Under the Hood: Aaron Alpeter from Mirror
Aaron Alpeter, the go-to person for startups building their supply chain and the VP of Supply Chain at Mirror.
Welcome to 1-800-D2C Aaron. Tell us a bit about yourself!
I’m a supply chain guy through and through. I started my career at Unilever before getting into startups and eventually founded Izba, a consulting firm that helps startups develop robust supply chains. Today I serve as the VP of supply chain at Mirror, where my responsibilities range from managing factories, forecasting, warehousing, distribution, and transportation, reverse logistics, and more.
Tell us how you got started.
I’ve always been fascinated by supply chain since before I knew what it was. There’s something about it that I can’t get enough of. I went to Ohio State University to study it. Once I graduated, I worked at Unilever for 5 years in a supply chain management rotational program before joining Hubble Contacts to build out and run their supply chain. Over time I’ve been lucky to work with some amazing companies like Kind Bar, The Flex Company, The Farmers Dog, Sunsoil, and of course Mirror.
What types of people are in supply chain?
In supply chain, there are essentially two types of people that you need: people who excel at going out and conquering new territory and people who are excellent at holding that territory. The roles you need people to play change depending on the company’s goals. For example, when your company is focused on growth, you need people who can go out and conquer new territory. Once you have a dialed-in, highly efficient supply chain process, you want people who focus on maintaining that territory.
What do you need to understand to have a successful supply chain?
Supply chain is at the intersection between global politics and economics, so I regularly look at the Wall Street Journal and the news. I’m paying extra attention to news that includes the regions of my supply chain. My supply chain isn’t just where my factory is located, it’s where my team is, where my suppliers are, and where their suppliers are.
Here’s an example of something I need to be aware of and think about:
How does the war in Ukraine affect grain shipments coming out of that region? How will that affect food supplies in the Middle East or Asia? What will that do to consumer demand & sentiment in the political landscape or the labor inputs in general? .
Overall, I always pay attention to any political instability, macro-economic trends or societal things that are happening, so I can really try to get a sense of what could be coming our way.
How do you cut costs in supply chain?
It mostly comes down to knowing when to renegotiate. There are really 3 reasons why you should renegotiate a contract. 1) The contract expires. 2) There is a fundamental change in your business (IE big volume change or investment) or 3) There is a big change in the market in general. When you’re looking to cut supply chain costs, you need to understand what leverage points are important to the other party and what is important to you.
Tell us a bit more about what you mean by leverage.
A negotiation is the beginning of a relationship. It's important to understand what each side wants out of that relationship. Maybe there’s a company that does warehousing, trucking, and international freight. As a brand, you can approach them and explore using them for everything. The benefit of this scenario is you’re dealing with one provider for everything,
You can also split it up and look for the best provider in warehousing, the best provider in trucking, and the best provider in international freight who may all be different companies. That means you’ll have multiple providers and need to manage multiple relationships. This may result in lower costs, or your all in one provider may have other internal reasons for wanting to keep everything in house and be willing to lose money in some areas to capture all of the potential revenue. You need to constantly learn about your partners and what is going on in their businesses in order to navigate the relationship successfully.
What’s the trickiest part about your role?
In general, supply chain leadership is tricky because you need to educate the broader business / team members about how some decisions or lack of decisions will create or extinguish future opportunities. These decisions, or a lack thereof, can impact the business 12-18 months down the line. I have to understand, realistically, what this looks like, explain potential scenarios to the team, ensure they’re ok with these outcomes, and align on a single decision. It involves juggling and balancing dozens of different inputs and scenarios into sound bite sized bullet points that are easy for non technical people to understand.
What are some common mistakes you see startups making?
Probably the single biggest mistake is a failure to holistically plan as a business. There's this idea that there's a marketing forecast and then there’s a supply chain forecast. If you fall into that fallacy then you end up with situations where companies are surprised by and unprepared for their success.
Here’s what should be happening instead:
1) Marketing and supply chain need a monthly meeting to review the projected demand for each SKU by month for at least the next 18 months. The point of the meeting is to talk about how confident or unconfident they are about different aspects of the demand.
2) Using those data points, the supply chain team determines the right inventory buffers. You never want marketing to say we wanted to make sure we had inventory, so we buffered high. That’s not marketing’s job. You want marketing to give a range of where demand can fall, so that supply chain can buffer accordingly.
3) Lastly, don’t have short term discussions about long-term problems. Sometimes when marketing & supply chain talk, marketing will be focused on the sales for this month or this week. If that is where the conversation is stuck then in reality, that’s too late for supply chain to really do anything useful.
What’s your tech stack?
The biggest mistake that we see companies make is thinking that buying tech will solve their supply chain problems. That won’t work in and of itself. You need to have a good, solid foundation of what you want to happen before you go and automate it. The best thing that any brand starting out can do is have a really good model and Google Sheets.