There are some simple mantras in business: When buying online, people expect a quick response, or they'll go elsewhere; e-commerce is on the increase, and when volumes go up, costs tend to go down.
But it's not always that easy: the credit crunch, rises in fuel prices and environment concerns have a marked impact on mailing and fulfilment operations. This means that now, more than ever, the back-end operations of any marketing campaign should not be treated as a commodity, since an open dialogue between client companies and their suppliers can led to more efficient working practices, which can cut costs.
Prolog says its governmental clients are forging ahead in terms of efficiencies in print-to-order as part of their sustainable agenda. According to the mailing and fulfilment house, the Health and Safety Executive (HSE) and the Department for Children, Schools and Families (DCSF) are in the lead in this field. "Their business models are making a virtue of small volumes and the trend is definitely going towards downloads versus hard copies," says Tim Logan, associate director, account management.
Reducing the number of hard copies sent out can save on fuel and dispatch costs, as well as being more environmentally friendly. Kevin Telford, strategy director at Dataforce, says his client, Holiday Cottages, has also started to think twice before it sends out brochures.
"It is asking consumers if they would like a PDF instead," says Telford. "And it is are tracking consumers online and sending thinner, more personalised brochures."
"Personalised digital print on demand is more cost effective and the ROI is better," he adds. "The technology is getting better all the time."
Those mailing and fulfilment suppliers who are ahead of the game upgrade their systems continually and ensure they have the best technology that's available. JEM, for instance, spent about quarter of a million pounds developing a live reporting system. Prolog has built a complex in-house IT system, which dovetails with the use of handheld scanners, to improve pick accuracy.
Many use automated dispatch manager software, which makes it possible to swap courier provider with the touch of a button. Such systems can help avoid the writing off of good stock by identifying the most appropriate packaging, or initiate what's known as a 'white glove service' if anything goes wrong.
Many mailing and fulfilment houses claim to be taking on a more 'consultative role'. Even so, JEM's managing director, John Mills, says that the type of services offered generally boils down to what the client asks for. "We are constantly reviewing couriers. You can go for 'cheap and nasty' with no tracking or you can go for next-day delivery. Our clients are split into two camps - some prefer the cheapest option, others like value-added services," he says.
Yet, as competition on the web increases, it can pay to invest in what may seem like minor details. Prolog plans to provide an in-house SMS system by next year to allow more sophisticated alert and notification systems. It says that clients Mothercare, Tearcraft and Imperial Tobacco have all expressed interest in the scheme. "By using a text alert or confirmation, you can optimise the drop off journey. But clients aren't necessarily aware it exists," says John Shore, Prolog's associate director, logistics.
So businesses with an online presence would do well to talk to their mailing and fulfilment partners at an early stage. Granby's head of marketing, Stewart Oxley, says that being proactive can reap rewards."One client supplied us with proofs of a carton it wanted to use and asked for feedback," he says. "The design would have been time-consuming, so we suggested an alternative, which cut packing time by more than half and saved over £10,000 on packaging costs."
Over the last couple of years, Granby has implemented a small volumes unit, enabling the company to take on smaller clients. The unit is a single, self-contained operation, a microcosm of the larger warehouse, which allows smaller jobs to be run more cost-efficiently.
"This works well for promotions that are winding down, or large value items, which may only shift 20 items a day," says Oxley. Kimberley Clark is one client company to have taken advantage of the unit, for orders placed on its andrexpuppy.co.uk site.
"It is never going to be sending out the same volumes as a firm such as Amazon," he says. "Having this self-contained unit also means that smaller volume jobs don't get lost in the larger noise."
It may sound prosaic, but minor tweaks to tried and tested systems and storage facilities can make all the difference when warehouses are shifting hundreds of thousands of products a day. Mark Hewitt, chief executive at iForce, says it's incumbent on suppliers to work with marketing departments to calculate the stock profile and products that are likely to move the quickest, so replenishments are quicker. "It's never going to be a perfect system," he says, "but you can't underestimate the importance of laying out warehouses properly".
Using handheld devices on the stock floor can provide accountability through the business, identifying errors or training needs as they occur. The technology can also be tied into email or SMS programmes, keeping customers and clients updated as to the exact location of stock, at any given time.
The quality of staff at any mailing and fulfilment operation is also key. Alongside standardised training procedures, many suppliers have turned the peaks and troughs of an uneven workflow into a positive for staff, by enabling them to work flexible hours.
Oxley explains that Granby employs a low, permanent staff base, but uses a temporary staff register of 250 people. These people are skills-checked beforehand, so it is possible to get 30 to 40 extra staff in the warehouse in 24 hours. "By using the same people again and again, there's no need to re-train,"he says.
Forward thinking mailing and fulfilment firms have also built up FAQs and returns lines, so that agents are prepared, and the customer experience is improved. Cutting costs doesn't necessarily mean damaging the customer experience. With the right provider, it can and should go hand in hand with getting parcels delivered intact and on time.
POWER POINTS
- Reducing the number of hard copies can save on fuel and dispatch costs, as well as being eco-friendly;
- The trend is going towards downloads;
- Mailing and fulfilment houses are taking on more of a consultative role.
CASE STUDY: TEARCRAFT
Client: Tearcraft, part of development charity Tearfund
Brief: To provide a scalable fulfilment operation with excellent customer service
Supplier: Prolog
Tearcraft is the mail-order craft business of Tear Fund, a relief and development charity, which creates employment opportunities and fair wages in third-world countries.
Cost wasn't the charity's top priority, but customer service was. However, over time, increased efficiencies have meant Tearcraft isn't spending any more than it was six year's ago. "By pushing traffic to the web, we have saved money," says Neil Stephens, business manager.
"Over half our business is now done via the web, compared with less than five per cent in 2002. And our returns rate is also very low."
After some disappointing partnerships, the charity researched the market to find out which firms would be capable of fulfilling its requirements. It short-listed five and finally opted for Prolog, which it has been working with since 2002.
"We wanted a long-term partner, which had the capacity for us to grow alongside them. Our long-term objective is to outsource, not to have our own warehouse," says Stephens.
"At Prolog, the level of flexibility with the shift work helps. The staff may choose to do overtime and then take a few months off."