Let’s say that you started a business that makes some sort of product and, after a few teething problems, you became pretty successful at selling it. The customers liked your product and, at first, they kept coming back for more. Business was looking good; so, you ploughed back a high percentage of your profits into product research and development as well as expanding your production facilities.
The First Few Years Were Good
All the signs had led you to believe that you had found the winning formula and you anticipated nothing but continuing growth; until, your sales people started to report on a shrinking order book and rumors of previously good customers turning to your competition. You were nowhere near going out of business; but, a downward trend was definitely detectable.
Then You Needed To Re-Assess Your Business Plan
The cause of your setback seemed to be rooted in your success; your product is aimed at the public consumer market and your orders largely came from relatively small wholesalers distributing this product to the stores. You obtained volume by the wide spread of wholesalers who purchased from you; but, each town in each State only had a finite number of wholesalers. As your sales people grew their order levels; they were mainly doing this by travelling further and further away from your home manufacturing base. In other words, the logistics, of getting your product to these wholesalers and then into the stores, so that they could get to the backbone of your business – the end using consumers themselves; were becoming ever more complex and somewhat out of your control.
When production had fulfilled an order (i.e. finished or completed it); there was a tendency to think that was the end of it. On statistical reports comparing orders received : orders in production : orders filled; they simply disappeared. The product was still in your facility but the customer’s order was not shown as pending because production had been fulfilled. You were not paying enough attention to the real, total Product Fulfillment Services that your customers expected; as a consequence, they did not receive their consignments from you in a timely enough manner – which is why they switched suppliers.
Once you brought in professional help on Product Fulfillment Services; the situation took a turn for the better. Furthermore, the Product Fulfillment Services provider that you hooked up with not only covers the whole of the US; they are talking about helping you break in to export markets also.
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