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1、Solutions for Todays Top Fulfillment ChallengesEcommerce Fulfillment Outsourcing GuideEcommerce exploded in 2020 with estimated U.S.sales of$794.50 billion.While the coronavirus pandemic dramatically accelerated the trend,consumers are likely to continue shopping online post-pandemic.The dramatic gr

2、owth has forced fulfillment operations into overdrive.To ensure an optimal customer experience,retailers and brands must fulfill an ever-increasing order volume quickly,cost-effectively and seamlessly no easy task.While fulfillment operations face many challenges,common pain points include:Ecommerce

3、 growth/fluctuations Increased order fulfillment costs Meeting consumers delivery expectations Supply chain disruptions Supporting multiple sales channels Technology limitationsThese issues can quickly overwhelm all but the most sophisticated operations.As a result,many retailers and brands are look

4、ing to external experts for help in addressing these issues.Experienced third-party logistics providers(3PLs)are often better positioned to accommodate the growing complexity of order fulfillment.This ebook will explore each of these pain points and recommend outsourcing strategies to help to overco

5、me them.Ecommerce Fulfillment Evolves2The past year has been one of extremes.Some companies have seen record ecommerce growth while order volume has plummeted or fluctuated wildly for others.With volatile demand likely for the foreseeable future,fulfillment operations must be ready to change course

6、on short notice ramping up or down as volume dictates.To prevent service issues or delivery delays,operations need space and staff available to handle peak volume even when sales slow.As volume increases,so does the need for efficiency.Process optimization is critical at every step from receiving an

7、d put-away to picking,packing and shipping outbound orders.Ecommerce fulfillment operations also must be prepared for high return volume.Roughly 10 to 30 percent of all online purchases are returned.To keep customers coming back,returns,exchanges and refunds must be fast and hassle-free.Ecommerce Gr

8、owth/FluctuationsFULFILLMENT CHALLENGE:32.4%INCREASE IN ECOMMERCE SALES YEAR-OVER-YEAR IN 2020Outsourcing SolutionsSCALE SPACE/LABORWith a shared-space environment,a 3PL can adjust resources to meet your needs,flexing to accommodate peaks and valleys in order volume.OPTIMIZE PROCESSESBy leveraging b

9、est practices,proven processes and quality methodologies like Lean Six Sigma,3PLs can help to increase efficiency and improve throughput.MANAGE RETURNSA 3PL is likely to have the systems,distribution networks and transportation capabilities necessary to process returns efficiently and cost-effective

10、ly and get salable products back in inventory.They may also refurbish or repackage items as needed.3Increasing CostsFULFILLMENT CHALLENGE:Picking,packing and shipping ecommerce orders is a resource-intensive process.Ecommerce fulfillment operations require two to three times the labor and three time

11、s the space as traditional warehousing operations.Competition for these resources drives costs up.Over the past five years,rent for light-industrial warehouse space has increased 30%.Labor costs also have increased.The pandemic has only served to compound the problem.Additional labor needs and impro

12、vements to accommodate growing ecommerce order volume have increased D2C fulfillment costs by as much as 5%to 15%.Order fulfillment can take a toll on operational budgets.Costs for warehouse space,labor and shipping add up,particularly when online sales volume increases.MIKE JENNISON Vice President,

13、Supply Chain Engineering Saddle Creek Logistics ServicesOutsourcing SolutionsMAXIMIZE DISTRIBUTION CENTER CAPACITYAn experienced 3PL can offer layout and storage solutions to increase efficiency and optimize capacity higher ceiling heights,narrow aisles,efficient racking systems and more.REDUCE OVER

14、HEADWith a shared-space 3PL environment,retailers and brands only pay for what they use.They have access to flexible resources without the associated overhead investment.INCREASE EFFICIENCYTo reduce labor needs,a 3PL can optimize processes and invest in automated fulfillment solutions that increase

15、productivity(i.e.,pick-to-light,powered conveyors,robotics).4Consumers expectations for fast,free shipping also impact the bottom line for retailers and brands.The pandemic has helped to temper consumers expectations for delivery speed.Free,however,is still the gold standard.Of course,shipping isnt

16、free for retailers and brands.And regardless of whether the cost is absorbed or passed along to customers,it is critical to control shipping costs.Unfortunately,parcel costs continue to rise.Major parcel carriers once again instituted a sizable General Rate Increase(GRI)for 2021 and continue to impo

17、se substantial peak season surcharges.In fact,surcharges can make up 10 40%of total parcel spending.Meeting Consumers Delivery ExpectationsFULFILLMENT CHALLENGE:Outsourcing SolutionsSPEED ORDER CYCLE TIMESWith a robust order management system(OMS),efficient processes and automated fulfillment soluti

18、ons,a 3PL can save precious hours and get orders out the door faster often same-day to speed deliveries to your customers.EXPLORE YOUR OPTIONS3PLs can help to negotiate rates and take advantage of planned shipping volume and zone skipping to specific sortation hubs.They also can explore options to b

19、roaden your carrier strategy with regional carriers,postal workshare options,etc.ANALYZE YOUR PARCEL SPENDA 3PL with good parcel analytics software can review your parcel spending to identify factors that may be increasing shipping costs.ADD DISTRIBUTION NODESMany companies are optimizing their dist

20、ribution networks by adding new distribution centers.A 3PL with strategically located facilities can move the fulfillment function closer to customers to reduce transit time and cost.MORE THAN 70%OF THE TOP 1000 RETAILERS OFFER FREE SHIPPING5FULFILLMENT CHALLENGE:During the pandemic,supply chain dis

21、ruptions were commonplace.Half of shoppers(51%)had orders delayed due to inventory issues,and 30%canceled orders due to out-of-stock products.Thats bad for business.The majority of shoppers(63%)will try another brand instead of waiting for an item to be back in stock.While many companies faced sourc

22、ing headaches,others were forced to shutter their operations due to government mandates or an outbreak of the virus.This was particularly damaging for those that housed their entire inventory in a single distribution facility.Fulfillment operations also faced a labor shortage.In spite of a high unem

23、ployment rate,retailers and ecommerce companies nationwide have scrambled to hire thousands of workers to fulfill the surge of online orders.Supply Chain Disruptions In the wake of the pandemic,retailers and ecommerce companies are recognizing their vulnerabilities and striving to become more agile

24、and responsive to changes in the marketplace.Theyre making risk management a priority.JEFF JONES Vice President,Business Development Saddle Creek Logistics Services6SUPPLY CHAIN DISRUPTIONS continuedOutsourcing SolutionsKEEP OPERATIONS RUNNINGSince warehousing is designated as an“essential”industry,

25、3PLs are required to maintain operations,even during disruptions like the coronavirus pandemic.Therefore,they can keep business running for clients who may be forced to close up shop.MEET LABOR NEEDSWith a scalable workforce,a 3PL stands ready to accommodate fluctuations in order volume.They may als

26、o be able to handle additional functions such as kitting and assembly to be responsive to changing needs.SUPPORT DIVERSIFICATIONTo mitigate risk,a 3PL with existing distribution centers can help a company to add facilities in multiple locations instead of housing an entire inventory in a single dist

27、ribution facility.PROTECT AGAINST FUTURE DISRUPTIONSAn experienced 3PL can help companies to recognize their vulnerabilities,explore strategies for mitigating risk and pivot to accommodate changing needs.COMPANIES CAN EXPECT TO LOSE HALF A YEARS WORTH OF PROFITS FROM SUPPLY CHAIN DISRUPTIONS OVER TH

28、E COURSE OF A DECADE.7FULFILLMENT CHALLENGE:Today,retailers and brands utilize a growing number of sales channels web stores,mobile apps,physical stores,online marketplaces and more.Providing a seamless customer experience across channels can be challenging.Each channel can also have different fulfi

29、llment requirements.For example,ecommerce generates a high volume of individual orders that must be piece picked while traditional retail operations ship larger units.It can be challenging to fulfill both order profiles from the same distribution center because of the need to alternate between picki

30、ng pallets,cases and pieces.In the wake of the pandemic,many retailers have begun fulfilling orders from brick-and-mortar stores to support buy online,pick up in store(BOPIS)and curbside pickup as well as ecommerce orders.While it helps with inventory utilization,this practice can be problematic as

31、most stores are not set up for efficient fulfillment and the process causes congestion which can alienate shoppers.Supporting Multiple Sales ChannelsOutsourcing SolutionsSUPPORT MULTIPLE ORDER PROFILESAn omnichannel 3PL will be equipped to handle various order profiles or supplement your in-house fu

32、lfillment operations by managing a subset of your orders,such as D2C.OFFER TECHNOLOGY SOLUTIONSWith omnichannel technology solutions,like an order management system(OMS),they can help to pull from the best fulfillment source and accommodate a variety of order profiles to ensure seamless service.PROT

33、ECT YOUR BRAND INTEGRITYA reputable 3PL partner will serve as an extension of your brand.Using quality management practices like Lean Six Sigma can help to ensure accurate,responsive service.IN-STORE FULFILLMENT OF ONLINE ORDERS IS A PAIN POINT FOR 73%OF RETAILERS.8FULFILLMENT CHALLENGE:Ecommerce fu

34、lfillment requires sophisticated technology especially when operations are spread across multiple facilities and serve a variety of sales channels.Retailers and brands need real-time visibility enterprise-wide,so they can optimize inventory across all fulfillment sources and determine the best fulfi

35、llment source to pull from.If they sell through physical stores,they need to support BOPIS and curbside pickup.They also need to manage backorders and process high return volume.In addition,todays consumers expect real-time information about product availability and order status and a seamless shopp

36、ing experience across all sales channels.In fact,67%of consumers say that inventory visibility across stores,online and mobile is important.To meet these needs,a robust order management system(OMS)is a virtual necessity.However,top-tier systems can require a sizeable financial investment and a knowl

37、edgeable IS department.Technology LimitationsRobust omnichannel technology helps retailers to address product visibility,inventory management across multiple locations,order-processing speed,reporting and analysis,and seamless services.STEVE CONGRO,Director,Omnichannel Fulfillment Technology,Saddle

38、Creek Logistics ServicesOutsourcing SolutionsOFFER ACCESS TO TOP-TIER OMSUtilizing a 3PLs order management system gives you the advantages of a robust system and regular upgrades without the capital investment.INTEGRATE WITH EXISTING SYSTEMSA partner fluent in OMS operations can help to integrate th

39、e system through all of your facilities,including DCs,stores,vendors,etc.PROVIDE EXPERTISEUnless your in-house IS department is experienced in working with an OMS,a 3PL can be a valuable resource overseeing implementation,troubleshooting problems and more.9Scalable D2C Fulfillment Speeds Start-UpWhe

40、n Hollywood mogul Mark Wahlberg helps to launch a new brand of mens apparel,its likely to create a buzz.To facilitate a swift start-up and accommodate rapid growth,the team at MUNICPAL turned to Saddle Creek Logistics for D2C order fulfillment.To meet the brands evolving needs while ensuring quality

41、 at every touchpoint,Saddle Creek custom designed a scalable ecommerce fulfillment solution.Every aspect of the operation was carefully planned to increase velocity and throughput and deliver an optimal customer experience.As a result,orders ship out the day they are received,customers enjoy their e

42、xperience with the brand,and operations are prepared for growth.“Saddle Creek was definitely our best fulfillment option.With their overall operational knowledge,it was a no brainer.”TYSON ALVAREZ,Director of Operations and Planning at MUNICIPALREAD THE FULL CASE STUDY1010Moving ForwardWith so many

43、pain points to navigate,finding a qualified ecommerce fulfillment provider is a top priority for many retailers and brands.In fact,one-third of merchants outsource fulfillment for ecommerce orders and more plan to do so.What to Look for in a Prospective Fulfillment Partner Of course,not all 3PLs are

44、 created equal.Before selecting a third-party provider,ask about the following:Going forward,the ecommerce trend is likely to continue its upward trajectory.It is critical for retailers and brands to use every available resource to optimize their ecommerce fulfillment operations.A reputable,experien

45、ced 3PL with a variety of resources can be a valuable partner for the road ahead.Ecommerce fulfillment expertise Can they show proven success in your industry?Formalized approach to start-ups Do they have clearly defined processes and an experienced transition team to ensure a seamless transition?Es

46、tablished distribution network Do they have facilities in strategic locations,or are they willing to open a new location to meet your needs?Robust technology Do they offer industry-leading technology,including an OMS and fulfillment automation?Parcel management capabilities Can they recommend strate

47、gies for controlling parcel costs?Value-added services Do they have the capabilities you need to customize or reconfigure your products to meet demand?Continuous improvement Are they committed to quality management?Do they utilize Lean practices?Good reputation How are they viewed in the industry?Ho

48、w long have they been in business?11Looking for an ecommerce fulfillment partner?At Saddle Creek,we support the ecommerce fulfillment needs of many retailers and brands,helping to get their products where they need to be quickly,cost-effectively and seamlessly.In fact,we rank#4 for Fulfillment Services on Digital Commerce 360s 2021 list of Leading Vendors to the Top 1000 E-Retailers.Contact us today to learn more! 3010 Saddle Creek Road Lakeland,FL 33801863-665-0966 Corporate866-668-0966 Toll Free