April 21-22, 2010 San Antonio, TX

The Reality of a Fulfillment Transition Consolidated GraphicsAmy Thunderburk & Betsy Davis

e-fulfillment

E-fulfillment can be defined as the integration of people, processes and technology to ensure customer satisfaction before, during and after the online buying experience.

The Reality of a Fulfillment Transition

Current Demand

today’s customers demand…

• Customized products delivered quickly to anywhere in the world

• Complete order flexibility and convenience

• Package tracking from purchase to doorstep

• Easy, flawless product returns (reverse logistics)

fulfillment follies•Lack of knowledge/visibility responsible for many e-business failures

•Lack of integration

•Poor forecasting

•No inventory tracking

•Human error

•Managing versionable items

•Not properly organized

•Billing inaccuracies - Items shipped vs. Items billed

• Space limitations

pros: for outsourcing fulfillment• Speed to market

• Scalability

• Maintain focus on core competency

• Minimal capital investment

• Focus on the customer

• Capitalize on efficiencies

The Reality of a Fulfillment Transition

Location

current distribution strategy

Warehouse Location

Delivery Destination

future distribution strategy

physical warehouse(s)• Square footage available • Secure location or secure areas • Climate controlled • Efficient layouts for workflow

The Reality of a Fulfillment Transition

Transitioning

process evaluation• System needs assessment

• Data upload – product information ID codes, reorder points weights, dimensions, etc.

• Identify on-going ordering and fulfillment business rules

• Determine critical success indicators•Facility readiness

•Start-up audits

•Reporting and metrics

•Conduct and record training events

physical inventory transition

• Inventory identification and space planning

• Transfer inventory

• Go live with ordering activity

• Business continuity

The Reality of a Fulfillment Transition

Technology

e-commerce sample site

e-commerce WMS sample site

The Reality of a Fulfillment Transition

Reporting

types of reportsProduct Reports

• Backordered• Product history• Inactive / Discontinued• Product return• Inventory valuation

Order Reports• Daily orders• Unconfirmed shipping orders• Orders backordered (by product)• Daily orders with shipping• Unapproved orders

Management Reports• Order billing• Credit card transaction• Order status report• Budget report• Payment type analysis

Inventory Reports•13 month average usage

Shipping Reports•Package shipments•Products shipped (by person)•Shipping order turn around•Shipping activity

report sample

The Reality of a Fulfillment Transition

Service Levels

fulfillment SLA’s•

Title: Level PenaltyExample: Order Line Turn Time 99% of orders shipped same day $10 per order not shipped same day

1. Order Line Turn Time >99% of orders shipped same day if in by 3pm

Based upon Service Level Agreement

2. Order Line Accuracy > 99% Based upon Service Level Agreement

3. Inventory Accuracy 98.5% is the target which consistently is reached or exceeded

Based upon Service Level Agreement

4. Return Processing Processed Within 24 hours Based upon Service Level Agreement

5. Receipts Processed Same day (within 12 hours) Based upon Service Level Agreement

6. System availability commitments (web & batch processing)

24/7 Based upon Service Level Agreement

7. Response to questions/problems from customer Immediate response: Resolution timeline to be established within 24 hours (dependent upon complexity)

Based upon Service Level Agreement

8. Completion of IT Requests Immediate response: Resolution based upon complexity of request.

Based upon Service Level Agreement

9. Mailings (On time and accurate) >99% on time and accurate Based upon Service Level Agreement

10. Conventions (On time and accurate) >99% on time and accurate Based upon Service Level Agreement

SLA options

• Variety of shipping options

• Turn around Time

• Managing your returns and exchanges

• Reporting supplied monthly, quarterly,

annually

• Electronic invoicing

fee structure typesReceiving    

  Line Items (per pallet/item)Processing    

  StoreFront order (client places order via StoreFront)  Manual Order Fee (order submitted via email, phone, fax)  Rush Order Fee (order required to ship same day)  Pick and Pack Charge Per Order  Pick and Pack Charge per line items  Packaging and Handeling Charge Storage      

  Storage Charge per Pallet  

  Bin Charge per location  

Customer Service  

  Account Management - Monthly Service FeesInventory Management  

  Physical counts, Stock destroys, Special Requests (per hour)Kitting / Assembly  

  Processing and Fulfillment - (per kit)  Processing and Fulfillment - Each additional piece (per kit)Programming/Data Management  Database Management, List Programming, Special Requests (per hour)

Postage Cost    

Freight Cost    

your opportunity

• 40% of the cost of goods sold is buried in fulfillment and back-end logistics!• Location• Technology• Service Level Agreement

• Free up to grow up

A fulfillment solution enables you to efficiently manage

your materials and provides you with real-time

information on demand

April 21-22, 2010 San Antonio, TX

The Reality of a Fulfillment Transition Consolidated GraphicsAmy Thunderburk & Betsy Davis