The Fullfillment Process Part 1

From creating/purchasing the goods/services 

  

that you sell to delivery to your customer 

  

how many steps are involved?

 

Processes and procedures within a business are expensive, therefore it is essential that business owners and managers understand the entire sales and fulfillment process.  The sales and fulfillment process for manufacturing businesses is much different than those of services business, and retail businesses provide still other challenges as well.  No matter your business there are some basic phases involved in the sales and fulfillment process.  Within each phase of the process there may be as few as one process or up to hundreds of processes.  The primary fulfillment phases are:

 

1. Product or service development
2. Sending the product/service to the market
3. Closing the sale/signing the contract
4. Delivery of goods or services
5. Follow-up with customer

 

Let’s look at each of the five phases for three sample businesses and more about this topic will be discussed in later chapters. 

 

Manufacturer:

Phase 1:  Product development:  In this initial step the business determines what it will produce, what it needs to produce the item, and how the item will be produced.  There are typically many different processes that go into this phase of the fulfillment chain.  Some of the critical processes to master for a manufacturing business are the supply of raw materials, the efficient production of the product, and the packaging of the product.  It is important to note that many of the processes in this phase may be impacted by what consumers have to say in the follow-up phase and what the sales professionals determine to be necessary changes.  This is more than likely the most expensive phase in a manufacturing business and should be the first phase to look at when determining if there is waste or inefficiencies. 

 

Phase 2:  Sending the product to market:  For manufacturing businesses this typically involves sales representatives, trade shows, or other means of communicating the product to the market.  Other processes that occur during this phase are advertising the product, sales promotions, and product demonstrations.  This phase is where your business should be making a good impression on the market for the products you manufacture and letting the market know your unique selling proposition and what makes your product different and better than your competition.

 

Phase 3:  Closing the Sale:  In the fulfillment process the most exciting part is closing the sale, because, after all that is what business is all about.  In this portion of the fulfillment process it is necessary that business owners, managers, and salespeople understand the expectations of the customer.  This phase is also where your business will define the legal terms of any contracts, final pricing of the goods, and a date and time for delivery.  Generally, this is a pretty simple phase with few processes however, you may want to analyze the processes within this phase to ensure that they are as customer friendly and efficient as possible.

 

Phase 4:  Delivery of Goods:  During your product development phase it should have been determined how the goods would be packaged and shipped for safe delivery to the customers.  In this phase the processes will include picking the customer’s desired products, in the desired quantities, packaging them for delivery, and shipping the products to the customer.  In many cases this is another expensive phase in the fulfillment process.  Packaging materials and shipping are expensive and the process for picking and packaging orders may be time consuming.  It may be beneficial for your company to utilize technology to make the process more efficient and it is very important to specify who pays the shipping and packaging costs in the sales phase so all parties know what to expect. 

 

Phase 5:  Customer Follow-up:  No matter the business, it is always a good idea to follow-up with the customer after the delivery of goods.  For a manufacturing business the follow-up should be made after the products arrive and the customer is given an appropriate amount of time to analyze and review the shipment.  Any issues that arise from the follow-up should be dealt with promptly.  This phase of the fulfillment process has the potential to not only create lifetime customers but also to provide the feedback on the entire fulfillment process plus any suggestions for product improvements.  This is a true marketing opportunity. 

 Tomorrow we’ll look at service and retail businesses and the five phases of the fulfillment process. 

Filed Under Purchase and Fulfillment | 3 Comments  | March 10th, 2010

Book Review – We Are Smarter Than Me

Book Review

We Are Smarter Than Me

New technologies create new opportunities to change the way we accomplish a variety of tasks.  The authors of this book, Libert, Spector, and Tapscott have used the current rise of social media and social networks to gain information for this book.  The experiment started when the authors realized that there is great power in the community and that the power within the community can have huge implications for organizations and business.  This book discusses the power of communities not only as comentators on a product or service but also great contributors to the success of a product or service.

We Are Smarter Than Me uses real world examples of how organizations have utilized communities (or crowdsourcing) to improve their research and development, marketing, customer service and virtually all other components of a business.  The vignettes presented in the book from such notable companies as Proctor and Gamble, Intuit, and Netflix show the various benefits of  using communities.  As the title of the books suggests the communities are smarter as a whole than a company’s management can be by themselves.  For example we learn in this book that Virgin Mobile created a team of elite young and active customers that served as both a focus group for new ideas and products and a loyal customer base that promoted the service to peers.

We Are Smarter Than Me also includes tips on how to use a community for your own business needs.  Another example in the book shows that loayl customers of a company can also serve as the support team.  A business can create forums for people to ask questions about a product or service and loyal, long-time customers can be given the job of moderating the forums, in many instances without any expense to the company.  This also serves as a way to show that the business is open and honest about the products and services it offers.

Reading this book helped me realize that all businesses should make the effort to create, develop, and nourish a community of loyal customers to spread the word about the business, provide valuable feedback about the products and services, and finally serve as goodwill ambassadors of the company’s brands and products.  For a very important lesson on this check out page 63 where the authors discuss P&G’s word of mouth program.  Go on out and create a community of your own with the advice and counsel of Libert, Spector, and Tapscott.

Filed Under Book Reviews | Leave a Comment  | March 9th, 2010

Why We Buy~ Book Review

Paco Underhill’s Why We Buy

Paco Underhill has written one of the most essential books for all retailers, marketers, product designers and business owners and managers.  This book describes the “science of shopping” in a detail that I have never seen.  From Underhill’s research he as gained valuable insight into the behaviors of all shoppers in just about any circumstance possible.  From merchandising and store layout to signage and salesmanship Underhill has given retailers the keys to successful selling.

To begin the journey to retail success Underhill discusses his research processes.  From countless hours of personal observation, video taping, and interviews Underhill has gone further and deeper into the psyche of shoppers than anyone thought possible.  Through the research presented in the book we learn about the “Butt Brush Theory”, an interesting phenomenon that all stores should avoid.  Further into the book Underhill underscores the vast differences between the way that men shop compared to women.  He even goes so far as to explain the effects of women shopping in groups, solo, or with children.  Underhill also emphasizes in Why We Buy the physiological requirements of shopping and how retailers and product designers must meet the physiological needs of their target market segment in order to achieve sales success.  The statistics and raw information combined with the real world examples presented by Underhill provide ample opportunity for the reader to learn and understand the optimum retail process.

One of the most helpful things presented in the book was the notion that the three pillars of retailing; design, merchandising, and operations must all work together for optimum sales performance.    In the many examples that Underhill provides on this topic we learn that by merchandising sweaters on tables rather than racks provides a better selling environment for the customer, however, it increases the need for an employee to fold and re-fold the merchandise.  This shows the effect of merchandising on operations.  Each of the three aspects of retailing have a direct impact on the other two.  Underhill really goes above and beyond explaining each component of retail and the optimum strategies to maximize all three into one great retail sales machine.

This book is a must read for anyone in retail, product design, or store management.  Even one of Underhill’s tips in Why We Buy has the great potential to increase sales by a rather substantial percentage but using all of his information can be a game changer for a number of businesses.

Filed Under Book Reviews | Leave a Comment  | March 8th, 2010

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