Cover Story : How Fast Is Your Fulfillment?

Take the test: operations best practices revealed

Research consistently shows that the quicker a company can get fulfillment materials into leads’ hands, the higher the sales conversion rate, says Mac McIntosh, a B-to-B marketing consultant based in Kingstown, R.I.

In order to meet and even exceed delivery expectations, the benchmark for order handling is same-day processing so kits can enter the mailstream or get handed off to an expedited carrier in the same window. Of course, all fulfillment facilities have daily cutoff times, after which incoming requests are counted as part of the next day’s volume, explains David Lowndes, director of product development at Iron Mountain Fulfillment Services, a fulfillment services firm in Milpitas, Calif. These cutoff times are coordinated with marketers’ data feed cycles as well as the time zones in which facilities are located.

To reach the benchmark of same-day processing, other benchmarks must be met. The appropriate material must be in stock, and the facility must offer some redundancy in procedures and equipment to ensure no single point of failure. For example, says Lowndes, if a press goes down, either a similar press should be available to pick up the slack or the fulfillment firm should have the ability to route items to another facility acting as a standby.

Other contingency plans include setting a business rule that when warehoused pieces run low without reorders, the fulfillment facility automatically can shift those items to print-on-demand production to avoid delays, as well as linking replacement items so if brochure A runs out it can be replaced with brochure F.

“The goal is to present a fully executable order within seconds of receiving to always ship fulfillment within the same day of the request,” says Paul Demirdjian, president and CEO of Tampa, Fla.-based Jagged Peak, a provider of e-commerce and supply chain software and services.

2. What is the minimum number of inventory alerts needed?
c) Three

While inventory management involves a good deal of automation, the computer can’t make the decisions without the marketer’s guidance. Because human brains can juggle only so many priorities at a time, multiple inventory alerts work best to provide marketers with enough notice to either reorder or make small alterations to an item or supply an entirely new piece.

Lowndes recommends one alert to communicate when inventory levels hit established trigger points, one alert to signal a switch to print-on-demand production and another alert to signal the move back to the preferred production method. The threshold minimums should be set to identify quantities that will last longer than it takes to get the items printed (or copied, in the case of CDs and DVDs) without incurring rush charges.

This level of explicit communication not only allows marketers to get ahead of opportunities to fine-tune or test kit elements, but also to adjust program costs for tighter budget tracking.

3. Which is the more cost-effective kitting approach?
b) Build to order

While build to stock—meaning kits are preassembled in anticipation of demand according to volume forecasts—has been the standard practice for decades, the increasing adoption of digital printing to customize fulfillment materials and reduce waste of obsolete materials has precipitated a shift to a build-to-order environment,
says Demirdjian.

“Cost comparisons show that build to stock is more expensive over the long term,” he states, due to the time and expense of dekitting to remove unwanted elements and then rekitting as appropriate. But, he adds, marketers don’t need to view kitting as an either/or scenario; build to stock is useful in about 10 percent of programs.

Lowndes agrees, pointing out that on some very large programs or campaigns for which the immediate response can be forecasted accurately, the fulfillment facility can compile the majority of the kit save for customized elements that would get printed on demand.

4. How should completed order updates be communicated back to the marketer?
d) All of the above

OK, this is sort of a trick question. The best practice is for fulfillment status data feeds to at least match the frequency of lead data feeds sent to the fulfillment firm, says Lowndes. So, if a marketer sends a daily blast, the fulfillment vendor will reply with a daily update, usually at the end of the last work shift. If the leads are delivered to the fulfillment firm in real time, then that’s how the lead fulfillment data should be processed.

With respect to the details shared, Lowndes says the update should include the status of the request, what was sent and, if the request was not fulfilled, why (e.g., missing data points or data points that conflict with the marketer’s business rules). Then, the marketer and fulfillment firm can work on any courses of action to process these leads according to the marketer’s lead management guidelines.

McIntosh explains that “most marketers have their fulfillment database separate from their CRM system,” and do daily batch processing where the two databases reconcile during the night. To reduce gaps in service and convert more leads, he notes, sophisticated marketers have invested in systems that tie in to their enterprise resource planning systems so information can be transferred in real time and leveraged for a more holistic viewpoint on customer interactions.

Such real-time visibility into the lead handling process rapidly is becoming a key requirement in business, says Demirdjian. “The days where you call the warehouse to find out what happened to your order or where your inventory level is should be gone,” he states.

In addition, this seamless transparency results in the reduction of backup contingencies, along with improved customer service and systems availability. With immediate insight on inquiry volume, the supply chain “moves from forecasting into nearly real-time” operations management, explains Demirdjian. “Today, you see all the demand coming in that needs to be fulfilled tomorrow.”

5. With digital fulfillment, it’s best to?
c) Serve Web page with link during online visit

When fulfilling information requests online, turnaround should be immediate, the experts agree. Depending on the marketer’s Web site capabilities, it’s best to follow the successful completion of a form fill with the serving of a Web page that contains the link to the downloadable materials.

An alternate method is to have the form completion trigger an automated e-mail that provides a link to a landing page where the requested materials can be downloaded.

What’s increasingly being avoided in regard to digital fulfillment is attaching the materials in PDF form to an e-mail. As Lowndes points out, some companies’ servers filter e-mails with attachments that exceed certain size limits. And, adds McIntosh, people tend to be wary about opening attachments due to computer virus threats.

McIntosh cautions marketers to be careful of going all-digital with lead materials. He’s seen research that shows people might appreciate the immediacy of a digital format, but they also like to receive the materials in color by mail—especially if they want to place their orders via mail and there is no print-and-mail mechanism in the digital materials.

One final piece of advice on digital fulfillment from Lowndes: Aim for the print and electronic materials to mirror each other as best as possible. If the electronic messaging is targeted, then the print kit should be, too.

6. The biggest missed opportunity in fulfillment programs is?
a) Not enough testing

“All types of communication programs should incorporate a learning process,” says Lowndes. Marketers always should be working different creative, channels, number of touches and other applicable aspects into their fulfillment programs. Doing so as a matter of standard practice allows them to determine what works and then continually refine programs for the best possible ROI.

“It’s easy to say, but not so easy to do,” Lowndes admits, advising marketers build a foundation for testing into the program from conception, making sure there is access to the data needed for analysis and that the responding audience can be chopped into representative cells.

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