FULFILMENT OPERATIONS ☛ WEB VERSION:
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Starting with the stockholding, how many SKU’s do you carry? For the non- operational amongst you the SKU or Stock Keeping Unit is the smallest uniquely identifiable piece of stock. Some retailers think in terms of Products or Styles, which may have many variants or SKUs. Just so that we are on the same page.
So how many SKU’s do you carry?
How do you categorise the range of stock?
Within each category, what are the average dimensions, weight and cost value?
Do you hold bulk (palletised) stock? If so, how many pallets on average and at peak?
What is the average stock churn?
What is the current layout of your storage/ distribution area in terms of locations, square feet and rack height?
How many Suppliers do you have? How often do they deliver? How many SKU’s are there in each delivery? Is the product delivered barcoded at SKU level? What is the carton size and number of units per carton? Is the supply Just in Time for immediate despatch or for stock holding?
What Quality Control procedures are needed for each supplier?
Are any SKU’s fragile, f lammable, aerosols,
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“It is with the 20:20 vision of hindsight that some businesses may now be observing how others, having outsourced their operations, have been in a better position to ride out the storm.”
perishable, food, alcohol, pharmaceutical, temperature sensitive, liquid, high value, or weigh more than 12kilos?
Are any SKU’s longer than 1.2metres?
Do any SKU’s require re- work, personalisation, make up to kit products, special packaging, gift wrap or handling whilst packing for despatch?
Do you have any special requirements for outer carton fill or branded packaging?
Moving on to order flows …
Do you have B2C and B2B orders?
For each a weekly breakdown by channel will be needed: • Orders % from Stock % from Cross Dock
• Average Order Value • Items per order • Carrier service used • Returns %
What service levels on each activity type do you require?
Partner Selection Having gathered all the information about your business you will be in a good place to approach potential outsourcing partners with a solid brief.
Make sure you have extended your current business metrics with reasonable projections for the next year or so. Most outsourcing providers will be looking for a long-term relationship.
More on the vendor selection process in the next issue.
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Do you offer express/same day despatch?
What procedures do you require for returns when received?
• QC to return to sale stock • Process refund to customer • Return to Supplier
• Quarantine for merchandiser review
• Secure Destruction
Again, leaving what is probably quite challenging until last…
How will order and stock data integrate with your systems?
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