All entrepreneurs must understand the complete order fulfillment process, from ordering to delivery.
The process of fulfilling an order involves multiple processes. It is important to ensure that the manufacturing, packaging and distribution, and delivery of an order are carried out successfully.
Any delays in these processes would lead to unsatisfied customers. An order fulfillment system must be carried out quickly to maintain customer satisfaction.
- What does order fulfillment mean?
No matter what business you are in, getting your product delivered to your customer is very important. Regardless of whether you are selling your product online or through brick and mortar, you need to have a process for getting the product from where it is made to where it is sold. This is known as order fulfillment.
- Why is order fulfillment important?
To begin with, if you can’t fulfill an order, you don’t get paid. Fulfillment also plays a role in building customer satisfaction and loyalty. Study shows that about 38% customers cut off from their suppliers after having a bad previous experience.
Simply, a satisfied customer leads to customer retention.
STEPS OF ORDER FULFILLMENT PROCESS
Online fulfillment is a sequence of operations through which goods are received, processed, and shipped. It can be considered the “methodology” applied to the activities in the fulfillment warehouse; that is, the procedure that has to be followed to get goods ready for shipment to customers.
The following 5 steps define this procedure:
- Sourcing and Receiving Inventory
Sourcing is the first step of inventory management in which manufacturers, retailers, or suppliers contact the 3PL companies.
Goods come to distribution centers in bulk or fewer quantities from third parties to 3PL companies for storage which are then inspected, labeled, and stored for future fulfillment.
In receiving phase, products are labeled using SKUs and bar codes to organize properly and for quick distribution promptly.
- Storing Inventory
Storage is done right after receiving with proper labeling to organize in an order. Products may be stored for the short term or long term. Whatever the scenario is, if the inventory is organized, it can be dispatched quickly even on short notice.
- Order Processing
Order processing is the management of receiving and processing new orders by customers every day. Just like in online stores, the software is used to manage orders daily that come in shopping carts. Processing leads towards picking and packing products.
- Picking, Packing, Shipping
The picking team picks the item by following the packing slip instructions. The slips mention specific details about color, size, type, etc. SKUs and bar codes help in finding the exact matches.
One way to reduce costs on your shipments is through packing materials. Packing materials are typically selected by humans or robots to consolidate the package’s dimensions.
This includes the length, width, and height of the package. The result can be calculated using multiplication. If this measurement is optimized, the transportation of packages becomes faster and lowers the cost of shipping!
Shipping can be done by hiring freight forwarders who pick up the packages from fulfillment centers and deliver them to the destination.
- Returns Handling
It is a crucial phase because you have to adjust refunds or replacements for the returned item.
Such items are inspected carefully whether to restock them or discard them. Furthermore, the products are then sent back to the manufacturer, retailers, or recycling centers.
ORDER FULFILLMENT CHALLENGES
When a customer purchases your eCommerce order fulfillment service, you need to make sure you’re getting the best deal possible in every aspect. For some, this means negotiating with suppliers for better prices. For others, it means shipping orders as quickly as possible to meet the needs of your customers.
Some of the challenges you may face are Inventory Management, Demand, and Supply, Logistics outsourcing.
In the eCommerce world, eCommerce fulfillment refers to the process of preparing and shipping a completed order from a retailer to a customer. In your business, you may outsource the fulfillment of your orders, which also allows you to increase your profit margins.
ORDER FULFILLMENT STRATEGIES
You’ve managed to get a customer’s order fulfilled. Now what’s next?
Choose an order fulfillment strategy based on what skills and resources your company has. Order fulfillment can be outsourced or done in-house, but you should choose according to your company’s strengths.
If your company struggles with fulfillment and logistics skills, outsourcing may be the way to go. If you already have these skills internally, then doing order fulfillment in-house will save money and improve operations.
Another option is the hybrid model. It means you can partially opt for 3PL fulfillment and an in-house fulfillment strategy. It overcomes the lacking you face in some areas of fulfillment.
The fulfillment process is the last mile in the supply chain. It happens to be one of the most crucial parts because, in this step, customer expectations are fulfilled. It’s just a matter of a few steps that have to be carried out in the right order and within a specific period.
Choosing the best strategy with an organized system and fulfillment warehouse helps in carry out smooth supply chain processes.