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Balancing Profit and Social Change

News Source: Philadelphia Inquirer

Is it possible to make money and change the world for the better?

The professionals and students at this weekend’s Net Impact Conference at the Convention Center came to build on that idealistic premise.

Chad Dickerson, CEO of the online artisan sales site Etsy, talked of offering his 1.2 million vendors the best terms, with the firm taking a modest 3 percent cut of sales and “encouraging the craftspeople to raise their prices.”

It’d be hard to find another public company as supportive of women as Etsy, he told moderator Katherine Klein, vice dean of the Wharton Social Impact Initiative at the University of Pennsylvania. Etsy’s board of directors is “50 percent women, which was not easy to achieve.” That diversity is also found among executives and staff, he said.

While the mostly youthful conventioneers and 100 exhibitors came from all over, the event focused on local game-changers, including “B-Corps” entrepreneurs like Jay Coen Gilbert and Heather Van Dusen of the Wayne-based B-Lab, which champions “profit and impact” and venture capitalists like RoseAnn Rosenthal and Margaret Berger Bradley of Ben Franklin Technology Partners, which helps poor communities get investment.

Also in the mix were social-change agents Carmen Ferrigno of Saint-Gobain Corp. in Malvern and Mark Alexander of Americas Simple Meals & Beverages, the organic-foods division of Camden-based Campbell Soup Co. that’s been growing.

One intriguing case study was shared by James “Jamie” Bonini, vice president of the Toyota Product System Support Center and Stacey Behm of Philabundance, detailing the carmaker’s efforts to improve operations of the city’s largest hunger relief group.

The project builds on the carmaker’s “lean” or “just-in-time” efficiencies and “jidoka” (automation with a human touch) philosophy. (MIT professors spun it as the 1990 classic The Machine That Changed the World.)

Nonprofits dealing in areas like health, hunger relief, disaster recovery, and minority businesses, get the bulk of Toyota’s free attention and consulting.

But teams are also available, charging a daily per-diem, for “small to midsized companies that reach out for help,” said Bonini, “like Herman Miller.” The office-furniture-maker was on the verge of shutting down its slow, unprofitable Zeeland, Mich., factory until Toyota streamlined the operation.

At Philabundance’s North Philly warehouse, Behm noted, Toyota’s “first priority was improving the environment for our staff, then working on the shop floor, building on the Japanese concept of Kaizen – the mind-set of small changes, big impact.” Also promoted was the cause of “customer first.”

Philabundance serves 350 agencies and 90,000 individuals a week, and processes 28 million pounds of food a year, Behm said. That includes “10 million pounds rescued from Grocers Against Hunger, with more gleaned from farmers and perishables that come into our port but can’t get to market.”

Toyota found antiquated processes at the group’s Berks Street warehouse, where customers had to call or fax in an order. The phone-tag problem often took two or three days to confirm. “They noticed a lot of boxes on the pallets were damaged, because of the way the orders were being picked and packaged. They asked what challenges our staff was facing, including errors in the orders and duplication of services, with one person picking the order, another person checking it. They dug in and determined we had an inefficient warehousing system with poor signage,” corrected by color coding and larger fonts.

Also up for improvement: the worker’s mind-set. “We adopted a daily huddle at 12:30 p.m. at both of our warehouses. We have a whiteboard and write things down, talking about errors, safety concerns, ideas about improvement. This is all part of the Toyota Way.”

Now the results are easy to see. “We used to finish picking orders at 3 p.m. Now we’re done at noon, which gives the staff time to work on special assignments and prep for the next day. It’s a huge benefit.”

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