Bullish on Teamwork: Why Integrate Fulfillment and Shipping Services?

February 19, 2019 by Harry Drajpuch

If the only thing it took to win an NBA title was having one of the world’s most dominant players, the 1984-1990 Chicago Bulls should have been a slam-dunk.  After all, they had Michael Jordan.

Yet the struggling Bulls didn’t manage to win a single championship until the early ‘90s, when new coach Phil Jackson convinced Jordan and his teammates to focus on team play instead of individual glory. 

So what does this have to do with warehouse fulfillment and shipping services?  Plenty.

Much like the pre-Jackson Bulls, these activities aren’t always integrated as tightly as they should be.  In fact, they’re frequently treated as separate silos with their own distinct KPIs and game plans.  That’s not always the stuff of which championships are made. 

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The limits of the “every man for himself” approach

fulfillment and shipping servicesThe truth is most eTail supply chains are far too interdependent for a functionally siloed approach to succeed – especially as companies and their associated order volumes grow and become more complex. 

That’s why you’ll often see many departments inadvertently robbing Peter to pay Paul when they attempt to make a cost-cutting or value-adding improvement.  It’s also why so many individual logistics departments, activities or locations, are often reluctant to “take one for the team,” even if it could eventually drive a big-picture gain.

Consider for example, the case of a retailer that made a move to a new fulfillment center.  The good news is it was a substantial win for the warehousing team because that center offered a significantly lower rent.  The bad news is it was a major loss for the transportation department (the bigger cost center by far), because the facility was situated in an out-of-the-way location that was harder for trucks to access.  

Look at what happened to a direct selling company when it decided to use a different kind of fill material without trial shipments. Although the switch succeeded in making its packages lighter and less expensive (which was a win for the shipping department), it also resulted in more of the products arriving damaged and/or looking like they had been packaged in a haphazard way, which was a major customer service and branding “fail.”

Or, try to wrap your head around the counterproductive implications of a conversation I had with a logistics executive at one of the world’s then-largest retailers in the 1990s. When told that a proposed change could cause major issues for a partner farther down the supply chain, he said, “That’s not my problem.  My bonus and future are predicated on driving costs down in my area, not anyone else’s.” Sadly, it wasn’t the only time I heard such a statement.

As a rule, the more independent you allow your warehouse fulfillment and shipping functions to become, the less likely you are to achieve true strategic improvements that will help take your success to the next level. 

Warehouse fulfillment and shipping services: the power of assists

Neglecting to integrate your warehouse fulfillment and shipping services also results in missed opportunities.

When key logistics players or locations operate in a vacuum, they’re unable to share the kinds of suggestions or best practices that can result in meaningful change – or pass along key observations about pockets of inefficiency in other areas that only they are in a position to see. And that means their companies are unable to benefit from the additional value those inputs might have created. What kinds of missed opportunities am I talking about? 

Well, if one of our clients hadn’t been open to hearing that inbound packages were arriving at one of our fulfillment centers with substantial leaks (and that we thought something needed to be corrected farther up the supply chain), it might still be paying $5,000 per month for replacement packaging and extra receiving fees.

If another client had told us to mind our own business when we advised that a switch from boxes to polybags could save it in a major way, it wouldn’t have trimmed its labor and postage expenses by 25%.

And how many dollars have eTailers ceded to parcel carriers because they decided to negotiate carrier contracts and rates themselves instead of taking advantage of their fulfillment providers’ larger-volume buying power?

The more often you allow for cross-functional cooperation from all of your players, the more likely you are to put more points (aka fulfillment, parcel shipping and marketing efficiencies) on the board.

The final buzzer

By now I hope it’s clear that when individual warehouse fulfillment and shipping functions stop looking out for number one and start supporting the company’s overall goals, everybody wins. 

Such was the case for Jordan and the Bulls, who went on to win a mind-blowing six championships in eight years.  And such could be the case for you and your fulfillment operation, provided you have the right game plan.

bulls-ringsIt also helps to have the right kind of coach.  After all, while some have pointed out that Jackson and the Bulls didn’t win a championship without Jordan, it’s also true that Jordan didn’t win any without Jackson.

So when you’re searching for a top fulfillment company, look for one that has the experience and ability to collaborate with you and bring out the best in your company.  In other words, talk to Amware.

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Filed Under: Parcel Transportation, eCommerce Fulfillment, order fulfillment process, fulfillment operations