Overall Reliance on Fulfillment Services Grows and In-House Fulfillment Challenges Increase

2016 Study by FulfillmentCompanies.net Uncovers Newest Trends in Fulfillment Services Satisfaction

Are you satisfied with the fulfillment and distribution services your company has in place? That’s one of the questions that Fulfillmentcompanies.net (a division of Intelligent Connections Corp.), which specializes in connecting businesses with pre-screened fulfillment services companies, set out to answer with its 2016 Fulfillment Satisfaction Survey.

Fulfillmentcompanies.net conducted its first survey of 6,000 of its users — companies who were seeking a partner to potentially fulfill some or all of their outsourcing needs — in 2014. This yearly follow-up survey wanted to update the original findings, which asked respondents about:

  1. Whether their companies use in-house or outsourced fulfillment services.
  2. How satisfied their companies are with fulfillment and distribution.
  3. What specific pain points their companies experience in the overall process.

Most notably, the survey found that 25 percent of respondents who managed their distribution and fulfillment in-house were “extremely unsatisfied” with their current solution.

More Companies Combining In-House and Outsourced Fulfillment

 

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One of the 2016 survey’s findings: Companies are more willing to use a combination of in-house service and outsourced help to meet their needs. Half of all respondents — 50 percent — are using a blend of services, up from just over 27 percent in the 2014 results.

Thirty percent of the companies surveyed used exclusively in-house fulfillment, which was roughly the same as in the previous survey. But only 20 percent outsourced everything, compared to roughly 43 percent who used outsourced fulfillment in 2014.

In-House Fulfillment May Not Be The Right Answer

Companies who handled some or all of their fulfillment and distribution were asked to rate their satisfaction with their current processes, using a scale of 1 for extremely unsatisfied to 7 for extremely satisfied. At the same time that more companies are managing at least some of their work in-house, they’re finding it to be a problem: A full 25 percent were extremely unsatisfied with the results they are seeing.

But the companies who outsource some or all of their logistics didn’t see as many issues. Only 12 percent of companies who outsource were extremely unsatisfied with their current solutions.

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The response indicates that there are problems actualizing the potential of the fulfillment process, especially for those companies who have recently taken on more of this work in-house. The variety of options for outsourcing may provide a better fit for many of these companies, but the wide range of providers also makes it challenging to find the right partner, especially for smaller and mid-sized businesses.

Cost Tops the List of Pain Points

Why are companies having problems with fulfillment? Whether they choose in-house logistics, outsourcing services or a combination, respondents ranked cost as the most important issue they experienced. Sixty percent said the overall cost of fulfillment was their greatest pain point in the process. That’s no surprise; fulfillment pricing is commonly cited by our customers as a major issue.

But other issues are related to managing services with a reasonable amount of time and accuracy. Failure to manage these areas can carry a significant cost, as well. They included:

  • Overall service (if outsourcing) – 30 percent
  • Handling returns – 30 percent
  • Shipping accuracy – 30 percent
  • Inventory accuracy – 20 percent
  • Time to manage the process – 20 percent
  • Warehousing and fulfillment technology – 20 percent

Surprisingly, only 10 percent cited order accuracy as their biggest issue. That’s even lower than in the 2014 survey, indicating that fulfillment solutions are working well to get the right products in customers’ hands.

Summary of the Results

Regardless of whether companies handle their logistics in-house or outsource some or all of their fulfillment and distribution, there is room to improve operations and reduce costs. But companies trying to do that by bringing work in-house are not necessarily reaping any benefits. With the insights from the 2016 Fulfillment Satisfaction Survey, Fulfillmentcompanies.net will continue to work with all sizes of companies who need help with fulfillment to help them find the right solutions. Contact us to start the process of improving your logistics through partnering with the right outsourcing specialist.