We’ve interviewed a number of long-time FSI employees and
will continue to do so in the coming weeks.
Today however we’d like to have a chat with the one who started it all. Ken Marbutt is the founder and President of
FSI, a long-time leader in the fulfillment industry, and remains a driving
force in the vision behind FSI. With
apologies to Lexus, Ken has relentlessly pursued perfection in the fulfillment business
since 1996. Let’s see what he has to say about these past 14 years.
How did you get into the fulfillment
business?
I had the good fortune of taking a position with a
company called American Graphics (AG) in the early 80’s which was one of the
best printing companies ever. AG was a
very forward thinking company that began a program with the soft drink industry
which was referred to as 3rd Party Marketing. AG printed the point of sale materials,
warehoused it, marketed and distributed directly to the bottling divisions of
major soft drink companies including Coca Cola.
This soon expanded into other industries, and fulfillment became a vital
part of their business model. AG eventually
was sold to a company called Cadmus Communications and I had the opportunity of
working with several of the Cadmus companies assisting them with fulfillment
operations. I had always dreamed of operating my own company and finally made
the decision to take the risk. So I
resigned my position and opened FSI on April fool’s day, 1996.
Many times companies feel they can do the
fulfillment themselves. Why should anyone outsource fulfillment?
There are many reasons such as cost, manpower, warehouse space,
IT systems and core expertise. Many
people think fulfillment is simple. You put
some stock on the shelf, take an order and ship it. But those 3 steps are
nothing but a summary of a hundred procedures that cover a thousand details. That order must be accurately packed, ship on
time, and arrive in good condition. It
sounds simple until people are faced with the realities of inventory
management, order tracking, customer service, backorder management, returns,
credit card processing, data security, systems management, and so on. It becomes
even more complex when you consider fluctuations in order volumes, so what do
you do when you have ten orders one day and a thousand orders the next? Rapid
changes in volume can cripple companies that aren’t prepared to ramp up
staffing at a moment’s notice, turning what should have been a financial windfall
into a chaotic nightmare.
So to handle these challenges you outsource to a trusted
company that specializes in fulfillment. FSI invests hundreds of thousands of dollars
annually maintaining our order processing and warehouse management systems,
effectively sharing the cost with many clients and reducing the overall cost to
any one client. From a pure economic
sense, a company cannot handle fulfillment in house as efficiently and cost
effectively as a fulfillment company.
Then there is the hassle factor.
You may have a great product and be really good at marketing it, but you
don’t need the daily distractions of product fulfillment. Wouldn’t you rather focus on building sales
rather than building kits?
Before starting FSI, you worked for a printing
company that had an in house fulfillment division. FSI often competes for
fulfillment jobs with printers. Knowing your printing background, when
should a printing company handle the fulfillment themselves, and when should
they outsource it to a fulfillment company?
Fulfillment can be a value added service for printing
companies if handled properly. If you’re
simply producing a printed product and immediately drop shipping it to the
destination, then by all means do it yourself.
If however it requires warehousing the product, taking orders
electronically, picking, packing, and shipping the order, providing customer
service, funds management, returns processing, etc., then you might want to
outsource to a trusted fulfillment company where that is their core competency. Understand that printing companies handle fulfillment
because it represents an additional revenue opportunity for them, but when they
do it badly it really bites their clients in a visible and damaging way.
So for the majority of businesses, it makes far more
economic sense to use FSI rather than to risk product fulfillment to a printer
that lacks the depth of experience to make it all happen. Exceptions still exist,
but most printers aren’t equipped to handle fulfillment in a way that reflects
well on their clients. A fulfillment company
does this for a living.
What separates FSI from other fulfillment
companies? What makes FSI different?
FSI has invested heavily in IT from the very beginning. We
have the ability to track an item from the time it reaches our warehouse floor
to the final shipping destination, online and in real-time. We rely on barcode
technology rather than hoping people pick the right quantity of the right items,
drastically improving accuracy. FSI has an in house programming staff providing
the expertise to maintain the systems and provide customizable solutions. This enables a consistent, yet tailored
approach for our clients as their business requirements change, so our clients
never outgrow us. Rather, we grow with them. Few companies our size can match
those capabilities.
FSI has enjoyed some growth (13,000 ft² -
150,000+ ft²), longevity (14+ years), and won some awards along the way since
you started the business in 1996. What would you attribute your success
to?
We listen to customers, respond to their needs, and treat
each and every order with the utmost of importance. It starts and ends with the
right personnel, so we are fortunate to have some of the best talent in the
industry employed at FSI. It isn’t the
999 perfect orders that our customer remembers, it’s the “ONE” that wasn’t. So through multiple incentive programs and a
constant quality review, we keep the pressure on to stay on top of our game
How has the fulfillment business changed
since you started the business in 1996?
When I started FSI there were only a handful of companies
advertising themselves as fulfillment providers. Now there are hundreds. Almost every printer includes fulfillment as
one of their service offerings. They may
do some form of fulfillment, but most cannot offer the wide array of
fulfillment services that we do. In
addition, when we first started most customers were satisfied with shipping an
order within two to three days. Now
almost everyone wants their order shipped the same day. This changes the
dynamics of the business tremendously.
Your staff must handle order volumes that literally change as the day
progresses. Then there is the IT piece, which many fulfillment providers treat
as an afterthought. But our customers
have the ability to see a real-time picture of their orders and inventory
through their web browser.
What do you envision for the future for
FSI?
We have worked very hard to position FSI as one of the
most trusted and respected fulfillment companies in America. We have built a reliable, expandable model that
will enable us to grow exponentially over the next few years. We are ready for that growth and look forward
to seeing the fruits of our labors. So we certainly expect to defend our
position as the best fulfillment company around.
As a business owner you can never stop
thinking about your business, but what do you enjoy doing in your spare time?
I love to golf, fly fish, travel, and spend time with my
grandkids. I have enjoyed building and
growing FSI tremendously and I’m very proud of the team that continues to run
the company on a daily basis. I will
probably never fully retire, but I love having the freedom to enjoy things
outside of FSI, knowing that every client remains in great hands.
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