A Recent Study Conducted by fulfillmentcompanies.net Reveals Results of Overall Satisfaction
Fulfillmentcompanies.net(a division of insightMedia, Inc.), a company that specializes in connecting businesses with pre-screened fulfillment services companies, conducted a survey in January of 2014 to determine the overall satisfaction related to the fulfillment processes, both in-house as well as on an outsourced basis. "For a long time, our suspicion has been that a surprisingly large percentage of companies that either perform the fulfillment function in house or use the services of an outsourced fulfillment firm are unhappy with the success of their fulfillment function," said Will Schneider, President of fulfillmentcompanies.net. Mr. Schneider continued, "We feel that our company is uniquely positioned to gauge the overall satisfaction within the industry because we have a rich, 8 year history of helping companies find the best fulfillment solutions, allowing for a diverse pool of companies of all shapes and sizes to poll on the subject."
In order to put the theory to the test, fulfillmentcompanies.net polled 6,000 of its recent users of its service (companies looking at potentially outsourcing their fulfillment with a third party warehouse), asking them whether or not they use in-house or outsourced fulfillment services, the degree to which they were satisfied with the overall fulfillment and distribution for their company, and the specific pain points in the overall process. With a margin of error of plus or minus 5%, the study revealed a number of interesting findings, including an alarmingly low 16.08% of all companies polled were "extremely" satisfied with their fulfillment solution.
Outsourcing Fulfillment is the Most Widely Used Option
The first question in our survey was aimed at getting a conception of how many companies utilize an in-house fulfillment strategy versus how many companies utilize outsourced fulfillment providers. Of all respondents, only 29.86% reported using in-house fulfillment exclusively. Outsourced fulfillment was by far the more popular of the alternatives, with 43.06% of all respondents indicating that they utilized outsourced fulfillment as the answer to their fulfillment challenges. Finally, 27.08% of all business respondents indicated that they used a combination of both in-house operations as well as outsourced fulfillment services as a part of their overall logistics strategy. "We weren't particularly surprised by the large percentage of companies that implement an outsourced strategy, as more and more companies see the benefits of removing the pain of the fulfillment services process from their extremely busy schedules in order to focus on other aspects of the business," commented Mr. Schneider. The below chart summarizes the breakdown of companies that use in-house solutions, outsourced fulfillment services, or a combination of both.
Fulfillment Isn't as Fulfilling as Many Would Like
The second question in our survey aimed at getting to the "meat and potatoes" of the issue, asking businesses just how fulfilling their logistics operations were for their company. We accessed satisfaction based upon a seven level index. Companies could answer that they were Extremely Unsatisfied, Unsatisfied, Moderately Unsatisfied, Indifferent, Satisfied, or Extremely Satisfied. On an aggregate basis, including companies that use in-house, outsourced fulfillment or a combination of both, the survey revealed that 16.08% were extremely satisfied, 30.77% were satisfied, 17.48% were moderately satisfied, 8.39% were indifferent, 14.69% were moderately unsatisfied, 7.69% were unsatisfied, and 4.90% were unsatisfied.
These results are surprising on a number of different levels. First, a minority of companies (46.85%) indicated that they are either satisfied or extremely satisfied, meaning that the majority of respondents (53.15%) range in satisfaction from moderately satisfied to extremely unsatisfied – indicating the need for improvement in order to actualize the potential of the fulfillment process. Second, only 16.08% of all companies surveyed were extremely satisfied with the process. "The number of extremely satisfied companies is quite interesting, as it shows just how infrequently businesses are either operating on all cylinders internally or thoroughly happy with their third party suppliers. Ultimately, it shows how much improvement is necessary on both sides of the coin within the industry," noted Will Schneider. The below chart showcases the overall percentage results when respondents were asked how satisfied they were with their fulfillment solution.
Another interesting finding of the survey related to the difference in overall satisfaction or satisfaction on an in-house versus outsourced basis. Outsourced fulfillment houses seem to be winning the race when it comes to avoiding complete disappointment, with 6.56% of all respondents that utilize outsourcing indicating that they were extremely dissatisfied versus 7.14% of all respondents that utilize in-house operations indicating that they were extremely dissatisfied. However, on the other side of the spectrum, companies that utilize an in-house strategy reported a higher percentage of extreme satisfaction (21.43%) versus their outsourced counterparts (18.03%). "Fulfillment companies seem to be doing a slightly better job of avoiding logistics catastrophes, but the variance in extreme satisfaction indicates that they could be doing a much better job of "wowing" clients, whether that's finding increasing cost savings, improving the overall process or adding additional value," said Mr. Schneider.
Some of the Most Common Pain Points Were Surprising
The third and final question in the survey asked respondents what part of the overall logistics function was most challenging. The most frequently reported challenge (56.82%) was not much of a surprise, as a majority of companies reported that reducing overall costs and fulfillment pricing was a challenge that they faced. But what was a surprise were the second, third, fourth, and fifth most popular challenges reported – inventory accuracy (34.85%), warehousing and fulfillment technology (25%), order processing time (23.48%), and the time it takes to manage the overall process (22.73%). "Just as surprising that order and shipping accuracy wasn't in the top five most challenging aspects for respondents was the notion that technology, order processing speed, and the time that it takes to manage the overall process were most challenging," indicated Mr. Schneider. Below are the results of the survey regarding the most common paint points and challenges related to fulfillment.
Summary of the Results
Overall, the results of the survey emphasized that there is a need for companies to push forward and implement changes in order to make warehousing and fulfillment more successful on the whole. Whether that's internally for companies that manage the process in-house or for outsourced fulfillment firms, there's definitely room to improve overall operations. Especially since the results offered significant insights, fulfillmentcompanies.net has decided to make this an annual study, in order to offer the industry another perspective on overall satisfaction levels. Because of the great mixture of smaller scale and large organizations that utilize the company's service, a broad spectrum of results are accumulated, which gives guidance to companies that don't necessarily fall into the Fortune 500 level of business.
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