Guns.com Talks with Larry Potterfield about the Future of Retail (Part 3 of 3)

This is Part 3 of a 3 part interview with Larry Potterfield from MidwayUSA.  You can read Part 1 here and Part 2 here.

“I asked my readers (i.e. fans of Guns.com), what they would ask you if they had a chance. The one consistent thing that kept coming up was whether MidwayUSA would open a retail outlet. Have you any plans to do so?”

Larry Potterfield smiled. But unlike his usual smiles, this one had a touch of the mischievous to it. “We’ve looked at it. Let’s just say that for now we’re happy to be the best possible online business we can.”

(New Construction)

I chuckled. His smile got wider. “But I can tell you that we just started work to put in a little museum over there with the main warehouse. Not real big or fancy, but with some nicer items from our collection. And there will be a couple of computers there. Someone can stop in, place an order, then browse the museum. We figure that it’ll take most people about 20 minutes to look through it. By then, their order will be waiting for them at a pick-up counter there adjacent to the museum.”

(Bridge to campus)

“So, the next best thing to a retail outlet. How long until this happens?”

“They started work just this week. Should be operational before the end of the year. This is only possible because we’ve cut the time to fill an order so much, thanks to the Nitro Express Shipping system.”

* * *

Amateurs talk tactics, professionals talk logistics.

‘Nitro Express Shipping’ is what they call the new ordering system at MidwayUSA. Part of it is software – the way that orders which come in are prioritized, then assigned for filling. Part of it is communications – the assignments for filling a given order are sent to the employees electronically, to these wrist-computers they wear that tells them what to pull for what order (there are no paper orders to shuffle around) and when.

But a BIG part of it is an amazing conveyor system that snakes through the plant at three levels, moving large plastic bins automatically through the different sectors where items for a given order are stored. It looks like a miniature highway system designed by a team of crazy people.

But thanks to brilliant use of bar-coding and extensive tracking systems, it works phenomenally well. Several different bins may be assigned for a single order, so they can track through the large warehouse quickly, all converging automatically when everything is ready to be boxed together. It is a mind-bogglingly-complex version of “just-in-time” logistics, and it has cut the time it takes to fill an order from about 2 hours (which was still considered unbelievably fast) to between 9 and 14 minutes.

The flip side of the ordering system is replenishing stocks. And while the employees filling the orders work from one end of the stacks of products, employees are resupplying those stacks from the other end, drawing from stores in another area of the warehouse as well as “just-in-time” deliveries from manufacturers.

There is a lot more to MidwayUSA, of course. There’s their Marketing department. Accounting. Human Resources. Information Systems. All the components necessary for a large corporation. But all of it – all of it – is as carefully organized and monitored as the Nitro Express System.

That’s why MidwayUSA was ISO 9000 certified in 2008. Why the company received the Missouri Quality Award that same year. And why in 2009 MidwayUSA was recognized with the Malcom Baldrige National Quality Award. This is actually a really big deal, though it’s the sort of thing that most people outside of business administration don’t know about. It is, basically, saying that MidwayUSA has lived up to their vision statement:

“To be the best run business in America, for the benefit of our Customers, by systematically practicing modern leadership and management principles.”   

MidwayUSA has a 93% Customer Satisfaction Rate. They don’t just compare themselves to their direct competitors. They compare themselves to the best-run companies in the country—and in the world.

Any corporation exists to maximize shareholder value. That can be done a lot of different ways. As Larry told me, his guiding principle has been the relentless pursuit of not profit, but perfection. Of putting the customer first. Of treating his employees and vendors fairly, making sure that they are happy so MidwayUSA can make sure the customer is happy. And through customer satisfaction, making his business a success.

We finished our interview. It was a bit after five. As we got up to go, Larry walked over to his desk, grabbed a business card.

“Here,” he said, handing me the card, “my personal contact info. If you have any questions, or need any help with your articles, just drop me a note or give me a call. I can’t promise I’ll answer immediately, but I’ll get back to you just as soon as my other commitments allow.”

“Thanks.”

“I’ll walk you out. I think everyone else has left for the day.”

We walked down the hallway. He was right – the receptionist was gone, the other offices there in the suite empty. We got to the door. “How about you? Don’t you get to go home yet?”

He smiled, opened the door for me, held out his hand. “Nah, I have another video conference to do here in a bit.”