6 Fast Order Fulfillment Methods That Can Improve Your Online Store
Posted On August 12, 2015 by
With Amazon and other large e-businesses expanding rapidly, this poses new challenges for other fulfillment companies to keep up. One area of focus that can yield immediate results to the consumer is fast order fulfillment. Here’s how businesses are meeting this challenge.
Updating to the latest warehousing technology has certainly become a major contributing factor to meet the increased order demand. Once an ecommerce business is handling 3000 or more orders a day, with 500 plus SKU numbers, a manual fulfillment operation can quickly reach a plateau followed by diminishing returns due to higher labor costs, order errors and the inability to get orders out the door in time. New software systems allow inventory to be tracked through the entire supply chain allowing quicker delivery times and less human errors. This can become increasingly necessary during peak seasons. Returns can be handled in a more efficient manner right through the e-fulfillment process.
Surprisingly, small and medium sized businesses have still been able to thrive in the competitive ecommerce environment. Partnering with other retailers to offer items on an international basis and by integrating digital interfaces to simply order processing can help. Partnering with a solutions provider that offers installation, onsite training and 24/7 aftermarket support of equipment is another solution these businesses have implemented.
Better Inventory Management
Along with these changes, companies have had to track which products are and which products aren’t turning over so quickly with clients. Monitoring supplier sales fluctuations to determine necessary changes for a product line has helped online stores to become more efficient. Also, just-in-time inventory systems prevent a quantity of product to take up shelf space that can be used for a wider range of products.
Cross Training Employees
Anticipating demand changes is a main challenge of a fast growing ecommerce operation. This can impact order fill efficiency, pick density, walk times and replenishment cycles. Cross training all staff can help to meet these demands and reduce the cost and impact of adding seasonal contract labor. It helps to remove silos within an organization as employees learn to appreciate different facets of the business.
Shorten Delivery Window
Last minute orders and same day delivery options have become the minimum standard for consumers these days. E-commerce companies need to be able to respond fast. A first step is to frontload the morning with replenishments and to pre-stage fast movers in order to free resources for afternoon or evening picking. Optimize batching to combine like SKU orders into one postponed pick order. This will save time and drive efficiency while still meeting customer requirements. Advanced order fulfillment software can determine when to release orders to ensure the highest level of productivity.
Good fulfillment companies calculate the ratio of error free orders over the total orders shipped, including the number of shorts and returns. This creates a baseline and key performance metrics for productivity goal setting. A real time order management system provides accountability into order accuracy, alerting operators of errors before shipping orders.
Reducing Returns Impact
Shipping, lost revenue, reverse logistics cost and customer dissatisfaction are all components that contribute to cost of returns. These should be calculated and built into the product pricing structure to minimize the impact on a company’s bottom line. In some cases it is more cost effective to discard certain SKUs than to incur restocking costs. Returns handling can be sped up by staging a quality inspection at the receiving dock to make restocking decisions and to return products back to inventory quickly. Using fulfillment data to create a returns policy and pricing strategy that strikes a balance between customer satisfaction and full cost of returns is crucial. Use the same outbound picking technology for your inbound logistiics which will help you return SKUs back to their location quickly for resale.
Incorporating these methods are necessary for any online store to thrive in the current environment. The investment may be great, but most businesses find that the payoff can be enormous.