Understanding order fulfillment: Process & pitfalls

Your customers hold more power than ever before. With countless online stores all clamouring for their business, it only takes a single late or incorrect order for them to make their next purchase from the competition.

That is why it is important for ecommerce businesses large and small to get order fulfilment right. With customers more informed and expecting higher levels of service, there is a constant need to ensure your processes are as accurate and seamless as possible. To do this, you need a solid understanding of the order fulfilment process.

Order fulfilment: Why it is so critical

First, let’s define what we mean by order fulfilment. Put simply, it entails the many tasks required to process and deliver an order to the customer’s specifications – from receiving and storing stock, to picking, packing, delivering and returning orders. Given there are so many tasks and hands involved during this process, there are many opportunities for things to go wrong.

For example, if you lack visibility of your inventory, you may not have the foresight to replenish stock as needed, leaving certain orders unable to be fulfilled. Or if you rely on time-consuming manual processes, you may experience bottlenecks that prevent timely order processing and result in late deliveries. And then there’s human error, which can pop up at all stages of order fulfilment and lead to the wrong items being delivered.

Fulfilling every customer order on time and to their specifications means ensuring myriad tasks, people and systems work together seamlessly. All it takes is just one error or inefficient process to derail the entire order fulfilment process and lead to unsatisfied customers.

The 8 steps of order fulfillment

Receiving inventory

The right procedures must be in place to receive and unload stock when delivered to your warehouse. Stock must be counted and inspected to ensure it is in good condition and everything that was ordered has been received.

Storing inventory

Goods received at your warehouse will need to be stored on-site or sent to another warehouse or fulfilment centre. This may be done via common methods like first-in, first-out (FIFO) or last-in, last-out (LIFO) to enhance storage efficiency.

Processing sales and managing stock

When a customer finalises an order via your online store or a third-party marketplace, the order items will be checked for availability. If they are not available, the order will be placed on hold while stock is replenished.

This is where inventory management software can help. It can provide real-time visibility of all inventory and ensure it is always in sync with sales channels. Software can even automatically order stock when inventory falls below a certain level.

Processing orders

The order must also be validated to ensure the customer’s payment has been successfully transferred and that their delivery details are correct. Picking and packing activities are determined based on the customer’s order, with warehouse staff provided with a packing slip.

Picking

A member of the warehouse team will receive details of the order and begin searching for and picking out items from inventory. They are guided by the packing slip, which provides a list of SKUs, quantity of units, item colours and sizes, in addition to their location in the warehouse.

Packing

The picked items are carefully prepared for dispatch to the customer. This may include packing items into a box or poly mailer, and if they are fragile, wrapping them in bubble wrap first. The correct labels and address are then applied to the package, as well as a return address.

Delivery

The package is provided to a courier for delivery to the customer’s address. Selecting the right courier involves assessing the cost and speed of delivery offered by different couriers. When the package is handed over to the courier, tracking information is then sent to the customer so they can monitor their order’s progress.

The courier will then deliver the package to the address on the shipping label. To confirm it arrived at the customer’s address, the courier may ask them to provide a signature or snap a photo of the package at their door.

Processing Returns

If the package is returned, it must be inspected to determine if restocking or scrapping is necessary. A refund and appropriate communications must also be issued to the customer.

4 threats to smooth order fulfillment

1. Supply disruptions

The ultimate goal of inventory management is to always have the right amount of stock on hand, at the right time, to fulfil every customer order. This is a careful balancing act to ensure you are not holding too much or too little stock.

However, often stepping in the way of achieving this are unforeseen supply chain disruptions that can delay stock deliveries. This risk is greater if you choose to source stock from a single supplier. While this strategy can offer discounted prices and favoured priority status, if your one and only supplier faces issues delivering stock, you may be left out in the lurch.

2. Fluctuating expenses

The costs of delivering orders to customers and replenishing stock are influenced by a range of factors that are constantly changing, including rising fuel costs, supply chain disruptions and shortages of certain stock items. These and other factors can push up the price of courier services, goods and in turn your products. The constant variation in stock and delivery costs can make pricing your products a challenge.

3. Inaccurate and inefficient manual processes

When order fulfilment operations rely on manual processes undertaken by humans, mistakes and inaccuracies are bound to pop up. Without technology like order management software to help automate certain tasks, staff are forced to use spreadsheets to track orders, deliveries, purchases and stock levels, for instance.
These error-prone manual processes only become more cumbersome and inaccurate as your order volumes grow.

4. Demand fluctuations

Rostering on the right amount of staff and maintaining the optimal level of stock is made exceedingly difficult by changing customer demand. Order management software can help you forecast demand for certain product lines based on historical sales data or seasonality, and therefore plan stock orders accordingly.

3 keys to enhancing order fulfilment

1. Automate processes

To gain a competitive edge, more and more ecommerce businesses are turning to software to automate tasks across the order fulfilment process. Automation can remove the need for staff to update spreadsheets and manually track orders and inventory.

It can also simplify courier management by automatically selecting the most cost-effective delivery partners for each of your orders. You can even set rules to automatically order stock when levels are low or decide what happens to orders during packing based on triggers like value, weight and delivery option selected.

2. Real-time visibility

The ability to easily track all your orders in one place, monitor your stock levels and movements in real-time, and view key metrics like picking accuracy are all essential to ensure maximum order fulfilment efficiency. Without access to real-time data, you simply will not know what needs to be optimised and will be forced to manually track orders and stock.

3. Simplify order fulfilment management

One of the biggest challenges ecommerce businesses face is the complexity and inefficiency of managing various fulfilment functions via disparate platforms. Order management software allows you to manage your inventory, orders and warehouse processes in a single platform.

It can also integrate and centralise all your marketplaces, shopping carts and courier platforms so all your data is synchronised, saving you significant time in managing everything manually.

3 benefits of order fulfillment software

The latest cloud-based order management software solutions offer powerful automation capabilities to eliminate countless error-prone and time-consuming manual tasks. They also provide real-time visibility of your order fulfilment processes to ensure optimal inventory levels, easily track and manage orders, and identify areas for improvement. All this combines to help you:

Get orders out faster

Software can help pickers increase accuracy via barcode scanning and work more efficiently with optimised picking routes. It can also automatically select the most cost-efficient and fastest courier services based on rules you define.

Improve efficiency

Order fulfillment software can help save time and reduce costs. Automating tasks reduces the amount of manual labour required and therefore minimises staffing costs. Stock orders can automatically be placed when inventory is running low.
Exceed customer expectations

By making all your inventory management and warehouse processes more efficient, order management software helps you provide the next or even same-day delivery today’s customers demand. It also makes it easy to keep them up to speed on the progress of their order via automatic notifications.

Software also helps ensure stockouts are not a problem, with the ability to reorder items when stock falls below a certain level. This means you can prevent delays in sending orders to customers and deliver the impeccable service they expect.

Stand out from the competition

With the ability to provide consistently fast, personalised and error-free service to customers, your business will inevitably stand out from the crowd. More accurate and efficient order fulfilment means you can help avoid negative online reviews and establish your brand as reliable and trustworthy.

How Access Mintsoft enhances  order fulfillment process

Access Mintsoft offers the intelligent automation you need to eliminate manual tasks and ensure efficient order fulfillment. Real-time reporting gives you full visibility of orders, inventory and deliveries while next-gen warehouse management features help you optimise warehouse space and processes.

This easy-to-use cloud-based solution is designed for Australian 3PL warehouses, wholesalers and ecommerce operations both large and small, no matter if your business is B2B or B2C.

Watch Video: Top 4 ways Mintsoft can help automate your order and warehouse processes