Q: I want a local fulfillment operation in Japan to efficiently grow my company there. How could I go to develop another fulfillment operation in Japan? A: First and foremost, you need to develop a business structure for the specified selling area. This is a three- to five-year strategic plan comprised of historical data and a projected forecast. A few pieces to the model are:
– Three to five years projected sales as orders, detailed to your weekly/daily (where appropriate) plan
– Average units and lines per order shipped
– Seasonal or peak volume increases as orders shipped, average lines per order, average units per line, average cartons per order
– Method of shipment and portion of volume by type for purchase orders (small parcel, LTL, T/L, container)
– Preferred method(s) of shipping by percent of total volume
– Average weight per order shipped
Second, identify where your projected power of sales will likely be and find out by far the most advantageous physical location in the new selling area for Cross Border E Commerce for your projected business structure. Site selection is essential to managing shipping costs and also to assuring there is an adequate labor pool.
Third, decide whether you should handle your very own fulfillment or contract a third-party logistics provider. You must identify any tax implications associated with opening a new business as being an employer. Normally the least-cost method of establishing a new operation is with a 3PL provider. Unless tax concessions for brand new employers are significant and long-term, it will probably be cheaper to operate for that first 2-3 years with a 3rd party. You can search on the internet to distinguish potential 3PLs. However, we definitely recommend a visit to prospective partners as a preliminary to the further conversation. It is way better to possess a visual image later while you review respective proposals.
Third-party fulfillment – Should you do choose to explore contracting having a 3PL, you must establish a ask for proposal. The primary content of the RFP is the business structure. The more accurate the details you supply concerning your business, the more effective the proposals from 3PLs will likely be. Send the RFP, with a clear deadline, to 3 to 6 3PLs that you feel are stable, industry-proven, and can effectively handle the volume from your business.
You should identify clearly every statement of the items the candidates propose to perform and to avoid, and each requirement and expense in a proposal. Establish a spreadsheet so that you can compare proposals and details. In case your team fails to have the experience to review and negotiate agreements, pursue the expertise of an advisor. Next you must negotiate each of the standards of work and contract terms to ensure that this 3PL can actually supply the service you expect.
Your work is not complete even after you have negotiated a binding agreement. Developing a successful 3PL partnership requires lots of time, effort, and follow-up by the client company. You should make clear that you have relinquished merely the physical handling of your own product for the 3PL, not the obligation to handle your company.
Identify key client contacts and decision-makers who will be issuing direction towards the 3PL. The 3PL provider must clearly understand who will provide direction and who is mainly responsible for resolving problems.
Remember that the 3PL is proud of the way it manages its business. Use the same consideration making contact with the 3PL that you would extend in your most valued associates within your own company. Never ignore issues or problems, but be firm and respectful in resolving them. The 3PL is usually quite mindful of who is making payment on the bills and who owns the inventory. The 3PL exists to serve; you need to be a gracious ruler.
Communicate daily with 3PL management and visit the site as often as travel restrictions permit. Discuss the basics in the previous day’s operations-receiving, shipping, inventory management-and always inquire whatever you can do today to assist those to achieve their set goals and objectives. If at all possible, visit monthly, but a minimum of quarterly. This type of relationship can turn into a classic case of “from sight, away from mind.”
Your client must be diligent in handling the 3PL through daily reporting. You happen to be now running a remote location, and therefore the best supply of information is the 3PL’s daily reporting and invoices. This can be no different than managing your very own operation. Master the data reporting so you can identify trends and immediately spot issues since they appear.
Inventory management is the most essential reporting in operating a 3PL. The customer needs to know where to search for issues like lost or damaged inventory, out-of-stock, so when the inventory records indicate adequate supply. They are warning signs of performance concerns requiring the client’s follow-up and resolution.
Receiving performance reports and inbound scheduling are next in importance for daily follow-up. The client has to know if you can find vendor delivery problems or 3PL receiving concerns that will change the customer support level. This really is lehmqw in which the daily phone follow-up will indicate any “carry-over” receiving issues on a purchase order.
Normal daily shipping follow-up is important, but the most crucial point is to know what did not ship. Returns reporting is vital not just to identifying customers’ satisfaction together with your product, but also to discovering any 3PL -related performance issues. Detailed reason code reporting is imperative, and cumulative graphing is useful for discussions with the 3PL.