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Is It Time to Move Your Fulfillment Operations? What to Consider.

by Robert Hartley on 2016-10-06 21:03:23

So... how are your fulfillment operations doing? This might be something to start thinking about, even at this time of year.

If you are unsatisfied with the performance of your current operations, you can't generate robust reports, you don't trust the inventory accuracy, or need you more room to grow, it's time to look for a new fulfillment center.time_to_change_fulfillment_centers.jpg

I want to address the steps involved in transitioning your fulfillment operation to a new provider. Each process is different and has different requirements, but working with an experienced 3PL will ease the stress and difficulties in the process.

First and foremost, you and the fulfillment partner need to be on the same page. Communication and multiple planning meetings are needed to have a full understanding of the requirements and procedures needed.

Here are some important topics to discuss with your current or potential fulfillment center:

  • Service Levels
  • Inventory & Replenishment
  • Lead Times
  • Any special handling requirements or value added services needed
  • Who are your customers? What are their delivery requirements?
  • Snapshot of the operations today and what you expect going forward
    • Volumes
    • SKUs
    • Seasonality
    • Turns
    • International Shipping
    • Packaging and assembly requirements 

IT

Another topic not listed above is IT communication. Before moving any product into the new warehouse, an IT connection needs to be established between the customer and the fulfillment partner. This could be through a CSV file, API or EDI connection, but in order for the operation to be successful, this connection needs to be established prior to starting. This will ease the process of sending orders and ASNs. Also, make sure that there is an understanding of the KPIs and reporting capabilities needed. Any fulfillment partner will be collecting data and will be able to produce the KPIs needed for the customer. A fulfillment partner needs to understand the product and SKU database through their system and have the ability to conduct audits and cycle counts when the customer requests. This will help with layout of the operation, and scheduling receiving and put away activities.

Parcel Shipping

Customer needs to express their shipping strategy to the fulfillment partner, so the 3PL can incorporate these details / procedures into the fulfillment process. If you need shipments sent via ground, overnight or 2 day priority, let your fulfillment partner know. The 3PL provider may have discounted parcel rates or a parcel program to help save costs for their customers. During this time, an agreement on cutoffs and how to handle specific rush situations should be discussed.

A few helpful techniques for moving to a new provider is moving product on a weekend, or moving “new” product from manufacturering to the new provider to build inventory as levels at current provider decrease. Once the customer sees the move will not disrupt operations, then move your final inventory. These are just a few ideas, but a smart plan will help ensure your customer / buyers do not see a change or issue with their orders. As I mentioned before, an experienced 3PL fulfillment provider can make all the difference as they understand the resources, scheduling and potential difficulties that can occur in transitioning to a new provider.

If you have any questions on moving or looking for a new fulfillment provider, give IDS a call today and we can put together a solution for you and your company!

 

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