Gain Critical Sign-offs On Order Management System Deliverables
One essential element to good project management is to have critical sign-offs on key deliverables as the project progresses. Through our experience in implementing Order Management Systems (OMS) and work as an expert witness in software litigation, we find that review and sign-offs by management, your team and the vendor’s raises the awareness of the detail plans and results as the project progresses. Much of the success of OMS implementation comes from planning and communication. These major reviews improve the quality of the process and end results.
Here are some major examples:
- Project scope or charter for project: this establishes the objectives and deliverables at a high level; what system(s) will be replaced; what new system (s) to be installed; degree of modification required; schedule; team members and responsibilities; budget by quarter and year; savings and benefits expected; authorization to proceed and management review points, etc.
- Program modifications: ideally done before signing the license and services agreements. Unfortunately, most OMS buyers don’t get this defined and signed off in the selection steps. It’s easy to have faulty assumptions about was verbalized as requirements and what the change might take in terms of work. Modifications can be sources of budget over-runs. Define modifications (e.g. what part of system(s) are affected, any database changes, display and report changes, etc.); estimate in man-hours and dollars; schedule; payment schedule; sign-off by user team and vendor before proceeding.
- Test plan and results: Plan out testing at program, subsystem and total system levels based on modifications. Are you planning a conference room pilot or full systems test? What are the details to be run in this process? How much time is required by various users and IT? This can take several elapsed months. This gives a plan for the vendor’s Quality Control or Test area to proceed from also.
- Conversion plan and results: What files will be automatically converted? The simple – but wrong answer – is all of them. Look at the practicality of writing, testing and converting all the files in the system. A commercial OMS can have hundreds of tables and files from a “S&H table to years of order and return files. Many should be built by manual keying (good training on new system too). What are the existing OMSD’ data integrity issues?
- Readiness for “Go Live”: Are the essential tasks completed? Program modifications; training throughout company and procedures; file conversion testing and sample files; integration readiness; operational responsibilities in place, etc.
- Post implementation audit: 30 to 60 days after the implementation what are the outstanding tasks – both yours and vendors’? Typically, it may take six months past the “Go Live” for the users to fully absorb the new OMS. Often users need further training; completing procedures, program modifications that became a Phase 2, etc. The savings and benefits often come over the longer term. Establish follow up audits to see that the company gains the benefits.
By adhering to these milestone sign-offs, you will uncover faulty assumptions, have more time to correct errors and meet the expectations of management and the users in terms of the project’s goals and implementation experience and quality.
Contact Jeff Barry at 804-264-8040 or jbarry@fcbco.com to schedule a call to discuss how we can assist with your systems project.
How to Implement Your Order Management System On Time and Within Budget
Installing a new Order Management System (OMS) is a big financial investment and considerable work for the department managers in your company, in addition to their regular jobs.
Our experience in implementing OMS and from IT industry surveys shows that more than 50% of major IT projects are not installed on-time and within budget. I’m sure this isn’t your management team’s expectations. Here’s what you can do to improve your success:
- Set realistic expectations for the project. OMS systems typically take 8 to 12 months to implement. It may take an additional 6 months for the users to fully absorb and gain the functions.
- Pricing. It’s every vendor’s intention to deliver the system at the quoted price. Professional services for modifications, training, file conversion and project management are on a time & material basis generally not fixed price. Being within budget can only happen if you have accurate estimates and efficient use of time.
- Share project management responsibilities. What are your project management skills? Interview the vendor’s project manager and team. Together do you have the project management skills to be successful?
- Don’t look at an OMS installation as solely an IT project and responsibility. The new OMS is how you’re going to manage your company; improve people productivity; service the customer; gain key analysis, etc. It takes total buy-in and assigned responsibilities of the department managers not just IT.
- Detail planning required. Most conversion plans are at too high a level. The project bumps along dealing with tasks and problems as they come up. Insist that your staff and the vendor plan the project at a detailed level so that ALL project tasks are identified with estimates, dependencies and start/end dates. Additionally, what types of skills will be needed for the tasks, the number of hours and team member assignments. Each week, update the work performed, the percent complete and use it to manage the conversion and communicate successes and issues.
- Openness in communication between team, management and the vendor. It’s not that people are deceptive. There will be issues like people being behind schedule; problems with modifications and interfaces; testing that is incomplete, etc. Open communication let’s all stakeholders understand and help with solutions.
- Sign-off on key deliverables. Key milestones like programming specifications, testing results, conversion results, readiness for “Go Live”, etc. should require formal check points for your company to review the written deliverables and results from the vendor and for you to sign-off. This establishes what the expectations are, the quality of what’s accomplished and will make you aware early of faulty assumptions.
- Regular and frequent status reporting. Distribute the plans and updates to all stakeholders. Bi-monthly initially; weekly as you get closer to the “Go Live” timeframe.
- Project management tool. You will find it beneficial to manage the project with hundreds to thousands of tasks concurrently with a tool like Microsoft Office Project. However, these tools take time to use proficiently.
Many companies and vendors deliver on-time and within budget. Improving project management will greatly improve your success too.
Contact Jeff Barry at 804-264-8040 or jbarry@fcbco.com to schedule a call to discuss how we can assist with your systems project.
Taylor Gifts Selects ManageMetrix for Business Intelligence Solution
Taurus Software
PRESS RELEASE: Taylor Gifts Selects ManageMetrix
November 3, 2011
FOR IMMEDIATE RELEASE
Catalog and Online Unique Gift Company Taylor Gifts selects Taurus Software’s ManageMetrix Business Intelligence Solution to Streamline Inventory and Merchandising
Redwood City, Calif. – Taurus Software, a premier provider of business intelligence solutions for multi-channel retailers, announces that Taylor Gifts, an online and catalog merchandiser of retail gifts and novelties, will implement Manage Metrix business intelligence solution. Developed by Taurus Software and F. Curtis Barry & Company, Manage Metrix provides inventory, merchandising and marketing analyses that enable companies to track key performance indicators including inventory turns, fill rates merchandise assortment performance, vendor scorecards, as well as promotion and channel performance. These analyses are supported by business consulting and guidance to measure and optimize improvements.
Taylor Gifts joins over 70 Ecometry clients that have been empowered with business intelligence from Taurus Software. As an application-independent solution, Manage Metrix is a robust business performance management program allowing the ability to increase efficiency, decrease costs and maximize profitability for multichannel retailers.
“Having been in business since 1952, a lot has changed in how we approach our merchandising and inventory. We look forward to the ability to more accurately determine our carrying costs and overall management of our product mix using Manage Metrix,” said Joe Falcone, Vice President of Operations of Taylor Gifts.
About Taylor Gifts
Based out of Paoli, PA, Taylor Gifts has been offering unique gifts since 1952. Their products include novelties, house wares, gifts, organizational solutions, pet products and accessories, and “As Seen on TV” products. Products are available both online at www.TaylorGifts.com and through their print catalog.
About Taurus Software
At Taurus Software, making liquid data means helping companies access their data easily. Taurus products include a variety of applications developed to help clients get more from their data by allowing them to Move, Map, Measure, and Manage data regardless of where it resides. Learn more about Taurus Software and our offerings designed for various data platforms and applications. Call 650-482-2011 ext. 1, or visit www.taurus.com.
About F. Curtis Barry & Company
F. Curtis Barry & Company is a consultancy specializing in multichannel operations and fulfillment for catalog, e-commerce, and retail businesses. F. Curtis Barry & Company offer clients expertise in direct commerce systems (order management, warehouse management, and inventory management systems); warehousing and distribution; call center; inventory management and forecasting; and strategic, financial, and operational planning for all business channels. To learn more about F. Curtis Barry & Company, visit our web site at www.fcbco.com.
For More Information
Call Taurus’ Sales Department
Phone: 650-482-2022, ext. 150
Fax: 650-482-2010
sales@taurus.com
How Do I Evaluate Whether Third Party Logistics Can Help Grow My Business?
Problems:
- You’re a start-up company with limited financial resources; or a company where fulfillment is not a core competency, but the need to upgrade your infrastructure (website, order management systems, call center or fulfillment operations) means an increase in expenses or requires new capital.
- You have seasonal spikes that run 10:1 or higher (peak vs. average sales week) and wish you could service these peaks in another way.
- You’re trying to build your business, and know fulfillment and customer service are critical to getting and growing sales—but fulfillment is not your core competency.
- Internal fulfillment costs continue to increase, impacting the bottom line.
In all of these situations, third party logistics might be the answer.
Solution:
Third party logistics options, such as call center and fulfillment, are not the right decision for every business. Here are some tips assessing third party logistics versus internal fulfillment:
- Develop a detailed Request For Proposal (RFP) including your business’s description, a proforma of the business’ transactions and metrics, rules and processes, value-added services, system requirements and web site requirements.
- Research which third party logistics vendors are viable options. Key things to consider include experience with your product, total annual cost, infrastructure requirements, call handling ability, personnel, and facilities. The following are key considerations when assessing third party logistics vendors:
- Experience with your product. Example: if you are an apparel website, do the potential providers have experience with large numbers of color/size SKUs, cleanliness requirements, processing large numbers of returns and refurbishing them?
- Total annual cost. Make sure all costs are included. Separate startup costs from ongoing charges, and make sure you’ve calculated your own costs for the comparison. Third party logistics services often use a laundry list of charges based on the services you use; put together an estimate of all the services and volumes of each and develop an accurate pro forma budget of those costs. Be certain the appropriate metric is applied to the right volume.
- Infrastructure assessment. Include your website and platform needs (development and hosting options) and functions needed from the vendors’ Direct Commerce Systems.
- Call handling. If you are evaluating a vendor for call center or chat services, review how they monitor their call sessions. What are their call standards? Listen in to a number of calls and evaluate how well the customer is handled.
- Personnel. How would you rate their management and staff? Can you see them taking good care of your customers? Is there “good chemistry” between their team and yours?
- Facilities. Visit their facilities. Do they appear to have the capability to meet your requirements? Do they appear to be clean and organized? Do they have the available capacity, flexibility and scalability?
- Reference check. Make reference calls to a large number of their clients, especially those in your niche. Would they use thir dparty logistics and, especially, this vendor again?
- Gut check. Do you trust them to do the right thing when problems arise, since the thir dparty logistics vendor directly services your customer?
- Put together a decision matrix of all the criteria. Compare your fully loaded operating cost per order with the vendors’ responses. Does outsourcing give you sufficient advantages compared to internal fulfillment operations?
- An independent consultant experienced in third party logistics projects can bring detailed insight to this analysis, shorten the vendor list and help you with due diligence.
Benefits:
- Outsourcing fulfillmentand call center services could provide cost savings when the internal cost per order exceeds that of outsourcing.
- Outsourcing allows you to focus on the core of the business, typically marketing and merchandising.
- You may be able to improve and enhance your current business model based on the experience of the outsource provider.
- Outsource can provide you business more consistent customer service.
- Allows you to use capital for other business opportunities.
Call or email Jeff Barry at 804-264-8040 or jbarry@fcbco.com to schedule a call to discuss how to search, select and utilize a third party logistics vendor. F. Curtis Barry & Company is a national consulting firm that works with eCommerce, catalog, retail, manufacturing and wholesale distributors on projects focusing distribution centers, order management systems, warehouse management systems, inventory management and forecasting, and freight rate analysis.
How Do I Get the Most From My Installed Order Management System?
Problems:
After all the effort of implementing new order management systems, it takes 8 to 12 months to begin to get the full benefit of the system; even then, companies often only use 25% to 30% of the built-in functionality. Order management systems have the potential for broad base improvement to company productivity and growth; not only do companies often fail to gain the maximum intended benefit, but a less effective installation has the opposite effect.
Solutions:
After 30 days, perform a post implementation audit. Identify:
- How are departmental users making use of the system?
- Are they still living with problems from the conversion?
- Which individuals need more training?
- What software functionality is defective?
- What functionality is not being used?
- What more do both the company and the systems vendor have to do to complete the implementation?
- Is there additional hardware, software or communications required?
Three months later, revisit the implementation and see:
- What process tweaking still needs to be done?
- What advanced user training should be scheduled with the vendor?
- What additional functionality does the application have that you should plan to investigate and use?
Benefit:
Gain much higher utilization and return on investment of the software you implement.
Call or email Jeff Barry at 804-264-8040 or jbarry@fcbco.com to schedule a call to discuss how to get the most from your installed order management system. F. Curtis Barry & Company is a national consulting firm that works with eCommerce, catalog, retail, manufacturing and wholesale distributors on projects focusing distribution centers, order management systems, warehouse management systems, inventory management and forecasting, and freight rate analysis.
How Do I Develop a Liquidation Strategy for Slow Selling Products?
Problems:
Inventory is the largest single balance sheet asset in most e-commerce businesses, but around 80% of sales are typically generated by about 20% of products—and more than 50% of products often either do not meet, or exceed, their burden in terms of contribution to profit. Many centers have significant space occupied by slow selling product; you can’t afford to sit on such high dollar inventories whose fully loaded costs include product costs, inbound freight, customs, marketing, fulfillment, inventory carrying costs, and eventual loss of margin through liquidation. Yet merchants are often reluctant to act quickly on overstocks that sap profits.
Solutions:
- Develop a contribution to profit analysis for products as part of your periodic merchandising analysis.
- Analyze your product sales daily and develop candidates for liquidation (the slow sellers).
- Make your first mark down of retail price your deepest to move product quickly.
- Though you’re an e-commerce company, using other media, such as bounce backs in outbound packages, may clear overstocks faster than other methods.
- A liquidation strategy should be executable with your website or other selling media. The following list is 14 major ways multichannel businesses liquidate overstocks:
- Internet/Website based
- Relist/Repeat
- Return to Vendor
- Clearance Catalog
- Bind-In Clearance Inserts
- Package Inserts
- Sale Page
- Outlet Stores
- Telephone Specials
- Warehouse Sales
- Sales for Employees Only
- Roving Tent Sales
- Charitable Donations
- Jobbers
Benefits:
- Keep your inventories lean and earn more profit.
- Free up cash invested in inventory.
- Proactive purchasing of faster selling product to prevent back order or stock out.
- Free up physical space in distribution center.
Call or email Jeff Barry at 804-264-8040 or jbarry@fcbco.com to schedule a call to discuss how to develop a liquidation strategy. F. Curtis Barry & Company is a national consulting firm that works with eCommerce, catalog, retail, manufacturing and wholesale distributors on projects focusing distribution centers, order management systems, warehouse management systems, inventory management and forecasting, and freight rate analysis.
How Can I Improve My Gross Margin?
Problems:
Inbound freight cost as a percent of gross sales is 2% to 4% for domestic and 6% to 12% for imported product. These costs are not only eating company profit, but as a component of the cost of goods sold on your P&L, inbound freight is reducing gross margin and causing companies to charge more for product. By allowing the vendor to select the freight carrier and routing, you generally pay a premium, as freight is a profit center for many vendors.
Solutions:
- Insist on paying for collect freight rather than allowing the vendor to pre-pay the freight.
- Develop and implement a routing guide to gain discounts from selected carriers, and audit your freight bills to enforce routing guide and carrier use.
- Use a UPS or FedEx program that combines small package inbound and outbound volumes and discounts.
- For LTL (less-than-truckload) freight, join a freight consortium to take advantage of multiple customer shipping volumes, routes and discounts, and significantly lower costs.
- Use an experienced transportation consultant to make sure you are getting the best possible negotiated rates.
Benefits:
- Reduce the rate of cost increases on inbound freight.
- A freight consortium can reduce costs 6% to 25% annually.
Call or email Jeff Barry at 804-264-8040 or jbarry@fcbco.com to schedule a call to discuss how to improve your gross margin through improving inbound freight costs. F. Curtis Barry & Company is a national consulting firm that works with eCommerce, catalog, retail, manufacturing and wholesale distributors on projects focusing distribution centers, order management systems, warehouse management systems, inventory management and forecasting, and freight rate analysis.
How Do I Improve Inventory Tracking and Labor Utilization in the Distribution Center?
Problems:
- Many of the fulfillment processes for DC product movement and filling customer orders are manual.
- Two of your biggest assets—inventory and labor costs—have ineffective tracking and analysis systems if you can’t track them on-line.
Solution:
Implement bar coding and scanning of your product inventory, along with any of the manual processes in the warehouse for which you can get an ROI. The processes to consider are dock receiving, cross docking product, stock put away confirmation, replenishment of forward pick locations, pick verify, pack verify, inventory control and cycle counting, shipping/manifesting and returns processing. Implementation of this technology should be a priority for most operations. Use the labor cost input to develop a weekly labor budget and expense analysis report.
Benefits:
Allows you to gain total inventory control, tracking product through the four walls of the DC, with improved real time tracking of product and customer orders. Reduces “can not find” inventory that holds up orders and inventory processing. Also reduces inventory shrinkage and increases inventory accuracy to 99.9%, while improving accuracy and controls of warehouse paperwork. Use of bar code scanning as a labor tracking device, with transaction input to departmental labor and individual productivity analysis, reduces labor costs through more efficient use of labor by department and individual.
Call or email Jeff Barry at 804-264-8040 or jbarry@fcbco.com to schedule a call to discuss using bar code technology in your DC. F. Curtis Barry & Company is a national consulting firm that works with eCommerce, catalog, retail, manufacturing and wholesale distributors on projects focusing distribution centers, order management systems, warehouse management systems, inventory management and forecasting, and freight rate analysis.
How Do I Develop and Implement a Vendor Compliance Program?
Problems:
When vendors don’t deliver on time, it means lost sales and/or back order costs that for most businesses range from $7 to $12 per unit of product. When vendors don’t conform to routing guides, it increases freight costs. A lack of standards can cause receipts to back up in receiving and put away, and not be available for customers. If vendors decide to provide “good substitutes” that are not what you described to your customers, you risk losing sales or adding costs for rework; fixing vendor errors or omissions (such as price marking) delays processing and increases labor and processing costs. A lack of paperwork standards means more time needed to reconcile accounts and pay vendors; plus, without vendor compliance you cannot implement advanced supply chain techniques such as ASNs (advance ship notice), vendor source marking, inbound transportation scheduling, EDI of purchase orders and invoices.
Solutions:
- From your warehouse assessment, identify the problems that are related to errors and omissions that happen in the vendors’ factories and DCs. If you don’t have vendor compliance policies today, identify the problems in the assessment that will bring the biggest immediate savings. These should include: routing guides, labeling inbound cartons and containers with product SKUs and purchase order #s, purchase order terms and conditions, etc.
- Vendor compliance policies should be developed by a committee of merchants, inventory control, fulfillment center and accounting personnel; the problems and solutions are in their hands. (See our blog post What Are Typical Vendor Compliance Policies That I Should Include? that discusses what is included in a fully developed vendor compliance or operating manual.) To keep the manual up to date and available to all vendors, post your policies as a link on your website.
- Non-compliance, errors and omissions should be charged back to the vendor, but the goal of the vendor compliance policy should be to have compliant receipts that move quickly through your center, not the “income” that these errors may generate. (See the blog post What Are Typical Vendor Charge Backs? to review what merchants implement.) Start slow; give vendors three months notice of upcoming policy changes.
- Ask vendor management to sign off on acceptance of vendor operating policies as a purchase order condition.
- E-commerce sites often use dropping product from the vendor to the customer; from the lack of systems integration, there may be a “disconnect”. Require that the vendor communicate the status of all major steps: order receipt, ability to ship, shipping confirmation, invoicing, etc. Connect the vendor’s systems back into your customer service system to track order status and be able to communicate with a customer.
- Trends in supply chain processes include pushing vendor compliance up the chain and negotiating with vendors to do more of the procedures, including vendor source marking, use of UPC bar code, inspection in the vendor’s facility, etc. Determine whether you can negotiate vendor managed or vendor back-up inventories.
Benefits:
- Vendor managed and back up inventories as well as a more responsive supply chain reduces the amount of inventory that you must have to service the customer.
- Effective vendor compliance procedures will decrease the time required to process receipts through all processes.
- Inbound supply chain communication of vendor shipments and ASNs is vital to staffing the receiving dock, QA and product put away.
- Ultimately, DC costs will be decreased.
- Improved communication and paperwork efficiencies for drop ship product.
- Lay the ground work for automation of the supply chain.
Call or email Jeff Barry at 804-264-8040 or jbarry@fcbco.com to schedule a call to discuss how to develop and implement vendor compliance policies. F. Curtis Barry & Company is a national consulting firm that works with eCommerce, catalog, retail, manufacturing and wholesale distributors on projects focusing distribution centers, order management systems, warehouse management systems, inventory management and forecasting, and freight rate analysis.
What Are Typical Vendor Compliance Policies that I Should Include?
So you have made a decision to move forward to develop and implement a vendor compliance program. You have an idea of what should be included into the manual to send to your vendors, but your not quite sure that you have all of the right sections. We have developed the following compiled list of sections from dozens of manuals that we have worked with our clients on. Sections to be included are:
- Company history and customer service expectations
- Vendor drop ship procedures
- Purchase order terms and conditions
- Duplicate shipments, overages and other shipping problems
- Cross docking procedures
- Routing guide
- Invoicing instructions
- Product specifications
- Quality Assurance standards
- Product marking and labeling
- Packaging instructions
- Service expectations and vendor charge backs (See blog post What Are Typical Vendor Charge Backs?)
- Company contact info key personnel
You can include others that are important to your specific business as well. These sections will ensure that your vendors have all of the information required to ship the appropriate products ordered and in the way that you require them to do so.
Call or email Jeff Barry at 804-264-8040 or jbarry@fcbco.com to schedule a call to discuss questions regarding specific policies to include in your vendor compliance program. F. Curtis Barry & Company is a national consulting firm that works with eCommerce, catalog, retail, manufacturing and wholesale distributors on projects focusing distribution centers, order management systems, warehouse management systems, inventory management and forecasting, and freight rate analysis.
