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What is Order Fulfillment – Meaning, Process, Importance and Strategies

Humra Sayeed — Thu, 09 May 2024 08:38:29 +0000

As a business owner, you would not want to miss any possible touchpoint to sell. We all know that the key motive of running a business is to earn profits, and new-age e-commerce demands the availability of your products and services everywhere possible. But what about the tons of behind-the-scenes that goes into the process? Selling on your website, multiple marketplaces, and stores means receiving orders simultaneously but processing them differently according to your buyer’s needs. Too many multiple stages of work! It’s easy to frame in one sentence but challenging to process in real life. What if you can have everything at your fingertips? Let’s start from the beginning.

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!

Why Shipping is both a Challenge and an Opportunity?

Team Unicommerce — Tue, 15 Feb 2022 05:19:25 +0000

Shipping is a crucial function of an e-commerce business. It is one of those common functions in the operations that is downright straightforward, but you cannot afford to make the pettiest mistake in carrying out the task. There is a lot at stake, your customer satisfaction, brand image, costs, and efficiency.

Irrespective of the nature of the business or its size, logistics is seemingly ordinary yet most critical function of them all to every e-commerce business owner.

Efficient shipping affects both you and your customers positively.

Read how Businesses are growing with Unicommerce – How Unicommerce helped Brand Studio carry out 2 Mn+ dispatches/month

Top Shipping Challenges and their Opportunities

1. Free shipping

Offering free shipping to customers is a great thing, and a powerful marketing tool to achieve customer happiness. But, how? Constant free shipping erodes your profits margin. On the flip side, your shipping charges may disappoint the customers and lose orders from them.

One way, to balance it out is fixing a certain base amount for domestic shipping. A clear shipping policy indicates the customers what to expect from your site when they are checking out to place an order. Their readiness to pay the amount removes the shipping fee barrier and eases the order placement process.

On the other hand, you can add the shipping charges (either wholly or partially) into the product prices and offer free shipping. This way the customers are pleased to have bought from you without shipping fees, but you would have recovered the shipping cost, either entirely or partially.

Whatever strategy you choose in the above scenarios, you must note that your profit margin should not suffer for the long run. You must also maintain competitive pricing of your products. It is a fine balance. But once achieved, it will ensure sustained business growth.

Unicommerce’s warehouse management system comes with the barcode supported system to identify how much profit margin you are marking on every product.

2. Product packaging

The logistics companies revise their prices year-on-year. The pricing mainly goes on the weight of the parcel. Shipping companies charge more to pick and ship the product package that is heavier. You can reduce the weight of the overall package by revisiting your product packaging arrangements.

Shipping discounts: If you can avail discounts on your order shipping, you save big and earn huge profit margin on every order. The negotiations must create a win-win situation for both the parties. The volume of packages and discounts go hand-in-hand.

3. Choosing the suitable shipping partner

There are many regional and international logistics companies operating in the country. The logistics industry is very competitive. Every shipping provider is characterised with a specific strength, for instance, some have broader reach geographically, some work on competitive price points, some handle delicate items exceptionally well, and some are quickest in order fulfilment.

Given the various plus points of the logistics operators, it takes a skilful analysis to shortlist the suitable logistics partners for order fulfilment.

Unicommerce’s WMS comes pre-integrated with almost two dozen leading shipping providers. The in-built feature enables our client’s order fulfilment process to be quick, easy and efficient. Since the process of shortlisting the appropriate shipping provider and assigning the order fulfilment is automated, our clients get ample time to introduce innovative business plans and grow exponentially.

The software assigns the shipping providers by pre-set guidelines and tracks order delivery in real-time. You and your customers get quick updates on the status of order delivery.

Shipping plays a crucial role in the e-commerce business. There are many hurdles as well as opportunities to benefit from the scenario. Having an efficient and automated tool to manage the shipping function is critical to achieving customer satisfaction and higher profits.

Get World-Class E-commerce Shipping Integrations with Unicommerce!

The post Why Shipping is both a Challenge and an Opportunity? appeared first on unicommerce.com.

Enhance the Operations of the Warehouse with Order Picking: Process and Methods

Team Unicommerce — Tue, 12 Jan 2021 16:10:08 +0000

The picking process is the next big step of warehouse operations and the first step towards providing a highly satisfying experience to the customers who have placed an order with your business.

Order picking refers to the process of taking inventory out of its designated warehouse location and starting off the delivery process. A good Warehouse Management System provides complete automation of the picking process to avoid any errors or issues.

In the process of picking, a Picklist is provided to the warehouse staff or to automated equipment that scans a tote or bin to get the locations of the item. Once the shelf is located, the inventory is scanned, picked and then sent out for packing and delivery.

In cases when an item cannot be located at a given shelf, another SKU of the same item is scanned till the inventory is available on a given shelf.

As the process of picking is time taking, it is necessary to have a technologically advanced warehouse management system in place that can carry out multiple scans and checks to quickly locate goods in a warehouse and then help the staff collect it and move forward with other processes.

By deploying the right picking processes for your warehouse operations you can provide your business with the ease to enhance the overall customer experience.

Right picking process involves: provide efficiency and accuracy, better order fulfillment and processing, increase the overall revenue of business.

The right picking process:

Provides higher efficiency and accuracy
Allows better order fulfilment and processing
Increases overall revenue of business
Enables faster and smoother deliveries
Reduce manpower and stock management costs
Saves time and efforts

To begin the process of picking, you need to first initiate serialization of products which helps you track each item in your warehouse for better and quicker picking process by giving them a unique code. Serialization is done using barcode systems that generate a combination of unique characters in 2D or 3D format that are then put as labels on each item and scanned for details at the time of picking processes.

Read our blog on Implementing the right Barcode Inventory Management System for your eCommerce business to enhance operational efficiency and achieve higher productivity.

There are various picking processes you can use, depending on the fulfilment requirements of your eCommerce business.

1. Zone Picking

For large warehouses that cater to multiple zones, the process of zone picking is recommended as it compiles large volumes of inventory for each particular zone with unique SKUs respective to them.

By doing so, the warehouse staff or automated tools assigned to each zone can easily pick up products and initiate order processing. The process of zone picking allows you to:

Improve efficiency of collecting goods
Speeds up collection of multiple items
Decreases move around time within the warehouse
Allows multiple pickups in one go

A picking bin, tote or box may move around various zones until it has collected all the required SKUs from that particular zone.

2.Batch Picking

This method of picking is used to fulfil multiple orders of the same item but in various quantities. Batch picking allows warehouse staff or automated equipment to move around for longer distances, collecting Items having the same SKU but different demands. Batch picking can also be done for the same channels, same logistics provider, priority orders etc.

Ideal for eCommerce businesses, the process of batch picking enables you to:

Increase order fulfilment rates
Decrease travel time for picking
Save on warehouse space
Organize inventory in a better way

Batch picking is recommended if you wish to make the most out of your small or big warehouse and to equip your staff to fulfil multiple customer orders at the same time.

Type of picking: Zone picking, batch picking, wave picking, cluster picking

3. Discrete Picking

The process of discrete picking involves collecting orders one at a time, providing complete staff assistance to a single item till the time the order processing is complete. Discrete picking is advised for small warehouses that get a lesser number of orders. With discrete picking, you get to:

Allows higher response time for order fulfilment
Reduces the possibility of wrongful deliveries
Enables easier tracking of orders
Eliminates the need for multiple touchpoints

Discrete picking is a simple and easy process that allows your warehouse staff with the ease to perform with complete accuracy, increasing your chances of providing better customer service.

4. Wave Picking

Wave picking is quite similar to discrete picking, except for the fact that it allows scheduling. Each order to be picked up can be allotted a specific time slot to further simplify the entire process.

Wave picking works best for warehouses with heavy demands and different kinds of inventory, as it helps the picker to:

Create separate order and group them based on priority
Align the picking process with that of shipping and delivery time
Manage warehouse operations more efficiently
Reduce workload on staff and keep the picking process uninterrupted

With wave picking, you get to manage your manpower and achieve higher order fulfilment ultimately increasing your overall productivity.

5. Cluster Picking

To fulfil multiple orders at the same time, the process of cluster picking is done. The method requires the warehouse staff to collect various items at the same time while separating them into unique boxes or bins to avoid mix-ups.

With Cluster Picking, you get to:

Reduce time to collect orders
Prioritise stocks over another
Easy sorting of products
Select the fastest route to pick multiple items

Cluster picking enables the picker to do two things at a time which improves your time to pick, pack and deliver.

Checklist of Picking

Based on the size of your warehouse, availability of products, variety of items, demand, manpower and location of your facility, you can use any of these picking methods and by automating your picking processes you will be able to achieve higher supervision of your warehouse operations with greater ease to focus on strengthening your customer relations, strategizing to enhance your services and improving your productivity.

Unicommerce is a platform that empowers your business to accomplish all of the above and more!

The fully automated and technologically advanced Warehouse Management System of Unicommerce helps you manage all your picking needs, select the best method that works for your facility and then simplify your warehouse operations.

Experience the true potential of your business with us today, click here to know more about our services or request a demo today!

Read our other relevant blogs for warehouse management to better understand the must-haves of warehouse operations in order to increase your business capabilities and achieve greater growth.