Industrial Insights with Adrian Betts

Adrian Betts - Xpandur, LLC 00:45

Thanks for having me Justin. I'm excited to be here as always and You know, let's just go right into it The reason the company is called Expander is because we want to expand your operational capabilities so usually if you're a my background's been with warehouses last mile deliver stations distribution centers and fulfillment centers and We work with them to get more throughput out of their warehouses using their existing hours

Adrian Betts - Xpandur, LLC 01:24

So it's it's hurting cats at scale so we have Probably in the last three months recently on board at three clients that have an existing footprint they are in the I8 if not mid-9 figure range as far as ARR So supporting a 3PL that has these clients under the same roof and we're bringing in a few dozen managers very quickly and several hundred employees within a few weeks and it is November. We are still bringing in people right now. And it's all about figuring out the building block of a big warehouse. So right now we have 30 managers and 500 employees. Like I said, it's a 17. to one ratio. we just think it's a 17 people and Adrian gets a 17 people and the other 28 managers get their 17 people. It's okay. Are you good? Yes or no? Why not? What is it? Okay. What do you need? Let's get it to you. When will you be okay? And then you do that 29 more times and you do that several times a day. And really it's like flying a plane. or driving a car, right? It's a lot of small inputs, a little to the right, a little to the left, you know, but you don't just hold it center.

Adrian Betts - Xpandur, LLC 02:54

you or does.

Adrian Betts - Xpandur, LLC 03:31

Yeah, it's, every time I get to one of these projects, it's like your favorite album. Like, you don't know when you first listen to it that it's going to be your favorite album. First, you find your favorite song, then you like the chorus, then you learn the verses, then you learn all the ad-libs for that song. And at some point, you can... know every ad lib, every chorus, every verse from the moment the CD goes in till the very end of the disc. So, I mean, the the tracks that let's say they're like your KPIs or your shift structure, they don't change. Right. But if once you're talking about track one, here are the words to that song. When we go to KPI number two, here's what that conversation looks like and so on and so forth. And then you do that for your respective customers. you have this cadence. And I mean, if you play this album over and over, that is how you can pretty much give a concert, you know, just off of memory because we create that structure and that cadence.

Adrian Betts - Xpandur, LLC 04:55

Yeah, it's, that's one of the things I tell them is I them, first of all, I that there are dumb questions. and i ask dumb questions on purpose. I do this on purpose, right? The reason I do this is because I want them to see how simple this really is, right? It seems overwhelming because you get asked a bunch of questions. Well, Reality is you get asked about 10 to 15 questions a hundred times a day. Right? So I asked the same question. said, okay, today's Friday. What's tomorrow going to be? said Saturday. said, it's November. What's next month going to be? They're like December. said, okay, it's fall. What's the next season? They say it's winter. Why are you asking me these questions? I said, it doesn't change. So if break time is at nine o'clock today, break time is going to be at nine o'clock tomorrow. Lunch is going to be at 12. Second break is going to be at three. The pick rate is going to be this. The pack rate is going to be that. Start time is going to be six o'clock. We're going to start talking at six o'five. We're going to stop talking at six ten. We're going to stretch to six twelve and everybody's going to be in path by six fifteen. We're going to go over a head count by six thirty and we're going to have all the balance and adjustments done by seven a.m. It doesn't change.

Adrian Betts - Xpandur, LLC 06:18

Yeah.

Adrian Betts - Xpandur, LLC 06:22

I've got three. I've got an 18 year old, a 14 year old and a 10 year old.

Adrian Betts - Xpandur, LLC 06:31

It is. When they were nine, five and one, I had to figure out how to go grocery shopping and manage like their different mindsets because the nine year old is like, I'm nine, I'm bigger than five and one. And the one year old, she's going to try to keep up, but she's going to fall behind and I can't have my kid just disappear in a grocery store. Not good. So I said, how do I do this? no. Okay, I'm sitting here. So we're going through the grocery store and I say, I need to put the one year old behind me. So I put the one year old behind me, the five year old behind her and the nine year old at the back. And I said, okay, how do I make sure that the nine year old doesn't run over the five year old and one year old? So I kind of made them do the step count with me. and I had them count with me in the store. Step two, three, four, step two, three, four, stop. And the people in the grocery store thought it was hilarious. And I said, look, I'm just trying to keep, I'm just trying to get through this grocery store in less than an hour and not lose any of my kids. I had to structure it.

Adrian Betts - Xpandur, LLC 07:54

Yeah.

Adrian Betts - Xpandur, LLC 07:57

You got any kids?

Adrian Betts - Xpandur, LLC 08:17

I'll tell you another good story. My daughters, the 14 year old and 10 year old, said, hey, you know, there was a whole bunch of dishes, several dish loads worth of dishes. And I said, wash all these dishes in the dishwasher. So as I'm about to turn on a dishwasher, I'm like, where are all the dishes? So I open it up, they put four loads of dishes in the dishwasher at once. and all the the tupperware. yeah. So I said, if I turn this on, this is going to burn down the house. So I said, girls, I said, so I started explaining to them. And I remember later on asking them if they could tell when I'm kind of unhappy. And they said, yes. And I said, what do I do? They said, well, you get very quiet. They said, you look over your glasses like this and you start explaining stuff in great detail. And the first question I asked, I said, okay.

Adrian Betts - Xpandur, LLC 09:17

You guys haven't been shown how to load a dishwasher. Let me show you how. And I was so happy that they didn't say like, you get angry, you yell. that is what I need to do to be successful in these projects, because you get.

Adrian Betts - Xpandur, LLC 09:35

pushed in with half of the timeline already evaporated. It's very high stress. Everybody wants things done now, now, now, now, now. And you have to have a lot of courage in order to tell people above you, hey, look, we're going to go slower to go faster. Because if I rush these 50 people out here to do this and half of it's wrong, that's way worse than if I wasted.

Adrian Betts - Xpandur, LLC 10:04

the first three hours of the day showing them how to do it correctly and how to resolve it if they did deviate from what was expected. yeah.

Adrian Betts - Xpandur, LLC 10:22

Yeah. Indeed. Yeah, and I get, I get laughed at a lot for my analogies and examples, but they stick. If they laugh, it's programmed in their head. Right? So I say, do you know the Big Mac song? And they say, well, I don't like Big Macs. I said, I didn't ask if you like them. Do you know it? And I say, it's to all beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun. And I said, there's only one way to do a Big Mac and every other way is wrong.

Adrian Betts - Xpandur, LLC 11:10

There's only one way to do this process and it's this way. Every other way is wrong. So I show them what to do. Then I have them repeat it back to me. Then I have them train me. And when you train me, I'm going to mess everything up on purpose. So I know, know what right looks like. Now, when I walk away, like I'm off the floor for an hour during peak season. And when I go back out there, it's not going to be blown apart because I knew this event was coming. And I said, here are the things that I need to make sure go perfect at least for an hour so I can have this podcast with Justin.

Adrian Betts - Xpandur, LLC 12:27

So I've seen a mix, right, where sometimes they have all the instructions. They just need to be trained and facilitated to the team. That's one. Another one is, hey, we just been tribal knowledge. did a launch. We launched a WMS in September of 2024, and we're going to write the SOPs for them in July of 2025. So.

Adrian Betts - Xpandur, LLC 12:54

We we've been doing what we thought was right according to the system before this one and it may or may not be. But can you go through and actually go through every single process and document what right should look like and then put that in a format and then sometimes it's hey we have no clue what it should look like at all. So here's what we need done. And it's just pure trial and error. And we move very slowly the first day, which is why I would say the first one is the worst one. And then you'll be surprised within as little as 24 hours how much you learn and how much you progress. Our first day before we got here, we were doing about 2800 units a day. And you're like reference in reference to what? Well, in about a week and a half, we did 18,000 one day and we still tripped over ourselves to get that 18,000. We had found so many bottlenecks and streamlined so many processes that we were able to six times our throughput. this is, VAS is a manual operation. There's nothing, there's no glamour in VAS. It's just, there's no scans. You're peeling a sticker and you're putting it to a, that's a value added services. So let's say I get my product.

Adrian Betts - Xpandur, LLC 14:24

We can even go to Big Mac, right? So let's say I have the McDonald's sign, the menu, all the menu items, right? But the cost of them that will be different in California than they will be in Atlanta versus New York or Seattle. So VAS would be like saying, hey, we're doing McDonald's order boards today. The first one is California. Here are the California prices for all the items. Make sure they match up. Pack it up. Send it to California. okay the next state then the next state then the next state then the next state. So it's a very manual and tedious process.

Adrian Betts - Xpandur, LLC 15:14

No, it's not, not at all. like if you're, if you take the salt shaker and little pepper shaker, which you can buy individually, and then you put them together and wrap them and make them a single selling unit, that would be like a vast project.

Adrian Betts - Xpandur, LLC 15:41

Yeah. Yeah. I don't know, 500,000 square feet up to the 1.2, 1.6 million square feet. Largest place I've been is 2.8 million square feet. Smallest has been about 30,000 square feet. But sweet spot is half a million to 1.2.

Adrian Betts - Xpandur, LLC 16:20

Yep, absolutely.

Adrian Betts - Xpandur, LLC 16:27

Where you said, you're going to do the first thing that's going to be the most, definitely the operations piece, right? So, because I was born in operations. So we're going to get the operations team right first. And before you go out there, before, first of all, I shouldn't get in with anybody. But before you go out there and say, this is wrong, you say, where are the work instructions? Does Justin have work instructions for this? Does he have work instructions for that? We create those. So we take away the excuse of I didn't know. Now, the next thing we move to is I don't care, right? So somebody doesn't care to work for the company, then I don't care for them to work for the company either. And yes, you can get out of here. And I will. I didn't always have an HR on site, so I do know how to show operators how to hire six hundred and forty people in a nine month time frame by themself. while still running the operation.

Adrian Betts - Xpandur, LLC 17:33

It is. so again, it's all building block and cadence. So it's 16 people in one eight hour day. You pretty much know you're going to hire them when you go to the grocery store. You know what you're going to get. Right. So when you look into the applicant tracking pool, you know exactly who you're going to hire. You call them in, you hire them. 16 people on eight hour day. You do that one day each week and every two weeks you have an orientation of 32 people and you do that 20 pay periods out of 26. Of course we would stop doing it by now in November. We don't do it in December. It's too late. Everybody should be in path and then January there's no volume. So those are the six pay periods. We don't do it.

Adrian Betts - Xpandur, LLC 19:44

Yeah. And especially the workforce that knows that if you let them go today, they can go down the street and get a job tomorrow. So it really becomes how do you, once you get good talent, how do you retain it? One of the worst questions to be ding negatively on when, when I was at Target was, would you take a job with a competitor at the same or lower pay? So if your employees are saying, yeah, I would take a job with a different company at the same pay or lower pay, that means you are doing about the worst job you could possibly do as far as retaining that talent. then, yeah, and so the other piece to that is that there is a piece included with the wages, the wage transparency, the progression.

Adrian Betts - Xpandur, LLC 20:38

so if if that you're in the industrial real estate space so we have a warehouse that looks like our entire box between you and me and there's a wall in between in the middle of this warehouse and there's tenant A and tenant B under the same roof now if I'm paying my people twelve dollars an hour and you're paying your people nineteen dollars an hour where most of the applicants gonna go? they're gonna go to justin's side of the warehouse So for the companies that say, we're struggling, we can't find good people. Man, there are so many good people available right now, especially in today's market. And another thing, if you have to get temp workers, there are people that are grossly overqualified that are taking whatever they need to, keep the lights on. As long as you actually know who your people are. You can tap into those skill sets and you're leaving so much money and potential on the table if you treat them just like another temporary worker. So that's that's probably the worst thing you could do if you do have temp workers is not know their names or their skill sets.

Adrian Betts - Xpandur, LLC 21:59

Yeah, these folks have IT backgrounds. They're to college for accounting degrees.

Adrian Betts - Xpandur, LLC 22:08

I had to glare but yeah these guys have all kinds of skill sets and they're not just operators and I think that would I'm gonna tell you why that makes companies stronger when people promote from the floor is because right now over the next few weeks people are gonna have all hands on deck and that's where everybody goes to the floor and helps out no matter who you are in the company go get orders out So now you got people who have never been on the floor and it's pretty funny because in the first five or 10 minutes they say, how do you guys put up with this? This is so jacked up. And we say, guys, we've been working around this all year, but you guys think we just complain all day and it really is that bad. Now, if you

Adrian Betts - Xpandur, LLC 22:55

Yes. Now when these people promote from the temps because they have these skill sets and whatnot and they actually go and they're marketers and advertisers, procurement, transportation and things like that. If you ever need them to push, come to shove back into the warehouse, you already know that they can have and will do it for you.

Adrian Betts - Xpandur, LLC 23:21

Yeah. And cross training is probably that's, that's something else. and I'll get to, there's bench depth and then there's cross training. There's two, and those are two distinct things. So bench depth is saying, okay, I only have one yard driver per shift. I only need one yard driver, but it would be foolish to have only one person who knows how to drive it. You need to have at least three others. one for vacation, one for calling in, and one for jury duty, you still have that fourth person. They may be terrible compared to the other three, but at least they can get you through the day. Now, that's bench depth. Cross training is where you say, OK,

Adrian Betts - Xpandur, LLC 24:08

In October, when we got all the Christmas trees in, was inbound was getting blown out the water and outbound was standing there looking silly. Well, I can call in over time for inbound or I could take some of these outbound people and say, hey, go take the stuff off the truck. Now, especially here over the next two weeks when the Christmas trees get pushed to the stores, everything's going to be pretty much going outbound. and inbound is going to be standing there looking goofy. So you can either call overtime for just the outbound team or you can say, inbound team, some of you guys go over there and help put stuff on the truck. Now that offsets the need for overtime up to a certain extent. And then there is the expectation that there will be mandatory overtime, usually from, depending on which business unit.

Adrian Betts - Xpandur, LLC 25:06

two weeks before Black Friday, all the way up until about three or four days before Christmas.

Adrian Betts - Xpandur, LLC 25:15

And here's exactly how it works what I've seen so you have between 26 and 33 days between Thanksgiving and Christmas depending on when Thanksgiving falls if it's like the 22nd or 23rd it's 33 if it's on the 27th of the 28th is 26 You get seven extra days worth of orders to do in that time frame Seven extra days and here's how we covered The first week, everybody does two days of mandatory overtime. The second week, everybody does two days of mandatory overtime. The third week, one day of mandatory overtime plus voluntary. The fourth week, one mandatory day of overtime plus voluntary overtime. And if there is a fifth week, usually you can cover it with just voluntary overtime. And that's the structure.

Adrian Betts - Xpandur, LLC 26:29

Yeah, I tell people peak does not have to be chaotic. Peak will be chaotic if you start planning for it in September, which some people say September is a bare minimum. There's nothing wrong with planning for it. I say the best day to plan for peak is the day after peak ends. The second best time to plan for peak is now.

Adrian Betts - Xpandur, LLC 27:00

Never. Yeah, and so there are about 17, 17 to 18 holidays in a year, and they don't change. This is also a post I do and I just, there's you got Mardi Gras, Valentine's Day, Easter, Mother's Day, Dad's and Grad's, Fourth of July, and it just doesn't stop. And so the lawn and patio or the gardening peak season is in Q1. swimwear, the grills, the fireworks, their peak season is in Q2. Right? So the different events are going to have their peaks throughout the year, which of course, the largest peak being in between your three biggest holidays of the year are hands down, Halloween, Thanksgiving and Christmas. And in the span of about what, eight weeks? which consequently you really don't get another big holiday after Christmas until pretty much Easter, which is why Q1 is such a drag. There's no fun holidays. It gets dark at 430, right? have everybody's maxed their credit cards out. You know, it's the holiday hangover. And what this does in a retail space or warehouse space is I don't need 100 % of my footprint anymore.

Adrian Betts - Xpandur, LLC 28:28

Right? I only need about 60%. And if you do it right, you can put the seasonal stuff in certain sections of the warehouse so that as the season goes on and the customers buy the product, your footprint naturally shrinks. When you go down to the lowest amount of volume, even though you have the highest overhead, you have the shortest travel path. Because if you have the stuff spread out and your warehouse looks like Swiss cheese, that is going to be

Adrian Betts - Xpandur, LLC 28:58

Financial death by a thousand cuts.

Adrian Betts - Xpandur, LLC 29:11

It is. Now, you know, most companies have to do a physical inventory, right? What better time to do it than when you have the most amount of hours and the least amount of

Adrian Betts - Xpandur, LLC 29:34

the most amount of hours and the least amount of volume. Right? So now you have a budget anyway of hours to do this physical inventory. best time to do what's in quarter one. The other reason we talked about that strategy of condensing the footprint is an aisle that is empty is a whole lot easier to count than one that has that's partially full. And if we're going down, I know how to empty 40 % of the warehouse.

Adrian Betts - Xpandur, LLC 30:09

Yes, you have basically you have the budget to count 100 % of the floor space 100 % of the locations, but if you know Strategically how to prevent 40 % of them from having anything in them in the first place you go to this aisle This aisle is physically empty Systematically what's in it three pallets? Oh really? Okay, let me see what they are and Later on you may find an aisle that has three extra pallets in it and you say this is exactly what they are. You plus it in and now that aisle is reconciled. I know this because I did so well with the capacity management. They asked me, hey, you want to do inventory this year? I said, absolutely not. They said, well, let me ask you this again. Would you like to do inventory this year? I said, I guess so. So now that I have learned that the hard way, that is my strategy as to, understand why they did it now. I would much rather manage capacity any day of the week than try to manage inventory.

Adrian Betts - Xpandur, LLC 31:29

Yeah, so it's when you manage capacity well you by default manage inventory well but it doesn't necessarily go the other way because inventory just means how much of it do I have capacity is do I have the right amount in the right place at the right time.

Adrian Betts - Xpandur, LLC 32:23

So there's a couple of buildings, a couple of projects, and these are at least half a million square feet. There's been no automation. There's been no conveyance. Like we're pallet jacking or forklifting product from one end of the building to the other. No conveyance. But here's what I'll say. What we can normally do is say, what are the expectations? Where are you performing right now?

Adrian Betts - Xpandur, LLC 32:52

And then we say, that gap in performance, hours times shortfall, equates to this many dollars. And what you want costs, I'll give an example. We were able to save one company $0.30 per case on 15 million cases a year, $4.5 million. So if you want a software that costs $2 million, And you're like, how am I going to afford this? Well, we can say, OK, here's how we're going to save 30 cents per carton on 15 million cartons to give you four and a half million dollars. We didn't add headcount equipment or technology. And now you can go and get that two million dollar piece of technology because this is money you were spending anyway and lost productivity. So now it's available to actually. Invest something into your company to enhance it.

Adrian Betts - Xpandur, LLC 34:05

Yeah, that's a good one. Which if you look at what the headcount was we got there the headcount was 420 people which is exactly a 40 % overage according to their budget So we implemented the blocking and tackling the structure and the cadence to get the headcount down to 300 while delivering the same amount of volume. And we said, hey, look, you know, and if you look at it, that was a, a $4.5 million spend two ways. You had the shortfall, you're paying for, for $18 million. You're paying for. You were basically getting a four and a half million shortfall from performance and you made up for it by paying $4.5 million extra in labor. Like, so it was a $9 million swing, but we're just like, Hey, we're just going to count, you know, what we get you back up to where you should have been.

Adrian Betts - Xpandur, LLC 35:54

They, yeah, they are. And just like you and me, if you're looking for a mezzanine convenience, you know, I know some people, if you need a bigger warehouse, I know Justin, right? If you need a right size warehouse, a smaller warehouse, temporary storage space, long, you know, that's Justin. And so there's a couple of people that are in the robot and tech space and people say, doesn't the robot and tech kind of, aren't you competing against that? said no, absolutely not, right? First, I'm going to get the most out of your horse and then if you need to go faster, I'm going to go take you down to the car dealer. But plenty of people who drive cars still on horses.

Adrian Betts - Xpandur, LLC 37:30

Absolutely. And I'll tell you about something that's kind of tried and true. And you know, this is going to get into the case study. What part of the country are you from, Southern California. What's the big grocery store out there?

Adrian Betts - Xpandur, LLC 37:50

And it's more than one in your zip code, right?

Adrian Betts - Xpandur, LLC 37:57

It's several, right? So in this one warehouse where there's a thing called dynamic sliding and static sliding. And I personally am a fan of dynamic sliding and I know that's probably going to, you know, make some people mad, but okay. Here's why. Static sliding is like having only one Ralph's for all of California. It doesn't matter how big it is. everybody in California trying to go to that one Ralph's will be inefficient. Dynamic sliding is like saying, I have dozens of Ralph's, right? And you can go by the one that's closer to your workplace, or you can go by the one that's closer to your house, closer to your church, closest to the ball game, closest to whatever you're doing. And you can get the same thing. So in a warehouse, if you only have one location, out of a million square feet where your hottest item is located, then when that item drops, guess where every picker in the warehouse is trying to go? To that one location. So we created zip codes where we said, hey, we want a Ralph's here, here, here, and here. So when the hot items dropped, we had four different ways that pickers could go and get this product.

Adrian Betts - Xpandur, LLC 39:22

And depending on, we even took it a level deeper where we said, okay, these, this Ralph's is going to be closest to these customers that are loaded at these dock doors. So now we've cut down the travel time. These customers are getting going to the Ralph's at this dock door, so on and so forth versus all of the Ralph's down here in the bottom right corner. And we had to travel all the way up the dock just to get to these set of customers.

Adrian Betts - Xpandur, LLC 40:01

That's it. I'm really, I'm going to try my best to understand a concept that I don't want to understand. And I'm going to say it's kind of like, formula one racing where they rarely make a pass. It's, it's a big deal to make a pass. And really it's about lap time. Everybody's just trying to get a better lap time, but rarely are you passing anybody. And so it's very efficient where, okay, I go up.

Adrian Betts - Xpandur, LLC 40:41

In one aisle, I pick the most stuff and as I keep snaking through, I pick less and less stuff or I pick lighter stuff. And then at the end, I'm dropping it off as close to where it needs to go out the door. And that's it. Right. It's designed for precision. Right. But volume. isn't always designed for precision, it's designed for volume, right? And if you want to get volume, you need to have multiple outlets for this product to get out of the building. Walmart. We can check out at Lawn & Patio, jewelry, automotive, electronics, self checkout, express, and the big boy lanes. So that's how I try to do my warehouse. The pickers are the grocery shoppers, the packers are the checkers, the cashiers, and shipping takes it to your car and puts it in your trunk like they used to do back in the day.

Adrian Betts - Xpandur, LLC 41:52

you Absolutely. Absolutely. It's not worth the squeeze.

Adrian Betts - Xpandur, LLC 42:51

Yeah, absolutely. biggest thing was three things. I'll say this quickly. Number one, for the people. They call me Unc now, which is short for Uncle, and I'm 42. And I'm like, said, no, guys, I'm not that old. But a lot of people I'm coming across are in their 20s now, and this is their first warehouse job. And so I'm like, wow, I really am starting to show them the next generation of leaders. the basics and fundamentals of this right that's one for the people piece number two for the company is getting the departments to align and when we say hey you know we say we're out of space but we have a hundred million in inventory and 30 million of it is excess of obsolete

Adrian Betts - Xpandur, LLC 43:37

So we're doing this off of only 70 % of our inventory spend. And if we optimize that 30 is 42 % of 70. So if we actually got the right product mix, we could potentially experience a 42 % increase in revenue with the same inventory spend just by having the right inventory. And the third thing is understanding capacity management. So just because you get a good deal on it, procurement looking at you. Hey, I got a great deal 10 cents per versus 25 cents. Yeah, but you bought so much that now we're going to spend a dollar per unit just to process it thereby losing money. So I'm very excited about teaching the next generation how to understand excess and obsolete inventory and then how to get the most out of their capacity. And that right there is going to make sure that what's in here Exist for another 20 or 40 years and probably long after I'm

Adrian Betts - Xpandur, LLC 44:46

outstanding. Hey, thanks again for having me, Justin.

Adrian Betts - Xpandur, LLC 44:59

All right, later.