Software as a Service (SaaS) and Cloud based computing has taken the application world by storm. As you consider acquiring new systems – whether they are – new Warehouse Management System, ERP, Order Management, marketing, telephone system or shipping systems – there nine factors to consider comparing SaaS and cloud to on-premise approaches. The chances are good that across your business you’ll use a combination of the two IT business models.Read More >
As we shop this Christmas season, we have had three examples that stand out from all the rest:
- We had our first same day order and same day delivery from Amazon.com. It wasn’t something we requested but we pleasantly surprised to get. Amazon has two distribution centers in Richmond, VA where we live. The order was placed on a Saturday in the late morning and delivered within four hours to our home. Frankly, I know that this isn’t an economical option for most businesses (maybe including Amazon). But I’ll tell you it is a formidable marketing weapon. It was extremely fulfilling to receive the item so quickly without leaving home.
I was walking through a trade show’s exhibit floor this week and met some “new to me vendors” we can consider for our client’s projects, after we thoroughly check them out. Understand me, without reliable vendors and their solutions, I don’t have a business. But I’m not into taking risks with projects.Read More >
Quality Circles, Total Quality Management, Dr. Demings 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.Read More >
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.Read More >
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.Read More >
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.Read More >