Occam’s Razor asserts that among competing hypotheses, the one with the least amount of assumptions is usually the best — and growing up, that usually translated to my father saying “why are you making things so complicated for yourself?” I was reminded of this recently when we were called in to a prospect’s office to talk about logistics management software.
In their environment we found; two different warehouse management systems, an external shipping optimization tool (which charged the prospect per optimization), two different ERPs, a CRM system, countless Excel spreadsheets that were critical to daily operations and a huge IT infrastructure to support it all. In other words; they knew they had a rats’ nest of systems, growing ignorance of how it all worked together, and unnecessary expense — but they were stymied about how to deal with it all.
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No, I’m not talking about your belly button — I’m much more interested in whether you manage your export compliance internally or use a third party to get your goods to your global customers.
Outsourcing as a model is hardly new. A lot of companies have grown (and a lot of money has been made) by service providers who take the burden off a business’s shoulders for activities that are necessary but not directly tied to the core business. Not that outsourcing doesn’t come with a lot of baggage.
At one extreme is the ubiquitous—and reviled—outsourced call center: script-driven, accent-laden, maddeningly frustrating black holes into which we often fall when looking to solve a seemingly simple problem.
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A recent spate of reports has discussed the increasing availability of same day delivery services for parcel carriers, primarily around retail purchases. Driven by the likes of Amazon, industry pundits are sounding the death knell for brick and mortar (and particularly small) retailers. Others much brighter and more eloquent than me can debate that issue (I personally think the notion of small retailers being wiped out is overblown—the successful ones will be specialized to a market, a cause, a certain set of needs.)
In this week’s blog, though, I want to continue the discussion around the current parcel carrier shipping model and how that model could change. I’m also interested in your views of whether you think the current near-duopoly serves the commercial world well or if there needs to be more effective competition to ensure that we’re all being taken care of in a cost effective and service-oriented way.
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As I mentioned in part one of this series, I’m wondering aloud if the complex pricing and service models that we see in today’s parcel shipping world are helping or hurting the industry. Look, everyone’s in this to make money, I get that—that’s why it’s called a “business”. But after diving deeply into the pricing and service world late last year in preparation for a look at 2013 parcel shipping pricing expectations, and especially the comments after the broadcast, it’s clear that there is frustration and confusion in the market.
Complex pricing and service models are nothing new, if you read a mobile phone bill, a cable bill or a network services bill, chances are you can’t figure out why you are paying what you’re paying. Is there a correlation between the least liked industries in the country and the complexity and services models that are employed? I’ll let you decide that.
Choice is good, but there needs to be a balance. Five different types of overnight services for the same categories of goods might not be necessary, and it does add cost to the overall model. Consider the impact of “choice”: for the shipping services provider it creates a proliferation of handling requirements, packaging to differentiate, delivery services that match the offering. That cost goes somewhere…right?
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In this week’s blog, I want to start a dialog alternative ways of considering the parcel carrier network that exists today. But to start, I want to turn back the clock to the late 20th century.
Back in the golden age of air travel (now a distant memory) You could—and did—travel from point A to point B in a more or less straight line. Travel was an adventure, people dressed for the occasion (no flip flops), and service was something to be enjoyed. Then deregulation hit, and with it, the boon of lower airfares and greater accessibility.
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Recently the Obama administration initiated steps to simplify (or maybe improve is the better word) existing export controls. OK, they are starting with weapons and ammunition controls, which in Fed-speak apparently means aircraft parts and high tech components of various sorts, including, one supposes, F18s, bullets, and maybe Brookstone remote control helicopters.
So what does that have to do with most of us? Well, it appears that this is the tip of the iceberg toward simplifying the country’s overall export rules and regulations — which will have a positive impact on everyone who ships out of the country over time, and that’s good for every sector of the economy.
For those of you who export for a living and follow every byzantine twist and turn of the regulatory agencies, this may be booooorRING…but for the rest of us who would love to expand our business outside of our home country but can’t manage the complexities in a cost effective manner, this comes as good news that should be supported, nurtured, and encouraged to spread—fast.
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Last year, Kewill was honored to receive a prestigious technology award from the United States Postal Service. We were cited for our strong support of automation, our innovation and commitment to ensuring that the USPS is well-integrated into leading edge parcel shipping applications.
From our viewpoint it was just business as usual—how could we not support shipping through such a ubiquitous and critical component of our country’s supply chain? That said, it was a great honor and we were—and are—grateful that our efforts were acknowledged. But that got me thinking… (more…)
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Today’s blog is about mud. Yes, mud.
Kewill’s North American headquarters is in New England, north and west of Boston. For those of you who are not blessed with our abundance of weather, let me explain: we have about 11 seasons in New England. Unlike, say Minnesota or Wisconsin, who have two: winter and construction, any given day in New England may see wind, rain, snow, sleet, thunder and lightning or brilliant sunshine—and sometimes all of the above!
For us, Spring is a “serving suggestion”, kind of like that really delicious picture on the side of Hamburger Helper: just add meat, vegetables, sauce and creativity and viola! A beautiful, delicious meal. The first day of spring this year had most of us had the joy of shoveling a foot of snow. But back to mud…
Once things start to warm up (which they eventually do, so we can complain about the heat) the once solid ground turns to mush. Deep, mucky, boot-stealing mud. Can’t go fast in mud. If you stand still you sink. Try and run, you lose your shoes. It’s gross. Keep that mental image in mind as we turn our attention to import and export automation.
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To keep your e-commerce business in the black, it’s imperative that your first-time customers become your regular customers. To do that you not only need to provide great customer service, you must ensure that you fulfill their orders accurately and deliver them on time while keeping costs down.
“Each campaign is different. One size does not fit all. What is best for one program is not always the best fit for another,” according to an article in The Quarterly DirectConnect.
“Being a creature of habit can be costly. New ideas and methods are constantly being developed. Don’t miss out on efficiencies and savings that your competition is enjoying. So what can you do? Educate yourself. Involve your fulfillment partner and ask questions.”
The Quarterly DirectConnect offers tips for developing cost-effective and successful fulfillment strategies for e-commerce shipping and other companies – strategies that will keep customers coming back. Below are our top 10:
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As e-commerce shipments grow, shippers and sellers are looking for more economical (slower, less expensive) parcel shipping solutions. At the same time, parcel carriers are looking for ways to cut costs, increase revenue and profitability while reacting to the changing realities of the parcel shipping industry.
There are pretty significant changes afoot in the parcel shipping industry – changes brought on, in part, by the ever-shrinking differences in delivery times for express and ground delivery – for both UPS and FedEx, according to Supply Chain Digest (SCDigest). Likewise, the growth of specialty and regional carriers who have completely different delivery models, are adding innovative delivery products to the market, which in turn adds more pressure for performance. But through all this, e-commerce volumes continue to grow and experts are forecasting strong double-digit gains for many years to come, which is good news.
But maybe not so much for the carriers.
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