With the speed at which online shopping is evolving, online retailers need to know how to modify their eCommerce order fulfillment model to respond to the changing order demand.
When looking at the worldwide market statistics, we can see a steep rise in demand over the past several years. Global B2C eCommerce sales are expected to rise from $2.5 trillion in 2018 to $4.5 trillion by 2021. When it comes to B2B eCommerce sales, they are expected to go from $7.7 trillion to more than $17.6 trillion during that same period.
To satisfy the diversity of delivery requirements coming into fulfillment centers, every omnichannel organization and eCommerce store needs a fulfillment strategy capable of adjusting and prioritizing orders as they come in. The reason for this is that any last-minute requests entering the supply chain will demand a shorter shipping and fulfillment cycle. This means that an online store or other eCommerce business needs to find a way to satisfy these orders without negatively affecting the rest of the fulfillment operation. By failing to do so, they will negatively impact their customer satisfaction ratings by not meeting customer expectations.
Periods of high volume orders that are placed at the last minute are challenging for consumers, retailers, and manufacturers alike. Whether it’s Black Friday or the holiday season, online retailers can expect last-minute orders from customers who still expect fast shipping. For this reason, sound holiday shipping and fulfillment processes need to be in place to satisfy customer expectations. If consumer demand is not met, customer satisfaction suffers, and so will your future sales. So, how do you go about handling last-minute order fulfillment requests in a cost-effective way?
Better Supply Chain Technology
When retailers reach a point where they have too many orders, a manual fulfillment model becomes counterproductive. Using this method, companies will quickly reach a plateau of how many orders they can handle on a daily basis. Past this tipping point, they will start experiencing higher labor costs, multiple order errors, and ineffective order processing. And when the wrong orders are sent in error, the result is an uptick in returns.
By using advanced warehouse management systems, your online store can begin seeing quick process improvements by allowing inventory to be tracked throughout the entire supply chain life cycle. This makes fast shipping times with fewer human errors a reality. Utilizing these technologies will be even more important during peak seasons or when reverse logistics become important.
Supply Chain Monitoring
Trying to predict and anticipate customer demand will go a long way in ensuring that all orders are met. However, this is only part of the story. Whenever holiday fulfillment is required, and demand increases considerably, retailers and manufacturers should monitor their supply chain to ensure that the actual results will match their initial predictions. This will allow them to be more flexible and manage their distribution accordingly while meeting customer expectations.
A process like this revolves around predictive analytics and, in part, real-time visibility of the supply chain accessed from the right supply chain management software. This allows for a more efficient handling of last-minute orders as well as a more profitable peak season.
Shorter Delivery Times
Last-minute orders, same-day, and 2-day shipping options have become increasingly popular with online customers. As a consequence, eCommerce businesses need to respond to this trend and prepare to adjust their cycle times. A good strategy for contending with this is to frontload during the first part of the day and then pre-stage express shipping. This way, you will be able to free up resources for the evening’s pick, pack, and ship process.
You can also look to optimized batching by combining SKU orders into a single, postponed pick order. In other words, you batch an order’s items together into the same area so that the location will be visited only once instead of ten times. This will save time, improve effectiveness, and help you meet customer expectations. More advanced order fulfillment management software can also determine when it’s the best time to release order, ensuring the highest levels of efficiency and productivity.
When dealing with order fulfillment, you should pay attention to the error-free orders over the total orders shipped ratio. This will form a KPI that works as a baseline for your future goals and activities. By using a real-time order management system in your fulfillment process, you also have greater accountability in terms of order accuracy, and are able to alert operators and any other stakeholders to possible errors prior to shipping orders.
Inventory Storage Management
Ineffective inventory management processes will also lead to numerous other challenges for retailers and manufacturers. Among these, we can include things like additional pressure on distribution channels as companies attempt to deal with last-minute orders, or when they decide to overstock in the run-up to the holiday season.
In other words, you won’t be able to complete customer orders if you don’t have available stock on hand. Your inventory needs to be stored at a reliable storage location, either in your own warehouse, your logistics provider’s warehouse, or your retail shops. Regardless of the storage location, orders need to be processed and shipped within the promised amount of time. When goods are arriving at these fulfillment centers, you will also need to ensure that you have enough capacity and resources to allow for the expeditious receiving of goods so that they show in your stock as quickly as possible.
It’s also a good idea to do last-minute inventory counting, particularly when it comes to high value and high volume items. Any inventory discrepancies need to be uncovered early; otherwise, you risk having a customer place an order that you can’t fulfill in the expected amount of due to a lack of inventory.
Outsourcing your fulfillment to a fulfillment provider and other supply chain operations to a dedicated and professional third-party logistics (3PL) provider will also prove to be a wise decision for most organizations. Experienced logistics providers are fulfillment strategy experts who have the necessary technologies like warehouse software, advanced infrastructure, and the know-how to deal with last-minute orders and deliveries. They also have highly optimized fulfillment processes. As a trusted fulfillment partner, they can share their solutions, tools, and best practices on how to deal with these situations in the most effective way possible.
If you require logistics services from a reliable fulfillment company or need help with managing your supply chain, Redbird Logistic Services is here to help during peak seasons and as your business grows. Contact us today for more information!