Case Analysis: Incident from Misconduct in Handover Procedures

A General introduction 

Operation center in GZ(Guangzhou)sent a local express mail via COD  worth of 9,500 RMB in March 16^th, 2011. The consignee received the package on March,17^th ,which was sent by our company but the shipment waybill is of Yibang Express and Zhai Jisong Express’s bill number does not exist. All of a sudden, we realized that the goods may be stealed, then we contacted the courier from Zhai Jisong Express to inquire whether he received the goods in the express mail. We could not provide the base sheet or any proof to prove the courier took the goods. (Warehouse in GZ is located in the yard of China Post’s logistics base in Fangcun village. Ever since Feburary,2011,China Post has forbidden any courier to go in and out of the warehousing yard, the handover procedure must be finished outside the warehousing yard). Because of the weather that day, the courier took the goods and returned the base sheet the second day, no handover procedure was conducted at that time.

Solutions:

Firstly, we got the Yibang Express’s base sheet from the consignee and contacted the courier concerned in Yibang Express; Then we got the video hung over the China Post’s yard. After we showed those proofs, the courier had to admit that he had received the goods and was willing to compensate for all the payment for goods. Zhai Jisong  Express compensated  the promised payment.

Lessons：

We have learned a lesson from this incident: the number of stock in and out must be kept accurate and the handover procedure must be conducted without any errors. All people in Guangzhou Operation Center reflected on this incident and found out some problems and loopholes during operation. Also we need to operate in strict accordance with our company’s operation procedures. Besides, the responsibility needs to be placed on each corresponding employee.

　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　

Interview of CEO Larry Lee and Vice CEO Yongming Xiao

Before CEO Larry Lee and Vice CEO Yongming Xiao set up the website http://www.fineex.com/, they worked together for 10 years as logistics software developers. When they were aware that traditional logistics service could not meet the huge demand from fast-paced ecommerce market, they set up their own website in March, 2006. Originally their company served as a platform of online communication and transaction. As business develops gradually, their company is transformed to the entity one and their purpose of starting the company is changing from simply making money to shouldering the social responsibility as entrepreneurs.  

Vision in Mind  Team as Basis

Reporter: As you see it, what are the problems with logistics industry in China?

Larry Lee: So far, the biggest problems with logistics industry in china can be summarized as disorder, disjection and dissatisfied service. Most of the logistics companies are confronted with problems that logistics systems are inefficiently used, the business process is not standard and its operation is inefficient. That’s why we started our company.

Reporter: Many professionals remark that logistics is the bottleneck of Ecommerce’s development, what do you think of it?

Larry Lee: In terms of early ecommerce, the bottlenecks were payment, credit and logistics. Up to now, Problems with payment safety and credit have been gradually resolved. The biggest problem now is indeed logistics, logistics safety in particular. The bottleneck in China’s ecommerce is how to deliver the goods to consumers safe and sound after the consumers place orders. Our solutions are: Order fulfillment can be monitored via stock management; Delivery speed can be accelerated by tracing and monitoring; whether the goods is fake or genuine, good or bad, the problem can be investigated during stocking(If the goods is fake or smuggled, stocking is forbidden)

Reporter: You are very confident, as we see, so where does your confidence in doing great in this business originate?

Larry Lee: My confidence genuinely originates from our team. We are very confident that we can do great in this business. Currently, our clients and cooperative partners, including Taobao, credit our service. Their credits are not based on how I credit them but based on how well our team does. Our people, especially those who work at basic level are doing great.

Reporter: As oil price is soaring and employees’ salary is increasing, will such factors influence the development of our company?

Larry Lee: In the short term, the increase of such costs will, to some extent, influence our profits. However, in the long term, the market is improving, costs will be absorbed only if our team is united to enhance the operation efficiency and improve our service.

Reporter: Could you please explain our company’s philosophy “Extraordinary logistics, Extra attentive service” to us?

Larry Lee: “Extra ordinary logistics, extra attentive service” means an innovation to ordinary (traditional) logistics. They have fundamental differences, seen from the second half part of this philosophy, that extra attentive service means active service by our company in contrast to inactive service by traditional logistics companies.

Reporter: Then I’d like to raise a question that our employees are badly concerned about. What measures will our company take to keep our employees and our clients?

Larry Lee: To keep our employees, I believe, is to respect them as well as to offer enough space and good platform for them to develop and enhance themselves. We need to avoid complex relationships among employees like other companies and keep everything simple. Internal newspaper we are committed to publishing is to ask our employees to share their experience, which is in itself a confirmation to our employees. Our clients can be kept if our employees are kept. Although we are not the best company, we improve fastest and offer fast response to any question and need. We will improve ourselves if any question occurs and we will try our best to fulfill our clients’ needs.

Reporter: what advice would you give to the fresh employees?

Larry Lee: Firstly, they need to incorporate themselves to our corporate culture as soon as possible. In addition, we take seriously each employee. Secondly, they need to take an active attitude. Thirdly, every employee needs to try their best to have a good command of our system.

Reporter: what do you think are the problems with logistics in China?

Yongming Xiao: The biggest problem with logistics in China lies in that the importance of logistics is somewhat ignored and little respect is shown to the couriers. For example, we used to be software developers, our clients show respect to us, whereas we are now logistics service providers, some of our clients take us as couriers and show little respect to couriers and those working in the warehouse. Most of the people haven’t realized that to provide nice delivery is to enhance clients’ shopping experience. Up to now, this situation begins to improve.

Reporter: you must have encountered many delicate problems during our company’s operation. So what is the biggest problem you have encountered?

Yongming Xiao: The biggest problem is always with employees in the different phases of our company’s development. We need our employees when we are at trouble. We need our employees to improve themselves and shoulder responsibility when our company develops fast. Now we set up operation department with Daijing and Yuhui on the important position, although they are not only responsible and experienced but also down-to-earth. Those who stay with us is our treasure.

Reporter: As a third-party service provider, Do our company have any specific standard for our clients?

Yongming Xiao: we are just a service provider, so it is not suitable to set standard for our clients. It is crucial to tailor ourselves to meet different clients’ needs. we need to standardize every detail in our working procedures and meet different clients’ needs by combining those details.

Reporter: Since you have been engaged in software developing for so many years, our company provides service of warehousing and distribution and has technically got improved, can I put it this way: technology is our winning magic?

Yongming Xiao: I am afraid I can’t agree with you. Any company could not only rely on technology, for it is just a tool and it is employees that undertake the specific job. As a grassroot third-party service provider, we are supposed to concentrate on our service to do best in every detail. Take packaging for example, we have rules about how to package step by step and how to paste every sheet. They are our integrated advantages and can serve as our winning magic.

Reporter: As is known to all, warehousing management is very complex and delicate, and if the number of orders is beyond our capability, how does our company face it?

Yongming Xiao: Obviously our online system exhibits its own advantages. You see, traditional logistics companies tended to deal with orders one by one. In contrast, we will take advantage of our online system to screen out orders of the same type, print the sheet, pick and package goods to promote the working efficiency and lower down the error rate.

Reporter: how does our company handle the situation that some of clients’ goods are found missing or spoiled if our clients store their goods in our warehouse and distribute them?

Yongming Xiao: Daily we check those goods that need to distribute on the very day and we know whether the number of stocks is abnormal. Also monthly we check all our goods to ensure that goods are not missing. As for the spoiled goods, we compensate our clients first if they cover their goods.  

The Next Five Years: New Beginning, New Challenge!

Since our company has set up for 5 years, CEO Larry Lee and Vice CEO Yongming Xiao both regard next five years as a new beginning and will meet other challenges. Yongming Xiao hopes that our every step and procedure is standardized and details are paid full attention to. The next five-year objective for Larry is to: enlarge our company’s team and cultivate employees at basic level into intermediate or even advanced ones at managerial level; try our best to be leading logistics service provider for ecommerce and help Ecommerce entrepreneurs smoothly start their business; set up 10 operation center all China.

Customer First, Employee Foremost

News1.3:Operation department is formally set up!

     In order to facilitate each department’s work and make operation process smooth, an agreement is reached during the administration meeting by our company that operation department is formally set up since May 16^th,2011, which is subbranched as customer service department, warehousing management department, regional picking department and distribution department. Details are indicated as follows.

   

News 1.2: Our company’s project team for Brand’s did a good job!

Our company initiated to offer logistics services integrating warehousing and distribution to Brand’s, a famous food brand with a history of over 100 years from December 2010. After running-in period and mutual communication, our cooperation has been on the way.

     

(This figure is drawn based on Brand’s order our company receives from Feburary to May,2011)

The figure above indicates that our company’s project team for Brand’s, including Guangnan( project team manager), Chengshuo (customer service department), Zhong Hongwei (account checking department), Cheng Huiqing& He Qiulang (warehousing department) as well as related personnels from distribution department and technology department made a great effort on this project to enhance the reception rate of Brand’s and decrease the returning rate to 0%. From ratings for Brand’s flagship store on Taobao shopping mall’s delivery speed, it is obvious that eforts made by our company’s project team for Brand’s have been translated into fruitful achivements and receive good remarks and comments from clients and customers.

The shaded part in this picture shows that the seller’s delivery speed has reached 4.8 points, which is higher than euqivalents on average.

News 1.1:Our company moves!

        Ever since April 11^th, 2011，most of the departments in our company have gradually moved to the second floor on South Building No.3. opposite to the original office building except customer service department and sales department. In addition, office appliances have been basically purchased and each office has been simply decorated. Up to May 30^th, legal department, marketing department, human resource& administration department as well as distribution management department have moved to offices 3217-3219, technology department has moved to offices 3221-3223 and also account checking department and financial department have moved to offices 3225-3227. New offices floor has been separated from other companies by glass and marked with our company’s logo in order to make it look like a company. According to Xujing, an assistant in human resource& administration department, the decoration of our company almost comes to an end.