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October 25, 2022
The estimated time to read this article is 5 Minutes

Digital Operations in Commerce: Best Practices – Part 3 Smart Order Fulfillment

Digital operations are at the core of any (e)commerce business. As commerce is evolving, and customer demands are changing, so is the need to manage digital operations more efficiently. Yet, outdated operating models and outdated systems can hinder transformation initiatives, impeding the ability to keep pace with customer demands. Fortunately, new initiatives help to close the gap between outdated systems and new customer demands. In this blog series, we explore best practices in managing digital operations in commerce with a DOP. In part three, we take a look at smart Order Fulfillment.

Order fulfillment is the method that companies use to process sales orders. Even though the definition is simple, managing order fulfillment is complex. Many different aspects come into play: inventory management, warehouse management, integrations with 3PLs, drop shipping, and much more. On top of that, customers have higher expectations of order fulfillment than ever before. In this article, we’ll examine how a DOP can help to support smart order fulfillment processes.

What is Order Fulfillment?

Order placement triggers the start of order fulfillment. It is the critical task of assembling products, shipping them to the customer plus all supporting processes such as label printing, warehouse allocation, and more. Typically these are the steps in the order fulfillment workflow:

  1. Order Placement
  2. Order allocation
  3. Shipping label printing
  4. Pick and Pack
  5. Shipping
  6. Delivery
Screenshot of shipping feature as part of the fulfillment system in marello

The exact processes may differ depending on company type, product type, size, warehouse type, shipping strategies, and more.

Why do I need Smart Order Fulfillment?

Order fulfillment is at the core of your operational management. Every order that is placed, needs to be fulfilled in the most (cost)efficient way. Your customers will love it when you offer them multiple ways to receive their orders (at home, in-store). Also, your business will run more efficiently, and your order fulfillment processes will be more sustainable. With smart Order Fulfillment, you will be able to support fulfillment strategies such as:

  • Fifo / Lifo / Lefo
  • fulfill the order from the closest warehouse
  • fulfill orders from the warehouse that has all products available
  • wait for all items to arrive in a warehouse before sending
  • fulfill orders from the warehouse specific to the sales channel

Also, your business might want to facilitate shipping strategies such as:

  • Buy online pick up in store
  • Buy online, pick up at pickup point
  • Ship-from-store
  • Drop shipment

To get all of these strategies right, your DOP needs to be flexible and scalable to support the fulfillment strategies that your company needs.

How is a DOP different from other Fulfillment tools?

There are multiple tools with which Order Fulfillment can be managed. Examples are Enterprise Resource Planning (ERP), Order Management Systems (OMS), Inventory Management Systems, and Warehouse Management Systems (WMS). Even though they all support parts of the fulfillment process, there is only one platform that specializes in every fulfillment strategy and that is the Digital Operations Platform.

When used for fulfillment, the aforementioned platforms are often largely inflexible, expensive to upgrade, and poorly suited to modern digital businesses. In contrast to DOPs, they focus on specific operations only.

As research firm Forrester puts it:

Digital initiatives fail without the right operational systems and processes, and many initiatives have failed to deliver on their promises. Today, we see the beginning of a new era of operational systems. We call them the digital operations platform (DOP) to reflect their Agile, AI-based, and experience-driven nature.

DOPs help with smart fulfillment as they focus on all operations as a whole and manage fulfillment strategies that take all operations into account.

Benefits of Smart Order Fulfillment

With the right fulfillment solution, orders can be handled from the time they are placed, until the time they are delivered. The best order fulfillment software will ensure you can offer your employees and customers the best fulfillment experience. Let’s take a look at some of the benefits.

Automated processes

One of the most significant benefits of smart order fulfillment is automation. By automation, the need for human intervention is reduced, saving time and money. Some of the processes that can be automated:

  • Updating inventory across all channels in real-time
  • Allocating inventory to specific sales channels
  • Setting preorder and backorder quantities
  • Creating optimal fulfillment routes
  • Communication between the customer, sales channels, and warehouses.
Screenshot of smart order routing in Marello

Eliminate errors

Today’s commerce environment is complex. Businesses are using multiple sales channels (webshops, marketplaces, apps, social media) to sell their products. Orders are fulfilled from warehouses, physical stores, and drop shippers. The more complex the fulfillment process, the more manual errors can occur. Order fulfillment software significantly reduces the chance of errors, and increased accuracy.

Custom Workflows

Order fulfillment software streamlines order fulfillment processes for optimal efficiency. It eliminates paperwork, the use of spreadsheets, and most manual actions. By orchestrating your order processes, you can:

  • Configure custom workflows
  • Fulfill BOPIS, BORIS, ROPIS, Ship from store, etc.
  • Aggregate cross-channel orders

A good Digital Operations Platform will also provide smart order routing based on inventory levels and proximity.

Improved customer service

Real-time tracking allows for quick and easy provide information that customer service needs to answer customer queries efficiently. With the right platform, the time takes for customer service to answer questions will be reduced as all information they need is readily available on a central platform.

Screenshot of buy online pick-up-in-store in the fulfillment system of Marello

Keeping customers happy and providing a high level of service is fundamental to retaining customers and growing your business.

Reduce stockouts

One of the most frustrating things is when customers are ready to buy but the product is out of stock. Out of stocks are painful: they cost you money and drive customers to spend their money elsewhere.

With better visibility into inventory levels across warehouses, the risk of stockouts is significantly reduced. Digital Operations Platforms allow you to set safety stock levels and automatically reorder inventory when needed.

Adaptable and scalable

The right Digital Operations Platform will grow as your business grows. This allows you to expand without worrying about having to replace your back office system. Instead, add or make changes according to your commerce strategy and desired workflows.

A Digital Operations Platform is crucial for Smart Order Fulfillment

Each business has unique requirements for its Order Fulfillment. Smart Order Fulfillment features in a DOP help to save time and stay ahead of ever-changing order management processes.

Want to know more about smart order fulfillment for your business? Contact us for a personal consultation and demo.

 

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