opinion on new service

[Simon.L]

Hi all
I am in the middle of setting up a distribution centre for my company to run along-side our staffing and recruitment services, it entails a fleet of vans with drivers, a team of pickers and packers a team of warehouse staff etc the intention is to offer the smaller buisness a distribution service (order picking/packing, storing, sorting and delivery) on an as needed basis. I'd really appreiciate some feed-back on the viability of the service or any opinions on what would improve the intended package. Feel free to PM me.
Cheers

Simon

 

[cjd]

Sounds very general - "a distribution service (order picking/packing, storing, sorting and delivery) on an as needed basis"

for what exactly? who are you expecting the service ?

 

[Simon.L]

Sounds very general - "a distribution service (order picking/packing, storing, sorting and delivery) on an as needed basis"

for what exactly? who are you expecting the service ?

Sounds very general because it is, we are planning not to specialize in transporting any particular product, we will gear the method to what the companies needs are, as we have access to any size or type of vehicle and have the relevant personnel to drive them it means we can handle anything from a mobile phone to a container load of engines.

Does that answer your question?

 

[DuaneJackson]

It sounds like a goer to me. I'm not in the type of business that would need this but I know plenty of peopl that are.

If you combine, storage, picking and delivery and can ensure security and competitive price then I think this could really work.

 

[Simon.L]

[Thanks Duane, I think so too, and as we have our own security division and £2,000,000 insurance we can pretty much guarantee security and we will try to be competitive as we can without compromising the quality of service.
Cheers

Simon

 

[Whistle Ink]

I agree - it has alot of potential.

Alot of wholesalers are shipping for businesses to their customers - but each time the delivery charge can around £6 - 10 for plain label packaging.

So if you're business is doing well then it can be alot just on postage. I am assume some businesses like myself would like to overbuy slightly of popular products and then ship out according to weight or size of package.

For instance if I get an order for one customer and I don't have it at home then I'd be paying around £6-10 quid on delivery where as if I brought 10 of one product (still not having space) then I could lower delivery charges and post out as needed via Royal Mail.

It would all depend on how much extra it would cost with you / how much I could save.

There are a few businesses out there that already do this 'Order Fullfillment' thing and the biggest market would I guess be ecommerce businesses.

 

[DuaneJackson]

If you could develop a stock managment system so your customer can log on and check at any time how much stock they have in your warehouses this would be an added bonus.

As above, my only concern is that you'd have to make sure you can compete with the current costs.
But if you have the USP of taking deliveries and managing a stock system then the price wouldn't have to be so competitive.

 

[Simon.L]

Both being very valid points, So in short if we can hold a certain amount of stock for various companies with an on-line database so availability can be checked we could then charge a flat storage rate which allowed x amount of deliveries per month with-in a specified time (i.e 24hrs) with-in a specified radius (i.e 100 mls) would that fit the bill?

 

[DuaneJackson]

Yeah, I think that's a good offering. You could offer different service levels. so for instance I could buy more space and get more deliveries thrown in. Or pre-buy a set amount of deliveries in addtion to my space, or a pay per use.

The fact that you can handle receving deliveries from suppliers too would be a real bonus.

If you can offer what other services don't/can't and do it well then I don't see why not. You need to plan out the offerings so as not to over complicate it.

I really think this is a great idea and if done well could be a good earner. I'd be keen to hear some negative comments though.

 

[Simon.L]

You and me both, i cant think of a down side as yet, but like all good concepts someone has already thought of it, what do they know that i dont!!!!!!!

Thanks for the input.
Simon

 

[gapgb]

I think the stock issue could be one of the key areas. The businesses who use this service will have to buy the stock and store it with you. They're going to have a very good idea of what sells in order to avoid having to write stock off at the end of the year when there accountants show up. This may be an area where the transfer of risk to them and the financial outlay they have to make may outweigh the savings they make on delivery charges.

 

[DuaneJackson]

Hi Guy,

Is that situation any different to how most of these business currently operate?

The handful of businesses I know that sell goods online all have the same problem, storage space. There's only so much you can fit in the garage.

This solution allows them to have external storage coupled with a delivery service and stock control system.

They wouldn't need to order any more stock than they currently do, but they do have the space for growth should they need it.

 

[gapgb]

I had the impression from an earlier post that people were shipping direct from the wholesaler to their customer, avoiding the need for them to have a build up of stock, cash tied up etc.

I agree that its a great idea for those people already committed to the whole stock issue.

 

[Simon.L]

Good point Guy, but i never intended to be the answer to all the problems of small buisness distribution, if companies dont know enough to monitor sales against stock so as not to have a surplus then maybe i should offer that as a service aswell, For a small fee of course!!!!!

 

[Whistle Ink]

if companies dont know enough to monitor sales against stock so as not to have a surplus

It can be hard to judge how many of each product you are likley to shift - esp if you are starting up.

 

[Simon.L]

It can be hard to judge how many of each product you are likley to shift - esp if you are starting up. [/quote]

Granted, but on the other end of the scale if you have just started i dont think you would consider this kind of service until your own system became overloaded so therefore you would have a good idea of product turnover.

 

[cjd]

I still haven't quite got the idea of this - can you give me an example how someone would use this service?

 

[Simon.L]

I still haven't quite got the idea of this - can you give me an example how someone would use this service?

Ok, I'll Try,
Your a company that make, say work boots, at some point in every month you have to ship all of your finished product to all of your distributers it takes a week to sort the right orders to go to the right areas on the right transport on the right day, So you need transport you need drivers and you need sorters and you also need space to start all over again for next month, you dont just take on relevant amount of staff for that one week period, so you take people away from making boots to sort stock pick orders and load vans. What if you had a company that came once a week picked up your finished product, stored it in a secure warehouse and at the relevant time picked all the orders and delivered them for a flat monthly fee, which enables you not to spend money on transport, fuel, insurance etc as well as enabling you to carry on production with no interuptions and all the space you need.

Hows that, a bit clearer?

 

[cjd]

Ok, so essentially for my boot business I've outsourced:

1 some storage/packing space
2 picking and packing
3 labelling
4 organising delivery to my end users/wholesalers

That's good because I can now think more about boot making and less about logistics.

But I do lose control of distribution to my customers so what I think I need is a linked order handling system with you so I have visiblity of what's going out & when and an easy way of intervening.

(and a good price too of course ;-))

 

[Johnuk]

Sounds like a viable idea. I had a similar idea recently, but was unable to find any backers for it! Route planning programmes are available to make deliveries more efficient, try www.paragonrouting.com/software/options.htm

 

[Simon.L]

Ok what about if we set up a system, where we only deliver on verbal or fax confirmation from an authorised person from your company by a certain time on the delivery date?

 

[magic-merl]

Speaking as someone who has managed multi-million pound contracts on behalf of some pretty high profile customers I would suggest your idea is a very good alternative to what the big players currently have.

Take TNT - Logistics, Network Logistics. It costs an absolute fortune to move pallets just within the UK and you have to have "X" thru-put before you warrant the cost of this kind of service.

What you are proposing is a fantastic idea. A smaller - more compact - service which benefits from, at least the sound of it, much better stock control and communication in general.

Personally - I think this is a winning idea. The best of luck and keep us all informed. Most of us could use a service like this to some degree or other.

FYI. Based around this business the one key area which can make or break contracts/local agreements is security. The higher your security thresholds the more confident and less cautious your customers will be. Three points - Solid Service, First Class Communication & Secure & Reliable.

 

[DuaneJackson]

Your a company that make, say work boots.....

I saw it in a slighlty different way.

This is based on an existing client of mine:

You're a company that sells phone gadgets - portable charges, that sort of thing. You carry some stock, but not a huge amount. From a variety of suppliers. Orders come in via the site, you pick, pack and ship. Job done.

With this service, orders would come in and it can be routed over to Simons firm. They then pick, pack and ship. As the business owner you can track the delivery online, as can the customer.

Also, when the website owner needs to order more goods, he doesn't need to wait in for a delivery, they go direct to Simon warehouse.

 

[Whistle Ink]

Your I saw it in a slighlty different way......

I agree with Duane. Like my business with cartridges. Ideally when I do hit it big time I would want to do it all myself under the business rather than get someone else to do it.

I see it as a temporary thing I would use rather than permanent. Probably cheaper to do it yourself when you get big I would have thought.

 

[easyasit]

it roughly sounds like the kind of company i am working for at present.

They are involved in the distribution of parts for post office and lottery machines. Although the courier is also the engineer and is expected also to fit these.
They operate from storage box facilites where damaged parts are returned and new parts collected.
Company vehicles are hired.
And all staff are recruited through an agency. So the company makes no long term comittment to you. There is no long term contract.
So if things do go wrong they can trim the fat very quicky and hire vehciles can just be rtned. This is suppose limited downside.
The other major downside is that as no security is offered to employees, so no loyalty can be demanded.
then the company is only two years old

Al

 

[DarrenC]

Simon, I is this anywhere in the UK distribution - pickup and distribution? I'm hoping to launch a business at the end of the year that will need a distribution network, so Im interested to hear costs.. when it gets off the ground.

Darren

 

[Simon.L]

it roughly sounds like the kind of company i am working for at present.

Hi Al, we like to think we can do better than that as we are already an "agency" with a very large data-base of staff all over the country. Some of our staff have been with us for as long as seven years. All the key staff in this venture will be salaried, the premises is ours not shared and is around 4000 sq ft and all are vans are long term lease which i think you'll find is pretty much the norm in this type of buisness as for long term commitment, we like to have a good personal relationship with our clients because it makes them easier to talk to if problems arise especial monetary

 

[Simon.L]

Hi darren, yes it will be nationwide, and hopefully up and running in the next month and i'm just in the middle working out pricing at the moment i'll keep you posted
cheers
simon