From the Trenches

What’s the best way to obtain innovative logistics tips to revive a faltering operation? Get a group of your peers together, hole up in a retreat for a day or two, and discuss how to manage operations in the real world.

That may be a luxury for many of us, but at Worldwide Business Research’s Etail 2004 conference, online retailers got to do just that. During the three-day event, which included an intensive workshop on Web analytics, executives from operations, marketing, and research got to examine and discuss what really makes an online operation (and by extension, its offline components) successful. O+F brings you some of their practical insights:

Stay on top of your SKUs

For Chris Hauser, vice president of operations at Drugstore.com, fulfillment is a “core competency.” With 3.1 million customers, 18,000 SKUs, and 9,000 different medications dispensed each year, Drugstore.com can’t afford to be a slouch. Hauser’s prescriptions for fulfillment efficiency: Analyze what products your customers order most often; install a flexible WMS; integrate your IT with that of your transport providers; and provide 24/7 customer care. Also important, he says, is a powerful inventory planning and replenishment system that allows for sudden spikes: “A single mention on Oprah can cause demand to skyrocket overnight.”

Monitor the process end to end

Karl Braitberg, senior director of supply chain planning and fulfillment at palmOne Inc., tries to achieve a “meticulous supply/demand balance at every level of the supply chain,” a process driven by rigorous measurement, forecasting, and real-time visibility. By applying this regimen, Braitberg has bumped up his inventory turns from nine in 2002 to 35 currently; he has also boosted on-time delivery from 50% to about 95%.

Don’t get carried away by technical wizardry

From David Pike, operations director at Ashford.com and Diamond.com, comes this tip for those overly fascinated with technology: Keep things simple. “Intuitive, simple navigation is the key to moving from hit to checkout,” he says. And to frequent site tweakers, Alan Perkel, an online creative director at PetSmart, has this to say: “Internal process reengineering is more important than site redesign.”

O+F on the Web www.opsandfulfillment.com

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