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5 Key Steps in the Order Fulfillment Process

Posted: February 27, 2020 by Ly Phan

5 Key Steps in the Order Fulfillment Process

Definition of Order Fulfillment

At SmartTurn, we deal with clients from a broad range of industries, each of which has their variations when it comes to defining order fulfillment. However, in general terms, the process can look like this:

  1. Order is received: The store or distribution center receives the order through different channels. A receipt or notification is sent to the customer, letting them know the order has been received.
  2. Order is processed: Using SmartTurn’s inventory management system, distribution centers can quickly process the order and alert the picking team.
  3. Order is picked and packed: Once the order has been processed, workers can pick and pack the items in each order and hand it over to the shipping team.
  4. Order is delivered: The products are then delivered to the customer, and with that, the order is fulfilled.

Looking at the process on paper, it can be easy to underestimate the challenge of fulfilling orders with maximum accuracy and efficiency. Busy warehouses often have to deal with thousands of orders each day, and   The problem is illustrated by the fact that up to 30% of retail stock becomes obsolete or “dead inventory,” costing US stores up to $50bn a year alone.

In this post, we will go through the key steps of the order fulfillment process to ensure no customer is left behind and grow the reputation of your business. 

 

1. Integration

The first step is to integrate the order fulfillment with other business processes such as stock control and accounting. Integrating the different systems both within your business and with trading partners is essential for a smooth, automated operation.

For example, synergizing accounting software with shipping can help speed up the order fulfillment process by allowing workers to check payment status and address details quickly. This can be repeated across multiple processes, which leads to greater efficiency and accuracy through automation.

The other aspect of integration is to ensure all the orders through different channel  flow to one place. Online, mail, phone, and in-store orders need to be treated the same way and fed into the same system. By centralizing this part of the process, businesses can reduce the risk of misplaced or lost orders.

2. Communication

In terms of order fulfillment, the crucial element of communication is ensuring all parties throughout the supply chain have a good understanding of expectations. One of the most critical links is the relationship between the distributor and the customer.

In an age where same-day delivery is becoming increasingly commonplace, customers can be quick to lose patience and cancel orders if not delivered within days. While in most cases businesses should aim to deliver products quickly, there are some circumstances where it’s just not possible. A good example would be with one-off, luxury items like hand-made jewellery or automobiles.  

Communication between trading partners is also essential. If a retailer has experienced a spike in orders, for example, it will need to let the manufacturer or distribution center know at the earliest possible moment. Failing to do so may lead to stock outs and unfulfilled orders.

These are just two scenarios of many where communication can have a direct impact on order fulfillment.

3. An Organized Operation

Alongside communication, an organized warehouse is equally vital to successful order fulfillment. This involves all the processes that lead up to the final stage of delivering the orders, including receiving and putaway, stock control, and the floor layout. Each process contributes to the efficiency of fulfilling orders. 

4. Technology

To bring all the steps together, order fulfillment management software is essential. In today’s increasingly digitalized world, embracing technology will enable the automation of processes, deliver real-time visibility, and increase profit margins.

The aim is to reduce the time from the order being placed to the point of delivery, and SmartTurn’s solution offers just this. By allowing workers to have real-time visibility with mobile devices, combined with scanning technology, items will be located and picked quickly. With integrated and automated processes, facilitated by software, the shipping of products will be completed with unprecedented accuracy.

Alongside inventory accuracy levels of 99%, SmartTurn’s clients have reported saving up to $15,000 a month in supply chain efficiencies. One such area where savings were found was in the method of transactions, where it cost up to $73 per paper transaction. Electronic transactions are not only quicker but also much cheaper at 34 cents.

In short, technology helps companies to achieve a smooth, fully integrated, and more accurate order fulfillment process. Reducing errors alone helps to alleviate costs, as well as generate more capacity to handle orders. It enables businesses to grow with minimal expense.

5. Analysis

With the technology in place, companies have the opportunity to analyze performance and trends such as time to delivery, peaks, and troughs in orders, and seasonal demand. Another key advantage of using SmartTurn’s software is that it allows managers easy access to the information they need to help improve operations.

For example, businesses can use inventory management software to check how long it takes for workers to pick and pack orders. In doing so, managers can find ways to reduce the time it takes and increase efficiency, speeding up the whole order fulfillment process.

At a more broad level, SmartTurn’s solution can be used to identify trends in demand levels, which can lead to more accurate forecasting. As a result, businesses will be able to have optimal levels of stock all year round, reducing the costs of both stockouts and overstock.

 

Holistic Approach Pays Off

The crucial part of mastering the order fulfillment process is to understand its place in the wider supply chain. It’s essential to have all the parts in place, running smoothly before the products are ready to be packed and delivered to the customer. Inefficient stock control and poor warehouse design, for example, can hamper workers who are trying to fulfill orders as they come in.

Thus, an efficient, well-managed order fulfillment system is one that is fully integrated within the supply chain and warehouse operations. By using SmartTurn’s technology businesses can seamlessly bring together the multiple processes and maximize productivity, leading to customers receiving their products on time, every time. 

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