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The bar has been raised

Editorial comments on e-procurement

Gary Forger, Editorial Director -- Modern Materials Handling, 5/15/2001

Last year at this time, we were in the getting-to-know-you phase of e-commerce. On the one hand, we hardly got to know a whole lot of companies with the wrong business models.

On the other, we all came to know that in both B2B and B2C, e-fulfillment matters. It's a core competency. If you can't fill an order promptly, accurately, and completely, don't bother to promise it in the first place. But that's easier said than done most of the time.

The Internet research firm Bizmetric did a survey of order fulfillment performance at dot com and click-and-mortar operations during the most recent holidays. "The results, based on Bizmetrics' Transaction Tracking Service," said the company, "reveal that Internet pure plays were faster at order fulfillment than their click-and-mortar counterparts."

Then the company offered real numbers for individual companies on the speed of filling orders, "the interval between the click of the 'buy' button and when the fulfillment operation hands over the order to the shipper for delivery." The best was drugstore.com at 10 hours and 5 minutes. The worst was Target.com at 4 days, 12 hours, and 9 minutes. An amazing gap.

While speed isn't everything, drugstore.com also fills orders accurately and completely. That's a winning profile for any warehouse or distribution center. So much so that earlier this year drugstore.com won the MMH Productivity Award in Distribution, beating out several DCs that have never filled an e-order. Truly, the bar has been raised for all.

The stories in this issue (plus several Web-only features at mmh.com) are all about what's being done to improve e-fulfillment operations. Hopefully, a year from now consulting group Accenture won't be reporting for a second time that 67% of online shipments during the holiday season were not received as ordered.

There are plenty of approaches. Some like Toysrus.com and Borders.com have turned in their orderpicking systems and partnered with someone else (Amazon.com) to handle e-orders.

Elsewhere, companies are finding ways to get a better view of their operations and those of their supply chain partners. They need to know where inventory is and how soon it can move to the next stage of the e-supply chain. And this benefits customers too as companies can now give them a better view into the status of their order on a 24/7/365 basis.

For the first time, manufacturing is becoming part of the equation. A year ago, items expected to be big sellers were ordered in huge quantities upfront. Now, e-fulfillment operations are working much more closely with manufacturers to take delivery on quantities they expect to sell closer to the time they expect to take the orders.

Then there's the matter of returns. Cited as the third most significant reason people don't buy online, returns can no longer be the forgotten child of e-fulfillment. Returns happen and companies are finding more efficient ways to deal with them.

As you go through this issue, keep in mind a comment from senior editor Tom Feare. "By all indications, the e in e-commerce will stand for 'exciting' for a few more years until more companies get it right." Clearly, the bar is going still higher.

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