Fulfillment services

Studies have shown that distribution fulfillment services, sometimes referred to as third-party service, have certain advantages to the grocer market. In a recent study, grocers using distribution fulfillment services indicated that the important business factors when choosing to utilize a Warehousing company were: responsiveness to service requirements, quality of management, and ethical business practices. Additionally, warehousing solutions such as value-added services and low costs were cited when choosing a warehousing company.

The benefits of using distribution fulfillment services as ranked by manufacturers, wholesalers, and retailers are as follows:

1. The ability to respond to specific logistics and warehousing needs. The flexibility of the warehousing services provided allows the client more responsiveness in their own specific marketplace.

2. Quality of management. Distribution fulfillment services by their very nature of being a specialized warehouse service are highly efficient and well-versed in the rapid, ever-changing warehouse logistics marketplace.

3. Companies also cited the excellent track record of ethical performance as an important criterion when choosing to use a distribution fulfillment service.

4. The ability to provide certain value-added services such as kitting and even light assembly creates the logistical advantage of having products come in already prepared for the marketplace.

5. Costs of warehousing and logistics is decreased by using a distribution fulfillment service. The absence of costs associated with capital expenditures for warehousing space and the procurement of real property is significant.

6. A specialized warehousing company , especially a regional one, is much more versed in the channels of transportation in the market area. This keeps the costs of transporting down as these companies are able to negotiate lower costs based on overall volume.

7. The knowledge of your market brought to bear by the distribution fulfillment service will streamline the flow of the product efficiently and smoothly.

8. The working relationships built with the warehousing and logistics service will add to the functional dynamic of the local business.

9. The warehousing and logistical service assumes some of the associated risk with the warehousing and shipping of perishable goods and the costs thereof.

10. Lastly, the distribution fulfillment service invests in state-of-the-art warehousing technologies. This systemic advantage gives the client unsurpassed technology for a fraction of the costs associated with procuring and implementing an internal system.

Further responses to preferences of the size and scope of the distribution fulfillment service chosen reveal that while national warehousing providers are preferred when a client wants to consolidate services, the warehousing consultants and logistical service providers most often prefer the regional distribution fulfillment service. This is attributed to the aspects of the reported research above. The regional warehousing company is better able to be in touch with the mission of the client, better able to provide flexibility and therefore be more responsive on a real-time basis to the specific requirements of the client.