By Chris on Mar 21, 2011 5:29:47 PM
Introduction: what’s Order Fulfillment all about?
Broadly defined, the term order fulfillment refers to everything a company does between receiving an order from a customer (the point of sale) and placing the product in the customer’s hands.
Unless you actively participate in the fulfillment process, you're probably not fully aware of what a successful delivery requires, and how companies manage to accomplish this task.
In this post, we'll give you a broader idea of what order fullfilment actually is, and what it means to a company’s workflow and product delivery.
From Purchase to Delivery
Every industry operates their fulfillment operations differently. The one thing remains constant: the faster an order can be delivered, the happier a customer is going to be. Therefore, the advantages of order processing are many, regardless of the means that companies use to serve their customers.
However, the only way of assuring order fulfillment is to also ensure the product’s quality standard until it's delivered to the client.
How does Order Fulfillment Work?
Delivering orders successfully is one of the most important aspects of running a business and staying in business. It requires providers pay attention to order processing, to client needs, time management, and efforts on quality assurance. In order to deliver orders successfully, companies need insightful people with specific business technical knowledge to achieve each request completion. The steps involved in the implementation this crucial part of a business in an efficient manner are not simple, nor easy.
Order fulfillment is quite complex and varies widely for different kinds of businesses. For example, a fast food restaurant can receive an order, place the requested food items in a bag, and deliver them to the customer within sixty seconds. Other industries might not be quite as fast. Furniture manufacturers, for instance, often wait until having an actual order from a customer before they actually begin making products. This means it can take several weeks until the final product arrives at the client’s door.
Due to the distinct processes and specific features of each product, order fulfillment is a completely different discipline for each, with wholistic methodologies and many ways of applying procedures to make sure an order is delivered successfully.
Who's using Order Fulfillment?
Companies of all types use standard – or special – order processing and fulfillment methods to help with product delivery. This includes large and small corporations, as well as local businesses.
Some will just need to take care of product delivery, some will need warehousing, special packaging and full logistics; and some might even use their fulfillment as a means to interact with their customers. With this in mind, industries that use order fulfillment can go from multinational companies such as banks or airlines, to local businesses like homegrown stores and online companies.
How has it changed overtime?
In the last three decades, computers and the Internet have widely influenced how order processing has developed.
With the escalation of online companies and online sales, order processing started being used to keep businesses organized in a sea of unfiltered information. Technology has created new methods of managing orders and client information. Companies are now able to make use of new order fulfillment tools that provide better organization and better efficiency.
Prior to these technological advances, order processing had to be done by hand, and it was not always necessary for companies to use order processing methods, as they were very limited in their customer base. Many companies would not contact or be contacted by potential customers, who did not live near the company. Fortunately, technology and globalization has given us access to a wide network of potential customers and infinite business opportunities.
How is Order Fulfillment processed?
The processing of an order can be carried out in different ways. The general core of the process is that an order is created and the product delivery must be assured within the expected timeframe while also meeting quality standards.
The customer’s orders sets the supply chain in motion to ultimately provide a successful customer service.
The term 'Order fulfillment' is commonly used to describe the act of distribution (logistics) or the shipping function. In a broader sense, it refers to the many ways firms respond to customer orders, and the processes they follow to move sold products or services to a customer.
However, this process involves more than just delivering order. Let’s have a look at the diagram below:
Inventory Handling – It involves creating inventory lists, monitoring product levels, tracking orders, and supervising the status of each product cycle.
Warehouse Management – This refers to the storing of products in a given location until they're ordered in the sales process and need to be shipped. Warehouse management involves controlling space usage, transportation equipment and effective labor.
Order Processing – When an order is processed, a product has been sold and needs to be delivered somewhere else. The efficient recollection of information regarding products recently acquired by clients as well as packaging and shipping details falls under the Order Processing phase.
Packing and Shipping – When the goods are retrieved from the warehouse, arranged according to the packaging system the company follows, and actually shipped to the client.
Accept or Return – This is one of the most critical phases of the process, and the one that verifies the whole process stability and efficiency. The client has a given number of days to accept or return the product – and if the product returns, this order will probably need to go through all phases again.
Order Fulfilled – At this stage, the client has confirmed that the order has been successfully delivered and has been accepted.
Why outsource your Order Fulfillment?
More and more companies are starting to outsource their order fulfillment duties and to accelerate their deliveries. Commonly, they partner with third party logistics firms, also known as 3PLs.
These firms keep a fully stocked inventory of the company’s products and fulfill all orders in a timely manner. This way, the company can focus on selling its products and doesn't have to go through any additional tasks to ensure that the product is delivered properly to the end user.
If your company has room for improvement with order fulfillment, consider discussing your options with a third party logistics firm. A 3PL can improve your delivery processes: while you focus on what you do best – making and selling your product – your 3PL partner will take care of the delivery process and make sure your customers get their orders on time.
Need help optimizing your fulfillment? Schedule a call with our fulfillment specialists today!