www.quantumprofitmanagement.com Quantum Profit Management
The Element of Fill Rates

Dr. Jeanne Hurlbert, President — Hurlbert Consulting Group

•Amazon Supply •competitive strategy •fill rates •customer service •order fullfilment •market intelligence •distribution management best practices •big data •product Line •profit strategy •opinion / commentary •expert interview •management strategies •industry perspective •Wholesale Distribution Industry •how to compete with AmazonSupply •new opportunities for distribution industry

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I recently sat down with my friend and colleague, Dr. Jeanne Hurlbert, to discuss the element of high fill rates and high accuracy in customer service, which affects your company's ability to efficiently give customers what they want. Jeanne has a PhD in Sociology and has absolutely mastered survey work, making her insights in this arena invaluable especially when it comes to detecting errors in companies' fulfillment practices.

"The first thing I ask wholesale distribution companies," Jeanne explained, "involves the information capturing processes. Things like, ‘Suppose this happens, would you be able to capture that?' Once we pin-point the gaps, places where companies currently aren't capturing information, we know where we should be working to improve things."

"Here's a perfect example," Jeanne continued, "I like to make homemade bread for my little girl, and I use white whole wheat flour, which isn't all that easy to find." Some of my local stores were out of it for a long time because it went out of stock; and then the retailers, whose systems only noticed that it wasn't selling, stopped ordering it. "I still wanted white whole wheat flour, but they didn't realize that demand was there because they don't have any way of capturing that data in their current system."

That's also always been one of my pet peeves with grocery stores. If something I really like goes out of stock, the turns go to zero and then the stores de-list it. Even if somebody shows up and the person at the counter or handling order entries says, "No, we don't carry it," that information is lost forever unless there's some kind of capture process. However, there's also the impact on product substitutions.

"Absolutely," Jeanne agreed, "if I substituted something else because the item I'm looking for isn't there, you're not going to realize that. I won't be as happy as I could be because this isn't what I wanted. I really wanted Item A, but I took Item B because it's my only choice. I might very well walk to your competitor if they have Item A and you wouldn't know why. This is why companies need to start asking their customers if there are things that they're looking for that we used to sell or if there are things that they're looking for that we never had sold."

Systems often cause or create problems because if customers are substituting B for A, the system thinks that B is getting more popular so you should order more of it, and that A is getting less popular which means you should order less of it. This exacerbates the problem since the system is depriving you of your ability to fulfill the first choice. It's one more reason why it's really important for companies to be on top of what's going on with customer relationships.

For more information about Dr. Jeanne Hurlbert, visit: www.hurlbertconsulting.com

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