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