Best Practices Series from etailinsights clientsOperating a Successful Fulfillment BusinessMark Chandley, CEO, Adeptiv Solutions
Key to Fulfillment Services Success Still No SecretOperating a fulfillment services company isn’t necessarily
the most glamorous business option. After all, fulfillment companies are
charged with the dirty work – receiving incoming shipments plagued with errors,
managing inventory on a seemingly endless number of items with an accountant’s
precision and order fulfillment at the speed of light in order to meet the ever
increasing demands of consumers worldwide. And usually all of this hard work is
performed in a clandestine fashion under the auspices of “fulfillment center”
or the client itself and without public recognition, so that end customers
receiving their much anticipated shipments don’t even know that their was a
third party involved. On top of these challenges, logistics firms operate
within the confines of a largely high volume, low margin reality, making it
extremely imperative that they constantly seek out new ways to stay competitive
and profitable. But for the most part, business improvements still seem to come
from the tried and true basics that have been present for years – people,
processes, and technology.It All Starts With PeopleIt’s intriguing to look first to technology in the
investigation process of uncovering new ways to improve fulfillment operations.
After all, technological advances have reshaped the business landscape as we
know it. But without people, the systems don’t come to life. Even with robotic
technology, the human element is still necessary in the fulfillment
environment, so building sound human resources practices within your
fulfillment center is critical. Strangely enough, many companies in this niche
don’t have a human resources department, and many others view the warehouse
staff as a lower grade position within the company without much after thought
to their importance.So what do top fulfillment firms do with regard to people?
First and foremost, they have an outstanding process for attracting top talent.
They understand the importance of all workers within the team, and they place
an enormous effort on bringing on the right “type” of people. Second, they do a
stellar job of retaining top talent. There are many ways that companies can
retain top talent – from providing them with proper motivation and incentives
for a job well done to empowering them to make “on the fly” decisions. At the
end of the day, most good people leave their positions when they aren’t
appropriately “stroked” for their hard work.Processes Lay the Foundation within the WarehouseWarehousing is a very detail oriented profession. Even
subtle changes can bring about tremendous improvement and cost savings, as with
most high volume, low margins businesses. For example, some firms have seen
noticeable reductions in error rates by segregating inbound receiving and
outbound shipping, ensuring adequate lighting in various areas of the
warehouse, and other very small details. The best of the best fulfillment
companies not only understand this, but they also have a formal process in
place for consistently moving forward with further change and progress. High
performing companies methodically detail and codify every step within the
fulfillment process, tie performance metrics around each step, consistently
monitor the results of these metrics, and place ownership of this iterative
process on key members of the team. And the creative evolution for very
successful companies doesn’t stop with warehouse workers; it incorporates and
involves other members of the team that bring different perspectives that can
challenge the status quo for the better.Of Course, Don’t Forget About TechnologyTechnology has transformed all aspects of the fulfillment
process. It all starts with the receipt of orders, e-commerce fulfillment, and integration
with customers’ systems. Fulfillment companies can now intimately integrate
with customers – and with a flexibility that wasn’t present in the logistics
industry even 10 years ago. But the technological evolution doesn’t stop there.
Rather, it continues throughout all areas of the warehouse. Most of the
technological advances have targeted either building greater efficiencies (with
relation to picking, packing, and shipping) or lowering costs. And, yes, there
are even robots picking and shipping orders. Those companies that don’t
incorporate these new advances into their overall strategy will no doubt be
eventually left in the dust.One Last Important NoteOutside of these three important factors remains one very
important and often overlooked trait of successful fulfillment companies – a
relentless focus on the customer. Not only do high performing fulfillment
houses build long term relationships with customers and make them feel
important, but they also view the product in the warehouse a little differently
than average fulfillment firms. They view it as their own – which is a very easy
thing to say but extremely difficult thing to practice. But when this level of
service is achieved, a bond is built that outlasts changes and threats that
would otherwise lead to the customer moving their business.
-Mark Chandley is CEO of Adeptiv Solutions, an etailinsights client, and a full scale call center and ecommerce order fulfillment
services company.
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