Last week I witnessed a stunning example of an internet retailer founded 6 years ago and had recently blasted through the £10 million turnover milestone. To the outside world, they look unstoppable: clear and concise web sites; international expansion thriving; precision merchandising; electric energy in the team dealing with the hundreds of orders rolling in across their 30 or so different web sites every day.
So why was I there? Their manual pen and paper e-commerce order fulfilment was stretched at the seems, unfortunately so was their ever increasing workforce. I was there to find a way to get double the amount of orders out the door but with the same or less order fulfilment and customer service staff.
These are the top 3 mistakes I discovered which seem common across 90% of internet retailers who are growing like mad and e-commerce order fulfilment is a challenge.
1. Printing pick lists and calling them a despatch note or invoice is wrong
These are problems this creates: Imagine Mr Customer phones and says she is not happy as the blue pen she ordered is in fact red. Your customer services team check the despatch note and it says that a blue pen was despatched. So you have to send another one or get that one returned at your expense to make the exchange. You also have a pissed off customer who will tell other people and is unlikely to use you again.
The other issue is that imagine you received a different order for the red pen. you web site says it is in stock. Someone goes looking. No luck. They tell sales or customer service to notify the customer that you in fact do not have that pen. Flip this around the other way and you will have inventory that is in stock, but your web site says 'Out of stock'. Not sure which is worse.
The way to prevent these issues is to remove the paper pick list. Get to electronic pick lists on a handheld mobile computer that scans the item barcode as they are picked. The operator cannot make a mistake in the e-commerce order fulfilment, meaning mispicks are eliminated. When order picking, if you scan the wrong item, the systems says 'NO'. Then comes the magic. The order is picked accurately and then the stock control software from the handheld will create the despatch note, paper or/and electronic, plus can push the information to the courier to complete the e-commerce order fulfilment. Tesco do this wonderfully when you order from them with a truly paperless system.
2. 'I haven't got enough room in my warehouse'
This is the warehouse manager's most common complaint that I hear. Most of the time, they have the space, they are simply not using it in an optimal way. This is the biggest reason I see for this: items have dedicated locations. What does that mean? This is when my blue pen has a fixed location on a specific shelf 100% of the time. Problem is that when you receive a large delivery of an item type, you have to try and squeeze it into that location if you are not using bulk locations from which you replenish. This ends up with your prime pick locations near the pack bench and despatch area looking like this:
What you need is that locations are fixed, but different products may go in them. Products may also be mixed in a location and/or be in multiple picking and bulk locations even though they are the same product. People naturally put things in gaps. New or temporary staff should not have to learn where to put everything.
A simple system can help them get up and running in minutes, putting stock away and doing e-commerce order fulfilment.
3. 'We have tried a stock take a few times, but never actually done it properly'.
No surprise, this is stock-taking. Many internet retailers have not found a way to use their existing finance systems like Sage to continue running their business whilst doing a stock take. They also print lists of what should be in stock. Get people to count it. Input that into the computer and then see the variance. This constipated elephant approach to an annual event for stock taking is useless.
Having stocktake software as part of your stock control software will make this a continual process where you do a few lines or locations when you have spare time. The system can drive that and quickly you realise an annual stock take is not necessary as these perpetual counts plus accurate order picking will ensure you have accurate stock figures.
These are the top 3 to attack with simple stock control technology. E-commerce returns are clearly another big problem. Fix the above 3 issues and they drop dramatically in line with your customer service team size. More saving
Author: Jonathan Bellwood