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Best Practices for Mastering Direct-to-Consumer Shipping with a Consumer Goods ERP

Best Practices for Mastering Direct-to-Consumer Shipping with a Consumer Goods ERP

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Best Practices for Mastering Direct-to-Consumer Shipping with a Consumer Goods ERP

26 Sept 2019

Ken Weygand
person accepting package from delivery worker

Direct-to-consumer (DTC) shipping is more than a trend.

It’s a new way of doing business. And it’s here to stay.

For the consumer, it’s easy to understand why. Online shopping has not only simplified the buyer’s journey, but it also offers nearly immediate delivery. For consumer goods importers and distributors, keeping up with a landscape that has changed so dramatically is a monumental new challenge.

What is DTC?

Historically, the traditional retail fulfillment model was straightforward for consumer goods importers and distributors—full pallets were shipped directly to retailers. It was as simple as that.

The emergence of direct-to-consumer (DTC) shipping has delivered a new complexity to the traditional fulfillment model. Instead of sending products to retail locations, distributors are now in a position where they must ship to various retailers, meeting strict OTIF standards, in addition to managing direct shipments for thousands of retail customers.

This shift in retail fulfillment has greatly increased the challenges consumer goods distributors must solve, namely: boxing, labeling, and ensuring on-time, every-time residential delivery.

While it’s common for industries and organizations to experience waves of change in processes due to technology, distributors are facing an entirely new way of operating. What are some of the challenges they face?

Top 4 Challenges of DTC

This shift creates four key challenges that distributors now have to tackle:

  1. DTC Increase Order Volume: The warehouse is now faced with an overwhelming amount of orders, reaching into the tens of thousands during peak times.

  2. DTC Increases Fulfillment Requirements: Retailers are demanding that businesses adhere to their rules, from order confirmations to availability updates to slapping branded packing slips on shipments. Fines can add up if businesses can’t keep up.

  3. DTC Adds Complexity to a Warehouse: Shipping full pallets is easy for your staff, but pulling thousands of small, often one-parcel orders at a time adds new complexity to their workday. Too much has changed for employees to continue operating the way they always have.

  4. DTC Requires More Shipping Methods: E-commerce shipments aren’t reaching their intended destinations in a traditional fulfillment model, which requires the use of small parcel providers. Consumer goods retailers and distributors need to be able to select the right carrier, control costs, and meet their requirements..

An ERP designed specifically for the consumer goods industry can help prepare businesses for the challenges associated with transitioning to DTC. Having the right tools and the right technology will help business owners to manage the complexity and volume that transition often brings.

Let’s look at the best practices you can use to make sure you’re keeping up with the deluge of ecommerce activity.

Best Practices for Managing Volume

With tens of thousands of incoming orders expected on peak days, the order volume can overpower the human capacity needed to manage it.

This is where electronic data interchange (EDI) can offer big benefits.

EDI is a method of communication that, when integrated into an ERP solution, allows users to share and exchange necessary order information (addresses, items, quantity) with customers. EDI is the standard of business communication today—automating the process of managing volume eliminates the potential for human error from manual order entry.

While ecommerce has revolutionized the buying process, the delivery process remains directionally challenged and prone to address accuracy issues. Without address verification, products that fail to reach the appropriate destination return to the facility with hundreds of dollars of fees and chargebacks. When integrated into an ERP, EDI has an address verification.

An ERP with integrated address verification can confirm that each address is valid, and staff can more easily manage the small number of invalid addresses without losing money and eroding margins.

Real-time inventory is critical in the age of rapid ecommerce. Retailers want to feel confident that the products on their website are in fact in stock, and distributors to feel confident that they can provide accurate inventory data to retailers. Your ERP solution—with EDI communication—not only ensures you’re keeping up with the volume and sheer demand but that you are doing it accurately and efficiently.

Best Practices for Streamlining Warehouse Processes

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, which means 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—along with the many repeat trips to the same location. Instead, orders can be pulled on an automated schedule based on a summary of how they are categorized and ordered.

With automated ERP bulk pulling capabilities, you can automate the entire process and pull orders as they stream in throughout the day, rather than waiting on an operator to determine when to pull them. An ERP solution, for example, can generate pick instructions for any new DTC order that has inventory allocated to it every thirty minutes.

Best Practices for Meeting Retailer Requirements

  • Proper labeling, branding, and packing: It may not be the retailer shipping these products out, but unless you want to be penalized, it would be beneficial to make it look like the package came directly from Walmart and not your warehouse.

  • Smart parcel tracking labels: Business owners don’t need to jump to another software to generate a tracking label. An ERP can integrate with a small parcel shipping system, so everything is driven by a single system. In the same vein, packing lists with the retailer logo on them should be driven by an ERP, not by an employee who is downloading that information.

  • Integration with small parcel shipping systems: If an ERP isn’t integrated with small-parcel or third-party solutions, it’s likely operating inefficiently in an increasingly high-volume environment by re-keying data.

  • Automated pack lists: Consumer goods distributors face the challenge of customizing packing slips for each retailer on individual orders—a laborious, inefficient process that is often incompatible with existing systems. The most efficient way to manage is to have these packing slips created directly from the ERP.

Future-Proof Tools for a New Fulfillment Model

It’s not that change is coming, change has already arrived.

Now is the time to adapt.

Digital transformation is necessary to keep up with demand. The shift in the buying process requires a shift in the fulfillment process, and it starts with ensuring you have the tools and technology to manage and ship high volumes of small parcels with efficiency and accuracy. It starts with Aptean.

Ready to master DTC? Find out how, now.

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