UNDERSTAND HOW ORDER FULFILMENT WORKS

 This is the age of the big E- electronics. Everything is done electronically – from shopping to business, from banking to courier services, everything is dependent on WI-FI and the internet. For most of the services or business streams, ecommerce fulfilment services are a very important component. Effectively ecommerce fulfilment services or Logistics services are the backbones of the ecommerce industry. Top freight forwarding companies in India renders a successful retail order fulfilment strategy that is vital for ecommerce businesses to stay competitive and build customer loyalty.

The main vertical of an efficient Logistics provider is the “order fulfilment procedure”

Order fulfilment is the entire procedure or steps involved in receiving, storing, processing and delivering orders to end customers. What seems like a very easy process to the layman or customer is actually very difficult and complicated.  Only when one thinks and analyses the procedures involved in this business, does the enormity of the business emerge.

Essentially an order fulfilment service is a third-party company that provides delivery service. Most often it is one arm of a Logistics provider.  Generally, 3^rdParty Logistics Order Fulfilment Services provide services for B2B, D2C businesses.

Fulfilment Centres are very precise and prompt in their services.

The following steps are involved in ensuring the best possible Fulfilment Solutions & Services:

·         Goods received have to be inspected for damages.

·         Exact inventory has to be made.

·         A stock keeping unit has to be installed. This is very important for warehouse management, time management, bookings and despatches of cargo, billings, stock checking, tracking and answering any queries raised in connection with the location of the cargo.

·         Storage of goods and the order of processing should be in the order of distribution. All cargo should be easily accessible. The goods should be stored in the order of distribution time-table. For instance, a crate of fruits should be stored right in front where it is easily accessible and the delivery date is the nearest. Similarly, a bale of garments can be stored in the interior of the fulfilment warehouse. Storage should also correspond to the delivery schedules and calendars and be sent as per schedule

·         Shipping: Cargo should be inspected and sent for shipping/distribution on or before schedule, except in specific cases like perishable produce, medicines and more. The Fulfilment Centers should be well equipped to respond and resolve all enquiries about any cargo held for storage and distribution.

·         Ecommerce fulfilment services must have a very comprehensive, detailed and precise policy for the return of goods. From vendor to fulfilment warehouse or from the end consumer to the Warehousing & Fulfilment centres to avoid losses to all concerned.

This various procedures and steps can be classified as order fulfilment and very broadly as 3PL Order Fulfilment Services, or simply cargo shipment. These are the refined procedures and norms followed by Gati.  Gati always keeps updating its procedures with progressing technologies. This keeps them one step ahead in providing complete customer satisfaction.

TYPES OF ORDER FULFILMENT

 

Order fulfilment is one component of the broader supply chain process. There are four main types of order fulfilment: in-house, outsourced, dropshipping and hybrid. 

● In-House Order Fulfillment

In the in-house order fulfilment model, a business uses its own employees to manage fulfilment processes. Employees handle all steps of the fulfilment process, including storing and shipping the products on-site at a company-controlled location. In-house fulfilment is ideal for established companies that want to have end-to-end control over the entire operation. Some home-based startups start out using in-house fulfilment as a low-cost option, particularly those with small order volumes. As they outgrow their initial space, many move to outsourced or hybrid fulfilment models.

● Outsourced Order Fulfillment

Outsourced order fulfilment is when shipping, storing and order/refund processing is handled by a third-party logistics (3PL) or order fulfilment company. Companies that don’t have sufficient storage space or personnel may choose this option. In this case, the 3PL’s employees handle the entire fulfilment process from end-to-end, from receiving inventory from manufacturers to delivering orders to the end customer. Inventory is stored in a warehouse controlled by the 3PL, meaning companies that use outsourced fulfilment don’t need to invest in their own warehouse facilities.

● Dropshipping

Dropshipping is similar to outsourcing, except there’s no inventory to manage. The retailer doesn’t keep the items it sells in stock. Instead, when an item is sold, the retailer purchases it from a third-party supplier. The supplier may be a manufacturer or a company that procures products from manufacturers to sell to drop shippers.  The supplier handles all orders and ships them to your customers. You’re only billed for the products you sell. It’s common for e-commerce and startup retailers to use this option.

● Hybrid Fulfillment

A company that uses a mix of the above order fulfilment options is using a hybrid fulfilment model. For instance, a company may process some orders in-house, such as custom items or items that must be assembled before shipping, while also using dropshipping services for non-custom items. Some companies choose to use dropshipping for items that are infrequently purchased or those that they don’t want to store in-house, such as large or expensive items. This is ideal for companies that need more flexibility or are undergoing rapid expansion. 

CHALLENGES OF ORDER FULFILLMENT

It’s not always easy to implement effective order fulfilment processes. Businesses face complex challenges with demand, inventory management and logistics planning.

Here’s a breakdown of the most common considerations:

·         Inventory management: Running out of stock is a quick way to deter customers from shopping with you. Companies that succeed in maintaining optimal inventory levels won’t have to worry about losing customers to their competitors due to stockouts.

·         Demand planning: It’s critical to know the demand for the products you sell. This way, you won’t risk overstocking (which can be just as costly as understocking). Demand shaping can also help with this, which involves using marketing and promotions to create demand.

·         Logistics planning: The shipping process is just as important as the sale itself, if not more so. You need to ensure the shipping methods, speed and care taken to get products to your customers. Otherwise, you risk late, broken or missing packages, which can hurt your reputation and sales.

·         Supply chain execution: Despite even the best planning, running out of inventory happens, especially during unexpected spikes in demand. When demand depletes your inventories, you must be able to replenish those items as quickly as possible. Choosing manufacturers that can quickly fulfil your own orders is vital.

ORDER FULFILLMENT BEST PRACTICES

Creating a streamlined order fulfillment process is the key to winning over customers and maintaining your competitive edge. There are several best practices to keep in mind that can help you optimize your order fulfillment processes.

● Choose what will work best for you.

First, you need to use the fulfilment model that best suits your business. It should be flexible enough to handle your order volumes, customer locations and sales channels. If you sell customized or made-to-order products, then your fulfillment process must be able to accommodate those complexities without adding unnecessary delays.

● Use data to drive your decisions.

Your technology should support order fulfilment with real-time data, giving you inventory visibility and enabling more accurate demand predictions. Making data-driven decisions about purchasing and production makes it easier to keep up with demand and maintain optimized inventory levels.

● Communicate clearly and effectively.

With better supply chain visibility, you can set clear expectations with customers about deliveries. Be transparent about returns processes, as well.

● Don’t be intimidated by automation.

Finally, leverage warehouse automation to improve order fulfillment efficiency and accuracy to better meet your customers’ expectations. Flexible automation solutions like collaborative mobile robots optimize picking routes in real-time, reducing unnecessary walking and improving picking efficiency. Collaborative mobile robots leverage AI and machine learning, guiding warehouse associates through tasks to help them work faster while reducing errors.

There’s no single fulfilment process that works for every business. Whether you choose to outsource to a third-party logistics company or use a hybrid warehouse fulfillment model, what matters is finding the right process that meets your company’s needs and your customers’ expectations. The goal is to streamline your fulfillment processes so your customers stay happy and your bottom line doesn’t suffer.