Download - The E-Tail Process by iStoreiSend
Store & Send Logistics Sdn Bhd
Consumer Facing Economy
The digital age has drastically changed customers consuming behaviour.
Empowered• Direct• Social
Connected• Multi Channel• Experience
Time Starved• Real Time• Mobile
Result
As a result the Retail Landscape
Changed
The Rapid Growth of eCommerce around the Globe
Whats changing next?
how we manage the Supply Chain
will change, Big Time
Disruption in the supply chain, from B2B to B2C
Fundamental DifferencesB2B B2C
Order Size Large Cartons Small ParcelsOrder Processed 10-100s 1,000-100,000sShipment Nature Scheduled ErraticOrder Frequency Weekly DailyReceiver Business ConsumerExpectation Medium HighCost Sensitivity Medium HighTracking Good to Have MandatoryService Level Med High
Road Block to realize the full potential of eCommerce
The Invisible Cost of Misaligned Supply Chain
IncorrectlyAlign Perfectly Align
StorageCost High
Pallet / Shelf base charge rate.Under utilised storage is charged Low
Unit measurement base charge rate. Under utilised storage uncharged
Process not build to manage low qty & high SKU, high inventory lost.
Build to manage. Low inventory lost, highly accurate realtime inventory
Pick & Pack Cost High
Paper Picking method.Low efficiency, High Error Rate.
LowDigital Picking method.High efficiency, Low Error Rate.
DeliveryCost High No Value Add, No Savings LowConsolidation of orders + last mile cost optimization, reduces average delivery costs
Customer Experience Bad
Slow fulfilment results in longer order to receive time + high error rate + unsuitable packaging leading to damage item ,with no clear return process leads to frustrated customers
Good
Fast fulfilment results in short order to receive time + low error rate + customised proper packing leads to higher customer satisfaction
Likely to return purchase+
recommend to others CACLTV
constant out of stock
orders!
No return purchase+
negative feedback to others
LTV0
Inventory Management Basics
What should i know about SKU?
• SKU (stock keeping unit) is your product’s Unique Identity• It is usually an alphanumeric combination of 6-20 characters• It is used to identify and track your product on a system• Before you can sell on most online marketplace, you will be
required to give your product a unique SKU
Not Same SKU
WDB1100RW WDB1100BR
Inventory Management Basics
Why is SKU important?
• Attach and collect information for each unique product / Variation• Name, Description, Size, Weight , Value• The basis for inventory management.
SKU Count SKU Movement
• On average, merchant stock around 200-300 different SKU
• 20% of your SKU will contribute 80% of your volume
Inventory Size
• Track your product history
• How long has the product been sitting around?
• How many qty has been sold? daily?
• Space Occupied(Storage Cost)
• Inventory Value(Money tied down in stock)
• Inventory Risk(Flood / Fire / Burglary)
Inventory Management Basics
Understanding & Categorising your products (SKU)
• Find how many units of SKU moved / day (total in / total age in warehouse), Call this Turn (unit/day)
• Sort from top to bottom in accordance to turn,categorised them from A-D.
• Normally A (top 5%), B (5-20%), C(20-50%), D(50%)• Look into the list created and you will find interesting
information about your SKUs.
ExampleXL size pamper’s turn is twice of L sizeL size pamper’s turn is twice of M sizeM size pamper’s turn is twice of S size
XL size move 10 times faster than S size
Inventory Management Basics
Stock Control & Replenishment
Buffer Stock DaysSKU Velocity (Turn)
40
Current Stock Level
Ordered Stock Quantity
100 7 50
How much should we replenish?
What else did we miss out?
Inventory Management Basics
Calculating your average logistic cost / unit
Storage Cost
Processing Cost
Distribution Cost
• Average Stock Age• Fixed
Rent+Utilities+Insurance/Space (M3)
• Packaging Cost• Orders
Processed/Headcount/Day
• Stationary Cost/Total Orders
• Total Delivery Cost / Order Qty
logistics cost on average is 10%-15% of revenue
How can we reduce this cost?
Inventory Management Basics
Storage RM1
Processing RM2
DistributionRM7
Increasing basket size and consolidation of items.Increase Item velocity, reduces storage cost
Delivery charges shared among more items, reduce distribution cost
Storage RM0.5
Processing RM2
DistributionRM4.5
Standard Logistics Cost / Unit
Fulfilment in a Multi Channel Environment
International Marketplace Personal Web Store
Sales channel becoming more and more complex!
Group Buying
VerticalsLocal Marketplaces
Social / M-Commerce
Fulfilment in a Multi Channel Environment• In order to maximise sales, merchant will list all SKU on all channels• Sales happens in real time across all channels, inventory updates
are not updated.• Too many channels to manage, each channel have their own
management system, takes more time to update delivery details and manage orders.
Result• Over sold happens frequently, resulting in delay in delivery and
reduce customer satisfaction• Orders not fulfilled / delayed.• Tracking information are not updated accurately• Consolidating inventory agains sales becomes more challenging
How to manage this?
Fulfilment in a Multi Channel Environment
Managing Self Fulfilment
SoftwareLabour Packaging Hardware
• Hire more hands to pick and pack, process more orders and monitor each order status.
• Buy more boxes to reduce damage and standardise packaging process
• Get an inventory management software that is catered to B2C businesses
• Buy a dot matrix printer for manual CN
• Buy handheld scanners to scan delivery tracking code
Invest in more space & warehouse racking
Managing Multi Carriers
Local Carrier International CarrierSpecial Service Carriers
COD, Cold
COD, Same-Day
Parcel Lockers
Tesco,Petronas& LRT
Optimising Last Mile
On Demand
Managing Multi Carriers
Average Delivery Timemerdeka week
Anticipate spikes and managing recipients expectation
hari raya, one week lead time
Fulfilment in a Multi Channel Environment
Managing Multi Carrier
Tracking & Pick up scheduleDelivery Zone Size of package Returns & Claims
• Sabah/Sarawak = Poslaju,widest coverage
• ODA, outskirt delivery area = extra charges
• Different zone different carrier different price
• Difference in size = different pricing.
• Some scales by every KG, some scales every 250gram.
• Some bracket pricing.
• Try to arrange for the latest pick up slot.
• Distance to sorting hub results in delay in delivery
• Cut off time for collection
• POD
• Attempt count• Return time
frame• Claims clause• Claims
process & rules
Are you ready for eCommerce Fulfilment
Delivery Service
Multi Channel Management
Customer Support
Small (20-100)
Valu
e Pr
opos
ition
s
The Need for a Central PlatformBy integrating various aspect of the supply chain together. We can then maximise value
Fulfilment Service
Analytics
Medium(100-300) Orders/DayMicro
(10-20)Large
(300+)
The value of an on-demand scalable fulfilment service becomes even greater as volume increases
Sales channels becomes more varied and complex as market shares increases
Savings from consolidation and logistics cost optimisation becomes more prominent
As Volume increases, optimisation of supply chain results can become a leading advantage against competitors
By successfully implementing good customer support service, such as returns and warranty policy, customer loyalty and awareness increases.
As size grows, more value is gained by engaging the right fulfilment partner
IStore ISend : The Story So FarData Analysis
Rigorous data analytics of clients’ distribution data allows us to unlock value for clients, allowing for cost optimization and serve untapped markets
Customer Focus
Flexible technology and processes allows us to collaborate with clients on new distribution channels and market opportunities
Client Integration
Full seamless integration of proprietary WMS with clients uniquely allows clients to reduce costs and redundancies
Industry Leader
Every step of the logistics process is digitally tracked and benchmarked, resulting in the lowest shrinkage levels in the region
Focus on Technology Optimization and Integration
50,000 sqft build up space
4 Storeys of Shelving
6 tier racking
50,000 pick faces
TPG Warehouse
ODiN (Online Delivery & iNventory System
Multichannel Management• Order History• Order Creation• Inventory
Management• Reporting Tools
Order StatusFrom Pick to PackingDelivery Status
Visit iSIS at www.istoreisend.co
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