Supply Chain Strategies
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. [...]
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 [...]
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 [...]
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 [...]
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 [...]
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 [...]
What are Typical Vendor Charge Backs?
In developing dozens of vendor compliance manuals, we have seen a wide variety of items, categories, and lists of vendor charge backs. We feel like with a new compliance program, you should include the following, to start with: Shipment did not conform to routing guide Early shipment without approval Improper PO# on carton Product substitution [...]
How Do I Utilize Slotting and Replenishment to Reduce Costs and Control Fulfillment?
Problem: Just 20% of products produce 80% of your sales, while as much as 70% of a picker’s time is spent “traveling” between pick locations to fill an order. Maintaining sufficient inventory in the pick slots is a challenging and dynamic process. Solutions: Develop a velocity unit sales report, ranking SKU’s from high to low [...]
How Can I Get An Immediate Increase in Productivity From My Labor Force?
Problems: Fulfillment center labor rates have increased 10% to 15% in the past five years. Excluding outbound shipping costs, 50% or more of the cost per order is labor related. Yet overall productivity has remained flat, so the cost per unit worked has increased. How well you manage labor affects both your costs and your [...]
How Can I Increase Throughput and Capacity in my Distribution Center?
Problem: With the management mantra “do more with less,’ moving into a larger space is not an option; you need to get more throughput and increased capacity out of your current physical layout and facility. Solution: Our 18 Industrial Engineering Principles are the best foundation for maximizing throughput and capacity from an existing facility. Use [...]
