Regardless of the size of your company, be it a startup or a well established brand, gaps in fulfillment efficiency can slow your business growth and cut into your profits. In today’s consumer-driven economic landscape, with 63 percent of consumers saying they expect three-day delivery as the standard, retailers have to put considerable attention and effort into ensuring that your ecommerce fulfillment and supply chain are running as smooth as possible. As Amazon continues to dominate and companies try to keep up, ecommerce businesses need to continually find ways to improve operations, reduce expenses, and improve the customer experience to stay relevant. Constantly evaluating your process can help make sure that you’re running an efficient operation, your products arrive on time, and your customers’ expectations are met. If they aren’t, then you risk customers going elsewhere. And with The COVID-19 coronavirus pandemic disrupting global supply chains, being as efficient in your fulfillment as possible is paramount.
Inefficient fulfillment processes such as inaccurate inventory, slow restocking, and outdated technology could cost you tens of thousands each year and lead to a decline in customer satisfaction. Here are some of the ways you can find these issues in your order fulfillment process and make it more streamlined, cost effective and efficient.
Focus on Inventory Accuracy
If your inventory metrics are not accurate then you won’t be able to properly store, pick, package, ship, and ultimately fulfill your orders at a high level of efficiency. Customers and partners expect to see what’s in stock and available in real-time when they are ordering, and if what they see does not accurately reflect what you have on hand it could lead to issues such as backorders, deadstock, and stockouts. And the worst case scenario is that your customers decide to purchase their products from a different vendor.
Some methods to increase inventory accuracy include establishing good inventory naming and labeling practice and performing spot checks and cycle counts. You can also leverage warehouse management systems (WMS) and inventory management systems (IMS) to eliminate manual data entry and reduce the chances of human error.
Make Your Order Fulfillment Process Predictable
When your order fulfillment process varies widely from one day, week, month or season to the next, inefficiencies are bound to arise. If you don’t know what to expect each day in your order fulfillment operations, you will experience higher labor and operational costs, as well as overstock or understock your goods. Invest in good order management software to help monitor, predict and automate your systems for more predictability. Automation has become a big deal in warehousing and logistics, and it’s only going to grow. Automation will save you time, and be more accurate more often. When your software handles the monitoring for you, it’s easier to refocus your attention and improve efforts elsewhere.
Optimize Warehouse Layout
The way a warehouse is laid out has a tremendous effect on the efficiency of the order fulfillment process. Creating a layout that optimizes workflow in all areas—from the first step of accepting inbound goods to the final step of shipping them—is important to help prevent supply chain bottlenecks and inefficiencies in the process. Bringing in a specialist is an option to consider if you think that your fulfillment center needs a complete revamp of your layout. They can also help you optimize your warehouse space so that you can store your products more efficiently without having to expand or rent additional space.
Streamline Order Picking
Order picking is one of the core components of any distribution center. Optimization of the picking operation is critical since even small inefficiencies in the picking aspect of your order fulfillment can affect your bottom line so it is important to optimize how the picking operation works. There are many different types of picking, such as wave picking, small batch picking, and zone picking that you can utilize. Small changes, like bundling orders into single units or organizing the top selling SKUs in an area closer to the other departments in your fulfillment center can lead to huge improvements in efficiency. A 3PL will have highly experienced pickers, so if you outsource your fulfillment you can benefit from their expertise.
Optimize Slotting
Inventory Slotting is the process of organizing your fulfillment center’s inventory before it’s picked, processed and fulfilled. Like picking, optimizing your slotting efforts can lead to more efficient fulfillment with small changes that are cost effective. Minor adjustments, like keeping your best selling products in the most accessible slots, can enhance your order fulfillment. It is critical to view slotting as a high level function in your fulfillment operations and follow best practices to ensure that your products are shipped in the fastest possible time frame.
Reduce Touches and Handling
It is critically important to monitor the average number of touches (the number of times an item is being handled by your warehouse workers) of a typical item in your facility. The more touches that are involved, the more room for human error and mishandling that could lead to the wrong products being shipped to the wrong customer, labelling errors and lost inventory. Another benefit of reducing the amount of times each SKU is handled is eliminating the chances of damage and theft, while at the same time boosting the speed of your fulfillment process. Any step in the fulfillment lifecycle could be considered a touch, whether it’s a robot picking, a pallet transporting, or a human packing.
Outsource Order Fulfillment to a 3PL
Outsourcing logistics to a third-party logistics (3PL) provider means getting the support needed to execute your order efficiently. They are experts in all areas of fulfillment, have strategically laid out fulfillment centers and top quality staff to pick, pack and ship your orders. The right 3PL for your business should be an integral member of your team, helping you build successful fulfillment strategies that prevent stockouts, backorders, and unnecessary additional costs due to errors. Your 3PL should ultimately be a partner who supports the growth of your business.
“Given that our entire logistical and manufacturing supply chain is outsourced, luckily we chose great partners that have been able to comfortably deal with the volume increase. What we’ve seen is that with the higher order volumes we’ve been able to optimize our time spent on customer support—creating new digital assets that has allowed people to receive the care they need.”
Utliize an RFID System
Transparency and data tracking at every level of the supply chain is vital to helping you develop solid analytics, and analytics are necessary for making impactful changes on a day-to-day level. With radio-frequency identification (RFID) technology and detailed tracking software, you open up a higher level of transparency and tracking throughout the order fulfillment process.
Minimize Packing
It should be a priority of every fulfillment operation looking for more efficiency to utilize the least amount of packaging as possible. More packaging equals more steps, more handling, more time, more money, and more waste. Your aim should be to figure out how to best protect items in transit with the least amount of materials.
Bottom Line
Establishing an efficient fulfillment operation should be one of the most important aspects of your business. With the right planning and systems in place you can eliminate some of the most costly and time consuming aspects. Working with a third-party logistics provider (3PL) is a great way to provide a seamless ordering experience for your customers, and take the hassle out of managing the logistics and fulfillment process yourself. If you are fulfilling orders yourself, take the time to ensure that you have the right systems in place and reduce the chances of any errors occurring that could lead to disruptions.
Do you need help with your order fulfillment process? Send us a note to connect about how DCL Logistics can help your company with fulfillment. You can read DCL’s list of services to learn more, or check out the many companies we work with to ensure great logistics support.
