IDII White Paper Section


Getting Sales & Warehousing
On The Same Page

Using Technology In Making Customers Satisfied With Their Orders

Summary: Your sales and marketing team works hard to build your customer base, but retaining those customers depends heavily on the efficiency and accuracy of your warehousing and shipping practices. Learning how to best use your software to coordinate sales with shipping can make all the difference between a customer who stays and a customer who strays.

In this issue we focus on successfully coordinating the sales department with the fulfillment of the actual outbound shipments. Our goal is to leverage (1) technology that permits consistency in customer requirements and (2) policies within the organization in order to leverage that technology to the maximum. To bring together these three separate mindsets (customer, sales, & warehouse) means that the technology must communicate the original customer order & the customer preferences precisely.

Capture the Customer Preferences

Begin by capturing customer preferences on shipping orders to their supply center. Many software programs capture free-form comments that will print on pick tickets. However, free-form comments are not sufficient in and of themselves! In order to automate and implement best practices, one must have specific strategies in mind in order to capture specific pieces of information about each customer. If the customer has a particular supply center requirement, then these specific pieces of information much be captured.

For the first original outbound order, the common customer information to start capturing within the database is:

  • List of Carriers to Avoid
  • Preferred Shipvia Code
  • Consolidate Shipment?
  • Does Customer Accept Substitutes?
  • Which Product Lines are OK Substitutes?
  • Ship Complete Only?

A good software package should also have a flag if it is a "ship complete" or "line-complete" order. If the original order has anything unfulfilled then a backorder situation occurs and the common customer information to start capturing within the database is:

  • Does Customer Permit Backorders?
  • Backorder Shipvia Code
  • Backorder Minimum Dollar Amount
  • Consolidate Backorder With New Shipment?
  • Consolidate Backorder With Backorder?

If the customer's shiptos (supply centers) have special requirements, then the customer information must also be captured at the shipto level within the database as well.

Your sales team must have specific strategies in mind to capture necessary pieces of information about each customer.

Consistent Processing Steps

The customer order comes in through multiple means (phone, fax, mail, email, EDI, e-commerce--even ASCII files). The processing of customer orders needs to treat the orders the same way. A single customer may pass the distributor many orders by multiple methods in a single day.

Ship the Original Order

Once you've captured all the necessary customer preferences, you can begin using this information every time the customer places an order. When a customer places a new order, Step 1 is to set the new order's shipvia from the customer's Preferred Shipvia Code. We also copy the customer's preferences for Consolidate Shipment, Does Customer Accept Substitutes?, and Ship Complete Only? into the order. (Note: If the customer does not have any preferences, then the company-wide defaults are utilized.

Step 2 is to tailor the order and get the specific order's line items, quantities, etc. The customer preferences for the order may be overridden during this initial creation of the order or later during an update, since a customer may have special needs for a specific order.

Selecting a Carrier

If the order entry person is overriding the shipvia, then the List of Carriers to Avoid is referred to. The software does not permit the order entry person to specify any carrier on this list, if any carrier restrictions exist. Step 3 is to do our basic checks (credit check, gross profit margin check) and allocate the inventory to the order.

A good company wide default for the Shipvia code is "Bestway". This is a good initial value for customer preferences as well. This is where we let the warehouse (or shipping manifest system software) make the best judgement call on how to ship it. Many strategies exist for BESTWAY shipping, including finding the carrier & service for the lowest cost, fastest way, consolidation, and more. Realize that the customer trusts you to make the best choice for him.

If your shipping system is multi-carrier, then one may program it to automatically "rate shop" when it receives an order with "BESTWAY" shipvia. Customers want to save money and time. The software can automatically do this much, much faster than a person. TanData, Tracer Research, Pitney Bowes, Aristo, and other vendors have multi-carrier shipping solutions.

When the order is released to picking, it has the correct shipvia. No guesswork at the warehouse level. Customer satisfaction is improved.

Examine the Backorder during Shipping Feedback

Once you've shipped the original order, there is another opportunity for technology to make sales & warehousing work together better. When the shipping feedback occurs on this order, lets exercise due diligence. First, cancel any backordered items if order indicates doing so. If customer will take backorders, change the orders' shipvia code to the customer's preferred Backorder Shipvia Code. These changes can occur automatically in the shipping feedback software.

Consolidating the Outbound Shipment

Later, during picking release for this backorder, the software will also examine the Backorder Minimum Dollar Amount (if any) and check the Consolidate Backorder With New Order flag, as well as the Consolidate Backorder With Backorder flag. If customer permits backorders to be picked and shipped with his other orders, this will increase our warehousing productivity and we can still put multiple packing slips into the one outbound shipment.

Backorders that are too small to ship out on their own can be held based on customer preferred Backorder Minimum Dollar Amount, until a newly entered order triggers both the backorder and new order to be released together into picking. The customer is happy to see how wisely the distributor acted on their behalf, as the shipping charge for both the new order & backorder combined is a tiny bit more than the new order by itself. Note: each customer may have a different tolerance for what is too small of a backorder to ship by itself, therefore permit a backorder dollar amount to be stored per customer.

Newly created orders can be consolidated as well, if the customer permits. It is highly advantageous to scan all open orders to see if multiple orders are going to the same address. The software should then examine the customer's preferences on whether or not to consolidate multiple orders into one outbound shipment. Note: even if customer preference is not to ship out mixed orders, the picking could be consolidated and the packer could pack individual outbound orders.

Program for Free Shipping

Some distributors promote their services by giving free shipping with certain limitations. Free shipping on any order with a minimum dollar amount is common in the industry. I have seen free shipping based on weight as well. Some companies modify their free freight rules based on the destination of the shipment. I.E. Alaska & Canada from the US may require a larger amount than within the 48 continental states.

The rules for free shipping are already published - your customer base has them - just program in the extra step when finalizing each newly entered order. Take order totals (total price, total quantity, total lines, total weight, and total volume) minus any restricted products to see if it qualifies for free shipping. If it does, then automatically change the FOB code to indicate that the distributor is paying for freight, rather than the customer. If Company policy requires, also change the shipvia to what will be utilized for free shipping.

Check Shipto Preferences Then Customer Preferences

In our examples above, we refer to the customer, but also are implying a customer's shipto location. For example, if customer A prefers UPS and backorders are permitted, but the Phoenix branch has a preference of Federal Express and no backorders are allowed. Newly created orders for the Phoenix branch would result in Federal Express and backorders would automatically be cancelled after the first shipment.

Advanced New-Order Entry

At the end of entering an order, there are great opportunities for examining the new order and doing something with it. Therefore, let's add a step 4 to our 3 steps above in Ship the Original Order section. Step 4 is to finish the newly created order by "examination" and take these opportunities to make customers happy.

  1. Opportunity One: If order is ready to go and needs to be immediately released into picking, then release it now automatically. This is good for distributors with customers that come to the shipping department to pick up their order.

  2. Opportunity Two: In our new step 4 (examine the newly created order) described above: If order is not ready, show the reason why to the person entering the order. The salesperson will appreciate a friendly (but short & sweet) reminder that the order is on credit hold, etc. That salesperson can then expedite the order by contacting that credit agent for credit release. The quick examination of the order might reveal that there is insufficient allocated stock to ship - but this reminder is very important to the customer on the other end of the phone.

  3. Opportunity Three: In step 4 (examine the newly created order) - If products in the warehouse are limited to certain shipvias based on hazard class, then Step 4 should alert us with a popup box (or email) that the requested shipvia & the following line items are in conflict, please resolve. The order should be placed on a hold or the shipvia changed in the popup box. This is easy to do since the carriers provide a list of hazard classes that are not allowed per service and the part's product setup should point to a hazard class.

  4. Opportunity Four: In step 4 - Invoke the Rate Shopping function in the Shipping Manifest System software and have it pass back a list of shipvias, each shipvia showing delivery time (or number of days) and estimated total shipping charges. Let salesperson scroll up & down on this list and select the one they need, based on customer input. Customers would love to have an intelligent choice, know how it is going to ship & what their shipping cost is.


In this paper we have set forth some ideas on what technology can do. This has actually been implemented at a wholesaler who purchased an ERP software solution, which was then customized as described above. Many hours of brainstorming & programming were needed to accomplish this.

Consider, adapt, discuss, brainstorm, enhance, and implement what will make your delivery weapon the best. Look at sales and the warehouse working together, with clear, concise customer preferences leading the way. The sales group needs more than free-form comments and so does the customer. When one can capture customer preference information, then tailor & ship each order correctly, customers are happier.

It is imperative to have upper level management commitment on these types of technology changes. Once the changes are implemented, it is important to have personnel utilize them for the productivity gains of the company. Personnel should be required to follow the new procedures and be allowed to recommend sound changes to make them even better.

Work with your software providers (or consultants) on adding any missing functions that your company needs today in order to meet & exceed those customer expectations.

After all, the sales group needs more than free-form comments and when one can capture customer preference information, and then tailor and ship each order correctly, your customers, salespeople, and warehouse personnel all are satisfied.

About the Author

Philip Obal is President of Industrial Data & Information Inc, a research-consulting firm that assists companies in searching, evaluating, and implementing software for their business. He has designed software for over 20 years and is author of the research report "What To Look For In Warehouse Management System Software" and other IDII research products. For more information, see or call 918.292.8785.

ecommend a New White Paper - Frequently Asked Questions

Industrial Data & Information, Inc.

Voice 918.292.8785 -

© 2017 Industrial Data & Information, Inc. (IDII)