Important KPIs To Determine Effectiveness of your 3PL Partners

With changing business environment, organizations, shippers, and even small enterprises are relying increasingly on 3PL or 3rd party logistic companies.  Companies tie up with 3PL providers to manage logistics and supply functions, get access to capacity and ability to tap latest technologies. 3PLs help clients reduce their costs through tactical improvements, and enhance overall supply chain performance.

When a company decides to employ a 3PL it is often founded by certain needs such as seasonal warehousing or transportation capacity and costs.

The demand for 3PL providers goes beyond delivery. They are also involved in other operations such as warehousing, distribution, customer service, order management and fulfillment. Since 3PL perform a wide range of duties it is important to gauge their effectiveness. Set certain expectations or KPIs to measure their performance over time and investigate the value that your 3PL provider is creating for you. These will help you understand if your business relationship will work or not.

Below are the essential KPIs you must have for your 3PL provider-

1. Freight costs

Tracking cost per shipment, costs per case, location, modes of shipment and delivery are all essential metrics that you should be monitoring. Since these costs will ultimately affect your product pricing , they have to be reasonable and meet business goals.

2. Percentage of timely deliveries

This is the most important KPI. You need to be sure that customers are getting deliveries on time as per your agreement with the 3PL provider. They must meet customer demands because if 3PLs are unable to deliver on time, you could be losing customers.

3. Percentages of loads that are accepted by primary and secondary carriers

What your carriers can carry at a time can have an impact on costs and customer satisfaction. You also want to exercise some control over when and how your goods would be delivered. You want to find out before hand if there are any costs to be incurred in the supply process. Hidden costs can blow your transportation budgets.

4. Technological innovations

Your 3PL provider should keep abreast of the latest technological innovations critical to the industry. Technology improves their efficiency and increases your productivity. A 3PL company that operates with advanced technology, experiences a lower margin of error which consequently benefits everyone in the supply chain.

Well, the services that your 3PL provides for you and your customer can make or break your business reputation. It is foolish to assume that the 3PL will do a good job by themselves. It is advisable to continuously monitor them by tracking KPIs to judge their efficiency.

The above are the KPIs that you set for your 3PL provider. But along with these here are 4 factors companies should take into account when assessing 3PL performance:

• Control

3PLs control the capacity of transportation and distribution. They liaise on their client’s behalf when partnering with carriers.

A primary reason why 3PL partnerships fail is poorly defined expectations. Customers need to exert some control as well. It is you who needs to assertively communicate and continuously benchmark KPIs that are most important to you—not them.

• Optimization

3PLs must create value by optimizing existing client transportation and logistics functions. They do so by collecting and filtering data, analyzing it, to identify anomalies and redundancies. With this data, they can then find quick fixes for certain processes. They can also find strategic system-wide improvements upstream and downstream in the supply chain that turn problems into new opportunities to drive greater efficiency and economy.

• Reporting

Reporting is a key aspect in understanding and recognizing 3PL performance. It is important to know about the movement of goods and their location in real-time. Clients need to tell them which status reports are most critical to their needs so they can view performance. Using metrics like these may help companies determine if the service providers are striking the right balance between service and cost.

3PLs collect, archive, and analyze past reports to identify improvement areas, expose inherent problems,  alert customers to recurring problems, and explore opportunities to increase efficiency.

• Execution

If a 3PL service provider is responsive to client expectations and executes according to plan, both will see vast improvements with regard to customer service, efficiency, cost savings, and innovation.

Conclusion

Clients should have a detailed contract spelling out the KPIs for the 3PLs. It would also be better to mention the actions that would be taken if expectations are not met, or result in poor customer service, logistics costs, or transportation issues occur by the 3PL provider.

The most effective ways to improve the order fulfillment process

Retailers or e-commerce sellers – all strive hard for perfect orders every time, but then it’s a tricky thing to achieve. Every business – big or small – faces several challenges throughout the order fulfillment process that are categorically related to demand planning, inventory management, supply chain optimization, logistics planning, and several other complex concerns.

One of the best ways to judge the efficacy of the order management process is the Perfect Order Metric. A perfect order from a supplier is one that contains the right product or service being delivered to the right customer at the right place:

1. At the right time (100% on-time delivery)
2. In the right quantity (100% fill rate)
3. In the right condition and packaging (100% “quality” related to fulfillment)
4. With the right documentation

Going further, if we look at an order fulfillment process, it refers to all the steps from the moment an order is received till the time it reaches the customer. For any company, the order fulfillment process typically looks like this:

1. Order is received
2. Order is entered into the order management system
3. Customer is notified that the order has been received
4. Order is sent to the warehouse
5. A warehouse operator finds the item, picks it
6. The order is packed and ready for shipping
7. Order is shipped
8. Customer is notified the order has been shipped
9. Customer receives order

‘Success in order management and fulfillment depends on the speed of decision making and continuous monitoring of the impact of those decisions at all levels in the organization. This can be achieved with advanced systems, which enable best-in-class processes across the order chain’

Here are some very practical but deep insights to help your business fulfill orders more quickly, accurately and efficiently.

1. Classify your inventory to ensure rapid handling: Grouping your inventory from fastest moving to slowest moving items helps to ensure that you maintain the right stock levels on your most important items. Put the most popular items in a centrally located area of the warehouse to ensure that they can be picked, packed and delivered to the shipping dock as fast as possible. Classifying inventory not only helps to save time in the order fulfillment process, it will also save money on labor costs in the warehouse.
2. Integrate systems for more visibility into all aspects of order fulfillment: In order to quickly fulfill an order, visibility into several areas is essential such as demand forecasting, sales, inventory, and logistics. This requires some integration between the inventory management systems, the ERP system that maintains the financial data and sales order management system. Systems integrations can provide better reporting and analytics that can assist in greater decision-making and profitability.
3. Automate processes: After your systems are able to provide more visibility into all aspects of the process, you should also look at how the processes themselves can speed up. Automation does not have to necessarily mean investing in robots or high-end machines, but simple scanners can also do the trick. Process automation not just speeds order fulfillment process but also provides accurate data for future orders.

While we have listed all major and possible avenues for improvement of order fulfillment, we suggest that an order management software is the must-have tool that can deliver immediate benefits, including: greater transparency and a single source of inventory information, reduced cycle times for orders and fulfillment, and improved ability to address complex customer needs more quickly and with minimal data errors.

But as anyone that works in the complex world of e-commerce and supply chains will know, that this alone is not enough. As to ensure success, companies must strive to continuously enhance their order management and fulfillment processes to improve both their competitive positioning and business results, and strategically adapt to change in technology and new developments.

What are the challenges you face with your order fulfillment process, and what are you doing to boost it up? We want to hear from you in comments.

Amazon key selling practices for holiday season

Holiday season are proving to most profitable season for retailers year-after-year. A report by Statista shows the increasing sales growth rate in the United States from 2012 and forecast for this year 2015.

Amazon Marketplace holiday sales growth

Among multiple marketplaces and selling platforms present online, Amazon.com experienced it’s 20th holiday season in the 2014 that generated a little more than a third of its $74.45 billion in sales for 2013 in the final three months of the year.

With the above facts and figures, sellers on Amazon have greater opportunities, but are they really making the most out of it?

This article will highlight the key practices for Amazon sellers, allowing them to take complete advantage of the coming holiday season, 2015.

1. Quality listings

First, you would need to think of ways to attract customer’s attention. And, the design of your shop can help you get eyes rolling and encourage customers to engage with your brand.

Ensure you offer a special theme as per the occasion to allow customers a joyful shopping experience. Check on your listings, and provide seasonal content to your product descriptions, all in an effort to allow customers get information quickly and take actions on-the-go.

2. Automate Inventory updates

Holiday season will bring you rush of orders, and you end up receiving  hundreds or even thousands of sales on a daily basis. But, if you don’t have a proper inventory management tracking system, you can experience costly stock issues that will make it difficult for you to process orders in time. And, selling over the leading marketplace Amazon.com- if you are unable to fulfill your customer’s orders, they’ll will jump to one of your competitors selling on the same channel and never return back to your store. Whether you have a single shop or running multiple stores on Amazon, having a system to track and automate inventory levels after every sale, will help maintain sufficient products in hand, especially during holiday season.

3. Quick Fulfillment

Unlike regular days, don’t delay in shipping orders. Ensure you try and get every order out as soon as you make a sale. This will leave you enough of time to process quicker returns, if any problem occurs. Adopting a good order management system will streamline your order processes and help you connect with leading and most cost-effective carriers, to ensure in-time delivery.

4. Instant Customer support

The better you solve your customer’s concern, the more sales you will make during holiday season. Ensure you have a proper support system in place that can help you respond to all your customer’s concern at the earliest(24 hours maximum). This way, you customers will feel safe to shop from your brand and result to repeat purchases throughout the holiday season. Also, you get an ability to receive feedback and take actions to make the most out of those rush days.

So, if you are selling via Amazon.com, ensure you adopt the above practice to maximum benefits and minimize the challenges this year during holiday season.

Godspeed!

Source Link
http://www.statista.com/
http://fortune.com/
https://www.amazon.com/

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How Orderhive’s order management app can decrease delivery time?

With the evolution of smartphones, today, they are not only used to make calls or text messages, but also, allows you process complex business operations in the most simplest ways.

Lately, mobile apps are proving to be a real time-saver for many business owners that allow a quick access to their important data and manage operations at the tip of the finger.

In this article, we will discuss on how using an order management app will help ecommerce business owners decrease delivery time.

There are many order management apps, however, some of them are either costly while others offer complex interface. If you are looking for simpler and cost-effective app, then Orderhive is the answer.

Orderhive Order Management App

Not being able to fulfill your orders in time can be frustrating for both, you and your customers. To eliminate such ugly scenarios, Orderhive management app will allow you process and ship orders from anywhere, anytime. Offering easiest order management tools and integration with leading shipping solutions(ShipStation, AfterShip, EasyPost), Orderhive app has already proven to be an ideal order management solution for many e-commerce business owners.

Key features that you can expect from Orderhive order management app

1. Automatically pushes order status

As soon as you create shipments or change order status, those changes will be automatically pushed to your channel in real-time. This means, you’ll eliminate the risk of fulfillment delays and boost customer service experience by offering in time delivery service, always.

2. Create full and partial shipments

There maybe times when you want to fulfill your sales orders partially, which means you want to ship certain products now and others later. Orderhive’s order management app allows you to do so. Quickly create shipments on-the-go for the ones you want to process, and gain access to the history of all your fulfilled products in real-time. This way, you can easily process orders as per your customer’s requirements, as well as, ensure you don’t miss out any order.

3. Print packing slips, shipping labels, and pick lists

One of the major advantage, you can also create packing slips and shipping labels. This way you can easily print them and make your package ship-ready from the place you are. Boost customer experience and bid goodbye to delay in order fulfillment, especially for those urgent requests from your customers.

4. Update shipping and tracking information on the go

Integrated with leading shipping solutions to enhance your fulfillment processes, Orderhive’s management app updates shipping information like carrier name, tracking number to your Orderhive account immediately when an order is processed. This makes it easy to access informations immediately and provide updates to customers whenever they contact you.

5. Create invoices with just a few taps

Another time-saving advantage, you can create invoices and insert a customized message for every sales orders that is to be fulfilled. Invoice generated via Orderhive management app are simple and have an aesthetic appeal, which you can quickly email it to your customers in just a few taps on your mobile screen. Also, Orderhive being well-connected with Xero accounting software, therefore integrating your Xero account with Orderhive will automatically push products and customers that are fetched from the invoice and immediately export the same to your Xero account.

Adopting Orderhive’s management app, you’ll be able to fulfill order management processes quickly and efficiently, helping you to save loads of time, money, and effort.
Available on Google Play Store: https://goo.gl/LQxzQ3

How to manage product return process?

Across a range of verticals, today’s customers look to shop from web stores that offer a smooth return process.

Receiving, fulfilling and delivering customers orders are a part of an order fulfillment process, but very  crucial ensuring that products are delivered to customers in time. But, even more important, is to handle product returns.

Customer’s can return products due to many reasons. Some returns include faulty products, few  due to damaged packaging, while others due wrong product delivered. Regardless to whatsoever reason, such customers are looking to return the product. Now it your responsibility to make it easy for them. By not doing so, can create a bad brand value for your business. However, if you make returns easy for your customers they’ll refer friends as well as prefer your site for future purchases.

But how do you ensure a perfect product exchange process for your customers?

Here are few effective tips:

– Have a clear returns policy in place

The design of your product exchange policy, will make it easier to deal with returns scenarios. Having a clear return policy in place allows you to request the customers to request for the returns online. Not only does it make save you and your customers the time and cost, but also inform them what items can be returned. Make sure you paste the returns and refunds policy on every packaging that you ship as well as post it on a part of your website, specially dedicated for shipping and product exchange policy.

– Identify the reason for the return

You have requested your customers to apply for returns online and you have received a returns request, what’s next? Identifying the reason for returns (are they matching to your policy) is what you should do. This will make it easy and quick to calculate the cost of returns, which in turn aids the action plan quickly.

– Act as per the policy

Once you identify the reason, it makes it quick to take action. For instance, if you customers has requested for a return due to wrong product delivered. You know you’ll have to offer a refund or store credit immediately or once you receive the wrong product in the warehouse. In such situation, before taking an action, it is always suggested to inform the customers about the method of return you will use. Informing your customers upfront will make them feel that you care for them, regardless to the return and may continue to shop from your site in future.

Working your customer’s returns in batches will help you reduce the associated overhead cost as well as increase your time efficiency. For instance, if you dedicate only one hour a day to process ten orders, it is profitable to dedicate one whole day to process returns. By doing this you can process double the number of orders in one hour.

Also, adopting an order management system that offer tools to automatically manage returns will make it very easy to keep a track on product returns and exchange allowing you to get real-time insights to see how many returns are in active progress, how many have been processed, how much time did it take to process each return, etc. Some systems even allow to add notes for each return. These notes come in handy to be careful and take necessary measures when processing orders for the same customers in future. In the end, how you keep your customers happy, will decided the success for your business.

– Try and offer free shipping on returns

Product returns and exchange process also gives you an opportunity to make additional sales. Offering a positive returns and exchange experience to your customers will bring a trust in your customers mind, that in case of returns, their money is in safe hands and repeatedly return to your online store to make additional purchases.

Try and offer free shipping on returns, like an extended period to claim for returns, if any in future. And, if you are doing so, don’t forget to highlight it on your site.
 
In Closing

Returns justify the quality of your service, therefore every customers who claims for a return should have positive experience which will automatically create a good impression of your brand in the mind and feel encouraged to purchase from you again in future.

If you haven’t given a thought about processing your product exchange, not it the time – especially with Christmas and New year just around the corner!

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