Fulfilment Center

The legacy business model

A UK retail brand has its manufacturing function based in India and Bangladesh. In the event of online pre-orders, flash orders and B2C orders, the company operates managed Fulfilment Centers / Distribution Centres (DC) in UK with transit times of 25 days in average from manufacturer location to distribution center. For an ecommerce operation as ideally form online order purchase a customer would expect the purchase to reach their door step at least in 4-5 days.
Also with the Brixit the UK distribution center could not directly supply to EU region customers which also resulted to maintain another distribution center in Spain which was add on investment and resourcing with also again 16 days’ transit time from manufacturer locations which was again not feasible.

What went wrong?

The extended transit times from origin to fulfilment locations has given way to multiple operational inefficiencies, causing delays in order delivery and inability to meet customer expectations. Of them all, the more critical concern was of item replenishment if and when product defects or variations are identified. As most such detections are made once products are received at the DC, the full transit time must again be borne before the replacement item arrives. By this time, the delivery cycle is severely behind schedule, making it near impossible to meet the order fulfilment timeline committed to online customers.
It was imperative that the shortcomings affecting the operational fundamentals of the business’s Ecommerce platform were immediately addressed in order to avoid a rise in customer churn rates.

The right solution

As fully fledged tax free logistics hub, Advantis Free Zone (AFZ) offers customers the convenience of free zone logistics in the heart of the sub-continent. AFZ offers a multitude of services ranging from storage solutions and value additions as well as outstanding connectivity within the sub-continent as well as European ports.

Implementation of business model

Advantis Free Zone (AFZ) proposed to shift the fulfilment center managed in UK and Spain to Sri Lanka, the ideal location to facilitate the consolidation of multi-country operations as served by the Indian subcontinent. Manufacturers from both India and Bangladesh could now ship bulk volumes directly to AFZ in little as 4-5 days of transit time, to carry out the same fulfilment operation previously based in UK and Spain.
The business scope received by AFZ was all-encompassing in its function as a DC, including cargo handling and logistics, warehousing / inventory management, quality checking, scheduling daily deliveries to end-customers, as well as many other processes that came in between.
The complexities inherent to any general Ecommerce operation were structured along a clear process-framework to aid simplified execution. The Retailer’s 1,900+ SKUs comprising multiple garments in an assortment of styles and sizes are sorted piece-wise, verified against accompanying packing list, invoice, carton labels etc. and stored in dedicated warehouse spaces. The quality check process also follows a similar stringent guideline where the customer-issued specification is compared against the QC spec. Only once the quality check is satisfactorily concluded are items picked and packed for delivery. All necessary export courier or air shipment documentation processing is handled by AFZ on behalf of the client prior to re-exportation. Both LCL air shipments and courier shipments are arranged based on customer purchase orders while export shipments directly reach end-customer addresses in standardized packaging. At present, cargo piece-wise sorting (including inventorying and QC) for a 20ft container is completed within 5 days while the daily ‘pick and pack’ quota is 5,000 pieces with capacity to further increase.
AFZ functions as a regional distribution hub, collecting and storing products originating from multiple vendors and thereafter processing them for international delivery. The number of couriered packages to individual customer destinations amount to 200+ units daily.

Key benefits

• Significant cost reductions achieved by maintaining a single regional distribution center as opposed to two centers in UK and Spain
• Shorter lead times from manufacturer to distribution center in Sri Lanka and then direct courier to the EU
• Replenishment items are received much faster due to AFZ being located closer to manufacturing origins
• Real-time stock reports and inventory management
• CCTV footage and cross-software integration enable real-time information availability via remote access