The Supply Chain Playbook: Lessons from Shyft Global’s CEO

welcome to the know your ship podcast presented by ehub I’m your
host Frank Dolce we’ve certainly over the last 12 months uh refined our
understanding of who our Target customer is how to serve someone that’s
probably what you’re talking about yeah and a lot of it is like less of the
startups more you know kind of five to100 million brands there are Brands
bigger than that that we work with there are Brands smaller than that but as
far as like if you say who’s the target it’s and even two two million you
know once a once a brand has enough momentum they have sales they have cash
flow they’re a good candidate for us to come in and help them optimize but if
they’re pre-revenue and pre- proof and pre- all these things there are
companies that specialize in that and that’s what the you know Kickstarter
type level things mhm and we kind of decided hey we’re going to really focus
on this constituency especially F growing companies they tend to break a lot
of things and our Focus isn’t just going to be let us Source things our focus
is going to be how much money can we draw out of your supply chain and give
it back to you and that’s money we can draw after our fees so that that’s
been really good I mean it’s it’s hard to it’s hard to say no to that sales
pitch it’s like okay we’ll do an audit for free if we can save you a ton of
money then hire us if we can’t then don’t yeah but we haven’t run into many
brands that one way or another we can’t come and say hey we can save you
money while not sacrificing quality or capacity or the other things that
matter in fact usually those increase as well but so how long have you been
in how long has shift been around now um seven years just finished seven
years so in prior to this I don’t know realization were you working with
anybody everybody Anybody Everybody in the sourcing kind of yeah I would say
you know when you bootstrap a company um because we have we’ve never raised
we’ve never done anything We Own 100% of it and there’s pros and cons to that
the but the big one of the big Pros is that or or one of the big cons or you
could see it either way is that you are a little bit more reactive to hey we
have to pay the bills so you know we can’t be overly picky about if you’re
the perfect Target MH uh if you go out and raise money and are a little bit
more deliberate and you’ve kind of beforehand figured out your ICP and you
never figured that out perfectly but you you have a little bit more of a
pointed approach for us for the first I would say four to five years um we
would rarely turn something down unless it was highly technical that we just
didn’t have the engineers because we’re not an engineering firm we we
wouldn’t touch those but just about anything else we would do and then it
started to become well let’s kind of refine it into categories and then from
there over this last 12 months we’ve even even those categories we refined
further okay and it’s like these are the three or four categories and they’re
still quite Broad you know they’re big categories like beauty Beauty and
wellness so that could be everything from a supplement to a cream to a
fragrance um soft goods that could be anything from a hammock to a backpack
to a whatever but but but they share commonality and the technical skill and
knowledge they share factory base uh networks and that’s where the Synergy is
for us is that we’ve spent a decade this and then even before shift building
these out and so you know it’s good when we can aggregate all of that so okay
all right well we’ll we’ll dive into that a little bit more that kind of cool
realization about where your where your time is best spent in working with
and I just want to make sure I’m saying your last name correctly Burge Burge
yeah Burge well there he is yeah Alex Burge or B de bour de B something like
that we honestly don’t know or believe any of the stories that my dad tells
us about our last name because they change so much that they don’t have any
like nobody knows are are you a dad also yes three kids yeah are you going to
do that to your kids too cuz I think that’s dads do stuff like that and it’s
like it’s inborn like you don’t know that and you just start doing it I’m not
that far into being a dad that I’m I’m blinded to that but I think I probably
will get there I used to make fun of my dad for doing that yeah and then I’ve
recognized that I do that yeah and it’s really enjoyable now it’s the
commercials like you’re be you know the you’re we we can’t help you from
becoming your parents or whatever those are still some of the best
commercials I love those commercials those and then the Resurgence of the
Caveman with Geico you like that I think it’s really fun have you seen the
new one where they’re playing like that what is that game called I can’t
remember heads up or whatever yeah yeah it’s I love it he’s like mayorca my
favorite one’s the one where he’s asleep and he wakes up he’s like they just
keep I don’t know what he say he like they just keep you know keep replaying
in my head like they’ made me an they made me like a figure you know it’s so
funny oh that’s good well welcome Alex Alex bird shift Global uh founder CEO
yeah co-founder CEO who is your co-founder my dad and your dad is a Serial
entrepreneur yes yeah he’s great that it must have been interesting growing
up in that household I mean that that led you down the path or did you do you
think you had that with even without seeing how your dad went through his
work experience hard to know but definitely benefited me either way
significantly and I if I had to guess I’d say it it impacted me a lot uh a
lot more than I realized at the time but for me the biggest part was um it
was it just was how it was MH like just people started companies that’s just
what you do for work you know and I knew that not everybody did that but that
was a real privilege to see someone who and not everything he did was a giant
success but it it very successful many times over and for me that was cool
you know like growing up he ran a for about 17 years he ran one of the largest
printing companies and so I would go and visit him you know three 400
employees all the big presses all of that and so I think it was real
impactful it made me feel like man one I have a really cool dad and two um
like this is achievable just like normal humans do this and I can do that and
I want to do that and so it didn’t really re-engage until I was a bit older
and and then the bug started but so you didn’t you didn’t or did you have
this sense of as you were growing up like I want to start something I want to
do this I’m GNA I this oh I love this thing and I’d love to be able to to
provide that to to the community yeah I think it came and went so when when I
was real young I I can look back now and see propensities that I had that
were entrepreneurial like repackaging based cards and selling them and stuff
like that it’s a great it’s a great story yeah but for a long time I didn’t I
didn’t I didn’t think about that I thought I maybe be a teacher maybe I’d be
a doctor maybe do what and then you know but you’re not at least for me I
wasn’t really serious about what I was going to do when I grew up until I
grew up and then I really started thinking about it so I’d say that all a
sudden mostly when I was in college I started to do side gigs and realized I
loved it and is that the start of your fascination I guess with or interest
interest in supply chain was it you you landed a a a job in a with a supply
chain or or a company that was working in supply chain you started to get a
background in that exactly yeah and that was just by I remember I was driving
to one of my mom’s she was playing tennis I was with my dad I was working at
a tech company and I was like man I I would love to work around you in some
way that’ be fun and then there was an internship at a company that he had an
association with and so I didn’t work too close to him but it was enough to
say I got to inter start interacting with him um in a more professional sense
and then it just kind of went from there and it happened to be at a supply
chain company I knew nothing about supply chain but no nobody knows anything
about supply chain until you just fall into it or something so that’s what
happened and so in that company in supply chain is that where you started to
think I this is I I could make a difference here could make a business out of
this there’s an opportunity here that somebody is missing yeah yeah that
that’s kind of the simplified answer I think what I found as an entrepreneur
is that most of your good ideas come in whatever you understand the best and
it’s just difficult it’s difficult to come up with a truly meaningful value
ad in an industry that you’d understand deeply the pain points and so because
that’s what I was doing it was natural to say hey I have this bug this
entrepreneurial bug and I think one of my talents is being able to find
solutions to problems and I saw a bunch of problems um and it led to an
opportunity to try to solve them and we’re still working on how to solve them
best but that’s kind of what led to it so what are what are some of the
things what did you notice that you thought you could solve um yeah this is
pulling back a while the I think the initial thoughts were and this is the
Genesis of shift yeah okay yeah and at the time I only had experience
sourcing helping companies Source Products in China mhm so shift obviously
has evolved into kind of a global supply chain start to finish multicountry
thing but that was certainly an evolution and so part of what um part of what
I felt like was missing was the customer experience was quite difficult um
and that was without saying anything negative about the place I work because
there was a lot of good people that did good things but it was pretty brutal
because they grew too fast MH and they didn’t have strong management
hierarchy and training MH so I didn’t I didn’t even get a single day of
training and so and I didn’t even know what the the Lexicon of Supply like I
didn’t even know anything so I was hearing terms I was like driving out in
the middle of nowhere trying to figure out how to print on stethoscopes and
it was it was a very inefficient way to help people but what it did is it it
you know helped open my eyes to hey you know the customer experience here is
rough there’s a lot of unknowns there’s stuff that ships and it’s pink and it
was supposed to be white there were so the the biggest opportunity and again
I I’m careful in saying that because the company did a lot of things well but
there were certain things they grew too fast and that got out of hand and I
got to see those because I was an account manager and I didn’t get to control
them but I had to take I had to tell someone your stuff is pink instead of
white and so as a young I was 21 or whatever it was like okay I think I can
do this really well with the help of other people and I think if you just
elevated the experience a little and were a little more thoughtful and
intentional about the categories you went after and and these types of things
you could build a company that um that um could could make a difference and
and kind of stand up above the the competition but um that was only possible
because that that company ended up going out of business and I it wouldn’t
have been natural for me to go and start a business in supply chain I
probably would have just gone and get done something else but that company
while I was employed there went out of business and I was just again I was I
wasn’t a very important part of that company but I was a part of it and so it
was like either get a job or start a company and this is what I know how to
do so I’ll start a and You’ had been obviously thoughtful about what was
happening right at that company so but your dad uh I wouldn’t say your dad
was in supply chain um yes and no I mean because he owned the he’s owned
several factories uhhuh he he helped uh co-found a company that did Imports
okay that’s now a pretty significant company he sold his interest off years
ago um so in that sense he understood supply chain but not the way that shift
does it as much that’s been a lot of development since then it was a
different type of supply chain mostly yeah but he was anyway yeah and so that
and so the reason did you go to him and say I want to start this company I
want you to be my partner is that how it worked or was there something else
no that happened it was actually so at the time I was looking at starting a
company I had made up my mind I want to do this and um he was the CEO of a a
different company at the time and there was this realization that hey there’s
an opportunity here we can try to um we couldn’t really continue necessarily
what the other company had done because um but in terms of what what the
service the the problem solution you know there’s a need for this and we can
add value and so he said hey he basically said hey why don’t we do this
together gotcha and I said because I was Brash and it took me a while to to
to you know get over some of the dumb things in my head but I said well I
want to be in charge you know I I need to actually it actually needs to be
because this is what I’m looking for in my life you know I want to be the CEO
I want to do all this and Y Yad Y and he said that’s great because I don’t
want to be in charge um he was running another company and you know he’s done
that enough that he he doesn’t want to be the CEO anymore and so it was
actually a great fit um and so for the first I’d say year and a half two
years it was mostly um me and then one or two employees that I had hired and
that was intentional because he was running another company but he was
certainly pivotal we couldn’t have done it without his help he gave us a loan
gave us a $70,000 loan couldn’t have done it without that I mean we couldn’t
have done it who knows but we wouldn’t have been where we are without all
those things and then he came and focused fully on it with me and he’s just
so critical to our growth in our company so and how I obviously the money was
important how important was his business experience and wisdom oh it’s yeah I
think it’s more important than I ever G gave it credit for because again to
your point he understood import and supply chain generally but it was there
was no playbook for what we were doing so in the sense that it wasn’t a fatherson
thing where it’s like the father built a business and he taught his son hey
this is how you master it we didn’t have that because it was a new frontier
largely for both of us we were only a couple years into understanding this MH
and so but that was good because that meant that there was a lot of autonomy
and he gave me freedom to make a lot of mistakes but I think where I get got
the most value was less about the specifics of how to run the company and it
was more just about the bigger lessons he’s been through stress that you know
many magnitudes of what I was experiencing he’s he been through hiring and
firing laying off scaling raising money and he was able to provide a lot of
cautionary tales to me you know I wanted to give away a lot of equity early
onh because it’s the thing to do for sure but as a 21y old all in this
together let’s yeah and you don’t realize that oh and luckily we have a
couple of those people that are just amazing and they’re still with us and
they’re absolutely deserving of you know that’s evolved since but there were
a you know 95% of the people in the first four years are gone and they were
great great they were fantastic but if I had just parsed out all the equity
and I wouldn’t have given it all away but things like that he was you know um
really really helpful well and is still I I want I was curious about that
because I would think if you have someone to rely on I mean you’re a TW 21 22
23 year old kid at this point at the time we started in 2017 so I would have
been um well 31 now we started seven years ago so 20 I think I was 23 turning
just turned 24 okay and and so it’s unlikely that you’ve experienced any of
that stuff and so so and and who knows how you would have responded I mean
maybe you would have responded with with delays or layoffs or employment
problems or whatever maybe you would have responded perfectly but to have
someone who’s I wouldn’t have who’s already been through that I mean that
that that experience and wisdom seems like it was critical oh yeah so so okay
so you’ve decided now that you’re you have this idea about what you want to
do you want to start a business you have an idea about it did you put this
down on paper did you write out a business plan what was your like what were
what was your foundation was it I mean I’m just going to give you some things
you can tell me what it was but just hearing you talk was it like we’re going
to provide the best customer experience possible we’re going to be super
efficient in sourcing products and working with factories overseas we’re
going to expand this network and provide solutions for I mean what were the
things that you that’s giving that’s giving way too much credit for the idea
I think it was honestly it was an exercise of how long can we go without
running out of money and so the $70,000 mind you didn’t actually give us
Runway MH it was to enable a couple of initial orders we had to front the
money so it was a loan that we paid back so it wasn’t operating Capital we
didn’t raise the money so we legitimately had $5 to $10,000 in the bank for
the first year at any time yeah but but so so the business plan was hey we
can help people make their product and I I have a list of ideas in the back
of my head of things that I think we can do eventually that will be really
exciting and part of that was technology and dashboards and you know we had a
dream but it was it was it was a seed at the time like there wasn’t a lot of
thought Beyond really what we spent the majority of our day thinking of was
okay do we have enough we had a few customers do we have enough orders to
make sure that we can make payroll and our payroll was probably $4,000 you
know yeah and so it was like that was it and I remember viscerally going back
and I remember the days that first year when it was like oh man we have two
months that I know we’ll survive like I know we can stay in business for two
months because we of this order and if we don’t mess anything up we’re good
and it was that and then it was oh my gosh like six months we could do six
months and then I remember the day in the first year when I when we finally
actually got an accounting software we got QuickBooks mhm because it was just
I don’t even know what we were doing I don’t know that we even used Excel
like we were we were doing it but but the first time we actually plugged in
the data to to QuickBooks and it said that we had done over a million dollars
in revenue and I was just like how did that even happen you know we were just
like 2,000 that we were selling the hoverboards on the side of the road we
were doing whatever and um so in our first year we’ ended up doing about 2.2
million um so we like to tell people and we’re proud of this that we were
profitable from like day 40 you know but the secret to Prof profitability is
that you have $10,000 in overhead you know like it’s not that impressive but
but it gives you an insight into how we slow rolled into this that’s kind of
how we did it so was your initial pitch I that we can we can build your
product like so that’s what you were going that was your go to market
strategy that was but and it was like can build and we had one employee in
China like we can build your product but not even that it’s like you need to
figure out your product and then I can build it and then I can’t design it I
can’t do Tech packs I can’t do okay you literally come to me and I’ll help
you find a factory oh man and so the value ad was there but it was yeah
needed some help I think we I think that we could spend a long time I would
love to go through all of those steps because comp compared to that start of
we can build your product to where you are today and that Evolution I think
would be fascinating to talk about I just don’t think we have enough time to
talk about that so we’ll try and hit on all all of those sounds great Pieces
by the way I’ve watched you in several podcasts and I’ve listened to a bunch
of stuff that you’ve done do you wear a different hat on all of your
appearances it’s so funny you said that because I deliberately wore this hat
because I’m like I can’t wear the same hat that I you know and I don’t do a
lot of podcasts I’m not but but I I have go-to hats you know and uh I had to
make sure I didn’t wear one of those but I am a hat guy yeah I love hats okay
yeah well you make hats you probably can make a hat yeah yeah we make hats
you had a New York Yankees hat on one of the podcasts I was watching I was
wondering if that World Series debacle no you know funny and I’m a poser
because I have a bunch of B I have a bunch of baseball hats that I don’t care
anything about the teams I just like the look gotcha people stop me every
time I wear I have a I have a you know Yankees and the GI well the Giants we
like because we’ve had friends in San Francisco so we’ve been to a few games
with our kids but anyway yeah I’m a poser gotcha well that’s okay that’s the
name of this podcast the Alex bur I’m a poser the poser get some traction
kind of sounds like that like well we can we can make you a product like we
can yeah we can do that okay so so you’re you’re you go out on the street and
you’re you’re telling people we can we can make your we can make your product
yeah okay and then and then you discover that you’re you’re profitable and
and you’re doing pretty well what how does that evolve to what is the next
thing so now you’re making products but what what is the next thing that you
say if we did this we could improve this much or did you just fall into
something else well most of at least for me there are probably more brilliant
entrepreneurs but for me most of Brilliance as you falling into stuff that
you didn’t think about right until it was an opportunity and then you saw it
and you went after it but I would say and you get more deliberate as you as
you go for sure but um actually the geopolitical and and and Global events
that have kind of plagued and defined supply chain for the last seven years
have been significant turn Styles in the in the evolution of our company so
for example six months into our company president Trump started the trade War
MH so all of all of the sudden the 25% tariff what that meant was well we
were only in China what that meant was that companies for and it’s still in
place today and obviously he just announced more tariffs over the weekend but
um he’s not even present yet but he’s he’s threatening he’s already throwing
that out yeah but um but what happened was six months in right as we’re kind
of starting to get some momentum 25% Teri on a lot of core categories so we
have customers that have 42 to 45% tariffs because they are already had 20 to
30% on their product another 25% you know whatever the numbers are but I know
specifically backpacks are around 45% so you talk about making a backpack for
$20 and then you pay three bucks for shipping but then you pay another 10 or
eight in Duty it just killed everybody’s economics so we thought okay well if
we’re going to be if we’re going to be a solution here we’ve got to somehow
get outside of China and go into another region that’s got these same
capabilities so we didn’t EX as China we’re still there and they’re amazing
at a lot of things but what we did was we set up an office in hoian City
Vietnam mhm and it didn’t start out as an office that started out as a single
you know 1099 employee just like our guy you know we built a few in China and
so that was I would say the first real evolution of okay all of a sudden
shift is no longer just to let us buy or build your thing in China it was now
we can build it in China or Vietnam or and then it started to evolve as we
built that office there or in Southeast Asia so you’re talking talking about
okay can and then we can go into India and we can go and so it started to
kind of spread because of the trade War MH well and then what happened was we
we had some interest from some customers to go to Mexico MH but Mexico has
been a sleeping giant in a lot of Industries for a long time and it’s really
had a rebirth because of covid and so in some Industries it’s been strong and
remained strong but anyway not to to give you too long too long of an answer
but those are the events that was the trade war and then it was Co so it’s
not necess neily like you were sitting down thinking because you were having
success Building Product in China and you weren’t necessarily thinking we
need to we need to spread out our footprint we need a larger footprint of
production we to think that way yeah okay so that’s interesting and and so
just just to understand how the tariffs work a little bit from the consumer
perspective yep you’re trying to build a product in China and and bring it to
the US and sell it in the US and what does that so when a tariff is in place
what does that mean to the end consumer if I’m buying the backpack you’re
producing the backpack you need to make a margin the company needs to make a
margin what does that mean mean for the end user well it’s it’s hard to um
fully kind of prognosticate on all on on the decisions that the brands make
but but generally speaking there are there are underlying economics that each
of these players in between can’t violate and remain profitable and so and
and what you’re kind of getting at here is that it’s it’s not simply uh any
one Link in that chain that pays for It ultimately it does push through and a
lot of Brands choose to increase the price of their goods yeah because they I
mean who can handle that who can handle a 40% and then you’ve got Amazon
taking their piece and these guys taking their pie and by the time it gets to
the brand you’re lucky if you’ve got 5 or 10% of it at a lot of Brands right
and so you can’t so I think that that’s that’s a real problem and and you’ll
see the polarity and the discussion right now of additional tariffs is this
going to do what you think it’s going to do or is it just going to hurt the
American people and inflate products more yeah and and and and there’s
opinions on both sides of the table but a lot of a scare TCH it is absolutely
and it’s a difficult question and I don’t know that well you’re probably more
well equipped than I am to his question so maybe we’ll leave that for another
time yeah let’s leave it for someone else yeah yes so okay so that that’s
interesting you you expanded your your footprint and uh that that just made
you I’m I’m sure that just made you more valuable in in the market when you
could now go out to a customer and say not only can we make your product but
we have six or seven different options yeah production facilities and and
they’re meaningful in all of these these different ways what as you look go
ahead did you want to say something about that no no I was just going to say
a lot of people so I just said no and then I gave you an answer so yes I do
want to say something a lot of people would say man it’s just been it must be
so difficult for you with supply chain and it’s been the you know it’s been
the theme and on and on and on it’s like yes it’s been difficult but it’s
hasn’t it’s been harder for the brand because we exist the harder the problem
problems the more valuable we are and I don’t say that to be um unthoughtful
about how difficult it is in terms of hard it’s a pain in the neck because we
have to learn how to figure out how to solve it so yes it’s very hard in that
way and it would be easier to smooth sale but it’s presented an opportunity
for shift to say okay well there’s a problem here for Brands can we be the
one who solves it and if we can be the one who solves it then we can win and
the brand can win and we try to put ourselves on the same side of the table
as the brand so it’s been difficult but it’s been an accelerant to progress
in a way that I would never you know I uh you of course would never want a
pandemic to H happen but if you look at the if you try to look at the Silver
Lining there has been acceleration in positive things too and for us that
certainly happened um and it helped counterbalance the amount of attrition
that naturally happened uh at the same time and so you got to take you know
whatever it is and and for us try to turn into something good but would you
at your core consider yourself or or shift just a Solutions provid fighter
yeah so the the short that we tell people is that we are supply chain
strategy and implementation so that’s what makes us a bit unique you’ll find
strategists you’ll find Consultants you can go pay Bane or who you can pay
people a lot of money oh and they’ll say here’s a plan yep um but to find
someone who’s going to say here’s a plan and we’re on the line to make it happen
yes that’s what we’ve tried to bridge yeah I love that okay so that’s kind of
an inflection point for for shift you know you’re you’re going out first
you’re saying we can we can build a product and then uh because of things
happening in the world you have to expand your footprint what is another can
you think of another inflection point in the company where like you said
maybe it is not necessarily strategy or maybe it was tied to some strategy
yeah that pushed you in another Direction yeah I mean there we made a big
decision in 20 22 I think maybe right before that to build out a pretty
robust product team so I told you in the first few years we were Ops guys and
we said build your product and then bring it to us well we started to realize
that hey there’s a big constituency here that isn’t getting what we could
sell them um if we had the ability to to also build the product design the
product make the tech packs and it was driven a lot of it was driven by
quality because what you find is if you don’t if you don’t have product
people building The Blueprint it’s like having a non- architect build the
home yeah you can get all the contractors you want in the world but then they
are handicapped you know not to interrupt you but I I have a little experience
in this and I will even say that in in in that world I and I’m wondering if
it is analogous here you can work with an architect and an arch architect can
design an amaz something that looks amazing on paper in in Blueprint form yep
but if if you’re not if you don’t also have experience as the contractor as
the guy who’s actually building what you have put on paper there can also be
exactly a disconnect yep so your ability to bridge that Gap has to be really
meaningful yeah exactly and I mean you hit it spot on that was the pitch it
was hey again you can go to a design firm this was another Bridge we tried to
make you can go to a design firm and there’s nothing I have nothing bad to
say about design firms but the reality is is unless it’s a graphic medium
it’s packaging it’s paper it’s things that you can see tangibly they can make
a beautiful backpack but unless you understand the sewing method at a factory
of how the pockets have to come together about the assembly order about the
constraints the materials the the tests that are going to have to be done for
it to be um worn the way it needs to be worn with weight in it you know I
I’ve met a lot of people that say Hey I just paid a design for $250,000 and
they gave me something really beautiful went to the factory and the factory
said we can’t build that make it and so we said well hire the guys who can do
both and all of our designers are are deliberately going to understand
manufacturing they’ll have worked with actual product they’ll have worked at
Brands so they know what your pain points are yeah and then when we design we
will Design understanding the end in you know keeping the end in mind we will
optimize not only for product experience but we’ll also optimize for cost
along the way so we can tell you hey we can design it with all these Pockets
but if you did this and this you’re also got to think about your cost and
what you’re selling it for and so that was a big that and that was a more
deliberate strategic move and we got really lucky to have some amazing
designers join the team um and developers and we built that out and that was
that took our quality on the manufacturing side and our customer experience
way up okay I I want to you you’ve mentioned a couple things there I w