E062: Warehouse Optimization to Feed the Hungry with Rise Against Hunger44 min read
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In this podcast, I interviewed Courtney Hudson, Distribution Warehouse manager with Rise Against Hunger. They were awarded the inaugural “Excellence in Sustainable Development” Award in 2019.
She shares the improvements they made to their warehouse operations to increase the number of packaged meals they send to countries in need. They are working to achieve SDG Goal #2: Zero Hunger by 2030.
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- Rise Against Hunger
- IISE Excellence in Sustainable Development Award
- UN Sustainable Development Goals
- Courtney Hudson LinkedIn Profile
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Brion (B): I’m here with Courtney Hudson, she works at Rise Against Hunger, and Rise Against Hunger was the first award winner for our Excellence in Sustainable Development. I wanted to have her go through and talk through the project that they submitted and some of the work they’ve been doing to apply Lean and Six Sigma concepts to their nonprofit work. And so, Courtney, do you want to introduce yourself and give your most recent job title? I know you’ve had a lot of activity happening at the organization, and then just how you got into Rise Against Hunger, and then share a little bit of some of the improvement work you guys have done.
Courtney (C): Yeah, absolutely. Thanks so much, Brion. My name is Courtney Hudson. I am these Centralized Distribution Warehouse Network Manager. And so I got started with Rise Against Hunger in 2016, and we were running a traditional model, which I’ll get further into as the presentation goes on, but I opened up our first ever centralized distribution warehouse down in Southern California. Since then, we’ve opened up two additional ones and I have kind of moved into more of a remote role, remotely managing the warehouse managers at those three sites. And so it’s been a really fun experience in my career, kind of building an entire operation model from the ground up. It’s been super fun to get creative and innovative with different strategies and ideas, which I’m really looking forward to sharing with you guys today.
I got into the work with Rise Against Hunger, and I’ll actually give you guys more information about our organization as a whole in just a few minutes, but I got into nonprofit work, in general, first, in college. I knew that I wanted to help those in need. I didn’t really know, necessarily, how or in what capacity of how I wanted to help them or maybe where my strengths were going to be best utilized in order to help those less-developed countries overseas. I volunteered abroad in college in Delhi, India and Moshi, Tanzania, so I’ve worked with some of our partners directly in those countries and I’ve just fallen in love with the mission ever since.
And so it’s been really fun working with Rise Against Hunger because our organization, as a whole, has so many facets that we try to help those impoverished communities without only just giving them meals, but actually empowering those communities and teaching them sustainable practices so that, eventually, they can turn to Rise Against Hunger and say, “Hey, you know what, we don’t actually need your help or your meals anymore.” That’s a little bit of background.
B: How did you get to the program in school? was that part of your study, in supply chain did you say? how did you connect with those organizations?
C: I was a president of a nonprofit in college that was actually fighting human trafficking, and so when you kind of boiled down a lot of the social issues and social injustice issues that we have in our world today, it kind of just boils down to people don’t have their basic needs, which is food, water, shelter. And when you don’t have those basic needs, it’s pretty crazy the lengths that people will go to to get those basic needs.
And so I was involved in that nonprofit in college, but I really, really identified with the international problem. I felt like there’s a lot of resources for United States citizens and programs for them to get the help that they need, but I felt like, overseas, there was just lack of infrastructure. And you hear it, kind of that narrative, over and over again that those organizations that have shipped over MRI machines to Africa to help, but they don’t have steady lines of power so they can’t use those machines, and so it really boils down to them not having what they need. And so I just did research, while I was in college, to find Cross-Cultural Solutions, which is the nonprofit, and I actually had to fundraise for both of my volunteer abroad trips. I taught English, as well as other subjects, over there for a couple of months at a time. So that’s a little bit about me, so I will go ahead and jump right into my presentation.
B: How did you end up at Rise Against Hunger? Was that just a job posting or did you reach out to them or had you volunteered with them before?
C: I actually got, right out of college, a different job with a mentoring at-risk youth nonprofit in the Bay Area in California. And it was fun and it was great, but I just felt like I wasn’t making a big enough impact there, that I was getting a little stir crazy within even just the first couple of months. So I was doing more research about international nonprofits that kind of focused their efforts on countries overseas and I came about Rise Against Hunger. At the time, we, obviously, rebranded, it was called Stop Hunger Now, which was our old name, but I just really fell in love with the mission and I really liked how the organization itself wasn’t just distributing meals, but they were really trying to empower the communities through teaching them sustainable farming, teaching them how to grow crops for themselves, how to make things so that they could sell them in the markets, and really teaching these communities how to provide for themselves so that we could back out of these cities. And so I really liked that kind of full-circle mentality, and so I immediately connected with Stop Hunger Now, at the time, and then have been with the organization ever since, almost 4 years now. I’ll go ahead and move forward.
My presentation today is about Rise Against Hunger operational model. When I first joined the organization, every location in the organization, because there was 20 at the time, operated the same way. We adopted a growth mindset and a growth strategy that we really wanted to reach more cities at a faster pace. Our goal and our mission at Rise Against Hunger is to end hunger by the year 2030, which is also the United Nation’s goal as well. And so in this presentation, I’ll kind of walk through how we’ve taken strides these past couple of years to get there. Throughout my presentation, I’ll give you a little bit of background on Rise Against Hunger, the organization, why we adopted the centralized distribution model, some of the resources that we used to make sure that we were operating in the most efficient way possible, including SIPOC analysis, value stream maps, warehouse layouts, the implementation of 5S and safety, and then the long-term efficiencies and improvement.
When I first submitted this presentation for the sustainability award, it must’ve been, jeez, Brion, I don’t know, not a full year ago, but definitely quite some time ago. And since then, we’ve even seen some major strides to adopting what is actually in this presentation throughout our entire organization, so I’ll explain that more towards the end of the presentation.
B: And also, we are recording this in late March, 2020, and so I think you submitted maybe end of 2018 or something like that, or early 2019. We’ve got a lot of stuff going on right now at this time with this Covid virus, so if anyone is listening to this, that will just give you a timeframe or where we’re at right now, so thanks.
C: Absolutely. Thanks, Brion. So Rise Against Hunger, we’re an international hunger relief organization. We distribute food and life-changing aid to the world’s most vulnerable in hopes to end hunger by 2030. And so you can see our impact there at the bottom, and so just to kind of explain the way that our model works. Our main source of revenue and how we actually package our dehydrated meals is the picture on the left.
So we host meal-packing events, particularly with corporate groups, volunteer groups, schools, faith-based organizations, or community-based organizations like a Rotary or a Kiwanis club. They reach out to us and they say, “Hey, we have a group of,” I don’t know, we’re scalable, so anywhere between 50 volunteers to 2000 volunteers, “we want to package meals. How many meals can we package in a two-hour timeframe?” and then the actual host donates the $0.34 per meal for all the food that we’re going to package with their volunteer group. And so each meal that we have is rice, dehydrated vegetables, a vitamin sachet, and then a scoop of dehydrated soy protein. These meals are all the same. They’re distributed to 74 countries that we serve. They’re all vegetarian because a lot of the countries that we serve maybe are vegetarian, and the actual meals that we package, in general, are just very bland tasting because we serve such a multitude of different countries, they typically will add spices, or if they have meat available, into the meals themselves to make them more accustomed to their culture and their way of life.
And so we package those meals at these meal-packing events and what the CET team does, which is our Community Engagement Teams, they’re the ones that are out in the field in the United States facilitating those meal packing events with the volunteers. Once all that food is packaged up, we load up our containers. In one ocean container, we can package with 285,000 meals and we ship that out to one of our 74 partners that we have in 74 countries, typically school-based feeding programs as well as maybe vocational elderly care programs, and they distribute the food to their populations over there.
Now, these partners, we call them partners, in these 74 countries are essentially nonprofits that are over in those countries and they aren’t really affiliated with Rise Against Hunger other than the fact that receive aid for us. So they’re completely standalone nonprofits, they have their own Board of Directors, they’re kind of doing what they need to do in their own country and we’re just helping them do that. And so a lot of our beneficiaries overseas are, for example, the kids that you see in the picture on the right. A lot of times, they’re only meal that they get in a day are our Rise Against Hunger meals, and so we try to pack them full of nutrients so that those kids are encouraged to go to school to eat those meals and encouraged to get an education, which does end the cycle of poverty. That’s a little bit about Rise Against Hunger.
B: How are you guys affected right now? Are you able to still ship food? Are you able to still operate?
C: That’s a great question. I’ll answer it now. Because of Covid- 19 and the restrictions on gatherings of I think it’s now 10 or more people, obviously, we cannot package our meals in the United States right now, or anywhere overseas for that matter, and so we have had to cancel all of our meal packing events. Typically, this time, March, April, and May, is actually one of our busy seasons, because we are a seasonal business, but because of the virus, we are not able to package meals, which means our beneficiaries overseas are not receiving meals, and so that’s been a really tough pill for us to swallow because not only is it affecting, of course, Americans who aren’t able to work or who are stuck in their houses, but also our beneficiaries overseas aren’t receiving meals. Right now, all of our events, Brion, are pushed out until June, so it’s a big, big gap in our abilities to package meals for our folks overseas.
To get into the operational model, when I first was hired with Rise Against Hunger, we had 20 US locations and they were all considered traditional locations. What that means is each location is required to have a warehouse, heavy machinery, staff hired. To open up one of these locations in a city would take us anywhere from nine months to one year end time, and a huge financial investment because we’re signing seven-year leases, so we have a lot of cash tied up in these individual locations. Each individual location, with our Community Engagement Team, were required to forecast their own ingredients, purchase those ingredients, store the inventory, clean the equipment, go out and actually run the meal packing event, market the meal packing event, and rent the trucks, and then come back, consolidate the finished goods of the meals, and then actually schedule the shipments as well. So if you were a community engagement staff four years ago at Rise Against Hunger, you wore several different hats, and as I’m sure we all know, when you wear several different hats like that, you can’t really wear any which one of those hats very well because you’re spread very thin.
And so what we wanted to do was centralize the forecasting, purchasing, and inventory storage. We wanted to allow the growth for more locations, so instead of waiting nine months to a year to open up a new location, we wanted to, if we wanted to drop a location, say, in Denver, Colorado, that would only take two months’ time. And then we wanted to standardize processes and procedures. So if you were to go to a meal packing event in Southern California, that meal packing event would actually look drastically different than if you went to a meal packing event in North Carolina at our locations. There wasn’t any standardization of processes, procedures, meal packing event experiences, anything like that.
And then we also wanted to reduce cash spent on leased warehouses space and machinery. We had a lot of cash tied up in warehouse lease space and it was also a big commitment. So we actually tried to open a location, say, in Salt Lake City and we’ve had it completely fail and it was a huge financial loss for us because we had to invest so much money on that leased warehouse space and the machinery. And so we wanted to kind of mitigate that risk, make it not so risky to open up new locations in new cities, so that’s why our operational team decided to pursue the CDW model, or centralized distribution warehouse model.
We wanted to centralize all the meal packing event equipment and raw materials. So instead of making the community engagement staff also be operational and supply chain staff, we wanted to separate those job descriptions, let the people that are trained in warehousing handle the warehousing. We wanted to create small satellite locations that operate out of third-party logistics warehouses. As you can see right here, the first ever CDW that we opened was in California, I opened it, and you can see all the satellite locations opening up. So instead of having one huge location in Santa Ana that covers this entire half of the city, opening up little micro-locations that operate out of 3PLs. Operating out of 3PLs works really great for our model because we’re only charged for what we use at that third-party logistics warehouse. So as a nonprofit, we’re trying to cut costs anywhere that we can. So like I said, we’re a seasonal business, so in December, when everybody is on Christmas or holiday break, we’re not being charged for warehouse space, say, in San Diego that we’re not using because we’re not packaging meals there with any hosts.
And then we wanted to increase operational excellence, which is standardize those processes and procedures, and we wanted to increase meal packing at satellite locations. So like you saw a couple of slides ago, we package about 76 million meals a year. We need to package a lot more meals in order to end hunger by 2030, so how can we maintain that growth mindset and rapidly speed up our numbers, are growth market margins, so that we can reach that goal by 2030? this was what kind of started this conversation about the centralized distribution warehouse.
We decided that California was the best place to start just because we had such huge markets in California and we saw such potential. And for those Californians that are listening to this webinar, as you know, traffic is really, really crazy in California, so although you may be out of San Jose and you have a Sacramento event, that could be anywhere from four hours to driving if you are driving at the right time during that traffic hour. So we wanted to create those micro-locations so instead of our community engagement staff sitting in their trucks going to and from meal packing events, that they could actually cut down on their driving time and spend more time marketing their markets and their area.
So in 2017, this is what our location kind of mapped over the United States looked like. Each location managed their own community engagement activities and their meal packing events and they also managed, like I mentioned, ingredient inventory, packaged meals, and meal packing equipment. This is our spread of 20 US locations. It kind of goes without saying that we’re a predominantly East Coast-based organization, which gave us kind of even more power to opening up our first CDW over here on the West Coast so that we could spread a little bit more evenly.
B: Where was Rise Against Hunger set up?
C: Our headquarters is in Raleigh, North Carolina, so over here, so it kind of makes sense why we grew like that.
And so with the CDW implementation, we decided, you know what, we’re going to implement this in three locations. So the first one was the California CDW, and we actually set up four new locations at the same time as opening up that centralized distribution warehouse. And then right after that, we decided to open up Florida, and it had three more locations over here in Florida, and then we also decided to open up Indianapolis, which would cover the Midwest. So our new locations for California were San Jose, Sacramento, Los Angeles, and San Diego and we converted our Southern California location to the CDW.
So instead of going into this new CDW model and deciding to go lease a much bigger facility in Southern California to handle the centralized distribution for the newly added satellite locations, we decided to convert what we had at the Southern California location and kind of just convert it temporarily for a year to act as the CDW so it was less risk, and also, we could actually open it up a lot quicker. You’ll see, later on in the slides when I show you some pictures of some of the activities that we were doing at that warehouse, it’ll make sense why storage capacity was one of our main issues that we were trying to mitigate was solely because our warehouse was just a little bit too small, which since then, we’ve actually upgraded quite a bit.
B: What’s a CEM?
C: A CEM is a Community Engagement Manager. So each of the satellite locations has a CEM, it’s just a staff member that actually manages all the activities at that location.
So the actual CDW concept and model. So centralized warehousing activities, we were going to do a better job at forecasting. So something that we saw Rise Against Hunger, and Brion, you know this more than anybody just from our conversations outside of this webinar, but folks weren’t skilled and weren’t trained on how to accurately forecast, therefore, you had huge discrepancies in inventory. You would either have a location that has 150 days on-hand supply of inventory or you would have them where they are constantly running out and we have to spend significantly more amounts of money just to expedite shipments of inventory to that location. So nobody was really trained on forecasting or inventory or prep time or lead times or anything like that, so what we wanted to do was take that activity back into the side of operations, so meal packing, ingredient inventory, packaging equipment, preparing ingredients and equipment for meal packing events, and then finished goods inventory, which is just packaged meals.
Up until this point, each location at Rise Against Hunger packaged there in equipment differently, and so this is the meal packing equipment that volunteers used to package the meals at the actual meal packing events sites. At each different location, they packaged and they kitted the equipment differently, they actually sometimes had completely different equipment than other locations. There was no standard there, which kind of feeds into that you could go to two different meal packing events and feel like you’re at completely two different organizations, and so we were really trying to bridge that gap by creating kitted meal packing equipment pallets, so that’s something that we did with the CDW concept.
And then we wanted to focus on distribution and warehousing as a service to the community engagement staff. Typically, in for-profit companies, your customer is the one that is buying and receiving the good that you are preparing, but at our organization, the CDWs, our customer as CDW staff, is actually our Community Engagement Teams. So the Community Engagement Teams, which are these satellite locations, once they plan a meal packing event, they actually send that order to the CDW, we prep the pallets to provide for that event, and we send it back to that satellite location. They use local transport; they go run the meal packing event. When they’re done, they drive back to their satellite location, which is typically a third-party logistics warehouse, and then they send all those goods back to the CDW location for us to go through, clean the equipment, repack it, and focus on what’s next.
So in a sense, our customer, as CDW staff, are our people, our satellite locations, and so really focusing on that being a service to the Community Engagement Teams. And this actually freed up a lot more time for our community engagement staff to focus on prospecting and relationship building and growing their markets, so we were seeing all this time and focus lost on the CE side because they didn’t have enough time and capacity to actually try to grow their markets, get more meals, get more meal packing events. And so now we could expand and grow faster without having to worry about warehousing at each location.
To do this, we decided to focus on essentially six processes at the CDW locations, event staging of equipment, event staging of ingredients, the actual wash, sanitize, and re-kitting process of that returned equipment post the meal packing event, the finished goods or the package meals consolidation and shipping out process, the new equipment kitting process, so when we do grow, we need more equipment to supply for our volunteers so what that kind of looks like, and then vendor shipments into the CDW, so raw material shipments into the CDW. And if you’ll see, a lot of our customers are those satellite teams, kind of explaining that a little bit further. And then, of course, the finished goods are going to our impact team and global logistics coordinator and our recipients overseas.
And so we used the SIPOC analysis to really kind of draw out what are the main competencies that we want CDW staff to master? be the best in class. And so that’s kind of what we focus on here in the SIPOC analysis. We created a warehouse process and value stream map and it kind of shows you what I explained a little bit earlier. Our suppliers ship everything to the CDW, we store everything, we pick orders, according to FIFO, for meal packing event orders at our six locations, we transport it to our community engagement staff, to their 3PLs, they run the event, they send back the dirty, we call it dirty, meal packing event returns in the finished goods, we put it away, and we clean and re-kit the equipment. Once we have 285,000 meals, we build the pallets and we load and store and ship the FGIs to feeding the customer, which is our partners over here.
And so we were able to see how much time it took for us to do each of these activities, which really helped us identify where we wanted to cut down on time. That was the next slide here, was what are some improvement ideas that we can harness our 5S and physical design and layout of this warehouse to really cut down on the time between these major activities? so we added some pallet racking, we did FIFO storage, we did equipment storage in a creative way, we removed all unnecessary items, we created visual boards with packing lists, we created flow changes in the warehouse with arrows so that we knew how the activity was going to flow through the warehouse so we didn’t zigzag across our warehouse and have to repeat steps.
We created mobile carts so that instead of having to walk back and forth from the office, we had everything that we needed on these carts and we could flow through the process without any bumps in the streamline. And so we kind of decided what areas of focus wanted to start 5S projects on and so I kind of go over that a little bit further over here.
So this is our original April 2018 layout. We had no pallet racking, as you can see. We just had pallet positions. We added these wood shelves that were already in the warehouse. Again, we took this over from a traditional warehouse model, so we did the best that we could with converting this to make it work as best for the CDW for the time being. We had 252 total pallet positions in the warehouse the way it was, status quo.
Now, with all of our improvement ideas, this is what we turned this warehouse into. We upped the total pallet positions to 345, which was what we needed when we were going to supply the goods to six locations. We added pallet racking in several areas, and you can see – it may be a little too small for you guys to see over the computer – but we created process flows of if we were going to put this pallet racking here, what process were we going to flow through here? Keeping, of course, the role of doors in mind because we were, essentially, shipping and receiving every single day of the week. And so we were able to add almost 100 additional pallet spaces to our space, thus creating a more efficient practice.
Some pictures, because I feel like pictures are the best way to explain some of this stuff. So you’ll see the before, this is our ingredient staging area in the warehouse. Since there was no pallet racking, we were just double stacking. You can see that there’s a lot of mess everywhere. You’ll see equipment bins over here to the left, you’ll see finished goods, which are those boxes that say Rise on them over here. This method of organization was also very hard to abide by first-in-first-out inventory because when you’ve got new inventory and it kind of jumbled all about keeping a straight standard of what you were pulling and how old it was. So we went ahead and we sorted out all the unnecessary items, we cleaned the area, we removed the trash, and we created aisles and walkways.
And so you’ll see the after over here. We added pallet racking, our FIFO was all of our newest ingredients were at the top and when we finished the oldest ingredients at the bottom, we shifted everything down. So anytime you’re receiving a raw shipment and raw materials, that would go straight up to the top because it would be our newest product. And so you can see that, on the left, you would kind of roll through here and grab everything from heaviest to lightest in the staging process.
You will see, over here, which is a different area of the warehouse, we got a pallet wrap machine. So we were trying to cut out those activities that needed to be done but were probably taking too much time to do. So this is our staging area for the out of market, or out of state, meal packing events. We decided, you know what, we’re going to create an entire placarding system so everything has a place and we can identify it really quickly and cut out some of those unnecessary items, like using one of our staff to wrap pallets and actually adding in a pallet wrap machine here to do that for us. As a nonprofit, we probably run leaner than most companies. So at this location, which would pack, store, ship, consolidate goods for six locations, we only had two full-time staff here and we would hire temporary staff or temporary laborers during our busy season, so any time saving was super important in this model. You can see the before, it’s just super all over the place, handwritten placards on the pallets, several different items of material over here, we have finished goods equipment, random boxes, and we went ahead and cleaned that up and gave it some standardization.
This is our vegetable and vitamin refurbishing area. You can see that, on the left, the before, very messy, cluttered. If you were to walk in, you wouldn’t know where to even start or where the person before you had left off. One of our main goals, in this 5S implementation, was we wanted, if I was working the first shift, we wanted to have my employee come in afterwards and know exactly where I left off and where to get going and not have it be a guessing game. We wanted it to be very, very streamlined, and so you’ll see that in the after pictures over here as well.
No, the equipment area of the warehouse was probably the most difficult. There is that wooden shelving I was referencing a little bit earlier. But it just was really out of sorts. There was really no rhyme or reason to the way it was set up. The before was very messy. Before we got the pallet racking, which was the during photos back here, we did the best we could by cleaning it up with what we had and then, on the next slide here, you’ll see after, once we got the pallet racking in, that there was a lot more organization to this. And we had placards put up letting whoever was packing the equipment know how many goes in each bin, how many to add to each pallet, really focusing on process flows, so doing heaviest to lightest equipment so you can just drag that pallet and pack it as you go. So we definitely standardized and sustained this area of the warehouse as well.
The equipment cleaning and storage area. So because we comply with FDA regulations, we have to clean all of our meal packing equipment because it’s touching the food that we’re packaging for other people. So as you can see before, there was just kind of random carts. We actually weren’t complying with FDA regulations because our carts weren’t covered on the left pictures, and so we went ahead and added a second sink so we had more capacity to wash. We added some safety mats, we added safety curtains, and added more drying space capacity, gloves. And then we actually created a process flow so we kept all of these little wheels on the carts so that when we packaged one up with clean, we could roll it around to the back and it actually allowed for mobility and some storage, which was really helpful with our small space.
This was probably my favorite part of the 5S project at this location, was the mobile work cart stations. So you can see one of the work carts over here on the before picture. They weren’t being utilized at all, and so we actually added two more. And instead of you having to walk around searching for pallet wrap or tape or scissors or a box cutter or a Sharpie or any of our special paperwork, I wanted you to be able to, right when you walked in, if you had to do something in the warehouse, you grabbed one of those carts and it has everything you need on it and it’s kind of nice because it’s a little station for you to write on. So we added two more of those carts and it definitely improved the safety of the warehouse because it was less people walking around aimlessly looking for things, and it also gave a place for all of those little items because those box cutters and scissors can be dangerous if we have volunteers in the warehouse. And so those were probably my favorite improvement to the entire model – something so simple but it makes such a big difference with your workflow. It drastically helped us go faster and be more efficient with our work, absolutely.
And then we also created placards. You kind of saw on some of the pallets before, they were just writing with Sharpies on the actual pallet wrap what that pallet was supposed to be, and so we didn’t want to do that, especially with adding four new locations. So what we did was we went ahead and purchased, through Uline, these little neon placard labels and we stamped them ourselves, because we’re all about doing the cheapest option but doing it for the sake of efficiency, and so we created a visual board. So anytime we would receive orders from one of our satellites, one of our six satellites, so each of them had an assigned color, we would print out the orders for the ingredients and then print out the orders for equipment and post them up here on our order board.
That way, whether it was me, my employee, or maybe our temp laborers, all they had to do was come into the warehouse, grab what the orders were that were posted on the board, and start getting to work, so it was very clear. And it was a really nice visualization of we’re completely done with orders this week or look at all these papers we still have left on the board, all these orders we need to get to work. And so each color corresponded to one of our locations, so we had Orange County, Los Angeles, San Diego, San Jose, San Francisco, and Sacramento, so those are the six colors, and then we had the purple label for out of market events, which adjust out of state events. And so it kept us a lot more organized and you can see here all the placarding of this work area over here as well.
And then visuals, which was also very fun. So we created visuals in the warehouse with floor striping to indicate floor requirements. So you’ll see this is actually the same exact warehouse layout that I showed you previously, where you see the ingredient storage over here and the equipment storage up here, but actually created lines on the ground but with arrows that tell whoever is in the warehouse exactly where they should be going with that pallet. And it keeps it all very streamlined and very tight and it also actually alleviates from errors as well. If you’re moving from Point A to Point B, everything that you need to package during those two points is actually just perfectly placarded there for you to grab, so it’s less forgetting and it leaves less room for human error.
And then something over here on the bottom left picture was our auditing area. When we got back our meal packing equipment bins from our satellite locations, volunteers are the ones that are repacking those equipment bins after their meal packing event. So although we like to trust our volunteers, you don’t always know if Jerry from some corporate event, who is trying to a call, is counting all the scales perfectly as he puts them back in, so we actually created an audit area. So when you are unpacking those pallets when the return shipments came back, you put them into the scale audit little tub area, highlighted in orange, and whenever we had free time, we would actually open up those bins, recount everything, redistribute, and put it back on the pallet, which indicates that it’s counted and it’s ready to go for the next shipment. And to remind anybody who was in the warehouse, because we oftentimes do use volunteers to help us with some of these warehouse activities, we have a placard up here that tells you exactly how many scale trays should be in this bin and we had it up for all of our equipment bins.
And then here is our visual shipping board and 5S board. So this was it previously, before, so you can see there’s actually like a random coffee table in here and I don’t even know why that was there, but hey, we’ve got it moved out of there. But you can see there really wasn’t any board or any organization to the board, so we actually created an order board, which I showed you previously. And then we also created a 5S board telling you the pallet pathway guide – what do each of these arrows mean on the ground – and give you all your placards that you might need here, all your instruments to keep the warehouse safe and clean and sustainable. And so that was a really fun thing, this little pegboard that we implemented here as well.
I won’t go through this whole list. I was actually thinking about deleting this and I decided to keep it just for it looks good. This is actually just our initial 5S action items. Some of them were easier than others, so all office spaces and restrooms professionally cleaned, just giving us a blank slate that we can actually prioritize and organize efficiently with a clean environment. And then also just maybe making us OSHA certified, so like making sure that we’re compliance with OSHA, so posting emergency exit floor plans, making sure that we have shatterproof lights, all this good stuff is stuff that we implemented at this warehouse.
And then this was our throughput estimates. We wanted to make sure that we were planning the warehouse according to the total capacity that we were expecting. So you could see that, during a peak week, we have quite more meals that we’re packaging in a week versus the average week. Now, let me remind you, 285,000 meals qualifies as a full ocean container, so we’re talking about our peak weeks we’re packaging of full ocean container worth of supplies and then some, in just one week. So our peak weeks are very heavy at our CDWs, and so you can actually see our peak month. We’re talking about over almost a million and a half meals that were packaging in a month. At some of our other locations at Rise Against Hunger, they packaging 1.4 million meals in their entire year, so we’re talking about these CDWs having the capacity and the time and the organization to do what some of our locations do an entire year in an entire month, and we were able to do it because of all of these efficiencies and working throughout all the details.
B: On the shipping container, is it possible to send smaller amounts or is it just the same price or you mentioned that 285,000, is that the best economic way to get a shipment sent over and it goes by ship?
C: Yes. If it’s a full-length container, we can ship about 20 pallets, if we do to spin wheels with the way that we load the pallets. Our pallets are 84 inches high, so we stack a lot of meals on those pallets. The reason we can send 285,000 meals per container is actually the weight as well as the pallet count. Typically, it’s 43,500 pounds is a full container of our meals, so we hit right under that 44,000 mark. We don’t ever send partial containers. What we do do sometimes, though, is say we’ll send 10 pallets of meals and then we’ll send 10 pallets of gift-in-kind donations. Gift-in-kind donations are donations that aren’t meals that some companies donate, so a lot of times it’s medical supplies, protein powder, Under Armor donated a bunch of shoes and activewear, and we just send that on pallets. But we do try to always fill up the containers because if not, it’s the same price to move it and you’re not getting as much benefit when they’re unloading it for the beneficiaries.
The way that our organization works, though, is we do all the prospecting for the meal packing events, we pay for all the storage of it, all the consolidation, all of our Rise Against Hunger employees. Our beneficiaries overseas, our partners, which are those nonprofits that have been completely established in these countries, they actually pay for the shipping of the container. So the reason why we do that is because, a lot of times, in these countries, they’re conflicted, a lot of times they’re war-ridden, and it’s very difficult to push these containers through ports over there and through customs, and so we have to have buy-in from our partners that, okay, they’ve invested, say, $5000 in shipping this container over to Tanzania. They have somebody and a contact on-site at the Tanzanian port where they’re going to help push this through customs with us because, if not, we’re at risk of having a container worth of $90,000 in meals to potentially stop at a port and we don’t have the capacity to push it through anywhere or the contacts to even do so. So we want buy-in from both parties, our side as well as their side. So they’re actually paying for it, so they probably want to get as most product and meals and aid for that charge that they’re going to have to pay for.
B: That makes sense.
C: And then corresponding successes in 2019. Before we implemented the CDW model, the days supply were 82 days on-hand of supply. We brought that down to 52 days on-hand of supply in just eight short months; the company average is 60. So although we were supplying the goods to six locations instead of one, we had better days of supply than our traditional locations because we let the professionals do the operational side of things. We had the second most accurate soy ordering forecasting even though we were doing the ordering for six separate markets, so that was pretty great as well. We created a safer work environment for staff and for our volunteers, complying with FDA, California laws, and OSHA. We effectively supported an operational model and a growth of 200% in satellite community engagement locations and we did it successfully. We resulted in a 57% increase in productivity, and we received approval to convert all Rise Against Hunger traditional locations to the CDW model, which I’ll get into a little bit more in my next slide.
But what does that really mean in terms of ending hunger? Right down here, I show you kind of our increased number of meal packages for our recipients, and you can see we go up and we got up even more, and this next year, in 2020, we’re adding more locations, so we’re going up even more. We’ve seen an 8.8% in growth of meals. We’ve increased the longevity of our meals by ensuring FIFO is enforced. So instead of shipping over meals to our partners and saying, “You only have one year of shelf life on these meals,” we’re able to stretch those meals even further because we can buy with the first-in-first-out so that instead of them having, say, one year of life cycle with their meals, they actually have, say, a year and a half to use those meals, so we’re helping our recipients in that way.
We improved the data saving, the company overhead costs, of non-value activities. So instead of hiring more employees to do tasks, we do the tasks more efficiently and save employees time, which saves the company money. And then lastly, we have more streamlined processes, allowing us to send out and receive gift-in-kind donations, such as protein powder. So we have created a process and a standardization for receiving and storing gift-in-kind donations, which Brion, like I mentioned, is like the protein powder or anything that a company might donate that’s an actual item, so maybe clothing, medical supplies. We were able to handle more of that because we now had a method of handling it and a process to handle it, which benefits our recipients.
And so what does this mean for 2020? this is a slide I added a couple of days ago. We had a new location open in January. We opened in Phoenix, Arizona the past January, so just two months ago, and it only took us one month and a half to open. So we decided, a month and a half before we opened Phoenix, that we were already packaging about a million meals in Phoenix already but we were doing them as out of market shipments, which means someone from California was flying out to do those events and then come back to their home location. We decided, you know what, let’s go ahead and open it.
Without the centralized distribution model, it would’ve taken us nine months to a year to open up Phoenix, but because we already have this infrastructure in place, it only took us a month and a half to pop down location in the middle of Arizona. And that’s what is so awesome about this model, is because we can grow so rapidly without any financial investments. We signed a contract with the 3PL there with a $1000 minimum, so if we do one shipment a month, it meets our $1000 minimum and we’re good to go there. And we can stop anytime we want, so if Phoenix turns out to be not successful, we can pull out and it’s no money lost.
And then leadership made a decision, this year, to convert all remaining traditional locations to CDW satellites. So my manager, who’s Director of Expansion and Supply Chain, and I are creating a two-year proposal to convert all of these little red dots over here to CDW models. What that means is that all of them will turn into satellite locations and we’ll actually be opening up a few more centralized distribution warehouses nationwide to fulfill the needs of those new satellite locations. So it’s a really, really exciting time for our organization. This model has proven to be so valuable for the ending of hunger in our lifetime and I’m just super excited for the next two years as we continue to implement and continue to grow.
B: I saw that your meals went up and increased. Is that primarily in California where you did the CDW pilot?
C: Yes, this is meals packed in California exclusively. We typically, as an organization, go up in meal growth every year anywhere between 5-7% organizational-wide, you can see that, actually, our 8.8% of growth in California is exceeding that companywide average, and we were able to do that while also marketing in brand-new markets. So in San Diego, we only actually had about three meal packing events a year and so when you pop a staff member there and say, “Grow that market,” it actually is pretty difficult to make it grow very rapidly because a lot of our model is creating these relationships and making people educated on world hunger and growing that rapport with them so that they trust our organization and what we’re doing enough to invest in us, which is hosting a meal packing event, and so that doesn’t happen overnight.
And so we’ve seen that one of the I wouldn’t say mistakes with the model, but more of a learning curve for us was that it takes longer than a year to establish those relationships, so we can’t expect that rapid growth overnight. It’s going to take probably in between a year to two years for us to really, really see that spike in meals. And so we’re still seeing it and, unfortunately, with this whole Covid-19, it’s really setting us back, and so I’m not sure that we’ll see that huge spike in growth this year either, but hopefully, next year when we recover.
B: How do you guys measure the impact in the countries that you serve? I imagine that would be difficult to determine, but do you have some anecdotal or some indicators that are saying that the increased meals are working or that you are reaching more people or alleviating the hunger?
C: Yeah. So one thing that you see in nonprofits a lot is not every nonprofit is super responsible with their finances or that follow-through mechanism. And so, for us, it’s very, very important that if we say our meals are going to serve a population, that they go and serve that population that we know that. And so we have our entire global impact team at Rise Against Hunger, which monitor our relationships and our partners with those nonprofit partners we have another overseas, and so to become a partner with us, you have to apply with Rise Against Hunger. We have to vet you for two years, so we have to know that that nonprofit that we’re supplying meals to are fiscally responsible and they’re doing good things for that country. And to be our partner, you have to do a lot of stuff on the backend, so we require pictures, we require data. We want to know how many recipients at your, say, school in Tanzania are being served, how they’re being served. We make site visits, so our global impact team are traveling around the world all the time doing site visit with our partners, making sure that everything is going okay, that the condition that the folks are making the meals in is all that, and so they give us a lot of data on that.
So after you’ve been with our organization for about a year, you get to go on what we call a vision trip, which means you get to go to one of our partners overseas and actually deliver the meals yourself and talk to those leaders of, say, the schools or those nonprofits overseas and talk to them about what a difference what we’re doing in the United States is for them. Because sometimes it’s easy, at our organization, to get caught up in supply chain and operations and forget that these meals are going to feed starving people overseas. And so I got sent to Belize to visit our partner there. It was really wonderful. I got to go to six schools in the southern part of Belize that receive our meals, I got to watch them make the meals, I got to eat the meals with some of the little kids.
They were so happy and one story that really struck me, and I think this really speaks to your question, Brion, is one of the teachers, who was from the United States, came to Belize to actually start this whole program with the schools in Belize. She said that the kids were fighting on recess or they were just sitting alone and didn’t really have a lot of energy to run around and play. They were fighting in class, they wouldn’t pay attention, they would talk, they would misbehave. And then she came back to the United States she ended up getting a contract with Rise Against Hunger, so we started shipping meals over there. She went back to Belize a year later and she said that since all the kids were fed, there was no fighting, everybody was paying attention, and she said it’s really, really interesting how if kids have their basic needs met, that they’re able to learn and that’s just not having food, that would engulf your whole life is just not even being able to eat every single day what you need to eat to survive, of you’re going to misbehave.
And so her story really struck me because our meals aren’t just meals, they’re hope. They’re giving these kids a better life, they’re encouraging these parents to send their kids to school because the parents at least know they’re getting fed, but also, they’re getting educated and that’s what ends these cycles of poverty and that’s what ends world hunger. And so that story really resonated with me because we are making a difference. These meals are making a difference.
B: That’s awesome.
C: So that’s it.
B: I’ve got a couple of other questions for you.
C: Yeah, absolutely.
B: Can you talk about the event experience for the companies that come in and pay for the meals and then bring their teams? so the other piece was, when we had our conference last year in Orlando, we went to the Orlando facility, I met Jason and he kind of showed us the setup and the cleaning operation and the tagging of bags. But we didn’t see an actual event, we just saw that through a video, I think you provided to us. But can you just talk through that experience and why organization should consider having their employees come and participate in one of these events and contribute to it?
C: Yes. A lot of the questions that we get, especially from operational folks, is, well, if you’re having volunteers package the meals, why wouldn’t you just hire more staff and package meals in your warehouses alone? and so that was kind of an interesting question that we get a lot and the reason is because we’re trying to spread a movement. We’re trying to have others advocate on the behalf of not only Rise Against Hunger but ending world hunger in general, which is why we have this meal packing events experience for volunteers to come out and actually put their hands on hunger. It’s a very different thing asking somebody to donate money, which is always great, every nonprofit needs them to donate money, but to actually donate time is one of the most valuable things that you can donate.
And so these companies and these churches or these schools, they want to instill the power of volunteerism in their employees or in their students, and so we offer an outlet for that. So it’s not just giving money, it’s not just fundraising to write a check, it’s actually you’re doing something for two hours and it really empowers people and it really makes people excited about volunteering and ending hunger because you’re actually packaging the meals yourself. And so these companies like doing it because, a lot of time, it’s like a teambuilding exercise or a teambuilding activity and they’ll do it around the holidays or they’ll do it around spring break and it’s super fun.
You get to kind of put tables together, there’s about six volunteers around each table, and everybody’s talking and everybody’s having fun. They have hairnets on, they have gloves, they’re packaging the meals, pouring all four ingredients into our bags, and then they actually weigh the bags, they seal the bags, and then they sticker the bags with the expiration date and the lot tracking information. Those volunteers’ hands are the last hands to touch those bags and put them into the boxes before they’re opened up on the other end in another country, feeding those recipients. And so it’s really powerful model that we’ve built and it’s really encouraged the spirit of volunteerism and giving back and not just giving money but giving your time, which is so, so valuable. And so that’s our meal parking experience.
We have whoever is hosting the event, whether that’s a corporate partner, a faith-based partner, a community partner, or a school, we have them donate the $0.34 per meal and it’s kind of a sliding scale, so the more meals you package, the less you have to pay per meal just because, obviously, there are certain costs associated, such as renting the truck, the staff time, the shipping costs, that it kind of remains the same, if you package more meals, we kind of can lower it a little bit. But we have the companies or whoever the host is make that tax-deductible donation to us to cover the meals and that’s why we were able to grow so rapidly. It’s a really sustainable method of receiving revenue in order to keep our mission going but also interacting and creating an outlet for people to volunteer.
And so instead of us hiring more Rise Against Hunger staff, who are already passionate about ending world hunger, and shoving us into a tiny warehouse to package meals, we want to go out and reach. We reach a lot of volunteers, and we call them hunger advocates. We have millions of volunteers over the United States that have worked with us and so we have over 454 million meals packaged by volunteers, and so that’s a movement. We’re creating a movement to end hunger by 2030.
B: I think there’s a lot of value for an organization from the teambuilding side of it and also feeling like that time to educate and find out and learn about the problem, if the company just donates the money, they don’t get that buy-in. And then the employees see, wow, our company has committed time and money to this cause, this is a nice company to work for. And so I think there’s huge benefits for an organization to consider these types of hands-on, engaging activities with organizations like yours.
C: And what’s even cooler about our model, Brion, too, is we’re completely scalable and we come to you. So if you have a conference room that can hold the amount of volunteers that you want us to package meals in, we drive everything to you, we load it all in, we set it up. All you do is have people come to wherever on your campus or your site or in your building, package the meals for two hours, and you’re only taking away two hours of productivity from staff time to come out and volunteer, because it’s so accessible and so easy. Whereas a lot of these other organizations, you have to go off-site and it turns into more of an entirety activity, so it’s a really cool way to make a really huge impact with a really, really small time investment.
B: How would an organization get hold of you to schedule or learn more about one of these events?
C: On our website, RiseAgainstHunger.org, you can see where the closest location is to where you are, and you can actually send in just to request just say, “Hey, I’m interested. This is how I heard about you,” and we actually have an entire opportunity lead process where we would connect you with which location would best serve where you are. So although there may not be, say, one of our locations in Denver, Colorado, we can actually create an out of market event and still be able to ship everything to your site and still run that meal packing even for you, even though we don’t have an actual existing location in that city.
B: Awesome. I think that’s a great overview and I think I don’t have any other questions. Do you have anything else you wanted to add?
C: No, that’s it. And if you are interested, I’m sure Brion will send out my information as well. If you have any follow-up questions or maybe any ideas, I love collaborating, so if this made you excited and you maybe want to do some skills base volunteering or talk more about operation, supply chain, our model, or have any great ideas for us, please, please feel free to reach out. I love collaborating and meeting new people. And that’s all for me, so thank you, guys, so much for listening and I hope you have a great rest of your day.
B: Thank you so much for your time, Courtney. Good talking to you and keep up the great work.
C: Thanks, Brion.