01 Jun 2018
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Case Study: Tip the Scale

A meat share company in search of speed—without sacrificing soul

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photos courtesy of Walden Local Meat

photos courtesy of Walden Local Meat

In 2014, Walden Local Meat founder and CEO Charley Cummings (MBA 2011) crisscrossed New England in a company truck to personally deliver orders of chicken, pork, lamb, and beef—all pasture-raised on small-scale New England farms. Today, with 35 employees, Walden counts thousands of members throughout New England and New York, a market that Cummings believes could support 100,000 customers or more. In the last year, Cummings hired sectionmate Philip Giampietro as CFO, a signal of the company’s transition from startup to growth mode.

Walden’s members purchase monthly shares by weight, rather than à la carte, resulting in a fulfillment process that is “relatively complex and pretty unique,” Cummings says. Every order—with 5 to 30 items, selected from 100 products stacked on a 100-foot-long rack—requires a holistic view: “We’re looking at what typically comes in a carcass, customer preferences, share size, order history. Formulas propose a suggested share, based on a selection of items we think will maximize this member’s happiness—within the constraints of our inventory,” Cummings says. Happiness is their core metric, he adds, taking precedence over speed in the fulfillment process. Walden aims to build a community of home cooks who are connected to local farms in a meaningful way, not simply a transactional purchase.

The Question:

With year-over-year growth at 75 to 100 percent, Cummings’s question is how to scale up the fulfillment process. The staff of seven recently switched from an assembly line to a less-efficient but more scalable pick-and-pack process, with one person completing each order. In the previous setup, adding staff would create bottlenecks. “Imagine six people in a line, passing something between them. If you add two people at the beginning, items will stack up before person number three,” he says. Now Walden can easily increase staff, but per-order labor costs are rising due to losses in efficiency—more walking along the racks to fill orders, in other words. Has Cummings made the right choice, or should he find another way to scale an assembly-line process?

The Answers:

Has Walden considered an Amazon approach, with additional procedures for a customer’s second and possibly third choices, in case inventory does not match a customer’s first choice? With acceptable substitutions, minimum order size could be maintained.
—Don Cottle (MBA 1961)

Try establishing several serial assembly lines with small buffers in between. The buffer is an indicator of where more staff is needed. This optimization could be done according to Kanban principles. It allows for a more flexible staffing of each assembly line, but an automated picking process in the future as well.
—Beat Fraefel (AMP 176, 2009)

What about a “dim sum” process? The pickers stay stationary. The line runs in a circle with a random assortment passing by that someone else loads from a central source of inventory. The pickers grab what they need as it passes. It’s probably obvious, but you could just replicate the old model and stamp it out. There are lots of regional micro-fulfillment centers that are closer to customers, all with seven employees on the line.
—Casey Taylor (MBA 2011)

This is a warehouse automation problem with known solutions. Consider a carousel system that can be vertical or horizontal where products come to the picker, not vice versa. It could be combined with a pick-to-light system, where lights show which bins need to be pulled and how many items need to be pulled from each bin. An order is complete when all the lights are out. Ideally, orders flow directly from order entry to a warehouse management system, but they can also be scanned or entered manually. None of this is new. I’ve seen it used for everything from tiny, lightweight products (e.g., dentistry supplies) to big, heavy products (e.g., cases of liquor). Fast and accurate, it’s also scalable, if you have room to add more carousels over time.
—Dan Wallace (MBA 1986)

Got a case? To take part in a future “Case Study,” send an outline of your company’s challenge to bulletin@hbs.edu

Case Study Update: Sweet Kiddles

In late 2014, Sweet Kiddles, a center-based, on-demand childcare company, was in search of unique funding models to fuel its expansion beyond two existing locations. Too small for private equity, in a sector that doesn’t attract VCs, and without enough of a track record for banks, Sweet Kiddles founder and CEO Andrea Kimmel (MBA 2003) was looking for more options.

Their path: Readers suggested everything from upfront payment models to partnering with employers looking to offer the centers as a benefit, but ultimately, one of the funding doors opened: The success of Sweet Kiddles’ second location—which reached profitability last year—led to a partnership with a bank, which has since helped them acquire two more locations.

Where they are today: The growth trajectory was slower than Kimmel may have wanted, but it’s still pointing upward. “We had $2 million in sales in 2017,” she says, “and we’ve got potential development partners lined up at the door.”

True to the core: Because the market demand for flexible childcare wasn’t completely clear when it launched, Sweet Kiddles offered regularly scheduled care to ensure that it was competitive in the established childcare market. “But we would always fight to make sure we didn’t have that traditional care model [amount to] more than a third of our business,” says Kimmel. “Now it’s just 10 percent of our business. That tells me there’s demand for what we are doing.”

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Featured Alumni

Featured Alumni

Class of MBA 2011, Section E
Class of MBA 2011, Section E
Class of MBA 1961, Section F
Class of AMP 176
Class of MBA 2011, Section A
Class of MBA 1986, Section G
Class of MBA 2003, Section E

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