ECMOD 2008 Preview
Desirable
despatching
“The Operations and Fulfilment Excellence
If the customer isn’t in—and 68 percent of households are empty
Forum”, scheduled for 1st October, will explore
during normal delivery times—the process is even longer: carried
back from front door and placed in van; unloaded from delivery van;
best practice in inventory control, warehouse
placed in held area; marshalled in depot; loaded to delivery van;
management and other aspects of order
unloaded from delivery van; and again carried to front door.
fulfilment. Here, Chris Pearce-Ramwell, director
So the product with point-of-sale packaging can be handled
of consultancy B2Advantage.com and one of the
up to 16 times if things don’t go to plan—and once the customer
session speakers, discusses the despatch process
receives his purchase he may want to return it anyway, given its
poor condition.
hy do companies spend millions on website
If you are considering expanding from the high street to include
W
development, marketing, warehouse management
an internet or mail order division, there are several aspects
systems and physical warehouses and then think very
of the despatch operation that you need to consider with as
little about getting the stuff to their customers?
much enthusiasm as the design of your website, warehouse
Despatching stuff is not sexy, I guess, and doesn’t excite any
management system or distribution centre:
members of the board. But despatch can cost up to 10 percent of *
product choice. Make certain that any products you sell online
the total discretionary spend. Now, 10 percent off the bottom line
can be sold economically and are likely to stand the rigours of
usually makes a finance director sit up and take notice. In fact,
being handled a minimum of seven times.
failed deliveries cost UK retailers more than £300 million annually. *
product packaging. Hold a packaged product at arms’ length in
They are also apt to cost you customers. And the cost of
front of you and drop it onto a concrete floor. If it is now damaged,
recruiting other buyers to make up for the ones lost through bad
then it is likely to get to your customers in a sorry state. Appropriate
experience—as well as for all the people the disgruntled customers
packaging will save you money in the long run.
have told about their experience—will eat into your profits. *
distribution centre design. Build in sufficient space to marshal
your deliveries so that you minimise misloads, optimise flexibility
From high street to the customer’s street when you need more than one carrier and ensure that products are
Most companies offer several service options: a free or cheaper not damaged before they leave you.
three-day service, say, and a premium, next-day service. I was with
*
website design. Don’t hide your distribution details. Good, up-
a retailer recently that picks everything for next day and then stores front delivery information will lead to increased sales.
the three-day stuff in the warehouse until the day before delivery—
*
carrier choice. Many types of carriers exist. Some offer a basic
a costly way of doing things. Thinking of smarter ways to operate service for a basic price. Some provide a very effective service at
your despatches can save big percentages. a significantly higher price. Then there are the carriers that offer
Another retailer that is very successful on the high street tried to a service unsuitable to your products at a price you might be
apply the same offers online as he did in-store. One of his bricks- interested in. Generally, though, there are no bad carriers, only
and-mortar promotions was selling pallets of sand on a buy-one-get- carriers that have been chosen for the wrong reasons. Often the
one-free offer, which meant the carriage on web orders cost more carrier is the only physical link between you and your customer, so
than the product. Some things should never be home delivered, as choose wisely.
the economics don’t stack up. Sheds for £99 and fridges for £100
*
carrier management. Keep an eye on service levels. Don’t
have low margins coupled with high weight or cube. Even if you believe the statistics that the carriers give you; check them yourself.
make a slight profit on the outbound transaction, you can guarantee Determine where the root causes of service failure are, and accept
a big loss when 10 percent of the stuff comes back. that there are three prime sources: your business, the carrier
Most products supplied for distribution to stores are packaged and the consumer. A general benchmark would be that you are
for delivery in bulk on dedicated vehicles. These products are not responsible for 40 percent of all failure, the carrier for an additional
suitable for home delivery in their point-of-sale packaging. I walk 40 percent and the consumer for 20 percent. Being open about
through hubs and see once-pristine products not standing up to causes of failure with your carrier—holding review meetings at least
the rigours of being handled a minimum of seven times. once a month to discuss benchmarks and statistics—will lead to
You might be wondering why they are handled so much. In a hub- more effective deliveries.
and-spoke operation, the type that almost all carriers operate, the Manage your distribution to consumers with the same level of
life of a parcel goes like this: loaded to trunk vehicle; unloaded from interest as you would put into any other part of your business, and
trunk vehicle; marshalled in hub; loaded to depot-bound vehicle; the result will be increased customer acquisition, improved customer
unloaded from depot-bound vehicle; marshalled in depot; loaded to retention and reduced operational costs. Now that is a sexy
delivery van; unloaded from delivery van; and carried to front door. proposition that will gain the interest of your company’s board.
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