Jan 2, 2019, 12:26 AM ETConference Presentation, Fireside Chat, Panel, Interview

a16z Podcast | Where's My Stuff? -- The Lowdown on Logistics and Ops

a16zJeff Jordan, Michael Copeland, Mike Smith, Laura Duke, Mike Swartz, Dwight Gaston

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Stitch Fix expects to manage high-growth dynamics within a current footprint of 450,000 square feet across two warehouses, relying on data analytics to select five items per customer while maintaining robust quality checks for personalized returns.
The company anticipates operational complexity will persist due to the unique nature of its service where no two boxes are identical, predicting that "a trillion metrics" will exist but requiring a focus on a couple key metrics like on-time shipping and cost per order.
Mike Smith projects that building proprietary systems is necessary because existing outside parties do not fit the "funky" models of personalized businesses, noting that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Stitch Fix plans to treat operations as a peer to other executive functions, maintain customer service agents in headquarters for transparency, and provide advance notices to warehouses to manage fixes weeks out, acknowledging that volume fluctuations make daily process issues harder to identify.
Laura Duke predicts that Zazzle will build a peer-to-peer logistics system to unify operations for diverse partners ranging from Disney to individual contributors, balancing outsource partners with internal production to handle the "heart and soul" startup culture.
Zazzle aims to create an end-to-end experience allowing small makers shipping a couple of items a week to leverage the same logistics contracts as large organizations, with plans to constantly work on shortening lead times to produce most items within 24 hours and many same day.
Laura Duke anticipates the industry must shift from 80s and 90s mass production methodologies to peer-to-peer logistics and personal shopping, with smaller startups enabled by cloud technology to compete with Amazons on the service front.
Zazzle expects to resolve customization and speed issues through expectation setting via storytelling about product origins, while forecasting that same-day delivery may remain viable primarily for fresh grocery rather than items like Apple products which may require four-week delivery windows.
Mike Swartz identifies that the primary challenge for hyper-growth companies remains the "soft stuff" of aligning personnel and changing roles, predicting that job requirements change so fundamentally in such environments that employees may effectively need to reapply annually.
He expects recruiting to be critical during expansion, noting that a 5 million square foot expansion at Amazon in 1999 required daily recruitment, and that skills for early success do not guarantee progression to the next level.
Mike Swartz warns that relying on "means" masks reality and that companies often fail to understand "variation" in metrics, predicting that alignment and daily improvement define success rather than just reaching a target.
Laura Duke anticipates startups must move from measuring metrics monthly to using leading indicators like backlog to predict delivery times and customer inquiries, while advising against a "grab-and-go" philosophy with vendors that neglects margin and customer experience.
She expects a culture embracing defects is essential, predicting that hiding defects due to negative attitudes harms improvement, whereas a culture where defects are public and root cause analysis targets the process drives better results.
Mike Swartz predicts that leadership styles must be situational, shifting between directive and collaborative depending on urgency, and that leaders must provide daily feedback regarding consequences rather than waiting for annual appraisals.
Dwight Gaston plans to solve operational breaks by outsourcing fulfillment to a third-party partner in Columbus to replace a small Seattle center, facing a hard deadline to have half of new products in the warehouse by the middle of the month for subscription boxes.
He expects continued risk in shipping about 30 brand new products a month due to hazmat regulations preventing air transport, forcing reliance on ground shipping like DHL which can take up to 10 days.
Gaston anticipates the beauty industry's 18-month product launch cycle cannot maintain itself, forcing companies to become more flexible and nimble, while security systems will continue to rely on human pattern recognition rather than expensive hardware.
Mike Smith predicts that the transition from big companies like Walmart involved a huge pay cut and challenges in purchasing basic goods like boxes of wine, while advising senior leaders to stay close to the work to avoid losing connection with operational realities.
He expects the transition from managing VP-level staff to really young people requires training new staff to challenge constructively while maintaining trust, noting that many companies must build their own systems because existing solutions do not fit.
Laura Duke expects that finding platforms versus owning code is a critical decision with global maintenance implications, and that finance teams should be involved early to partner on true costs rather than being presented with results for debate at the end.
She plans to establish shared metric discussions like gross margin to force cross-departmental alignment on capacity constraints, while anticipating that startups must avoid adopting a grab-and-go philosophy with vendors.
Mike Smith anticipates that operations ownership of demand planning translation allows for better estimates of variability to build in, and that managing operations requires telling warehouses how many fixes they are doing weeks out.
He notes that non-seasonal businesses like Stitch Fix benefit from quality as a foundation with constraints on inventory, stylists, and ops capacity, whereas peaky season businesses must invest in technology or flexible workforces to handle worst-case scenarios.
Dwight Gaston plans to bring in a senior role model to mentor junior customer service staff to resolve chaotic situations without disruption, evaluating internal candidates to determine who should stay or take different roles rather than immediately replacing staff.
Mike Swartz predicts that patent trolls and IP litigation threats remain an ongoing problem for companies like Blue Nile and Julep, while people marketplaces will continue to face big labor law issues regarding contractors versus employees and competition with union labor.
Laura Duke expects that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization with speed, the industry must focus on expectation setting through storytelling regarding product origins, such as a small organization in Kenya making a shirt.
She plans to actively work on shortening lead times to produce most items within 24 hours and many same day, while anticipating that demand planning ownership often creates friction that is best resolved when operations translates sales plans into units.
Mike Smith predicts that white hat hackers used to test infrastructure are a helpful way to secure web business, referencing the hand-to-hand combat experienced at eBay and PayPal.
Laura Duke anticipates that to reconcile customization