There’s No Flop In These Fish-Flops

Madi-18-700x466The understanding of operations management is a vast one, being constantly revisited by companies for ways of improvement and how it can be applied more efficiently to the whole team; but how can a 15-year old encompass this at such a novice level?  I’m speechless!  Through the data inflow of the customer requirements like community reinvestment and proactive volunteer support, she has maintained that consumer engagement so crucial to ensuring longevity of a product line.  She has donated more than 10,000 pairs of her Fish Flops to countless organizations that convinces her customer base that there is more to this startup than profits.  With the aid of her senior leadership team (who consists of strong people like her father and family) she was able to drive this business to the success that it has achieved now.

Through the simplicity and perseverance of Madison showing through, customers are willing to commit to that tradeoff price (a whopping $20 per pair) for the quality of the product (no holes in the sole like traditional flip-flops).  Some things that it continues to do to distinguish itself apart from its competitors is as follows: ability to invest in good materials and design processes (with a lot of help from her ole’ man that has his own t-shirt company), a strong presence in local retailers (welcome to NORDSTOM!), highly satisfied customer base, and of course innovative shoe technology (who can resist light up shoes?).

With a philanthropist idea set for the future of the company, it’s no wonder why this young entrepreneur has engaged such consumer market and future prospects, all part of her incredible strategic plan.  She can still further improve in her business based on what the world of operations management has discovered with a few recommendations.

A closer look at her strategic plan shows that a key function is to ensure that the retail face is keeping up with the quality Fish Flops wants to convey.  This can be done through product and service performance measures and working on a lean/six sigma processing. This is done by choosing suppliers overseas that can handle the cost of manufacturing the sandal, while at the same time keeping quality ensured (like making lights last longer than a week in the shoe!).  Another recommendation would be to include a key metric dashboard if they haven’t already done so; include a type of information system that can incorporate the preferences of her client base and the designs that are in most popular demand so that she can develop a leaner JIT inventory system to cut her costs down.  Also shipping can be improved and updated on her new website to include real time tracking and reports that would provide essential information for customers seeking the latest product line offerings.  She should also work to develop measurement of customer satisfaction to increase that metric.keep-calm-and-wear-fish-flops

Do you think Madison will face rejection soon, or did she find the goldmine of the shoe industry?




Sweet Mandy B’s Sweet Success


Most students at DePaul University have encountered the delicacy of Sweet Mandy B’s at some point during their college education, whether directly or indirectly. There are the die hards (as often as they can get there, they do), the excuse makers (I don’t want to write this paper anyways, so lets go get cupcakes), the “I earned it” girls (who can justify the indulgence since they worked out), the special occasions (birthdays, weddings, the works), and the rest have either simply tried Mandy B’s or heard other students discuss it.

The number of students that Sweet Mandy B’s draws in on a daily basis is astounding; and students are only a portion of their customer base. There are people all over Chicago who are willing to make the trip to Lincoln Park in order to get Mandy B’s. In food and confection related industries, the quality is top priority since that is what consumers are truly after when they go in for a treat. In order to sustain such high quality management and fresh cupcakes, cookies, and specialty foods, just in time inventory is a must. Nobody wants to walk all the way there to spend money on a cookie that is stale or doesn’t satisfy that sweet tooth. Managing the way that baked goods are created, decorated, and stored in order for maximum freshness for the maximum amount of time appears to be something that Sweet Mandy B’s management has mastered, from my experience at least.

Another aspect of operations that is essential to consider in this industry is capacity. When people place orders for cakes, it is typically for a special occasion, in which case they need the cake at a specific time on a specific day. Cake orders and order patterns must be closely analyzed in order to increase staff during busy ordering times such as holidays or time of large events like graduation. Space and oven scheduling is another consideration, for only so many cakes can be baked as there are ovens. Sweet Mandy B’s seems to have this under control as well, for the entire second half of their store is available should they need to utilize that space, yet the don’t waste money keeping it lit or stocked when they are able to limit baking to the main kitchen.

Location strategy is interesting in this case, for Sweet Mandy B’s does not follow the typical “Location is everything” mantra. Rather it makes a product that is too good to resist, and people have no problem travelling from all over the city to pick up their pre-ordered cakes or stop by for a snack. However, their location is, in fact, intelligently placed because many college students do not drive, and the proximity to campus is a major plus. Its convenience also encourages students to stop by when they probably would not have made the trip if they had to actually plan for it and catch a train. With its thriving success, is there anything that could drastically hurt Sweet Mandy B’s sales?


JIT – Just-in-Time or Just-in-Trouble?

The importance of managing risk through the supply chain has become painfully evident as a result of natural disasters which have occurred in recent months and years. Despite the obvious human cost and tragedy that ensued, catastrophes caused by the earthquakes, tsunamis, flooding, factory explosions and volcanic eruptions have all impacted enterprises who source globally, and who have embraced Lean/JIT practices at least to some degree.

The supply chain effects of these catastrophes have lead to a JIT rethink, but it is clear that many companies have failed to put in place back-up plans to cope with emergencies like the Japanese catastrophe. They were content to place all their eggs in one basket like Japan or China owing to low production costs while ignoring the obvious risks of natural disasters. But even where companies had a disaster-recovery plan in place, room for maneuver depends largely on the nature of the industry.

The production philosophy born on the factory floors of Japanese car companies is a global management practice and has saved companies billions of dollars. The idea behind JIT, or lean manufacturing, is to have the supplies a firm needs at the exact moment that they are needed. Most of the companies, with production systems based on just-in-time inventory management, understand keeping minimum inventory has its risks.

The problem for many global corporations is that they are mesmerized by cheap production costs in disaster-prone countries. They know the natural disaster risks but feel that their infrequent occurrences on a major scale justify the risks. Nature is not the only threat to the supply chain; there are also significant political risks to be considered in many politically unstable countries.

The rising production costs in China will favor a shift of production back to countries concerned to have a more secure source of supply unaffected by natural disasters. There are, however, other reasons favoring a production shift back to regions close to their markets, like flexibility to react to market changes more responsively.

There are number of avenues open to risk mitigation strategies to deal with large scale disruptions of supply chains, including:

–        Challenge suppliers to develop disaster plans so that they can make provisions to move to alternate sites for production, in the event that they are unable to produce product at their main plant.

–        Eliminate sole-source suppliers, and developing the capabilities of additional companies. Having one supplier is probably too few, but having five suppliers is too many in terms of achieving economies of scale.

–        Analyze where suppliers are located, and limiting the number of critical component suppliers that are geographically situated in a risky area.

–        Review insurance policies and consider taking-out contingent business interruption insurance that protects against losses relating to the inability of suppliers to deliver.

Experts have been recommending for years that manufacturers diversify their supply base. After all, recent history is full of examples of widespread supply chain disruptions and their consequences for manufacturers reliant on too few sources, such examples are: attacks to WTC and Hurricane Katrina in USA, flooding in Thailand, factory explosions in Germany, volcanic ash from Iceland and earthquake and tsunami in Japan.


Japanese Earthquake-Tsunami Show Flaws In Just-In-Time

Reducing Risk in The Automotive Supply Chain

Japan’s earthquake must force JIT supply changes

Auto companies relook at just-in-time mantra

 Japan One Year Later: What Did Supply Chain Practitioners Learn from the Tsunami?