Assurance policy

Mar 01, 2006 10:30 PM  By

Daniel Knight is the director for fulfillment quality assurance (QA) for Home Shopping Network’s Roanoke, VA, distribution center. HSN is part of New York-based IAC Interactive, which has also owned West Chester, OH-based cataloger Cornerstone Brands since last spring. Knight, who joined HSN in May 2000, oversees inbound inspections to ensure that the merchandise received in HSN’s distribution center matches the specifications from the merchants. He is spearheading an internal program, Target 100, that’s designed to continuously improve its fulfillment operations.

What is your Target 100 program?

It partners fulfillment and QA with the goal of 100% quality and fulfillment accuracy. Target 100 audits outbound orders and distinguishes between “fatal” errors, such as incorrect item or quantity or missing items, and “nonfatal errors,” such as using inappropriate-size containers for shipping. HSN is then able to measure and reduce the instances of these errors. Since its inception in September 2000, HSN has used the T100 methodology to reduce the instances of fatal errors by 89%, reduce nonfatal errors 97%, reduce customer complaints from fulfillment issues overall 40%, and reduce customer returns from fulfillment performance 60%.

Do you think there is more pressure on HSN for speedy fulfillment because of its visibility on television?

I think HSN’s high expectations and delivery standards puts more pressure on us than the fact of being a TV retailer. And the online aspect of our business adds to it. Online shoppers are increasingly savvy, and they are geared more toward convenience and immediate gratification. They want to place an order from home and receive it within the next few days.

What is your fulfillment nightmare?

It’s overlooking something critical during a quality assurance inspection on the front end. HSN relies on my team to make effective decisions about whether or not a product meets our expectations. If someone on my team misses something during an inspection, it could result in thousands of customers receiving the wrong merchandise or, even worse, damaged/defective goods. That’s my nightmare.

How did “the warehouse” evolve to a “distribution center”?

This has really just followed the evolution of supply chain technology. Advances here have transformed concepts like just-in-time inventory into reality. Without the technology needed to support real-time tracking and movement of goods, retailers such as HSN would still be required to warehouse huge volumes of merchandise rather the truly distributing it.

If you had to choose: backorders or overstocks?

From a QA perspective, I’d choose backorders. If absolutely unavoidable, I’d prefer to reasonably delay a ship date if that meant ensuring that the customers’ expectations for the product are ultimately met. That said, HSN has made it a priority to eliminate backorders through better, tighter supply chain management on the front end.

Is it a challenge juggling disparate merchandise lines?

Absolutely. We carry all the product lines that you find in any major department store — jewelry, clothing, domestics, home furnishings. That means that we need a huge array of material handling equipment, storage, and warehouse management capabilities. It also means that our fulfillment staff must have both very general and highly specific product knowledge and training. We have some specialists on staff, but as a rule we don’t have the luxury of specializing in any particular area.

Most interesting or favorite possession in your office?

I have these plate-size pieces of marble from the fireplace of the original Italian embassy in Washington. I typically find them in a creek that runs near our Roanoke DC. At the turn of the last century, they renovated the embassy, and a local businessman salvaged the marble mantel and moved it to his mansion outside Roanoke. About 80 years ago, the mansion burned to the ground. But after a big storm, I can usually find a new piece or two.