As soon as you start your online business, ensuring that your order fulfillment process is efficient and quick becomes imperative.
Order fulfillment processes may vary, but the basic idea remains the same: get the customer’s order ready and make sure it reaches the customer on time and in good condition.
A faulty order fulfillment process can cost you both time and money, impacting your bottom line and customer satisfaction. You may even lose customers along the way.
This article will explain why it’s essential to review your order fulfillment process regularly and how to streamline your operations and minimize costs while improving customer service levels.
What Is the Order Fulfillment Process?
The order fulfillment process is what you and your business will use to handle a customer’s purchase. The process varies depending on your business, but a basic rundown looks something like this:
- Receive order – You receive an order from a customer via the phone, email, or other means.
- Process order – Use your back-office system to process the order internally.
- Pack and ship product – Package and ship the order out to its destination quickly.
- Track shipment – You need to track each shipment that leaves your facility for security and alert customers if there are any delays.
- Arrival – The shipment arrives at its destination.
Depending on what type of business you have and how much customization is involved with each product, there may be even more steps that are unique to your company. For example, an advanced e-commerce website might require specific systems such as having an ERP in place.
9 Strategies for Streamlining Your Fulfillment Process
Speed and accuracy are of utmost importance when it comes to fulfilling orders. Here are nine tips on how to improve your order fulfillment process and boost the ability of your business to fulfill orders efficiently while keeping customers happy.
1. Define Success
Define what success looks like. This means you and your organization should have a clear understanding of what perfect order fulfillment is for you.
This will help you identify opportunities for improvement in your supply chain. While discovering better routes, you can also think about ways you can improve route coverage or reduce your dock-to-stock time, etc.
You have to be familiar with the cogs in the supply chain before you can think about making changes. That’s because any mistake made right now may reveal itself as the biggest regret many months down the road.
This proves to be a proportionally scarier decision for bigger businesses who have to think about global shipping, foreign laws and regulations, taxes and labor costs.
The next step is to measure the performance against your objectives to attain goals. There’s no one size fits all approach, however, research is advised, especially in businesses in your niche market or industry.
There are several different ways people have gone about defining their next immediate goals and improving their overall order fulfillment performance.
Statistics bear witness to the fact that not only has fulfillment optimization helped businesses achieve better results, but it has also gained more customer confidence which consequently, resulted in additional sales.
Improving delivery mechanisms, trying out different 3PL vendors (if you’re outsourcing) or working on demand forecasts are all relatively effective ways to optimize fulfillment.
2. 3PL Outsourcing
Shipping is the core of any e-commerce business. A 3PL service with a good reputation, competitive rates, and proper tracking can give your customers peace of mind that their package will arrive in one piece.
Choosing a logistics partner that doesn’t offer a good SLA or doesn’t provide substantial order accuracy numbers could lead to bad reviews and lost customers.
Before choosing a company, ask about their services, such as international shipping, free returns, and insurance protection against damage or loss during transit.
Make sure you choose a reliable company that will get your customers their products as fast as possible. You may also want to look into whether they have drop-off locations around your customer’s city.
Convenience can save all parties time and money on delivery fees. Researching each company thoroughly before choosing a provider can help ensure your order fulfillment process runs smoothly.
Your bottom line is what matters most. Ultimately, your preferred shipper should be reliable and affordable.
3. Prioritize Order Management
Order management refers to the process of taking an order from a customer and initiating fulfillment operations to ensure delivery of the product.
The first part of order management is developing a user-friendly interface with all your products and their related information, e.g. weight, dimensions, and delivery estimates to the customer.
Another important part of order management to ensure customer satisfaction is providing them with updates regarding their order. That also includes showing them where their products are in real time.
You can accomplish disclosure through various methods including emails, text messages, and phone calls.
However, a lot of frustration can come from manually pulling this information for customers, which is why you should automate the process using modern software that provides customer portals.
Once you have established excellent communication, you can feel confident knowing that your customers are getting all of their questions answered and their needs met. Then they can move on to loving your business rather than complaining about it.
4. Ensure Visibility with Vendors
The other side of order management, checking on your suppliers and logistics partners, is something that can also be streamlined by using a comprehensive set of supply chain management tools.
When outsourcing services to other vendors, it’s crucial to ensure they have seamless communication with your business. Integrations in modern APIs allow you to share data between various platforms, like inventory management systems or accounting software.
This way, all of your information is stored in one place and automatically updated when changes are reported from a warehouse or FC. Without integrations, you may be manually inputting data into multiple systems, which can lead to errors or inconsistencies in your data.
By integrating these platforms you can save time by having everything run more efficiently. Plus, if there is a problem with an order, you won’t need to check each system manually; instead, notifications will pop up on your screen, so you know what needs to be rectified.
Integration helps streamline order fulfillment processes and provides a better customer experience. It can also help reduce costs by providing real-time information about sales volume, prices, and revenue.
5. Choose Your Warehouse Locations Tactfully
When it comes to shipping and receiving, logistics is king. If you’re not careful, missteps in your warehouse processes can directly impact customer satisfaction and your bottom line.
Consider the proximity of your warehouses to major markets and their location relative to transportation hubs like airports and ports. It would help to consider how easily you can replenish inventory from each site.
Each warehouse should be able to replenish its inventory within about three days of a customer placing an order.
If you sell products across several different locations, you need multiple warehouses in each market. Otherwise, customers will see longer wait times from when they place an order to when they receive their product.
Ensure that all of your warehouses are large enough to accommodate future growth. This way, you won’t find yourself scrambling later down the line as orders start pouring in faster than anticipated.
Pay attention to local regulations and taxes when deciding where to locate your warehouses. There may be fees associated with establishing a warehouse or importing goods into specific areas, so consider that before making any final decisions.
6. Demand Forecasting
One of the most critical parts of running a supply chain is demand forecasting. Not only is it entirely based on assumptions from analysis of current business data, but it’s also painfully disappointing to get wrong.
Demand forecasting refers to predicting consumer behavior by analyzing current sales and market trends to identify inventory requirements.
For every business, it is critical to be able to predict consumer demand and the bigger your supply chain is, the more important demand forecasting becomes.
While it’s not integral to all types of supply chains, demand forecasting is certainly helpful for all businesses.
7. Measure and Review Key Metrics
One of the most important things to improve your order fulfillment process is measuring and reviewing critical metrics. KPIs are measurable values that help you track progress toward a goal.
There are several order fulfillment KPIs that you should regularly measure when it comes to ordering fulfillment, including:
- Inventory Accuracy
- Shipping Time
- Order Accuracy
- Billing Accuracy
- Return Rates
Feedback and data are vital to running a successful company. What you do with that information, however, is even more critical. It would be best to review your company’s data to look for deficiencies regularly. Keeping a close eye on these metrics will help you determine which areas need to be optimized.
Once identified, you can begin working to eliminate them and optimize your order fulfillment process. Ideally, you should constantly be testing one new variable at a time to understand how it affects vital metrics.
This way, you can easily monitor all your business’s key metrics and ensure everything is running smoothly. Brands can easily share dashboards with fulfillment centers for visibility into what’s going on each day.
8. Reduce Inventory Damage
If you sell products on your website, shipping them safely and efficiently can be challenging. Needless to say, you can’t afford to cut corners when it comes to logistics.
The last thing you want is to ship an order only to have a customer complain about a damaged product or poor packaging.
Quality control is essential because online orders are significantly affected by negative reviews. They know what good service looks like, and they won’t be afraid to say something if they feel slighted.
The best way to ensure secure and efficient order fulfillment for small businesses is to hire third-party fulfillment centers specializing in eCommerce solutions.
FCs provide everything from warehouse space to packaging materials and have extensive experience in managing inventory comprising a large variety of different types of products.
They also have highly trained employees who know how to efficiently process orders quickly to get them shipped out as soon as possible.
You should also consider investing in digital solutions specifically designed for eCommerce businesses so you can collaborate with your fulfillment centers more effectively.
9. Automate Where Possible
Often, fulfillment processes are tricky because they’re manually executed and require communication across various teams. That means it can be challenging to get things done quickly and effectively.
With numerous channels, platforms, and consumer devices at your disposal, being able to adapt is crucial. Look for ways to incorporate technology into your fulfillment process so that you can streamline it as much as possible.
For example, use a digital label printer that will allow you to print directly onto packing slips eliminating manual data entry. Automation can also help you to easily update inventory levels when a customer places an order based on specific rules.
Think about ways you can automate as much of your process as possible. Consider switching platforms or providers so you can automatically populate shipments directly from sales data.
Streamline Your Fulfillment Process
A business’s ability to fulfill orders and complete transactions is directly proportional to customer satisfaction and revenue generation. An efficient order fulfillment process builds customer loyalty, leading to more outstanding sales and overall growth.
Strive for a cohesive approach that keeps all aspects of your operation working together toward a common goal. Supply chain management is a complicated and cumbersome discipline that can require experienced leadership.
Izba, a team of supply chain management consultants is ready to help you scale your business.
With our help, your business will quickly and easily improve its order fulfillment process, deliver a better customer experience, and grow your bottom line.