The requirement to migrate to e-fulfillment centers is a natural consequence of evolution

The requirement to migrate to e-fulfillment centers is a natural consequence of evolution

Interview with RAZVAN MARINESCU, KLG Europe Logistics

Q: In  these  troubled  and  clearly  uncertain  times,  what  has  been  your  company’s  dynamic for the first part of 2020? And what  are  your  expectations  or  forecasts  for  the  end of this year?

R. M. I can start with the fact that 2020 has been and still is  a  year  full  of  opportunities.  It  is  true  that  is  a  matter of choice, depending on what you prefer, to complain about the situation or to search for new opportunities. In  the  beginning  of  the  year  our  dynamic  has  not  been the greatest but there was not any moment in which   we   were   frightened   about   our   results   dramatically   changing   compared   to   what   we   initially planned.As  every  other  company,  including  transport  and  logistics  ones,  we  faced  some  reductions  of  the  volumes  for  a  part  of  our  business  lines,  but  the  business  recovered  little  by  little  and  now,  at  the  end  of  the  year,  we  can  say  that  we  outgrew  our  expectations.In  the  end,  we  put  ourselves  the  question:  do  we  want to remain the same and see what happens to us  by  the  end  of  the  year  or  do  we  want  to  mold  ourselves on the current situations? In   the   end   of   2019,   we   started   a   project   of   developing a new e-fulfillment service, a business-oriented  ecosystem,  meant  to  help  entrepreneurs  develop their businesses.E-fulfillment industry is a concept that is not very well defined at this time in the Romanian market. We do not believe that at this time, the e-fulfillment market  can  be  defined  as  a  market  by  itself,  but  certainly  the  demand  will  grow,  and  this  service  will become essential for online stores to be able to develop further businesses. Our estimate is that at this moment the e-fulfillment market, respectively the  market  formed  by  companies  that  offer  this  service,   is   extremely   small   in   relation   to   the   volumes of goods traded online.In the last two years, the requests we have received for  outsourcing  the  logistics  processes  for  online  stores, tripled. However,  in  2020,  amid  the  pandemic,  when  the  final  consumer  came  to  choose  to  make  these  online  purchases  more  out  of  a  need  rather  than  out of a desire, the companies for which we provide e-fulfillment   solutions,   registered   a   number   of   orders  4-5  times  higher  than  before.  Thus,  the  requests for outsourcing to an e-fulfillment center have increased significantly up to 6 times.Although,    without    anticipating    this    pandemic    context,   but   anticipating   the   sales   increase   in   e-commerce,    last    year    we    decided    to    start    developing an e-fulfillment service. At  the  beginning  of  this  road  that  we  started,  the  rhythm  was  a  more  relaxed  one.  Starting  with  January, we began the construction of a new brand with  a  design  adapted  to  the  audience  we  are  addressing. As  the  current  context  has  taken  the  direction  we  all   know   very   well,   we   have   accelerated   the   development of this service, laying the foundations so that now we can already have the first customers in the Simplify platform. Moreover, we started from a simple idea of developing an e-fulfillment service and now we have come to create an entire business ecosystem focused on online commerce.

Q: KLG    Europe    Logistics    is    part    of    a    multinational  company,  with  over  100  years  of  tradition  and  experience.  How  was 2020 at global context? What lesson has this year taught us?

R. M. This   year,   all   over   the   world,   freight   volumes   fluctuated  greatly  and  there  was  also  a  volatility  between the volumes of goods transported on each type of transport. In the end, however, the fact that we offer the full supply chain management services, helped us to keep our business at the same level of expectations.A  great  lesson  that  we  learned  was  and  still  is,  is  that we should communicate more internally, with our      colleagues.      Now,      we      explore      many      communication  channels  in  order  to  facilitate  our  work   but   also   to   maintain   the   same   level   of   collegiality  that  was  very  familiar  to  us.  So,  this  became our top priority.

Q: For  KLG  Europe,  this  was  also  a  year  of  new  beginnings.  You  recently  launched  Simplify,     the     newest     e-fulfillment     service in the country, that addresses Romanian entrepreneurs. How does this integrated solution work   and   what   advantages   does   it   bring   for   them?

R. M. Simplify is the newest product in the e-fulfillment market  in  Romania  and  the  only  one  with  the  possibility  of  inbound  transport.  Through  it,  we  introduce  the  concept  of  an  e-commerce-focused  business ecosystem to the market. Simplify  offers  entrepreneurs  a  solution  based  on  the   integration   of   technology   and   operational   flows, to simplify their internal processes.The new Simplify service also provides customers with  detailed  information  about  the  final  delivery  to  the  consumer,  last  mile  as  we  call  it,  through  Innoship  -  a  platform  that  optimizes  interactions  between  retailers  and  couriers,  streamlining  the  costs  of  courier  services  and  increasing  delivery  performance  through  a  dynamic  order  allocation  to  couriers.  Thus,  each  customer  can  have  direct  access  to  complete  information  about  deliveries  made  through  courier  services,  but  also  to  real-time  reports.  Moreover,  online  store  customers  need  the  return  orders  to  be  as  easy  as  a  simple  order,    so    the    platform    also    improves    the    management of returns.What we offer in this moment?Supply  chain  management  -  From  suppliers,  anywhere in the world, using our own road, sea, air transport services;Storage,  order  preparation,  returns  -  We  use  a  modern  storage  method,  adapted  to  the  needs  of  online  store  flows.  Logistics  flows  are  exclusively  paperless,  made  by  the  software  ecosystem,  the  The e-commerce market has grown significantly in recent years, especially in the context of the pandemic, when it was even the only method of purchase for part of the population.Through Simplify, we introduce the concept of an e-commerce-focused business ecosystem to the market. human  factor  intervening  only  in  the  configuration  of the systems.We also take over the return flow for orders, a critical and extremely important activity for online stores.Delivery by courier - We easily connect the stores with  the  courier  services,  without  them  having  to  integrate  separately  with  each  courier  or  we  take  over  the  delivery  service  to  the  final  customer.  We  optimize  deliveries  by  courier  depending  on  the  price  and  delivery  performance  of  each  courier  but  also  depending  on  what  the  customer  wants:  low  cost, quality or a balance between the two.Multiple  sales  channels  -  We  connect  the  online  store  with  the  existing  marketplaces  in  Romania,  through  our  partner  easySales,  thus  facilitating  the  access to several sales channels and implicitly to the increase of the turnover.What  do  we  plan  to  do  next  with  the  Simplify  ecosystem? Our  vision  is  to  create  this  ecosystem  together  with  partners   for:   financing   services   for   online   stores,   training   services,   online   marketing   services,   web   design  services,  consulting  services  and  Customer  Service.  Since  we  can  manage  the  entire  chain,  from  the time of online order or purchase, to delivery to the final  consumer,  we  can  take  the  effort  to  answer  questions from customers who order online, so to free the  online  stores  and  implicitly  to  offer  a  better  and  faster  service  than  now,  considering  that  we  have  an  easy access to the information about the orders.There  are  two  major  benefits  that  come  with  an  e-fulfillment service partnership:The    way    in    which    the    cost    is    composed,    respectively  from  a  fixed  cost,  it  turns  into  a  100%  variable  cost,  depending  on  the  space  needed  to  store the products and the number of online orders.  Moreover,   we   also   ensure   a   volatility   of   stock   volumes   and   daily   number   of   orders.   Thus,   the   hassles of peak periods with storage space, delays in order  preparation,  overtime  and  sleepless  nights,  simply disappear, giving the client the opportunity to focus  on  the  really  important  things  for  the  online  store.Quality of service. Delivery performance on time, performance to deliver to the customer exactly what he  ordered  or  even  improved  delivery  time  will  certainly  be  much  better  and  with  a  final  effect  in  keeping the promise of quality promised to the end customer.Ultimately,  a  satisfied  customer  stays  loyal  to  the  product and service, orders again and automatically increases sales

Q: Who  are  Simplify’s  clients  and  what  are  their   specific   needs?   Are   those   needs   influenced  in  any  way  by  the  pandemic  crisis?

R. M. Simplify’s   clients   are   online   stores   with   products that can be delivered through couriers, and want  to  get  rid  of  the  stress  provoked  by  what  logistics means.Their needs are simple. They should not get tangled in questions regarding how much space they have or if  they  will  lose  money  on  restocking  returns,  and  instead  they  should  be  focusing  on  how  to  expand  their business or open other new lines. In order to answer all this questions, Simplify helps its  clients  with  click  to  door  solution,  optimized  costs, inbound transport, optimized last-mile deliver, unlimited operational support.The  e-commerce  market  has  grown  significantly  in  recent   years,   especially   in   the   context   of   the   pandemic,  when  it  was  even  the  only  method  of  purchase  for  part  of  the  population.  Data  from  our  partners  say  that  we  have  a  40%  increase  in  online  orders in the first half of 2020, compared to the same period  last  year,  the  number  of  orders  in  certain  industries,  even  doubling.  The  e-commerce  market  is  constantly  evolving  at  the  moment  in  Romania,  which     normally     implies     a     development     of     complementary services, such as e-fulfillment. Thus, the requirement to migrate to e-fulfillment centers is a natural consequence of evolution.

Q: What  is  the  biggest  challenge  that  you  identify   on   the   transport   and   logistics   market,   considering   the   unstable   and   always changing regulating context?

R. M. The biggest challenge, and not just in transport and logistics  industry,  is  to  take  decision  and  choose  between cost reductions and investments, regarding people and the business in general. For us, these decisions were easy because they were always  based  on  our  vision,  mission  and  our  clear  strategy. We choose to have the same team no matter what,    invest    in    personal    development    of    our    colleagues and design new services.

Q: Which  are  the  top  5  priorities  on  your  agenda today? Did this sanitary crisis shift your business strategy or priorities in any way? Can you still sketch long-term plans?

R. M. We continue to develop and deliver the same quality of services despite what is happening globally.The sanitary crisis represented a small impediment in achieving  our  goals  but  it  didn’t  stop  us  in  fulfilling  our mission: To continue to develop our solution that integrates  all  the  supply  chain  services,  focusing  to  enhance to our customers easy access to information, a solution that is both efficient and "one click away".We    are    creating    a    working    environment,    our    playground,  which  is  trustworthy,  responsible,  fun  and innovative. A place where we can become better, more creative and responsible.So, to summarize our priorities:We want to integrate all our services, to become one to the clients’ needs;We will increase our volumes, by implementing new ideas and molding on the current markets;We will digitalize our business and all our internal processes;We will transform our workplace in a second home for our employees;And finally, we will innovate... New services, processes and we will generate and offer new results

Q: From your experience, what’s your „Focus on  ...“  advice  for  the  managers  of  local  companies during this challenged period?

R. M. I think that the most important advice is to focus on investing  in  developing  people’s  professional  and  personal skills because they are the most important resource of any company We continue to invest time and effort in making the work  place  a  desirable  one,  even  though  in  these  times, this may represent a challenge.We  offer  them  the  possibility  to  take  over  projects  that  are  not  necessarily  about  their  specialization  and we encourage them to broaden their horizons.We  were  always  a  strong  team  and  we  want  to  remain  the  same  in  the  future  and  that  is  why  we  always motivate them to read, study and be curious at what’s happening around them  The world is changing so fast, especially these days, that    we    don’t    have    enough    time    to    process    everything.We  like  to  take  a  step  back  and  think  how  we  can  change our business: what are the current needs of our    colleagues,    how    can    we    improve    their    experience, what can we offer them more than what they already have. Nowadays, we manage our team’s needs and how we try to make this transition to this new lifestyle, easier to them. That`s  why  we  are  unique,  we  are  open  to  try  everything to the detriment of the fact that we know that  for  sure  we  will  also  make  mistakes,  but  we  never give up for what we want to achieve.

You can also consult the interview in the document below: