MSC honors same-day pledge
The term “same-day shipping” has become inexorably linked to the customer-service pledge of any e-tailer looking to stay in the game. And while Amazon and subsidiary Zappos built their fortunes on it, rarely do we turn our attentions to how same-day shipping can help an industrial distributor build competitive advantage—and even take the lead in its respective market.
You can add MSC Industrial Supply to the list of companies that built its reputation—and subsequent success—on the same-day pledge. In fact, the distributor of industrial supplies to durable goods manufacturers has been putting its money where its month is since 1991: “We’ll ship your order the same day you place it or send you a cash-back guarantee.”
But what’s most impressive about MSC’s success is how that simple pledge pushed the distributor to stay on the cutting edge of current best practices—from a pick-and-pass order fulfillment process in 1991 to a newly automated, RF-driven process that keeps up with the multi-pronged, e-fulfillment challenge of today.
As executive editor Bob Trebilcock chronicles this month, when MSC first launched the program, different regions of the country had different order cut-off times—some regions could place orders up until 8 p.m. ET while others had until 1 p.m. ET.
But in these early stages, MSC was able to make good on its promise because order times tended to be fairly consistent. “When most of our customers phoned or faxed orders in, we would get 45% of our volume for the day before lunch,” Doug Jones, executive vice president of global supply chain operations, tells Trebilcock. “The pick-and-pass method served us well for years.”
But between 2005 and 2012 the company’s business doubled, mostly through acquisitions, and the supply chain team felt a sudden jump in new volume that had to be absorbed into the existing system. And this surge just so happened to take place during the same time period that customer order patterns were changing due to the Internet.
“Instead of getting 45% of our volume before lunch, we now get 60% to 70% of our volume between 3 p.m. and 6 p.m.,” Jones says. “If you take an order at 4:45 p.m. in a region with a 6 p.m. ship time, that three-hour cycle time is a problem.”
What unfolds is an e-fulfillment evolution success story that’s based on more brains than brawn. It incorporates wave-planning software, high-speed belt conveyor, narrow-belt sortation, put-to-light technology and mobile computing and bar code scanning. The new system has resulted in reduced order cycle times and one order cut-off-time for same day shipping no matter where that customer is in the country.
“For many retailers and industrial distributors like MSC, the ability to order at any time of day and from any device created by the Internet has really changed the game,” says Treblicock. “Now, distribution and order fulfillment systems need to keep pace with these new demands, and MSC is a great example of this phenomenon.”