Operating in a Downturn

There’s been no shortage of industry layoffs news, but what about the employees that remain at the company—how do they get things done with fewer people? Kim Silva, operations Team Leader at Phoenix-based Fairytale Brownies, took time to chat with MULTICHANNEL MERCHANT’s Jim Tierney about the dismal economy’s effect on the company’s operations and fulfillment.

Q: Since the economy has impacted almost all businesses, how has the operations and fulfillment department at Fairytale Brownies been affected?

A: People are job sharing more and helping in departments that they normally would not, and since we have cut some of our vendors, we are doing things like cleaning the building ourselves. We implemented cleaning teams across the board, including all team members, team leaders and owners.

We are also packing some items that were previously copacked for us; we are eliminating some SKUs; we have put some of our benefits on hold for the year (such as the anniversary bonus payout), and we are implemented hiring freeze and salary cuts.

Fairytale Brownies is moving more into the wholesale market to try to even out the seasonality of the business, so we are concentrating efforts to get this off the ground.

Q: Is your staff smaller now than it was a year ago?

A: Yes, it’s 20% smaller.

Q: What adjustments to the daily work schedule have been made?

A: All hourly team members are at 36-hour workweeks and all salary level team members took a pay cut (between 5%-20% depending on position). If it is not busy, people are asked to go home, but we still maintain the minimum level of hours required to keep their medical benefits active.

Q: Has seasonal help been affected?

A: We are not in season, so we are not dealing with that at this point. In a sense, it was affected from the aspect of not being able to offer any seasonal employees a regular position after December, which is what we typically do to increase our core regular staff where needed.

Q: In what other ways has the poor economy affected your operations department?

A: We are treading water this year, so to speak. No new products introductions, reduction of nonsellers, we’re doing renegotiations with all vendors–particularly our contract carrier—and eliminating some vendors all together, as well as salary cuts, a hiring freeze and benefit cuts.

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