Complaints - Simple Fulfillment Services Process Errors Will Affect the Bottom Line

Fulfillment Services – The Process in a Nutshell

The primary functions of fulfillment services systems are to respond quickly and correctly to an order by delivering the item ordered,  to maintain customer records,  to send invoices and to record payments,  to respond to customer inquiries and complaints and resolve problems, and to produce purchase and payment information on an individual customer basis and on a group basis, usually by source or key code, to aid in developing marketing plans and strategies.  Processes necessary to receive, service, and track orders sold via direct marketing. There are different types of fulfillment services systems based on the product or service sold, including subscriptions, book club memberships, continuities, catalog merchandise, and fund-raising. The differences among fulfillment services arise from whether the sale is a one-shot or involves continuous service over time, whether there is one product being sold at a time or many, whether the sale is on a cash or credit basis, the nature of the product being sold and its delivery requirements, and the type of statistical information that must be compiled.  The basic processes of fulfillment services are mail opening, caging, order entry, customer service, address label printing and presorting, merchandise picking and packing, billing, promoting, and statistical analysis and reporting.

Fulfillment Services Errors Will Affect the Bottom Line

Most customers buy from a specific company because they like the product or the price.Fulfillment services and delivery are considered immaterial and transparent. However, if persistent problems arise and continue, the relationship is impacted, and fulfillment services can go from immaterial, to irritant, to issue and, finally, to intolerable. The delivery then becomes a deal-killer.  Unfortunately, many companies wait until this situation occurs before they review their fulfillment operations. That’s why it’s important to assess tactical day-to-day savings of utilizing a high-quality fulfillment services company, long before the customer threatens to walk away. In fact, for high-quality products or luxury products, having a quality-oriented fulfillment services partner is a must.  There are numerous consequences a company faces. The following are the more common worst-case scenarios when errors occur in shipping and fulfillment. Lost customer loyalty and trust. When customer loyalty is impacted, there are additional costs. A simple calculation  shows that three fictitious companies can pay substantially more for order fulfillment services in order to avoid the risk of losing future orders. If they lost just one order for every misshipped order, they can pay from $1 more per order up to $150 more per order.  Another issue is sales force problems. If orders aren’t met, shipped, or delivered a company’s sales force might have to step in. Once the sales force gets involved in shipping and fulfillment services problems, companies incur a huge cost.  Sales calls also cost companies money. When a sales person is taking care of a complaint, the sales person is missing the opportunity to sell to a new customer or have a more constructive dialog with the existing customer.  Demoralized sales force is another common problem. Sales people are great at selling, and performing damage repair can be demoralizing to anybody. It is hard to be upbeat on a sales call if you had to fix problems earlier in the day. Then you may just feel that you are creating the next problem that needs to be fixed. Persistent fulfillment services problems can eventually force top sales performers leave. This, again, can have disastrous impact on the company and can become a strategic problem. Companies using low-cost fulfillment services providers need to watch for this problem and calculate the real cost of any fulfillment services error. Charge backs and returns are detrimental. Most companies feel they are paying too much for collecting their accounts receivable. However, collection costs can become a nightmare if there are fulfillment problems or record keeping problems. Credit card companies reverse charges as soon as they get a complaint, and it is up to the sender to prove that the product was delivered.  Retailers routinely ask for delivery confirmation before paying bills. Companies that rely on accounts receivable for their day-to-day cash flow must consider the risk of delayed payments when choosing the fulfillment partner. Charge backs have become common among retailers.  Charge backs are categorizes into three categories, Negotiated “Intentional” charge backs, including rebates, advertising allowances, markdown allowances, etc. Preventable chargebacks, which are mostly related to logistics and information system failures, such as improper labeling, missing delivery appointments, invoices that don’t match deliveries etc.  Lastly, unauthorized charge backs, which may be masked as bogus logistics failures, or vague returns numbers that don’t match what was actually sent back, paying the wrong price for the goods, etc. Even the smallest IT glitch in advance ship notification to a retailer can cause a delay and a considerable penalty. Charge backs may go as high as 10% of revenue, a number that can cut significantly into profit. A small supplier that fails to send an acknowledgement within 24 hours of receiving a purchase order, or fails to send an ASN within a certain timeframe, or falls below a certain fulfillment rate or provides substitutions on an order, might incur a charge.  Being able to control and respond to charge backs is critical. If a company can save the basic penalty on every fifth order, they can pay additional amount per order to their fulfillment company. In summary , avoid high error rates. For example, many online retailers are running up to 30% returns. Of course, only few of the returns are due to fulfillment services problems. Most of the returns are probably due to problems with size, color or style. However, with the right vendor-partner, an online retailer can provide real-time analysis of returns causes, make changes on their e-commerce site and avoid the costly returns.  As illustrated, shipping errors are expensive. Simple shipping errors can impact an entire organization, cause customer relationship and even cash flow problems. Avoid this by choosing a vendor who has the right systems in place to help achieve a company’s fulfillment services and shipping goals and needs.

END TO END ORDER FULFILLMENT SERVICES SYSTEMS IS THE SOLUTION

It needs to be understood that order fulfillment services technology is the best way to cut order processing costs and improving warehousing costs and efficiency. Experienced system consultants help you develop fast, accurate and low cost order fulfillment services solutions for all order profiles. Our solutions can dramatically reduce distribution center costs and provide a quick fulfillment. Order fulfillment services system benefits include optimized supply chain, reduced order fulfillment services cycle time, reduced customer service complaints, order accuracy improvement, labor productivity improvement, reduced system bottlenecks whether you need to transport product between two different locations or different elevations, divert product from one conveyor line to another, and hold product until a specific condition is satisfied. Fulfillment Services can supply a turnkey conveyor solution for your application.

fulfillment services