How to improve order fulfillment process?

How to improve order fulfillment process?

In e-commerce, a smooth and quick order fulfillment process is important for a business to succeed. As people expect much from businesses and competition, companies must keep making new improvements in their work to meet demands and stay profitable. This article talks about how to improve order fulfillment process: it takes insights from professionals and follows the industry’s top ways.

Key Takeaways

  • Inventory accuracy and efficient warehouse layout are critical.
  • Automation and order management software enhance reliability.
  • Outsourcing to 3PLs and using RFID technology improve efficiency.

What is the order fulfillment process?

The order fulfillment process is a set of actions that a business takes to finish an order, starting from when it gets received until the moment it reaches the customer. Although details can differ from one business to another, basic steps are similar.

Order Receiving Stage: The process starts when a customer makes an order. This can happen in different ways like on an online platform, via simple call or face-to-face interaction.

Order Processing: After receiving the order, it goes through internal processing by back-office systems. These activities include checking and confirming details about customers, checking payment for authorization, and making sure accuracy is in order.

Fulfillment Request: Once the request has gone through operation, it is sent to the warehouse or stockroom for fulfillment. This alert indicates an order requiring fulfillment from the inventory management team’s perspective.

Retrieval: The team responsible for inventory finds and brings back the items from the stockroom or warehouse. This is a crucial step, as it guarantees choosing the correct items.

Packing: Things taken back are organized and put into appropriate containers for protection during travel. This might include putting in extra packaging items if needed, so the things reach their destination well-maintained.

Shipping: After the order is packed, it gets ready for global shipping. The carrier will send out the order. Customers are usually informed at this point, frequently getting an email or message to let them know about their order being in transit.

Arrival: The last stage of the whole process is when the order arrives at its destination. Customers get their package and the fulfillment cycle finishes.

How to improve order fulfillment process?

Focus on inventory accuracy

The most basic part of any effective fulfillment process is correct inventory control. Using good naming and labeling methods, doing frequent random checks and cycle counts, along with using systems like Warehouse Management System (WMS) or Inventory Management System (IMS), can greatly decrease manual mistakes while making sure that stock is seen in real-time.

A man is checking the inventory with a tablet.

Predictable order fulfillment process

Problems with the order fulfillment process can cause irregularities and higher expenses. Order management software investment can assist in monitoring, forecasting, and setting up automated systems for more reliability. Automation saves time and increases precision, enabling you to concentrate on other business aspects.

Optimize warehouse layout

If you optimize the warehouse layout, it will stop any supply chain issues and enhance the flow of work from receiving to shipping. Get a specialist to rearrange your layout and make the best use of space without needing more room in the ecommerce warehouse.

Streamline order picking

Using various methods like wave picking, small batch picking, and zone picking could bring considerable enhancements in efficiency. Even slight adjustments such as grouping orders or arranging frequently sold SKUs nearer to other departments might make a big difference.

Optimize slotting

Slotting is arranging inventory before picking, processing, and fulfilling. If we keep our top products in easily reachable slots, this can improve how quickly we do fulfillment. Please handle slotting as a function at a high level and apply recommended methods to secure shipping times as fast as possible.

Reduce touches and handling

When an item is handled less in your warehouse, the chances of human mistakes, wrong treatment, and lost inventory decrease. Less touches can also assist in avoiding damage and theft while making the fulfillment quicker.

A man is using a forklift to lift items in a warehouse.

Outsource order fulfillment to a 3PL

Working with a third-party logistics (3PL) provider can carry out orders effectively. A 3PL can assist in creating prosperous fulfillment strategies that avoid stockouts, and backorders along with extra expenses because of errors, aiding your business expansion.

Utilize an RFID system

Using radio-frequency identification (RFID) technology and sophisticated tracking software can give better visibility and traceability across the order fulfillment process. This information is crucial for creating strong analytics and implementing significant operational improvements.

Minimize packing

Using the smallest amount of packaging possible can also help with efficiency. When there is more packaging, there are more steps, handling, time, money, and waste involved. The aim should be to safeguard items in transit with the least amount of materials necessary.

Last words

Improving the order fulfillment process is a multifaceted endeavor. It requires strategic planning and technological innovation. By improving this, businesses can meet even exceed customer expectations and foster loyalty in the competitive market.

FAQ

How to optimize order fulfillment?

Optimizing order fulfillment includes finding ways to make it simple and cost-friendly, reducing mistakes during handling as well as boosting satisfaction for customers. It covers improving inventory accuracy through WMS and IMS, standardizing how orders are processed with automation, and improving warehouse operations. It also can reduce the touching of items to lessen harm or stealing chances from inside warehouses. Getting help from 3PL providers could be another beneficial step for expertise growth on a large scale. Increasing the use of RFID systems will help in tracking and making everything more transparent.

What is the KPI for order fulfillment?

Key Performance Indicators (KPIs) in order fulfillment are measurable standards used to assess how well the process works. These KPIs aid businesses in pinpointing areas for enhancement and tracking advancement toward operational targets.

Order Fulfillment Time: Measures the time from order receipt to delivery.

Accuracy Rate: The percentage of orders fulfilled correctly without errors.

Inventory Accuracy: The match rate between inventory records and actual stock.

On-Time Delivery: The percentage of orders delivered within the promised time frame.

Return Rate: The percentage of orders returned due to errors or dissatisfaction.

Customer Satisfaction: Measured through surveys or feedback on the fulfillment process.

Order cost: The money needed to complete an order, covering expenses for work, goods, and delivery.

Order Fulfillment Rate: The percentage of orders fulfilled within a given period.

What are three functions of order fulfillment?

Order fulfillment serves three primary functions within a business.

Customer service: This is important because it directly affects how happy and loyal customers are to a business.

Inventory Management: The process of handling and controlling stock levels so that they match the amount required, while also ensuring there is no excess or shortage of items. It is essential to keep operations smooth and financial fitness in check.

Logistics Coordination: It involves managing the logistics of shipping, like choosing carriers, handling transportation, and following up on deliveries to make sure that orders reach customers as stated.

How can you improve the order fulfillment process?

Improve order fulfillment by focusing on inventory accuracy, optimizing warehouse layout, using order management software, streamlining order picking, reducing handling touches, and considering outsourcing to third-party logistics (3PL) providers. Implementing RFID systems and minimizing packaging also enhance efficiency.