What is Order Fulfillment?

Let’s say you are hungry and plan to bake a cookie for yourself. Having the final cookie is like receiving the final product. But preheating the oven, making a dough, adding the right amount of ingredients, one by one, without missing any of it, and finally baking it is the whole process. Just like that, what goes on behind delivering the product is called the order fulfillment process.  The order fulfillment process is a method a business follows to process its orders from the point of sale to delivery.  It starts with ‘add to cart’ and ends with a ‘happy customer.’ However, the umbrella of order fulfillment also includes all the backend processes and management of returns. It’s an obscure process that includes several stages. For example, having a cookie would make you happy, and efficient order fulfillment makes a customer happy. It holds the brand reputation and is directly related to the sales, aka, in our language, the profits!

Understanding 3 Different Parts of the Order Fulfillment Process

Let’s step behind the curtains and understand the importance of an efficient process via each stage and how it functions to make an order successfully delivered to your customers. Let’s understand three different parts of the order fulfillment process. 

1. Inbound

Shall we continue with our cookie example? So, the first concern when you decide to bake a cookie that would come to your mind would be: do you have all the ingredients available at your place? This is precisely what purchase management does regarding order fulfillment. The inventory sourcing process has to be maintained to process the orders from your warehouse; you must ensure everything is in place to start the process! 

Optimizing your Inbound Process: Imagine a technology solution that will help you know right when the first stock is ending and the second has to be there so that your flow of orders will not face any discrepancies. It can even help you project what-when-how much to buy. The buying process becomes automated, and its allocation in the warehouse is accurate.  The cherry on top is that you can even share controlled access to your vendor through the vendor panel. And….. Welcome!  You have reached the solution called Purchase Management. The gap between inventory sourcing and the GRN process is inventory replenishment, which purchase management takes care of. You no longer need to worry about the inventory and their respective timelines. 

2. Storage

As expected, we are going back to the cookies.  As simple as filling up your groceries, storing them right is another task! You have to make sure nothing stales away. Something that you bought earlier should be used before the fresh one. In the warehouse, it’s the same: where to put your inventory, how much to put, keeping a check on what to sell first, and taking care that nothing should go to waste. 

Optimizing Your Storage Process: Some inventory control strategies include batch picking, zone or picking, like FIFO or LIFO, or using data analytics tools to keep track of the inventory in advance, which is crucial. All this is capable of controlling the level of each SKU. Solutions that manage warehouse and inventory, as well as the orders seamlessly, play a very significant role in the storage stage. 

3. Outbound

This is where the main part comes into the picture, where you would start baking. The outbound includes the processing of the orders. Let’s explore the stages of the outbound process. 

Order Fulfillment – Stages of the Outbound Process

• Order Receipt
• Order Processing
• Picking
• Packing
• Shipping
• Returns Management

1. Order Receipt: Orders will be coming from various channels, and capturing their accuracy has to be precise. Processing orders and shipping them requires both money and time. Starting them wrong will be a blunt mistake in the whole process. Hence, seamlessness in receiving correctly is crucial to the fulfillment process. 

2. Order Processing: The smooth functioning of the outbound process relies on the tasks completed during the inbound and storage stages. Now that we have the order details, we can set order allocation rules.  For instance proximity based allocation, that allows to allocate the orders according to the nearest availability. Hence, the feature of order allocation comes into the limelight along with checking the inventory, accuracy of the orders received, fraud, and processing ahead. 

3. Picking: Once you know where to send, you pick up what to send. Solutions like order management take the limelight here; a central picklist is created so you don’t have to travel multiple times to pick up the same product, saving time and making order fulfillment efficient. 

4. Packing: The automation of what item has to be packed in what packaging, along with the automated invoicing, is the nucleus of the whole order fulfillment process. If it’s all blueprinted through technology, then there’s no room for human eros, making the order fulfillment smooth. 

5. Shipping: It’s been a while since we talked about cookies. Let’s consider them again. Shipping is like the final baking, just like how we decide what goes into the oven and at what temperature. We also have to decide what product goes through which logistics partner.  By setting shipping allocation rules and using order management software along with the replenished flow of inventory, the best logistics provider is allotted by the system that caters to the customer’s needs at the best possible.

6. Returns Management: For any reason, if the product is returned, managing its return to the warehouse is also a part of order fulfillment. Just like doing the dishes after you ate! It comes with it! Platforms where return shipping is not synced with their channels. The investment in the right technology will automatically integrate your shipping to the platform and make returns easier, even if it’s a brand’s website. 

Why is Order Fulfillment Important?

Every business is dynamic and has its way of catering to its order fulfillment process and keeping the customers happy. A technology that fits your process and makes it seamless benefits any business.

Let’s look at an example: a reputed brand had two warehouses. One is just for storing the inventory, and the second is for processing orders. Hence, there’s no role of a vendor. However, integrating both warehouses is necessary to keep the inventory and all the inbound processes in sync.  So there you have it – the cookie recipe for seamless order fulfillment! Just like baking a perfect cookie requires precise ingredients and timing, optimizing your order fulfillment process ensures happy customers and increased profits. From managing purchases to storing inventory and shipping orders with finesse, every step matters. Ready to bake your e-commerce success?

Let’s get it cracking!

Related read:

• What is Order Management?
• Why is Order Management System Important for E-commerce Business?
• Why do e-commerce businesses need a robust order management system?
• What is Omnichannel Order Management?

The post What is Order Fulfillment – Meaning, Process, Importance and Strategies appeared first on unicommerce.com.

With a population of over 110 million people and a rapidly growing middle class, consumer spending power is also increasing. This has led to a surge in demand for fashionable clothes and accessories and opportunities for businesses to thrive. 

Highlights of the E-commerce Apparel Industry in the Philippines: Opportunities & Trends

• The Apparel market is on the rise, with a projected revenue of US$779.10 million in 2023.
• Robust growth is anticipated, with an annual growth rate of 15.01% between 2023 and 2027. This will lead to a market volume of US$1,363 million by 2027.
• While the Philippines is seeing growth, China dominates the market with a staggering revenue projection of US$131,300 million in 2023.
• The number of users in the Apparel market in the Philippines is set to increase, reaching an estimated 34.2 million users by 2027.
• User penetration in the market is growing steadily, starting at 22.4% in 2023, and is forecasted to reach 27.5% by 2027.
• The average spending of each user, or ARPU, in the market is projected to be US$29.62.

However, along with these opportunities comes a unique set of challenges for the retailers operating in this region. So, let’s explore the challenges, opportunities, and solutions of the Philippines’ booming fashion industry. 

Overcoming E-commerce Apparel Industry Challenges with Solutions in the Philippines

The apparel industry is known for its ability to adapt to ever-evolving styles and trends. However, this state of flux brings notable challenges, including the following:

1. Real-time Inventory Management

In the fast-paced fashion industry, managing inventory is crucial. The task of mapping an extensive SKU base with orders on various marketplaces like Lazada, Zalora, Shopee, etc., can become tedious and error-prone if handled manually. For Example, manual mapping can sometimes lead to the same products being marked with different SKUs, causing them to be counted as separate items.

Adding to the complexity, the fast-changing trends in the apparel industry lead to short product life cycles. Fluctuating demand and rapidly changing fashion trends can lead to overstocking or stockouts, both of which can be costly for retailers. 

Solution – Implementing Barcode Inventory Management System

Retailers should implement a robust Barcode Inventory Management System to tackle these challenges. This system enables real-time tracking and accurate monitoring of inventory levels. The centralized SKU mapping enables retailers to streamline operations and ensure consistent product identification across various sales channels. 

With precise insights, retailers can optimize stock levels, minimize stockouts, and enhance order processing efficiency. Brands like Luxurious Cravings have successfully leveraged these automated systems to stay ahead in the competitive market.

Moreover, these automated systems not only streamline inventory control but also provide comprehensive reports. These reports offer valuable data and analytics, empowering retailers to make informed decisions and anticipate future demands. 

Given the rapidly changing pace of the fashion industry, these reports provide sellers with the latest trends. They provide insights into the best-selling and lowest-performing SKUs, allowing retailers to form their strategies effectively. 

2. Order Processing and Fulfillment

Retailers in the Philippines face significant challenges with processing and delivering orders. Businesses need to handle this task well to uplift the post-purchase experience of their customers. The region has different kinds of areas, some with modern facilities and others with fewer resources. 

Also, the presence of islands within the Republic of the Philippines adds a distinctive layer of complexity to the logistical landscape. The country consists of more than 7000 islands, and shipping and returning goods between these islands require a refined transportation and coordination strategy to guarantee timely and undamaged deliveries. This can make it tricky to process and deliver orders on time, especially in remote areas.

Solution – Automating the Entire Order Processing Workflow

Implementing a robust order management system can centralize and streamline the entire order processing workflow, from order placement to delivery. Retailers can consider investing in systems with solid integrations with 3PL (Third-Party Logistics) providers. These established logistics companies have expertise in navigating the region’s diverse landscapes, resulting in timely deliveries and higher order fulfillment rates. 

Leading brands like Ellana Cosmetics have successfully achieved faster, better, and more efficient deliveries through automation. The brand achieved an impressive 99.99% order fulfillment rate by implementing a robust e-commerce order management system. 

3. Product Returns and Reverse Logistics

Returns management is crucial in establishing a solid brand reputation, especially in the apparel industry with high return rates. A cumbersome and slow returns process can result in customer dissatisfaction and negatively impact brand reputation. 

Businesses must also be vigilant about fraudulent returns, where some customers may abuse the process for personal gain. For example, some individuals may return used or damaged items, claiming they are faulty, in order to receive refunds or replacements.

Solution – Using a Robust Returns Management System

To address these challenges, it’s essential to implement an efficient returns management system that facilitates smooth and quick handling of product returns, ensuring a positive post-purchase experience for customers. 

The system should include features like easy return initiation, seamless reverse pickup, thorough quality checks, inventory reconciliation, refund processing, and more. This can help retailers minimize return processing time, reduce operational costs, and maintain a positive brand image. 

4. Changing Landscape of the Retail Industry

One of the biggest challenges facing fashion retailers is the industry’s changing landscape. With advancements in technology and shifting consumer preferences, traditional brick-and-mortar stores are facing intense competition from online retailers. 

D2C brands are investing heavily in technology to build a strong supply chain ecosystem and drive traffic to their brand websites. The convenience and accessibility offered by online shopping have revolutionized how people shop for clothing and accessories. As a result, many traditional retailers have had to rethink their strategies and find ways to integrate online platforms into their business models.

On the other hand, digital-first brands, which initially started as online-only entities, have recognized the value of offline presence and are expanding into physical retail spaces. This convergence of online and offline retail indicates a shift towards a more holistic approach to retailing, where brands are exploring multiple ways to connect with consumers. 

Solution – Building a Strong Omnichannel Presence

In this ever-changing landscape, it has become essential for retailers to build a solid online presence. However, it is equally important to maintain a physical store as well. Adopting an omnichannel approach allows retailers to seamlessly integrate their online and offline channels, providing customers with a cohesive shopping experience across all touchpoints. For instance, with an omnichannel strategy, customers can order online and return offline and vice-versa, or they can choose products online and try them in person.

For this, businesses need to have a user-friendly website or mobile app that offers convenient browsing and purchasing options while ensuring that brick-and-mortar stores are visually appealing and provide exceptional customer service. By creating a seamless online and offline shopping experience, retailers can attract and retain customers in an increasingly competitive market. 

Leading omni brands like Edamama have successfully implemented an impactful e-commerce strategy to strengthen their presence in the market.

Let’s Make Fashion Business Easy in the Philippines!

While there are challenges facing the fashion retail industry in the Philippines, there are also immense opportunities for growth and success. Retailers can navigate the evolving landscape by staying agile, embracing technology advancements, and understanding consumer needs. As the Philippines continues to be a hotbed for fashion innovation and consumption, it is crucial for retailers to stay ahead of trends and constantly innovate to stay relevant in this dynamic market. 

Frequently Asked Questions (FAQs)

1. What factors affect the fashion and retail industry in the Philippines?

Factors affecting the fashion and retail industry in the Philippines are the shifts in consumer preferences, the economic fluctuations of the country, the changing landscape of the e-commerce industry, the growing online penetration, increased competition, and the ever-changing supply chain dynamics.

2. What is the weakness of the fashion industry in the Philippines?

The weakness of the fashion industry in the Philippines lies in various factors, such as its reliance on imported raw materials, limited infrastructure, and inconsistent regulatory frameworks across different regions in the country.

3. What are the popular fashion trends in the Philippines?

Fashion trends in the Philippines can vary from city to city, but some popular trends in the region include a fusion of traditional and modern elements, vibrant colors, intricate patterns, and a mix of Western and local fashion influences. Moreover, streetwear, sustainable fashion, and athleisure are gaining popularity among the younger demographics.

Explore our platforms:

1. Integrated logistics management system
2. Automated payment reconciliation system

Related read on E-commerce in Philippines –

• Top E-commerce Marketplaces for Businesses in the Philippines
• Maximizing Efficiency in Manual Inventory Management: Challenges and Solutions in the Philippines
• E-commerce Fulfillment in the Philippines: How to Boost Operational Efficiency and Profitability?
• E-commerce Logistics Management: How can you overcome Supply Chain Challenges in the Philippines?
• How to Sell on Lazada Marketplace in Southeast Asia
• How Edamama managed business operations across 1,000+ brands with 99.99%+ fulfillment rate?
• How PayO Asia achieved 10X growth in sales, simplifying their operations across 43 Facilities?
• How Philippines-based beauty brand, Ellana Cosmetics achieves 99.99% order fulfillment rates?

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