An education in ops

Adam Schwartz is vice president/general counsel for Colchester, CT-based S&S Worldwide, which sells education and recreation products to schools and institutions. The company’s 12 catalog titles include S&S Active Learning and S&S Discount Sports and PE Supplies. Schwartz’s responsibilities, meanwhile, extend to the company’s entire supply chain.

What is your biggest challenge?

Replenishment. Much of the backstock is in locations that are local but not necessarily adjacent to our forward pick locations. The growth in number of SKUs means that there are more replenishment tasks each day than I would like. For example, our bins are too small. In many instances, they hold a week’s worth of inventory when I would like them to hold a month’s worth. Migrating toward more total inventory forward and less replenishment effort is a long-term goal.

What is your favorite day of the week and why?

Wednesdays. On Wednesday afternoons we have our operations and supply chain meeting. This is a cross-functional group of about a dozen managers representing all functional areas. The ops meeting is where we set the measures for the operation and also where we watch those measures. I get excited when we see progress. Staying on top of the numbers is really feeling the pulse of the business, week after week, month after month. We also solve problems, deal with many of the interdepartmental issues that arise day to day. In our busy season, the ops meeting is like a war room where we can react continuously to the demands and flows of the business.

What is your operation’s greatest innovation?

Our fill rate at the line level is more than 97%. To get there, we had to confront the difficult nature of forecasting our business. We have many state, local, and municipal customers who can take three months of inventory at once, putting our smaller customers into a backorder situation. We developed an order inventory allocation process that allowed us to hold an order in suspension and await the out-of-stock product. This means one shipment rather than two against the order, reducing processing and freight expense. The allocation process, which we call the pick rules, is set up to provide us flexibility and visibility to orders awaiting product. We can see how long the order is waiting, when the goods are expected, and even customer details that allow us to discern their needs for the goods — or instance, if they need the order at once or are willing to wait.

Can you describe your “welcome to operations” moment?

A few years ago we added a product line of large free-standing game tables, such as foosball and ping-pong. Previously we only drop-shipped the tables from a U.S. factory. Now we’ve decided to import the items because the product line came at a great price. However, we didn’t know much about these items, including how heavy they were. We had no idea what it took to move these things around our facility. Making matters worse, the packaging was not strong enough to survive less-than-truckload shipper delivery, and there were lots of damages in shipment. Our standard freight policy was nowhere near enough to cover the cost of the freight. What a headache! But again, the customers love these goods. So over time we have gotten better and better at managing them. The vendor now crates the goods before export. And we’ve also learned that some of the margin we thought we were making had to go toward the shipping expense. Nevertheless, the goods remain great sellers at strong profit.

What’s the most interesting thing or object in your office?

The desk I work at every day — it’s solid oak and must weigh a thousand pounds! It is probably 75 years old and belonged to my grandfather [Aaron Schwartz, who founded S&S in 1906 as a leather goods wholesaler]. My dad used it for 20 years or so before I inherited it. When I started working here, the then-vice president of operations had it refurbished for me. In some old photos of my grandfather, you can see the desk. It is a terrific reminder of the legacy and heritage of our company. The drawers still smell a little like leather.

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