OzLINK Advanced Fulfillment Guide for NetSuite

ELOPMENT OzLINK Advanced Fulfillment Guide for NetSuite Learn more about OzLINK s solutions for NetSuite at:

1 Table of Contents 1. Warehouse Challenges for Growing Businesses 2 2. Opportunities for Warehouse Optimization 3 3. Bar Code Scanning Defined 4 4. Mobile Technology 7 4.1 Purchase Order Receiving and Put Away 7 4.2 Wireless Order Picking 8 4.3 Inventory Cycle Counts 9 5. Serving Increasing Complex Sales Channels 10 5.1 Get the Broadest Carrier Support 10 5.2 Ship Small Package or Freight Generate a Bill of Lading 12 5.3 Business Rules Balance Service Levels and Costs 14 5.4 Analytics for Shipping & Handling Costs 16 5.5 The Right Documents and Process for your Customers 17 5.6 Serve International Customers 17 6. Fulfillment Process and System Integration 18 6.1 Pack Verification 18 6.2 Combined Pack List and Shipping Label 18 6.3 Integrated Scales 20 6.4 Batch Processing 21 6.5 Streamline Returns Processing 21 7. OzLINK Solutions for NetSuite 22 7.1 OzLINK Mobile 22 7.2 OzLINK Shipping 22 7.3 OzLINK 3PL Ordering 22 7.4 OzLINK Packing 22 7.5 OzLINK Combined Pack Slip and Shipping Label 22

2 1. Warehouse Challenges for Growing Businesses Managing a fulfillment operations for a high growth business can be one of the most challenging jobs. The difficulty comes in balancing the ever heightening customer expectations with rigorous cost constraints. It is a requirement to be able to have a highly flexible workforce with minimal required training. As companies grow, their business, suppliers, sales channels, and the goods they sell typically expand. This further adds to the complexity. Operating a highly efficient warehouse presents the following challenges: Maximizing customer satisfaction by getting orders filled correctly and delivered on time. Ensuring picking and shipping errors are minimized. These can cost anywhere from $50 to over $500 per order. Maximizing the efficiency of the warehouse team to ensure their tasks are all adding to the customer value with minimal costs. This includes no overtime and no wandering around finding items. Efficiently receiving goods into the warehouse and getting them available for sales as rapidly as possible. Ensuring goods that were ordered are received completely. Controlling transportation costs in balance with customer expectations.

3 2. Opportunities for Warehouse Optimization To address the challenges above there are a number of opportunities that will increase the performance of your warehouse while reducing errors and controlling costs. These include the following: The use of mobile technology to guide workers through tasks, reducing errors, increasing visibility, and minimizing the need for training. Automation of clerical tasks and bar code scanning. For example, processes such as purchase order receiving, updating inventory counts, or typing data into your shipping system with bar code scanning. Create flexibility to support multiple sales channels with multiple shipping options, business rules, and producing the right documents. Integrate systems and process steps to eliminate low value steps or cut out tasks completely.

4 3. Bar Code Scanning Defined Many customers inquire about bar code scanning as they look to improve their operations. Their first question is, Do you support bar code scanning? This can mean a lot of different things and the investment levels can also vary dramatically. However, implementing bar code scanning can be one of the most important outlays you can do. Bar code scanning can improve operations through-out your warehouse as shown in Figure 1. 4 Areas to Improve with Bar Code Scanning 1 Receiving & Putting Away 2 Picking Area 3 Pack & Shipping 4 Inventory Counting & Moving Quality Control Secondary Storage Area Figure 1: Four Areas to Improve with Bar Code Scanning

5 The costs to invest are all different. While handheld computers certainly garner the coolness factor, based on your operation you may be better served with a tethered scan gun. To determine the process of where to apply bar code scanning, you should start with current areas that need the biggest improvement or are causing issues. For example, are you having too many fulfillment errors? Working overtime to get orders out? Are your suppliers sending the right quantities? Where is the biggest pile of paper? Having identified the process areas will then lead you to define where bar codes should be created and leveraged. Be careful as it may be most cost effective to fix something upstream. For example, picking errors may be improved with bar coding, but it may require the labels to be applied at time of receipt. In order to leverage bar code scanning in your distribution center there are three dimensions you should consider: Which processes can best be optimized with bar codes? How are bar codes created and where should they be applied? What is the right technology? Should you use wireless scanners, handheld computers, or a wireless computer cart? Bar code scanning does not necessarily mean handheld computers or even wireless scanners. In fact, based on your operations, a mix of technologies might be appropriate. For example, if you have multiple smaller orders which are quickly received and put away, it might be best to have a tethered (wired) scanner. The scanner should have a local PC and the ability to print and apply additional bar code labels as items come in. Alternatively, if big shipments come in that take hours or days to count and receive, resulting in a large receiving area, a mobile scanner might suffice. Finally, if you need to create labels in this scenario, a mobile printer could be justified. Bar codes can be applied to in countless ways. Understanding the options within the above processes is critical to gaining performance improvements you need. Ideally, you would want items flowing into your distribution center to be bar coded or be able to leverage their UPC code. However, based on packaging, items, and suppliers this is not always possible. Also it may not be required (or feasible) to bar code all your items.

6 You may simply bar code their bin location or the pallet on which they sit. Other examples of applying bar codes is on pick tickets. The order number can be bar coded or the line items can be bar coded. During the pick process you could use bar codes to apply license plates to boxes or totes if you use them in multi-order picking. This speeds up the shipping process. At pack time scanning the pick list and items can speed the pack verification process. To gain advances in the picking area, wireless is typically a must. However, there are also choices on the technology. If you are a high volume, fulfilling single orders with a small package, handheld computers are probably the best option. Alternatively you may be doing a lot of palletized shipments and have wider aisles, making mobile computer carts feasible. Regardless of where you start, it is important to get some experience. Bar coding impacts your workflow, training, systems management, and possibly your supplier and customer relationships. The sooner you develop your expertise, the faster your operation will reap the benefits.

7 4. Mobile Technology Your goods and people create the flow of your warehouse and so should your technology. The biggest advantage of mobile technology is that it allows your employees to do the work they need to where they need to do it. These tasks can include: purchase order receipt, moving and putting away inventory, order picking, inventory counts, and returns and receiving. Beyond eliminating paper processes, next generation mobile applications also guide workers through the tasks. This drastically reduces training, drives best practices, and eliminates costly errors. 4.1 Purchase Order Receiving and Put Away The issues with purchase order receipts when not performed efficiently can lead to inventory discrepancies, overpaying vendors, and delays on customer fulfillment. Improving information quality on your goods in the warehouse starts with accurate and timely receiving. Ideally, this process is initiated at the supplier, with accurate labeling and bar coding of the shipments before they are transported to your warehouse. However, based on the mix of goods and the influence you have, this may not be possible. With mobile bar code receiving and put away you can: Cut down on the manual time and paperwork in checking against the purchase order. Instantly capture new inventory and make it available for sales order fulfillment. Create case or item level bar codes for optimized flow within the fulfillment process. Capture serial numbers or lot information. One of the key characteristics of a general mobile solution is real time connectivity to the NetSuite inventory and purchase order records. This ensures a single record of the truth, avoiding duplicate databases, and issues caused by discrepancies.

8 4.2 Wireless Order Picking Picking is typically one of the most labor intensive tasks within the warehouse. Based on your SKU mix and warehouse labor with manual paper picking warehouse personnel can spend up to 35% of their time walking. With the pressure to increase productivity you need to increase their time picking orders, while reducing their time finding and moving inventory. In considering whether wireless picking is a fit for your distribution center, and how to determine the best fit, you need to consider the following questions: Do you perform single order picks or multi-order picks? Based on the layout, size of goods, and order volume, should you leverage handheld mobile computers or mobile PCs on carts? Do you need to print labels or documents as part of the pick/pack process? Do you pick into boxes or have separate totes with packing handled downstream? Different approaches will be appropriate based on the answers to the above. By implementing the picking process with mobile technology you will: Cut down on walk time. The picker will be guided through the warehouse in the most efficient manner. Improve the accuracy of orders. Since the scanner is connected to NetSuite real time, if the primary picking bin does not have sufficient quantity, they can be directed to alternative locations or even to quantities available on the dock. Capture tracking information such as serial numbers to improve customer service. Ability to integrate packing into the process eliminating separate steps. OzLINK Mobile supports multi-order picking and paperless picking with capabilities to address your processes. This will drive improved fill rates with your same staff. The intuitive user interface makes adding and training staff extremely cost effective. The guided pick locations, error checking, and guided data prompts ensure employees are productive within hours.

9 4.3 Inventory Cycle Counts With success and growth comes complexity. Keeping accurate inventory counts is the lifeblood of accurate orders and profitable growth. The challenges created by your expansion include: Increased number of SKUs to track. Multiple locations where goods might be kept. Broader mix and more rapid changes based on seasonality, promotions, or expanding channels. Ensuring you manage the inventory within your distribution center is critical to minimizing missed orders or excess inventory which needs to be written off. It is critical to practice proper financial controls and regulations. With OzLINK Mobile, you can run periodic inventory counts based on the jobs that fit your distribution center and your schedule. OzLINK Mobile directs the user through the distribution center and ensures not only the actual quantity is accurate in NetSuite, but also where in the distribution center the goods are located. The exception management and automatic reconciliation capabilities ensure your efforts are spent on the counts rather than checking paperwork and manually updating NetSuite.

10 5. Serving Increasing Complex Sales Channels Expansion of sales channels and customer requirements are constantly increasing driving further complexity in managing the delivery of orders to your customers. In order to position yourself for these challenges, you need to ensure you have the flexibility in shipping options, as well as the ability to produce the right documents for your customers. Those documents could be specialty branded packing slips for your B2C channel while the large retailers are requiring vendor compliance labels and advanced shipping notices (ASN). OzLINK provides the most flexible and advanced shipping and fulfillment options for NetSuite users. This advanced guide outlines how you can leverage OzLINK to: Increase carrier options to support your growth including small package and freight. Better control your shipping costs through business rules. Produce the right documents and processes to support your customers. Support expanded sales with automation of export shipments. 5.1 Get the Broadest Carrier Support Shipping is a key component of your overall costs whether you send product to consumers or other businesses. Balancing those costs against customer expectations is one of your most fundamental responsibilities because OzLINK leverages carrier provided software. OzLINK delivers a combination of the broadest support of carrier services and automated carrier service selection as shown in Table 1 and Table 2.

11 Carrier Service Native NetSuite Shipping OzLINK Advanced Shipping UPS Package Services UPS Air (all services) UPS Ground UPS Mail Innovations UPS SurePost UPS Hundredweight UPS Freight Services UPS LTL/Freight UPS Air Freight UPS Return Services Print Label (Include with outbound shipping) Electronic Label Print and Mail Authorize Returns UPS Special Services Signature Services Proof of Delivery Insurance COD UPS International Paperless Invoice Table 1: UPS Services

12 Carrier Service Table 2: Other Carrier Services Native NetSuite Shipping OzLINK Advanced Shipping FedEx Package Services FedEx Express (all services) FedEx Ground FedEx SmartPost Multi-weight FedEx Special Services Signature services Proof of delivery FedEx Electronic Trade Documents USPS Package Services Parcel Select Parcel Post Priority Select Regional Ground Commercial Plus Purolator Package Services Purolator Express (all services) Purolator Ground (all services) 5.2 Ship Small Package or Freight Generate a Bill of Lading If you ship pallets OzLINK simplifies the LTL shipping by using the information in NetSuite to fill out a standard Bill of Lading (Figure 2). The user has the ability to input the number of packages or pallets along with the total weight for shipment. They can enter the carrier s PRO number or it can be generated automatically.

13 Date: BILL OF LADING Page Name: Address: SHIP FROM Bill of Lading Number: BAR CODE SPACE City/State/Zip: SID#: FOB: SHIP TO CARRIER NAME: Name: Location #: Trailer number: Address: City/State/Zip: CID#: FOB: THIRD PARTY FREIGHT CHARGES BILL TO: Name: Address: Seal number(s): SCAC: Pro number: BAR CODE SPACE City/State/Zip: Freight Charge Terms: (freight charges are prepaid unless marked otherwise) SPECIAL INSTRUCTIONS: Prepaid Collect 3 rd Party (check box) CUSTOMER ORDER INFORMATION CUSTOMER ORDER NUMBER # PKGS WEIGHT PALLET/SLIP (CIRCLE ONE) Y N Y N Y N Y N Y N GRAND TOTAL Master Bill of Lading: with attached underlying Bills of Lading ADDITIONAL SHIPPER INFO CARRIER INFORMATION PACKAGE COMMODITY DESCRIPTION LTL ONLY HANDLING UNIT QTY TYPE QTY TYPE WEIGHT H.M. (X) Commodities requiring special or additional care or attention in handling or stowing must be so marked and packaged as to ensure safe transportation with ordinary care. See Section 2(e) of NMFC Item 360 NMFC # CLASS Where the rate is dependent on value, shippers are required to state specifically in writing the agreed or declared value of the property as follows: The agreed or declared value of the property is specifically stated by the shipper to be not exceeding per. RECEIVING STAMP SPACE GRAND TOTAL COD Amount: $ Fee Terms: Collect: Prepaid: Customer check acceptable: NOTE Liability Limitation for loss or damage in this shipment may be applicable. See 49 U.S.C. 14706(c)(1)(A) and (B). The carrier shall not make delivery of this shipment without payment of freight and all other lawful charges. Shipper Signature SHIPPER SIGNATURE / DATE Trailer Loaded: Freight Counted: CARRIER SIGNATURE / PICKUP DATE RECEIVED, subject to individually determined rates or contracts that have been agreed upon in writing between the carrier and shipper, if applicable, otherwise to the rates, classifications and rules that have been established by the carrier and are available to the shipper, on request, and to all applicable state and federal regulations. This is to certify that the above named materials are properly classified, described, packaged, marked and labeled, and are in proper condition for transportation according to the applicable regulations of the U.S. DOT. By Shipper By Driver By Shipper By Driver/pallets said to contain By Driver/Pieces Carrier acknowledges receipt of packages and required placards. Carrier certifies emergency response information was made available and/or carrier has the U.S. DOT emergency response guidebook or equivalent documentation in the vehicle. Property described above is received in good order, except as noted. Figure 2: Bill Of Lading

14 5.3 Business Rules Balance Service Levels and Costs The ability to configure or customize your shipping environment around your specific business rules is the most powerful capability within OzLINK. It is also one of the most critical needs for you to service your customers while controlling transportation costs. Some simple examples of business rules include: If shipment is to PO and APO box, use USPS. If shipment is less than 2 lbs, ship via UPS SurePost. If shipment value is over $100, require insurance. If shipment is going to an urban environment, require proof of delivery. Based on consignee, ship using the appropriate requested account. The business rules you automate through OzLINK eliminate shipping errors, ensure your costs are contained, minimize training, and speed up your fulfillment operations. What makes OzLINK unique is the ability to define business rules based on virtually any attributes. This is illustrated in Figure 3. The input to the OzLINK business rules engine come from three sets of information: (1) shipping details, (2) consignee information, (3) address information. OzLINK can be set up to leverage any of these inputs or a combination of these inputs. OzLINK then determines the optimum carrier and service combination.

15 Business Rules Weight, dimensions Value Commodity Delivery Rate Loyalty Programs Drop Ship Preferred Carrier Residential/Commercial Urban Environment PO Box International/Export Shipment Details Consignee Origin/ Destination Address OzLINK Automate Business Rules Carrier Services Selection Figure 3: Business Rules

16 5.4 Analytics for Shipping & Handling Costs Getting the visibility at a detailed level is critical in order to ensure that you are leveraging flexibility in the most optimized way whether you use shipping as a marketing tool or a profit center. With OzLink Shipping you get three invaluable reports (Figure 4): OzLINK Carrier Shipping Cost Analysis: Provides visibility by shipment of your shipping charges, costs, list rates, and margin. OzLINK Shipping Cost Profit/Loss by Customer: This report shows your profit/ loss by customer. This is especially useful in conjunction with B2B scenarios as well as customer loyalty programs that provide preferential shipping options. OzLINK Shipping Cost Profit/Loss by Date: This is a very useful tool to measure the impact of promotions, marketing programs, and seasonal changes in your shipping volumes and the impact on your profitability. You can set up your own handling charges to ensure you cover your costs appropriately. These can be a flat fee or as a percent of the shipment costs. Figure 4: OzLINK Shipping Report

17 5.5 The Right Documents and Process for your Customers Whether you serve ecommerce or wholesale customers they are constantly raising the bar in terms of expectations. Having the flexibility to serve your customers in the most flexible way is a business opportunity. The capabilities of OzLINK allow you to increase your business by leveraging your expertise in logistics. These include: Drop ship capabilities on behalf of your wholesale customers. Multiple options for billing of shipping, leveraging your contacts, or your partners. Increase time to delivery for your customers by having your suppliers ship on your behalf. Fulfillment across multiple brands and market segments including customized labels and branded pack slips. Multiple delivery options including Saturday delivery. Streamline return processing. Creation of compliant vendor labeling and ASN s for your large retailer customers. 5.6 Serve International Customers International shipments can be the most time consuming and complex transactions with greater data requirements and export documentation regulations. OzLINK streamlines the integration of international commodity information with your carrier shipping software. This results in the creation of the correct export documentation handled in the same flow as domestic shipments. Finally, by leveraging paperless commercial invoices with UPS, you can reduce paperwork further by speeding up the process and lowering costs.

18 6. Fulfillment Process and System Integration Improving your fulfillment process through either process changes, automation, or integration of your systems can create significant operational savings. The benefits include cutting down or eliminating manual tasks and reducing errors. Not eliminating these errors can increase hard costs such as a customer receiving a late or inaccurate order. Areas of opportunity include pack verification, combining packing lists and shipping labels, integrated scales, batch processing, and automating returns. 6.1 Pack Verification OzLINK pack verification reinforces the accurate packing of orders fulfilled in your warehouse. Within NetSuite, the operator selects the sales order to be pack verified and scans a bar-code identifier for each item in the order. OzLINK validates the scanned item against the fulfillment within NetSuite. The bar code scan must match the NetSuite item name or UPC number. If the item matches the fulfillment OzLINK updates the item fulfillment. If the order fulfillment requires multiple quantities the user can enter these or scan multiple times. OzLINK also supports item serial numbers or lot numbers to be captured consistent with NetSuite processing. 6.2 Combined Pack Slip and Shipping Label Creating an integrated pack slip and shipping label can be one of the quickest ways to cut down on steps within your operations as well as reduce shipping errors. The combined pack slip and label moves the labeling process upstream, saving at the shipping station or even reducing dedicated shipping stations. Figure 5 shows an example of that label.

19 PACKING SLIP DATE: JANUARY 1, 12012 THANK YOU FOR YOUR ORDER! Please contact Customer Service at 508-366-1969 with any questions or comments. SHIP TO James Lach NetSuite 2955 Campus Drive San Mateo, CA 508-366-1969 BILL TO James Lach NetSuite 5800 Explorer Dr. Cooksville, ON L4W 5J3 508-366-1969 ORDER DATE ORDER NUMBER JOB January 1, 2012 456787 Ecommerce Order DESCRIPTION QUANTITY 348957 Great Products Package 1 Figure 5: Combination Slip & Shipping Label

20 6.3 Integrated Scales Weighing shipments is critical to getting accurate shipping costs. Unless you have very accurate weights within NetSuite or various mixes of packaging, capturing the shipment weight is the best way to ensure your rates are accurate. This is valuable in conjunction with packaging type and dimension outlined in Table 3. Type Model Number Detecto AS400 Detecto AS420 Digi 610 Endicia 2500U Endicia 7500U Express Cube Fairbanks SCB R9000 Fairbanks SCB R9000 P2 Fairbanks 70-2453-4 Fairbanks 70-2455 NCI 3825 NCI 3835 NCI 7010 NCI 7620 NCI 7720 NCI 7880 NCI 7880 (lo-res) Ohaus Adventurer Pro Pelouze 10-lb USB Pelouze 4030 Pelouze 4060 Pelouze 5-lb USB 4019 Pitney Bowes MP06 Precision Parcel PS30/PS31 Stamps.com 2510 Toledo 8213 Toledo FedEx Toledo UPS Toledo PS15 Table 3: Supported Scales

21 6.4 Batch Processing Batch processing enables you to fulfill orders by either selecting the orders on NetSuite s fulfill sales order screen or by choosing to fulfill all orders currently pending fulfillment. OzLINK automatically processes all orders selected and sends each order to the carrier provided shipping software. Batch processing supports UPS, FedEx, and USPS. This process assumes the following: Each order fulfills within one package. The shipment weight is equal to the total item fulfillment weight. A configurable additional box weight. Customized rules can be applied. 6.5 Streamline Returns Processing Returns can be one of the most under managed processes creating unexpected costs, and resulting in reduced customer loyalty. OzLINK can eliminate these issues. With OzLINK you have the flexibility to create alternate return addresses. This is very important if you are handling any outsourced fulfillment and/or drop shipping. OzLINK can also manage the return shipment process. Based on your customer service strategy, OzLINK supports two methods of returns: (1) Post sales with the creation of a return authorization where OzLINK creates the return shipment with the carrier and integrates the tracking number and other pertinent information into NetSuite; (2) At time of shipment a return label can be automatically generated and included in the outbound shipment.

22 7. OzLINK Solutions for NetSuite OzLINK provides a series of modules that are designed to optimize your NetSuite fulfillment from receiving goods into the warehouse to delivering them. 7.1 OzLINK Mobile OzLINK Mobile enables you to quickly receive purchase orders, dynamically move inventory, and pick orders faster without making mistakes, using a few simple prompts on a wireless mobile computer with a built-in barcode scanner. 7.2 OzLINK Shipping OzLINK Shipping automates your fulfillment process, allowing you to ship more orders per day with fewer mistakes. You can ship with all three major carriers simultaneously. OzLINK Shipping automatically reads package weight from your digital scale for faster more accurate processing. 7.3 OzLINK 3PL Ordering OzLINK 3PL Ordering provides integration and visibility to those fulfillment operations that you have outsourced to a 3PL. It provides the integration with NetSuite to ensure that you gain the cost advantages of using a 3PL without losing the control. 7.4 OzLINK Packing OzLINK Packing reinforces the accuracy of orders fulfilled in your warehouse. Within NetSuite, the operator selects the sales order to be pack verified and scans a bar code identifier for each item in the order. OzLINK validates the scanned item against the fulfillment within NetSuite. 7.5 OzLINK Combined Pack Slip and Shipping Label The OzLINK Combined Pack Slip and Shipping Label gives your shipper all the information they need to complete an order on one sheet. This combined label will help you to cut down on steps within your operations and reduce shipping errors.

ELOPMENT About Us Oz Development provides business application integration solutions that drive outstanding business results in organizations of every size and category. Our OzLINK solutions have created value for more than 10,000 customers in industries such as manufacturing, retail, education, health care, government, and financial services. Our expertise on their business operations is what separates us from everyone else. With a customer-focused culture as our single most important quality, we have worked to achieve exceptional growth rates. Oz Contact Information: Phone: 508-366-1969 Email: sales@ozdevelopment.com Website: www.ozdevelopment.com