Key Takeaways from Parcel Forum 2019
Parcel Forum is billed as the only conference dedicated to professionals responsible for shipping, warehousing, packaging, distribution and delivery of parcels. From what we saw over three days that is 100% correct.
This year’s PARCEL Forum in Dallas was a huge hit. Three days of networking, learning, and collaborating with Supply Chain professionals focused on shipping, warehousing, and distribution of packages. This year’s conference had the added urgency of expediated shipping wars and increasing costs in both the exploding Direct-to-Consumer market and Intracompany shipping. Adapted from Susan Rider and Gwen Rhine’s event wrap-up summary, here are some lessons learned over the event’s 72 hours. These are in no way all of the takeaways, but we will try and expound on some of the highlights.
SALT: Space, Accuracy, Labor & Throughput
Save CapEx by doing the math first. By addressing the SALT opportunities, you can gain efficiencies without adding square footage, expensive automation, or people. Hire an outside consultant, consult current vendors, or task your internal BI teams to dive deep in the data to look at how you are utilizing space, inventory, and existing systems. Nine times out of ten you can find opportunities to make changes that are affecting your throughputs.
In regards to labor, “it is easier to retain than to recruit and train.” Spend the time to recognize, train, and lead your employees rather than have them move on. Your best employees perform much better than the temp workers that will fill their spots.
So why do so few companies use a rate shopping engine during the eCommerce experience? The answer is often performance. Given the necessity of speed and throughput in eCommerce, if you were to use a PTMS to real-time rate shop, millisecond response times are paramount.
Compare Net Cost Per Package when deciding on carriers
Incentives and discounts both look pretty, but for example a percentage off list price doesn’t always mean what you think it does. The devil lies in the details of contracts and fee details like the DIM divisor, fuel surcharges, and other accessorials could more than consume the “savings” if not accounted for in calculations. Make sure to review actual invoices versus what you negotiated for at the beginning of the last contract.
Check the gap between actual usage and contract
It may be time to revisit your contract to validate your actual shipping matches what was expected when the contract was negotiated. Audit your current output and your contract to see if gaps exist and then take an honest look at what you are being charged. Variance report auditing could uncover a lot of money that was left on the table and be directly bringing down your bottom line.
(Additionally, when entering carrier negotiations, you don’t have to lay all your cards on the table ‒ only provide the information necessary. And keep in mind one of the pros of utilizing regional carriers: everything is negotiable.)
Recognize operators that are Rocks Stars
As with all labor, a constant flow of people in and out of your Supply Chain burdens overall effectiveness. You might think you have easy processes to learn and systems that run themselves, but you will truly find out how vulnerable they are when you lose institutional knowledge base that knows every square foot of the warehouse.
Not everyone wants to be a manager; there are several ways to recognize people that don’t want to be promoted. Maybe look at production numbers and set up an incentive program. An incentive program that pays out for performance during peak could reap dividends.
Call out those workers that are there every day, those grinders that make the places move. Recognize them out loud and in public by letting them know they are valuable and appreciated. People leave when they don’t feel recognized. Sometimes it is more than a paycheck; get those rock stars involved by asking their opinions and provide them an opportunity to provide insights from the floor.
Find accessorials or fees from your carrier you can control, for example with a little research you may find address corrections are costing you over $100k per year. Ask your PTMS to correct malformed addresses if your OMS isn’t capable (and if it is, it’s a solid backup option). A simple change with your PTMS provider could save you hundreds of thousands a year. Make sure to create a summary report/export of these bad addresses and fix them within your OMS and CRM so they don’t come back to haunt you.
Stop Paper Picking
We understand that such a statement is easier said than done and can be quite an investment. A good inventory control system that uses barcodes and handheld scanners will increase order accuracy for better customer experience and stop incorrect orders that tie up inventory with lost product and returns. Sending out incorrect orders eats up money in returns, lost revenue, customer experience, and your time. Your accuracy goal should be well over 98%.
If you can’t get rid of the paper, look at the font. As Susan Rider said, increase the font of the location, SKU, and Quantity to be human readable and watch as the accuracy goes up; nobody can pick at speed reading an 8pt font.
The “3 UP 3 DOWN” method
You can reduce firefighting in your warehouses by implementing this strategy. This can be as simple as note cards and in a weekly meeting, list out three good things and three bad things. Demystify your culture that all bad things are bad things. Bad things happen, people make mistakes, conveyors go down, systems crash, best laid plans go pear-shaped. Make these learning experiences and opportunities to get ahead of situations. Like a bad smell that won’t go away, issues tend to get worse if you don’t act on the root cause. Use the three good things to make recommendations in other departments and give credit to individuals.
TMS Integration and Utilization
It is time to get full visibility of your shipping ecosystem and track with KPIs. KPIs are only as good as the effort you put into tracking and reporting on them. If you have a spreadsheet filled with columns of numbers and you only care about a few of them, simplify your report.
Cost optimization doesn’t do you any good if you aren’t rate shopping.. Rate shopping within a single carrier is helpful (for example, Ground should be an option in your Expedited rate shop if TnT proves delivery is possible), but a true multi-carrier rate shop including all carriers ‒ including regionals ‒ is essential to recognize the most savings.
Daily communication for projects
Nobody likes daily standup meetings unless they are productive... and many aren’t. Head the cynicism off by showing your team you are getting ahead of problems and allow every team member, vendor, project lead, stakeholder an equal opportunity to speak. These can be quick with agenda items related only to what is pressing and a time limit on how long you can go on a topic (before taking it offline with necessary stakeholders). Be respectful of everyone on the call, and make sure that there is a system in place to track all notes and progress. This way it gives everyone the ability to hold each other accountable, and limits finger-pointing due to expectations don’t meet reality.
In addition to usual strategies to optimize your current parcel fulfilment and delivery, a primary focus of Parcel Forum this year was how to adapt and grow into the future by taking advantage of warehouse innovation, and/or expanding your delivery network (Regional Carriers, anyone?) Of particular interest was the session on future delivery options comparing drones, autonomous vehicles, and crowd-sourced delivery. Marc Gorlin, Founder and CEO of Roadie made quite the convincing argument as to why crowd-sourced delivery options, as opposed to fixed asset-based models, will lead the way. With 250 million cars on the road, with 4 billion cubic feet of space, “it’s not about building a new infrastructure, it’s about revealing one.” Roadie clients like Walmart Grocery and Home Delivery are already using crowd-sourced delivery options with proven success – it’s definitely a model worth exploring to see if it’s a good fit for your logistics strategy.
As always, Parcel Forum offered up plenty of valuable information, and it was a pleasure to meet so many valued partners; hope to see you next year!
We realize this piece is very high-level, and if you’d like to drill down on any of our recommendations, reach out to us with questions or comments. We also welcome opportunities to deliberate or dispute our insights and recommendations. No conversation is off limits; you are an expert and we'd love to speak with you.
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