3 Tips for Finding a Distribution Center with Fast Order Fulfillment

Posted by JR Siegel on Wed, Apr 24. 2013 @ 11:04 AM

Ecommerce customers are an impatient lot.  They want what they bought from you, and they want it now.  Want proof?  Look at recent moves by WalmartGoogle and Amazon to test the viability of same-day order delivery.   

 

Waiting for eCommerce order                      Don't make eCommerce customers wait around (they get anxious)

Most retailers don’t have the resources to build out a fleet of truck and distribution centers to compete with these giants.  Thankfully, there are ways to compete—and win—without your own fleet of trucks. 

Here are three tips for selecting a third party logistics company (3PL) that can deliver fast order fulfillment:

  1. Select a 3PL with a distribution center that can reach your customer base quickly.  From our facility in Devens, MA, Quiet Logistics reaches 45% of the US population, and 56% of fashion customers, via two-day ground.  Ask potential 3PLs for their shipping zone maps and analyze how much of your customer base they are able to reach via next-day, two-day and three-day ground service.   
  2. Select a distribution center that can handle seasonal order spikes. Fulfilling nearly 100% of customer orders same day during the February retail doldrums is easy.  Achieving similar results during the holiday rush when orders are flying off the shelves and seasonal labor is hard to come by, is hard. Ask third party logistics companies how they fared during last year’s holiday season.  Ask about contingency plans they have for future holiday seasons and sales spikes and what they learned from last year.  An operation that doesn’t review past performance and make changes to improve future outcomes will most likely fail during high volume periods like the holidays when every order is time sensitive. 
  3. Learn about their standard service-level agreements (SLAs).  Typical fulfillment services contracts contain SLAs around two key metrics:
    • Dock-to-stock.  The amount of time it takes from when a distribution center receives a product until it is placed in a pickable location.  The shorter the dock-to-stock time, the better.  Good fulfillment partners should commit to receiving all products within 48 hours in their SLAs.  Ask 3PLs what their standard dock-to-stock SLA is, how often they meet it and why.
    • Fulfillment time.  The interval between when a distribution center receives a customer order and the order leaves the building on a carrier truck.  SLAs vary based on customer requirements, so it is important to ask potential 3PLs what percentage of orders ship within their customers’ SLAs.  In addition, ask 3PLs about what percentage of orders ship same-day, next day and within 48 hours.  The caveat here is that if most customers have a fulfillment SLA of 48 hours or less, a distribution center will most likely have a low percentage of orders that ship same-day.  To dig a little deeper, ask 3PLs about the most stringent fulfillment SLAs they’ve met and the past.

When looking for a distribution center, don’t lose sight of other crucial aspects of order fulfillment like order accuracy and order presentation.   

Click here to download The 7 Keys to Analyzing Ecommerce Fulfillment Providers Ebook

Topics: Third party Fulfillment