Izba - Building and Scaling Start-ups during a Pandemic (CHAIN) by iThink Media

IZBA: BUILDING AND SCALING START-UPS DURING A PANDEMIC

BUILDING AND SCALING START-UPS DURING A PANDEMIC

rior to the Covid-19 pandemic, supply chain was seen as an important part of a business. With the pandemic, many businesses view supply chain as a core strategic pillar and asset if used correctly. Aaron Alpeter of Izba recognises how sorely fast-growing companies, in particular startups, need adequate resources

navigating today’s challenges. He says, “We’ve focused our firm to be flexible, relationship driven, and technology forward. We are on a mission to be the undisputed thought leader when it comes to supply chain in the start-up ecosystem.” Izba is a consulting, outsourcing and technology firm committed 4

to helping start-ups be successful through excellence in operations. With over 175 years of combined industry experience and a growing customer base, Izba has improved investor value by over $2 billion for its portfolio of clients in only a few years. Izba’s dedicated team prides itself on having the expertise to professionalise and streamline an organisation’s processes while adding to its bottom line. Aaron Alpeter is Principal and Founder, Warren Harper is General Manager, and Jennifer Polce is Director of Consulting, at Izba. Warren explains, “If you take a company that is starting up their business,

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they usually have great marketing ideas and a strong financial background, but they likely do not have the deep level operational expertise necessary to build and scale a company. Our consultants step in and help execute dreams into reality.” Jennifer says Izba provides a range of services depending on the company needs – from fulfilment, manufacturing and planning, to sourcing and procurement. She adds, “The work we do will depend on the stage the company is in. If they are working through product development, we can

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help look for strategic sourcing partners. If they are expanding their network, we can extend their fulfilment infrastructure to reach customers quicker. The same is true for freight strategy and transportation. It is all about understanding what we can do to make the service to their customers better, but also considering costs and sustainability factors.” Izba supports clients in a variety of industries, but Aaron adds, “We

don't pretend to know everything about everything, but feel that we are end-to-end experts because 90 per cent of principles in supply chain transfer between industries, whether that is apparel, FMCG, food, or electronics.” What lessons did the Izba team take away from the pandemic? Jennifer answers, “You cannot just assume that something will be available. It is really important to plan on an 18-month 7

finance. Without this planning, you might have a huge spike in demand, but you wouldn’t be able to communicate to your factory fast enough to procure the right materials, or to fulfilment centres to find the labour you require to ship your products out. I think Covid has taught us that communication over that time horizon is more important than ever.”

horizon, but prior to this, a lot of companies missed having robust communication between critical functions like marketing and

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Warren highlights the importance of lean solutions that are stage-appropriate. He adds, “Being able to adapt quickly, being quick on your feet, and being nimble are key to helping start-ups without a lot of resources grow in times of uncertainty. We can provide that lean solution that can adapt with them as their business grows over time.”

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What’s more, there are also bigger companies that are interested in having the ability to be flexible and react quickly. Warren continues, “A number of our larger clients require these skills, so how do we bring them in? It is a real change of mindset for them. The start-up world operates very quickly, and for more traditional businesses, it is both exciting and terrifying. You really have to be on top of things all the time.”

Jennifer adds, “With the move to more people working from home, we have been able to do things faster and partner with larger companies, because (since Covid) they are now more adept to change.” Just like their clients, Izba also strives to stay nimble by helping fill gaps in the start-up ecosystem. Izba has recently launched a software product. Capabl is an automated fulfilment scorecard that helps brands and fulfilment centres track 10

performance. Aaron explains, “After working with dozens of companies and hundreds of fulfilment centres, we found that we were solving the same problems over and over again. In particular, fulfilment relationships were often emotionally charged when they didn’t need to be. A lot of this came from a lack of transparency. Despite signing specific performance metrics (SLAs) as part of the contract, it is very difficult for both brands and fulfilment centres to track how they are doing. As a result, fulfilment centres do not get credit for doing a good job, and brands don't see the full context when one order goes wrong.

“We initially built a manual dashboard, and used it internally for about 18 months. The increased transparency gave us some remarkable results. We had one client who felt unhappy with their fulfilment centre and wanted to move. Before doing so, we started scorecarding the current performance and dug in with the provider. The fulfilment centre recognised that they were falling short, and to their credit, made the appropriate changes. They stepped up their game and are now at 99.9 per cent fulfilment compliance, and the brand has been there for over three years.”

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Capabl connects to a brand’s shopping cart, and looks at fulfilment contract criteria to determine if orders were fulfilled on time. This data facilitates conversations between brands and fulfilment centres. When asked if he anticipates expanding service offerings in the future, Aaron answers, “Our responsibility as a consultancy is to find the best products and the best providers for our clients regardless of who makes them. If we can’t find something that lives up to our standards, we will look to build it ourselves.”

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Resiliency is another buzzword that has come to the fore since supply chain first felt the impact of Covid. Aaron says, “We worked with clients to make sure they diversified their sales channels, with multiple factories and multiple warehouses. Some brands grew and took market share from their competitors who were not able to do that.

The industry has definitely learned a lot in the last two years.” So, what advice would Aaron give to businesses looking to scale especially with Covid? He answers, “The first thing we tell people is that they should be

working on an 18-month horizon, and they should assume that they are going to reinvent their supply chain every 18 months. What we find is if a company says it aspires to be a billion-dollar company, they 14

should first focus on being a milliondollar company – first things first. We help them see what the next 18 to 36 months will look like, only building what they need at that point, so they can remain as flexible

as possible while their business is pivoting, and staying ahead of any problems that might pop up.” Jennifer believes it is extremely important to build strong relationships with suppliers and fulfilment centres for start-ups to grow, especially in this environment. She continues, “Overall, visibility and communication are key. Without strong supplier relationships, operations can go wrong in many ways. By leveraging the strong relationships you have, regardless of your size, you can really launch your business forward.” Jennifer adds, “It is important that partners are equally yoked and share the same values. For example, we had one client that wanted music to be played during the pack-out of their product, so we found a fulfilment centre that was willing to do that.” A few of the key partners that Izba partners with are Amware, IDS, and Mainfreight. Aaron adds, “These are several of our go-to partners when we want industry advice. When we refer clients to them, we know

they will get the attention they deserve.” As for future plans for the company, Aaron says he is very optimistic. He explains, “Capabl is our focus right now, but we want to continue to see what needs to be done in the start-up ecosystem. Our goal is to make sure that when our clients and consultants have grown beyond Izba, they are able to stand and thrive on their own two feet. For clients, that means building them a worldclass supply chain team. For consultants, it’s supporting them as they go on to found companies or be VPs of supply chain at fastgrowing companies. We will always be there. We will cheer on their success, even if we do it from afar.” Aaron concludes by saying he cannot guarantee a start-up will make a lot of money, but he points to his strategy on how everyone can win; “It’s all about our relationships with our brands, consultants, and our network of supply chain vendors that has helped us bring flexibility to supply chain, grow during the pandemic, and bring value to the market.” For further information, visit www.izba.co 15