Why Multi-Channel Fulfillment Works Better Under One Roof

Dec. 19, 2013
Retail, wholesale and consumer markets are served best and most cost effectively by one fulfillment center, a new whitepaper concludes.

It is no longer about how you deliver products to customers, it’s about how the customers choose to have product delivered. That’s how e-commerce is changing order fulfillment, although it still only makes up about 5% of all retail sales, states a new report, “Personalized Multichannel Logistics,” from Tompkins International.

“Multichannel operations that are personalized will help to minimize labor costs, reduce inventory costs, and integrate an organization’s IT strategy,” says Thompson Brockmann, author of the paper and a Tompkins principal. “When channels are split into multiple facilities, each operation must develop a staffing plan to match the seasonality in its receiving and order profiles. As the typical peaks for wholesale, retail, and direct to consumer (DTC) fulfillment are often offset, this results in redundant planning, hiring, training, learning curves, and downsizing.

Combined distribution and fulfillment operations minimize these redundant costs. Even though each channel will have its own set of challenges and unique staffing considerations, Brockmann states, combining channels under a single roof will provide significant savings.

These savings include:

  • Minimizing temporary staff build-ups across multiple sites.
  • Reducing redundant training across multiple sites.
  • Providing a longer working opportunity for temporary staff, which creates a more favorable employee environment and allows the operation to employ higher quality staff.
  • Providing a longer review of the temporary staff, which allows the operation to adjust both the quality and quantity of staff.
  • Creating a bigger opportunity to use flexible volume to better smooth the peaks and valleys across channels.

Even though peak DTC shipping days tend to be more intense and more concentrated than retail or wholesale peaks, combining these operations under one roof will provide a broader planning perspective, Brockmann concludes. And a centralized staffing plan will provide the additional benefit of risk reduction during critical holiday periods.

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