In recent years the 3PL sector has undergone fundamental changes resulting from the increasing power and capability offered by e-commerce. Today, even companies still classified as SMEs can be processing 10-15,000 orders a day. The rewards for those who get it right can be impressive allowing SMEs to compete head on with the big fulfilment houses and enjoy tremendous growth; but the consequences of getting it wrong are severe with anything but perfection being unacceptable.
Creating the software to handle this type of throughput, whether business to business or business to consumer (dropship) is tricky. Making that software robust and future proof, requires skill and experience. The demands on today’s 3PL companies do not allow for compromise. “They have to deliver first time, every time,” said Tony. “Not doing so can result in the disproportionate costs of handling returns, being demoted in rank by their principals, being badly scored by consumers on the internet, or even the loss of a client. Get it wrong and you don’t get a second chance.”
Conversely, time to market is important too. “Many of our clients require us to work fast to meet the needs of a new contract. If they fail to be ready on time, or miss any of their KPIs, they can be fined, or worse. There just isn’t time to be developing everything from scratch no matter how unusual the application.”
The essentials for an e-commerce WMS are straightforward but must be executed with precision. It must have the ability to merge all the order channels, speed the picking process, ensure zero defect picking, smooth dispatch through interfaces with a variety of carriers, and link the whole process with the incumbent ERP or accounts system. “The key to achieving this, as a standard, is to use experience,”
But that’s not where the process stops. E-commerce suppliers need the support of their technology partners as well. There’
Darren Yull is the Head of IT for MSE Group, the global entertainment distributor that handles up to 30,000 orders a day using MACS software. He said that the use of e-commerce systems from MACS had completely changed the way the business works and agrees that it is experience that really makes the difference. “Moving into e-commerce was new for us, so we really appreciated MACS’s understanding, flexibility and knowledge. The guys get what we are doing and constantly come up with new ideas to help us.”
Tony feels very strongly that e-commerce should not be a bolt-on extra to an existing system, it should be inherent within it. “Having a holistic approach to the strategic development of software is surely the best approach. In my world there is no difference between traditional warehousing procedures and e-commerce. Moving from 100 orders per week to 100,000 orders per week, the management of consolidated orders to individual depots with separate billing addresses, ‘ dropship’ orders, the management of consignment stock and demand forecasting/
But despite the level of sophistication of the ‘standard’
The obligation of an e-commerce supplier is to provide security of outcome. What should happen, must happen, every time. According to Tony Liddar, the way to achieve that is by calling upon experience. Short cuts and quick fixes rarely work.