Russ Reynolds likes numbers. So when he started as CEO at Batteries Plus Bulbs and realized that the company’s supply chain infrastructure needed a lot of work, his focus was not on the mechanics of effective logistics.
“For me, sitting in a weekly meeting going through exactly how we’re going to integrate a warehouse would be like watching paint dry,” Reynolds says. “That was not my gig. I like numbers, so I needed to make sure I had personally bought in on the prize.”
The “prize” was the cost savings that the battery and light bulb franchise company could achieve by transforming a system that had stores in the Batteries Plus Bulbs family ordering from 25 to as many as 50 distributors each week.
“All those distributors had varying order minimum quantities,” Reynolds says. “So to manage just getting goods into the store was a substantially more intensive effort than it was for another retailer down the street that got its goods in one order from a warehouse.”
Share your plan
It was going to be a big change, but Reynolds says the key to implementing big change is to present it in a way that doesn’t feel overwhelming.
“You have to root out the anecdote in the fear that may be emotionally based, but isn’t factually based,” Reynolds says.
“Just go back to the objectives and the facts that you built the case on. For us, we wanted to make it substantially easier for the stores so they could spend time on their sales floor as opposed to being stuck in their back room trying to figure out what to order from which guy on which day.”
You also need to make sure people understand that the change process won’t be perfect.
“There are going to be bumps,” Reynolds says. “We’ll plan our best, but we have to keep our eye on the long-term prize and not what happened Tuesday with my order.
“We were fortunate because we have a group of franchisees and people who had bought in early to our system. They had a lot of general business experience running divisions of companies and had some strong business acumen. If you sell perfection as an objective out of the gate, you’re probably setting yourself up to fail.”
Reynolds and his team followed a methodical process to develop an effective supply chain infrastructure for Batteries Plus Bulbs.
“We knew where to get the batteries, high-quality batteries, from the right suppliers, domestically or internationally,” Reynolds says. “We just didn’t have a point of consolidation or the technology that would run them to our stores.”
Focus on your own needs
One of the mistakes that Reynolds has seen companies make when it comes to supply chains is to not get distributors on your technology platform.
“If you’re having them pick, pack and ship items to your stores using your technology platform, the integration and the work that you have to do to maintain your system is one platform,” Reynolds says. “When you have to create integrations and handoffs to somebody else’s system, they’ll talk about open architecture and technology bridges and all that. But it’s really doubling your effort. You have a second platform you have to figure out to make sure it’s talking to your systems.”
Batteries Plus Bulbs built its own platform and prioritized product lines, gradually moving them to a single warehouse.
“When we finally got to a single point of distribution, we arrived at the end of a journey and not in one fell swoop,” Reynolds says. “It took us about 18 months, but it probably saved us a lot of pain.”
The transition quickly paid valuable dividends.
“We had a lot of distributors that had pockets of profit that we could consolidate,” Reynolds says. “Upon full implementation of the new program, we saw a 7-point improvement to margin for our stores. So there was a huge economic prize. That was easy to put facts around.”
As for Reynolds, he offered his support. He kept apprised of what he needed to know, but didn’t obsess over details.
“You have to make sure you support them with what they need and not the other way around,” Reynolds says. “Any time you get into a big project and everybody is trying to tiptoe around the CEO, you can create a culture that makes it difficult for people to want to take on bigger things that will make the company better.” ●
How to reach: Batteries Plus Bulbs, (800) 274-9155 or www.batteriesplus.com