Store & Send Logistics Sdn Bhd

Consumer Facing Economy

The digital age has drastically changed customers consuming behaviour.

Empowered• Direct• Social

Connected• Multi Channel• Experience

Time Starved• Real Time• Mobile

Result

As a result the Retail Landscape

Changed

The Rapid Growth of eCommerce around the Globe

Whats changing next?

how we manage the Supply Chain

will change, Big Time

Disruption in the supply chain, from B2B to B2C

Fundamental DifferencesB2B B2C

Order Size Large Cartons Small ParcelsOrder Processed 10-100s 1,000-100,000sShipment Nature Scheduled ErraticOrder Frequency Weekly DailyReceiver Business ConsumerExpectation Medium HighCost Sensitivity Medium HighTracking Good to Have MandatoryService Level Med High

Road Block to realize the full potential of eCommerce

The Invisible Cost of Misaligned Supply Chain

IncorrectlyAlign Perfectly Align

StorageCost High

Pallet / Shelf base charge rate.Under utilised storage is charged Low

Unit measurement base charge rate. Under utilised storage uncharged

Process not build to manage low qty & high SKU, high inventory lost.

Build to manage. Low inventory lost, highly accurate realtime inventory

Pick & Pack Cost High

Paper Picking method.Low efficiency, High Error Rate.

LowDigital Picking method.High efficiency, Low Error Rate.

DeliveryCost High No Value Add, No Savings LowConsolidation of orders + last mile cost optimization, reduces average delivery costs

Customer Experience Bad

Slow fulfilment results in longer order to receive time + high error rate + unsuitable packaging leading to damage item ,with no clear return process leads to frustrated customers

Good

Fast fulfilment results in short order to receive time + low error rate + customised proper packing leads to higher customer satisfaction

Likely to return purchase+

recommend to others CACLTV

constant out of stock

orders!

No return purchase+

negative feedback to others

LTV0

Inventory Management Basics

What should i know about SKU?

• SKU (stock keeping unit) is your product’s Unique Identity• It is usually an alphanumeric combination of 6-20 characters• It is used to identify and track your product on a system• Before you can sell on most online marketplace, you will be

required to give your product a unique SKU

Not Same SKU

WDB1100RW WDB1100BR

Inventory Management Basics

Why is SKU important?

• Attach and collect information for each unique product / Variation• Name, Description, Size, Weight , Value• The basis for inventory management.

SKU Count SKU Movement

• On average, merchant stock around 200-300 different SKU

• 20% of your SKU will contribute 80% of your volume

Inventory Size

• Track your product history

• How long has the product been sitting around?

• How many qty has been sold? daily?

• Space Occupied(Storage Cost)

• Inventory Value(Money tied down in stock)

• Inventory Risk(Flood / Fire / Burglary)

Inventory Management Basics

Understanding & Categorising your products (SKU)

• Find how many units of SKU moved / day (total in / total age in warehouse), Call this Turn (unit/day)

• Sort from top to bottom in accordance to turn,categorised them from A-D.

• Normally A (top 5%), B (5-20%), C(20-50%), D(50%)• Look into the list created and you will find interesting

information about your SKUs.

ExampleXL size pamper’s turn is twice of L sizeL size pamper’s turn is twice of M sizeM size pamper’s turn is twice of S size

XL size move 10 times faster than S size

Inventory Management Basics

Stock Control & Replenishment

Buffer Stock DaysSKU Velocity (Turn)

40

Current Stock Level

Ordered Stock Quantity

100 7 50

How much should we replenish?

What else did we miss out?

Inventory Management Basics

Calculating your average logistic cost / unit

Storage Cost

Processing Cost

Distribution Cost

• Average Stock Age• Fixed

Rent+Utilities+Insurance/Space (M3)

• Packaging Cost• Orders

Processed/Headcount/Day

• Stationary Cost/Total Orders

• Total Delivery Cost / Order Qty

logistics cost on average is 10%-15% of revenue

How can we reduce this cost?

Inventory Management Basics

Storage RM1

Processing RM2

DistributionRM7

Increasing basket size and consolidation of items.Increase Item velocity, reduces storage cost

Delivery charges shared among more items, reduce distribution cost

Storage RM0.5

Processing RM2

DistributionRM4.5

Standard Logistics Cost / Unit

Fulfilment in a Multi Channel Environment

International Marketplace Personal Web Store

Sales channel becoming more and more complex!

Group Buying

VerticalsLocal Marketplaces

Social / M-Commerce

Fulfilment in a Multi Channel Environment• In order to maximise sales, merchant will list all SKU on all channels• Sales happens in real time across all channels, inventory updates

are not updated.• Too many channels to manage, each channel have their own

management system, takes more time to update delivery details and manage orders.

Result• Over sold happens frequently, resulting in delay in delivery and

reduce customer satisfaction• Orders not fulfilled / delayed.• Tracking information are not updated accurately• Consolidating inventory agains sales becomes more challenging

How to manage this?

Fulfilment in a Multi Channel Environment

Managing Self Fulfilment

SoftwareLabour Packaging Hardware

• Hire more hands to pick and pack, process more orders and monitor each order status.

• Buy more boxes to reduce damage and standardise packaging process

• Get an inventory management software that is catered to B2C businesses

• Buy a dot matrix printer for manual CN

• Buy handheld scanners to scan delivery tracking code

Invest in more space & warehouse racking

Managing Multi Carriers

Local Carrier International CarrierSpecial Service Carriers

COD, Cold

COD, Same-Day

Parcel Lockers

Tesco,Petronas& LRT

Optimising Last Mile

On Demand

Managing Multi Carriers

Average Delivery Timemerdeka week

Anticipate spikes and managing recipients expectation

hari raya, one week lead time

Fulfilment in a Multi Channel Environment

Managing Multi Carrier

Tracking & Pick up scheduleDelivery Zone Size of package Returns & Claims

• Sabah/Sarawak = Poslaju,widest coverage

• ODA, outskirt delivery area = extra charges

• Different zone different carrier different price

• Difference in size = different pricing.

• Some scales by every KG, some scales every 250gram.

• Some bracket pricing.

• Try to arrange for the latest pick up slot.

• Distance to sorting hub results in delay in delivery

• Cut off time for collection

• POD

• Attempt count• Return time

frame• Claims clause• Claims

process & rules

Are you ready for eCommerce Fulfilment

Delivery Service

Multi Channel Management

Customer Support

Small (20-100)

Valu

e Pr

opos

ition

s

The Need for a Central PlatformBy integrating various aspect of the supply chain together. We can then maximise value

Fulfilment Service

Analytics

Medium(100-300) Orders/DayMicro

(10-20)Large

(300+)

The value of an on-demand scalable fulfilment service becomes even greater as volume increases

Sales channels becomes more varied and complex as market shares increases

Savings from consolidation and logistics cost optimisation becomes more prominent

As Volume increases, optimisation of supply chain results can become a leading advantage against competitors

By successfully implementing good customer support service, such as returns and warranty policy, customer loyalty and awareness increases.

As size grows, more value is gained by engaging the right fulfilment partner

IStore ISend : The Story So FarData Analysis

Rigorous data analytics of clients’ distribution data allows us to unlock value for clients, allowing for cost optimization and serve untapped markets

Customer Focus

Flexible technology and processes allows us to collaborate with clients on new distribution channels and market opportunities

Client Integration

Full seamless integration of proprietary WMS with clients uniquely allows clients to reduce costs and redundancies

Industry Leader

Every step of the logistics process is digitally tracked and benchmarked, resulting in the lowest shrinkage levels in the region

Focus on Technology Optimization and Integration

50,000 sqft build up space

4 Storeys of Shelving

6 tier racking

50,000 pick faces

TPG Warehouse

ODiN (Online Delivery & iNventory System

Multichannel Management• Order History• Order Creation• Inventory

Management• Reporting Tools

Order StatusFrom Pick to PackingDelivery Status

Visit iSIS at www.istoreisend.co

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