IT Speeds Delivery of Web Orders

FRAMINGHAM (08/04/2000) - Order a watch or wallet online by 2 p.m., and Fossil Inc. will have it at your doorstep the following day.

Go to one of Eden Prairie, Minn.-based Best Buy Co.'s 350 stores and configure a customized laptop online. Before you hit the parking lot, workers at Micron PC Inc. in Nampa, Idaho, are busy building your computer.

Granted, not all e-commerce encounters are so efficient. As recently as December, 8.8 million online orders were delivered late or not at all, according to BizRate.com, an online customer-service rating firm in Los Angeles.

But slowly - thanks to major information technology systems-integration work - that picture is starting to change, with some of the more noticeable improvements being made on the logistics and fulfillment fronts, according to managers attending this week's electronic-logistics conference run by the International Quality & Productivity Center (www.iqpc.com).

"Back-end integration has always been on companies' to-do slide for the future, and it's beginning to happen," said Tim Minahan, an analyst at Boston-based Aberdeen Group Inc.

"The real nirvana is to have machine-to-machine communication, or in essence, removing manual intervention at as many steps as possible," Minahan added.

To get on a next-day delivery cycle, explained Kurt Hagen, vice president of e-commerce at Richardson, Texas-based Fossil, "we had to remove all human interaction with an order between the Web site and our warehouse."

"Now, the first time a human interacts with an [online] order is when it pops up on the screen of a radio-frequency scanner in our warehouse," Hagen said.

Because the Web site is integrated with legacy inventory systems, online shoppers can see - and buy - only those items that are in stock and ready to ship the next day. The result: no costly back orders.

Next-day delivery has also worked to extend Fossil's sales periods prior to special occasions, such as Father's Day.

"Previously, we'd see a selling spike five to seven days before an occasion.

But with next-day delivery, the marketing team can go online with promotions two days before [the holiday], so we've also extended the selling period," Hagen said.

Fossil's integration project, which relied heavily on XML technology, took six months.

Micron PC also is relying on XML to integrate retail and factory systems so it can transmit real-time order and shipping information from legacy inventory and manufacturing systems at Micron's Idaho factories to customers at Best Buy's Web-based kiosks.

"With XML, we get orders sent directly to the factory from the point of sale and send back an available-to-promise date to the customer right then," said John Janson, director of worldwide distribution at Micron Electronics Inc.

Washington-based online college text retailer VarsityBooks.com Inc. recently integrated its e-mail customer-notification system with its inventory maintenance system. The result: Bookpager, a system that offers to alert browsers in search of a special text when it arrives at the bookseller's warehouse.

"People loved it. It also had the impact of getting us information, such as the names and addresses of Web surfers who we could eventually market to," said Andrew Green, vice president of operations and business development at VarsityBooks.com.

The new, integrated system also yields valuable demand information in an industry where sales history can be sketchy.

"Because a lot of college texts are new editions or [titles], there's no sales history on them. With Bookpager, we know how big of a problem it is if a book isn't in," Green said.

"Technology enables you to make up stuff that has never been done before," he added. "That's why I advise people to hang out with the techies and get to know them. They can put things together and make things happen that you never thought of."

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