The dot com adventure
By Gary Forger -- Modern Materials Handling, 2/1/2000
Another presidential primary season is here and in some ways it feels like 1992 all over again. Then, it was all about the economy, stupid. And it still is. But this time around we're all nearly obsessed with the new economy of the Internet and e-commerce.But just as George Bush (no W) was a little slow on the uptake about the old economy, there are dot com companies that think e-commerce is all about their Web site. It's not.
Even The New Yorker knows that. "The automated warehouse is as much a part of e-commerce as a Web site. In fact, it is the more difficult part of e-commerce."
Ask the people at Toysrus.com. They know that the customer's loyalty is won or lost in the warehouse. Before last year, they had already lived through one tough Christmas season with a sub-par warehouse. So, the company moved into a facility with experience filling e-commerce orders for Christmas 1999.
As our cover story explains, even that didn't prove to be the magic charm. Some orders weren't processed fast enough, and the company paid out $100 gift certificates to ease the pain. Not everyone was satisfied. As one litigious Mom made clear, dot coms are a lot more likely to be sued for making a mess of shipments than for a bad Web site.
Nevertheless, Toysrus.com is better off today than before. It continues to improve at filling large numbers of very individual orders correctly in an ever decreasing amount of time. As the people there will attest, e-commerce is not a destination, it's a process. It's also an adventure.
And just as there are different routes to the peaks of major mountains, the same is true for order fulfillment in e-commerce. Toysrus.com has its approach. Other dot coms prefer to manage the Web site and let someone else fill the orders. Third-party logistics (3PL) providers across the country are doing just that for many .
One interesting twist is being pursued by systems integrator Key Handling and 3PL NFI, says Key's senior vice president, Steve Martin. The two are strategic partners in what Martin calls an e-commerce incubator in an Edison, NJ warehouse. There, startups such as Planetoutdoors.com can have their orders filled by NFI. More importantly, says Martin, this is not a 3PL facility. It's a 3PO (third-party operation) where the emphasis is on the warehouse operation, not a fleet of over-the-road delivery trucks.
Still another twist on this was announced just a couple of weeks ago. Real estate firm Trammel Crow Co. unveiled plans to build an e-commerce order fulfillment complex next to the Portland, OR airport. But please don't call the buildings warehouses. Trammel Crow prefers "pass-through facilities."
Call it what they like. The point is the same across the e-commerce world. Just pick, pack, ship that dot com order now. If not earlier.
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