13 Oct The 6 basics of improving order fulfilment processes
Give your business a platform for growth & customer satisfaction through efficient order fulfilment
It is no secret that ecommerce is growing exponentially, and that it has become big business.
The UK is in fact the third largest ecommerce market in the world, with total sales of 533 billion pounds in 2015.
And it doesn’t matter if your business is primarily selling to consumers, or is purely B2B (business to business sales accounted for 96.5 billion pounds in the same period – and has grown considerably since). In total, ecommerce sales accounted for almost a fifth of all business turnover.
This has implications for your business, regardless of your market, customers or business type. It also has implications for your order fulfilment processes too.
Defining order fulfilment
It is probably unlikely you need to ask “what is order fulfilment”, but in effect it is everything your business will do between receiving an order from one of your customers and getting the purchased products into their possession.
So this covers everything from processing the initial request, retrieving the items from storage (or manufacturing them if they are bespoke), packaging them, organising delivery with your courier and any after sales support and marketing.
As you can see, this applies not only to ecommerce sales, but any orders that your business may receive (via phone, specific ordering platforms, repeat invoiced work and even fax).
What is sometimes forgotten is that this can have a huge impact on your business success – and that improving order fulfilment processes can actually help sales, loyalty, repeat business and the overall satisfaction for your customers.
Why order fulfilment is important
Many businesses realise the importance the order fulfilment, and this is one of the reasons that many will outsource their requirement to third-party logistics companies (also referred to as 3PL).
However, regardless of the size of your business and operations, streamlining any aspect of the order fulfilment process can be an extremely worthwhile project.
It can help you with the management of your stock levels. It can help with organising your inventory. It allows you to reduce picking times. It can allow you to meet surges in demand more easily (e.g. Christmas).
It can even help you minimise cancelled orders and improve your customers’ overall satisfaction.
However, it is absolutely crucial that the basics of efficient order fulfilment are put in place to allow your business a strong foundation on which to grow.
The 6 basics of improving order fulfilment
Whilst there are numerous different ways to handle your specific processes, it is widely agreed that the 6 basics of improving order fulfilment are as follows:
- Organise stock
- Use picking bins
- Train and incentivise staff
- Keep picking zones safe
- Make better use of floor space
- Use efficient packaging
- Prepare for the unexpected
Whilst each of these areas can be sub-divided into what can become quite complicated and detailed topics (you can see advanced strategies to improve picking and packing here), the rest of this guide focuses on how you can ensure you get the basics right, giving you a platform for sales and revenue growth.
Think about the last time you went to the supermarket.
Chances are you had an idea of what you needed, and where you would find it. And what’s more, all of the items related to each other – for example, everything you would need to bake a cake – tend to be grouped together.
Your own warehouse / storage facility should be setup and organised in this manner.
By grouping your inventory into related items, and establishing a logical and defined order, it will help you to find the products your customer has ordered (or indeed the materials / components you need to manufacture their order).
By speeding up the time it takes to pick your orders, it means that your customers receive their goods more quickly too.
This, in turn, leads to improved satisfaction, your customers knowing that they can rely on you for last minute or urgent requirements, and will ultimately help the perception that they form of your company.
In contrast, if you take forever to get their orders to them – or even just longer than your competitors do – you could soon start losing business.
Utilise Picking Bins
For many, however, organising stock can be a logistical nightmare. This can be particularly pronounced if your inventory consists of lots of small components, products or parts, or is made up of lots of very similar lines (for example different sizes of clothing items).
It may also be the case that your warehouse consists of lots of racking or shelving, that isn’t particularly suitable for your products.
The answer to both of these issues is making use of picking bins.
Usually manufactured from corrugated cardboard or various plastics (depending on the specific application), these allow for much better utilisation of warehouse space, can help to organise your stock much more easily, and also reduce picking times.
This final point is crucial for the same reason as organising your stock is – in that minimising lead times on your orders will help improve customer satisfaction and allow you to process higher volumes of orders of too.
Saying that there are numerous other benefits of using order picking bins, including protecting stored items, easier management of stock levels and improving the overall efficiency of your operations.
Train and incentivise staff
Order fulfilment can be quite labour intensive depending on the type of picking processes and methods you are using.
As a result, it is vitally important that staff are well trained, know where to find the items they need to fulfil a specific order and are offered realistic incentives to keep them motivated and happy.
In fact, as with last two points, a motivated and efficient workforce will help you to reduce average order fulfilment times, and will be more productive in general.
It is also worth remembering that, whilst it is important that staff now their own job inside out, if you have important team members off due to holidays, illness or other reasons, that you have other employees that can step in to their role with the minimum of disruption.
This cross training ensures you will have a multi skilled workforce that can handle more than one job in your warehouse, and that can help out of particular areas become exceptionally busy.
Keep picking zones (and warehouse in general) safe
It may sound obvious, but keeping your warehouse safe is exceptionally important.
A high number of work related accidents and injuries take place in areas assigned to order fulfilment and warehouses in general. This can be anything from slips and falls, injuries caused by lifting, reaching etc., and even forklift accidents.
The consequences of this can be serious. Besides your responsibility to the welfare of your staff, a high number of accidents can result in injury claims, lost productivity through staff requiring time off, affecting staff morale and even making recruitment and retention harder.
Besides following health and safety guidelines (and training staff on best practices), by implementing efficient processes and organising your warehouse, you can minimise manual handling and movement, reducing both risk and accidents.
Make better use of floor space
One problem that many businesses face is a lack of space.
This can become particularly acute if you experience growth, have fast moving seasonal products or do not have a particularly big warehouse in the first place.
Besides making it harder to organise your stock (therefore affecting order fulfilment times), overloading shelves or even having stock placed on the floor in aisles etc., can be a real health and safety issue (not to mention increasing the risk of stock damage).
So if you cannot organise your racking or shelving more efficiently using parts bins, another solution may be to use what are often called “stacking pick boxes”.
These are similar to picking bins but are free standing, allowing you to house additional items on the end of your rows of racking, or even on empty floor space that otherwise would not be used efficiently.
Depending on the material used for their manufacture, it may also be possible to assemble and use these only during peak times and storing them flat when not required. Being mobile, they can also be used to store particularly fast moving lines ion a location that reduces travel time for your picking staff.
Ultimately, making best use of your floor space can not only offer you extra capacity (either permanently or temporarily), but can also provide a lift in productivity too.
Use efficient packaging
Once your orders have been picked, the next stage is to pack them ready for despatch.
But this is an area that is frequently overlooked in terms of how it can affect your order fulfilment.
For example, boxes that are slow to assemble have a knock-on effect regarding your team’s productivity (and therefore how quickly your customers receive their items). Boxes that are not strong enough will result in damage in transit, and high level of returns. Boxes that are too big will require excessive amounts of void fill and will cost more to ship.
Even having a large inventory of custom sized boxes can be disadvantageous if not handled correctly, preventing you from taking advantage of economies of scale.
As such, analysis of your packaging should be a project all of its own. Get it right, and it can aid productivity, lower costs and aid customer satisfaction. Get it wrong and the impacts can be extremely detrimental to your business.
The final point to remember is that cheap packaging isn’t always the cheaper long-term option.
Prepare for the unexpected
Whilst it could be argued that peaks in your order volumes at times such as Christmas or Black Friday are hardly “unexpected”, it is important to be ready for surges in demands for your products.
It may be the case that a product you sell is featured on a TV programme, and the exposure sees sales spike dramatically. Maybe an unseasonably warm summer pushes sales of specific line above expectations. Perhaps a new line performs much better than expected.
Regardless of what can cause increased (and potentially unexpected demand), it is essential that your order fulfilment processes can cope.
All of the points above – such as organising stock well, maximising floor space use (including temporary storage if required / appropriate) and having a flexible, well-trained workforce that cover a variety of roles will help maintain the level of service your customers expect.
And whilst it may be time-consuming, making plans for as many eventualities can help you minimise any impact if the unexpected happens.
The basics of improving order fulfilment, whilst not necessarily complicated, can still be difficult to implement successfully.
However, doing so gives your business – ecommerce or not – a solid platform to grow sales, increase your product range and develop a reputation that will led to repeat business and satisfied customers.
But once you have the basics in place do not stop there. There are a number of advanced strategies for picking and packing that can really drive your business to the next level.
Saying that, a good start for any business looking to improve their order fulfilment processes is to ensure that the right picking bins are being used.
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