Taking stock of your fulfillment company is an important part of achieving and maintaining success. You rely on your fulfillment company to fill orders, and to do so with a high degree of speed and accuracy. Even if things seem to be going well, it’s always a good idea to take some time to assess your fulfillment company and make certain that it’s the right “fit” for your needs.
Head Back to School
Well, not really. But if you remember back to business classes, your instructor likely had you do at least one quasi-SWOT analysis. Need a refresher? SWOT stands for Strengths, Weaknesses, Threats and Opportunities. And a great way to evaluate your fulfillment company would be to look at the strengths and weaknesses. We’ll call it a SW analysis.
Working on an in-depth SW analysis of your fulfillment company requires you to dig deep. This isn’t the time for listing superficial issues or problems. This is when you really get to the nitty-gritty of what’s working and what’s not. What strengths your fulfillment company consistently displays, such as efficiencies within their systems and what weaknesses (such as order inaccuracies) have popped up on your radar.
Don’t forget to do some basic research. Things may have easily changed over the time you have been working with your fulfillment company. Look for customer testimonials. Search for reviews or forum threads that may dish on your fulfillment company. If a former customer is not happy, you may want to know why, so that you can try to prevent any similar issues occurring for you.
If you have never physically evaluated the facility, or it’s been a long time, then you should take a tour. This isn’t time for a white glove test. It’s not about being squeaky clean, but you most definitely want an orderly and organized warehouse for your materials. You want to know that it’s OSHA compliant. That safety is taken seriously and policies are in place. You also want a secure location and a warehouse that has security in place to deter theft. You want to know what your fulfillment company is doing to protect your inventory.
Check the Data
You should have metrics in place. If you don’t, you need to put them in place now, though it’s hard to make a true assessment of how things are going if you haven’t been tracking anything.
Look at costs. Have any costs been reduced since working with your fulfillment company? Is your fulfillment company working towards reducing costs? Have they identified ways to reduce costs and made it clear to you what needs to happen in order to achieve those numbers?
Your fulfillment company should have a clear organizational structure and should be set up to optimize the ROI on everything from employees to inventory to fulfillment software.
Here are some measurements and information you should ask your fulfillment company for:
- Delivery / distribution speed (broken down at points such as picking, packing, shipping)
- Number of errors per day (in order fulfillment process)
- Length of time inventory sits
- How often inventory is tracked / updated
- Who is accountable for data, and how is accuracy of data confirmed
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Would You Like Fries With That?
Everyone knows that fast food chains are notorious for upselling when a customer places a food order. Sure, you were only there to pick up a soda, but those fries sound pretty tasty. And hey, it’s easy to say “Yes.” The point is, your fulfillment company should have value-added services they can offer you. And they should make you aware of them, whether you need them or not.
Imagine working with your fulfillment center for a couple of years and not knowing that they have additional services that would have made your working relationship easier or more advantageous for you. Something like this would make you question whether your fulfillment company has your best interests in mind. They should always be thinking about ways to make your working relationship better and more advantageous on both ends. And leaving out important information like other services they could offer you is a huge oversight.
Pull Out a Scorecard
Scoring your fulfillment company may sound hokey, but it’s not. When you assess your fulfillment company and look over the strength and weaknesses of that company, keep score. It can be as simple as a range of 1-10, and then developing 5 to 10 key components of your relationship and their ability to provide accurate and on-time fulfillment. As you score each component, you may have a little light bulb going off over your head. Maybe things haven’t been going as smoothly as you thought. Or maybe things aren’t as bad as you imagined. It’s easy for one or two situations (especially bad ones) to really cloud your vision.
At the very least, you should score your fulfillment company in the areas of customer service, inventory management and tracking, warehousing and shipping. But you may want to drill it down to more specific components in order to better see where the issues (if any) are.
Keeping score and then coming up with the overall tally can paint the big picture for you. If your fulfillment company is hitting mid-range scores on every key component then you really need to decide if mediocre work is going to cut it. In fact, as you create your scorecard, you should determine an overall score that will mean it’s time for some major changes, time for a meeting of the minds or time for a big high five for all involved. In the end you want to feel 100% confident that you are getting what you are paying for and that you’re not paying for more than you actually need.