As the Ecommerce market continues to thrive during this global pandemic, supply chains are forced to address how they are keeping up with the growing demands. 3PLs are working overtime to meet the expectations of consumers and mitigating the pressures felt by warehouses, suppliers, and fulfillment centers.
WHAT IS ORDER FULFILLMENT?
Order fulfillment is the process of receiving goods, then processing and delivering orders to customers. The process starts with a customer placing an order and ends once they receive it. However, if the buyer wants to return a product, order fulfillment manages the return transaction as well.
The order fulfillment process can be broken down into five parts: receive, pick, store, pack, and ship. Let me explain. Once an order is placed, a 3PL will coordinate the inventory arriving at a fulfillment center. The picking team will be responsible for receiving the inventory once it arrives at the center, where it will be organized, shelved, and indexed while it awaits shipment. Finally, a 3PL will be responsible for securely packing the items and coordinating with external shipping companies to make sure everything arrives at the consumer on time.
CHALLENGES FOR SUCCESSFUL ORDER FULFILLMENT
The description above makes order fulfillment seem relatively easy, but in full transparency, there are many challenges a 3PL faces from order to delivery. The most common challenges are often linked to inventory management and the precision of a business’s processes. From stockouts and improper packing to shipment delays and communication gaps, fulfillment centers are working around the clock to make sure that these challenges don’t impact customer satisfaction.
So what are the keys to order fulfillment success?
5 SECRETS TO ORDER FULFILLMENT SUCCESS
1. ALIGNED FULFILLMENT PROCESS
Utilizing a 3PL can save companies time and money, but only when the order fulfillment process is fine-tuned. Processes need to be standardized, consistent, and transparent to ensure an understanding of how orders are being fulfilled and delivered. Standardizing fulfillment workflows prevent mistakes (like lost orders or misplaced warehouse inventory) from occurring. This efficiency helps reduce fulfillment time and money spent on getting orders delivered.
2. WAREHOUSE ORGANIZATION
It may seem obvious to some, but an organized warehouse is key to order fulfillment. “Since 3PLs are adamant on consistently enhancing and improving their warehouse operations for optimum efficiency, [Ecommerce] can then focus their resources on building their brand and business. “
Quality 3PLs are adamant about enhancing and improving their warehouse operations for optimum efficiency. This allows online retailers the ability to focus their resources on building their brand and business. Without clear processes and organized shelves, inventory management is compromised.
3. COMMUNICATION
Anita Roddick once said, “Communication is the key for any global business.” You may want to read that quote one more time to feel the impact of its words. A direct line of communication with fulfillment centers is key to tracking operations. Clear communication and process transparency between sellers and 3PLs are essential especially since online store owners are the ones fielding customer requests and updates.
4. RELIABLE CUSTOMER SERVICE
Globally, 60% of consumers said they stopped doing business with a brand due to a poor customer experience. Online sellers have to be able to track every step of purchase to ensure the highest level of customer service. 3PLs are responsible for providing retailers with real-time updates so buyers aren’t left in the dark.
Reliable customer service also means being proactive. Delays in deliveries, inventory storage, and lost or damaged goods are all challenges that 3PLs face. To create the best customer service experience, 3PLs need to communicate these obstacles as soon as possible and come up with solutions to enhance brand loyalty and repeat purchases.
5. DATA-DRIVEN DECISIONS
Your company likely already collects data from different sources that can be used to make more efficient decisions about inventory management and order fulfillment. The question is what is your company doing with this data? Simply collecting points of data is useless unless you’re using the results to grow and change. Implementing strategic analysis and application of data can propel your company to success.
A successful 3PL does more than just fill orders. As industry experts, they are identifying areas of opportunity and solutions for your biggest challenges through data analytics. These insights will help improve logistics processes, fulfillment timelines, and warehouse operations.
HOW TO STAY WINNING AT FULFILLMENT
I’m a big football fan. I grew up watching the game, following along with my dad as he cheered for his favorite team, the Green Bay Packers. I always remember him shouting at the television “the best offense is a good defense.” The same can be said about fulfillment. To stay ahead of the game, so to speak, businesses require a fast and efficient order fulfillment center while also protecting their bottom line. From strategy to operations, knowing the ins and outs of your fulfillment process is vital to any successful company.
FULFILLMENT FUNCTIONS
Often referred to as a third-party logistics provider, or 3PL, a fulfillment center has three key functions:
- Receiving and storing inventory
- Fulfilling orders for customers
- Packing and shipping goods to their final destination
Fulfillment centers store products for short periods of time with lower inventory levels. The goods kept at fulfillment centers are usually in great demand and are constantly used to fill orders, resulting in high product turnover.
FULFILLMENT TECHNOLOGY
With the spike in Ecommerce over the past year, fulfillment centers have been under fire to become faster, more efficient operations. Businesses were forced to invest in cutting-edge technologies to stay ahead of their competition. The outcome has been immense advancements in automation technology that have streamlined, and improved fulfillment centers capabilities.
The most common fulfillment technology we encounter is order fulfillment software. This software allows your business to process orders from customers and prepare them for shipment from any business location. This technology automates inventory and warehouse management operations resulting in more efficient order fulfillment.
Fulfillment software also integrates with warehouse systems providing data in real-time. This level of transparency throughout the fulfillment process allows businesses to stay in the know on order fulfillment, tracking, inventory, and even delivery, guiding strategy, and staying ahead of disruptions.
SIZE DOESN’T MATTER
With the right foundation, the size and frequency of your shipments become less important. When you don’t have the right setup, these details can waste time and money. To ensure that your fulfillment center is maximizing your resources, your shipment strategy, though fluid, needs to be established. There are three main areas to focus on:
- Rates and methods: With more and more businesses offering free shipping, it’s hard to not play the game. This means that your company will absorb some of the shipping costs, but will ultimately drive revenue for your business
- Size and weight: Using technology, like fulfillment software, will help determine the size and weight of each of your products, alleviating fulfillment and packaging issues during processing. As new SKUs are added, you can easily manage and track size and weight through the software program and have exact measurements and details available when you need them.
- Packaging: Packaging is extremely important when it comes to fulfillment. From heavy-duty boxes to small plastic slip bags, packaging can be costly and in turn, add drive up your shipping costs, but cutting cost on packaging materials can also result in damaged goods and unhappy customers
Once these key areas are determined, the relationship between shipping and fulfillment begins to work harmoniously, increasing efficiency and driving profitability. It’s easy to see how all the working parts come together, much like the offense and defense of the Green Bay Packers, to achieve a higher goal, in this case, a fully operational, highly productive fulfillment center.
FULFILLMENT SERVICES
Here at WSI, we offer specialized fulfillment services to B2C and B2B industries. Our 3PL capabilities can transform your existing supply chain into a robust system allowing your company to stay ahead of the game. Our fulfillment experts work with your team of leaders to run the ball across the end zone. Contact WSI today to discuss what we can do for your Ecommerce operations.
