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DTC POD
#328 - The Mastermind Behind Seed’s Supply Chain & How to Design DTC Ops for Hypergrowth
Speaker
Blaine Bolus
Speaker
John Morgan
00:00 Learned from one-unit classes, got MBA. 03:40 Company rapidly grew, taking on major responsibilities.
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“This is a space exclusively for D two C founders and operators to connect, share ideas, ask questions and support each other.”
“I found this niche skillset of working with engineers to outsource carbon fiber assemblies or sub components of the actual structure of the rocket across Falcon nine and dragon. So imagine just very complicated designs and some of the most brilliant engineers in the world constantly iterating on and trying to get Falcon nine fully reusable as a product or just like, to work and, like, fly.”
“So imagine just very complicated designs and some of the most brilliant engineers in the world constantly iterating on and trying to get Falcon nine fully reusable as a product or just like, to work and, like, fly.”
“Everyone was like, we're going to Mars or bust.”
“For those of you who run supply chain, and especially for being in charge of 24 unique, clinically kind of studied strains from around the world, keeping those bugs away from heat and humidity and from activating before they actually got to the right part of the customer's digestive system was like my entire challenge.”
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Youll be able to manage your whole sales process. Plus my favorite part, the reporting, its super intuitive, powerful and customizable. Plus the whole thing is powered by AI, so your teams can spend less time on tedious, time consuming stuff and more time on developing relationships. Also, no one likes a clunky platform that takes months to onboard onto, but getting set up on saleshub is really quick and easy. It's free to get started. The pricing will scale with your business, and with more than 1300 integrations and add ons, you can tune it to your exact needs. Visit HubSpot.com sales to start selling with sales hub what is going on? DTC pod. Today we're joined by John Morgan, who is the founder of Pelagic, uh, which is an operations and supply chain, sort of, uh, network of the best people in the field.
So we're really excited to be able to talk about operations on this episode. But prior to starting Pelagic, uh, John was the VP of ops at Seed Health, uh, which is one of the largest health and probiotic supplement companies in the world. And before that, he was at SpaceX. So, John, I'm going to let you kick us off. Why don't you just tell us a little bit about your background, how you got so involved with supply chains, operations, and what kind of took you along your career journey to get where you are in logic, logic today.
Great. Thanks, Blaine. And really happy to be here. So, yeah, to go way, way back, I guess I did not come from a family of entrepreneurs or any background like that. I had two doctors as parents and so when I told them I was interested in this career path, they were like, cool. We have no clue what that means, how companies are built, but go for it. And, um, a really pivotal discovery was from my time in undergrad at USC, I found an entrepreneurship minor and got to hear directly from these founders building their businesses. And I thought they had the coolest jobs.
They, they taught, like, one unit classes and would go in and talk about what they were doing and then, uh, run their businesses on the side. So I think that was the first time I, I even knew that was a thing. But on top of that, I got very lucky and did a MBA level supply chain internship from one of the gurus in the space, Jimmy Anklesaria, a mentor of mine out of San Diego. And that experience put me on the map when I applied to a role fresh out of college at SpaceX, and it was originally in procurement, we were a fast growing company. SpaceX has had a few different chapters. Now, as a thing, it's been amazing to watch and be a part of. But at that time, they were perfecting the design of the Falcon nine rocket and just coming out with like, here's how we're going to launch humans into space. So that was around 2014.
The company grew very, very quickly. From there, I got handed a lot more responsibilities in all different ways, shapes and forms, but I found this niche skillset of working with engineers to outsource carbon fiber assemblies or sub components of the actual structure of the rocket across Falcon nine and dragon. So imagine just very complicated designs and some of the most brilliant engineers in the world constantly iterating on and trying to get Falcon nine fully reusable as a product or just like, to work and, like, fly. There were definitely a couple of times where we, you know, blew up a rocket on accident in different ways, shapes or forms. That was tough to swallow as a company. But overall, I think what I got out of that was just getting to work on kind of products that were first in, first of their kind for human history in a really amazing way. Making rockets fully reusable and then learning how to problem solve in a really intense work environment, but also amongst, like, a pretty passionate culture towards those problems. Everyone was like, we're going to Mars or bust.
We're going to figure out everything. There was no such thing as, no, we can't figure it out. It was, yes, but, and this is what it's going to take. So that was where I think I really learned or got very lucky, kind of setting the bar with supply chain. And I have nothing but wonderful things to say about SpaceX. I think a lot of people got burnt out or just couldn't handle a lot of the pieces of that culture. But I left after befriending and getting to know one of the two co founders of Seed and starting to hear about this really exciting space called the microbiome. Um, and.
And he's the very technical R and D oriented founder of the two, one of the. The smartest people I've ever met. Um, and he. He was like, the microbiome is going to change everything. Like, it's just like outer space. Like, you're gonna. You're gonna wish you were part of this. And so, um, Raja really, like, took a bet on me, but we found a way to say, yeah, these products are gonna be very innovative and hard to manufacture.
Like, I need you to come on and start figuring out our operations and our suppliers chain. I'll pause there if you want have any questions so far, Blaine, but I'm happy to go straight. Straight through into seed. Seed experience next.
Yeah, no, absolutely. I'd love to. Yeah, let's talk a little bit about seed. So, kind of when you came in, what was the status of the company? What did everything look like and where, you know, where did you start being able to apply your expertise to seed? Like, what were the first action items? What did you see and what did you do?
Yep. So, I was. I was one of the earliest full time hires. We were a team of interns and contractors. We had raised a pre seed round of about 2 million, and we were getting ready to launch a very delayed launch that a lot of people were pretty stressed about getting out the door. So our manufacturing network and supply chain was a bit chaotic, and we didn't have any operational data defined, organized, anyway, very vague understandings of our cogs, very approximate targets on our margins, and a whole lot of, let's say, wonderful chaos in the office and in how people were working on what they should or shouldn't be working on. I was very quickly handed the supply chain, the finance, and some internal human operations or HR work to. To dive into, and, um, had really amazing people to support me in that over time, especially as we picked up sales and got a lot more traction.
But, um, look, the thing I'll tell everyone is that we changed manufacturers and our entire, like, supply chain system, like, four to four, like, really four to five times across very, very rapid growth, where we continued to have a fantastic brand and market ourselves appropriately and stack subscribers. But we were always iterating on the format to achieve a higher viability or ensure that what we were telling our consumers was meeting with the label said, and that we were hitting these very potent, clinically proven living cell counts at the probiotic level. For those of you who run supply chain, and especially for being in charge of 24 unique, clinically kind of studied strains from around the world, keeping those bugs away from heat and humidity and from activating before they actually got to the right part of the customer's digestive system was like my entire challenge. It was like, how do I keep these things alive? How do I test them? How do I make sure they're perfect quality? And ultimately, through a lot of searching, hard work, hard lessons, a couple stock outs that people may or may not remember in which the whole company is looking at me. To make sure we had enough capsules in time, we landed on a really innovative technology we called the Viacap, or a cap in cap system, which was these probiotics being engineered for the journey. They had to go by being protected by a dried, super low humidity prebiotic, pomegranate extract and powder. And once we found that product format, the whole company, I think, really started to click. We saw people feeling fantastic biological effects.
We felt the supply chain was scalable. And then Covid hit. And so I think for the first time, supply chain became a thing in the global context. I think when Covid occurred, people remember it for being shut down, for the horrible effects and the unfortunate deaths of the illness itself. But it also tipped the global supply chain system all one direction. I was heavily involved in trying to import PPE devices and coverage, just trying to help my cousins and doctors in hospitals at the time because I had relationships. Supply chain in China, really wild things occurred, and I could literally track Covid impacting our global manufacturing and supply chain as that all went down. So a lot of our strains were fermented in Italy and Spain, which was a heavily hit area.
Our manufacturing on the capsule level was done in the tri state area, which was also heavily impacted. Imagine just having tens of thousands of subscribers expecting and depending on you for their biological daily health, suddenly becoming even more aware of microbiological beings wanting their probiotics even more. And you can barely keep it afloat or supply them. And so we had to get very scrappy. We learned a lot of different things. I think there's a whole category of seed that was really innovative as well. That was our ultra sustainable packaging formats that we invested really heavily in to stand out as a brand that also suddenly became really complex, from our paper foam trays to our algae based cardboards. So I would just say seed was a unbelievable experience of a trial by fire, but getting through Covid and keeping all of our customers supplied and happy and continuing to grow very fast as a business is something I'm very proud of today, but also something I saw as that something incredibly difficult to navigate.
And I use that word navigate to then prompt kind of where we are today, which is what pelagic is as a brand. It's. It's a service to help founders and or early stage employees navigate extremely difficult challenges that supply chain can create for your business. From just lower cost or higher cost, lower margin at an early stage, to as you're growing and scaling, the things that tied up inventory or cash flow problems can really create for your business. And, um, over the last year and a half, I think we've been perfecting a model that's. That's really starting to find some traction and work really well for brands in terms of how we can service something so complicated that is your supply chain operations in a, in a white glove way.
So I think, John, I think that's actually a great place for us to start. Um, because I want to talk about what are, like, the core fundamentals for founders who are launching brands. Like, what do they need to know about setting up, you know, an initial basic supply chain?
Right?
Like, you've got a product that you're likely importing some component of. You've got packaging, got a place to where you've got to assemble it, and you've got to, like, ship it to a customer. So if you could just talk to us a little bit about what is the. What does the MVP look like for getting supply chain right from the get go?
Yeah. Each supply chain is its own fingerprint. It has its own very unique design experience problem. And we do have a really good simplified framework for approaching supply chains. We kind of break down your operations into these 16 unique categories, which sounds like a lot. At the most fundamental layer, it's kind of your packaging, your raw materials, your manufacturing, how your raw materials are synthesized or turned into the product you want to provide, your inbound logistics or transportation infrastructure necessary to move all these pieces through the supply chain, your quality systems, to make sure you're producing what you need to create. I could go on and on with what those key categories are ultimately through three pl or in source distribution and then delivering to your end customer. I think a huge mistake that people make at the earliest stage is that they skip over or don't ask hard questions or look into the details of their supply chain.
I've seen a lot of great marketers or super brilliant PhDs, and they just don't want to worry about the details. So they outsource everything to, like, one shop, one turnkey manufacturer sounds great. And I think a lot of times people are giving up way more than they ever expected in having it all be bundled under one house. Like, hey, I will go source your ingredients. Hey, we'll do manufacturing. You don't even need to check us on the quality side. We got that in house, too. And there are really wonderful pressures that occur when you start being able to manage some of that as the brand and own different pieces of it in terms of how much you give up for the sake of simplicity.
I think the other thing I'll point to that I think is so wonderful about supply chain operations is that it's humans doing business with more humans. And I think a lot of times people just say, like, I just want to put the money in and then have the product pop out. And I would not have survived building anything at seed if I had treated my supply chain and those relationships that way. And so another really, like, fundamental lesson I would tell everyone is like, go see them in person. Like, if those manufacturers or people are going to be, like, relevant or important to your business, go treat them like humans. Go actually ask about their lives. Get to know who they are, because things are going to go wrong or break, and you're going to need their help to unbreak it. And honestly, one of the most full circle moments is my most trusted co packer, the team or business that put the capsules into our very weird, long, narrow necked pouches that are the refill pouches of seed.
They bailed me out so many times, they would put capsules into pouches within a day because I was about to stock out on subscribers, like, two days later. And he, he actually now works with and for me at Pelagic, and he's absolutely amazing and has this, like, insight into how manufacturing runs and operates and how to build those operations fundamentally in a scalable way. But, um, also is just like a great human and, and persons, and we did that right. And I think a lot of founders are just like, oh, like, I'm going to smash you down on price and over negotiate and get the lowest cost ever. And you just kind of have to remember that these people have their own businesses, too, and they're torn, like, 50 different ways. And so understanding them and listening to them and building those relationships is something that's fundamental to your success at that early stage.
I think that's a really good point, because at the end of the day, like you said, it's not a question of what goes wrong, it's like something will go wrong and you're going to need people there to help you out. But another question that I had kind of in that vein is like, how do you think about setting up a supply chain in the beginning, do you think of it as an iterative process? What's the trade off? Because obviously there's certain partners that you're going to be able to work with where you know, you can achieve scale. But in the beginning you need to be able to create product, get it to your customer and, you know, kind of be able to like check the box before you get enough capital to get your next PO or your next raise or something like that. So how do you think about building out supply chains or operations in terms of like an mvp, right. Like starting simple and, but at the same time giving yourself enough leeway to scale up when you're ready.
Yeah, I think it's a great question. So a lot of these things, the product itself will dictate, right. The complexity of the product, the number of ingredients you're putting into it, the difficulty of the machinery or the tooling it takes to actually go create. But you know, I think the, I totally just lost my train of thought blame. But you said the, I'm just asking.
About like scalability, right? Because in the beginning, like you said, you want to obviously work with the right people, but like maybe in the beginning you don't have the budget to do that, but like you're trying to test market demand, you're trying to bring a product to market. So, you know, kind of what does it look like in terms of managing both the ability, the ability to get a product to market in a way that like works and, you know, building out the supply chain for the business that's doing, you know, several, several million dollars a year worth of revenue. That's like a flywheel that's just coming along.
Yeah, you keep breaking up on me, but I'm just going to get after it. So that, yes, supply chains are fully iterative, but I think, and I think you should always think about them that way. Something that's been really cool to witness at Pelagic, you go from I'm embedded in the high complexity level of the seed operation to now getting to see tens to a couple hundred different operations and how they're built is that you can actually start to map almost these like very distinctive volume or complexity or growth moments and be very honest with your supply chain and your, and the brand builders on like when it's time to shift or when it's time to add redundancy and another like piece of your supply chain into your system. And so, yeah, I could tell you like, yeah, like there's certain three pls that are capable of working with you at a very low moq. And that's, that's super early stage and they're very high touch. There are other ones I would say you should only be talking to once you're in like a 50 million and up revenue like category and moment. And so within every vertical or category of your operation, I think there are like distinctive and flexible changeover moments or ways you need to start considering new partners. Aside from on top of just the supply chain, fundamentally and your product, they also have to think about your changing channel strategy and growth.
So many of our clients come to us saying, holy crap, we just got approved for a target launch or sprout said yes, or we have some new growth potential that we're really worried about. And if we don't service it or have the operational systems internally to keep up with it, we're going to break or we're going to fail or we're going to run out of cash. So yeah, those moments, ideally you are anticipating those moments three to six months ahead of when they happen. So you can build, find and set up the systems you need or the, the partners you need to grow into that. But you know, if it happens like in the next two weeks to a month, you can just call us and we'll make it happen.
We are really excited to announce that DTC pod is officially part of the HubSpot podcast network. The HubSpot podcast network is the audio destination for business professionals. And we're really excited about being part of the network because we're going to be able to keep growing the show, bringing you guys amazing guests, and obviously helping you guys learn from the best founders, marketers and builders of the most successful consumer brands. So anyway, keep listening to DTC pod and more shows like us on the HubSpot podcast network@HubSpot.com. podcastnetwork. I love that. My next question was going to be, you know, obviously it's great. We can just pick up the phone, call you guys if we're having somewhat scale that we need to get things figured out.
But for most people who are getting started, how do you see things playing out with operations? Is it typically the founder that's taking that on? Is it a certain hire that you're making? Is it a consultant you bring in? Like, what does success look like, especially for an early stage founder who may not, you know, have the background or experience in dealing with supply chain. They know how to build a brand, they know how to build a product, they know how to speak to their customer, they know how to build an amazing landing page and run a social strategy, but maybe they don't have the technical chop. So do you think, you know, what are some of the options on the table to like really flush out and make sure you're going about your ops the right way?
Yeah. In the market today, you know, we, we built our model to be flexible that way because we want to be like founder oriented at any size and stage. So we have this like crawl, walk, run optionality. That is, if youre very early stage we can engage as advisors and just hour for hour give you our perspective on what to do if youre very non technical with your supply chain, if you want to be budget conscious. But you know, theres a lot of value to unlock in just like tactically resourcing or finding a new three pl or auditing your cogs. Right. Like we can do a project basis and then a lot of brands who scale very quickly, we will or expect to scale very quickly based on they're backed by influencers or they're going to spend a lot of marketing dollars. We can run your daily operations turnkey and we've done that for brands for a year or more in the market more broadly, if I put myself in the shoes of the founder, you can work with, plagiarize in any of those ways.
Um, you can run it yourself and try to figure it out, which I think doesn't work for very long. Like you, you're so valuable in other areas that I think, um, you, unless the supply chain is fundamental to your technology or your product or your differentiation and you want to own that yourself, um, you should be handing it off. Uh, and I think as of the last three to six months, we're really starting to compete with like a full time hire. And so what I tell founders is like, at least let us audit and tell you very transparently, like you, what level of hire you need to run these operations. So we could save you from hiring a COO and you just kind of hire a great ops manager who can cover a lot of the basics with really fantastic tooling and a starting operational infrastructure on top of that, I am blown away by the AI age that we are now living in and its implications and the power of some of those tools in the math. Fundamentally that is supply chain. And so our fractional operators are starting to be, on a cost basis level, actually more competitive than you would pay in terms of, let's say a small amount of equity and a salary range for that full time operator, which is what I overall, I see the most capable talent in the venture ecosystem moving into this fractional model more and more because there's so many tools out there to like market yourself and become accessible. It's a different lifestyle.
But look, I have an incredible team and those people are able to deliver the same value across many different clients. And so I'm challenging founders to start thinking about us in the same commoditized way that they do accounting services. So everyone starts out and you pay for your fractionalized accounting like we want to be your fractionalized supply chain operations who can help you make sure you dont make any bad decisions at the early product development and design level, and then ensure that at least in that zero to 50 million in scale, like your supply chain is going to be on time, low cost and high quality.
I love that. John. My next question was going to be kind of what we talked about in the iterative stage. But as youre launching a business, how do you think about profitability and when it comes time to like optimize the supply chain for cost versus, you know, get the right product out?
Right?
Because I think there's a lot of founders who, when they think about their business, it's like, sure, in that first PO, we can fully optimize for cost, or we might optimize a little bit less for like profitability just to, you know, make sure we're getting the right product in people's hands, uh, and, and that sort of thing. So I, how do you think about that when it comes to like cogs and financial optimization? When it comes to supply chain?
Yeah, I think, look, I'm, I'm still looking for the client that is willing to pay us a percent of cogs savings in the way that some of these like growth marketing agencies have set up their, their engagements. But um, look, cogs is the other half of, of the, you know, the most important part parts of your business. It's, it's really what defines your, your margin, your growth. I think there was a, a time and place where margin was less important in the venture or e commerce world, but margins have made a huge comeback and are now being looked at in a very intense way by founders as they should be at seed. We definitely invested in the brand that way. We would maybe pick the slightly more expensive packaging solutions to be sustainable or walk the walk in that way to stand for something. And I always want to support those decisions. And we're really just here to just be very refined on the data behind those decisions.
To say, here's what you're giving up in terms of dollars in the bank of what you could do with to have a much higher quality product or to make sure it's going to be on time every time. On the financial decision framework side overall, the other big question I would have, and I think there's a lot of like creativity in how these business models are built, is, you know, cogs is just one piece of the whole experience. If you're a subscription business, you know, LTV matters more than just like that initial margin on that first product bought, right? So if, if you can validate those higher costs over time or find ways to bring them down across the customer experience or the journey through the product overall, then it's something we're totally down to support. But look, cogs will always be a focus, and if not now, then in the future. And people, I think, make the mistake of sometimes saying like, oh, cogs will get better as we scale with climbing volume of orders, we're going to get all the cost savings we need. And I would just argue that you're leaving so much opportunity on the table there, like actually leveraging and negotiating those volumes and shopping them out to many other very capable, high trust, super experienced manufacturing partners, is what you should be doing at many different steps along that build and scale journey. And yeah, I mean, look, like this morning we saved a really exciting pre launch client and entering the colostrum space like 50% on their initial cogs. Like out the gate.
They haven't launched yet and we already just unlocked those dollars for them and how they can go hire like two more people. So yeah, we always try to validate our costs very quickly through those cost savings. And I hope I answered your question about the importance of them overall, but absolutely fundamental.
Yeah, I think that's a great framework to think of. My next question is going to be about importing. Right. There's a lot of supply chains that deal with other countries or manufacturers outside the US, whether it's packaging components, whether it's inputs or the whole product itself that you're importing. If you could just give us like the TLDR or like the download on what founders need to know when it comes to importing products that they're selling in the US, like what do we need to know and how does it work?
The TLDR I love it. Yeah. So look, I love tracking this stuff just at the macroeconomic level, like the trends, the shifts. I think the Flexport founder and CEO talks about this stuff all the time. Like when the. So as canal gets blocked, what happens are there's attackers in Yemen, but in general I've seen a slow but steady shift away from China. It obviously depends on the market or commodity or product sector you're talking about. Reshoring of manufacturing intentionally from government incentives down to just convenience or risk overall to North America is of a lot of interest to a lot of founders these days, specifically Mexico.
What I will say is that similar to a lot of your supply chain, there are high quality and low quality brokers that exist in terms of compliantly and cleanly moving your, your products through us customs and border patrol. And, and I think like, I think it all, you should always just be very conservative to start with how that stuff goes. I think you should always lean on experts who understand exactly what import codes you should be using or how to keep optimizing those solutions. I would maybe then, like, the best kind of guidance I can give is like, it's not worth it to do it yourself and it'll always go slower than you expect. Uh, I know specifically one customer of ours, we did everything completely right. We prompted and answered and, uh, moved a very critical on pre order shipment through customs in the port of LA, like as effectively as possible. And unfortunately, turns out there was a giant backlog on rail cars leaving LA that we didn't know about, couldn't know about, and ended up kind of causing a huge headache in terms of messaging customers and timing of that delivery. And so, yeah, I would say lean on experts, seek experts in moving products into the US, especially with a lot of changing tariffs and political things occurring internationally.
And then give yourself extra days every time.
Yes, the extra days. One, I think that's really important because it's really hard to hit a deadline and if you don't and you've got customers waiting for it, that's just cash that you're leaving on the table. So as we wrap up here, just a couple last questions that I wanted to get through with you. The first was going to be, I think we covered it a little bit before, but I'd love to talk about other common mistakes that you see from founders or brands setting up their supply chain in their ops, whether they're at the earlier stages or even at the later stages when they're scaling up. What are some of the biggest mistakes that you've seen across other businesses that if you could avoid them now, you would be in a much better place for it.
I think one mistake, I can speak very specifically to it in a certain category, but I think just to speak more broadly, is not being afraid to entertain, or explore, or seek or source other options at every level. I think one of the highest friction, or most fear causing changes to make, if not your manufacturer, is your three pl or your outsourced manufacturing partner. There are so, so many options out there, and they are all, I don't know why, but they're very complicated. They're priced very differently. They have all different competencies, or ways they were created, or ways they run, or advantages or disadvantages. And so we find ourselves helping. A lot of people just feel like they can actually switch to a new distribution warehouse and partner, and it's usually only once they're creating acutely awful problems for their customers that they consider making that switch. And I would just encourage people to think about changing that up at a much earlier stage ahead of your problems.
The other one is that was hugely power, like, impactful at seed, was this idea of building a really powerful dashboard that works for you, that consolidates all of your purchasing, your cogs, your inventory, and your supply data, and really taking the time to define those inputs and trust the supply side of your organization just as much as you do your demand. So I see all these technologies and tools and solutions out there that combine all different fractured data sets on how efficient your marketing is. And then people are like, yeah, I have no idea what my cogs are, nor do I track it more than quarterly. And all my pos and what I actually spend or what's in what location is all just pure chaos, and I don't track it anywhere or have any one place to look at it. That is a very, very powerful tool that we call Ops hub, that we encourage and build for clients very frequently, that I would encourage people to do sooner rather than later, before you start having to untangle a lot of historical spend and a giant mess that your future acquisition partners don't love seeing and has to get cleaned up eventually. So, yeah, what we call Snop, and really understanding your supply in relation to your demand as things change, is the other area I'd really encourage people to take a look at and also just don't overengineer it. A powerful spreadsheet can cover you a very, very long way. There's a lot of great software out there, but forcing yourself to be proactively organized and build that tool early on is something I definitely encourage.
I guess that was going to be my last question on the topics of tools and tech. Are there any other tools or tech that you rely on in your workflow? It could be anything from custom to just standard operating procedure that you like to see businesses run on.
Yeah, we work with a lot of different partners. Operations is very central. We work with a lot of different pieces of software. We've seen a lot of different wmses out there. We've seen a couple different light erps, we've seen a couple of different inventory or forecasting support tools. I think nothing's really stood out. And honestly, I'd love to maybe chat chat again in like six to eight months in terms of what we have in the world of AI enabled workflows and how the future may be actually avoiding these very feature set heavy, extremely complicated, difficult to use operational SaaS tools that exist in the world today and actually just copy and pasting certain prompts to get AI to do very time intensive historically tasks that you can then get done in seconds and keep that supply chain brain oriented on the strategy and on the human level, that is negotiating or working with your partners to deliver outcomes and a scalable product and business.
Sweet. I love that and I think that's a good place for us to end. As we wrap up here, John, where can we connect with you? Are you on LinkedIn Twitter? Why don't you shout out your socials, email, wherever we can contact you.
Great. Yeah, you can find us on LinkedIn, Pelagic and Pelagic Co. Pelagic Co. Or shoot me an email. John pelagic.com, that's the best ways to get us.
Thanks John.
Thanks for having me. Blaine.
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@John Morgan, with his rich background from @SpaceX to @Seed Health, brings a treasure trove of insights to @DTC POD. John sits down with @blane and unpacks the ever-evolving world of supply chains, stressing the need for agility and smart financial decision-making, especially in subscription businesses.
From saving a client 50% on initial costs through savvy negotiation to tackling global supply chain strains amid Covid-19, John shares his wisdom on navigating operational challenges with a focus on profitability and sustainability.
Learn the critical steps for e-commerce founders on setting up a solid supply chain framework and why relationships with manufacturers can make or break your business.
John also gives a sneak peek into the future of operations with anticipated AI advances, as well as his personal experience transitioning from rockets to probiotics.
Tune in to hear John's expert advice on scaling your brand's operations efficiently.
Full episode here: [Spotify Link]
#dtcpod #supplychainmanagement #ecommerce #scaleup #operations #cogs #sustainability #techadvancements #AI
1️⃣ One Sentence Summary
Supply chain insights for founders with John Morgan on DTC POD.
💼 LinkedIN - 6 Reasons Post
Overengineering your startup's supply chain can sink your business before it sets sail. Here are the top six reasons why simplifying your supply chain is a must:
Complexity kills speed.
In the startup world, speed is everything. An overly complex supply chain can slow you down, making it harder to respond to market changes and customer demands. Keeping it simple means you can move quickly and stay nimble.
Costs will spiral.
Complex supply chains come with hidden costs at every turn—from increased management overhead to more expensive logistics. Simplification helps keep your costs transparent and under control, preserving your crucial margins.
It hampers scalability.
Scalability should be a built-in feature of your operations, not an afterthought. A convoluted supply chain can become a choke point as you grow, creating more problems than it solves. Simplify to ensure your supply chain can grow as fast as your business.
It distracts from your core business.
Your energy and resources should be focused on developing your product and market, not managing a labyrinth of suppliers and logistics. A straightforward supply chain frees you to focus on what really matters—your customers and your product.
It weakens relationships.
Strong relationships are the backbone of any effective supplyhip chain. When things are too complex, it's harder to develop these relationships as you're constantly bogged down in details instead of fostering partnerships.
Data becomes daunting.
Data-driven decisions are key to startup success. An overly complex supply chain generates too much data noise, making it difficult to extract actionable insights. Simplification helps keep your data manageable and useful.
TAKEAWAY:
Keep your supply chain straightforward to maintain speed and agility.
Monitor costs more effectively with a simplified system.
Ensure your supply chain is designed to scale from the start.
Concentrate on your core business, not on supply chain complexities.
Build stronger supplier relationships with a streamlined supply chain.
Make smarter, data-driven decisions with a supply chain you can actually understand.
In sum, simplifying is just smart supply chain management—keep it lean and flexible to support your startup's growth and success.
Interview Breakdown
In this episode of DTC POD, John Morgan, founder of Pelagic, lays out the playbook for navigating the turbulent waters of supply chain management. He draws from his deep expertise, from revolutionizing operations at SpaceX to overcoming challenges at Seed Health, to give listeners an insider's guide to scaling their brands.
Today, we'll cover:
The significance of reassessing supply chains amidst market fluctuations and how to adapt for growth.
Deciding when to partner with various types of 3PLs based on your business’s revenue and potential.
Morgan's offerings from advisory roles to full operations for brands on the fast track.
Emphasizing cost optimization and the integral role of cogs in shaping profitability and expansion.
Strategies for e-commerce founders to balance margins with long-term customer value and operational efficiency.
🔑 7 Key Themes
Importance of iterative supply chain management.
Engaging with third-party logistics strategically.
Utilizing fractional operations and technology tools.
Prioritizing profitability and cost optimization.
Emphasizing founders' sustainability considerations.
Scrutiny of margins at seed stage.
Building fundamental supply chain frameworks.
💬 Keywords
supply chain management, iterative supply chains, third-party logistics, 3PL partners, revenue category, growth potential, advisory services, project-based engagements, turnkey operations, scaling brands, fractional operations, technology tools, profit optimization, cost of goods sold, sustainability in supply chains, data-driven decisions, e-commerce margins, seed stage startups, contact John Morgan, Pelagic company, Blaine Bolus, D2C pod community, HubSpot sales hub, founder community, SpaceX, Seed Health, import delays, operational dashboards, supply and demand, Covid-19 impact on supply chains.
📚 Timestamped overview
00:00 Attended one-unit classes, did an MBA-level supply chain internship, and joined SpaceX in procurement in 2014.
03:40 Rapid company growth, rocket engineering challenges, and Mars mission passion.
07:45 Switching manufacturers, supply chain changes, focus on quality, developed innovative technology Viacap for probiotics.
13:15 Each supply chain is unique, with 16 key categories. Mistake to skip details.
17:10 The text discusses the importance of planning a supply chain and operations for scaling a business.
18:56 Flexibility and iteration in supply chains, identifying key moments for change, and aligning with partners based on revenue category are essential for growth and success.
23:41 Consider outsourcing supply chain management to save costs and increase efficiency. Fractional operators and AI tools offer competitive advantage over full-time hires.
27:41 Consider financial trade-offs in decision-making for product quality and timely delivery, emphasizing subscription business LTV and manufacturing cost optimization for long-term success.
31:24 It emphasizes the importance of using experts for efficient and compliant product transportation to the US, citing a specific example of unexpected delays despite following protocol.
35:03 Create powerful dashboard; trust supply data; organize purchasing, inventory; use Ops hub early.
37:18 The speaker works with various partners and software, but looks forward to AI-enabled workflows simplifying operational tasks in the future.
📚 Timestamped overview
00:00 Learned from one-unit classes, got MBA.
03:40 Company rapidly grew, taking on major responsibilities.
07:45 Changed supply chain, maintained brand, innovative technology.
13:15 Unique supply chains need detailed framework assessment.
17:10 Importance of supply chain planning for scalability.
18:56 Adapt supply chains to growth and change.
23:41 Advocates for outsourcing supply chain operations & technology.
27:41 Focus on quality, timeliness, and financial strategy.
31:24 Import compliance advice: rely on expert help.
35:03 Create powerful, efficient Ops hub for organization.
37:18 Multiple partnerships, operations central, AI-enabled workflow future.
❇️ Key topics and bullets
Episode #328 - John Morgan on DTC POD
I. Introduction of Guest and Topics
Blaine Bolus introduces John Morgan, founder of Pelagic.
Overview of John Morgan's professional background, including tenure at SpaceX and Seed Health.
Announcement of John Morgan's appearance to discuss supply chain management, cost optimization, and leveraging technology.
II. Importance of Iterative Supply Chains
John Morgan emphasizes the need for ongoing assessment and adjustment of supply chains.
Discussion on complexity, volume, and identifying growth opportunities in the supply chain.
III. Engagement with 3PL Partners
Advice on when to engage with different third-party logistics based on revenue and potential for growth.
Consideration of factors like financials in relation to product quality and LTV.
IV. Support for Early-Stage Founders
Morgan offers options such as advisory services and project-based engagements.
Introduction of turnkey operations tailored for rapidly scaling brands.
V. Emphasis on Profitability and COGs
The discussion focuses on cost optimization and the significance of cost of goods sold.
Strategies for leveraging and negotiating volumes to reduce customer experience costs.
VI. Founders' Considerations and Data-Driven Decisions
Sustainability considerations in managing supply chains.
The use of a data-driven approach for strategic supply chain management.
VII. Scrutiny of Margins in the E-commerce World
The intensive focus on margins by founders, especially in seed-stage ventures.
The importance of maintaining margins while managing customer acquisition costs.
VIII. Methods to Connect with John Morgan
John Morgan is reachable through LinkedIn, Pelagic, and email.
IX. Call to Action by Blaine Bolus
Encouragement to rate and review the DTC POD.
Instructions to follow, subscribe, and use resources from dtcpod.com.
X. Launch of Slack Community
Promoting the new Slack community for founders and operators.
Announcement about the waitlist and application process for community membership.
XI. Promotion of HubSpot’s "All New Sales Hub"
Benefits of using HubSpot for increasing revenue and fostering growth.
XII. John Morgan's Experience with Supply Chains and Operations
Retrospective on Morgan's work on the Falcon nine rocket at SpaceX.
Challenges faced while managing the supply chain at Seed Health, including manufacturing obstacles.
XIII. Challenge of Financial Decisions in Supply Chain Management
Advice on negotiating volumes to decrease costs.
Potential pitfalls in importing products into the U.S. due to tariffs and political issues.
XIV. Founders' Common Mistakes in Setting Up Supply Chains
Reluctance to explore different supply solutions.
Neglect of establishing a comprehensive dashboard to track purchasing and inventory data.
XV. Recommendation for Supply Chain Tools and Technologies
Adoption of tools like Ops hub and SNOP for data organization.
Prospects of using AI-enabled workflows for operational inefficiencies.
XVI. The Pandemic's Impact on Global Supply Chains
Morgan shares experiences of supply chain navigation during Covid-19.
Addressing the high demand and import challenges for medical equipment and health products.
XVII. Introduction of Pelagic
Launch of a service focused on assisting founders and early stage employees with supply chain woes.
XVIII. Core Fundamentals for Brand Launches
Blaine Bolus inquires about essential elements for founders setting up supply chains.
John Morgan outlines a basic framework for supply chain operations and the value of solid supplier relationships.
XIX. Concluding Insights
Emphasis on the iterative process in building and scaling a supply chain.
Overarching theme of maintaining product marketability amidst operational challenges.
🎬 Reel script
Hey, I'm Blaine Bolus, your host at DTC POD, where today we've dived deep into the world of supply chains with the incredible John Morgan. John's insights from SpaceX to Seed Health show us how supply chains are ever-evolving organisms that need constant tuning—be it for coping with complexity, driving growth, or optimizing costs. He shared golden nuggets on when to leverage 3PL partners and the power of tech to keep costs down without sacrificing quality. For fresh founders, John emphasized the value of plotting your own financial course and the importance of a solid dashboard to steer your operations. Don't miss out on our full conversation for tactics on scaling operations while keeping a sharp eye on margins. Tune into episode #328 of DTC POD, and remember to push your limits every day in the fast-paced e-commerce world. Join our conversation, hop onto dtcpod.com, and connect with fellow founders. Catch the full story—we've got your back on the journey to scale and success!
✏️ Custom Newsletter
Subject: Unpack the Secrets of Supply Chain Mastery with John Morgan on DTC POD 🚀
Hey there!
If you've ever wondered what rocket science and probiotics have in common with the world of direct-to-consumer businesses, you're in for a treat with our latest DTC POD episode!
Episode #328 - John Morgan: A Guided Journey Through Supply Chain Optimization
In this episode, Blaine Bolus sits down with supply chain sage, John Morgan, who brings his interstellar experience from SpaceX to the ever-evolving landscape of DTC business operations. John dives deep into the nuts and bolts of supply chains and how to keep them running like a well-oiled machine.
Here are 5 key takeaways you'll glean from tuning in:
Iterative Magic: Learn why constantly reassessing your supply chain is essential for handling complexity and seizing growth opportunities.
Smart Partnerships: Discover when to engage with various 3PL partners to maximize your revenue and growth potential.
The Cost-Optimizing Lens: John reveals how focusing on COGS can significantly amplify your margins and pave the way for lasting growth.
Tech to the Rescue: Get the lowdown on how fractional supply chain operations and the latest technology can be game changers for your brand.
Foundational Fundamentals: Grasp the core principles to set up a robust supply chain, from understanding details to nurturing supplier relationships.
Fun Fact Alert 🎉: Did you know John Morgan once tackled the chaos of the cosmos while working on the Falcon nine rocket? Talk about stellar problem-solving skills!
Wrap-Up & Gratitude
Before we sign off, don't forget that seeking a supply chain sherpa could be just what your brand needs—and John's insights are pure gold. Plus, if you're jazzed about connecting with other founders and operators, check out the DTC Slack community!
Call to Action
🤝 Join the DTC Slack community: [Insert Link]
🎧 Listen to the full episode: [Insert Link]
🌟 Leave us a review on [Platform Name]: [Insert Link]
💌 Stay in the loop: Subscribe to the newsletter & follow us on socials!
Thanks for supporting the DTC community and happy listening! Let's continue to crush it in the commerce world, one episode at a time!
Cheers,
The DTC POD Team 🚀
🐦 Business Lesson Tweet Thread
1/ John Morgan's story is a testament to the relentless nature of supply chain management. From SpaceX's rockets to the delicate world of probiotics at Seed Health, mastering the depths of operations is an art.
2/ In this high-stakes game, Morgan reveals that constant adaptation is key. The volume, complexity, and growth opportunities keep the supply chain dance ever evolving.
3/ For founders, understanding when to call in 3PL partners shapes the trajectory of growth. Morgan's insight: revenue isn't just a number; it's a guide to scaling your operations intelligently.
4/ Early decisions spell the future of your brand. Morgan spotlights the special stew of advising, tackling projects, or turning keys on operations—each a lifeline for businesses at different growth stages.
5/ Tools and tech are allies in the mission for efficiency. Morgan vouches for tech-enhanced operations, paving the way for strategy over slog, foresight over firefighting.
6/ Margins are more than figures in a ledger; they're the pillars of your business temple. Morgan stresses this, especially for e-commerce warriors at the seed stage where every penny counts.
7/ Challenge is the crucible for innovation. SpaceX's supply chain hurdles and Seed's manufacturing maze gave rise to breakthroughs—rigor meets revolution.
8/ What's a plan without a pitfall? Founders often stick too close to their comfort zone, but Morgan urges the bold step of weaving a dashboard that captures the full spread of supply metrics.
9/ At Pelagic, Morgan harnesses these lessons to steer founders through the stormy seas of supply chain management—proving that even in crisis, clarity in operations is within reach.
10/ The core pillar? Know your terrain before you invite others to tread it for you. Founders must grasp the guts of their supply chain to scale with certainty.
John Morgan's journey distills into one clear message: In the world of supply chains, vigilance, versatility, and vision are the virtues that vault your venture to victory.
🎓 Lessons Learned
Supply Chain Dynamics
Assess, adjust supply chains continually for growth, complexity control.Partner Timing
Choose 3PL partners strategically based on revenue, growth.Flexible Services
Tailored services for various stages: advisory, project-based, turnkey.Tech & Operations
Use technology, fractional operations to optimize supply chains.Profitability Focus
Prioritize cost of goods sold for improved margins.Sustainable Decisions
Founders must consider sustainability, data in supply chains.Margin Scrutiny
Seed-stage, e-commerce founders intensely review product margins.Negotiating Costs
Leverage volume for cost reduction throughout customer journey.Avoiding Mistakes
Don’t fear alternatives; crucial to use powerful dashboards.Core Fundamentals
Founders must understand, relate to supply chain basics.
💎 Maxims
Certainly! Here are some maxims distilled from the themes and advice expressed by John Morgan on Episode #328 of the DTC POD hosted by Blaine Bolus:
Always be ready to adapt: Supply chains are ever-evolving; stay agile to keep up with complexity, volume, and growth opportunities.
Knowledge is power: Engage with 3PL partners strategically based on revenue and growth potential.
Scale wisely: Embrace services like advisory, project-based engagements, or turnkey operations to match the stage of your business.
Embrace technology: Leverage fractional operations and modern tools to streamline your supply chain.
Margins matter: Keep a sharp eye on the costs of goods sold and overall profitability for sustainable business growth.
Measure to manage: Make decisions based on data-driven insights, and consider sustainability as part of your strategy.
Margins under the microscope: Remember that in early stages and e-commerce, margins will be scrutinized heavily.
The customer's perception is your reality: Focus on financial decisions that enhance quality and ensure timely delivery, as customer lifetime value hinges on satisfaction over initial margins.
Negotiate with volume: Use your scale to negotiate better costs at all stages of customer experience to enhance savings.
Prepare for the unexpected: Anticipate import delays and seek expert advice, considering the volatility of tariffs and political tensions.
Avoid tunnel vision: Don't hesitate to explore new supply chain options and invest in powerful analytics dashboards.
Organize and anticipate: Build an operations hub and a sales and operations planning (SNOP) process, but avoid overcomplicating solutions.
Evolve with AI: Look forward to integrating AI-enabled workflows to optimize time-consuming tasks and focus on strategic growth.
Relationships are the backbone: Build and maintain strong relationships with suppliers and manufacturers—they can make or break your supply chain.
Start with a framework: Each supply chain is unique, but having a simplified approach can guide operations from inception.
Own the process: Understand the nitty-gritty of your supply chain before outsourcing to stay in control.
Iterate, don't stagnate: View your supply chain as a work in progress that requires constant refinement to be effective, especially in times of crisis.
🌟 3 Fun Facts
John Morgan shared his impressive experience working on the Falcon nine rocket when he was at SpaceX before transitioning his focus to operations and supply chains at Seed Health.
While at Seed Health, John Morgan developed innovative technology called Viacat for probiotic products amidst tackling chaotic supply chain and financial situations.
In a practical example of cost reduction, John Morgan recounts how through leveraging and negotiating volumes, he assisted a client in slashing their initial costs by a notable 50%.
📓 Blog Post
Title: Mastering Supply Chain Efficiency with John Morgan on DTC POD
Introduction to Supply Chain Mastery
In episode #328 of DTC POD, host Blaine Bolus leads an in-depth conversation with John Morgan, an industry expert whose experience spans from SpaceX to Seed Health, and currently at the helm of Pelagal. Morgan's approach to supply chains is dynamic, advocating for a continuous assessment and evolving strategies to cope with the complexities and rapid changes in the industry.
Optimizing for Growth and Profitability
Morgan's insights into supply chain management stress the importance of profitability and cost optimization. Understanding the intricacies of cost of goods sold is crucial for defining margins that facilitate robust growth. The road to scaling a business involves strategic decisions on when to engage with different types of third-party logistics partners, a factor Morgan ties to a company's revenue and expansion ambitions.
Flexible Supply Chain Solutions
Morgan's wide-ranging expertise has led to the development of flexible options for supply chain management. Early-stage founders can access advisory services tailored to their evolving needs, while more established businesses can benefit from project-based engagements or holistic turnkey operations. This scalability ensures that brands at any stage can streamline their operations for maximum efficiency.
The Power of Fractional Operations and Tech Tools
The application of fractional operations and the use of advanced technology tools stand at the forefront of current market strategies. By leveraging these methodologies, businesses can ensure they remain agile and adapt quickly to ever-shifting market demands and consumer expectations. Moreover, Morgan anticipates the integration of AI-enabled workflows that will revolutionize traditionally labor-intensive tasks, emphasizing the strategic and negotiation aspects of supply chain management.
Sustainability and Data-Driven Decisions
Founders cannot ignore the increasing demand for sustainability. Morgan underscores the need for a data-driven mindset when navigating the supply chain. Decisions must reflect an understanding of long-term impacts and the footprint of the supply chain not just on the bottom line, but also on the environment. This introduces an additional layer to the complexity of supply chain management, one that presents both a challenge and an opportunity for forward-thinking companies.
Covid-19 and Supply Chain Strains
John Morgan candidly discusses the tumultuous period of navigating supply chain disruptions during the Covid-19 pandemic. This conversation provides invaluable insights into the rapid adjustments required to import essential items under strained conditions, highlighting the critical nature of resilience and adaptability in supply chain planning and management.
Setting the Foundation for Supply Chain Strategy
For founders at the inception of their brand journey, John Morgan defines core principles for launching a self-sufficient supply chain. He advocates for a detailed understanding of the supply chain processes before considering any form of outsourcing. Engaging directly with suppliers and manufacturers builds foundational relationships that are key for long-term collaboration and success.
Building a Robust Support Community
Significant to this episode is Bolus' announcement of the D2C pod Slack community. This community is designed to be a vibrant hub where founders and industry operators can exchange knowledge, experiences, and support one challenge another through shared experiences. Currently on a waitlist, the community aims to boost connectivity and collaborative problem-solving once it launches.
Harnessing Advanced Sales Solutions
Lastly, the episode includes a nod to the modern solutions offered by the "all-new sales hub" from HubSpot, which promises to amplify revenue and bolster growth for businesses looking to maximize their sales processes.
Closing Notes
Throughout the episode, themes of proactivity, innovation, and collaboration emerge, painting a picture of a landscape that is both demanding and rewarding. For more insights and resources, listeners are invited to leave a review for DTC POD, follow the newsletter, and visit dtcpod.com. Engage with John Morgan through his LinkedIn, at Pelagic, or via john@pelagic.com.
Leveraging the nuanced advice from an esteemed expert such as John Morgan, companies can navigate the tumultuous seas of supply chain management with greater confidence and strategy. Episode #328 of DTC POD offers a treasure trove of insights for anyone eager to fine-tune their operational efficiencies and drive impactful growth.
🎤 Voiceover Script
Navigating the complex journey of supply chain management can seem daunting for any founder. That's precisely what we dive into with John Morgan in today's insightful episode of DTC POD.
You'll glean wisdom from John's stint at SpaceX and Seed Health, learning about:
The iterative approach to fine-tune supply chains as your business scales.
Strategies behind engaging with 3PL partners to fuel growth while keeping an eye on costs.
The critical role of data and technology in crafting an efficient supply chain operation.
Join us to unlock the secrets of building resilient, cost-optimized supply chains that stand the test of market demands and global challenges.
🔘 Best Practices Guide
Supply Chain Best Practices for Founders: A Quick Guide
Constantly assess and adjust your supply chain, considering volume, complexity, and growth.
Engage with 3PL partners appropriate for your revenue stage to maximize growth.
Utilize fractional operations and technology to maintain adaptability in the market.
Keep a sharp focus on profitability and cogs to optimize margins.
Prioritize a data-driven, sustainable approach in decision-making.
Maintain a keen oversight of margins, crucial for seed-stage and e-commerce ventures.
When expanding, factor in financial decisions alongside product quality and timeliness.
Leverage volume negotiations to cut costs and scale.
Build robust, streamlined dashboards and supply-demand tools to organize key operations data.
Cultivate direct relationships with suppliers and avoid over-reliance on outsourcing.
Stay prepared for global challenges like tariffs and logistic delays.
Embrace iterative development in your supply chain to enhance market delivery.
🎆 Social Carousel: Do's/Don'ts
Cover Slide
"10 Key Supply Chain Strategies"
Slide 1
"Reactive Planning"
Adopt proactive strategies using tools like an Ops hub and SNOP to organize data effectively.
Slide 2
"Ignore COGs"
Prioritize cost optimization to improve margins. Detailed cogs analysis is crucial for scaling.
Slide 3
"Solo Sourcing"
Build relationships with multiple suppliers to ensure flexibility and mitigate risk.
Slide 4
"Neglect Tech"
Implement technology tools and anticipate AI to streamline operations and enhance strategy.
Slide 5
"Undervalue LTV"
Focus on long-term value over initial margins, especially in subscription-based models.
Slide 6
"Settle on Costs"
Negotiate volumes and innovate to slash initial costs, aiming for substantial savings like 50%.
Slide 7
"Overlook Delays"
Allow for extra time and seek expert advice when importing, considering tariffs and political climates.
Slide 8
"Avoid Dashboards"
Establish powerful dashboards to consolidate key metrics, from purchasing to inventory.
Slide 9
"Rigid Methods"
Embrace flexibility and the iterative nature of supply chains. Be ready to assess and adjust.
Slide 10
"Outsource Blindly"
Obtain a deep understanding before outsourcing and keep track of scalability and market reach.
🎠 Social Carousel
Cover Slide:
"10 Supply Chain Commandments Every Founder Needs to Know"
Slide 1 - Iterative Approach
Constantly adjust your supply chain to stay ahead of changes in market demand.
Slide 2 - Timing 3PLs
Match engagement with third-party logistics to your revenue and growth stages.
Slide 3 - Flexible Options
Utilize advisory, project-based engagements, or full operations based on brand scaling needs.
Slide 4 - Tech Leverage
Implement technology tools to streamline and enhance your supply chain efficiency.
Slide 5 - Cost Focus
Keep a keen eye on COGs to optimize profitability and sustain growth.
Slide 6 - Sustainability Matters
Factor sustainability into your supply chain for long-term brand credibility and impact.
Slide 7 - Margin Scrutiny
Especially at the seed stage, margins are critical. Analyse them intensely to ensure viability.
Slide 8 - Quality vs. Timeliness
Prioritize the trade-off between product quality and timely delivery based on LTV goals.
Slide 9 - Avoid Pitfalls
Don’t get comfortable; continuously seek improvements and use data to consolidate operations.
Slide 10 - Relationship Building
Understand details and foster strong connections with suppliers to create a resilient supply chain.
CTA Slide:
Got Supply Chain Questions?
Join our growing Slack community to connect with experts and peers. Apply now and get exclusive insights and support!
[Apply Link in Description]
One Off Tweets
Iteration is the heartbeat of successful supply chains. Adjusting to complexity and volume is not just a one-off; it's a continuous journey toward growth.
Knowing when to partner with 3PL providers is a dance with revenue and opportunity. Engage at the right time to elevate your supply chain strategy.
Are you an early-stage founder? Don't overlook advisory services that can scale with you. Flexibility in support can propel rapid brand growth.
Embrace fractional supply chain operations and tech tools. It's like giving your business superpowers in efficiency and strategy.
The pulse of profitability lies in the control of cogs. Tighten your grip on margins to fuel your company’s ascent.
Sustainability isn't just a buzzword; it's a founder's strategic choice driven by data and customer expectations.
Scrutinizing every margin is the founder's rite of passage in e-commerce. Eye the bottom line with the precision of a hawk.
Spaceships to supplements, my journey shows the universality of supply chain challenges. Learn from my voyage at SpaceX to Seed Health.
In the labyrinth of importing, the cautious win the race. Expert guidance and timing are your allies against tariffs and political winds.
Build a fortress of data with powerful dashboards. Overlook this, and you're sailing without a map in the vast sea of supply chains.
Twitter Post 1
This SpaceX marvel helped save precious time and resources.
Falcon 9 Rocket
Using the same rocket multiple times cut costs and revolutionized space tech.
Mindsets
If you're looking to master the art of supply chain management and position your brand for growth, there are some crucial mindset shifts that you need to consider:
💭 Shift from static planning to embracing the flow of change. The supply chain landscape is continually evolving, and your strategies should too. Recognize the importance of regularly assessing your operations, as John Morgan underlines. This allows you to stay nimble and seize opportunities for efficiency and growth.
💭 Embrace technology as an ally, not a crutch. In today's market, tools and software can offer incredible insights and streamline processes, but they should enhance, not replace, strategic thinking. As John points out, the future of operations includes AI-enabled workflows, which will free up time for strategy and relationships – the core of any successful business.
💭 View challenges as catalysts for innovation. Navigating supply chain hurdles, especially during unprecedented events like the Covid-19 pandemic, requires resilience and creativity. Rather than being roadblocks, let these difficulties inspire you to innovate and improve your processes, just as John Morgan did with the development of Seed Health's Viacap technology.
The insights from today's episode with John Morgan are indispensable, and if you're a founder or operator in the direct-to-consumer space, remember to rate and review DTC Pod, follow and subscribe, and check dtcpod.com for more valuable resources. Joining our Slack community will put you at the heart of a network where ideas, strategies, and support are shared fervently. Don't miss out on applying via the link in the description – we're launching once we hit 150 members!
#DTCPOD #SupplyChainManagement #GrowthMindset #FoundersJourney #InnovateAndScale #EmbraceChange
Tactics
For businesses looking to retool their supply chain strategy in challenging times, implementing fine-tuned measures is crucial. Here are five nuanced tactics and strategies, inspired by insights from John Morgan on Episode #328 of DTC POD, that you could apply to enhance your business operations:
💭 Embrace the concept of fractional supply chain management to augment capabilities without full-time hires. This means utilizing part-time or temporary specialists to analyze and adjust your supply chain strategies as demand and market conditions fluctuate. It’s a flexible, cost-effective approach that gives you access to expertise precisely when you need it.
💭 Leverage data through an integrated dashboard that consolidates purchasing, COGs, inventory, and supply information. By having key metrics at your fingertips, you can make informed decisions rapidly and stay ahead of potential disruptions. Prioritize simplicity in these tools to avoid overcomplication that can hinder, rather than help, your operations.
💭 Foster deep relationships with suppliers and 3PL partners by understanding their challenges and constraints. Go beyond transactional interactions; invest in trust-building and open communication. This can lead to better terms, improved cooperation during demand spikes, and a more resilient supply chain.
💭 Use strategic volume negotiations to drive down costs across the entirety of the customer experience, from ordering materials to final delivery. This doesn't mean simply reducing costs at every corner, but rather smartly investing where it counts to ultimately lower expenses without compromising on quality or timeliness.
💭 Integrate AI-enabled workflows to streamline operations and free up time for strategic work. Evaluate repetitive, time-intensive tasks within your supply chain and identify technology solutions that can automate these processes. This forward-thinking step can considerably reduce human error and increase overall efficiency.
In applying these tactics, businesses can create a robust and responsive supply chain that not only withstands disruptions but also captures growth opportunities in today's dynamic market.
In Depth Thread
Overrated: Spray and Pray.
Hoping to catch a break in supply chain optimization by trying every possible tool and tactic will eat through your operational budget faster than you can say "inventory turnover."
Underrated: Tailored Optimization.
Here's the exact approach John Morgan used to slash a client's initial costs by 50%:
Simplify Your Partners
Work with less but more versatile 3PL partners.
John suggests partnering based on what stage your business is at:
Early Revenue: Consulting driven 3PLs
Growth Phase: Project-based 3PLs
Scaling Quickly: Full-service turnkey operations
If your 3PL can’t scale with you, rethink it.
Five Key Focus Areas
Your operations can only juggle so much. Concentrate on these:
Cost of Goods Sold (COGS)
Freight and Logistics Optimization
Volume Leveraging
Data Consolidation (Ops Hub and SNOP)
Tech and AI Integration
If these don’t ring a bell, it’s time to hit the drawing board.
Market Snapshot
Avoid the operational weeds when you first outline your supply chain infrastructure.
Here’s what to focus on:
Your immediate logistic needs
Anticipated complexity at the next revenue milestone
Growth potential and market scalability
Five quick bullets will suffice.
Elevator Pitch
This is your supply chain at a glance. Here's Pelagic's own pitch:
“We navigate the waters of complex supply chains to deliver seamless scalability for founders.”
Craft a sentence that captures your operations.
Define Your Narrative
Instead of relying on buzzwords, use specific descriptions that set the scene for your supply chain story.
Pelagic’s: “Iterative supply chain architecture.”
Bezos’: “Our customer service obsession.”
Control the conversation with your phrasing.
Your Roadmap
We do more than consulting.
Understand sustainability, tech integration, and lean operations. Tell your partners the steps you’ll walk through together.
Service Outline
Spell out your service engagement model upfront.
Pelagic offers options:
Advisory for early-stage setups
Project-based engagements for growth strategy
Turnkey solutions for brands on the fast track.
Clear expectations are key.
Visualize Success
Charts and graphs can highlight your supply chain’s throughput, cost breakdown, and scalability. Get visual but keep it direct.
Use straightforward graphics - consult a pro if you’re unsure.
Team
Ultimately, supply chain mastery is about people.
Showcase those who make logistics look like clockwork.
Their expertise is your brand’s strength.
If you’re building from scratch...
Focus on your adaptability and vision.
Show your roadmap for scaling operations, your commitment to slim margins for greater LTV, and your experienced team ready to handle growth.
Master the 3 'S's of Supply Chain:
• Strategy, Scalability, and Sustainability
• Systems, Software, and Savings
Detail your S’s as meticulously as you plan your inventory.
Remember, no detail is too small when it comes to optimizing your supply chain. It's the backbone of your business.
New Idea
Idea #2: Navigating Supply Chain Complexities with Flexibility
Approach supply chain management with flexibility and cater to the unique challenges of growth and scalability through:
Embracing Iterative Processes: John Morgan underlines the significance of progressively refining supply chains in response to evolving complexities and volumes, which recognizes the non-static nature of global markets and consumer demands.
Offering Tailored Solutions: Providing a variety of services—including advisory for newcomers, project-based collaborations, and complete operations for scaling entities—exemplifies a flexible approach that adapts to the distinct needs and developmental stages of different brands.
Leveraging Fractional and Technological Strategies: John advocates for the use of fractional supply chain operations and modern tools, showcasing an understanding of the current marketplace's resource constraints and the necessity for cost-effective, technology-driven solutions.
Tweet thread on learnings
Tweet 1:
In episode #328 of DTC POD, supply chain sage John Morgan from Pelagic imparts wisdom from his time at SpaceX & Seed Health, underscoring the essence of agility in supply chain management. Here’s a sneak peek at the gems he shared: 👇
Tweet 2:
The Dynamic Puzzle of Supply Chain Management
Supply chains are living entities that need continuous monitoring and refinement. From complexity to growth, staying ahead means adjusting the pieces efficiently and effectively.
Tweet 3:
Scaling Smart with 3PL Partners
Choosing when to engage with logistics partners is crucial. John outlines strategies based on your company's growth trajectory and revenue, ensuring you deploy resources only when it's most beneficial.
Tweet 4:
The Power of Fractional Operations
For early-stage founders, flexibility is key. Pelagic’s approach includes customizable solutions, like on-demand advisory and operable turnkey solutions for scaling companies.
Tweet 5:
Tech & Tools: The Game Changers
Integrating technology is non-negotiable. From fractional operations to software aids, John bets on tech-driven efficiency to handle repetitive tasks, freeing the humans for the big-picture strategies.
Tweet ignificance of COGS
Tight control of the cost of goods sold is the lever to profitability for D2C brands. John emphasizes the criticality of margins, especially for founders scrutinizing every spending choice in the seed stage.
Tweet 7:
Sustainability and Data: The New Age Lock & Key
Founders must juggle eco-consciousness with solid data to back decisions. John heralds this pairing as central to modern business, balancing responsibility with commerce.
Tweet 8:
Lessons in Negotiation: Cutting Costs without Compromise
How do you halve initial costs? Leverage volumes and negotiate. John shares an anecdote where smart negotiations led to a 50% saving for a client, showcasing the might of calculated talks.
Tweet 9:
Avoid Set-Up Pitfalls: Strike a Balance
A common supply chain set-up failure? Being rigid. John suggests a potent dashboard to compile key operational figures and recommends simplicity over complexity in organizational tools.
Tweet 10:
Covid-19 and Supply Chains: The Adaptability Test
John recounts the pandemic pressures, illustrating the necessity for supply chain resilience amidst crises, and introduces Pelagic's role in aiding founders to overcome such obstacles.
Tweet 11:
Starting from Scratch: Supply Chain Basics
Each supply chain is a unique beast. John advises founders to grasp the fine details before delegating and to cultivate strong supplier relationships as the backbone of effective operations.
Tweet 12:
Wrap-Up: DTC POD’s community is growing with a new Slack space! 🌟 For all you founders and operators seeking fellowship and knowledge, hit the link to join our waiting list. Don’t forget to check out @HubSpot’s all-new sales hub - a possible key to your revenue climbing. #DTCPOD
Tweet 13:
A final shout-out to our listener family - if John Morgan’s insights lit a spark, leave us a rating and spread the love with a review. Your support fuels this channel. For more, follow us, subscribe, and dive into our resources at dtcpod.com. 🎧🚀 #supplychain #ecommerce #growth
Future State, 6 reasons post
In the span of a single fiscal quarter, we've begun to elevate the intelligence of supply chain operations, shaving significant percentage points off our COGs, and enhanced our foundational frameworks for scalable growth. As a guest on DTC POD, John Morgan has shed light on a simple truth: the agility of your supply chain is a pivotal driver of company health. Forward-thinking brands now stand before a tantalizing opportunity. By mastering the new era of supply logistics and operations, they're not just surviving; they're setting themselves up to soar.
BACKGROUND:
It's no secret that before this, many startups experienced the inertia of outdated supply chain strategies—where pivotal moves toward efficiency in operations were hampered by reluctance to innovate or strategize around data.
Old Supply Chain:
Static supply chain models
Inefficient response to market dynamics
High COGs bogging down profit margins
Limited engagement with tech and analytics for decision-making
New Supply Chain:
Dynamic, fluid supply chain management
Proactive adaptation to changes in market conditions
Streamlined operations reducing COGs and boosting profitability
Data-driven approach augmenting strategic foresight and operations
John Morgan's conversation with Blaine Bolus paints a vivid picture of a future where data and relationships drive the core of supply chain management, optimizing both costs and customer experience. The days of essence, this next epoch will bring together human insight and technological precision in an orchestral display of operational brilliance.
HERE'S HOW...
Yet, to achieve this evolved state, there's work to be done. Morgan proposes a series of actionable tactics to usher in this golden age of logistical operations.
Here are my 6 recommendations:
Assess and Adjust: Regularly evaluate your supply chain to navigate the ever-evolving complexities of your industry and scale accordingly with agility.
Tech and Tools Utilization: Integrate technology tools and AI-driven platforms to automate routine tasks and concentrate on strategic decisions and negotiations.
Project-Based Partnerships: Engage with adaptable 3PL partners and advisors attuned to your growth trajectory and revenue streams.
Cost and Quality Balance: Prioritize the financial obligations concerning product quality and timely delivery, especially vital in a subscription model where LTV prevails over initial profit margins.
Building Robust Dashboards: Develop an operations hub consolidative of purchasing, COGs, inventory, and supply data to avoid common supply chain pitfalls.
Sustainable and Data-Driven Focus: Consider the environmental impact of supply chain decisions while maintaining a core foundation of data-driven maneuvers.
Entering this echelon of supply chain excellence could secure not just survival in our tumultuous market, but enduring prosperity.
P.S.
In what ways do you think startups can further innovate their supply chains to prepare for future market demands?
How important is the integration of sustainability into the supply chain strategy for you? Share your thoughts and explore further by joining our Slack community!
About the Episode
In episode #328 of DTC POD, John Morgan dissects the intricate tapestry of supply chain management with a laser-sharp focus on adaptability and continuous improvement. He underscores the significance of constantly reassessing and refining supply chain processes, emphasizing the need for businesses to remain agile as they experience fluctuations in complexity and volume. Throughout his discussion with Blaine Bolus, Morgan zeroes in on the strategic engagement with third-party logistics partners. Matching the scale and growth trajectory of a company with the services of a 3PL partner can be a navigational beacon for businesses wading through revenue categories and pinpointing when to harness external expertise to accelerate their trajectory.
Morgan does not shy away from advocating strategies that bolster financial prudence in supply chain operations, positioning cost of goods sold as the linchpin in the architecture of profitability and expansion. By elevating the role of operational tools like Ops hub and SNOP that consolidates vital metrics such as purchasing, inventory, and supply data, Morgan extols the virtues of establishing a nexus of clear, accessible information. This approach beckons founders to move beyond myopic decision-making by harnessing a dashboard that paints a holistic view of their supply chain's health.
The episode illuminates the path by highlighting the technological advancements that are reshaping the operational landscape. John Morgan leans into the power of technology, forecasting the innovative integration of AI-enhanced workflows to streamline supply chain operations. By freeing up bandwidth from routine tasks, he argues, businesses can devote more energy to strategic decisions and cultivate a keen edge in human-centric negotiations. It's a vista where insight, powered by technology, carves out efficiency and uncovers opportunities for brands at the vanguard of market growth.
🔘 Best Practices Guide
Essential Supply Chain Management Tactics for Founders
Adaptivity in Supply Chain: The Iterative Approach
Embrace the fluid nature of supply chains by regularly revisiting and refining processes to cater to the evolving aspects of your business. Adjust strategies based on the ebb and flow of complexity, volumes, and emerging growth possibilities.
Strategic 3PL Engagement Timing
Align your partnership with third-party logistics (3PL) providers based on the current revenue tier of your business. Effective timing in engaging 3PL services can play a pivotal role in supporting and amplifying your brand's potential for scaling and growth.
Flexible Operational Solutions
Consider a spectrum of operational support, from advisory services for nascent entrepreneurs to comprehensive, project-based engagements and full-fledged turnkey operations for swiftly expanding enterprises.
Tech Utilization & Fractional Operations
In today’s market, stay competitive by incorporating fractional leadership into your operations and harnessing the power of advanced technology tools to streamline your processes and optimize efficiency.
Profitability and Cost Optimization Focus
Center your supply chain management strategy around profitability, particularly by managing the cost of goods sold (COGs) to solidify margins and enable sustainable progression.
Sustainability and Data-Driven Decisions
Align your brand with sustainable practices and underpin your strategic choices with a robust, data-driven approach, ensuring long-term viability and responsibility.
Margin Management Attention
Margins deserve rigorous attention, particularly for seed-stage companies and within the e-commerce sphere, where every percentage point can be the difference between success and failure.
Financial Prudence and Quality Balance
In subscription models, long-term customer value often outweighs initial profit margins, necessitating a balance between cost-effectiveness, quality, and timely delivery.
Negotiating and Scaling Economies
Effectively leverage volumes to achieve cost reductions, and approach scaling with an eye towards economizing the entire customer experience.
Supply Chain Setup and Mistakes to Avoid
Founders should be wary of common pitfalls such as resistance to exploring supply alternatives and the lack of a comprehensive operations hub or SNOP (Sales and Operations Planning) to consolidate critical data.
Tools, Technology, and the Future
Engage with user-friendly software to manage operations, and stay attuned to the emerging prospects of AI and automated workflows that promise further efficiency and focus on strategic actions.
Building Relationships
Develop deep relationships with manufacturers and suppliers, gaining a keen understanding of the nuts and bolts of your supply network—a critical strategy against outsourcing dependencies.
Remember: Your supply chain is not just a logistical necessity but a strategic asset that, when managed well, has the power to give your brand a competitive advantage in the marketplace.
🔘 Best Practices Guide
Supply Chain Essentials for Founders
Regularly reassess your supply chain for growth adaptation.
Align with 3PL partnerships based on business scale.
Employ tactical operations and tech for market agility.
Focus on cogs for margin optimization and profitability.
Make sustainable, data-informed decisions.
Monitor margins closely, especially in early stages.
Negotiate volumes to reduce costs and aid scalability.
Establish clear data dashboards for supply chain oversight.
Forge strong supplier relationships; minimize outsourcing.
Be proactive in managing global supply chain disruptions.
🔘 Best Practices Guide
Supply Chain Best Practices - Top 20 Tips
Regularly review and refine your supply chain.
Choose 3PL partners that align with your current revenue and expansion goals.
Adopt scalable options like advisory services and turnkey operations.
Implement technology for efficiency and competitive advantage.
Focus on cogs to drive profitability and sustainable growth.
Embrace data-driven strategies to make informed choices emphasizing sustainability.
Scrutinize margins closely, especially in early stages and e-commerce spaces.
Establish direct communication channels with suppliers and manufacturers.
Take a step-by-step approach to scale your supply chain.
Foster relationships with partners to understand supply chain complexities.
Anticipate political and economic influences on imports.
Address challenges proactively and avoid reluctance to change suppliers.
Consolidate key data through an Ops hub or SNOP.
Limit overengineering; prioritize practical, organized solutions.
Prepare for unforeseen global logistics disruptions like the Covid-19 pandemic.
Prioritize product quality and timeliness in subscription models.
Engage expert guidance to navigate import regulations.
Leverage negotiation for volume discounts to lower initial costs.
Anticipate technological advancements to further streamline operations.
Always work on improving your product's journey to market.
Understanding these fundamentals will lay the groundwork for a supply chain that is resilient, strategic, and capable of supporting your company's growth.
Episode Summary
John Morgan is the founder of Pelagic, a company that specializes in helping e-commerce brands optimize their supply chain operations for profitability and sustainable growth. With extensive experience at SpaceX and Seed Health, John understands the unique supply chain challenges faced by early-stage and rapidly scaling brands.
In this episode of DTC Pod, John shares his insights on designing and managing supply chains for hypergrowth. He discusses the importance of iterative supply chain optimization, the timing of engaging with 3PL partners, and the value of leveraging fractional operations and technology tools. John also emphasizes the crucial role of cost optimization and margin analysis in driving profitability and growth for e-commerce brands.
Success Strategies
Here are 3 strategies for DTC success based on insights from John Morgan:
Proactively organize your supply chain data
Consolidating key supply chain metrics into a centralized dashboard is crucial for making informed decisions as you scale. Rather than cobbling together data from disparate sources, take a proactive approach to organizing information related to purchasing, COGs, inventory levels, and demand forecasting.
By building an "Ops Hub" or SNOP (sales and operations planning) tool early on, you'll have a clear view of your supply chain health and be better equipped to navigate challenges as they arise. Remember, it's not about overengineering a complex solution, but putting in place a practical system to keep your operations running smoothly.
Leverage volume to negotiate better terms
As your brand grows, don't be afraid to explore new supply chain partners and use your increased volume as a bargaining chip. Morgan cites an example where renegotiating with vendors based on higher quantities helped a client save 50% on their initial costs.
Look for opportunities to reduce expenses across your entire supply chain and customer experience by leveraging the economies of scale that come with growth. From raw materials and packaging to shipping and fulfillment, incremental cost savings can add up to a significant impact on your bottom line.
Build flexibility into your supply chain
In an unpredictable market, the ability to adapt quickly is a major competitive advantage. Morgan recommends incorporating flexibility into your supply chain wherever possible, whether that means having backup suppliers, investing in agile technology, or working with partners that can accommodate fluctuations in demand.
Don't get locked into rigid, long-term contracts that limit your options. Instead, prioritize relationships with suppliers and logistics providers that are willing to grow with you and support your evolving needs. By designing your supply chain for flexibility from the start, you'll be better positioned to weather any disruptions that come your way.
Castmagic LinkedIn Post
Effective supply chain management is essential for the success and scalability of any DTC brand.
John Morgan, Founder of Pelagic and former Head of Supply Chain at Seed Health, joins Blaine Bolus to share his extensive experience in building and optimizing supply chains for high-growth companies.
In this episode, we dive into the iterative nature of supply chains, the importance of data-driven decision-making, and how to leverage technology and partnerships to optimize costs and drive profitability.
John also shares his insights on navigating global supply chain challenges, particularly in the context of the Covid-19 pandemic, and offers practical advice for founders looking to set up and scale their supply chain operations.
Listen to the full episode here: [link]
#supplychain #dtc #ecommerce #operations #logistics
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