By David Schneider
I started this practice in January 2008, but the seeds of the practice began earlier. I started to get calls from other logistics and supply chain practitioners while still working as Director of Logistics at Pep Boys Auto. With 25 years of developing, managing, and leading strategic logistics projects generating over $250 billion in total impact, I recognized that my deep experience and knowledge carried value sorely needed by other companies. In 2006 I accepted a call for help that became the first of several small and informal advisory consulting engagements. By the end of 2007, I had accepted five small assessment engagements. Each focused on facility or operations changes that improved the productivity and profitability of their operations.
By the fall of 2007, I realized that I had accomplished what I wanted to do at Pep Boys. I considered moving to other corporations, but all involved relocation that would end my wife’s career. As I had worked as a consulting engineer before, I looked to that option as a solution to supporting my wife’s career and to expanding my service to other practitioners. In January 2008, I walked away from the perfectly good paycheck and officially opened the doors to David K Schneider & Company.
By the close of October 2008, the company created sufficient cash flow to cover not only general expenses but to repay my initial cash investment into the company. By the end of that same year, the company was not only profitable; it created a 30% cash gain on the original investment.
The trend continued in the incredibly tough business environment of 2009 as total revenues doubled over 2008, despite the company relocation from Pennsylvania to Virginia. In 2010, I reinvested every dollar of pretax profit back into the company. In The Great Recession of 2010, many companies downsized their staffs, tossing talent into the unemployment lines. Recruiting known talent as 1099 contractors, I focused on putting this talent to work in focused engagements that helped people keep their homes and fed their families, helping some to find permanent employment with the clients they served, others to launch their own consulting practices.
From 2008 through 2014, we took on no debt, as there was none offered in the market. Many clients in need could barely afford our services, so we focused our engagements to identify and unlock operating cash flow improvements that funded our work and the changes the clients needed. We leveraged my connections to help clients, and to help the contract associates that we worked with along the way. From 2010 through the end of 2012 I did what many startup founders did. I did not take a salary to make sure we carried sufficient cash to keep our talent working and to market the company. We reinvested in building our tools, marketed our services, and built an independent, content-driven website that spoke to the men and women driving the supply chain.
Our efforts bore fruit, as more companies turned to us to help them avoid or get out of problems. We did more than just look and prescribe; we got to work side by side with our clients to solve their biggest challenges. In one engagement, the client asked us to put together an “A-Team” to come into a new distribution center that was failing in startup. Hope had left the building, and the failure jeopardized a $1B annual revenue division of a public company. Our team of four landed on-site, took charge as operations managers, eliminated and changed processes, trained personnel, supervisors and managers, and in seven weeks turned the facility around. We shattered company daily shipping records six times, each time shipping in a single day more value than the entire company had ever shipped. With that engagement, we gained a quiet reputation of being able to fix where others had failed, and have served other companies in their moments of need.
For many clients the situation is not so dire, and we engage in a collaborative way to focus on far more than strategy. Strategy is easy. Tactical planning is where leaders get lost in the weeds, and horrible execution destroys beautiful and glorious plans. This is where we step away from most consultants; where others can’t execute, we can. Our approach is to coach and lead, sometimes in a pair-of-hands role, often as a collaborator, coaching the client’s own managers and associates in the change and the ongoing improvement. Our goal is to work ourselves out of a job.
We continue to contribute to what I call the industry, and that contribution returns value to our practice. In 2011 we launched We Are The Practitioners, a website that, starting as a blog, is the home of more than 1,200 articles about different aspects of supply chain management. Between startup and 2015, the site proved to be more popular than most traditional advertising support sites, as we added long-form content on subjects that the trade press ignored, but practitioners wanted to know. We Are The Practitioners continues to grow and transition beyond the blogs, as we build more written, video and audio content.
The website is the beginning steps behind a broader mission to focus on developing knowledge and wisdom in the supply chain and logistics community. You can train people how to do a task; but beyond training, experience and community build knowledge of multiple ways to solve a problem. Knowing what solution is best for a specific application is wisdom. The internet provides mountains of data, attempting to become informed by answering the basic questions people ask. However, knowledge is far less plentiful on the internet, and wisdom is sadly lacking. While others create data and information, we coach and teach, focused on creating knowledge and building wisdom.
We invested deeply in a new facility supporting our mission in Q3 2016. The Hornbaker Works is beyond the offices where we do our consulting work; the new facility is a serious investment creating more value for our SMB clients. Hornbaker Works is home to our audio/video production studio and teaching facility. This teaching facility is unlike any other privately held operation, where we use our operating mini-fulfillment center and warehouse management system as a working lab for teaching the physical art of warehouse management. Using a small class size, we demonstrate ways to use existing tools that every company already has, we demonstrate and train through practice how even the smallest of operations can operate systems and processes that just five years ago could only belong to billion-dollar enterprises. Instructional materials from the Practitioners website support classroom and lab instruction.
The Hornbaker Works is home to our skunkworks, where we develop practical small-scale automation for clients. Using the latest Autodesk software (Fusion 360), CNC machining, 3D printing and inexpensive open source electronic controls, we create Industrial Internet of Things (IIoT) solutions that blend the latest small-scale technology into solutions for SMB clients.
The Hornbaker Works demonstrates that we eat what we cook, in total integrity, we walk our talk, following the same rules and using the same tools that we advise our clients to follow. The Works allows us to demonstrate how automation and good management does not require a large investment, that through intelligent design, discipline and practice, an enterprise of any size can follow the state-of-the-art and be a leader in their industry.
In the same way that drops of rain gather to form rivers and lakes, our small efforts create more cash with each improvement to form pools of cash, allowing clients to survive and thrive. There is no logistics problem we haven’t seen and overcome to generate massive cash.