Businesses of all sizes use order fulfilment services, either in-house or outsourced, to get their products from their production facilities to the end buyer, whether this is a business or consumer. Inventory control is one of the main factors which leads to errors in the order fulfilment process. This article will explore mistakes that businesses large and small have made when they have outsourced their order fulfilment, and how you can avoid making these costly mistakes yourself.
Poor inventory control
Inventory control is a key factor which contributes to mistakes in the fulfilment process. When taking orders for products a seller has to know they have the product to supply the order otherwise there will be disappointment and loss of confidence from the purchaser and possibly financial ramifications. Inventory management software can decrease the occurrence of errors due to poor inventory control and overselling products. It assists with ensuring enough product is being supplied to meet demand through forecasting of demand and controlling the availability of the stocked products to the end purchasers so that available products are not oversold.
Choosing the wrong fulfilment partner
Many businesses chose to outsource their fulfilment to third parties handing over inventory control of their products. An international example of this is Amazon who offers Fulfilment by Amazon. However, when choosing a fulfilment partner it’s important to not just chose the cheapest option as this could cost your business more than you save in the long run in both financial and reputational damage. Read this article for tips on choosing your fulfilment partner.
When deciding on an order fulfilment provider businesses need to conduct a thorough review of their history, experience and processes to ensure it is the best fit for your business not just the cheapest. If your order fulfilment partner is making errors, you could end up paying for them. Things such as time to resolve customer issues, return shipping costs and repeated picking and packing all add up and affect not only your bottom line but also your customer satisfaction and loyalty.
Not using fulfilment data to managing inventory control
Fulfilment partners often provide data to their users on how their products are selling along with supply and demand trends. Often this information is not used by producers as it is not fed into wider production forecasting. Inventory management software combined with an effective fulfilment partner can allow producers to harness the data provided and use it to forecast seasonal demand trends and in order to have greater inventory control in their supply chain. Ensuring effective supply to fulfilment partners means that end buyers will receive a greater certainty of supply which builds goodwill in the B2B and B2C relationship.
Communication failures in the fulfilment relationship
There needs to be two-way communication between fulfilment providers and producers especially around changing demand trends. An example of this is seasonal demands or sale periods, a producer needs to communicate to their fulfilment partners when they may be expecting demand fluctuations so that the fulfilment company can adjust capacity. Both the producer and the end customer benefit from this communication as it means the fulfilment partner has more time to ensure that they have the means to meet the increase in demand.
Outsourcing order fulfilment is common, especially in today’s eCommerce-driven world. Mistakes have been made time and time again by businesses underestimating the importance of their fulfilment processes. Using these tips makes sure when your company decides to outsource order fulfilment that you don’t make the same errors others have, saving you time, money and keeping your customers!
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.