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To bring better service to their customers and expand their market reach, Atlanta-based fulfillment company, SBC Fulfillment will enter into a joint venture agreement starting July 1, 2010. The decision to partner with Utah-based fulfillment company, Integracore came after SBC Fulfillment President, Brian Schoenbaechler wanted to have a stronger east coast presence with the option of expanding into the west coast region.

"After 14 years in business this was the next logical step to position ourselves for growth while continuing to provide topnotch service to our customers," says Schoenbaechler.

Integracore and SBC Fulfillment will share 60,000 square feet of warehouse space located in Austell, Georgia. The move will allow both companies to expand their operations and if all goes according to plan, their space could jump to over 600,000 square feet over the next 2-3 years, according to Integracore CEO, Ted Broman. Integracore''s Utah warehouses currently exceed 620,000 square feet, which is exactly the growth that both Broman and Schoenbaechler would like to mirror in Georgia.

Besides changing it’s name to Integracore Atlanta, LLC, SBC Fulfillment is slated to launch their new website on July 6, 2010. SBC''s clients can expect to get the same level of customer service and attention. "Our clients are our number one priority. Nothing will change for them, in fact, this will allow more opportunity for their growth as well," says Schoenbaechler.

Be sure to check back next week for updates and a link to their new site.

Tags: fulfillment | business | georgia | outsourcing | warehousing

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The 21st Annual “State of Logistics Report ® ” released this week by the Council of Supply Chain Management Professionals (CSCMP) , showed an economic slip in the U.S. logistics industry. The annual report, presented by Penske Logistics, cited that lower inventory levels, a drop in modes of transportation and interest rates (which hit historic lows) contributed to the decline which dropped to 7.7 percent of U.S. Gross Domestic Profit in 2009. A sharp decline considering the 2008 rate was at 9.3 percent.

By mid-year in 2009, warehouses, which were full of inventory earlier in the year, dropped 2 percent due to inventory relocation or movement. These empty spaces combined with a fall in inventory-carrying costs and plummeting interest rates were to blame.

Additionally, the report revealed that out of all the modes of transportation, trucking (which accounts for a large percentage of transportation) dropped 9 percent in the amount of tonnage transported. Other modes of transportation such as rail and ocean carriers were also hit hard. In spite of lowering their rates, some ocean carriers continued to report historic losses. However, by the close of 2009, the air cargo industry showed a stronger finish. Elements such as a large amount of space and a lack of freight to move, has caused shippers to continue to drop their rates.

But not all the report’s findings are doom and gloom. According to Penske Logistics President, Vince Hartnett, the trucking and supply chain industries are showing signs of turning around in the right direction. If this positive ripple effect continues, trucking and logistics firms will need to add capacity resulting in additional jobs for drivers.

The “State of Logistics Report ®” released their first report and findings back in 1988 and continues to provide valuable information related to the U.S. supply chain process. Each year the report factors in key measurements such as transportation, freight volumes, inventory-carrying costs and revenues.

Tags: logistics | industry | report | warehousing | supply chain | air freight

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In an effort to expand it’s global retail reach, Japanese e-commerce company, Rakuten announced the acquisition of a leading online U.S. retailer, Buy.com . The $250 million dollar buyout would put Rakuten in position as the world’s largest online retail marketplace. Combined, both companies would bring 35,000 global merchants and offer consumers over 60 million products. The acquisition will be handled by Rakuten USA (based in Boston), the U.S. subsidiary of Ratuken.

To date, Rakuten, in the Asian market, tops Amazon Japan’s sales and boasts 64 million members and $3.2 billion in sales. This isn’t the first move that Rakuten has made to further reach the American market. Five years ago, the Japanese online retailer acquired Linkshare, a New York-based advertising network for a whopping $425 million.  Rakuten CEO Hiroshi Mikitani views this Buy.com acquisition as an opportunity to truly expand into the U.S. e-retail market and would allow sellers and buyers to connect no matter where they are located.

Here is a glance at both companies as they stand before the deal is completed next month.

Company: Rakuten, Inc.

Founded: February 7, 1997

Based in Tokyo, Japan

Website: rakuten.co.jp

Rakuten, Inc. is currently ranked as the 5th most popular site in Japan for online shopping and has over 28,000 merchants and 35 million different products.

Company: Buy.com

Founded: 1997

Based in Aliso Viejo, California, U.S.

Acquired by Rakuten, Inc. on May 20, 2010, for $250 million dollars.

Buy.com brings more than 12 million customers with a focus on entertainment and technology retail. Part of the dot-com boom from the late 1990s.

Tags: ecommerce | shopping | online | georgia | import | export

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Tags: ecommerce | georgia | technology | SEO | marketing

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Tags: fulfillment | kitting | packaging | warehousing | Gulf of Mexico | oil spill

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On April 20, 2010, an explosion occurred on a BP drilling rig causing 11 deaths. As of today, the leak, located in the Gulf of Mexico continues to reek havoc on our natural resources and could potentially threaten shipping, production and natural gas in Alabama, Louisiana and Mississippi. Industry experts are nervous about the spill spreading west towards New Orleans, which will obstruct ships entering and leaving the Mississippi River-the largest waterway for U.S. commodity ships.

The logistics industry could feel the impact and additional risks associated with this disaster. Ships moving cargo through this major port face the dangers of tracking oil and potentially impeding clean-up efforts, says one BP official.

The danger of fire is always imminent when oil slicks are present in the water. The slicks could also give off toxic fumes, which would put workers in danger.  So far, two gas platforms and one drilling rig has been evacuated.

The leaks, which are located 5,000 feet from the surface of the water are currently spewing approximately 210,000 gallons per day, according to an earlier estimate by The National Oceanic and Atmospheric Administration. A staggering amount when compared to the Alaska Exxon Valdez disaster that occurred in June of 1989. So far, a more accurate estimate has not been established.

As of today, ship traffic has been not been affected, says a Port of New Orleans official. Two clean-up stations have been posted by The Coast Guard close to the Mississippi River for vessels that may encounter the spill. So far, the main channel to the river (The Southwest Pass) has not been affected by the spill and no commercial ships have had to use them.  The Mississippi River has anywhere from 5,000 to 6,000 ship calls annually.

BP (which is financially responsible for the clean-up) continues to seek ways to plug the leaks.    NOAA's website provides updates where you can track and view photos and videos of the Gulf of Mexico oil spill.

Tags: shipping | logistics | oil spill | import | export

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The Georgia Center of Innovation for Logistics held its second annual statewide Logistics Summit Thursday, April 29, to unveil the 2010 Georgia Logistics Report at a gathering of industry leaders. View the full Report.

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Book: Exceptional Service, Exceptional Profit: The Secrets of Building a Five-Star Customer Service Organization (Hardcover), ~ Leonardo Inghilleri(Author), Micah Solomon (Author),

Background: I added this book to my Amazon wish list, which in turn posts to my FriendFeed account. Micah Solomon found my post on Friend Feed and sent me an advance (signed) copy, pretty “exceptional service.” Micah is the small business guy who founded Oasis Disc Manufacturing. Leonardo is best known for his work with the Ritz Carlton.

Main Points: The main points I took away from the book can be summed up in language, anticipation, and tracking.

Language: The need to be intentional about the language you and your employees use. This includes words to use, not use, and words that are “banned.”

Anticipate: Exceptional customer service comes from anticipating your customer’s needs. Anyone can hand a towel to a customer who asks for one, but an “exceptional company” hands you one before you have the chance to ask.

Measure: You NEED a system to track your customers likes and dislikes. Additionally, you can track top problem for continuous improvement programs.

Take Away: Your customer service program must be intentional and must incorporate training that constantly reinforces your program.

Conclusion: Great advice from some world class companies. The pages contain golden nuggets for companies big and small (like mine). My only criticism is I would like to see more case studies. Overall this book is a must read. Highly recommended.

Tags: customer service

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With "Generation Y"—the generation born between 1980 and 2000—making up the second-largest workforce in U.S. history at 70 million-plus people, you can't avoid them if you want to keep your DC fully staffed. But do companies really need to alter their strategies for attracting, retaining, and motivating employees who have never used a typewriter or worked on a carburetor?

Yes, said Don J. Boos, president and managing principal of the professional services firm Gorillas and Gazelles. During his keynote address at the NA2010 Material Handling and Logistics Show, Boos outlined what to expect from this new generation of workers and how to keep them happy.

For one thing, they are technology-savvy and expect the same from their employers. Running old software or hardware (or, heaven forbid, a paper-based system) is the kiss of death to these youngsters, who view old technology as a sign that a company will not be viable in the future. Additionally, if you aren't able to communicate with them through their media of choice, then they figure what you have to say is not of much value, Boos said.

The good news, said Boos, is that concerns about change management related to new technology rollouts are greatly diminished when you deal with Generation-Y workers.

Another key to retention is a flexible work schedule. Boos said that surveys demonstrate time and again that for Generation Y, time off may be valued more than higher pay. Younger workers firmly believe that they should be allowed to work when and where they want—as long as performance requirements are met.

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"Can you imagine that a manuscript can be downloaded from a digital file, printed, pages trimmed, bound and covered with a custom-designed book cover, all within 15 minutes time?"

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Hello Brian

I’m writing to send you a complimentary company copy of our newly released 3PL Market Report North America 2010. You can download the 56pg report at no cost by clicking here: Download Report PDF

Feel free to pass this research on to colleagues, peers or customers who may be interested. Hundreds of 3PL management, senior supply chain and logistics executives, and carriers were surveyed for the report to reveal where the growth areas and new opportunities are in the market.

Key sections include:

• Measures for combating the recession, harnessing the opportunities of the recovery, and being aware of the risk of future economic bubbles
• Regions, verticals and services with the greatest opportunities
• Methods for insulating the business from risk, and dealing with fluctuating volumes and rates
• Key reasons why some 3PL-customer relationships are failing, while others are using the revival as a platform for innovation, growth and profit
• Key SCM challenges including the economy, cost control, supply chain forecasting, managing freight rates & fuel prices, globalizing the supply chain, dealing with demand fluctuations & capacity shortages, improving visibility and managing relationships
• NEW 3PL technology procurement insights for 2010 – Find out this year’s technology investment priorities for 3PLs, shippers and carriers, how they find out about the technologies they buy, and how they like to be marketed and sold to

See below for a list of charts & graphs included in the report.

To get many more findings, graphs and statistics please download the report on http://events.eyefortransport.com/3pl/download-free-industry-report.shtml

This report has been produced to support the content of the 8^th 3PL Summit & Chief Supply Chain Officer Forum in Atlanta, June 21-23, 2010. The brochure for the event at the end of the report details the speakers and agenda, and includes a discount code valid for a total of $300 off a ticket if used before the April 28^th deadline.

These are the unique events that CEOs & Chief Supply Chain Officers consistently leave the office for – and this year sees our best speaker faculties yet, check out the group on www.3PLsummit.com

If you have any questions about the report or the event, or would like to reproduce it anywhere, please don't hesitate to get in touch with me.

Kind Regards,

Katharine O'Reilly
Senior Vice President - Research
eyefortransport
World Phone: +44 (0)207 375 7207
US Toll Free: 1800 814 3459 ext.7207
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To be removed from any further emails concerning 3PL and supply chain research please click on: http://events.eyefortransport.com/3pl/unsubscribe.shtml

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List of Charts

General Charts

Business Type .......................................................................................... 7
Annual Revenues (US$) .............................................................................. 7
Experiencing the Economic Slowdown .................................................... 8
Effects of Economy on Financial Predictions ........................................... 9
Timescale for Global Economic Growth ................................................ 10
Expected Shape of Rebound .................................................................. 11
Industry Concerns ................................................................................ 12-20
Sustainability Initiative Drivers .................................................................. 21
Environmental Performance .................................................................... 22

Charts relating to 3PLs and Manufacturers/Retailers

Measures for Combating Global Economic Conditions ...................... 23
Region with Greatest Opportunities ....................................................... 24
Methods of Reducing Exposure to High Fuel Prices .............................. 25
Increases in ‘Near-Sourcing' .................................................................... 26
Sales & Marketing Strategies Used .......................................................... 27
Manufacturer/Retailer Industries ............................................................. 28
3PL Performance ....................................................................................... 29
Likelihood of an Increase in 3PL Services Used ...................................... 29
Number of 3PLs Used ................................................................................ 30
Use of 4PLs .................................................................................................. 31
Media Resources Used for Supply Chain Management Decisions ..... 32
What Manufacturers/Retailers Look for when Choosing a 3PL ...... 33-36
Biggest Challenges for Manufacturers/Retailers ................................... 38
Key Reasons why Customers Don't Renew Contracts ................... 39
Importance of Innovation to Manufacturers/Retailers ........................ 40

Charts relating to Technological Solutions and Solution Providers

Technology Solutions Used by 3PLs ......................................................... 42
Technology Investment Priorities for 3PLs ............................................... 43
Technologies Expected by Manufacturers/Retailers ............................ 44
Methods of Discovering Latest Technologies ........................................ 45
3PL Drivers for Selecting Technology Providers ..................................... 46
Technology Solutions Provided ............................................................... 47
Solution Provider Prospects ..................................................................... 48
Channels for Marketing Solutions to 3PLs and/or 3PL Customers ....... 49
Drivers for Selecting Technology Provider ............................................. 50
Change in Marketing Budget ................................................................. 51
Change in Sales Force ............................................................................. 51
Demand Compared to Before the Recession ...................................... 52
Revenue Compared to Before the Recession ...................................... 53
New Product Launches this Year ............................................................ 53

Download the full 56pg. report now on http://events.eyefortransport.com/3pl/download-free-industry-report.shtml

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Great article from Wildfire blog today The Value of a Facebook Fan. It turns out that Adweek published the math here.   "Social media specialist Vitrue, which aids brands in building their customer bases on social networks, tried to put a media value on such communities. The firm has determined that, on average, a fan base of 1 million translates into at least $3.6 million in equivalent media over a year.  Vitrue arrived at its $3.6 million figure by working off a $5 CPM, meaning a brand's 1 million fans generate about $300,000 in media value each month. Using Vitrue's calculation, Starbucks' 6.5 million fan base -- acquired in part with several big ad buys -- is worth $23.4 million in media annually."

So is social media just a fad!

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In Adrian Gonzalez's blog Logistics Viewpoints he points out a couple major announcements last week by logistics software vendors.  SBC Fulfillment uses a SaaS WMS product called SmartTurn.  We were an early adopter of SaaS and I have found it to be the future of enterprise software.

Adrian states, "The first three news items from Sterling Commerce, HighJump, and GT Nexus are related: they underscore the growing presence and acceptance of software-as-a-service solutions in the supply chain and logistics market. At its User Conference this week, Sterling introduced “as-a-Service” offerings of its Sterling Order Management and Sterling Multi-Channel Selling solutions. This adds to the company’s other SaaS solutions in TMS (via its acquisition of Nistevo several years ago) and supply chain visibility.

In the logistics space, SaaS first gained traction in the transportation management system market, where it is now the fastest-growing segment. In contrast, SaaS adoption in the warehouse management systems (WMS) market has been slow for various reasons (e.g., business processes are less standard across companies). But as HighJump’s announcement demonstrates, the tide is starting to turn. Here is what my colleague Steve Banker had to say: “There is a good deal to be said in favor of having your supplier host your solution. It allows experts to maintain and upgrade your system; and from a budgeting perspective, having a simplified SaaS payment plan that includes software, the server infrastructure, and maintenance for both, better aligns the costs with a new WMS to the cost reductions it brings.”

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Posted by Dharmesh Shah on Mon, Apr 19, 2010:  "If you have time to read one document on the topic of startup culture, you should read through the NetFlix “culture deck”.  If you have time for two, read through the NetFlix deck twice — it’s that good.  It is so good, in fact, that I’m surprised when I come across entrepreneurs that haven’t seen the deck yet.  These are people that read all sorts of great material on the web to help their startups."

Insights From The NetFlix Startup Culture Presentation

These are just some of the points that jumped out at me.  I’m sure you’ll have your favorite parts too. 

1. Comes right out and says who the “freedoms and responsibilities” applies to.  In their case, salaried employees only.

2. Lots of companies have nice sounding values, but real values are defined by who gets rewarded and who gets let go.

3. You can articulate what you are, and are not trying to do.

4. You can separate what must be done well now, and what can be improved later.

5. You treat people with respect, independent of their status.

6. You accomplish amazing amounts of important work.

7. You focus on great results, rather than process.

8. You have a bias-to-action rather and avoid “analysis paralysis”

9. You create new ideas that prove useful.

10. You find the time to simplify so we can stay nimble.

11. You are quick to admit mistakes.

12. We’re a team, not a family. 

13. A great workplace is stunning colleagues.

14. You behave like an owner of the company.

15. Prevent irrevocable disaster.

16. “There’s no clothing policy at NetFlix, but no one has come work to naked lately.”

17. Act in the company’s best interests.

18. Flexibility is more important than efficiency in the long term.

19. Best managers focus on context rather than control.

20. Titles are not very helpful.

21. Compensation should be about external market value, not internal parity.

22. In some groups, there may not be enough growth opportunity for everyone.

23. Individuals should manage their career paths — not the company.

Which ones do you like?  What did you like that you would have included?  Which parts of the presentation do you disagree with?

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by Angela Cavallari Walker

In an effort to keep up with the Top 500 web-only businesses, consumer brand manufacturers are turning to online selling to stay in the more lucrative e-commerce game.

Amazon.com leads the list of the Top 500 web-only merchants with 52.2% of all web sales. The online retail giant increased their sales from $12.1 billion in 2007 to $14 billion in 2008. If you take Amazon.com out of the equation, manufacturers stand to gain the most as one of the fastest-growing groups in Internet Retailer’s Top 500 Guide.

In the past, most manufacturers have been hesitant to create an online store that would sell directly to consumers. One cited reason was that is might upset or weaken their relationships with distributors and traditional retailers. According to industry analysts, larger chain stores such as Wal-Mart Stores, Inc, and Best Buy are able to better negotiate inventory and pricing with manufacturers through purchasing power. Retailers such as J.C. Penny have focused on producing their own private label brands. This presents a larger threat to consumer brand manufacturers that can be leveraged by selling directly to consumers online. Apple Inc. (number 5 on the list) grew their web sales to $39.4 million in 2008, an increase of over 55%. Brand manufacturers such as: American Apparel, Vera Bradley and Jones also increased their revenues through online transactions.

This trend also creates opportunities and advantages for online merchants seeking a simpler and more streamlined approach to fulfillment. “We are continuing to develop tools and technology that is targeted to the online retail industry,” says SBC Fulfillment President, Brian Schoenbaechler. The Georgia order fulfillment company, launched two connectors last year that allow companies using AbleCommerce and Magento e-commerce software to directly tie into their warehousing, packaging, shipping and fulfillment services. “ The future of the retail industry is dependent on e-commerce, and we want to be a part of this ongoing growth.”

Tags: fulfillment technology | warehousing | packaging | ecommerce

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by Angela Cavallari Walker

Approximately 20% of businesses are currently outsourcing their fulfillment and only 4% of companies are considering using an outside source, says a survey on Operations & Fulfillment conducted by Multichannel Merchant’s Outlook 2010. Additionally, the same percentage of respondents outsource their call center services while 14% of respondents are strongly considering using a call center service.

However, industry experts expect this percentage to rise. One cited reason is the realization that operations can be better controlled by outsourcing to a reputable company. Most importantly, this gives companies the opportunity to focus on merchandising and marketing-the core to sustaining and increasing sales.

While it may have made financial sense a decade ago to handle fulfillment internally, business owners now have to manage the current rising costs of fulfillment. In most cases, direct merchants are able to reduce overall internal fulfillment costs by outsourcing.

Buying Power

The biggest fulfillment expense lies in shipping product to the end customer. Fulfillment outsourcing can reduce a company's internal fulfillment cost through shipping volumes which directly effects freight expenditures.  One key advantage to outsourcing is technology. Order fulfillment companies such as, SBC Fulfillment, spend the investment of researching and purchasing software that supports payment method systems. Recently, SBC added a QuickBooks Connector that directly ties into their online (WMS) Warehouse Management System, SmartTurn.

However, outsourcing does carry some risk. Pick a company that doesn’t understand your industry and products and you could be in hot water. If you do decide to outsource, here are some factors to consider.

-Current Costs You will want to include all your current expenditures to make a sound decision. Be sure to also calculate the current cost of technology, warehousing overhead, hiring and time. Your total annual costs will allow you to better calculate your savings.

-One size does not fit all Each merchant is as unique as their product. When choosing a vendor, be sure that they can or have had experience working with the same or similar merchandise as yours.

-Investigate inventory capabilities One of your largest considerations should be what type of tools your potential vendor uses. Fulfillment services can vary based on their experience with their clients past and current inventory. Improper management of your inventory can not only cause you to lose customers but will severely damage your business’s reputation.

-Pay a visit Before signing on the bottom line, you will want to take a tour of your potential vendor’s site. This may involve sitting in on phone calls (if you are considering call center outsourcing) or taking a tour of their warehouse. Pay particular attention to the rhythm of their operations and determine if that meets yours as well. This would also be a great opportunity to meet your assigned client manager should you decide to go with them.

-Take their services for a test drive Most reputable vendors will allow you to try out their services during a trial period. This can help you evaluate their communication systems, reporting capabilities and day-to-day operations.

-Negotiate your needs When it comes to contract length you will want to go with a term that makes the most sense for your potential vendor and your company. Contracts ranging between two and three years is a good start. Be sure to also cover any potential price increases that might arise in the future.

-Stay involved Keep your vendor informed of any company changes that would directly affect the execution of their services.

To learn more about fulfillment and call center outsourcing visit www.sbcfulfillment.com.

Tags: operations | warehousing | georgia | call center | fulfillment | outsourcing

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