How Warehousing and Distribution Drive Customer Satisfaction

Published : June 7, 2016

Warehousing and distribution location

Deciding on a location for your new warehousing space often requires a strategy that relies heavily on company resources. This, in turn means that a disproportional amount of thought is given to immediate and short-term cost over long-term customer satisfaction. Granted, certain considerations — overall cost of operations, proximity to major suppliers, ease of access to 3PL partners — are necessary components of a smart warehouse location, but your search may highlight a need to step back and reanalyze your decision making process.

If moving shop causes your delivery targets to slip and your customer satisfaction scores to wane, here are a few tools to pivot back to success.

Determine Your 3PL Options

Imagine you've found the perfect place for your warehouse: It's close to major supplier shipping lines, the facility overhead is attractively low and skilled local help is plentiful. In fact, it's perfect in every way — except for the fact that the move seems to have slowed down your outgoing shipments considerably.

Business tends to succumb to inertia when it comes to service partnerships; once they're in motion, not even the disruption of a changing facilities does much to shake things up, only highlights the inefficiency. And it’s one case where a little tampering is necessary for operational success. Once your warehouse is moved, it's time to have a chat with your shipping representative(s). A basic assessment of your overall usage, service tiers and potential upgrades is something you should be periodically scheduling anyway, and a change of venue is the perfect opportunity to pick up the phone. Chris Arnold of Supply and Demand Chain Executive suggests creating "order profiles" of current typical shipments in order to illustrate your need divisions during these conversations. 

Once you've armed your decision-making process with potential choices, it's time to sit down with sales. Determining how flexible the process that leads to fulfillment is will be crucial in narrowing your viable options down. Can your free shipping offers trigger at a higher cart total in exchange for a faster method, for instance? Is it possible to add new shipping providers if your current team is underperforming at your location? Customer satisfaction is generally closely linked with the variety of choices available to them, so consider adding to your current roster of shipping choices, rather than replacing or eliminating familiar ones. Unless your current shipping rates are dependent on a specific order volume that "competitive" methods may threaten, the more the merrier; just make sure you're locking in the same level of tracking and transparency throughout each available method.

Listen to Your Customers' Needs

The customer comes first: It's a common refrain in business excellence how-tos. Even if your warehouse strategy doesn't focus on their needs 100%, it doesn't mean you should brush off their opinions once you've moved. Keeping your customers happy starts with asking them what their expectations for shipping are versus their experiences, and always has an open-door policy for suggestions. Roll out automatic post-receipt email surveys if you haven't done so already, adding discount incentives if click-through is low.  Use this information to inform your in-house practices directly. If, for example, items are arriving damaged, invest in better packing material. If your returns process is deemed to be too complicated, consider adding post-paid labels to each outgoing order. In this same vein, in an article for LinkedIn, industry thought leader Frank Castiglia encourages companies to make "what the customer wants fast and simple." Simply put, if your customers are finding pain points at any point in the ordering and fulfillment process, immediately figure out what you have the power to remedy and make it happen. Endless discussions and meetings only lead to more customers experiencing that same frustration, where actions speak to a company willing to compensate for their own operational shortcomings.

Complaints and negative surveys can be painful to read, but they're also your best source for honest critiques. Pay special attention to any issues that seem to crop up with frequency or in patterns. Could a certain employee or an environmental issue be at fault for shipping times or poor fulfillment performance? If these problems have been happening over an extended period of time, why haven't they been addressed until now? The speed and depth used to tackle systemic problems tells a very honest story about a company. It's time to ask your team to read that story and determine the lessons it has to tell. If only half your team adopts a customer-first outlook in their work ethic, rest assured: You'll have similarly inconsistent results in your customer satisfaction scores.

Take a Hard Look at Your Supply Chain

Issues in fulfillment, particularly where expediency is concerned, are seldom linked to a single source. Most often, they're a combination of several small "hold ups" that begin with supply and end with delivery at the far end of the chain. If your partners aren't providing the level of support you need to not only meet — but exceed — customer expectations, you're missing an important ingredient for fulfillment success.

One of the best ways to weed out your underperforming supply chain partners is to look at your most in-demand items on backorder. This is a definitely red flag that there’s a breakdown somewhere in the supply chain that is increasing your risks of poor customer satisfaction scores, and it's a situation that needs to be remedied. Even if one item out of ten isn't available, if that in-stock gap shows up in every order a customer places, they'll eventually start to perceive your company as unreliable and take their business elsewhere.

Aim for Further Transparency and Efficiency "At Home"

If there's anything that can further complicate a lengthy shipping window, it's finding out that an item is out of stock or an order is only partially complete. If extended shipping times are largely unavoidable, it's vital to shore up every workflow you can before the shipment ever leaves your docks. Denny Hammack, president of shelving and storage provider Patterson Pope, notes that using "enabling technology" like warehouse management systems and RFID-like tech on the products themselves can benefit a company in several different ways: This data stream, once established, can be handed off as a report to management team and used to directly improve operational efficiency. Outside the warehouse walls, it can also be fed to a customer-facing UI to enable transparency, informed buying decisions and realistic delivery expectations. 

On the efficiency side of things, problems with incorrect inventory in a warehouse and complicated workarounds for common issues have a tendency to ripple through your entire fulfillment center. Whether it be employee frustration, "overspending" of personnel resources or simply time spent hunting for a product in the wrong location, when your workflows are broken, it will clearly show in your delivery results and overall speed.

Monitor the way your employees move around the facility while fulfilling a typical order. Is there any hesitation apparent in their movements? Any double-checking needed beyond basic quality control measures? These moments of uncertainty are the moments that the wrong item ends up in an order or an erroneous out-of-stock notice is sent through the WMS or, worse, directly to the customer. If customer satisfaction is a goal, bad product stock information is one of the fastest ways to miss the finish line entirely. Tighten up your access to current, accurate warehouse inventory numbers and mistakes in fulfillment will likely drop off sharply, if only by virtue of operational vigilance.

Finding the right location to expand your warehousing is only one component in the ongoing quest for customer satisfaction, so don't let a poor fulfillment strategy compound your workflow problems: turn it into a trigger for better operational excellence. Your customers will be sure to thank you with plenty of repeat business, and you'll regain any loss of shipping speed edge you might experience from your company's new location.

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Topics: Warehouse Management

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