10 Ways to Improve Vendor Quality Control

Quality Circles, Total Quality Management, Dr. Deming’s 14 Point Theory and Six Sigma are all various programs aimed at improving quality in an organization. They have been successfully implemented in many corporations, but have failed to attract a following in the direct-to-customer fulfillment industry. Major reasons for this are the complexity and resources required to implement these highly touted quality control programs.

If you are seeking ways to improve your vendor quality control without having to dive headlong into a new way of doing business, take heart. There is an option that relies on the basics of upholding merchandise quality. The following are 10 proven strategies that we have identified through inventory best practice assessments for improving your vendor quality control program. These techniques also can be used to design such a program if you do not have one in place today.

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How to Avoid Order Management System Project Waste

Management often bemoans the fact that IT projects fail to be delivered on time and within budget. And the truth is, the IT spending waste that occurs in our industry is at times mind-boggling. We have seen clients —ranging in size from $7 million to $650 million in sales —all struggling with the same schedule and budget problems as they attempt to implement a new order management system and/or warehouse management systems.

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Inventory Best Practices Assessment Show Issues in Systems to Fix

Since inventory is the largest balance sheet asset in most companies, this is certainly a hot spot for all companies. “Systems” don't take into account the total costs of owning slow-moving inventory (occupancy, interest on the investment, distribution center labor to maintain and control it, etc.). Only management can analyze these expenses and methodically reduce them.

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Major Order Management System Project Failures and How To Avoid Them

In doing some research for a client looking to get started on an order management system project, we came across a study that was conducted of 800 senior IT managers from the United States, England, France, Germany, India, Japan and Singapore. The study revealed: 

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How Does My Warehouse Cost Per Order Compare?

In a recent blog I mentioned that typically we see efficient, conventional - warehouses with minimal automation - have Total Warehouse Cost Per Order between $3.00 and $4.50 for consumer direct-to-customer companies. You might say, “For what sized company?”

To show how results can vary, I have selected 16 companies from our proprietary database of operations costs and productivity. They had 26.9 million orders annually with Total Warehouse Costs of $114 million. The “fully loaded” weighted average for Total Warehouse Cost Per Order was $4.24. Nine of these businesses had annual orders less than 1,000,000 and the largest was 7.2 million orders annually.

By “fully loaded costs” I mean management salaries, direct and indirect labor wages, total occupancy (including heat, light, space, depreciation and amortization for conveyance and MHE); and packing costs.

We excluded the outbound order shipping as it distorts comparisons between companies. Reasons: DIM/weight and negotiated carrier costs vary widely. Additionally we did not include cost of employee benefits, payroll taxes and vacation.

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Direct to Consumer: What is Your Competition Up To?

PARCEL Forum 15

Date and Time: Tuesday, October 20th 12:00-12:50 pm, OL504 MEGA SESSION, 

Presenter: Curt Barry, President, F. Curtis Barry & Company

Title: Direct To Consumer: What is Your Competition Up To?

Customers and competition are driving a sea of change in American retailing. E-commerce has increased competition to sell product by manufacturers, retailers, direct merchants, foreign companies, to name a few. More than 50% of all in-store purchases start with an online inquiry; mobile has become the fastest growing channel. As we cater to customer omnichannel shopping preferences, major tactical changes are required to ship orders to stores, ship orders from stores and DCs, place e-Commerce and phone orders to pick up at store with no shipping and handling fees, processing web returns at stores and processing returns for free. Additionally, customers want delivery to be fast and “free” at a time when UPS and FedEx have forced changes through their charges based on DIM weight. The “small order nature” of direct orders and returns requires highly efficient operations to make money and provide high customer service.

Come hear Curt Barry, one America’s leading direct-to-customer fulfillment consultants, present 10 Operations Tactics your company must master to be competitive in the direct-to-customer marketplace. Here are a few of the issues that Curt will address:

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7 Important Order Management System Agreement Points

It is amazing how many companies don’t look at vendor's order management system license agreements very closely. These are binding legal documents and without close review of payment terms, deliverables, schedules, termination options, etc. you could be putting your company at risk for losing thousands (or hundreds of thousands) of dollars.

There are two major aspects to these license agreements:

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Inventory Management System, Availability Key to Omnichannel Shopping

For national retail chains that want to grow ecommerce as omnichannel businesses, there are three inventory management systemelephants in the room. The first is of course the behemoth of Amazon.com, with its far-reaching tentacles. Next is the customer’s ability – and preference – to shop anytime, anywhere and from any device of their choosing.

While both are truly big challenges, the biggest elephant of all is the retailer’s own supply chain and infrastructure. More specifically, it’s their inventory management system, and the need to make inventory availability a customer-facing application (see elephant #2 above).

I’m not chiding big retail. Make no mistake – my bet is on big retail. But the magnitude of these system changes and other supply chain requirements will burden IT management and the future earnings of many companies. The problem is the first two elephants are driving the sea of change, and there can be no going back without severe sales losses.

Here are some reasons why inventory management systems and inventory availability is the biggest elephant of all:

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Do You Really Need All Those Order Management System Modifications?

Recently we had a chance to follow up with a client and vendor on the outcome of their seven-month order management system modificationsimplementation negotiated last year. There are some unique lessons learned about making modifications to  an order management system; or an ERP or warehouse management system for all of us.

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