Order fulfilment is the task of getting merchandise to your customer each time an order is received. It sounds simple, but it’s a complete process that requires multiple steps to achieve. This process involves warehousing, picking, packing and shipping the product, and sending an automated email to the customer to let them know the order is in transit.
Efficient order fulfilment processes ensure that the complete order is received by the customer, in a timely manner, undamaged and accompanied by the correct paperwork. When it comes to increasing order fulfilment efficiency, the following five steps can guide significant improvements.
When you receive an order to be filled, it may have been placed either in person, online, over the phone or via email. The order is entered into the back-office, electronic or software system. At which point the customer should be notified that the order has been received and for electronic and online orders this can be via an automated notification.
The order is then sent to the warehouse as a hardcopy or directly from an order management system for picking, packing and shipping. If any part of the process neglects to communicate efficiently with the next, problems arise that can result in incorrect orders being sent or shipping delays and late deliveries.
Technology such as a single integrated software system allows managers, salespeople and warehouse staff real-time access to order processing information. This reduces the risk of miscommunications to improve order fulfilment efficiencies.
Classify your inventory stock to ensure rapid handling. By grouping inventory from fastest to the slowest moving items you can to ensure that you always have the right stock levels of your most important items. Place the most popular products in a centrally located area so they can be picked, packed and delivered to the shipping dock in a minimal amount of time.
Slower moving items can be stored in a separate area. Having a logical arrangement of inventory stock can cut down on the time it takes to process and fulfil orders. Reclassifying inventory saves time in order fulfilment processes and will save money in terms of warehouse labour costs.
Order fulfilment processes are often reported to consume over 60 percent of the total direct labour associated with warehouse operations and order picking offers one of the best opportunities for optimisation and cost savings.
The picking processes is a crucial component of order fulfilment and it’s especially important to optimise your pick path and the pick rate times each picker takes to retrieve an inventory item. Have effective systems in place to direct pickers on a logical path through the store to help minimise fulfilment times.
Ensure inventory stock is clearly labelled and easily accessible for workers in the warehouse or store to find and pick to fulfil an order.
Identify areas of the fulfilment process where any activities take too long to achieve or for areas where frequent failures occur. This can highlight inefficient processes and identify opportunities for improvement.
Correctly packing an order to prepare for shipping can mean the difference between an order getting to the customer damaged or undamaged. How orders are packed can also greatly influence shipping costs.
Packers need to understand maximum fill levels of various boxes to allow for insertion of padding materials and the weight constraint on boxes being used. Additionally, they should be aware of certain products that may require specific box types, such as an insulated box for temperature sensitive goods.
Better packing density is generally achieved when larger items are picked before smaller items that can be packed around the larger items. Ensure items are packed to comply with delivery specifications.
Invest in automation to speed up your order handling times. This can be as simple as investing in scanners to easily enter inventory into the system, scanning inventory stock as it arrives into the warehouse and as it leaves.
Automation will improve order fulfilment by reducing the time it takes to manually complete processes, tasks and activities.
Identifying the most common areas of concern and points for improvement helps to prioritise and improve order fulfilment processes.
Break down your processes into costs and compare various stages of the fulfilment process to better understand where you are incurring your greatest costs. Comparing costs across each fulfilment point over time will help highlight any disproportionate increases.
Actively monitoring performance and applying cost analysis allows you to flag areas to improve order fulfilment as they arise.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.