Our client, an online retailer of sheepskin products, had quickly outgrown their current premises and were left with the burning question of relocation versus outsourcing.
The main issue as ever was cost. When selling high volumes of low ticket lines they were limited on which SKU's would hold enough margin to fit a fulfillment
They chose to outsource a selection of their slipper lines to Cync
choosing to leave gloves and insole lines and returns handling within their main warehouse in the north of the country.
Fast forward two years and they again faced the ongoing problem of wanting to grow but being restricted by space and margin. The current pricing model included fees for rework and picking which meant that the total cost for handling through a 3rd party fell way above the actual profit on each item.
Identifying areas which could be improved upon, mainly the picking process and the storage options Cync agreed to work with the client to improve efficiencies which would in turn allow the pick rate to reduce and as such open the outsource opportunity to more lines.
Our client applied pressure to their suppliers to have product arriving barcoded and pre kitted and default locations were applied to each and every recurring SKU, allowing not just picking to become quicker but also goods in. Scanning in and scanning out meant that every product had a three scan minimum through its life span within store and operatives spent zero time looking for the illusive size seven in brown.
Through planning and listings management we turned off dispatch for two days which allowed us to strategically relocate over 2K SKU's and apply robust testing to the new procedures and software. The result being that the pick
rate per hour increase by over 340% and as such the costs for picking were reduced by 53%, thus opening up the possibility of taking in more lines.
The results speak for themselves:-
- Cync received an additional 10K picks per annum, (forecasted)
- Charges were reduced by 53% without affecting human resource or service levels
- The client remained competitive within the cut throat world of channel sales.
An additional 1K SKU's were now suitable for outsourced pricing addition and just as important, the inventory inaccuracies have completely disappeared and we are now dispatching orders up until 6pm and everyone knows that this order will reach the retail customer as expected when expected and what was expected.
We would call that a win and more importantly so would our client!