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When outsourced fulfillment doesn’t work, bring it inside
When multi-channel retailer Jos. A. Bank Clothiers brought fulfillment in-house, it cut 24 hours out of its order-fulfillment process.
Managing the relationship with an outsourced fulfillment vendor is one of the thorniest areas of making outsourcing work, Geri Spieler, research director for Stamford, CT-based Gartner Group says. In fact, in her list of 10 reasons outsourced fulfillment arrangements fail, Spieler places managing the relationship at No. 3. "If something goes wrong with fulfillment, guess whose finger gets cut--yours," Spieler says. "If not managed well, you can ruin your entire business."
When that relationship doesn’t work out, however, retailers have the option of bringing fulfillment in-house. Multi-channel retailer Jos. A. Bank Clothiers did just that last year and has cut 24 hours from its fulfillment process, CIO Gary Merry tells Internet Retailer. Bank, which has been selling on the web since August 1998, implemented software from CommercialWare Inc. to manage its catalog business, including performing fulfillment in-house. The system integrates order management, warehouse and fulfillment systems and allows the company to see which items are in stock and to find delivery dates
The outside vendor Bank was using employed a manual system to process orders, which meant that merchandise didn`t go out until the day after it was ordered. Partly for control reasons and partly to make sure it could make changes quickly, Bank took the process in-house. Today, it operates a fully automated system that allows it to ship on the same day orders that come in before noon, Merry says.
Well-executed fulfillment is key to protecting a retailer’s brand, analysts say. "Consumers do not see the difference between the web site and the store and that means the brand is exposed," says Donny Askin, CEO of Natick, Mass.-based CommercialWare. "We`re able to handle fulfillment in a real-time fashion and we can help retailers turn orders around in 24 to 48 hours."