In the health and wellness space, the viability of direct to consumer business models has increased in recent years. But companies in this space face unique challenges when it comes to logistics, such as inventory aging, lot number tracking and data privacy. Excelsior fulfillment services are designed to help health & wellness companies implement immediate scale and structure in logistics so they can overcome these challenges faster. Here’s what we’ve learned and how we can help.
- LOT# Tracking: Many health & wellness products have lot numbers and expiration dates on them. Dental resins for 3D printers for example, must be tracked by lot numbers for quality assurance purposes. Tracking inventory by lot number can be critical when doing an investigation or a recall. Health companies need to be able to view what inventory they have in the warehouse broken down by lot number, and also know what lot number each consumer received.
- FIFO (first in first out): Due to the time sensitive nature of many health-related products, such as nutritional supplements or shelf stable food, it is critical that inventory be shipped on a first-in-first-out basis. This ensures a steady rotation of product so that nothing is sitting on the shelf too long. If inventory is not used in this way, the risk of aging inventory increases, and could lead to having to dispose of product that expired or was close to expiring.
- Returns: Returns for health products can be tricky to process. If the product was used or had its tamper seal broken, often it must be disposed of. Other times under certain conditions, it may be re-sellable. Or returned products may need to be bundled and shipped periodically to a repair or re-seller. Health and wellness companies often will have specific rules on how returns should be processed, and they need a 3PL partner that can adhere to those rules strictly.
- Data Privacy: Health data is extremely important to keep private. While logistics companies often do not come into contact with Protected Health Information that would make them subject to HIPAA, it is still critical that names, addresses and products received are protected and private. Often after an order has shipped, the information on that recipient can be anonymized as the info is no longer needed by the 3PL.
- Bulky products – handling & shipping: If the product is bulky, managing inventory, picking orders, and moving product throughout the warehouse can require equipment and operations designed for handling those size items. And bulky items usually trigger dimensional weight pricing from carriers, so you’ll want a 3PL with a high dimensional weight divisor if you ship using their account.
- Special shipping options: Because of the high unit value of items, shipping options such as delivery signature confirmation can make a lot of sense. Products with batteries or other specialized materials such as 3D printing resins, can also require material data safety documentation when shipping, especially internationally. So you may need your 3PL to help navigate those requirements. Some products such as sampling or test kits, require a return shipping label to be included in every order, so the consumer can ship the product back to a third destination for the sample to be tested.
- Multi-warehouse fulfillment: If delivery speed is critical, products are bulky and trigger dimensional weight calculations, or order volume is high, then multi-warehouse fulfillment can make a lot of sense. Splitting inventory between warehouses can dramatically reduce shipping costs, while maximizing your footprint for two-day ground delivery.
- Multi-channel Integration: You can choose to have your 3PL connect directly to each channel or use an order management software and connect your 3PL to that. Some fulfilment companies also have APIs which you can utilize to build your own integration to them. Data privacy may play into the decision here. Either way, you need a partner with pre-existing integrations and that is willing to work with your specific business needs. A degree of flexibility and a willingness to build new features to accommodate your needs are important. EDI integration capabilities can also be important, if you plan to sell with big box retail stores.
- Inventory Accuracy & Security: Health and wellness products can cost several thousand dollars so inventory accuracy and security are both key. On the accuracy side, check with your 3PL on how they measure accuracy and what their operational procedures are that maintain it. For security, a 3PL must have the necessary measures in place such as video monitoring and workforce screening. It also helps to visit and build a relationship with your partner so you know you can trust them. Additionally, for high end products, unit-level inventory tracking can be a business requirement and help provide visibility into the supply chain.
How Excelsior does fulfillment for the Health & Wellness Industry:
- Customer service driven: Whatever your industry, your relationship with your 3PL is critical. You’ll have unique requirements and issues that arise as you grow, and we get that you need to be able to talk with us regularly, sometimes frequently. We’ve built ourselves on the service we provide, and pride ourselves on it. If you need us to inspect 500 units of a potentially defective item, expedite an order to a special customer, re-package one product with a newer version of packaging, or whatever else, we’ve got your back.
- Integrate with any channel: Check out all our integrations here. Or build your own with the Excelsior API. If you need something you don’t see, we’re eager to help you solve it, just ask.
- Scalability and Startups: Some of our biggest success stories are customers that started with 20 orders/day and can now hit peaks of 5,000+ per day. We take a service driven approach and love working with young companies, implementing the logistics infrastructure now, that your business will need in 3 years.
- Shipping: We have warehouse facilities in Massachusetts and California, which will allow you to reach 70-90% of your customers with cheaper shipping options that still arrive in two days or less. We ship with all the major carriers – UPS, FedEx, USPS, DHL, and many freight forwarders and can offer you steeply discounted rates. We also allow you to ship on your account or any third party account should you prefer.
- Inventory Accuracy: We have several operational systems in place designed to maintain the highest inventory accuracy: ASN based receiving with automated checks for receiving accuracy, a replenishment process that uses older stock first and maintains PICK versus OVERSTOCK bin accuracy, periodic cycle counting procedures, and a quality control scan on outgoing orders (provided products are accurately barcoded).
- High value items: Excelsior staff are willing to go the extra mile to ensure inventory integrity and extra security are available if needed. This could mean storage in locked rooms, extra security cameras, or even just more frequent cycle counting. Additionally, we can institute serialized inventory management on any of your products that have unique serial numbers. This enables unit-level inventory traceability. Here’s how serialized inventory tracking works.
- Returns: Excelsior’s return processing services will help you streamline this crucial yet often overlooked component of the logistics lifecycle. We provide inspection according to your specifications, capturing of return reasons and any comments, automatic notifications and easy access to all your data either through our web portal or API.
- Product Assembly & Kitting: We offer optional product assembly, bundling and kitting services whether it’s for a one-time project or ongoing product line. Some clients choose to delay final product assembly until the last possible step, giving greater inventory flexibility. Others may need to re-work a product by removing one component item and adding another newer version. Our kitting services give you this flexibility.
- Presentation & Branding: Along with fulfillment speed and accuracy, presentation is an important factor in the delivery experience your customer will have. We’ll help you create a delivery and un-boxing experience that suits your brand and leaves a lasting impression on your customers. We can do this by allowing customization options in the packaging step of the fulfillment process, such as using your branded tape, stickers or custom packaging, handwriting thank-you notes, following special item placement rules, or any other ideas you come up with.