Order Fulfillment

You’re flipping through a 500-page catalog for a major player in the janitorial and sanitation (jan/san) supplies market sector when you happen upon a section displaying waste containers. The catalog carries a host of well-known brands — including wastebaskets, can liners and other products made by United Receptacle. What you may not realize is that the other company’s catalog that you’re viewing actually features page layouts, photos and graphic designs produced not by that catalog, but by manufacturer and distributor United Receptacle. In addition to producing its own catalog each year to showcase its full product line, United Receptacle also helps many of

Profile of Success: Randy Brough, supply chaing manager, Lifeway Greatest initial challenge: Making the distribution center (DC) a core competency for the company. “LifeWay’s DCs were treated as a forgotten part of the organization. … It was basically a necessary evil to be dealt with.” For the first few months, Brough, who joined LifeWay in 1994, and his boss even researched the possibility of outsourcing the entire operation. Plan of action: The long-term costs of outsourcing outweighed the benefits, so Brough and the logistics team implemented the following tactics: 1. Built a better management team. Since 1994, the management staff increased from eight

Problem: Multititle cataloger Shindigz/Stumps wanted to reduce overall transportation expenses, while retaining flexibility in its product shipping options offered to customers. Solution: The multichannel merchant put its parcel shipping business up for bid. Results: A switch in carriers enabled Shindigz/Stumps to reduce its overall transportation costs by 27 percent. Brad Grimsley knew he needed to make some changes. The vice president of service and fulfillment at Shindigz/Stumps, a South Whitley, Ind.-based party and prom supplies merchant, says he noticed soon after arriving at the company in 2003 that he had an opportunity to reduce shipping expenses. Meanwhile, the company’s overall order volume

Problem: Seta Corp., a jewelry syndicator and the parent company of Palm Beach Jewelry catalog, continually looks to reduce labor fulfillment costs. Solution: Instituted employee incentive programs, improved automation, realigned scheduling and staffing, and streamlined distribution center operations. Result: Between 1999 and 2004, the cataloger reduced its labor fulfillment costs by 45 percent; at the same time, it increased employees’ average hourly wages. * The following functions are included in Seta’s labor fulfillment costs: receiving; quality control; stock putaway; picking/packing; shipping; engraving; returns processing and putaway; production maintenance; and all hourly and salaried payroll costs, including payroll taxes. If you’re of the

Implementing the following three smart strategies can help you save money on your merchandise shipping. ¥ If you ship books, CDs and/or other small items, use the U.S. Postal Service’s Media Mail program and save up to 50 percent off the mailings’ costs of other carriers, said Mark Taylor, CEO of Taylor Systems Engineering, a consultancy and provider of shipping systems, during the panel discussion”60 Ideas in 60 Minutes: Fufillment” held during the National Conference on Operations and Fulfillment, in Grapevine, Texas, last week. ¥ For orders worth more than $100, never pay the retail insurance rates of the big carriers, said Taylor. Save money by

For many catalog and online retailers, parcel shipment cost is the highest single line item in the fulfillment process. Fortunately there are some simple checks available to determine if your company is spending too much. In conjunction with rate negotiations and invoice auditing, look at the following five areas as tools to control unnecessary parcel costs. 1. Zone Skipping: If you have a small number of distribution centers, relative to the geography they serve, and a medium to large volume of daily shipments, look here for savings. Zone skipping is a practice where shippers consolidate pre-labeled parcel orders, ship past several geographies and deconsolidate the

Facilitated largely by the Internet, consumers have been ordering gifts later in the holiday season. Indeed, 20 percent of consumers reported they started their online shopping later in 2004 than in 2003, according to the 2004 Shop.org/BizRate.com Online Holiday Mood Study. Shop.org also reported that 46 percent of online retailers offered express shipping promotions the week of Dec. 19, no doubt adding more pressure to their already full holiday workloads. These trends can cause some rather drastic spikes and accompanying problems in any catalog business. During the past several years, we’ve heard horror stories of poorly planned operations resulting in excessive order

When catalog order management systems were first developed in the 1970s, they were designed to manage all aspects of catalog operations: from order entry, customer service and customer database management to response analysis, inventory management, purchasing, fulfillment, and returns. Thirty years later, they still are, which is why so many direct merchants can run their businesses on these applications without a need to add specialized solutions for things like warehouse management. Some companies, however, find their catalog management systems don’t provide the flexibility or sophistication they need to address their inventory or fulfillment challenges. For them, a warehouse management system (WMS) is a necessary

Catalogers possessing high-performing operational units concentrate on the following five fundamentals. 1. Optimum Location Superior merchandise fulfillment begins with facility location, which should provide average or better solutions to the following criteria: - An adequate labor supply of both full-time and seasonal workers, as measured in terms of costs, availability, stability and productivity. Note: This is the single most important location-related criteria. - Proximity of suppliers and customers to the facility, as measured in both inbound and outbound transportation costs and delivery time. - Local economics includes reasonable construction or building rental costs; availability of government incentives; and reasonable taxes (e.g., income, personal

Catalogers often try to reduce associated returns costs with policy initiatives. Since returns are seen as a bottom-line deficit, countless hours are spent defining a policy to minimize returns. Here are four tips for better managing returns:ï3/4ï3/4 ï3/4ï3/4  1. Divide the responsibility for returns between appropriate departments. If returns are due to product quality, your merchandising team must be involved in the solution. If they’re due to presentation issues, the creative team must participate. Slow deliveries? Get your fulfillment and inventory teams involved. Tip: Create a returns team with members from each department to focus on return reduction and management. Fiscal responsibility also should be shared. 2.