The E-Tail Process Platforms, Payment Gateways, & Logistics Module: Introduction to eCommerce 102 Title: What is fulfillment and how it can help your business Presenter: Tommy Yong, Co-Founder (iStoreiSend) Date: 15 March 2016 Venue: Selangor Digital Creative Centre

1. Store & Send Logistics Sdn Bhd

2. Consumer Facing Economy
The digital age has drastically
changed customers consuming behaviour.
Empowered
• Direct
• Social
Connected
• Multi Channel
• Experience
Time Starved
• Real Time
• Mobile

3. Result
As a result the
Retail Landscape
Changed
The Rapid Growth of
eCommerce around the Globe
Whats changing next?
how we manage the
Supply Chain
will change, Big Time

4. Disruption in the supply chain, from B2B to B2C
Fundamental Differences
B2B B2C
Order Size Large Cartons Small Parcels
Order Processed 10-100s 1,000-100,000s
Shipment Nature Scheduled Erratic
Order Frequency Weekly Daily
Receiver Business Consumer
Expectation Medium High
Cost Sensitivity Medium High
Tracking Good to Have Mandatory
Service Level Med High
Road Block to realize the full
potential of eCommerce

5. The Invisible Cost of Misaligned Supply Chain
Incorrectly Align Perfectly Align
Storage Cost High
Pallet / Shelf
base charge rate.
Under utilised storage is
charged Low
Unit measurement
base charge rate.
Under utilised storage
uncharged
Process not build to manage
low qty & high SKU, high
inventory lost.
Build to manage. Low
inventory lost, highly
accurate realtime inventory
Pick & Pack
Cost
High
Paper Picking method.
Low efficiency,
High Error Rate.
Low
Digital Picking method.
High efficiency,
Low Error Rate.
Delivery Cost High No Value Add, No Savings Low
Consolidation
of orders + last mile cost
optimization, reduces
average delivery costs
Customer
Experience
Bad
Slow fulfilment results in
longer order to receive time +
high error rate + unsuitable
packaging leading to damage
item ,with no clear return
process leads to frustrated
customers
Good
Fast fulfilment results in short
order to receive time + low
error rate + customised
proper packing leads to
higher customer satisfaction
Likely to return purchase
+
recommend to others
CAC
LTV
constant
out of stock
orders!
No return purchase
+
negative feedback to others
LTV0

6. Inventory Management Basics
What should i know about
SKU?
• SKU (stock keeping unit) is your product’s Unique Identity
• It is usually an alphanumeric combination of 6-20 characters
• It is used to identify and track your product on a system
• Before you can sell on most online marketplace, you will be required to
give your product a unique SKU
Not Same SKU
WDB1100RW WDB1100BR

7. Inventory Management Basics
Why is SKU important?
• Attach and collect information for each unique product / Variation
• Name, Description, Size, Weight , Value
• The basis for inventory management.
SKU Count SKU Movement
• On average, merchant stock
around 200-300 different SKU
• 20% of your SKU will
contribute 80% of your volume
Inventory Size
• Track your product history
• How long has the product
been sitting around?
• How many qty has been
sold? daily?
• Space Occupied
(Storage Cost)
• Inventory Value
(Money tied down in stock)
• Inventory Risk
(Flood / Fire / Burglary)

8. Inventory Management Basics
Understanding & Categorising
your products (SKU)
• Find how many units of SKU moved / day
(total in / total age in warehouse), Call this Turn (unit/day)
• Sort from top to bottom in accordance to turn,categorised them from
A-D.
• Normally A (top 5%), B (5-20%), C(20-50%), D(50%)
• Look into the list created and you will find interesting information about
your SKUs.
Example
XL size pamper’s turn is twice of L size
L size pamper’s turn is twice of M size
M size pamper’s turn is twice of S size
XL size move 10 times faster than S size

9. Inventory Management Basics
Stock Control &
Replenishment
Buffer Stock Days
SKU Velocity
(Turn)
40
Current Stock
Level
Ordered Stock
Quantity
100 7 50
How much should we replenish?
What else did we miss out?

10. Inventory Management Basics
Calculating your
average logistic cost / unit
Storage
Cost
Processing
Cost
Distribution
Cost
• Average Stock Age
• Fixed
Rent+Utilities+Insuran
ce
/Space (M3)
• Packaging Cost
• Orders
Processed/Headcou
nt/Day
• Stationary Cost/Total
Orders
• Total Delivery
Cost / Order
Qty
logistics cost on average is 10%-15% of revenue
How can we reduce this cost?

11. Inventory Management Basics
Storage
RM1
Processing
RM2
Distribution
RM7
Increasing basket size and consolidation of items.
Increase Item velocity, reduces storage cost
Delivery charges shared among more items, reduce distribution cost
Storage
RM0.5
Processing
RM2
Distribution
RM4.5
Standard Logistics Cost / Unit

12. Fulfilment in a Multi Channel Environment
International Marketplace Personal Web Store
Sales channel becoming more and more complex!
Group Buying
VerticalsLocal Marketplaces
Social /
M-Commerce

13. Fulfilment in a Multi Channel Environment
• In order to maximise sales, merchant will list all SKU on all channels
• Sales happens in real time across all channels, inventory updates are not
updated.
• Too many channels to manage, each channel have their own management
system, takes more time to update delivery details and manage orders.
Result
• Over sold happens frequently, resulting in delay in delivery and reduce
customer satisfaction
• Orders not fulfilled / delayed.
• Tracking information are not updated accurately
• Consolidating inventory agains sales becomes more challenging
How to manage this?

14. Fulfilment in a Multi Channel Environment
Managing Self Fulfilment
SoftwareLabour Packaging Hardware
• Hire more
hands to pick
and pack,
process more
orders and
monitor each
order status.
• Buy more boxes
to reduce
damage and
standardise
packaging
process
• Get an inventory
management
software that is
catered to B2C
businesses
• Buy a dot matrix
printer for
manual CN
• Buy handheld
scanners to
scan delivery
tracking code
Invest in more space & warehouse racking

15. Managing Multi Carriers
Local Carrier International CarrierSpecial Service Carriers
COD, Cold
COD, Same-Day
Parcel Lockers
Tesco,
Petronas
& LRT
Optimising Last Mile
On Demand

16. Managing Multi Carriers
Average Delivery Time
merdeka week
Anticipate spikes and managing recipients expectation
hari raya, one week lead time

17. Fulfilment in a Multi Channel Environment
Managing Multi Carrier
Tracking &
Pick up schedule
Delivery Zone Size of package Returns & Claims
• Sabah/Sarawak
= Poslaju,widest
coverage
• ODA, outskirt
delivery area =
extra charges
• Different zone
different carrier
different price
• Difference in
size = different
pricing.
• Some scales by
every KG, some
scales every
250gram.
• Some bracket
pricing.
• Try to arrange
for the latest
pick up slot.
• Distance to
sorting hub
results in delay
in delivery
• Cut off time for
collection
• POD
• Attempt count
• Return time
frame
• Claims clause
• Claims process
& rules

18. Are you ready for eCommerce Fulfilment
Delivery
Service
Multi Channel
Management
Customer
Support
Small
(20-100)
ValuePropositions
The Need for a Central Platform
By integrating various aspect of the supply
chain together. We can then maximise value
Fulfilment
Service
Analytics
Medium
(100-300)
Orders/DayMicro
(10-20)
Large
(300+)
The value of an on-demand scalable
fulfilment service becomes even greater as
volume increases
Sales channels becomes more varied and
complex as market shares increases
Savings from consolidation and logistics
cost optimisation becomes more prominent
As Volume increases, optimisation of
supply chain results can become a leading
advantage against competitors
By successfully implementing good
customer support service, such as returns
and warranty policy, customer loyalty and
awareness increases.
As size grows, more value is gained by engaging the right
fulfilment partner

19. IStore ISend : The Story So Far
Data Analysis
Rigorous data analytics of
clients’ distribution data
allows us to unlock value
for clients, allowing for
cost optimization and
serve untapped markets
Customer Focus
Flexible technology and
processes allows us to
collaborate with clients
on new distribution
channels and market
opportunities
Client Integration
Full seamless integration
of proprietary WMS with
clients uniquely allows
clients to reduce costs
and redundancies
Industry Leader
Every step of the
logistics process is
digitally tracked and
benchmarked, resulting
in the lowest shrinkage
levels in the region
Focus on Technology
Optimization and Integration

20. 50,000 sqft
build up
space
4 Storeys of Shelving
6 tier
racking
50,000 pick faces
TPG Warehouse

21. ODiN (Online Delivery & iNventory System
Multichannel Management
• Order History
• Order Creation
• Inventory Management
• Reporting Tools
Order Status
From Pick to Packing
Delivery Status

22. Visit iSIS at
www.istoreisend.com