Order fulfillment is a complex process, encompassing everything from the point of sale to delivery to the end customer. Naturally, companies are always on the lookout for ways to better optimize the fulfillment process, improving accuracy while meeting demands for rapid delivery.
There are several ways companies can improve the order fulfillment process, from implementing logistics management software to adopting collaborative robotic picking. Fortunately, you’re not limiting to leveraging a single solution or strategy to improve your order fulfillment process. To gain some insight into the tools, tactics and strategies that produce results for today’s companies, we reached out to a panel of warehouse and logistics pros and asked them to answer this question:
“What’s the single most effective way to improve the order fulfillment process?”
Meet Our Panel of Warehouse & Logistics Pros:
Nate Masterson is the Marketing Manager for Maple Holistics.
“The single best way to improve the order fulfillment process is by…”
Validating metrics. Metrics are there to provide an analysis, but they only show the outcomes. When you don’t back up the how and the why, your process falls apart. Flaws in your process can only be rectified once they are acknowledged. Analyzing your blind spots will eventually allow you to anticipate potential problems, thereby eliminating the risk before it arises and providing perfect product fulfillment.
Nicholas Daniel-Richards is the co-founder of ShipHero, a platform that helps growing businesses manage inventory, eliminate fulfillment errors and reduce shipping costs. He has worked across many industries, working with Anna Wintour while the CTO of Code & Theory to launch Vogue.com, working Pete Cashmore Founder of Mashable to launch on mobile and most recently, working directly with NBA players such as Steph Curry, Lebron James and Chris Paul as the Chief Digital Officer at the National Basketball Players Association.
“The best way to improve the order fulfillment process is to…”
Minimize the number of decisions that need to be made by warehouse staff for each order. Generally, warehouse teams are most productive and less prone to error when tasks can be clearly understood and repeated. Decisions require time and energy and often don’t allow for simple repetitive tasks — this increases time required for each order, with an increased chance of error.
What are the most common decisions that need to be made when fulfilling orders?
- Figuring out which orders to fulfill in which order.
- Figuring out where to go in the warehouse to pick items for orders.
- Figuring out what packaging should be used for an order.
- Deciding which shipping method should be used to ship an order.
How do you minimize decisions?
Use a WMS/OMS to automate repetitive decisions. For example, use an order management system to help map out the optimal picking routes for warehouse employees to know where to go and pick items for orders. Another great example would be to use an automation rule to use information associated with an order such as the weight, shipping address and required delivery date to determine the most cost effective shipping carrier and method that saves the shipper money while ensuring the order is delivered on time.
“As an e-commerce company, we’ve figured out how to improve the order fulfillment process and customer experience while also…”
Becoming more flexible by reducing fulfillment costs. We found that the online return process was not only a challenge but also was critical to the future success of our brand. Today, online returns are expected to be hassle-free for customers. Our return process used to be very costly with a lot of manual labor. Since changing over to a more automated process, it has increased our profits and provided a much better return process for our customers.
Many of our customers now order multiple products to try on and return the products they are not completely satisfied with. We see this as a cost of doing online business since the customer can’t try on the clothing before buying, compared to going into one of our physical retail stores. Customer satisfaction and providing a better shopping experience is our number one priority so we encourage this practice and market that our return policy is hassle-free.
Additionally, using software to help manage the entire returns process is vital. Our recently upgraded software can now automatically send a customer a return label for them to send products directly back to us. This reduces lots of friction by not requiring the customer to provide their own shipping labels. The software also helps us track exactly which stages the return is in and clearly communicate the status to the customer so they know what’s going on at all times.
Aaron Pfeifer is the Founder and Principal Business Strategist at Obsidian Solutions LLC. Aaron’s experience ranges from industrial engineering and sales to managing multiple business units responsible for sales, engineering and production. Aaron now specializes in working with businesses from start ups to multi-million dollar corporations to re-engineer and optimize their operations and grow strategically.
“The most effective way to improve your order fulfillment is through…”
Automation of your system. Order fulfillment is one of the most important aspects to running a business, second only to obtaining sales. When inputting information, you aren’t just doing it once but typically two to four times depending on your order acceptance, order fulfillment or manufacturing system, invoicing and customer relationship tools. Most businesses manually input information into each system and often spend the majority of order fulfillment time doing repetitive tasks. Because these tasks are repetitive data entry, companies hire anyone they can find, which can lead to lower quality work.
Instead, by investing in automating your workflow so you only need to input the data once. With effective integration from your order entry system, to order fulfillment, invoicing and customer follow up, you can have work orders generated automatically, invoices prepared to send at shipment and reminders to following up with customers later for satisfaction and future sales. This decreases or operating costs and reduces human error and rework, while creating sales opportunities.
Jessica Thiele is the marketing lead at VL OMNI, a GDPR-compliant integration platform for real-time, agile and scalable iPaaS data integration trusted by over 200 growing merchants.
“Imagine this scenario: You’re a small online business that receives approximately 5 orders a day. In fulfilling those orders…”
You manually either copy and paste between the relevant applications or you download and upload a CSV or other file type. Sometimes this process doesn’t work for you, so you manually re-key in the data between applications. And this happens at each stage of the order fulfillment process: order in, invoicing, fulfillment updates, all the way to delivery.
And this works for you.
Now imagine the same scenario, except instead of those 5 orders a day, you’re doing 10. Or 50. Or 5000. How do these same processes hold up for you?
There’s a reason top brands online don’t employ reams and reams of data entry personnel. In the age of automation, technology, IoT and more, why do something manually or inefficiently when there are solutions out there to automate?
One of the single most effective ways to improve the order fulfillment process is to automate the data movements between your applications. In reality, this should be between all applications in your entire back-end technology stack, and your data integration strategy should match what your business is looking to accomplish. (This seems like an obvious statement, yet many e-tailers do purchase applications only to realize later on that the application simply can’t do what the business wants it to do because it was never designed that way — integration ability included.) Your data integration approach can be as simple as using plug-and-play apps that are usually already available, bolted-on to applications your organization likely already uses. For more complex scenarios, there are companies that specialize in more complex and strategy-lead data integrations. It’s all about finding the right solution for your business, but automation is absolutely the best way to quickly improve your fulfillment process. It’ll save you time, money — and headaches.
Srajan Mishra is the CEO of TSI International FZC, based in UAE, which operates a global textile network and supplies fashion garments and uniforms to companies and brands all over the world. An electrical engineer by degree but an entrepreneur at heart, Srajan always tries to be better than he was the previous day, striving to learn something new with every step and misstep in life.
“The single best way to improve the order fulfillment process is through…”
Inventory classification. Find a way to group your stock into categories that make the most sense to your business. The most common one is clubbing stock based on how fast they move. This would help in two major ways. First, it can help a business in maintaining adequate stock levels of fast-moving items. You can easily ensure the appropriate levels are maintained for each of the categories and avoid running out of stock for the most important and fast-moving items.
Second, the grouped items can be placed in warehouses so that the fast-moving items are identified in a particular area while the slowest moving items are stored in another section. This would help reduce the time taken to process the order — right from pickup to delivery.
Andrew Rawson came to Traliant with more than 25 years of experience in strategy, operations and marketing. Most recently, Andrew served as the Global Head of Compliance Learning (eLearning) at Thomson Reuters, an information, technology and services company with more than 60,000 employees.
“The single most effective way to improve the order fulfillment process is to…”
Make sure your inventory is up to date. Out-of-stock situations are one of the biggest ways that the order fulfillment process can be held up. There is nothing that a customer hates more than seeing a product they want to buy, purchasing it and then being told it is out of stock. The best way to avoid these out-of-stock situations is to keep inventory up to date as much as possible.
David Altemir is the President of Altemir Consulting, a manufacturing and supply chain consulting firm located in Dallas, TX. Altemir specializes in optimizing inventory management practices.
“The single most effective way to improve the order fulfillment process is to…”
Ensure that sufficient stock is on-hand to ensure a high fill rate without investing too much in inventory. If you are currently setting your minimum on-hand safety stock quantities based on a number of days or weeks of average demand, then you very probably have more inventory than you really need and are missing the boat on what safety stock is really for.
The purpose of safety stock is to absorb variation in demand (a.k.a., spikes). Averages only characterize steady state demand, not the spikes. Inventory reductions of 25% to as much as 85% have been realized by setting safety stock levels using statistical methods that focus on measuring the spikes rather than average demand. In many cases, overall fill rates have increased while total inventory has decreased, sometimes dramatically. This has a tangible impact on warehouse footprint and fulfillment costs.
For companies that are smaller or whose product demand is sparse, statistical methods may be hampered by an insufficient number of data points. For these practitioners, an approach known as Demand-Driven MRP (DDMRP) may be useful. DDMRP doesn’t have the same reliance on statistically-derived estimates of demand. It instead provides an inventory control mechanism that is focused on responding to actual demand by dynamically adjusting target stock levels.
Josh Brown works in Content Marketing for Sales & Orders.
“There are several ways to improve the order fulfillment process…”
1) Have the option to dropship. As your e-commerce business grows, if you notice that certain products are starting to sell well, you can find similar products to use as cross-sell or upsell opportunities from companies that dropship and handle all the logistics, including fulfillment. Using this type of model helps to prevent loss of potential sales while you figure out how much inventory of your own products you should keep on hand/with a third party.
2) Until your e-commerce business reaches the type of growth where you can have employees dedicated to handling fulfillment, you’re most likely better off partnering with a third party. Besides the fact that these companies take care of packing and shipping, they can also typically offer you better shipping rates per unit then you would be able to achieve on your own. The key to working with a third-party solution is to do your research so that you can find one that’s a good fit (they have handling times within expectations, they’re reliable, good packaging — ideally custom).
3) When you establish that your e-commerce business is really growing and hasn’t just hit a spike, you may then want to start looking at handling self-fulfillment. At this point though, you should (ideally) hire someone to dedicate to managing this aspect of your business so that you can continue to focus on what you’ve been doing to grow your e-commerce business in the first place.
Adam Watson is a director at www.hollywoodmirrors.co.uk.
“The most critical piece of the fulfillment process is…”
Having the item you are selling in stock to meet today’s consumer demands for next-day delivery.
Having inventory management software that automates stock control and merchandises your store to show only items that are in stock helps prevent huge customer complaints, a bad reputation, wasted manpower, time and money.
Karen Gordon is the VP of Growth for Goodshuffle Pro, a software for event rental companies.
“The best way to improve your order fulfillment process is to…”
Always treat ancillary items as if they are equally important to main inventory. This will make your fulfillment significantly more efficient and save your company tons of time! For example, push carts, packing peanuts and other seemingly small components of a delivery should be highlighted on pullsheets and clearly noted for your staff (via software or other mechanism) to emphasize their importance.
Robert Rebitski is a member of the team at Predictable Surgical Technologies.
“As a company that ships medical supplies to hospitals and healthcare facilities, well optimized order fulfillment is crucial…”
Regardless of the type of business you are in, a company’s success is often measured by its ability to accurately supply its customers with exactly what they need, when they need it. Choosing order management software that enables your customers, your sales team and your management personnel to view order details, the status of orders and track their shipments in order to prevent costly errors or delays is vital to the fulfillment process. Allowing customers to track their orders in real time from the warehouse to their front door keeps them informed, and you’ll be spending less time fielding calls and more time getting orders processed.
Jim Barnes is CEO of enVista. He brings more than 25 years of experience successfully deploying customized supply chain and unified commerce solutions for companies in the retail, wholesale distribution and e-commerce industries, addressing their unique requirements. He has consulted with hundreds of recognized retail brands, unifying commerce and solving their omnichannel requirements as well as profitability and top line revenue.
“Investing in a ship-from-store or pickup-from-store strategy can significantly benefit a retailer’s business by…”
Increasing foot traffic, improving sales opportunities while also serving as a key competitive differentiator and then also providing more customer service touchpoint opportunities.
Customers expect desired products to be available at nearby stores or delivered to their doorstep within a short time frame, often 24 hours or same day. With as much as 20 percent of products sold online now being shipped from store, it’s a better time than ever to invest in a ship-from-store strategy to differentiate from competitors.
With a ship-from-store or pickup-from-store strategy, retailers can leverage the best of both online and in-store channels. They can expect to drive more foot traffic from an e-commerce channel, putting the customer in an impulse buying decision position; create an immediate differentiator; build customer relationships almost instantly across all channels; fulfill more online orders in-store, driving down fulfillment costs overall; and reduce in-store markdowns because of increased visibility into in-store inventory.
With optimal solutions (applications to synchronize your omnichannel customer experience), retailers can obtain inventory visibility across all distributions center and stores with a network and begin to offer more advanced fulfillment options in response to today’s consumer buying behaviors.
Andrei Vasilescu is a renowned Digital Marketing expert and CEO of a money-saving platform in the name of DontPayFull. He has been providing cutting-edge digital marketing services to various international companies and different online coupons of various brands for years.
“Increasing picking accuracy is essential…”
An optimized picking system greatly helps to improve the order fulfillment process. Picking mistakes make it necessary to engage your workforce (man and machine both) in non-profitable tasks, which is actually a total loss. A good amount of time and labor is wasted placing the wrong picks back in their allotted spaces. Using modern software and proper tagging of all the items in the warehouse, picking locations can be easily pinpointed and the shortest traveling route to pick specific items can be selected within moments. By leveraging modern technology, picking accuracy can reach up to 99.9% and workforce waste can be reduced to minimum. So, increasing picking accuracy is one of the most effective ways to improve the order fulfillment process.
Kyle is a marketing coordinator at Tradogram — a startup company that delivers online procurement software solutions to its clients. With a long history of freelance writing and work related to non-profit entrepreneurship, Kyle has recently turned his attention to SEO strategy development and content creation.
“One of the most effective ways to enhance order fulfillment is by…”
Using a tool or system to manage the process. Why? Because business purchasing is an incredibly complicated process with a lot of moving parts. However, there’s something even more important than sourcing different solutions and tools before choosing the right one(s) for your company — you seriously need to talk to everyone who’s involved in the ordering process first and get them on board with making a change.
Take it from the horse’s mouth: I’ve seen people purchase order management software, only to send back dismayed messages a few days later complaining that their team wasn’t actually using the software to place their orders. Compliance is a huge deal when it comes to order fulfillment, and internal compliance in particular isn’t something you can just wave a magic wand to fix, especially when you start getting into medium-sized businesses.
We’ve published an interview with a procurement professional in the past which can be found here in which he discusses the approach he took to implementing the “no po, no pay” policy in his company, which was directed primarily at increasing external compliance in the ordering process. The same steps need to be followed in order to achieve internal compliance — at the end of the day, the people making decisions in your purchasing process are human beings, and you’re going to have to discuss your objectives, their current way of doing things and what the plan for action is if you want to experience a positive change. Key takeaway? Be patient, and expect to do a lot of talking with your team if you want to truly improve your order fulfillment process.
Stacy Caprio is the Founder of Growth Marketing.
“I would argue the most effective way to improve the order fulfillment process is to…”
Outsource it completely, either by sending products and shipping materials to a warehouse that will pack and send it for you or by ordering from a dropship or pre-made product facility.
If it’s not possible to outsource completely, make sure you at least have an online order system that is consistent across all computers and automatically updates when orders come in and are fulfilled.
Stefano Penzo graduated in statistics at the University of Padua. He is a consultant in Modular Product Architecture and expert in company Quality systems (ISO 9001). He is currently CEO of CSTeam, an Italian IT company.
“The most effective way to improve the order fulfillment process and decrease lead time is to…”
Use a sale and technical configurator software. Above all, in the presence of complex or highly customized products, a configuration software provides important advantages both in the definition of the order requirements and in order fulfillment.
In fact, the process begins with the verification and confirmation of orders, followed by production and delivery; in many cases it can also include installation and assistance to the supplied product.
The use of a product configurator can reset the confirmation times, as it includes the rules for assessing the conformity and technical consistency of the requirements. The sales configurator or Configure Price Quote software also allows the calculation of the exact price. All of this facilitates the sale and decreases the times of the first phase of order fulfillment.
The technical configurator then minimizes any design activities, automatically generates the bill of materials and work instructions for production processes, even connecting directly with the production equipment (cutting tables, presses, welding machines, …). The software also helps to ensure complete traceability.
Finally, an evolved product configurator can also generate instructions for correct installation.
Nicholas Kinports is an entrepreneur with two exits focused on e-commerce, tech, innovation and the future of retail.
“One of the biggest challenges with fulfillment is seasonal demand spikes…”
As e-commerce begins to make up a larger percentage of retail sales, seasonal spikes will become larger and larger with each year. Having a scalable system in place that can meet a multiple of regular demand is essential to success.
Austin brings over 20 years’ experience in complex sales management and integrated systems design to AME, which he joined in 2017. His project experience draws from a broad range of automation technologies in the distribution, warehousing and manufacturing markets. Austin began his career with a family-owned Hytrol distributor in St. Louis, spent a decade with Dematic in Chicago, then successfully started up European OEM Savoye technologies in the U.S. through his channel creation role at New York-based Retrotech, now KION AG.
“The single most effective way to improve the order fulfillment process is to…”
Time-study and flow chart document all of the steps within your fulfillment process. Make sure you do this before you spend a dime on system investment. Many times operations can adopt work around procedures that become ingrained in the day-to-day operation that were really meant only as temporary. Taking a step back to understand every step in the process and the time associated with each will give you a much better picture of where inefficiencies occur. Comparing this to the facility throughput goals will quickly point to equipment bottlenecks and other areas for labor management study.
Jake Penney is the Co-Founder of English Blinds, manufacturers of luxury bespoke window blinds and shades.
“Investing in a CMS with full e-commerce management and an integrated order processing system has had the biggest impact on our order fulfillment process…”
Automation of the management process has minimized the number of manual steps and significantly reduced the order processing errors and costs. It has provided improved efficiency in the supply chain and brought greater visibility into each order via real-time tracking. Customers are also kept up to date regarding their order status with real-time and on-demand updates. Systems integration has not only improved the order fulfillment process and customer communication but also provided more accurate data for future orders along with better analytics and reporting, which has aided decision making and profitability.
Huib Maat is the in-house perfumer at Pairfum, a London based Artisan Fragrance House.
“We faced a few order fulfillment challenges, including…”
- Coping with the seasonality of our business and the changing staff numbers required as a consequence
- Lack of parcel volume for negotiating rates with the couriers
- Lack of flexibility regarding space, expanding or contracting depending on shipments coming in and going out
- Amortization of expensive equipment needed for efficiency
For us, the single most effective way to improve our order fulfillment was to outsource the warehousing, pick & pack and shipping to a 3rd-party warehouse. By doing so, we reduced our supply chain costs (e.g., warehouse, shipping, etc.), added the ability to scale our business without limitations and removed the ‘distractions’ of the day-to-day running of our supply chain, which increased the ‘focus’ on core activities within our business.
Steve Pritchard is a Business Consultant for Ben Sherman.
“Inventory management is an essential part of the order fulfillment process…”
Customers will never be satisfied by a company which cannot fulfill their order correctly and by the time/date specified. Any industry you care to name is almost certainly a competitive one in today’s business climate, so there are always plenty of alternative companies for consumers to go to; therefore, it’s vital you get it right the first time.
Synchronizing real-time inventory will give your business a leg-up in handling the orders and return process, without needing to delay your customers’ delivery time. This will stand you in good stead when it comes to repeat business.
Jun An Tan
Jun An Tan spent the past 5 years gaining experience in Business Development roles across the finance and construction sectors, which eventually led to him founding Eezee. Eezee aims to streamline the lengthy and tedious procurement process with the use of technology.
“The single best way to improve the order fulfillment process is…”
Integration across multiple systems. For fast and efficient order fulfillment, visibility of every area during the process is important from inventory to sales and logistics. There must be some level of integration across different systems such as CRM, e-commerce and order management systems to your inventory management and logistics fulfillment systems. This reduces the time needed to adjust different systems and to check and audit the reliability of data within individual systems, thus improving the efficiency of the order fulfillment process.
Maxwell Ziegler is the Marketing Manager for Conveyco Technologies, a premier automation systems integrator who helps warehouse and fulfillment/distribution center operations grow and thrive.
“When trying to improve an existing order fulfillment process, proper slotting is critical…”
Often times, as an operation has grown and evolved, so has the SKU assortment — new products are added, old ones removed and product affinity changes over time. By taking another look at how your SKUs are slotted (where they are located within your storage system), you will likely find efficiencies to exploit. By moving your now high-volume SKUs to a central location and by keeping SKUs that typically ship in the same order close to one another, you can cut down on picking time and increase order throughput.