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E-commerce: The Direct to Consumer Shipment Problem

If you’re not already doing direct to consumer (drop ship) orders they are very likely in your future.  While those big, high dollar pallet shipments are never going away, your retail trading partners are certainly scrambling to become more nimble and grow revenues by offering it to consumers.

If you are already participating in this trend, you are very aware of the challenges and problems this can cause for a supplier.  

It all starts with the use of the retailer’s portal to download the order by your order processing team.  Or, if you are semi-fortunate, SPS Commerce, CommerceHub, HighJump or some other 3rd party company is downloading that order for you and putting it into your order management system (QuickBooks, Sage, NetSuite, etc.).  The reason I refer to this as “semi” fortunate is that they are charging you for every order downloaded.

Next comes the order processing tasks.  This includes things like creating the Packing List, determining the number of boxes and weights, entering the shipping information into the FedEx, UPS, or USPS portal or another 3rd party shipping software, generating shipping labels, printing everything, and having the warehouse pick, pack and ship.

And then there’s order tracking that includes entering the tracking number in your order management system, entering the tracking number in the retailer’s portal, updating inventory and carefully filing the order –  just in case – something goes wrong and you have to troubleshoot it later.

I’m sure you agree that’s a lot of time and effort for what can be a one-item, relatively small basket size order. 

IF ANY OF THIS SOUNDS FAMILIAR, consider the following example:

 

But that’s only half of it.  Now, what about the load on your pickers and packers in the warehouse?  They aren’t picking cartons and putting them on pallets anymore. They have to pick and pack individual items for shipping one at a time.  Another huge amount of time and effort for a relatively small basket size order.   

To this end, OPAL also provides further savings in the pick, pack and ship process.  It’s surprising but many business owners can’t actually identify the utilization of their pickers and packers and this labor can be another $4+ in the cost to complete that drop ship order that has already absorbed the EDI cost and order processing labor cost.

To get a handle on this you need – at a minimum – the tools to know today’s order volume, determine the warehouse Location based on item availability and shipping location, determine the number of packers needed based on today’s order volume, determine the number of pickers needed based on today’s order volume, predict tomorrow’s order volume and staffing needed, and automatically generate Shipping Labels, Packing Slips, etc. without manual intervention. 

And wouldn’t it be awesome to track picker and packer productivity, the cost of pick and pack and ship, and increase the number of shipments you can complete each day?  Absolutely!

As I said earlier, IF ANY OF THIS SOUNDS FAMILIAR, then you should really take a look at OPAL, an order processing and logistics software solution designed to handle this workload autonomously and provide you with the rapid return on your investment your business needs.