Now that you are here, let me ask a quick question to you, “Have you ever wondered what happens after you place an order on an e-commerce platform?”
In simple terms, a whole process gets executed, which is responsible for delivering your desired product from warehouse to packing, packing to shipping, and finally to your doorstep!
Although in layman language, the process seems to be utterly simple, it takes a considerable amount of workforce and systematic management of data to keep things on track. As such, automating the whole process helps in cutting costs and collecting the haphazard data and then presenting it in a way that is most convenient to understand and make decisions based upon it. In this article, let’s understand a-z of the order fulfillment process, the scope of automation in order fulfillment and how to choose the right software for automation. If you are all set, then let’s begin our journey towards understanding our first question a little bit thoroughly, i.e., what is order fulfillment?
WHAT IS ORDER FULFILMENT IN DETAILS
As mentioned earlier, the entire process right after order generated by the customer until the delivery of the desired item is the order fulfillment process.
For you, as an ecommerce retailer, the road to order fulfillment is a tough one and is filled with challenges. Each step in the order fulfillment process is a potential challenge on its own. Let’s take a closer look at these roadblocks to have a better understanding about the ecommerce order fulfillment process.
Steps involved in order fulfillment process are:
- Inventory management
I am damn sure you must be thinking, hold on! How can Inventory Management be a roadblock? Well, let me give you a typical real-life example to make you better understand inventory management’s significance in order fulfillment process. Someday or the other, we all have struggled with our A.C. remote in finding the optimal temperature that suits us. You must have also faced the same situation. Few degrees lower and you are freezing, go a bit up, and it’s like an oven.
In the world of ecommerce, the struggle is between Overstocking and Understocking. Overstocking is going to burn your pockets, and understocking is every ecommerce retailer’s spooky nightmare. Can you imagine selling more stocks than you have in your inventory? Yup! It’s a mess. According to ecommerce fulfillment report,
“34% of businesses are shipping late due to unavailability of products in stock“
Do you know what happens as a chain reaction due to understocking? Customers begin to cancel orders due to late shipment. As a result, your business reputation slashes with great force.
A survey reveals,
24% of shoppers reported to have cancelled their order because of slow delivery speed.
And an unhappy customer is going to make your life extra difficult by scaring off potential customers.
38% of customers say they’ll never shop with a retailer again after having a negative delivery experience.
If you think that an unhappy customer can’t hurt your business reputation much, think again! The word of mouth from an unhappy customer weighs more than your marketing campaigns. A Survey by hubspot reveals that
“81% of Consumers Trust the Advice of Family and Friends Over Businesses”
How to Automate your Inventory?
One of the costliest and not so error-free methods of tracking your inventory is manual intervention. That’s the prime factor in choosing automation.
Imagine a situation where you have 10 quantities of a product. Everything is running smoothly, so you decided to spend some time with your family. When you start working after your vacation, you get to know that people had ordered 30 quantities of the same product when you were on vacation.
I am telling you this, for a moment, you will be stunned! Because now you can’t refuse your customers who ordered their product. You need to raise a PO(Purchase Order) of the product and wait for your supplier to deliver the item as fast as possible. After all this hassle, you still got unhappy customers because your delivery was late.
You must be thinking,” What more could be done about such a situation?” Well, for starters, you can start by investing in an inventory management software that offers automation. Orderhive can easily tackle such horrific scenarios. For example, if I were to go on a vacation, I would have set an action using Orderhive to raise a PO of the item to the supplier. The PO will be raised based on a trigger that can also be set within Orderhive. Let’s suppose I set my trigger as 7. That means, if my product stock goes less than 7 in stock, Orderhive will automatically execute the action specified to raise a Purchase Order of the product to its supplier. Voila! Your inventory is replenished right on time, and you didn’t have to break a sweat.
2. Inventory Storage and Picking
The second roadblock down the line is all about storage. You found the sweet spot between overstocking and understocking, and now you need to store the inventory in your warehouse. Now you may ask, “what’s the big deal about storing some items in a warehouse?”
If you don’t store your items systematically, finding an item in a warehouse will be like finding a needle in a haystack. You should arrange your inventory in proper shelves and bins to avoid hassles during pickups.
According to a survey,
49% of businesses have separate employees for picking and checking orders.
Even after allocating dedicated staff, companies were struggling with picking errors. The survey further reveals that,
40% of businesses said that increase in picking errors is the main reason they opted for warehouse management system(WMS)
Clearly, companies are investing in the warehouse management system to tackle all these potential problems. Check out the benefits of WMS to better understand why you might need one.
How to automate your Storage?
The need to automate your storage is to efficiently manage your warehouse and minimize the time required in obtaining the specified product from your warehouse.
You can manage your inventory smartly using RFID technology and warehouse management system. Reading the RFID tags and linking it to your warehouse management software makes things way easier for you.
The whole manual processes of figuring out what needs to be bought, periodic inventory counting that leads to errors, a separate channel for returns management have come to an end.
Now in the warehouse management dashboard, you can see how many stocks of a particular product you have and which products need to be replenished. Moreover, the whole process is in real-time meaning instead of periodically managing inventory; it is now managed perpetually. (Perpetual Inventory vs. Periodic Inventory)
The WMS also guides you on storing your inventory for more systematic and hassle-free pickup. For example, the products that move in and out of the warehouse frequently are placed on the front side of the warehouse.
3. Packing and Shipment
No one likes their order delivered at their doorstep in crumpled packages. Imagine your new phone delivered to you in a box that is torn from 5 different places. The happiness of receiving a brand new product gets spoiled. Maybe you did not lose your orders, but it certainly mutilates your brand’s image in public.
Shipping is one of the major roadblocks towards your order fulfillment process. Consumers nowadays prefer free shipping. In fact, a survey shows us relevant data stating,
“53% of shoppers will abandon their cart if shipping charges and taxes are too high”
The more convenience you give your customers, the more loyal they are going to be with you in the long run. As such, you should try finding out a shipping partner that offers other options of payment, such as cash on delivery (COD) and prepaid fees.
How to automate your Shipping Process?
After order generation by customer and picked up from the warehouse, what’s left for you is do packing and to handle shipping.
The packaging is one of the time consuming and labour-intensive work. Automating the whole process using packing robots can help you ease this tedious process. In fact, companies like Amazon have already implemented such packaging robots.
Amazon is using the new robots known as CartonWrap from Italian firm CMC Srl has the capacity to pack 600 to 700 boxes per hour. This is roughly four to five times the efficiency of its human counterpart. Apart from CartonWrap, the company also announced its intended use of another robot known as SmartPac, which will automate the process of mailing items in patented envelopes.
Two important aspects that need to be in consideration while shipping is picklist and packing slip. Picklist consists of all the items that need to be picked from the warehouse while the packing slip contains all the information regarding where to deliver the package and which shipping carrier will be handling the package.
The whole process can be automated using Orderhive Automation. Using the exact 3 simple steps I did while managing my inventory i.e. Action, Trigger and Execute. I will be setting the action to select the shipping carrier as USPS and print pick list and packing slip. This action will be executed based on a trigger. Let’s suppose whenever a customer generates an order that is available in stock in your warehouse.
Orderhive also manages multiple warehouses. So, in our automation we can set and interrupt too. Suppose we have two warehouses A and B. The process is as simple as setting trigger to search for product in warehouse A; and if the product is not available, search in warehouse B.
4. Return Orders
Order fulfillment process ends with the delivery of the product to the end consumer. However, in this modern era, order returns are something inevitable and therefore should be added to the process. A study of consumer behaviour regarding order returns reveals the following:
“30% of all products ordered online are returned”
A consumer can return a product based on top 3 reasons.
- received damaged product
- received wrong item
- product received looks different
For such reasons, clearly the consumer is not at fault here. So, he would expect that shipping cost of returning the product be waived off. Study shows,
“79% of consumers want free return shipping”
“92% of consumers are likely to buy something again if the return process is easy”
How to Automate Return Processes?
Automating your return process is the last step in your order fulfillment process. Your returned goods need to be repacked and stored again in your warehouse and your inventory count needs to be updated.
You can automate the process by selecting the appropriate carrier based on cost, parameters like weight and dimensions, etc whenever a customer raises a return. After the carrier delivers the returned product to you, simply check-in the returned item in through WMS will do the trick of updating your existing inventory. Since, the WMS can be integrated with your accounting software, after your inventory get updated, refund will be initiated to the customer.
E-commerce business is no easy task and order fulfillment is a tedious process with so many things to keep in mind. We all got the same 24 hrs to spend in a day. How we manage our time is what counts in the end. Automating the order fulfillment process not only gives peace to your mind but is also an efficient way to manage your time. The purpose of this article is to give you a detailed explanation of the various processes involved in order fulfillment and how to automate them to make your life stress free. If you have any further queries, feel free to mention them in the comment section below