My grandfather was a carpenter, and watching him work, I learned so much about how to avoid costly mistakes. It is critical to be precise, to pay attention to the details, and never, ever assume that something is square, or plumb, or straight. You must check every assumption.
Warehousing and prep is something that also rewards precision. The minute you try to cut a corner is when things go pear-shaped. Thankfully, it’s not too difficult to keep things on track. All you have to do is set up a system and follow that system faithfully.
It sounds simple, but simple isn’t easy.
These days I don’t spend much time on the floor. My job is in troubleshooting. I find and fix the problems that no one has seen before, and then I try to make sure we have a process in place for preventing it, or at least dealing with it the next time. I know that not everyone feels the same reverence for a well-designed system as I do, but I assumed we could agree on the basics: the more transparency into what went where, the better for everyone.
That being said, I am still always surprised at the myriad ways that supply chains can break down, so it isn’t strange that clients, people without much experience in this world, can’t anticipate ahead of time what will go wrong. After all, it’s our job to be the expert here, not theirs.
So I was alarmed to see an announcement from a competing prep center that in two days they will no longer check inventory in upon its arrival. As far as I can tell, their policy will be to not inspect the inventory until they are ready to prep it for Amazon. To be clear, I do not know the full extent of their procedures. But what is in the press release is bizarre enough that I think it needs to be addressed.
It’s a bit like if you hired an accountant and he just threw your receipts in an old shoebox. If YOU want to throw your receipts in a shoebox, that’s your lookout. But he’s the professional and he needs to make sure things are done to a professional standard.
The short version is this: YOU CAN’T NOT CHECK IN PEOPLE’S STUFF. There is little enough transparency and control for 3rd party Amazon sellers without just throwing it in a pile until the Create Shipment trigger comes in.
If that makes sense to you, there’s no reason to keep reading, as supply chain management and inventory management is pretty dry stuff. But if you want to hear horror stories, read on.
Inventory Management is No Joke
Inventory management is one of the hardest problems in retail. One of the hardest problems anywhere, in any field involving physical items. You have probably heard of the concept of shrinkage. Most people think shrink is only caused by theft or fraud, but in reality, there’s a ton of ways for things to just get lost or damaged. Add in transport and the sheer number of times items change hands, and even if the percentage of problems overall is very small, the number adds up in absolute terms.
Let me just run down a list of all the ways a simple shipment from a supplier to a prep center can go wrong:
- Item not shipped (either at all, or not in correct qty)
- Item misplaced in shipping (it never turns up again)
- Item damaged in shipping (USPS forwards the item to their lost mail division, but they tear off the label and send it to us for tracking purposes)
- Item misdelivered. (Surprise! Your tracking number will say delivered, but GPS shows it scanned delivered at the wrong location. One time a box got misdelivered to Michigan. I’m still not sure how.)
- Item arrives at prep center, but without your name on the label, so we don’t know whose it is
- Item arrives, but the flap of the box is torn open a little bit so we really hope everything that’s supposed to be in there is in there. (Hope your supplier included an invoice)
- We received an item, but that item isn’t in your spreadsheet. Are you just bad at recordkeeping, or did someone send you the wrong item? Hopefully the supplier used a name you recognize in their return address so you can track it down.
- It’s surprising to some people but once it actually gets to the prep center, it’s unlikely to get lost or damaged. It’s moving the inventory that causes the vast majority of problems. But once in a while we do track down a missing item mistakenly stowed in an adjacent bin.
None of these are particularly large issues, and almost all of them can be either worked out with the supplier or the shipping company if you find out in a timely manner. You’ll get a refund, or make a return, and that will be the end of it.
If you wait until it’s time to ship, even if you ship within a week or two, the complications stack up. That’s why we flag the problems early, and we don’t ship anything that hasn’t had those flags cleared.
Imagine the scenario if your inventory sits, still wrapped, for two weeks until it “looks like” enough for a shipment.
- Did you receive an item that was in markedly worse condition than expected? So is it supposed to be shipped or not? Trust me, clients all have VERY different philosophies on this subject
- Did you receive the wrong item? Well, that’s a big ole can of worms. Probably it can’t be shipped even if you wanted it to, since it doesn’t have a listing. But it will sit there, taking up space and getting staler until you figure it out. And you lose two weeks if you don’t find out about it ahead of time.
- Did you receive a counterfeit item? Well, hopefully that won’t get shipped. But in the meantime, you didn’t know you needed to blackball that supplier, so in the interim, you’ve bought a dozen other items off him.
- Do you have 40 items marked “Delivered” and only 36 showed up in the shipment? Where did they go? Well, if they’d been checked in, you might have been able to find out that instead of 4 books in one shipment, only 3 arrived, and that two others are misdelivered, and it’s anyone’s guess what happened to the fourth. Maybe it’s that wrong item that showed up.
Do you see what I mean? It’s ludicrous that not checking in items until it is time for them to be prepped would be acceptable.
I’m not suggesting that you need to quiz up every prep center that you research on whether they do checkins. There are hundreds of prep services and this is the first I’ve heard of anyone thinking checkins are optional. However, because that prep center is offering their services so cheaply, I know that a lot of people don’t understand enough about warehousing to know how corners need to be cut in order for the economics to work for them. They chose to cut something I truly believe is integral to transparent and trustworthy inventory management, and that is why I made this very dry and boring explanation of all the ways that things can go wrong if you get rid of that piece of the system.
Hopefully, the more I talk about the behind-the-scenes of supply chains and inventory management, the more you will be able to understand that a trustworthy prep center partner is worth the extra expense.
As of this writing, we are still accepting new clients (January 2020), so if you are interested in signing up, please use the contact form to inquire.