Music Parts Plus (MPP) is an Internet-based retailer that provides hard-core musicians with high-quality musical replacement parts and accessories that allows them to personalize their instruments and sound. Offering more than 5,000 SKUs of products, ranging from picks and guitar knobs to lubricants and oils, MPP opened for business eager to make a mark in the online world.
As musicians discovered the e-tailer's low prices and prompt turnaround, order volumes began overwhelming its manual fulfillment system, leading to shipping delays as well as inventory and picking errors for thousands of small, look-alike parts.
“We reached $1.2 million in sales our first year, shipping about 200 packages a day,” says founder and CEO Dominick Moreo. “But we had an order error rate of close to 10%. That led to a reduction in repeat orders, unhappy customers and our overall expenses going sky high.”
Another area of concern for MPP was how fast an order could be fulfilled and ready for shipment by a certain time each day so that the orders could meet the promised delivery times without resorting to other, more costly shipping options. “This is the part that can make or break an e-commerce business,” Moreo says.
After achieving success in being recognized in the e-commerce world as a cost-effective and timely provider of music parts, MPP realized that, to keep current customers satisfied, it also needed to build out the capability for expansion. It became clear that there were too many problems and not enough competence at both the front-end (storefront and payment/order management platform) and the back-end (physical distribution fulfillment) parts of the business, so Moreo made the hard decision to shut his warehouse down and seek the proper solutions.
Moreo chose an e-commerce platform from Infopia for the front end, but armed with the knowledge of his frustrating back-end fulfillment experience, he explored a number of potential fulfillment service providers. He needed a logistics partner capable of handling a large number of small items, such as six-piece sets of guitar picks, and ultimately chose Quiet Logistics, an Andover, Mass.-based fulfillment company. Moreo determined, “I was growing so fast that I could no longer pick and pack my small-part orders accurately and efficiently without making a serious investment in automation. I now have unlimited growth potential with no up-front capital investment.”
Robots at Work
Today, barcode scanning and laser-directed pick-to-light systems ensure inventory and order accuracy, even for the smallest, look-alike products. Robots are now used to deliver the product (on racks) to pickers, with picking and packing completed simultaneously. Order accuracy has improved significantly, nearing 100% accuracy achievement.
“In the past, we did about 200 orders in a day,” Moreo remembers. “Now, we can do 250 orders in an hour and a half. Our feedback from customers has been 100% positive. It's not general comments like ‘great job’ — a big chunk of them say ‘good shipping’ or ‘super-fast shipping.’ Almost all of our eBay feedback scores cite our super-fast, accurate shipping.”
Regarding the make-or-break ability to meet promised delivery times, Moreo says, “The time from when we receive an order to when we have a package with a shipping label ready to leave the fulfillment facility can be as little as 14 minutes. In the past, it might have taken 24 to 48 hours.”
Significant areas of importance involve customer-service issues regarding order/shipping errors and returns. To that end, MPP leverages an online platform for resolving customer-service problems.
“If a shipment gets damaged while in transit, we have the ability to resolve the issue in mere seconds online, rather than go through a lengthy review process on our end,” Moreo explains. MPP also receives electronic alerts from Quiet Logistics when it has received returned packages so it can immediately process refunds or exchanges.
“We can now calculate how much time we spent on a return, including the time to e-mail a customer instructions on how to return a product, and how long it took us to get the product back and update our internal system to relist it,” Moreo says. MPP also relies on a new process that records items received damaged from suppliers or customers to ensure those items are not placed into regular inventory.
With significantly increased accuracy, reduced order turnaround times and improved customer satisfaction within the first six months of its automation implementation, MPP has been able to expand its capabilities and, in October 2009, began shipping internationally.
Bruce Welty is the CEO of Quiet Logistics Inc., a third-party logistics provider that leverages automated robotic technology for fulfillment.
MPP'S Automated Turnaround
Order accuracy within six months: 99.97%
Order turnaround: cut in half, from 24 to 48 hours to 12 to 24 hours
eBay vendor rating: 236 reviews gave highest rating; six-month ratings: 3,331 positive, 12 neutral, 1 negative
International shipping: initiated Oct. 15, 2009