70 Ways to Reduce Costs, Increase Productivity and Improve Customer Service
Cost Reduction and Productivity Improvement Assessment
70+ Ways to Reduce Costs, Increase Productivity and Improve Customer Service
By Curt Barry
Over the past 23 years F. Curtis Barry & Company’s work with multichannel companies in operations and fulfillment consulting has allowed us to compile these 70+ ways that can cut costs and increase productivity, which will ultimately lead to an improvement in customer service. We have focused our cost reduction and productivity assessment efforts in the following four major areas:
Contact Center (Call Center)
Scheduling and staffing models, service levels and technology in the call center are all affected by the increasing eCommerce order volumes. What are the ways to be more efficient and serve the customer better from the contact center? Learn how to reduce costs and increase productivity in your contact center.
Warehouse & Distribution
With most companies coming out of a less than perfect holiday season, there is a real need to increase productivity without having to make major capital purchases to do so. Discover ways to reduce your warehouse cost per order, increase capacity without expansion and improve service levels.
Forecasting & Inventory Management
Inventory is most companies’ largest balance sheet asset. How it’s managed determines customer service and profitability. Learn ways to improve the management and forecasting of inventory.
Multichannel Business Systems
Order management, warehouse, e-commerce and inventory management systems are at the heart of the company. These systems affect the productivity and sales of all departments including merchandising, marketing, fulfillment and contact center. Investigate ways to plan for, select and implement effective Multichannel Business Systems.
We ask that you please consider using F. Curtis Barry & Company’s consulting services to tailor a cost reduction and productivity improvement assessment to your company’s needs in order to evaluate, develop and implement these improvements and cost reduction practices.
Download the PDF: 70 Ways to Reduce Costs, Increase Productivity and Improve Customer Service
For more information contact Jeff Barry at 804-740-8743 or email jbarry@fcbco.com.
National Wildlife Customer Alert
It has been seven weeks since BlueSky Brands shut down operations, stranding a number of catalog and e-commerce businesses. Now we’ve received an e-mail that the National Wildlife Federation sent to customers who have purchased items directly from the Federation.
Here’s what the e-mail said:
“There are still many opportunities to receive great wildlife and nature-themed merchandise when you support National Wildlife Federation!
Previously the National Wildlife Federation’s name and logo was licensed to National Wildlife Direct, a separate, unrelated company that offered nature-themed products and gifts. Unfortunately, National Wildlife Direct recently closed its doors and is no longer in operation.
However, we know how much you love helping wildlife and our environment while you shop. Watch your email in-box to find out about new offers coming directly from the National Wildlife Federation such as:
• Carry-all Bags: Handy totes, field bags, backpacks and more
• Outdoor Gear: Umbrellas, windbreakers, fleece jackets, beach towels and blankets
• Animal Adoption Gifts: A special Wildlife Adoption Center with many items to choose from. Receive an adorable plush with each symbolic adoption
• Products just for Bird Lovers: Unique bird feeders, bird-watching kits and binoculars
• Gardening Gifts: Gardening totes, how-to books and tools
• Educational Gifts for your Favorite Children: Magazines that help connect children with nature
• And more!
And the best part is, your gifts directly fund the vital conservation programs of National Wildlife Federation.
We appreciate your love of wildlife, the environment and outdoors.”
As you can see, NWF mentions that BlueSky Brands had licensed their name and is no longer in business. Here is the scoop that I got from the head of Customer Service at NWF:
The catalog, of course, is closed down indefinitely. If existing customers of the catalog/website have outstanding orders, they can call 800-822-9919 or e-mail info@nwf.org. NWF will talk them through what they need to do to resolve the situation. They will not receive the product they ordered. If they ordered via credit card, they will be told to dispute the charge through the bank or credit card company. If payment was via check, they will not receive a refund until the issue with BSB is resolved.
The products mentioned in the e-mail are already sent out to people who sign up for memberships in NWF. These products are distributed via a 3PF vendor that they have been using for some time.
We applaud NWF for stepping up to help these customers, even though it was not their actions that caused the disaster. Such a possibility is always present when you license your name and don’t have direct control over others’ actions.
Jeff Barry is marketing manager of F. Curtis Barry & Co. – we are catalog consultants working with multichannel businesses to improve warehouse operations through the assessment and implementation of warehouse management systems and careful benchmarking of strategic metrics.
Are We Trying to Make a Broken Business Model Work?
At our recent Executive Forum we talked about how rising postage costs, increasing paper costs and the fall off in prospecting response rates have radically changed the traditional catalog business model. While there are large, efficient catalogs that spend in the high 20-percents on the total cost to create and mail catalogs, many businesses are paying 30% to 35% of net sales. Postage will continue to go up.
List prospecting has declined for 10 years and has been dismal for many companies. Some attendees felt that the co-op databases, while they developed responsive lists and expanded circulation for the membership, may in the long run have eroded response rates as customers are receiving too many pieces of mail.
When you look at major expense categories, other than merchandise purchases, the total marketing cost is the major expense—well ahead of fulfillment and G&A overhead combined. To turn around company profitability, the industry has got to get more prospects and sales at a lower cost than we are used to with the traditional catalog model.
But the real question is this: are we, in the catalog industry, relying on a broken business model? And is the old traditional catalog business model one that can be fixed? We have had occasion to work with a couple dozen Internet pure plays in the past year. None of them use catalogs. Granted, they are all smaller companies. But they generate traffic to their sites with search engine optimization (SEO), mostly organic rather than paid search.
How much money are you spending on SEO? If the traditional business is broken, is that expenditure enough to push your company to more financial viability? In talking with clients, I’ve found very few who are experienced and comfortable with this new electronic media and can decrease their dependence on print catalogs.
How is your experience—good or bad—with SEO? Post your experiences, and let’s learn from each other.
Curt Barry is president of F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm for catalog, e-commerce, and retail businesses. We offer clients expertise in business process and order management systems, inventory management systems, warehouse management systems; warehousing and distribution; contact center services; inventory management and forecasting solutions; and strategic, financial, and operational planning for all business channels.
Macy’s National Strategy Gets a Makeover
The Wall Street Journal (April 21, 2008, B1) detailed a strategy by Macy’s CEO Terry Lundgren to localize store assortments to cater to what shoppers are more interested in buying. This localization—called “My Macy’s”—will for now will be only 15% of the total SKUs, which range from 1.5 million to 4 million, depending on store size.
Macy’s same store sales declined 1.3% for 2007 from the previous year and 2% overall. Macy’s is the largest department store in the U.S., with 2007 sales at $26.31 billion. The other department store leaders are J.C. Penney, with sales of $19.86 billion; Sears, $19.50 billion; Kohl’s, $16.47 billion; and Nordstrom at $8.83 billion. Only Sears posted a worse 2007 sales decline than Macy’s.
Mr. Lundgren is obviously one of America’s smartest and leading merchants. But somehow, to me as a shopper, the strategy of all the stores across the country being a cookie cutter didn’t make sense from the beginning. If shoppers didn’t find what they were looking for in one Macy’s store, there was no reason to even set foot in another.
Having acquired nearly all the major regional chains and then homogenizing them to eliminate any differences, Macy’s may be lucky sales weren’t even lower. Even before Macy’s acquisition strategy took place, one of the faults in traditional department store retailing was that stores looked too much like each other and they carried the same national brands.
If you think of your own town, there are sure to be residential areas that are very affluent, with customers who are more selective and can afford better brand names. At the same time, in an urban environment assortments may need to be tailored to shoppers who work downtown. The people who live downtown may be affluent younger professional folks and a minority of lower income residents.
Once again, we believe the Internet has a profound effect on this strategy; in today’s shopping world, comparison shopping engines can pinpoint stores with lower prices and greater availability. This makes national brand names much more comparable and stores more vulnerable.
However, gearing stores to more localized assortments will be harder than one may think. It means turning some of the control over to local management rather than centralized buying and decision making. According to WSJ, “Management behind the scenes will be revamped to have 13 executives oversee the merchandise assortments at 10 stores each, instead of 7 executives overseeing assortments in up to 23 stores.”
In going localized, Macy’s is following the approaches that Best Buy, Ross Stores, Inc., Wal-Mart and Gap, Inc. have trail-blazed.
We wish Macy’s well as they make their transition—and we’d love to hear what readers think of this new approach.
Curt Barry is president of F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory management, merchandise planning and benchmarking. Learn more online at: http://www.fcbco.com.
Economists Say USA is in Recession
Two-thirds of the 52 economists interviewed by USA Today in their quarterly survey say the U.S. is now in a recession. Add to that those surveyed who believe we will be in a recession soon, and the number reaches 79%. If there is any lightheartedness in this tough business climate, it is when people joke that the Feds will take six months to declare what most people experienced in their businesses six months before.
The good news is that the 52 economists interviewed feel that the recession will be “short and shallow and inflation will abate.” Eighty-seven percent of those surveyed expect the Feds to reduce short-term rates to 2%. Inflation was 4% in March, and they feel it will decline throughout 2008. Unemployment will reach 6%, which they feel is low for a recession.
But there was no explanation or rationalization of the terms “short and shallow.”
From a different angle, FoxBusiness.com’s article this morning reports “The country’s economic growth during January through March was the same as in the final three months of last year, the Commerce Department reported Wednesday.”
“The statistic did not meet what economists consider the classic definition of a recession, which is a retraction of the economy. This means that although the economy is stuck in a rut, it is still managing to grow, even if modestly”, FoxBusiness.com also stated.
I will say that I’m seeing many of our clients dealing as well as they can with the reality of the recession. They have moved out of the stages of confusion and what looked like paralysis earlier in the year.
Our advice is to plan the fall and holiday very conservatively, to avoid severe inventory buildup. There has been less promotional activity in 1Q 2008 than there was in 4Q 2007. Most of our clients are going to be very careful to avoid major mailings in front of the election.
What are other businesses planning? Readers, how are you planning fall and holiday 2008? Let us know.
Curt Barry is president of F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking; Learn more online at: http://www.fcbco.com.
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