and be able to harness the best materials when it came to manufacturing their own product. So on his own path, Aaron started IZBA. A company that builds supply chains for businesses. Or as he says ' our company builds companies.'
Understanding Supply Chains in Todays World with Aaron Alpeter
Mary Harcourt 0:05 Welcome to Ready Set glow, a podcast where I interview the person behind the brand. We're going to talk about what it took to get started, the lessons learned along the way, and the advice they have for you on your own journey. I'm your host, Mary Harcourt, founder and CEO of Cosmo glow. Today we're meeting with Aaron L. Peter, an entrepreneur who has a background and tons of experience understanding supply chains. His career path has led him to work for some pretty awesome companies, such as mirror Hubble contacts, and Unilever. Aaron realize there's a hole in the market, specifically for new companies and startups that truly needed to understand the Supply Chain system, and be able to harness the best materials and processes when it comes to manufacturing their goods. Seen that market gap, Aaron started his BA, I Z BA, a company that helps companies build their supply chains. Or as he says, our company builds companies holding true to that he's helped build over $2 billion worth of companies. I understand the importance of Aaron's company and its goal speaking from personal experience, having launched Cosmical, during a pandemic, when supply chain shortages existed around every corner, it has been a struggle at times, I experienced this firsthand. And I know what it feels like to wait on a single part or a single component. And at times, it's left my entire production paralyzed until they could resume with that part of the supply chain is but as a much needed answer and a true need in the market between Venters the manufacturing process. And the larger manufacturing companies who've been producing the same product online for decades, who's there to help the inventors, the startups and the new companies that are just getting their production on the way. We're so grateful to have Aaron here with us today, and talk about supply chains, what it means for you, and your business, and products and ideas. Aaron, welcome to the show.
Aaron Alpeter 2:08 My pleasure. Thanks for having me.
Mary Harcourt 2:10 How did you get started in this line of work? First off, I didn't even know studying in school supply chain was a that was a career or something to study. So I learned something new today. But aside from that, how did you pick that?
Aaron Alpeter 2:24 You know, honestly, I didn't know it was a thing either until I started majoring it and knew that I wanted to do business. And so I transferred to Ohio State. And we got into the business school and just kind of asked them what was the most difficult competitive major that they had. And I figured I'll default into that. And if they don't like it, I'll go do something else. And they said there's this thing called supply chain. And I was like, Okay, talk to me, what what is this? And they said it's you know, factories and moving stuff and planning and, and all these sorts of things. And the more and more I learned about it, the more I was hooked.
Mary Harcourt 2:53 I mean Little did you know that that would be the buzzword topic of conversation for the last three years going through a pandemic like you are the IT person?
Aaron Alpeter 3:02 Yeah, it's a bit of it is kind of lucky timing right place, right time. But if you look at supply chain as a discipline, it's over the last 30 years, even it's gone from, hey, just purchasing and someone who spends the money to really being a business partner. today. It's a strategic edge. It's a competitive weapon.
Mary Harcourt 3:21 Absolutely. And we'll get more into what your company does. It's so fascinating. I feel like you really complete a hole in the market that maybe not that many people know about. But I want to put it out there today. So if my listeners ever get to a point where, hey, you're launching a company, you've got the idea, you're prototyping, and now you need to get further they can contact you. It's such an impressive little niche. And I hope you guys go super far with it. Aaron, tell me about the early days, when all of a sudden you decided you want to do this all by yourself, and weren't quite sure how you're going to make it work. What was that? Like? What were the challenges that you faced?
Aaron Alpeter 3:58 It was scary. I'm not I'm not gonna lie. I was lucky enough to live just outside New York City. And so I would go in every day. And I would try to network. I tried to volunteer at accelerators talk to startups and friends that I had to see who I could talk to who I could give free advice to to see who I could pitch my idea to, you know, it was a lot of work. It was It was the summer of it's just 2019 you know, there were some months where I made 300 bucks. And that was kind of tough. Yeah, I would wake up I'd go into the city. And I was so frugal that I would, you know, take the bus into Port Authority. And then I would take a one way subway subway ride down to Soho or something like that. And then I would schedule all my appointments as I walked up back toward Port Authority. So I'd save you know, the dollar 75 Fair coming back. That that's kind of the level of frugality that was in. You know, I used to kind of try to motivate myself a little bit and you know, if I was out talking to people for you No six or seven hours and didn't really feel like it had anything that was going to lead to a client or a project, I would skip lunch for the day. And if if things were going well, if I if I had a good interaction or something I was proud of, and I treat myself to, you know, dollar slice of pizza at Chipotle events feeling greedy. But that that's really what it was, it was kind of this scary thing of, you know, am I going to be able to take care of my family? There were some pretty dark times there were, you know, I remember looking at this and saying, Man, I've been at this for two and a half, three months, I've done some some projects, it's been good. But I'm still haven't quite unlock this, how do I build this? And I remember looking and saying, Well, you know, Home Depot's paying 15 bucks an hour, I could I could do that for a little bit, you know, and maybe work that out. But, you know, kept kept going with it. And just was really lucky to have some transformative contacts and clients that really helped this thing take off?
Mary Harcourt 5:54 Well, I think that's so important. I always think you go through some tough times to kind of understand your own values. And why are you doing this and get really clear with yourself. Because there are easier ways out there are easier ways to make money, there are easier ways to get through life. But if it's something you truly care about, you need to pursue that and going through these tough times. Sometimes you get the grit, and that grit allows you to get to the next level. Because if it's always comfortable, it's always cushiony. Sometimes you don't experience as much growth as taking the rug out from underneath you and going, Oh, wow, yeah, that hurts. I'm okay. So I'm gonna rethink this, here's what I really want. And here's what I'm willing to do for it. And all of a sudden, you look back and go, I actually didn't know I had that in me. But wow, I can do it. And now that I can prove to myself that I can do it. Like, what's the next level? Where do I go from here. And I find that so powerful for people doing their own thing for innovators, for entrepreneurs, for anybody that just like you kind of had to figure out your own route. Now you have this whole company that you're so passionate about. And they have a beautiful story. It's super fulfilling, and you have a niche place in the industry helping these companies go from just an idea to conception to a really scalable house name company, which is huge or house name, I'm trying to say their household name. There we go.
Aaron Alpeter 7:21 Yeah, no, I completely agree with that. You know, it's it's thrilling to see one of my good friends, the founder of bubble, Jesse, you know, once told me that, you know, owning a business or being a founder just means that you're stressed all the time, you're stressed when things don't go well. And you're stressed when things do go well, and I you know, you have to be a founder or a business owner to really appreciate that. But as I've gotten the chance to talk to some amazing people, you know, lots of people are on the Forbes 30, under 30 list, for example. What I found is, is probably the single biggest thing that separates you know, a good founder from a fantastic founder is how much pain they're willing to endure, and how they handle that pain.
Mary Harcourt 8:02 Absolutely. Yeah, it's funny, I saw a hair. As girls, we have long hair, and it falls out on my desk today. And I picked it up and halfway through it was gray. And I thought that must have been exactly the day I started Cosmo glow, and it went right it went white from then on. And you do go through incredible amount of pain and stress. But you also go through an incredible amount of growth, I don't think I would be the person I am today. If I didn't take the routes I were to take. And I say that to encourage other people. If it's something you're thinking about, you have this idea in your head, you have this product that you want to release to the public to consumers to take the leap to do the step because it really does pay off. And you'll be so thankful at the end of that journey. When you look back and go, Hey, I could have been still doing that every single day in my life. And I took a leap and here we are. Yeah, it's not easy. It's terrifying. It's scary there stressful days. And some days you wake up and literally just don't even know the next move. But you do get through it. And I think that's so rewarding is to look back and see this journey or these things that you've built, how many people you've helped, or a company you've built. And here you are, and nobody will do it for you. It is truly a self journey that you can only you can do that. But it is it's a really cool thing.
Aaron Alpeter 9:19 I certainly wouldn't be where I am today without lots of luck and lots of great people who helped me out. I get these questions a lot from people who are in kind of big corporate cushy jobs and just wondering like, do I come out I'm always interested in startups or doing something different or taking this risk. And, you know, I've shared lots of advice about what I would do differently or, you know, what I don't regret or what I would do again, you know, we recognize that probably not everybody is going to retire from izba. Right? Not everybody's going to retire from whatever startup they're working at. But what we are focused on what we try really hard to do is that we want their time with us to be a career accelerant. We want it to be something that you know They look back on and you know whether it was a couple months or a couple years, they say, Wow, I learned a ton. It was it was amazing look at the folks that have have graduated from izba. And they've gone on to found companies, they've gone on to run fast growing CPG companies that you know, are really hot brands. And I'm so proud of that, that that success that, that we were able to be a step in their, their own journey to self discovery in their careers.
Mary Harcourt 10:27 Absolutely, we go through that ourselves. With our company, you get such first hand information. And it is such a learning curve. But you're there firsthand, you're what you say and what you throw into meetings, you get to watch it play out. We're sometimes in such a corporate structure, you your little plugin, it's important, but you're very limited. Where with a startup, sometimes you're a little bit more, hey, let's just see if this works. Okay, that didn't work. Let's try this. That worked. And I think it's really cool to watch people gain these skills and have first hand experience where every day is different. And it's so fast moving and things are happening. And all of a sudden, if they go on to another position, they can always look back and be like, I learned so much from the years that I spent at that company. And you brought up something you brought up luck. I don't know if you saw Elon Musk just posted this. And I thought it was so true, where he posted, working seven days a week, 365 days a year for decades at a time. And people are still calling me lucky. Yes, that is so true. Everyone is so easy to look at you and go, it's just luck. But there are you put the hours and you put the time you put the stress, you put the innovation you put the brain, sometimes you just have to take yourself outside and think how to get over this next hurdle. And at the end of the day, you can surprise yourself and you can build these amazing companies from it. But it's not every day isn't like a day at the pool.
Aaron Alpeter 11:53 There's something I think where the luck comes in is the opportunities that you're given. I think if if I had been born in a different country a different time, you know, I wouldn't be able to do what I'm doing. And I think there's certainly luck in the opportunities that you're given. But, you know, he's right, where it's up to you to make the most of it, you know, very few good things come down to just Here you go, you know, you just there's stories of countless of the people who took the chance, sent the email, talk to somebody and just did everything they could to get it out to get going, you know, to make their their ambition reality.
Mary Harcourt 12:26 Um, what are some of the challenges you faced in switching to working with newer brands and ventures and their business? Is it different? Or is it just on a different scale versus these larger companies that you've worked with?
Aaron Alpeter 12:37 You know, it's really interesting, I spent the first five years of my career at Unilever, and was able to see what was arguably the number one supply chain in the world up close and personal from every different facet. And at the time that I was considering leaving Unilever, I was doing some consulting work for my first startup, which was Hubbell context. And there was about a six month period there, where I was working full time as a manager at Unilever, and consulting and building out Hubble from from the ground up. And it was so interesting, because in a big company, you're you're used to you're very small discipline, you're your niche, right, you have to take care of your corner of the garden. And when I was working on a startup, suddenly all these things started to make sense. And I clicked and I understood, why do we do planning? Why do we, you know, look at all these different aspects of logistics, and warehousing and financials. And so it was really interesting, because I think that the last six months, I was at Unilever, I probably knew the most about kind of how supply chain interacts the rest of the business. And I was so much better because of doing both of these. And so the really interesting thing that I learned about supply chain is that, you know, the foundational principles transfer really well. I don't have to be an expert in beauty care, right, or I don't have to be an expert in beverages in order to come in and know 80% of the issues and the fundamentals that need to go there. And that final 20% is really, really important. But there's so many basic things that if you understand the levers that a business can pull on to, to improve its financial position to grow to, you know, what's going to cause it to fail. Suddenly, you're in the driver's seat, you're able to build something real special.
Mary Harcourt 14:16 I love that. And it's so fascinating. You guys act as a bridge sometimes between helping companies get where they want to go, without knowing exactly how is your specialty to say, Hey, let me hear what you're saying, where you're building your company, here's your things that you're struggling with. These are the things we're experts in, and we can come in and help you guys get to where you want to go. That's what we do, which is awesome. And something that's very needed in this industry.
Aaron Alpeter 14:42 It's one of those things to where they asked me what is supply chain, and I'll tell them that supply chain is where good ideas and ambitions hit reality. Right. It's things that happen in the physical world, and it's a harsh reality. Yeah, suddenly it's it's you get beyond clicks and pixels, and there's some very real stuff that needs to happen move around. Yeah, you know, we really try to help companies look around corners. And you know, the great thing about working with startups is for the most part, they've never, this thing has never been done before. Ready, that they're doing something completely innovative, that that really is first to market, or they themselves are doing something that's very new. And so all these relationships are there. And wow, you know, I can't tell you everything about everything. I feel that, you know, we're very good at putting all of those Indian pieces together. And so you can have a coherent blueprint and thought for how to bring a product to market, how do you scale a company from, you know, $1,000 a month to $10 million a year, there's, there's all sorts of different twists and turns that you need to pay attention to. And we've, we've done it, we've seen it, and so we're able to pass along that experience?
Mary Harcourt 15:46 Well, in your history, you've built over $2 billion worth of companies, which is quite impressive. That's some firsthand experience for sure.
Aaron Alpeter 15:54 Yeah, I've been really lucky to work with some amazing founders and some amazing companies, whether they be, you know, kind bar, Hubble mirror flex company, the list goes on and on of just some great companies that we've gotten to work with, that I've worked with personally and have been able to be a part of their story.
Mary Harcourt 16:13 So the CEO of a kind bar has been on Shark Tank, and I'll bring that up as a very relatable thing. Let's say you go on Shark Tank, you have this idea. It's working, it's live. But it's really not efficient. Is that something that your company handles as far as, hey, I have the idea, I have the dream, I don't quite know how to make it all work, but I want it to, and then the investors come in, put in their kind of two cents, take a chunk of the company and get it up and running. Is that something relatable to how you guys work as your company?
Aaron Alpeter 16:46 Yeah, we work with a number of companies that have been on Shark Tank, and it's fun to hear their behind the scenes experiences, which are pretty cool. But we work with a lot of venture backed companies as well, which is very similar to the Shark Tank esque motif. And, you know, really what it comes down to is, first let's talk about what your ambitions are what you know, what do you want to be, before you're a billion dollar company, you need to be a million dollar company. And so let's talk about what your ambitions are for the next 18 to 24 months, and really start to build what you need, that's going to be fit for purpose. And it's it's all about making sure that you know, you're able to execute on something that's repeatable today, before you become huge, and you know, a good example is his, you know, company like the farmer's dog, where they started out making dog food in their apartment, and they would hand deliver it themselves, and they had handwritten notes. And that's how they started. That's literally where they started. And over time they grow into commercial kitchens and things like that, and eventually graduate into factories, and, and you know, are just this fantastic company today. And they had to go through those steps, they had to build the supply chain, the operation that made sense for them, at that given point in time. Have they decided one day, you know, I've got this idea. And then they went to knock on a factory door. Factory wouldn't listen to that go away, you don't know what you're doing it. And so we really encourage people to think about what are those bite sized chunks that they need right now that helped them grow, and not overextend themselves, but then also look around the corners, because you should be constantly inventing and reinventing your supply chain about every 12 to 18 months.
Mary Harcourt 18:21 Wow. Well, okay, let's go back to farmer's dog. Because that's a brand that I think everyone kind of recognizes, when they were building it in their kitchen making dog food, and they were sourcing everything locally, I would imagine and making handwritten notes, how were you able to help them grow into what they are now, which is I would imagine a household name.
Aaron Alpeter 18:43 Yeah. So you know, I worked with the farmer stock for just a few months and in a pivotal area where they were growing and scaling. And so their team deserves all the credit for kind of getting to where they were, and growing through there. But you know, there's lots of other countries that we can point to where there's a better track record here of, you know, my direct involvement, but the principles are overall the same, where, you know, in my mind, it comes down to having a halfway decent plan. And, you know, we talk a lot about SNMP, sales and operations planning, it basically forecasting and I can guarantee you that your forecast is going to be wrong.
Mary Harcourt 19:18 It always is. But you have to start somewhere you have to have goals and aiming for some sort of forecasts. It's exactly that you have to start somewhere we forecasted for last year, we were crazy off. But also I know and learn the importance of how important that is, even if you have to change it every three days.
Aaron Alpeter 19:37 There's a lot of value in having the team come together and put their assumptions down on paper and say, This is what we think the future is going to look like. And then as you get more information as you look at things you you're able to see wow, we spent more on marketing our CAC was more efficient and you can update that forecast in that view. You know, the story I like to tell us is when we were When I was at Hubbell context, I made I forced the founders and the team to forecast and put a plan together for what we're going to do over the next 18 months for the first three months before we even sold a single unit. And they were sitting there and saying, This is This is dumb. Why are we doing this? Is it just humor me? It's 10 minutes, let's go through it. And what was interesting is, as we started to get closer and closer to launch, we were refining and getting more information, right, our assumptions are a little bit different. And as a result of that, I was able to give an updated forecast to the factory, which was, you know, showing things over 12 to 18 months, they were able to start say, Okay, this is how much you know, last time we need raw materials, etc. And Hubble took off like wildfire. And we, you know, we're adding 10s of 1000s of subscribers beyond what we had initially thought. But because we had laid the foundation to forecast and to update that forecast, we scaled that company, fashion we could have ever imagined, without a single inventory stock out. And it just, you know, just worked, we had 30 days of inventory. It wasn't as if we were sitting on five years of inventory either.
Mary Harcourt 21:03 Well, it's impressive. And we talk about forecasting in our company. It's all the little pieces that form the bigger goal. Because if you just say, hey, how many units a month, can we sell your Forsyth kind of stocks? How many can we sell this year? Next year? What countries do we want to be in? What markets can we be in and then backtrack to how do we get there, it's, I think we can do this many on that platform per month, I think we can do this many on that platform, I think if we added this different sales market, we could do this. And all of a sudden you understand and see the whole clear picture to go back to your manufacturers and to go back to your supply chain, and say, hey, at this point in time, I need this amount of units. However, in the next year, I'm gonna meet me this amount of units. And for us, it worked out really well to kind of lock in the partnership and to lock in better products and to lock in, we can send communications back going, Hey, this worked, this didn't work, can we make sure that we get more of that product and just x Now on the other, because they know that long term, our goal for this company was so much more than what we're doing at that particular time. I think that's so helpful with the forecasting and to is understanding how to leverage that with your manufacturer, or with your suppliers or with your distributors into saying, I know we're here. Now, here's where we plan on being and they can see the whole picture and go you're worth the investment. Absolutely.
Aaron Alpeter 22:24 Your partners want to partner with you. Right, your factories want, you know, they don't want to look for new customers, they want to grow organically, they want to, you know, be with you and be a part of that, that success. And we've had lots of good examples of working with companies where we're able to adequately forecast and tell the story of what the brand could be. Without, you know, of course, being honest, and not just saying that, you know, it's going to be hockey stick growth, but just being very open and transparent with them. And as a result, the factory says, Okay, we get this, we will take on the risk to hold more raw materials, or we will give you better payment terms so that we can fund your growth with our balance sheet. And when you start to take these companies that, you know, we're doing $10,000 a month, and you start to celebrate when they're doing millions of dollars a month, that's just a really cool feeling to be around companies that that have that kind of trajectory. And when when your supply chain goes from being a millstone around your neck to the strategic weapon that allows you to outmaneuver competitors. And to bring those ambitions to reality, it's a really special thing, I always like to joke around with the marketing guys and say, Look, you know, we have to do this dance, I want you to break the supply chain with growth. And I'm going to I'm going to keep it from breaking. And it's just it's fun to watch that play out over and over again.
Mary Harcourt 23:42 Absolutely. And someday your company does shoe, which I find very interesting. It's you lay the foundation for helping source all of these things, we will also entertain a company by working there to getting them to be a more efficient company a more efficiently ran by looking at how they're spending all of their energy. And if you can offer better sources, better solutions, and maybe just a better overall run of the company, which is so important to run your company more effectively. And I think that's something that you guys do as well.
Aaron Alpeter 24:14 Yeah, so is a is a outsourcing consulting and technology company. We focus on supply chain and kind of anything that touches supply chain. But we don't know everything about everything, right, we are happy to refer to experts in the areas when we can find them. We're very selective about the types of companies that we work with, because we want to be with them for a long time. We want to be part of that growth. We want to have those great stories that we can build together. And so typically, the way it'll work with a company is we'll start out with a project and it's usually our request is to say, hey, let's let's really scope this down and, and do one thing really well. We we want to make sure that it's a good partnership that we enjoy working together and that you know, it's working for both sides. And then from there more often, it'll flip into retainer where they need either outsourced operations and, you know, we've we've hired folks from freight forwarding backgrounds or from transportation backgrounds who can manage that transportation for them, we have planning experts, we have manufacturing experts, who can help run the day to day of that of that operation, while providing fractional kind of CIO leadership. And as we go through the lifecycle of the client, eventually, they're going to need some full time focus, you know, you may not need a CEO full time, but you do need an analyst or you need someone, Junior, who can look after things. And so we will work with that client to identify, find source recruit someone onto that team, we will manage that full time employee. And then when they get big enough, we'll train up that person or hire, you know, kind of a VP of ops, and they will report to that person. And so we've got a really good track record of hiring below us and above us on a full time basis. And then, you know, our goal is to leave companies in the strongest possible way, you know, that we can, and when, when the the relationship has turned its course, we want to leave behind a very, very strong internal supply chain team with that client.
Mary Harcourt 26:07 I mean, that's such a strong focus, I think that's beautiful. It has to be a very fulfilling position to watch these companies come in some kind, sometimes probably in just a little bit shattered pieces, and put them all back together, and then stand back and go, Wow, I had a hand in helping them grow. And now they're on a great trajectory, and they're going to blow this place up, it's going to be amazing.
Aaron Alpeter 26:29 Yeah, I mean, I get a lot of satisfaction from talking with the brands that we work with either informally advising and giving them some advice, and they kind of take it from there, or people that we've directly managed and help scale, you know, I get a lot of personal satisfaction with with Mir, I, you know, join them, like two or three months after launch is about three years ago, this week, actually, at that point, we were happy to make a few 100 units a week, new systems, new processes, all sorts of things and to see where it is to see have grown. And, you know, to the point where, you know, Lululemon acquire them for $500 million, and then they've grown since then. Yeah, it's been at this amazing thing of taking a company that was this little engine that could that grew and exploded with growth kind of right place, right time, we had to rebuild that supply chain about four or five times because of just the growth and you know, being able to leverage the right processes and saving tons of money just with, with all sorts of things that we were doing in collaboration with that team,
Mary Harcourt 27:30 which goes back to the efficiency I was talking about, I know firsthand what it's like to find it a company that will work with you on a very small budget, and then outgrow that budget and kind of need to rework things. So you guys are very well placed in the market? Where do you see your company growing? And you have a second company as well? Correct?
Aaron Alpeter 27:50 Yeah, companies is capable, and I'll get to that in a minute. But, you know, for izba, we really want to be kind of the undisputed thought leader in supply chain for startups, we are working very hard to make sure that the clients that we to take on and again, we're very selective about who we work with, but we want to make sure that it's a positive interaction for everybody that people look back at to say, Wow, this was really well worth that relationship. And, and even when we've moved on from there, we want to be still in the loop. We want to be there to answer any questions. And, you know, we usually tell you, I usually tell the team that, you know, when a retainer goes to zero, meaning that they've paused the retainer, they've paused to the heaven, and they're still a client, you know, we still care about them, we cheer them on. We want we wish them success. And so you know, this the sorts of things that we really focus on with this book.
Mary Harcourt 28:42 And I would imagine when they pause the retainer, you guys have completed your job, you did this thing that you both signed on to do as far as making them a cleaner running a more effective and growing company that now they understand how to run by themselves. I mean, it has to be a really sad and rewarding thing all the same time to kind of be like, Yeah, we don't need you anymore. But thank you.
Aaron Alpeter 29:06 Yeah, definitely, certainly mixed emotions there. But you know, by and large, it's, it's something where, usually it doesn't go to zero, it scales up or scales down, because we are flexible month, a month, right. And so we have scenarios where we need to increase it quite a bit because we're in Build mode, or we are in rebuild mode. And there's others where we kind of are stepping back into advisory mode. But we just we just love these companies. We love these founders, and we're just so grateful to be a part of them.
Mary Harcourt 29:33 And how long have you been around as a company?
Aaron Alpeter 29:36 Technically, I started about five years ago, I went full time with it in 2019.
Mary Harcourt 29:42 Okay, and what was the moment you were working for all these well known companies, you just decided, hey, I want to wake up one day and do my own thing. And that starts tomorrow, or how did that story play out?
Aaron Alpeter 29:53 Yeah, it was. It's really interesting. There was a lot of personal growth that went on for the first couple years after I I left Unilever, you know, when you're in a corporate CPG environment, you're kind of used to, to say no all the time. And so I had to learn how to say yes, getting into a venture environment is different, just the incentives and, and kind of how things work, or, you know, are different, I think one of the things that was surprising is going from a big company to a small company, you know, there's, there's a certain level of predictability in a big company. And then when you go to a small company, that predictability goes out the window, not just is my job going to be around, and you know, three years from now, but just, you know, you wake up thinking you go left, and by lunch, you're, you're going right, and you're doing, you know, everything different that way. But for me, I had gone through a couple of companies, a couple of startups, and was at a company that was doing okay, but just wasn't a great fit for me personally, and, and we've kind of talked about transitioning off at some point. And I wanted to stick around for the series A to close before I left, cuz I figured if I left before the series A that probably wouldn't be good news for the company. And they had similar thoughts where we closed on Friday, and on Monday, they encouraged me to go find other opportunities. And so it was a little bit of a Oh, wow. Yeah, I mean, it was a little bit of a shock, but best for both sides. But you know, here I am mortgage payment with with a young kid at home, and kind of like, oh, well, a difficult experience, I don't want to rush into another one. And it was it was kind of one of those elements that you hear the story about Cortes burning his boats, you know, once he, he reaches the shores, it kind of felt like that moment where I had been toying around with this idea of supply chain as a service or trying to build a consulting firm or practice, I didn't really know what it was. But here I had, I had my my boat burning moment where it was okay, you know, here's what we're gonna do. I'm lucky enough to just have a fantastic spouse, my wife was super supportive. And you know, I always remember, when this is all going down, she said, Look, you know, I didn't marry you for a title, I didn't marry you for a bank account or salary. I married you for you. And I think you can do this, she encouraged me to go try and I spent a lot of time those those first couple months trying to, to build something I need to figure out if it was going to be a bad idea and, and it fail quickly. Or if I could get through it, it would be a success.
Mary Harcourt 32:14 And look, I even now it's interesting. We come from more of a beauty and beauty background. And with us, you always I feel you work for somebody or right out of school, you know, I'm going to be an entrepreneur from the day one I start my own business, I'm gonna rent out so rent solace lawn, or salon Republic, and I'm going to be my own boss, or your don't you work for somebody, and somehow that bridge not necessarily gets burned, but breaks down. And so many of us kind of had the door shut behind us and said, Well, I can go work for someone else. Or I can try it for myself. And let's just see how it happened. We didn't dream of this, I'm, I'm the one to say this, I didn't dream of being my own boss. I never thought I could have my own company. I always did amazing for other people. And then one day, it's like, well, that option now expired, I can go do the same thing I'm always done. Or I could take a risk and see what's out there. If I try it for myself. And it's the most beautiful journey. It's not easy. But it is the most beautiful journey of self discovery of entrepreneurship to see what is out there. And I feel like once you get the confidence, you're unstoppable. So congratulations for getting out there and your own company. And you have a second company.
Aaron Alpeter 33:26 Yeah, so capable, we actually just launched it. So you heard it here first. But it's it's kind of an outcrop of of the consulting experience. And what what capable is is a SASS platform that helps bring transparency and clarity to fulfillment relationships for their for the brands and fulfillment centers. As a consultancy, we solve the same problems over and over again. And we found that fulfillment centers and fulfillment center relationships, there's always just a lot of tension in that in that relationship, for whatever reason, because the fulfillment centers are the last step before your client, right, they're the last line of defense before your customer. And so how things go out the fact that they're oriented correctly, that they look good, that you know, it's the correct product, that all is really important, you sign this fulfillment center contract, and there's these SLAs about shipping on time and accuracy and those sorts of things. And everybody agrees to it, we agree that we're going to ship 99% of orders that You know, are received by 2pm. Local ship same day. That's that's pretty standard. And it's very, very difficult to to actually measure that to look at that. And so kind of the origin story here was I was working with a flex company, they had a thought center that was really struggling. The CEO said hey, I need you to come in and just try to help figure out what's going on we think we have to delete we don't think we can solve this relationship. And so I said well, first thing we need to do to figure out where we are Are we shipping on time are we not? And so I am relatively get from Excel and so got him Shopify downloaded a whole mess of information and built a scorecard to say okay, well when did this order come in? When Should it have shipped and did it ship yes or no? And you start building all these complexities And what was really interesting was, you know, a week or two of building this thing. I then showed us the fulfillment center, the first thing they said, when the numbers were bigger said, Oh, your numbers are wrong. This isn't right. This is This is no good, right? We had this fight about the accuracy of the data. And he said, then we went back and forth said, No, I think he's right, like, give me your data. Let's take a look at it. And then we thought about the methodology. And so well, your methodology must be wrong. And then we vetted that out and said, Nope, it's accurate. And then this magical thing happened is they recognized that they were not performing at the level that they were comfortable with, that they were proud of. And so once we got past this idea that the math was correct, and that the methodology was correct. I started publishing a scorecard every day. And the interesting thing is that this particular fulfillment center went from 60 70%, on time fulfillment, to 99% fulfillment in just a matter of months. And they have been at 99% fulfillment for years. And it's one of the strongest wishes they have. So that was really the experience. And we, I saw this insight said, Wow, this scorecard should be easier to deal. And so we built capable. And really, all you need is your Shopify login, a credit card and fulfillment contract. And within 15 minutes, you can be up and running, and have an automated scorecard sent to your your email every morning. So you can see how you did previously. And there's a dashboard to to look to see which orders should have shipped that didn't ship, I think the really beautiful thing here is, is we vetted out a methodology across, you know, dozens of industries and hundreds of companies. We've vetted out the math, and so we could be that neutral third party between the fulfillment center and the brand to say, here's the score. We're not here to tell you if 85% is good or not, we're just here to tell you it's 85%.
Mary Harcourt 36:38 It's transparency. Exactly. That's very fascinating. I feel like that's something we could use. Oh, let me pick your brains. I'm just a purely opinion thing. So obviously, we've all been through the COVID situation, it's been going on for way longer than any of us thought possible. Do you feel like there has obviously been changes, and shortages and overflows and just all kinds of things happening with supply chains? Do you feel like any of those are here to stay, or they're eventually going to work themselves out and be back to exactly how things were running before, or there'll be some permanent changes coming out of this last couple of years of change,
Aaron Alpeter 37:18 the world has fundamentally changed. And so you know, there are some things that will go back to relatively normal. The other things that are very different. I think the interesting thing about COVID is that it accelerated our digital adoption by 10 years in the span of two years. And so you look at just the adoption of zoom, right, a Google Hangouts, that was a little bit kind of different beforehand. And in 2018. Now, it's here to stay like this is video conferencing is there, you look about all this stuff around virtual learning around, maybe not needing to travel as much around, everything needs to be connected to the internet now, and there are some very big fundamental shifts that have happened. From marketplace perspective, we should look to see what's going to continue, I mean, connected fitness exploded because the pandemic, and it's going to continue to be a big part of our post COVID world, whenever that's going to be now there are some things like like shipping, which is it's a good one, shipping containers, you know, used to be $4,000, to container from, you know, China to LA. And now they're, you know, they've been as high as 20 or 25,000 per container, that's going to come down somewhat. I don't think 25,000 is here to stay. But I also don't think we're going to be back to 4000. And so we're going to find a new equilibrium. And depending on how high transportation costs remain, there'll be some more back and forth about well, does it make sense to produce in Asia? Or should I be looking at producing in North America so things are going to shift around and then we will get things sorted out?
Mary Harcourt 38:45 That was gonna be my very next question is Do you think any of this struggle in the last couple years will lead more people to manufacture in the USA we produce in the USA, and at first it was a it was a really hard kind of run? And then we got it all figured out. And now we look at it and go, Oh my god, I'm so thankful we got on board with USA manufacturing, considering what's happening all across the world, the globe, the imports, the exports, the cost related and just the shipping times what we make on a Thursday afternoon get shipped out on a Thursday afternoon and it's to our our customers house or door delivery in three days later. I mean, it's awesome. But it came at a cost as well. It is more when we were looking at was more expensive to manufacture in the USA. But I wonder if there's more people that will now explore that versus Asia was always the go to you manufacture in Asia. That's what you do. We're now you kind of do a double take and go Well, let me see what is it like to manufacture in the USA versus manufacturing in Asia?
Aaron Alpeter 39:46 Yeah, Asia is still fantastic produce some things. I think the the interesting thing is that even before COVID, China in particular was was losing some competitiveness that labor rates were growing pretty competitively, or pretty aggressively. That was already He's starting to happen. But then you start adding in higher transportation costs, tariffs, delays with with ports and things like that. And some of the calculus is a little bit different. What we encourage companies to do think about is just what's your total landed cost? What's your total landed experience, producing in North America makes a ton of sense. If being reactive, holding less inventory is important to you, right? If you have something on the water for 30 or 45 days, you need to hold at least that much inventory to buffer for anything that could go sideways. To your point, if if you don't really have to hold any inventory, and you're able to do a make to order sort of environment, you can be a much more efficient company, from a cash perspective, even if the margin may be a little bit lower.
Mary Harcourt 40:40 Oh, absolutely. And with technology, there's so much more automation coming online. I've heard of these, what they called lights out facility where they don't even leave the lights on because they're so fully automatic, and they're huge. I think diamond sugar is one of them. Diamond sugars has something like seven employees that run I'm sure it's not a huge company, but the one manufacturing that they have in Florida, because they can leave and turn out the lights and the thing runs 24 hours a day. And at that point, it is cheaper for them to manufacture in the USA versus importing it because of all these different costs. And they've been doing that for years. So it's interesting to see the turn of events and wonder how many other companies are going to jump on board with just upping the technology automation. And what will come of that?
Aaron Alpeter 41:27 Yeah, I mean, that's a that's a great example. You look at at a company like that. And they're doing something in a massive scale. And so automation makes sense. If I was just starting out, that's not where I would start, right. And so I think it's important to recognize, too, that the global supply chain that we have today that effectively broke during COVID was intentional, like we built this as a as a global society, we mandated that we wanted to have low barriers to entry from a trade perspective, low tariffs. And so with with free trade, we are encouraging bigger companies to specialize in things, and to produce things wherever they're cheapest, and to kind of reset all those sorts of things. And so there's a reason that cell phones by large are made in Southeast Asia. That's because the big factories are there. And then all the suppliers are there as well. And so if you're looking at moving the assembly to the US, for example, that may help you somewhat, but your suppliers are still in Asia. So it's very difficult to pick up and move everything. And so I think that, you know, manufacturing is going to come back into North America. And I'm specific about North America versus the US because I think next Akos moment in the sun is coming. But I think that we will continue to see more and more manufacturing and production happening in North America. But it's going to be different, it is going to be this automation, where it makes sense. And is going to be you know, companies that are looking to reduce their inventories, and introduce those sorts of costs. And so we'll see where the global supply chains shakes out as far as tariffs and, and in transportation costs. But those are the two big factors that determine whether or not we go back to 2018. Or if we see more nearshoring.
Mary Harcourt 43:10 I love it. So tell me, what is your perfect client Sony's listening today and going maybe you could help me, I think I'm there. What is your typical client that you work with your customer database, somebody that locks into you guys, and goes, here's exactly what I need? Who are they?
Aaron Alpeter 43:28 Yeah, so we're pretty industry agnostic. We've got experience in beauty, apparel, consumer electronics, medical devices, food and beverage, CBD, I mean, we kind of run the gamut there. And so, you know, ultimately, it comes down to fit, we, you know, are not a inexpensive service. So I think funding is probably an important thing, whether they're, they're pre revenue, or they've launched somewhat, but really, what we want to be able to do is to have a relationship where we can grow and invest in this thing together. And it's not necessarily about who can pay the most money for us to go do something, it's really about understanding that, you know, supply chain can take time, right, it can take time to move a factory from Asia to North America can take time to move fulfillment centers. But those long term benefits come from short term vigilance, I typically say it's a it's a company that is close to their series, a if they're going to venture out that, you know, has a product that's already designed and is looking to scale it we help with finding manufacturers and you know, managing those relationships, those contracts. You know, we work with omni channel clients. And so if you are shipping DTC or Amazon or retail, those are areas that we play well, and, you know, we really are looking to build those great companies that tomorrow, those companies that are going to grow very, very quickly. And so where it's the best value to to the clients is somebody who's is well funded and has a very aggressive growth. Planning can't afford to invest in marketing and we can start that dance I talked about where the marketing team tries to break the supply chain with with growth and we don't let it happen.
Mary Harcourt 45:09 I love that. Awesome. And then where can they go find you?
Aaron Alpeter 45:13 Is by.co So www.imtcva.co is where you can find information about us my emails, email@example.com and capable is CA p AB l.co.
Mary Harcourt 45:26 Awesome. Well, Aaron, thank you so much for your time. I love picking your brain supply chain is such a fascinating thing to me. I didn't know you could study it in school. Now I did. And you guys seem like you're at a very important niche area to help people bridge just kind of their ideas, making them a reality and then running these companies to be more efficient. And thank you so much for your time tonight. I really appreciate you being a guest with us.
Aaron Alpeter 45:51 No, my pleasure. It's a lot of fun.
Mary Harcourt 45:54 If you need help with your products, business and supply chain structure, you can find Aaron on his websites izba icba.co and capable.co. Ca P a b l.co. It's been a pleasure having you on the show. Thank you so much for your time today. This wraps us up for our today's episode. You can always find more information about our guests on Mary harcourt.com under the episodes tab, and you can always find me at Mary Harcourt underscore on Instagram and the cosmic blue light. I hope that you enjoyed tonight's episode and many more to come
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