Which Service Model is Best For Your Company?Posted by Holmes Chappell on July 16th, 2021 Order fulfillment is in the simplest sense the entire process from initial inquiry, selection of products, placing an order and delivery of a purchased item to the end user. This can be as simple as filling out a form online, or it can be the extensive process of placing orders with numerous third party fulfillment companies, including shipping companies. All of these efforts will need to be undertaken in a timely manner with consistent follow up. Order fulfillment may include, but is not limited to, the following: Order receiving, inventory control and maintenance, order placement and follow up, return and refund, cross sell and more. In today's business world, it is important to utilize all available tools and technology to effectively and efficiently carry out order processing and order fulfillment . Let's take a look at each of these individually. Once an order is placed, it must be received by a processor. Depending on the nature of the order, this could be by phone, fax, or email. Once an order is received, steps involved in processing may begin. First, the processing company will need to determine if the order is a "goods-in-transit" (GTI) or an "impound unit" (UI) based upon the order number. A good rule of thumb is to always assume GTI, as all documents are associated with such a situation and thus "goods-in-transit". Depending on the nature of the order, it may also be necessary for the processing company to contact the appropriate storage facility for pick-up. There are many forms of order fulfillment that do not require the sending of a truck, therefore moving storage is not required. Many fulfillment companies offer their clients storage options, and these services are usually managed by third-party logistics firms. Depending on the needs of your company, you may find yourself needing to utilize one of these services. Another very important factor in order fulfillment is the delivery experience. How quickly does the package get to your customers? What happens if your shipment is lost, damaged, or delayed? As customers say on the internet, "That which is delivered is sent." So you want to make sure that you are sending your customers the right product and the right way - by ground, air, or sea. The fulfillment model you select will also depend on your understanding of the supply chain you currently operate. For example, warehouses can be built in-house, out-of-house, or part of a larger distribution network. Warehouse capacity, staffing, and access to warehouse space and equipment are critical considerations in your overall fulfillment strategy. If your company lacks the resources to properly maintain your own in-house inventory levels, then you should seriously consider a third-party provider who can meet your short and long-term fulfillment requirements. You should also be cognizant of your current sales and shipping practices. Are you taking full advantage of available technology to improve your tracking and inventory management? Can your customers now order online without being required to leave the comfort of their homes? Many companies are making the transition to e-commerce, but it is still important that customers are fulfilled fully in order to retain their business. You need to establish your strategic goals and metrics in order to determine what your ideal solution is for your current order fulfillment processes. Another thing you should consider is whether or not your business requires upfront capital in order to meet your fulfillment needs. If your company operates on a small scale, the stocking costs of your in-house logistics department may be too high. Instead of investing in additional in-house staff members, you may want to consider a third party logistics provider with the ability to manage your inventory levels and shipping processes for a nominal fee. This may ultimately result in a net savings to your company in terms of payroll, employee compensation, and other direct costs. Order fulfillment software and other technologies allow your company to operate more efficiently, thereby reducing costs and profits. When it comes to fulfillment, it's important to compare costs and the range of available options between different service providers in order to determine which will work best for your business. By investing in new technology, you can increase the efficiency and effectiveness of your warehouse operations and better manage your overall costs and expenses.Like it? Share it! More by this author |