Friday, January 2, 2015

The Business Balancing Act...

It's a balancing act, focusing on smaller orders with higher profits while keeping your larger customers happy.

"When you look at the speed of change and the level of uncertainty, specifically when you look at things like omnichannel and e-commerce, growth rates are hard to predict. " 

That overwhelming emphasis on speed, though, means that fast and accurate communication between you and your customer is crucial. Google, Amazon and others are delivering in under an hour, but they are getting paid more for the products and services they provide. This added profit cones either in the form of a subscription service like Amazon Prime or just higher prices on items with smaller delivery windows. 

"As omnichannel becomes more prevalent, that's driving a lot of pressure in the DC/warehouse  environment. A lot of distribution networks can handle delivery for B2B and classic commerce. But there are many companies who don't have the internal expertise or right infrastructure to handle omnichannel. It takes a different type of operation for picking, packing, and shipping direct to consumer. We've seen a lot of people take that portion of their operations as they move into the multichannel arena and outsource to a 3PL." 

But as with anything there are pro's and cons when using a third party.

Those same challenges make close integration between customer and 3PL systems imperative. When you are operating that much faster and going to direct-to-consumer fulfillment, you have to look at how you handle that integration. The question of how many 3PL partners a shipper might have aside, the fact remains that working with one of more 3PLs adds a level of complexity to tracking and managing your goods. 

So what can distributors do to make the process as seamless as possible?

The good news is that the MDS-Nx software suite has a number of tools to help you segregate and service that business more efficiently and in some instances allow you to handle this new volume in a more cost effective manner then shipping it off to a 3PL. or Use the 3PL as an adjunct or overflow for your volume. 

So as the new year starts and you look at new business models and ideas to grow your company here are four easy methods you can implement to service that business using MDS-Nx. 

Multi-Warehouse shipping based upon customer profiles
Bulk Picking for single line orders. 
Split Orders lines to create bulk and LUM picks
Split Shipping for multiple orders/Drop ship on the fly 

Multi warehouse shipping doesn't have to mean opening up a new branch or created a new physical space. It can be as simple as segregation an area of your warehouse for the items you will be breaking down to eaches. 
when customers place and order through your retail website those customers can be tagged as retail and have the order directed to the retail warehouse which is logically setup to ship eaches in smaller boxes.

For those customers who are setup a retail the number of lines tends to be much smaller. Industry averages are under 5 lines per order. To assist in shipping and picking - setup a Bulk Pick Sheet which allow you to list say 50  orders lines together with the same item - then pick the 50 pieces in bulk and move them to an assembly area where you can then easily box them and scan them for shipment - this will save the time going back and forth to the warehouse location and will allow you setup a packing operation based upon the items size and weight. 

In the instances where certain items don't fit your order profiles IE they ordered 4 small each items and one larger case. you can have the MDS-Nx system automatically split those lines into seperate tickets. 
In a larger warehouse the forklift might be needed to get to that case of gloves so the second ticket will go to that pickers handheld. and they can bring the case to the pick area. Or you can simply have one person pulling Bulk items after the other items are picked. By having two separate workflows once for bulk and one for piece you can 
increase productivity on both lines. 

Lastly when all else fails - you can still use that 3PL or the Manufacturer Direct by splitting the order in customer services based upon inventory and shipping times.. This will allow you to take a single line and have it ship directly from your 3PL partner or the Manufacturer but still keep the billing order under your control. 

The turnaround time might be smaller but the concepts are still the same. 
Using the tools you have available now you can service omni channel business more effectively and chose to take advantage of this new profit area. 

For more information on TSH or MDS call The Systems House, Inc. at 1-800- MDS-5556. Or send a message to
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