ShipHero recently launched The Fulfillment Innovation Wheel to help 3PLs understand what capabilities and service offerings they need to implement in order to be successful and to help online retailers and brands choose which 3PL is right for them by allowing them to ‘check the boxes’.
The Fulfillment Innovation Wheel listed a set of twelve (12) capabilities that fulfillment providers and logistics companies should implement to continually delight their customers and push themselves towards greater success and innovation.
The twelve capabilities are:
- 2-day delivery
- Same day shipping
- At the box personalization
- Designed for returns
- Sustainable fulfillment
- Resilient shipping
- Distributed fulfillment
- Data now
- Scale up and out
- Integration stack
- Professional services
In this article, we will be diving into the Capability #10: Scale Up and Out.
And be sure to stay tuned for future articles as we deep-dive into each capability.
Capability #10: Scale Up and Out
Your business constantly strives for growth. Whether it’s new customers, new markets, new products, your quest for innovating and providing more value seemingly never ends. Shouldn’t you ask the same of your fulfillment providers?
Without clear-cut criteria and a well-executed strategy for growth, your fulfillment provider could slow your business down. As we saw with this global pandemic, traditional shipping carriers like FedEx, UPS, and even Amazon could not scale quickly enough to meet the soaring demands of the eCommerce boom.
Conversely, FaaS providers and third-party logistics (3PL) companies like ShipHero that were built for scale, equipped with agile development processes and defined expansion strategies, not only experienced tremendous growth and innovation but were able to deliver for their customers when others could not.
We attribute this success on the Fulfillment Innovation Wheel to Capability #10: Scale Up and Out.
The Data-Driven Approach
First and foremost, through real-time data monitoring and executive reporting, your fulfillment provider should get the right data to the decision-makers, so that they can make the best possible decisions when it comes to expansion. Let the data tell you when it’s time to expand, because over-expansion is a kiss of death all on its own.
Make sure you are tracking the data that tells the real story, like ‘Miles Travelled per Order’ or ‘Time to Fulfill’; whatever it may be for your business. Remember, locking in new warehouses to your network is expensive and very difficult to undo, so you need to ensure that there are no simple fixes for your current fulfillment capacity.
At ShipHero, we have clearly defined criteria that informs us when it’s time to expand our operations. We know it’s time to expand when one of the following happens:
- We reach physical storage limits for inventory
- We reach shipping capacity, in terms of the amount of orders that can be shipped in a day
- We recognize regional bottleneck trends, e.g., a distribution center on the East Coast is frequently shipping to the West Coast
If you are a 3PL or FaaS provider, be sure to collect the right data and set clear-cut goals for expansion.
If you are a customer looking to outsource fulfillment, make sure that your fulfillment provider has these in mind, and can grow as quickly you do.
Want to learn more? Some content from this article was borrowed from our previous article: Warehouse Buying 101: A Guide to Scalability, where we dive deeper into the expansion strategy that launched us to become trusted by over 4,000 ecommerce brands and 3PLs every day, in just under a year.
Stay tuned next as we cover Capability #12: Professional Services! At your service. ShipHero.
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