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2013/04/24

Managing Expanding eCommerce Channels in Your Warehouse


The opportunity to grow sales through eCommerce is undeniable. However, for the team running the NetSuite warehouse, this growth opportunity can be a doubled-edged blade. New orders and customers are always welcome, but the fulfillment complexities can create a broad range of challenges for the warehouse, including:
  • A wider variety of order mix: order size, SKU variation, order volume, requiring different picking models;
  • Growing requirements based on customer and channel such as status updates and documentation;
  • More complex inventory allocation as well as wider variety of pack and shipping options.

For the most part, the increased volume and complexity is often expected to be handled with the same staff. Peak volumes need to be executed flawlessly with temporary staff and minimal training. Finally, the speed at which the channels and requirements are changing accelerates and requires an extremely agile operation that scales up and down rapidly while accommodating new processes.

NetSuite provides the most flexible/agile solution to handle the end-to-end order management process. Extending your NetSuite warehouse to meet the demands above is critical to supporting your eCommerce opportunity. Let’s look at each of the aforementioned challenges with some tailored recommendations.

A Wider Variety of Order Mix
As the order mix changes, the picking process becomes more complex. Common divisions include wholesale orders versus eCommerce (consumer) orders; other examples include single item orders versus multi-item, as well as priority orders based on customer, delivery date, order value, etc.   The operational objectives are to minimize pick time while achieving the highest pick/ship accuracy. Mobile technology using bar code scanning can create huge productivity improvements. These include guided walking paths through the warehouse to minimize pick time, bar code scanning to increase accuracy, and real time NetSuite integration to ensure control and visibility.



There are also smaller steps you can take with your NetSuite warehouse operation, such as batch picking with a master pick list. This is suitable for large numbers of single item eCommerce orders and can streamline these simpler fulfillments. One of the most common NetSuite extensions is to create a combination branded pack slip with an integrated shipping label. This combines the pack/ship steps, cutting down on effort and errors.

Growing Requirements by Customer and Channel
Each channel often has unique requirements in terms of providing the customer with visibility to order status and documentation. For example, a recent customer added Groupon; in addition to being able to handle large batch order processing, Groupon requires a branded pack slip. With multiple channels, each requiring branded pack slips, advanced ship notices, specific labeling, or different shipping charges, processing these without automation is a recipe for disaster.  A temporary warehouse worker could easily mix up the multiple requirements - for example, using a Lowes branded pack slip instead of Home Depot. This not only results in penalties and fees, but it also jeopardizes the relationship with the customer. Capturing and automating these rules not only saves costs and time, it could also increase output and reduce space requirements. A simple suggestion/solution is to consolidate pack and ship stations or domestic shipping and international, eliminating staging areas.

More Complex Inventory Allocation
With increased sales channels the transportation options and needs become more complex. It could be driven by consumer promotions, such as free shipping, or more consolidated freight shipments to wholesale channels. With mode optimization and business rules, you can automate the selection of the right carrier and service while balancing the costs and customer expectations. For example, when offering free shipping to consumers, the lowest cost option would be selected, using services such as UPS SurePost. Alternatively, in a B2B scenario, where the customer has a defined delivery date, it may be justified to automate a service upgrade based on time in transit to ensure the delivery is made on time. The additional transportation cost outweighs any penalties or customer relationship issues.
In summary, to ensure profitable growth coming from new eCommerce channels, you must ensure that your end-to-end NetSuite fulfillment is automated.



Guest post courtesy of Oz Development. 

Oz Development is the provider of OzLINK. OzLINK is a set of cloud-based solutions that integrate and automate the order management process. OzLINK streamlines functions from eCommerce through to the warehouse and shipping. OzLINK has created value for more than 10,000 customers in manufacturing, wholesale distribution, retail, and the health care industries. Oz Development is privately held with global headquarters located in Westborough, MA, USA.
For more information on Oz Development solutions and service, please visit http://www.ozdevelopment.com


Brian Hodgson provides strategy and execution of Oz Development’s sales and marketing. His responsibilities include market strategy, go-to-market, marketing/communications, sales channels, and demand management activities to drive Oz Development’s growth. Prior to Oz Development, Brian was Chief Marketing Officer for Kewill PLC, a global software provider specializing in trade and logistics solutions. Brian brings more than 20 years of experience in high tech sales & marketing to Oz Development, having held executive sales, marketing and business development roles at Kewill, Eleven Technology, and SupplyWorks. Brian holds a BA degree in electrical engineering from the University of  Waterloo.

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