Topic: Management Improvement, Lean Thinking
Joel Spolsky writes the excellent Joel on Software blog and runs Fog Creek Software. Recently he has been writing about process improvement of the order fulfillment process for a movie on the experience of interns at Fog Creek Software, How to Ship Anything by Joel Spolsky
Joel is a great writer and tells a interesting story about of how they improved the process. This is one of a series of articles on the process improvement around order fulfillment for the documentary made of “project Aardvark”:
Shipping Update: “We discovered that 2 people working in tandem can ship an order every 12 seconds using the new system.”
The level of detail in his posts is great. Aardvark’d DVDs Ship; Final P&L:
$2.00 – DVD production and delivery
$5.00 – Royalty to filmmaker
$0.30 – Envelope for shipping
$2.52 – Postage (weighted average)
$0.20 – Other supplies for shipping (labels, paper for packing slips, toner, boxes, etc)
$1.00 – Shipping labor (estimate, since most labor came from Fog Creek employees on the payroll anyway).
Total per unit: $11.02. Since we’re selling at $19.95 that’s $8.93 gross profit.
$5,000 – Stipend paid to Boondoggle Films
$5,000 – expense reimbursement to Boondoggle Films
So we need to sell 1694 copies to break even. As of today, we’ve sold 2595, so we made a profit on the movie of about $8048.
And he really understands the value of the movie to his company, which I agree with:
I want to work for them. More reasons to work for them:
- Fog Creek Software Management Training Program – our previous post on the Management Training Program
- Fog Creek Compensation
- Bionic Office
- Incentive Pay Considered Harmful – “If you’re in this position, the only way to prevent teamicide is to simply give everyone on your team a gushing review. But if you do have any choice in the matter, I’d recommend that you run fleeing from any kind of performance review, incentive bonus, or stupid corporate employee-of-the-month program.”
- The Joel Test: 12 Steps to Better Code