In taking to the air Amazon must also ensure sufficient fulfilment cover on the ground, says Jonathan Bellwood, founder & CEO, Peoplevox
Amazon’s plan to invest $1.5bn in an air cargo hub is intriguing. This is to support a fleet of “Prime Air” freight planes and is a bold initiative to ensure maximum control of its end to end supply chain. But could its taking to the skies to get even closer to customers with a uniform next day/same day international delivery service, be a step too far? Or perhaps not even necessary?
When it comes to e-commerce retailing, Amazon is clearly undisputed king of the clicks for volume of online sales. And its Fulfilment By Amazon (FBA) service is without doubt a highly impressive and well-oiled logistics machine. According to the company’s 2016 financial results announcement, the fourth quarter saw FBA accounting for 55% or so of total third-party units shipped and the service certainly sets the standard for many e-commerce retailer warehouses to follow.
But what of the 45% of sellers who aren’t using it? While more frequent bulk delivery drops to distribution centre destinations across the globe may well help with supply chain management, they will have little impact on controlling the quality of fulfilment or delivery at the local level – the ‘last mile’.
Amazon may therefore be overlooking the weakest link in the chain, the fulfilment capabilities of the many sellers not using FBA and who are totally reliant on the fulfilment abilities of their own warehouses. These, albeit unwittingly, could make or break Amazon’s reputation in its quest for universal same time, anywhere deliveries.
As with any other fast-moving, high velocity online retailing business, if fulfilment quality varies and is patchy from country to country, or town to town, it will inevitably lead to disgruntled customers. What if items ordered are actually out of stock, are not as ordered, don’t arrive on the day promised, or not at all? Any one of these will leave an everlasting negative impression, quite possibly causing consumers to make alternative arrangements and result in lost sales.
Perhaps Amazon should take a step back to ensure the ‘connections’ all sellers have with their own warehouses are up to scratch for being ‘Prime Ready’. However, many are small operations and still inexperienced in the complexities and intricacies of scaling up to meet the demands of next day/same day e-commerce fulfilment.
Fixing the weakest link
The weakest link here is the overall efficiency of the warehouse and fulfilment function, the nitty gritty that must take place between the point of order and the final despatch. Whether you are an Amazon seller or otherwise, get this part right and you can be confident in knowing exactly what can and cannot be sold and promised for delivery at any given time, and if an item is available be totally sure it will be picked, packed and addressed correctly to meet the chosen delivery deadline.
With so much at stake it is surprising how many e-commerce retailers continue to struggle along with paper and pen based warehouse stock management and goods despatch ‘systems’, even though their business has outgrown them and simply cannot cope with the complexities of modern e-commerce.
As customer demand for speed and convenience prevails, taking steps to integrate a fit for purpose e-commerce WMS with front end and back end systems sooner rather than later may be a more prudent approach. After all, prevention is always better than cure.
Turning chore to business opportunity
With the growing demand for next day and even sooner here are a few key steps to consider for helping ensure your warehouse and fulfilment operation is fit for business:
The goods receipt process (goods in) is the lynchpin of any warehouse. If problems occur here then it will likely cause trouble further down the line.
Doing a manual count is vastly inefficient because it increases the cost of labour and lowers the return. It also increases the risk of mistakes being made, misplaced or lost orders and inaccurate stock figures appearing online.
Use a warehouse management system (WMS) that incorporates barcode scanning which eliminates the margin for human error and ensures that all delivered items are correctly recorded. The correct stock figures are listed online, meaning fewer oversells or missed sales opportunities.
Avoiding missed sales
The longer it takes for your inventory to register online, the larger the window for missed sales opportunities.
If your process currently involves uploading a CSV file or similar into your e-commerce software, then the best solution is to find a WMS that integrates with this platform and cuts out the file uploading. Inventory figures should be updated across all platforms as soon as they are scanned at Goods Receipt.
Managing large quantities
It is difficult to unwrap and check each item which can lead to inaccurate stock figures. Inaccurate stock figures can then lead to missed sales opportunities, or overselling.
So barcode label the pallet and assign the products to the unique pallet label. This enables you to move the pallet around efficiently. You can also store inner, outer, and pallet quantities in a WMS and use your software to calculate quantities based on defaults.
The key thing to have available if you go down this route is the ability to overwrite the default quantity if you need to.
Dealing with despatch
This is your last line of defence for stopping any order going out incorrectly. If this does happen, you open yourself up to a wealth of problems, the worst of all being a disgruntled customer.
The despatch bench is the last place to spot an error with any order, such as the wrong colour, size, or quantity. Without a WMS, you can only rely on your despatch team’s ability to correctly identify a product which can get difficult for inaccuracies such as wrong size or colour. With a warehouse management system that is made for e-commerce, however, these kinds of errors should be flagged up at the picking stage when the item is scanned.
If it isn’t, the item being scanned again at the despatch bench is another opportunity for the system to notify the user of an error that might be missed by the human eye.
Manual address entry
If you are manually entering addresses then you are relying on the accuracy of humans which is simply not efficient for a competing e-commerce business. Not only are operators likely to make mistakes when manually entering addresses, it also takes an unnecessary amount of time.
With warehouse management software, all customer addressed are stored on the system with the order details. When the items arrive at the despatch bench and the order is scanned, the despatch label will print automatically with the correct details, saving time and reducing errors.
Visibility on despatched orders
If you can’t track which orders have been despatched in a day then you can’t monitor or report on performance. This is incredibly important for identifying what targets your operators are currently meeting and how you can improve.
By using a WMS, every order has a status assigned to it, whether it has been received, allocated to a picker, or despatched. As the order moves through each stage, the status is updated in the system so, when the carriers have all left the warehouse at the end of the day, you will have full visibility on exactly how many orders were despatched.
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(A Retail Times’ sponsored article)