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Author: Jane Dawson
As the world wide recession continues, many online retailers are looking at their operations to figure out how to save money and enhance revenue. One of the less frequently looked at areas is the channel from your supplier to you or to your customer, in the case of drop shipping.
Many retailers are asking suppliers for materials handling help doing a better job managing inventory and information.
Supply problems can create both headaches and revenue loss for the online retailer. The more time you have to spend straightening out orders that have been incorrectly filled, chasing back orders and sorting through billing problems, the less time you have for attending to the business of selling the product.
One of the ways that suppliers to online retailers are beginning to help is by developing electronic data processing capabilities that can track orders; assess inventory, monitor order fill, shipment and billing. This type of system is capable of producing an extremely valuable tool, the ASN or advanced shipping notice.
The ASN is an electronic packing list that can be used to list the contents of a shipment of goods as well as additional information relating to the shipment, such as order information, product description, physical characteristics, type of packaging, marking, carrier information, and configuration of goods within the transportation equipment. The ASN enables the sender to describe the contents and configuration of a shipment in various levels of detail and provides an ordered flexibility to convey information.
The ASN contains essentially the same information as the bill of lading; its great value lies in the fact that it is received ahead of shipping so that the order can be reviewed for accuracy and corrections made before shipping occurs. The ASN saves logistical time and expenses. However, the ASN is only as useful as its accuracy.
If the ASN accurately describes the order you submitted, but the person who packed the shipment has failed to include the correct items in the shipment, there is still a logistical headache to contend with once the items are received. And, to the extent that you are using just-in-time (JIT) shipping to keep your inventories low, the problem can become a customer relations issue as well.
This situation is leading online retailers to do things. First, they are looking for suppliers who offer the best automated systems for ordering, packing and shipping. Second, where possible, they are negotiating penalties for inaccurate ASNs.
This strategy may not be possible in every case, especially if you are a low volume retailer at this point. If you do not feel that you can negotiate a penalty, then at least speak with the supplier about how they can help you make up the cost of dealing with their fulfillment mistakes and see if they will offer an assurance backed up with some type of 'put your money where your mouth is' program.
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