The introduction of Direct-to-Consumer (DTC) shipping complicates the traditional fulfillment model. Instead of sending full pallets directly to the retailer, distributors now must ship to various retailers, while meeting strict OTIF standards, and simultaneously manage direct shipments.
This shift dramatically increases the number of challenges home goods distributors face and introduces an entirely new way of operating to which they must adapt.
Take a look at the top four DTC challenges and some best practices on how to manage them.
Challenge #1: Increased Order Volume
The warehouse now faces an overwhelming amount of orders, reaching tens of thousands during peak seasons.
Best Practices: With thousands of incoming orders, the sheer volume can overpower your staff. Electronic Data Interchange (EDI), when integrated into an ERP solution, allows users to exchange necessary order information with customers. Automating this process eliminates the potential for human error.
Real-time inventory is critical in the age of rapid e-commerce. Retailers want to feel confident that the products on their website are in stock, and distributors want to know they’re providing accurate inventory data. These tools ensure you're keeping up with the demand accurately and efficiently.
Challenge #2: Requires More Shipping Methods
E-commerce shipments aren't reaching their intended destinations via traditional fulfillment, requiring the use of small parcel providers. Home goods retailers and distributors must be able to select the right carrier, control costs, and meet their requirements.
Best Practices: While e-commerce has revolutionized the buying process, the delivery process remains prone to address accuracy issues. Without address verification, products delivered to the wrong destination return to the facility, ensuing fees and chargebacks. Integrated EDI validates each address and helps staff manage the few invalid addresses remaining, without eroding margins.
Challenge #3: Increased Fulfillment Requirements
Retailers ask businesses to adhere to certain rules, from order confirmations to availability updates. If companies can’t keep up, the fines accumulate.
• Proper labeling, branding, and packing: It may not be the retailer shipping these products out, but unless businesses want to be penalized, it’s important to make it look like the package came directly from Costco or Walmart.
• Smart parcel tracking labels: You shouldn't need to jump to another software to generate a tracking label. By integrating your ERP with the small parcel shipping system, everything is driven by a single platform, including packing lists with retailer logos.
• Integration with small parcel shipping systems: Without proper integrations with small-parcel or third-party solutions, you’re likely operating inefficiently by having to re-key data.
• Automated pack lists: Distributors face the challenge of customizing packing slips for each retailer on individual orders. The most efficient way to manage is to have these packing slips created directly from the ERP.
Challenge #4: Added Complexity to the Warehouse
Shipping full pallets is easy for staff, but pulling thousands of one-parcel orders creates complication. Too much has changed for employees to continue operating the way they always have.
Best Practices: What does the activity on your warehouse floor look like? More importantly, how are you pulling your products?
Future-proofing your warehouse starts with exploring ways to pull bulk products. DTC orders have a commonality, so pulling individual orders is no longer an option to keep up with the speed of demand.
With ERP automation, the paper "pick sheet" process can be eliminated. Instead, orders are pulled on an automated schedule as they come in, based on how they are categorized and ordered, rather than waiting on an operator.
Ken Weygand is Solutions Architect, Aptean Apprise ERP. To learn more about Apprise ERP, Aptean’s fully integrated Consumer Goods ERP solution, visit us here.