Managing Supply Chain Expectations for Different Growth Periods

Will Davis (00:06):

Welcome to another episode of Safety Stock, everybody. I’m Will Davis. No more Dan Magida. He is gone. Loved but still gone. And we’ve got a very special episode of Safety Stock today. I am actually joined by a Dan. It’s just not Dan Magida and a Kristen, Dan Sears and Kristen Lee. How are you doing today?

Kristen Lee (00:27):

Doing well.

Dan Sears (00:28):

Fantastic.

Kristen Lee (00:29):

Happy to be here.

Will Davis (00:30):

Nice. Happy to be here and doing well. Now, Kristen, you are a product supply manager at Native and Dan Sears. You are a director of Product Supply, is that correct?

Dan Sears (00:42):

Yes.

Kristen Lee (00:43):

Yep.

Will Davis (00:43):

All right. Now for the people who don’t know what product supply is, kind of what are you doing on a day-to-day basis and you know, what should people know about why people need product supply? Kristen?

Kristen Lee (00:57):

Yeah, so essentially we’re the ones, we get product to our customers, so we kind of oversee the whole supply chain from beginning to end components to getting the product printed. Then working with our sites to get the product manufactured and shipping it out to the different warehouses to support retail and e-commerce.

Will Davis (01:14):

When things are not showing up at any location, are you the people that people come to and say, where’s my stuff?

Kristen Lee (01:26):

Yes, essentially I feel like most issues end up back at us. Any part of the supply chain customer complaint comes back to us, no inventory comes back to us, and then probably quality is the one that’s below us. They get everything. But yeah, I think any issue, usually product supply, we try to find an answer for it.

Dan Sears (01:45):

You almost have to do product supply because you love it. People don’t notice when their products are on the shelf, but they definitely notice when they’re not.

Will Davis (01:53):

So people I think are familiar with the term out of stock when you think out of stock product supply is the one who is combating that and making sure that not only retailers have their things, but it’s also DTC now because DTC is so important.

Dan Sears (02:09):

Yes. That’s all the way through the supply chain, Will. You know, whether it’s, it’s, you know, as Kristen was saying, raw materials, the packages, everything has to come together at one point to be able to enable that to hit the store shelf or our, our DTCs.

Will Davis (02:23):

Got it. Now y’all both work for Native, you know, when people think of Native, they think of deodorant, but not just deodorant. They think of body wash, they think of hair care products, sun care, toothpaste, all different types of things.

(02:38):

And Native has been growing at crazy clips from back when they were first purchased probably Proctor and Gamble from Moiz. And then now where they are today, the brand has some would say exploded and people are always interested in that and understanding why things are going so well. So when you think about growth and you think about what it is to understand those factors for growth for y’all, what do you, what do you think of like for Native, what are some of those factors that you see from a business side that you’re like, man, this is what’s leading to some of our growth?

Kristen Lee (03:16):

One thing is the product itself, it’s a very simple product. I think our packaging really sells itself, so it’s just kind of carried on. We haven’t changed the packaging too much. We keep our ingredients very simple. So I think that’s one thing that’s really been attractive to the customers. And then yeah, Dan, I’m not sure what you see on your side.

Dan Sears (03:35):

I was just gonna add that you know, it’s trust too. It’s, it’s trust and word of mouth. So as we think about, you know, the, the, A brand has grown 10 x in the last four years from a sales perspective, and you know, word of mouth has been a, a huge help for us. But, you know, each time somebody refers us to one of their friends or family members, we have to have a very quality and consistent product.

Will Davis (04:02):

Got it. Now, when you’re witnessing this extreme growth, what are some of those scary things that you’re encountering when things are going so well?

Kristen Lee (04:13):

I think one thing is really understanding the factors of those growth, because you never know if sales are gonna drop. So some things like when you see really high orders from retailers, that’s great, but it can be scary. You never know if the next week it’s gonna drop. So it’s understanding the consumption data behind it and all the data that’s causing that growth and making sure you have that evidence that you indeed are on that trend upward because retail orders, different things can cause spikes in sales. It could just be a blip in the system. So I think really understanding what’s driving that growth. So we are seeing the consumption from the customers that support that growth. So that’s one big thing.

Will Davis (04:52):

And Dan, what about you? Any, you know, anything that you see when you’re seeing the numbers come in that scare you?

Dan Sears (04:58):

Yeah, I, I would say for me the number one thing is, is capacity. You know, as, as we plan for our launches you know, obviously we’ve planned for success, but we’ve had such great success that sometimes it’s almost a champagne problem, so to speak, to where you plan to grow at 50%, but you actually grew at a hundred percent. It’s, it’s very hard to complain about that growth, but at the same time, you have to, you have to manage that growth.

Will Davis (05:26):

Yeah. Now, kind of along those lines, you know, you, you start seeing the signs of a brand doing well, whether that be the actual growth itself in the numbers, you know, advertising going up, it could be related to sales.

(05:43):

 Is there a certain type of expectation management that you have to have within the company where you have to say like, guys, I, I really can support only X amount at this point in time, or we really need to be careful about doing certain things to make sure that you’re not overextending yourselves?

Dan Sears (06:02):

Yeah, I, I would say you know, first and foremost absolutely is the answer. Just because as, as we look at if, if you’re in, if you’re in a couple retailers and you’re looking to expand to three or four more retailers, you have to ensure that you can supply the first three before you take on the next three, for example. And that, that’s always been something that we’ve, we’ve tried to be very careful on. You know, having that, that controlled expansion

Will Davis (06:29):

On that side of things when all right, your business doubles, so like, it doesn’t have to be Native, but this could just be any company, you know, you’re working at a random place and your business doubles. What part of the supply chain or the supply are you protecting first and how are you actually prioritizing, like which places you’re picking?

Dan Sears (06:49):

For us, it’s really for, for retailers we’re, we’re really not allowed to play favorites. So, you know, everybody has to get their fair share on the DTC side you know, it’s more of a give and take as to, you know do we supply somebody on, on the retail side and then we have to do some type of compensation on, on the DTC side because we were out of stock to be able to keep that same customer. That’s the balance we’re trying to strike is trying to keep everybody happy and sometimes it almost involves keeping no one happy to where it’s just fair across the board.

Will Davis (07:28):

You know, you say that you try not to have favorites or you don’t play favorites. And, you know, parents say that to their kids too, that they don’t have favorites <laugh>. But is it one of those situations where you’re actually like, I kind of do have a favorite, but, you know, does somebody ever get a little extra love or is it always like, equal across the board?

Dan Sears (07:48):

So, you know I do have five kids will, and I will say that none of them are my favorite.

Will Davis (07:55):

But you’re saying, you’re saying that now I’m saying to say

Dan Sears (07:58):

I know.

Will Davis (07:59):

But right now the older child’s like, I’m definitely the favorite.

Dan Sears (08:02):

Yeah. And then, and, and the younger one’s yelling at the older ones saying, no, I’m the favorite. Right, exactly. No, I, I would say for us, you know, just, just because of, of the way we’ve grown we’ve had to be fair across the board you know, there’s folks that have much better sales for example. So they’re, you know they’ll get a percentage of their sales, whereas, you know, somebody much smaller will try to give them the same percentage of their sales.

Kristen Lee (08:31):

Yeah. And the relationships are so important. So we get to play a big role in allocating our inventories. And so we do have a play fair playing field. And I mean, I personally, I have three siblings. None of us know who the favorites are, so…

Will Davis (08:45):

No one knows.

Kristen Lee (08:48):

No,

Will Davis (08:49):

Come on.

Kristen Lee (08:50):

Our parents have never, are never told us or we have our guesses, but our parents have never told us. Yeah, exactly. But we, we genuinely don’t know. And I think we, hopefully our customers are the same and our retailer are the same. They might have suspicion, but they hopefully don’t know cause we try and try and play fair.

Dan Sears (09:07):

You’re probably gonna have to edit this part, Will, but Tuesday night, Kristen and I were at dinner and this conversation came up and it was a different answer, so I’ll have to tell you off camera.

Will Davis (09:15):

Oh, ok gotcha.

Kristen Lee (09:16):

That was the one they’ve never specifically told me though, but we have our suspicions.

Will Davis (09:20):

Right. Alright, so what it seems like is there’s not a situation where, you know, over the weekend you went to a retailer and you know, they were out of your favorite product or like you slipped in the milk aisle and you were like, you know, something. They’re not getting their allocation of product that they thought they were getting too much. Now <laugh>, everybody is on the up and up, so that’s a good thing. That’s what I hear. I like it. Alright, because y’all are growing, you have to hire people, you know, obviously you have to be smart about it, but when you do hire people, how do you convey to them the speed that they actually need to operate at?

Kristen Lee (10:02):

I think it’s pretty quickly that I think the sales we have conveyed in itself, each week I’ve been at Native sales have gone up. So that in itself it shows the pace you have to move at, but also Native runs dog years. We say like 10 years in the regular world that just flies by when you’re at Native. So I think it’s, it’s very clear when you join the team automatically you just see the speed everyone else is working at. But also it’s not just careless speed. You have to be agile and make sure you’re making effective, thoughtful decisions because when you’re growing this quick, you can’t make rash decisions or it could bite you in the butt later. So yeah, I think it’s pretty clear when you start, or at least when I started, it was very clear that everyone moves quickly. Everyone works with that speed.

Dan Sears (10:46):

I was going to say leading by example. So for example, when folks come in, you can sense the energy in the room around the team. And that’s partially why we have such a rigorous interview process. I, not to get sidetracked, I would love to speed up our interview process, but the reason we don’t is cause we wanna make sure that those folks are a very good fit from a personality wise, you know, as well as a skillset.

Will Davis (11:16):

Yeah. You know, and it’s interesting that they recently you know, I think there was a Wall Street Journal article that they’re talking about. The hiring process across the board has actually slowed down tremendously. Partly because the labor force is so tight you want to make sure you get it right because if you don’t you’re potentially stuck with this person even more than you might have been beforehand.

(11:40):

And because you’re missing out on somebody else by hiring that person. So that process has gotten longer in addition people are just more focused on it. So now it makes sense. I always used to think hiring was a coin flip. But it’s interesting that y you know, y’all are seeing something similar on your side as well.

(12:01):

So okay, you’re growing like crazy all of a sudden, you know, say you have a large issue and, and the issue is, you know, in a general sense, whether it be a supplier failure is a QA issue, et cetera, and you need to get product out the door, you know, what is your mindset in terms of how you’re handling that while still knowing that you have all these orders you gotta get out?

Kristen Lee (12:29):

I think instinctively or I know from the past I’ve wanted to quickly get through the problem as like as fast as we could because we answer for inventory, we get yelled at when there’s inventory, but at the end of the day, quality comes first and systemic fixes you really need it and, and find those and implement them or you just gonna have history repeat itself. So it’s good to take a breather and take your time with it. And luckily we have a great retail team, so the communication and the message track you give to the customer or the retailer is so important. And with our strong team, most are very understanding. If it’s a quality issue, we can’t rush through that and they can manage that message track to give us the time we need to really find those systemic fixes and make sure the problem doesn’t happen again.

Will Davis (13:12):

Now, Dan, is there instances where a retailer will say, listen, work with me on something, can you gimme a little bit of what you have? Or can you work on me with a plan to make sure certain stores aren’t empty because things are selling like hot cakes?

Dan Sears (13:30):

Yeah, absolutely. And that, that really showed itself during Covid, I think basically the world was in a supply crunch and from our point of view at least what, I think was the most helpful was we basically were just transparent with each retailer and said, Hey, we’re out of a, but we believe, you know, in two to three weeks we’ll be able to get this to you. It won’t be exactly what you want. And I think that really went a long way even after Covid as far as building that trust.

(14:02):

I think your knee-jerk reaction for some folks is to say, I promise I can do it next week or I, you know, or I can have it on a truck. But, you know, there are times where you just have to be brutally honest. It’s just not going to arrive this week or next. It’s maybe two, three weeks out. Gotcha. Now it makes sense.

Will Davis (14:21):

And then last question before the speed round <laugh> what are some of those subtle cues that you kind of see from a business perspective that you can tell? Like if things are increasing, I know you’re not really seeing it as decreasing when you’re starting to launch a new product. Like how do you know like, oh, this is gonna start taking off, this is gonna start doing well outside of just numbers.

Dan Sears (14:45):

I would say social media you know, we’ve, we’ve really been been blessed to have a very loyal social media following and you know, we’ve had some, some big names endorse us or organically.

(15:01):

And that’s been a huge help. So if if somebody comes out and says they absolutely love it and they have, you know, quite a few followers for example, then, then we know it’s not just going to be a short burst in the retailers, we know it’s more than likely going to be sustained.

Will Davis (15:17):

That is true. I can think of a specific individual that I was surprised cause I randomly saw on her feed, I think it was like the Cupcakes by Melissa, like launch and it was like, oh man, that’s gonna be helpful from a sales perspective. I can guarantee it.

Dan Sears (15:35):

No, it’s, there’s a funny story behind that Will was we were in our last two or three weeks of the sale when that that endorsement came out and everybody was so happy except for the retail team or the product supply team. <Laugh>,

Kristen Lee (15:50):

Dan and I were like, oh no. Yeah.

Dan Sears (15:51):

<Laugh>. So we’re, you know, everybody thought, okay, we survived this fantastic sale and then all of a sudden this big name came out and, and endorsed us. And I, I think everybody in product supply smiled and then kind of just hung their heads like, okay, yeah. They’re like, why is your, why is your laughing and crying sound so, so much the same? It’s like, I’m just happy sobbing here. Yes.

Kristen Lee (16:12):

Happy tears.

Will Davis (16:13):

All right, so speed questions. Speed round. All right. The goal is to answer as quick as you can. First thing that comes to your head. On the first ones, if you’re going too slow, I’ll let you know. I’ll be like, Hey, we gotta quicken this thing up. But it is by far turned into the best part of the show. So are you ready now?

Kristen Lee (16:39):

No. Somebody should. We both answers.

Will Davis (16:42):

We’ll let Kristen go first. Ladies go first and then we’ll alternate it back and go from there. All right, here we go. Kristen, what is an underrated part of your job that should get more love?

Kristen Lee (16:56):

Travel? I know Dan says we have to travel and one day I’ll get to that point, but I still think I get to travel.

Will Davis (17:01):

Dan Sears and then Kristen, you after this one, what is your favorite Native scent?

Dan Sears (17:07):

Citrus herbal musk by far.

Will Davis (17:09):

Kristen

Kristen Lee (17:10):

Cashmere and rain.

Will Davis (17:11):

Got it. I’m a sea salt and cedar guy,

Kristen Lee (17:13):

Too Musky with same as citrus. I hear you guys need to do charcoal charcoal’s ny favorite male scent.

Will Davis (17:18):

Oh, there we go. All right. What is an underrated native scent people should buy more of?

Kristen Lee (17:24):

Based off sales. I think our coconut milk and turmeric hair care deserves much more love.

Dan Sears (17:30):

I was actually gonna go Sea Salt and Cedar. It, it is my second favorite and, and we really don’t sell enough of it.

Will Davis (17:37):

You know, I think sweet peach and Nectar, you know, that might be a basic thing because I’m sure it does well, but I really like that scent

Kristen Lee (17:45):

That one’s grown the most since JFM. So I think you’re onto something with that one.

Will Davis (17:49):

I might be a sommelier of the noses. <Laugh>. There’s a, there’s a name for it. I’m just forgetting it. <Laugh>. Alright. What part of supply chain is most complicated?

Dan Sears (18:00):

I would say sales projections that and then close second would be packaging.

Will Davis (18:06):

Oh. near and dear to my heart. As a just from in general, I think it’s fair to say that projecting sales and demand planning historically every company struggles with.

Kristen Lee (18:21):

That makes me feel much better about my role.

Will Davis (18:24):

Yeah. It’s hard to…

Kristen Lee (18:25):

Thank you. I needed that.

Will Davis (18:26):

Absolutely. <laugh> It’s hard to predict the future and it’s hard to be within a certain factor from that site. It just is what it is. All right, Kristen, coming back to you then. What part of the supply chain is the least complicated?

Kristen Lee (18:40):

I’m gonna phone a friend, so okay.

Dan Sears (18:40):

Dan? We’ll, phone Dan, Dan least complicated part of the supply chain?

(18:40):

I would say raw materials. They’ve come so far since Covid. During Covid, they were by far the most complicated and they’ve become so much more stable right now.

Will Davis (18:40):

Got it. We’re back on the other side of the pendulum. Yes. All right. Kristen, what type of technology helps you the most during your job?

Kristen Lee (19:06):

Recently I’ve seen the power of Google documents and shared documents. I think since we’re working with a lot of different sites across the country, around the world, being able to interact on the same document has been super beneficial.

Will Davis (19:18):

Awesome. Dan?

Dan Sears (19:20):

Anvyl.

Will Davis (19:24):

Another place that you can share and work on things with your suppliers. All right. Dan? Favorite food

Dan Sears (19:31):

Pizza.

Kristen Lee (19:31):

Specifically Hawaiian Macaroni Salad.

Will Davis (19:37):

Oh man.

Kristen Lee (19:38):

I have this like listed somewhere, so that’s, that’s what I always say.

Will Davis (19:41):

I like that. Kristen, next trip plan. Where is it?

Kristen Lee (19:46):

We actually have a Native Operations team offsite. It’s gonna be in the Bay Area, so we’ll be working on our plans with the new fiscal year during that one.

Will Davis (19:56):

Oh, nice. All right, Dan, where’s your next place you’re going?

Dan Sears (20:00):

So Kristen I think is way too dedicated. She’s going on a family vacation this weekend that I think is going to be much more fun to the Northeast.

Kristen Lee (20:08):

I thought it was related to work.

Will Davis (20:11):

Just a trip. That is dedication. Yes.

Kristen Lee (20:18):

I am going to Austin also this weekend. There, there you go.

Dan Sears (20:21):

For me Lake Cumberland, Kentucky, we’re going this weekend.

Will Davis (20:26):

There you go. All right. Well, Kristen and Dan, it has been great having you. I hope you, number one, continue to do a great job on the product supply and that as we continue to see products as they come into the stores, that we know that y’all are behind it. And then additionally as it’s coming out, you know, we can always check in and see how things are doing. Where can we get a Hawaiian macaroni salad recipe for <laugh> while checking up on the product or on the team offsite or people want recommendations of where to go in Lake Cumberland or sending them your way? Dan. Awesome. <Laugh>. Nice. All right guys.

(21:09):

Well thank you very much. And just for everybody to know if you’re looking for Native, you can find it at a lot of different places. You can find it in Target, Walmart, Walgreens, or other retailers along with online. Subscribe to a DTC bundle and save some money there.

(21:25):

So I will be your host and we’ll be back for another episode of Safety Stock soon. You can subscribe to Safety Stock on Spotify, Apple, or wherever else you get your podcast. And just to remind you, Anvyl is a software that helps consumer brands improve their supply chain process from PO issuance through to warehouse delivery.

(21:43):

To learn more about Anvyl, visit our website at anvyl.com. That’s A N V Y L dot com. Talk to you soon.