F. Curtis Barry & Company Blog

4 Easy Steps to Select an Order Management System: Steps 1 and 2

Whether your company is in need of a commercially packaged warehouse management system, point of bigstock-Four-Gears-Steps-Principles-In-58922081sales system, inventory control system, direct-to-customer order management system --or some combination of the aforementioned, the selection of the right system is a major undertaking for your business. No matter what type of new system you’re considering, that purchase is going to be a long-term investment. It has significant ramifications for how you serve your customers, the productivity of your personnel, and the management information it can provide to help you manage and grow your business.

To make an accurate system assessment and choose the right system for your company’s needs, we recommend you follow a four-step selection plan. This plan includes:

  1. Organizing the project;

  2. Defining your business needs;

  3. Gaining a complete understanding of the vendor’s systems and capabilities; and

  4. Examining the expected ROI of the system.

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Topics: order management system

How Much Space Is Needed in Your New Distribution Center?

Deciding to move into a new distribution center is no easy task and certainly requires planning that many companies are not accustomed too. If not done properly, the process can be doomed from the beginning. The first major challenge is conducting an operational assessment determining how much space you need to accomplish the existing tasks and to support sales growth. And then how will the space be best used? Here are 10 important factors to take into account regarding whether a potential warehouse will work for your company.

1. SKU and Sales Growth

One of the first questions that should be asked is what will happen with SKU growth. Companies often think about where they are currently, and how many SKU’s they have added recently. But you must take into account changes in the business and answer some of the following questions:

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Topics: distribution center, warehouse layout, inventory turnover ratio

Greater Inventory Control Needed to Combat High Cost of Backorders

How are backorders affecting your profitability? From our consulting with clients on how to improve their merchandise planning, forecasting and inventory control processes and systems, we see the range of costs over 15 years to be $7 to $12 for each unit that goes into a back ordered status. I have seen the cost be much higher for shipping heavier weight packages. I am sure you are asking yourself how can it be that much? Or as many companies say I am just not going to take back orders. Let’s take a look at what makes up the costs and what sales you are giving up by not taking back orders.

For this example I’m using data from our proprietary data base of operations costs. Let’s assume the company’s orders are 50% Internet and 50% phone orders through their Call Center. The company processes 250,000 apparel orders last year with an average of 2.5 items per order; $75.00 average order value; 625,000 units ordered and had a 15% back order rate. With its 15% back order rate that equates to 93,750 back ordered items.

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Topics: inventory control

Inventory Management Best Practices to Reduce Expenses

Let’s take a fresh approach to implementing inventory management best practices to see if there are some ways you can redouble your efforts and find further ways to reduce expenses.  One thing many of us have learned over the past couple of years is that there are numerous areas to reduce expenses and rethink the ways that we are doing business.  

Companies have shown that they can be much leaner and service the customer at the lower total expense levels.  While it’s been painful; it has been achieved.  We believe that companies will be slow to add back expenses as business improves. In this context of having reduced expenses significantly, we take a look at deploying inventory management best practices to further reduce and contain expenses in your business. 

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Topics: inventory management best practices

Are You Getting The Most Out Of Your Order Management System?

After installing a new order management system; we find that most are utilizing less that 50% of their system's full potential. This is true for many reasons; especially since training was probably a while ago and personnel do not remember all of the different options that are available to them.

Since most order management system implementations are a significant capital investment, shouldn’t you be looking at taking advantage of other functionality to improve business processes? The answer is a simple yes, you should be looking at utilizing your new software application to its fullest, in order to maximize the investment and improve and simplify your business processes. 

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Topics: order management system

Does Your Order Management System Need To Be Replaced?

The best time to assess your current order management system infrastructure is now. We have listed some questions below to see how your system fairs.

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Topics: order management system

Operational Assessment to Improve Distribution Center Capacity

Is your distribution center running out of space? Did you feel the pressure of needed space this past Holiday season? Considering the following tips could add on two to five more years in your facility. Here are the top factors we review during an operational assessment when looking at warehouse layout to improve capacity.

  1. Thoroughly understand the flow and utilization of the current layout, including rack configuration, slotting/pick philosophy, receiving, putaway, replenishment, inventory management, and packing and shipping. Include peak seasonal trends and a thorough volume analysis of inbound and outbound product flow.

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Topics: distribution center, operational assessment

Guidelines for Order Management System Scripted Demos

One of the most important aspects of selecting any order management system is actually getting a demo of the vendor’s application. There are a couple of different approaches to demos; depending on where you are in the system selection process. One is used to get the general feel for a system early in the search process and lasts one to two hours. What you get is a high-level overview of a few of the system’s functions.

The second type of demo, which is what the focus of this post is about, is much longer taking a day or possibly a day and a half; depending on the complexity of your business. This longer demo is used to select the finalists after vendors have responded to your Request For Proposal (RFP).

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Topics: order management system

Establishing and Running a "Hot Pick" Zone in Your Distribution Center

The idea that all items are created equal just does not fly when you are slotting SKUs in the distribution center. An often overlooked attribute of SKUs is their sales velocity. This simply refers to the number of physical shipping units of each SKU that are sold and shipped daily, weekly, monthly or annually.

It is very surprising that when we conduct an operational assessment for a client and discover that they do not know how well each of their items sells. This is fundamental information required of every efficiently run distribution center. The old 80 – 20 relationship applies in most cases where 20% of your SKUs represent 80% of your sales. This ratio may change from company to company, but invariably, a small number of your SKUs represent a significant part of your total sales.

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Topics: distribution center

How Do I Reduce My Cost of Shipping?

Problems:

Outbound cost of shipping now averages 6% to 8% of the average order (often much higher for somebusinesses), exceeding fulfillment labor costs. Carriers can also add over 90 accessorial charges, and there is no end in sight. Consumers take shipping & processing (S&P) rates into account in their purchasing decisions, with these charges among the top reasons for cart abandonment.

Solutions:

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Topics: cost of shipping