A Smoother Road to Market: Operations Management
By Tim Skowronski
Thinking about mass production in a startup context is difficult. As a founder of a hardware startup, there are so many things that need to be done, and it may feel like most all of them need to be done by you. Mass production, if it happens, seems a long way off from now. Why would you ever want to bring someone to help you design and execute a supply chain if your focus is on fundraising and getting the thing you are working on actually working? But hiring an Operations Manager early on could be what helps you rise above your competition quickly and more smoothly.
Why Do We Need an Operations Manager?
Because you, as a founder, can’t be all things to all people even if you really want to. At some point, you have to bring in folks with expertise, let them do what they are great at, so that you can focus on what you are great at. When you feel the pain of being pulled too many directions, it is too late!
In my experience, there are three misguided beliefs that founders fall victim in terms of operations:
- “An operations function isn’t needed during New Product Introduction.”
- “Since volumes may not be huge right away, the function can be delayed.”
- “I mean how hard can it be, right?”
New product introduction (NPI) is generally owned directly by engineering, however an operations manager will keep the product on a scalable course. Your Engineering Program Manager (and you should already have an EPM) is tasked with shepherding product. She will not have much time to dedicate to managing your factory (contract manufacturer or internally built). Therefore, you need someone else thinking about factory flow, output, understanding internal CM processes early to ensure that when you launch everything goes off without a hitch.
Before you ship the first thing to the first customer it is imperative you test the supply chain. You wouldn’t ship a product that hasn’t been tested would you? Sending things from the factory, to your third-party logistics (3PL), and from your 3PL to a customer is simple in concept but difficult in reality. And what happens when the customer doesn’t like what they receive? Or worse, what happens when the product is defective? You then need to ship it from the customer to your 3PL, back to your headquarters, or back to the factory, or some mix. Much like a supply chain, this just doesn’t happen on its own. It doesn’t happen quickly. It most certainly doesn’t happen flawlessly the first time.
Please don’t use your early customers as a supply chain/ logistics experiment!
When Do I Need to Start Recruiting for an Operations Manager?
If you are designing and building a piece of hardware and plan to make it at scale, you need operations expertise sooner rather than later. Likely, sooner than you think you do.
Designing supply chains is hard work. They are living beasts that mutate over time. Bringing someone in at or before the Engineering and Validation Testing (EVT) phase will allow for an actual time-phased supply chain strategy, using a supplier selection and qualification approach. Even if your volumes are small, and stay small for an extended period of time, a thoughtfully designed and executed supply chain is important to your success.
There is little chance that the supply chain that you have during NPI is the one you launch with. An even smaller chance that supply chain scales well. Having someone that helps you see around corners might be the secret to your success because they will help you save time, create realistic and achievable timelines and customer expectations, and ultimately save you money and heartbreak.
What Are the Different Kinds of Operations Managers?
There are different types of Operations folks out there. Hiring one depends on what you are making and how you are making it.
- Operations Program Manager: Are you making a consumer electronics product with a CM? Then you will likely need an Operations Program Manager (OPM). OPMs are generalists that act as puppeteers to your CM. They create the general strategy and ensure that the CM executes.
- Operations Manager: Are you a robotics company that is attempting to do many things in house? Then you likely need a classic Operations Manager with a deep background in manufacturing or factory management. They are less puppeteer and more of a hands-on builder of things (workstations, quality control plans, work instructions, etc.).
- Supply Chain Savant: Are you a company that is using a lot of off-the-shelf components, working towards home-grown designs? Then you likely needs someone that is supply chain-heavy in experience as you will be doing a great deal of sourcing and supplier selection.
What Should I Look for in an Operations Candidate?
Some things to screen for in an operations generalist:
- They need to work well with engineering, and understand that a positive tension should always exist between the two teams.
- Ask which type of Ops person they are and which they would like to be: generalist, supply chain focused, or factory focused. Ideally, this person would have a nice mix of all.
- Ask for a high-level timeline of what they would do if given the job. I always find it fascinating to listen to the questions a candidate asks when asked for this timeline. Do they ask questions? Do they jump right into a solution? Do they recognize the differences from their general blueprint and show some ability to adapt?
- Fire and endurance. This role can occasionally require the ability to hold people accountable. I mean, REALLY accountable. An Ops lead has to have that ability to summon up that kind of fire when needed. This role can also occasionally require a high level of stamina and endurance.
- Context switching. What works well on the factory floor that is potentially a world away might not work well at home. The ability to context switch is critical to playing nice with everyone.
Below you will find a job description from Privacy Labs (a Lemnos portfolio company) that threads the needle and hits many of the qualities above. Privacy Labs is making a consumer device with some home-grown solutions, some off-the-shelf solutions, plastic parts, metal parts. The device required much hands-on factory building early on, and is expected to ship in large volumes later.