Performing a Fulfillment Needs Assesment

By Clint Bolte Information and document fulfillment services are growing by leaps and bounds. A number of distributors and printers are getting into this business because one of their larger clients says, "Take this over and do it right!" If clients are demanding these services, how can your company deliver a qualified proposal?

The answer is to develop a thorough needs assessment. Determining a client’s fulfillment needs will begin with a quantified assessment of the systems, procedures, and practices currently in use. This article will detail the steps necessary in making such as assessment.

The near-term objectives of an assessment is to determine how much warehouse and pick-and-pack square footage to plan for plus what manning level is required. Longer-term objectives are to determine the management information system requirements and the role the Internet might play to aid the ordering and communicating processes.

The person chosen to perform an assessment must be sensitive to all of the operational steps needed to accomplish the tasks. An assessment will typically take several days to a couple of weeks to benchmark the current practices followed by the corporate client. This would be an ideal project for an industrial engineer (IE) or an IE student, but few exist in the printing industry. Any manager could perform this assessment, but again this is a limited resource with many distributors. This leaves one of two choices: a sales person or foreman in the plant. Either would be an excellent candidate, particularly if they have been identified for future career development into management.

Begin by finding out and meeting all of the client’s staff currently involved with fulfillment tasks. Be sensitive to the fear factor that might exist for any of the people possibly losing their job as the result of fulfillment outsourcing. This can often be averted by corporate management discussing the project with all effected employees in advance to allay any concerns they might have. It is not unusual for one employee to be recognized as key to the current operation because of their intimate knowledge of current practices. This person might be offered a full time job in the new facility—with all parties’ concurrence.

The Right Questions

In the information gathering process, a number of questions need answers. These answers need to be quantified and qualified in as tactful a manner as possible. Keep in mind that if the answers to these questions were readily available, the client would not be asking you to solve a problem. While average numbers are helpful, a range of numbers will give a more realistic view of regularity of volume.

Who is ordering the materials? Compile a client listing with names, titles, addresses (postal and email). Get a sense of how current and accurate the list is by asking how often the list is run through USPS approved NCOA (national change of address) software.

How are orders being placed? This could range from telephone orders taken on a scrap of paper to fax-in furnished forms (get a copy of each form being used) to email requests to website responses. In the first two cases, quantify the long distance charges, either dialed by the client or toll free.

How frequently are orders being placed (per day or per week)? The manager and person actually performing the task will offer an average and peak quantity. This needs to be verified. Daily logs are ideal but often not maintained. Daily shipping logs by UPS or Federal Express (FDX) will verify frequency. If shipping logs are available for the past year, they will show potential seasonal peaks in demand. Discuss these spikes in demand with management to ascertain whether they were one-time occurrences, e.g., a new location opening up, or a predictable spike due to an annual meeting, etc.

How long is it taking to fill the orders? A daily log showing date and time each request arrived versus when the order was sent out needs to be compiled. While the verbal response might be "a few days," the proportion of overnight couriers versus UPS ground might clearly suggest that clients are not getting materials as quickly as they like and are complaining or management is attempting to make up for lost time.

What types and quantities of materials are being ordered? Clients who are experiencing delays in getting basic information products often overcompensate by ordering much more than they actually need, in hopes of not running out and having to deal with another reorder delay. There is clear evidence that proven, reliable and quick response to a client’s documentation needs will go a long way in reducing the necessary overall inventory levels. While digital printing clearly offers the goal of responding to each request on-demand, the reality of zero-based inventory is difficult to achieve, at least initially, for many corporations.

What is the current inventory of each line item? If a documented inventory tally exists, this should be tactfully verified. If one does not exist, a physical inventory needs to be taken. In the process of verifying or counting, inspect for damage and potentially outdated material. Indicate how much material is in broken cartons, full cartons, and skids, as different warehouse locations may need to be assigned for each of these category quantities. Also indicate on the inventory form how the product is packaged, e.g., "shrink-wrapped in 25s." Discuss stock-outs, their frequency, and how they are handled. If the current vendor is providing a monthly inventory listing report by SKU, try to get the monthly listings for the past 18 months. This will quickly show the range of skid inventory needed as well as highlight the "fastest movers." This later point is called a "SKU profile." In other words your warehousing manager desperately needs to know the 80-20 profile. That is, 20% of the SKUs create 80% of the movement. These 20% will be stored closest to the shipping area with the least amount of time and distance to traverse to pick.

What is the logic of the current warehouse location scheme? Many information products are grouped together because they are ordered either together or in sequence. Placing these items relatively close together in the warehouse will make the picking chore easier and quicker. Placing the most frequently ordered materials closest to the packing desk will again eliminate unnecessary steps for fulfillment personnel.

How often are new items added to the inventory? How often are older, obsolete items purged? As the use of digital printing continues to grow in providing the most current information, this should help to stabilize the number of inventory items and often help to make the adding and purging tasks become more predictable. However, digital printing will not correct an inventory problem!

How much kitting is required? Kitting requirements can be quite complex if many orders for kits containing many items need to be turned around overnight. Many fulfillment houses accomplish this by building partial kits. If eight of the twelve items are requested two-thirds of the time, it is wise to have an inventory of partial kits prepared containing these common eight items. Picking and packing the remaining four custom items becomes less burdensome in a short time period. However, keeping track of partial kits requires special MIS capability. Invariably when running short of one item, it is borrowed from a partial kit with every good intention of replacing it when the reorder shipment comes in.

Most kitting projects are not ongoing but rather for a particular merchandising or promotional effort. Hearing stories of how kits were previously managed will provide unique insight into how much pre-planning versus last minute scrambling is typically required. In documenting the kitting requirements it is essential to understand the total man-hours required for each stage. If this is not documented, then it will often be at least 50% greater than what is recalled in an interview.

Take Good Notes

In the process of assessing the current status it is very easy to think of numerous improvements that can be made. It is recommended that all of these ideas be saved and not brought up until after a very thorough discussion with the client. This discussion is to allow the customer to express his ideal fulfillment service. In garnering the specifications for the improved service don’t hesitate to ask what the value is for these improvements? Is there cost savings, improved service leading to more sales or more loyal clients?

Come to Atlanta to Hear More

Entering the document fulfillment market takes a major commitment. One of the first steps is educating your key staff members, and knowing what to expect. Clint Bolte is a noted fulfillment consultant to the printing industry. You can meet Clint in person on Saturday May 17th, at the upcoming DMIA Manufacturer and Supplier conference, Solutions 2003 held in Atlanta. For more information on Solutions 2003 click on this link.

DMIA also hosts a Fulfillment Special Interest Group. Learn more about DMIA’s Fulfillment SIG by emailing Marj Green, CDC at DMIA. Her email is mgreen@dmia.org.

You can reach Clint Bolte at 717-263-5768 or at cbolte3@comcast.net.

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