October 30, 2014

Our “Unpacking” series is dedicated to defining and expanding upon a practice or concept in the supply chain world that prompts a lot of questions. You can read all of the previous entries here

This week we look at price ticketing, an activity that for us comes under the category of “value added services.” These are activities that we undertake above our core services, often tailored to a client’s custom requirements. There are plenty of service solutions that come under this category and we’ll explore many of them in this series before the year is out.

http://gty.im/152891684

 

Price ticketing is the process of labeling up products so that they include the information required by the customer and end-retailer. This includes the price, of course, any discounts, relevant product information, and often codes that can be scanned. In some cases customer-friendly codes may even be included, such as Quick Response (QR) codes that can be scanned by mobile devices and allow the customer to access more detailed product info and specifications.

Price ticketing tends to be completed at the point of manufacture, whenever possible. Product planners usually have close relationships with their manufacturer and build the price and information tags/labels into the production process. Often labor costs are lowest at this section of the supply chain, bringing the marginal cost per product down, and it’s appealing to have products labeled up and ready to go the minute they arrive at the warehouse.

That being said, when the country of origin has higher labor costs or insufficent expertise on the supplier’s part, the price ticketing activity may need to be moved further down the supply chain. We perform the price ticketing function for most of our clients. We focus a lot of effort and attention on our value added services and have become well-known . The labels often come from an approved vendor, or the client will provide an approved sample as a blueprint for production of the full batch. This makes it possible to take stock product and customize it for a specific retailer.

If price ticketing is pushed all the way to the end of the supply chain and reaches the retailer (DC or store level), they tend to levy charge back fees. These are sufficiently large enough to discourage this practice, making the 3PL an attractive alternative to price ticketing at origin.

 

Along with assembly activities – such as kits, gift sets, shopping channel combination packagess – this type of value added service comprises approximately 10 to 20 percent of the work that a 3PL (third party logistics) provider like Capacity LLC undertakes. It also provides an opportunity to get closer to our clients and understand their requirements a little better, the value of which is tough to put a price on (in a metaphorical sense, of course!)

October 24, 2014

In a city dominated by Duane Reade and CVS, a small corner of NYC’s Williamsburg neighborhood in Brooklyn is served by a different kind of pharmacist. And it’s “served” that is the key word here, as Northside Pharmacy demonstrates a distinct flair for keeping customers not just happy, but ecstatic.

A quick look over the pharmacy’s Yelp page tells the story clearly. Here’s a sampling of the comments, including one from Thom Campbell, our Chief Strategic Officer:

Northside Pharmacy Brooklyn

 

“Knowledgeable,” “helpful,” “friendly,” “high quality” and many more superlatives. All words that any customer service team dreams of seeing associated with their company.

Northside Pharmacy reviewsBig brands spend enormous amounts of money to build brand reputation and keep their products top of mind with customers. Of course the products have to have a certain level of quality to make that marketing effective, but a large ad spend goes a long way.

For smaller businesses, customer service is where you’ll find the best opportunity to develop a reputation and eke out a competitive advantage.

Our efforts at Capacity LLC continue to build on a close relationship with our client partners, a passion for what they do and the drive to help them achieve strategic objectives.

If we can remain on a path that leads to the levels of success and customer recognition that Northside Pharmacy has achieved, we’ll be on the right path!

 

October 21, 2014

The world’s most innovative brand returns to retail this week, but this time it’s not in the form of a shiny new device or sleek new operating system. Instead, the launch of Apple Pay is what is exciting and troubling retailers, depending on your perspective.

The new mobile payment product was announced last month at Apple’s Fall event, but was rather overshadowed by the new iPhone 6 and Apple Watch (which itself will sync to and be an important element of the payment system, but more on that later.)

For retailers, however, it could be the most important part of that event and usher in a new way of working at customer checkout.

 

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Plenty of services have attempted to bring about the age of mobile payment but few have so far succeeded.

Paypal has long been the veteran of online payment but its transition to mobile has proved surprisingly abortive, with few vendors and a lack of consumers using its limited mobile app.. Elsewhere, even with the vast resources of Google behind its Wallet service, and big name partners like American Eagle and Subway, it still hasn’t  captured the interest of the diverse Android user base. And Square, with the early innovation of its card reader mobile insert to bridge the gap between old and new, has been unable to move beyond small vendors and into the mainstream.

Even with all of this competition, few brands are placed as strategically well as Apple to make mobile payments a mainstream reality.

In what could be an estimated $100 billion industry (Forrester Research) as we reach the end of this decade, the company has moved with great purpose to make sure it has all the pieces in place before diving in. With major brand names like Whole Foods Market, McDonalds, Walgreens and Disney signed up, and the promise of easy payment across numerous devices nearing thanks to the looming Apple Watch, enough high-spending iPhone owners should be convinced to make the jump. If Apple can reach a point of traction with many consumers regularly using the service, more merchants will follow and the brand could have a cash cow on its hands. Despite the low margins,the frequency of transactions helps to make the market attractive for any company who can command a sizeable chunk of the market.

For retailers, the dawn of mobile payments is a double-edged sword. 

Initially it will require a certain amount of upheaval in terms of both technology and training to ensure that the system rolls out effectively. Add in more than just one service for Android users, perhaps even Windows Phone and standalone services, and we have an early adopter transition phase with the potential to get messy.

Retail checkout comes right at the end of the supply chain, but it’s one of the most important parts in terms of customer experience and enduring brand reputation. Moving customers through quickly and efficiently is a small part of the overall brand experience but disproportionately memorable, as it involves people’s most precious currency, time. As anyone in logistics is well aware, make your customers wait too long on a regular basis and they won’t be taking up your time too much longer!

Once systems like Apple Pay are established, the benefits to retailers will be immense. Almost everyone has a smartphone nowadays and the automatic processing that occurs – perhaps even pre-payment as the systems mature – hold the potential to dramatically reduce wait times and keep customers coming back for more.

What it all comes down to is that “time is money,” and every minute you save your customer may well equal extra dollars spent further down the line!

October 17, 2014

Some movie quotes come to define real life, repeated so often that they become a shorthand for things, times and people we love.

Our favorite films inform our lives, so why not our industry as well? Following some inspiration from our friends at IDS Fulfillment that’s what we thought as well, and why we set about compiling six splendid quotes to summarize key concepts of supply chain management.

Good Films movie theater display
Image Credit: Noëmie Haffner

Six Spectacular Movie Quotes (Adapted for the Supply Chain)

Cover of "The Godfather (Widescreen Editi...
Cover of The Godfather (Widescreen Edition)

“Make him an offer he can’t refuse.”

~Don Vito, “The Godfather”

One of the best movies of all time also nails a key concept when it comes to what you pay for supply chain services.

Price is always a primary factor in any operational decision, but is it so important that you’ll get involved with anyone who names the right number? Consider all the costs before you get in bed with the bad guys!

 

“It’s one louder, isn’t it? It’s not ten.”

~Nigel Tufnel, “This Is Spinal Tap”


The classic concept of “turning it up to 11” is immortalized in this cult comedy hit. Watch the clip for the full effect of level 11 deadpan.

On a serious note, it’s a reminder that what you measure in your supply chain, you can manage. Just because a number is one bigger, doesn’t always mean it’s better.

 

“What we’ve got here is failure to communicate.”

~Various, “Cool Hand Luke”

Synonymous with taking a beating and being pushed back down by overwhelming forces in the movie, taken at face value that’s exactly what will happen when communication lacks in the daily operation.

For the supply chain to function, everyone needs to be faced in the same direction and telling the others what’s going on.

 

“Sometimes s#@t happens, someone has to deal with it, and who ya gonna call?”

~Dr. Peter Venkman, “Ghostbusters”

A line now as timeless as the Ray Parker Jr. classic theme song, we all need an organization to turn to when there’s a challenge we don’t understand… especially a slimy one.

So can Capacity bust the spooky side of your supply chain? We don’t have a screeching converted ambulance to respond in, but you’ll always be glad we answered your call!

(You really want to hear that song again, don’t you? Okay, go ahead, press play below and we’ll wait…)

“You’ve got to ask yourself one question: ‘Do I feel lucky?’

Well, do ya, punk?”

~’Dirty’ Harry Callahan, “Dirty Harry”

A classic summation of the chances we take in life and how far we can push things before the wheels come off. If you see problems in the supply chain but keep putting them off, Harry’s words will be ringing in your ears.

So we’re asking, “do you feel lucky?” But, well, we respect you too much to go throwing the “punk” around….

 

“You’re going to need a bigger boat.”

~Martin Brody, “Jaws”

Great White SharlThere’s something to be said for doing more with less, but the time comes when your supply chain requirements simply spiral out of control compared to the early days of your business.

When that happens, finding the right 3PL provider is what stops that giant supply chain shark becoming your business’s white whale.

 

 

Watch some fine films this weekend and come back on Monday with some spectacular movie quotes of your own for us.

We’ll be over on Facebook waiting for your inspiration!