Ten Tips for Consolidating Fulfillment Partners
Written by:
Jeremy Sacker, Sr. Vice President & General Manager
For many companies it can seem like a daunting task to consolidate multiple fulfillment services vendors, find a new vendor or outsource an in-house operation. The thought alone can send even the best marketers screaming for their procurement departments. The risk of paying too much and getting too little is a chance no marketer is willing to take in these tight economic times.
If you are planning on changing or consolidating your fulfillment partners this year for your organization, here are ten tips to follow to ensure you make the right choice:
1. Experience is Crucial
The right partner will provide solid expertise and experience both within your industry as well as theirs. An easy way to measure this is by requesting case studies that relate specifically to your industry as well as examples with similar requirements. This information will provide you with a clear indication as to whether they understand the challenges you face. Lastly, make sure to ask for three to four references to verify the vendor’s experience and one reference from a former client.
2. Proven Problem Solver
Choose a partner that has a proven track record for looking out for their clients’ best interests. Select a company that can provide examples of where they have identified areas of improvement and cost savings opportunities beyond the established scope of responsibilities. This will ensure that they share the “partnership mentality” and will be a true business partner. A true business partner will apply best practices and create cost efficiencies in the execution of your marketing programs, thereby freeing up valuable resources in both dollars and manpower that can be deployed elsewhere in the marketing program. They will enable your marketing department to focus on its core business competencies while it handles the time-consuming, detail-driven marketing execution functions.
3. Financially Stable
One of the most obvious criteria for selecting an outsourced marketing partner is making sure that they are financially sound. Requesting their Dun & Bradstreet number as well as a copy of their latest annual report or balance sheet are two things to review to uncover any red flags. Also make sure to ask about any potential mergers and acquisitions.
4. Facility Capabilities
The partner you select should have the capacity available to meet your current and future needs. You want a company that can meet your growing demands and be able to respond quickly. Ask them for their total warehouse square footage, available storage and production capacities, facility certifications, security measures and disaster recovery plans. As part of your final vendor selection process, be sure to tour your potential vendors proposed facility at least once to see their operation in action.
5. Suite of Services
The right partner will provide a breadth of services to fill the gaps in your marketing mix. They will look beyond the basic pick, pack and ship methodology and provide you with services that make your job easier. Look for vendors that provide services such as customer support, procurement, printing personalization and analytics, which will help you get a better return on your investment.
6. Accuracy Levels
In the fulfillment industry there are industry standards for service levels metrics and it is important that you understand which ones fit for your business. Are your items identified by a bar code? If not, do you have clearly identified item numbers (SKUs) on your items? All of this will dictate the accuracy levels that your fulfillment provider can meet. If they tell you that they can meet your expectations, ask for proof.
7. Competitive Pricing
Of course, competitive pricing is on your list of criteria for a fulfillment service partner. In fact, I am sure it is at the top of your list. The cost of order fulfillment includes the charges associated with product receipt, product storage, facility fixed costs, order entry, order picking, order packing and order shipping. Additional costs include account management, technology systems (if required), and reporting. Be sure to request unbundled pricing, so you can easily compare each vendor's prices.
8. Reputation
Select a company that has a “white glove” reputation. Conduct online research by checking out blogs and articles for any negative information. Also, request the names of the company’s top clients. If you recognize the names of Fortune 1000 companies (which you should), chances are the company won’t have any skeletons in their closets.
9. Easy System Integration
Having a partner with a top-notch order management system is great, but if it doesn’t easily integrate with your system, you could end up paying more in “hidden fees”. Ask them questions about how they would integrate with your system including what fees would be included.
10. Analytics
Every fulfillment company you interview is going to say they have hundreds of standard reports such as order status and low water. In today’s economy that just isn’t enough. What you need is a company that can provide analytics, so you can analyze your program’s performance such as which product received the most customer calls. Be sure to ask your vendor about their analytics capabilities including the costs.
Bonus Tips!
11. Account Management
An experienced fulfillment vendor will provide you with an account management team to manage your program. These teams are responsible for making executive decisions, delivering quarterly business reviews, providing industry expertise, handling escalated issues, handling daily needs, and answering any questions regarding invoices, reporting, and customer service issues. Be sure to ask for a meeting with your proposed account management team to ensure compatibility. Don’t be afraid to request a different team if you do not feel completely comfortable with the one that has been provided to you. These employees will be your main points of contact, so it is crucial that you are satisfied with the selection.
12. Transition Management
Transitioning your business to a new partner takes a lot of work, attention to detail and resources, which is why the right partner should have a streamlined process to ensure that transitioning your business to them will be fast, efficient and cost-effective. Be sure to ask your vendor for a complete implementation timeline, a list of roles and responsibilities, and an overview of their process for making sure the transition stays on time, on target and on budget.
Want to learn more? You can contact Jeremy Sacker at ask@archway.com.
About the Author:
As Senior Vice President, General Manager of Archway, Jeremy focuses on delivering exceptional client experiences. Jeremy has more than 10 years of operational experience coupled with extensive military training in supply chain management. Prior to joining Archway, Jeremy was the director of operations at Minneapolis-based Best Buy Corporation where he managed the supply chain infrastructure and was selected to lead the formation of Best Buy’s private label group. Jeremy also held leadership positions at Solo Cup Company.