Capacity's New Website

We're excited to announce our brand-new website! After many years in the able hands of webmaster (and Partner, and CFO, and packaging designer, and so on) Arlen Fish, we've finally decided to work with a great professional design group out of Tiverton, Rhode Island, Zeus Designs (http://zeusdesigns.com). And yes, the name appealed to our delusions of grandeur. So, sprung like Athena from Zeus's head, welcome to the new Capacity website! Comments are of course welcome. But be kind. We warehouse types are so sensitive.

Capacity Manhattan Office & Partner Off-Site

You may think that Capacity's partners rarely step back from the day-to-day operations and responsibilities of a fast-paced third party logistics and order fulfillment environment. You may be right. However, once in a while we do pull back from the demands of the day-to-day to take time to assess how thing are going, where they should be going, and how the heck we're going to get there. Our partner and management off-sites have an illustrious history: the first one saw Arlen, Jeff and Thom at the latter's parent's house (cost-effective as always.) Arlen coined the Capacity name from a top-secret, undisclosed location there. Later management off-sites have included impressive sledding acumen, in particular Mike Devivo's stylish pre-snowboard schuss on an old plank down the Campbell family's favorite ski hill (not the one with pond at the bottom.)

For this off-site Jeff was kind enough to share his new spread at the foot of the Catskills. Minutes away from the lovely Ashokan Reservoir, the partners convened early this November. We talked about our beloved clients, trusted employees, darkest enemies (just joking), as well as our hopes and dreams. We discussed the prospect of having an actual dedicated sales and marketing group (?!!) in addition to the efforts of the partners, and how that would facilitate smooth client integrations and handing relationships off to client service. We discussed capital investments in our new facilities in New Jersey and California, as well as our new Manhattan office. We did have a few cocktails too.

Jeff frankly blew us away with his gourmet cooking. Lunch the first day was lollipop lamb chops on the grill, potato kale chorizo soup, and a small aperitif. Dinner that night was outrageous: stuffed Cornish game hens with greens and corn and cocktails, of course. After dinner we enjoyed a rousing bonfire under a nearly full moon, all of which facilitated lots of clear, strategic thinking. The next day brought a brief constitutional down by the reservoir and back to work. Lunch was Jeff's signature onion soup and then a scenic drive back to the Big Apple and our brand new (as yet unfurnished) offices at 53rd & Broadway.

We may not have changed the world but we did have a great chance to catch up, appreciate what we have accomplished with our employees, clients and partners, and look forward to new challenges with a fresh prespective and a little less bourbon in the world.

Capacity's got a brand new warehouse

Capacity has just expanded into a new facility directly across the cul-de-sac (that's French for dead end per our polyglot Director of Operations M. Karim Fofana). Across from our HQ, affectionately called 'C1', we'll have easy access to an additional 140,000 square feet of high quality, high bay space. We will be calling 1101 Corporate Road "C2new" to avoid confusion with our other space in the area at 1600 Livingston Ave., at least for the coming months.

We've already got our latest project cooking in there: assembly of Thanksgiving meals for Fresh Direct (www.freshdirect.com) and the Robin Hood Foundation (http://www.robinhood.org/home.aspx). We are excited to be working with such great partners for this project and it seems like good karma to initiate our brand new building with this work. Here are some images of the team taking down the 'for rent' sign and working on the layout with our new Sales Engineer Gus Andersen, cutting his teeth on a big bite of order fulfillment and assembly work.

Capacity recognized by NJDOT as NJ Smart Workplace

Yes folks, we made it. Due to the number of employees who ride the shuttle, we are a proud member: for immediate release:


“Governor Corzine and I congratulate you and your company for becoming a part of the 2009 NJ Smart Workplaces winner’s circle…This is a celebration of employers who, like yourself, have earned the NJ Smart Workplaces designation to reduce traffic congestion and improve air quality with work-site based employee commuting options. It is a notable achievement that deserves recognition.

Congratulations on this outstanding achievement.

Sincerely,

Stephen Dilts, Comissioner
State of New Jersey Department of Transportation”

Capacity’s Dumpster Diving CEO

Capacity client Berkshire Hathaway recently received a disturbing call. A retail mall had found boxes addressed to Berkshire’s subsidiary NetJets in the mall’s dumpster and wanted an explanation. Given the sensitive nature of the issue, NetJets’ Capacity relationship manager immediately elevated the issue to one of the co-heads of our Client Service team, Jeff Kaiden, who also happens to be our CEO. Since the dumpster was located near our headquarters in North Brunswick, NJ, Jeff and one of our facilities manager headed on over to see what they could find out about this unusual situation.

When they arrived there were a dozen different containers behind the retail mall where NetJets boxes had been reported. Enhancing his already legendary ‘street cred’ Jeff gamely traipsed around inside the dumpster’s construction waste until he found the flattened boxes bearing UPS labels with NetJets as the recipient – inevitably in the last dumpster he searched. He also located the Capacity WMS (warehouse management system) barcode and carton ID labels indicating which order they had shipped with and when, as well as some useful handwritten indications like ‘Precious items,’ ‘Kitchen,’ and ‘Dining Room.’ Apparently someone had used the boxes to move recently and slipped them into the contractors’ waste containers.

NetJets’ Director of Owner Communications was suitably impressed, amused and relieved, as were we.

Free Advice

When we were fishing around for free advice prior to starting our business (www.CapacityLLC.com) my business partner and I visited a family friend, my brother’s godfather. Uncle Hal was and is still the perfect avuncular type – dapper, kindly, a successful owner of his own business, and willing to share some of his time. He was happy to answer our questions on anything from how he kept his Savile Row suits looking so immaculate (avoid excessive dry cleaning) to the pros and cons of various lightweight laptops. We even had some questions about our proposed venture, providing logistics services, including warehousing and order fulfillment. But there was one question he asked us which has been more of a driver to our own success than any of the answers he provided to our uninformed inquiries. That question was: “Can the business support you?” It was then the late 1990s when startups were like fungus on cow patties and about as intoxicating, so what may now seem like an obvious question to ask seemed less so then.

In our business plan we anticipated raising a substantial amount of money. A real estate down payment for a warehouse is large, as is the budget for a marketing and programming blitz required to quickly create the pre-eminent branded platform for third party warehousing and logistics. But by the time we had actually landed a client, almost two years later, the bubble had burst and easy money was long gone. At inception the partners had managed to pull together enough capital to hire our CEO away from his father’s design consultancy full time and buy a few laptops (cheap, not the nice one Hal sported). We found our first client. They already had a facility, but were in serious need of operational expertise and cost cutting. Because we were physically hosted by our first client, our business was cash flow positive initially, a benefit earned by cutting our host client’s costs by 40% in a matter of days, and more over time through the judicious use of technology and sweat. We made enough to provide modest salaries and begin payments on the investments in technology we hoped would differentiate our services over time.

Once I was working for myself for only slightly more than I earned upon graduating from college, Hal’s advice seemed a very sharp point, and we started hewing even closer to the revenue line to maintain positive cash flow. When our host client sold its business, overnight we went from cash flow positive to only three month’s rent on hand. We cut our own salaries in half. We set out to fill the empty third of our first warehouse, which had suddenly become several hundred thousand cubic feet of very expensive air. We made a hundred cold calls a day, sent out mailings, prowled trade shows, all the things you do when your next paycheck is waiting to be earned. I did nothing but think about finding, qualifying, and closing new business. My employees could all see me on the phone a dozen hours a day, and while they looked concerned, they worked even harder.

The key lessons for us, in terms of how to make sure the business can support you, were:

Be conservative and disciplined. Make the money before you take it out of the business. Stick to your core competencies before expanding your offering. Make a plan, work the plan, review and renew the plan, repeat the process.
Deploy capital wisely. Be careful with it when you have it, and when you don’t, get creative and compensate with hard work, and then some more even harder work.
Market and innovate (the Drucker directive). Spend a great deal of time and effort acquiring clients, and then twice as much time and tenfold the effort servicing them.

It paid off, eventually. We acquired more clients. We tweaked existing software platforms and enhanced and built proprietary technology aimed at continually improving our operations. We delivered the client service levels required to keep clients, which allowed us to succeed alongside them. We became profitable about five years ago and have just expanded our business from our facilities in New Jersey to another in California, an exciting market for what we do. We still like to be pretty thrifty – I was shocked when we recently got some very nice new laptops (turned out they were deeply discounted). The memories of leaner times are still vivid, along with Hal’s key question, the best free advice we could have hoped to have. When we recently updated Hal about our progress, he asked about further automation of the business: another excellent question I’m sure we’ll be addressing in the years to come.

Capacity goes live with a California warehouse

Capacity has opened our latest fulfillment center in Compton, CA. We commenced operations on behalf of American Eagle Outfitters (http://www.ae.com/web/index.jsp) and are bringing additional clients live over the next two months. From our New Jersey locations, we service major corporations like Berkshire Hathaway’s (http://www.berkshirehathaway.com/) executive jet share division NetJets® (http://netjets.com/) and ADP® (http://www.adp.com/), the payroll and business solution company. We also have expertise with smaller companies who need high quality order fulfillment and assembly services.

Capacity has locations in Compton, CA and North Brunswick, NJ. All four facilities are close to the major ports of LA/Long Beach or Newark/NY. We offer third party warehousing and fulfillment. We provide distribution to US- and Globally-based companies ranging in size from startups to the well-established. Clients include major brands like A.P. Deauville (http://apdeauville.com/), the manufacturer of the PowerStick®, Freeze 24/7 (www.freeze247.com) and ZIRH Men’s Skincare (www.zirh.com). These and other Capacity clients are shipping health and beauty aids (HBA) to EDI retailers including Nordstrom, Saks Fifth Avenue, Sephora and dozens of other major retailers.