Fulfilling orders is complex, with many things that can go wrong. Shipping delays, stockouts, overstocks, and return handling can all disrupt operations. This leads to dissatisfied customers and hurts your profitability and reputation. High-volume operations face even greater challenges, especially during peak season. That’s why optimizing order fulfillment is so important.
Since order fulfillment heavily influences shipping and the overall buying experience, optimizing these processes directly impacts your brand image and bottom line.
In this article, we’ll look at some best practices for optimizing order fulfillment. We’ll show you some strategies that can benefit high-volume ecommerce brands and third-party logistics (3PL) providers and what technologies are available for implementation. Then, we’ll show you how Logiwa can make the most of your order fulfillment operations.
Contents
Understanding the order fulfillment process
The order fulfillment process contains many different components, so there’s always plenty of room for improvement. The main stages are:
- Receiving, when the fulfillment center receives and must putaway product
- Picking, when workers retrieve product needed for filling the order from the warehouse
- Packing, when workers assemble all appropriate components into a package for shipment
- Shipping, deciding on best carrier options and sending the order to the customer
- Returns management, when customers send back a product for a refund or exchange
By implementing best practices, warehouse managers can improve their order fulfillment center’s efficiency in each component of order fulfillment processes, optimizing operations across the board. For example, warehouse managers can decide between batch picking vs wave picking to improve employee productivity and shorten picking times, and they can implement automation or robotics for enhancing order picking accuracy. They can also leverage warehouse management systems (WMS) and fulfillment management systems (FMS) to help them achieve perfect order fulfillment.
Best practices for order fulfillment optimization
Optimizing order fulfillment takes more than a single technology—it takes a comprehensive approach. From automation and AI to pick-and-pack tactics and predictive analytics, warehouse managers should use all means at their disposal to optimize each phase of their order fulfillment processes.
The exact tactics that your warehouse can employ will depend on your resources and manpower, but some of the most common order fulfillment best practices are:
- Real-time inventory management: Advanced inventory management systems give you real-time visibility into your warehouse processes by integrating a host of technologies that track warehouse inventory across every stage of the supply chain. From implementing dynamic slotting strategies (directed putaway) that optimize warehouse space to selecting the picking method that will reduce shipping time, Logiwa IO’s advanced FMS lets you oversee each phase of your operations.
- Automation in fulfillment: Automation technologies such as barcode scanning and automated picking systems minimize human error and increase your pickers’ speed. AI and machine learning can also enable better demand forecasting, helping you avoid stockouts and overstocks.
- Enhanced picking and packing techniques: Batch picking gathers smaller inventory items at set intervals, wave picking selects similar items, and zone picking assigns workers to specific warehouse areas. Choosing a picking method depends on your operation, as each method has its own advantages for speeding up order fulfillment. Advanced WMS and FMS systems can help you determine the best approach. Additionally, you can optimize packing by using standardized materials and implementing quality control checks.
- Advanced shipping solutions: Logiwa IO uses AI-driven algorithms to evaluate shipping rates, carrier choices, and packaging options, ensuring you select the most cost-effective and fastest solution for each order.
Some of these order fulfillment best practices hinge on policies that improve the efficiency of your people and processes, while others involve implementing specific technologies for better order fulfillment. If warehouse managers hope to fully optimize their operations, they’ll need to integrate both.
Click on the video above to see how Logiwa IO’s Dynamic Replenishment keeps you prepared with proactive replenishment (just one of Logiwa’s advanced features.)
Leveraging WMS and other technology for better order fulfillment
Although optimizing order fulfillment processes requires a mix of multiple strategies, it’s impossible if warehouse managers don’t have the right tools to guide them. Implementing industry-latest technology is essential for optimizing order fulfillment, and some of the most important tools are:
- Warehouse management systems: From monitoring inventory levels to deciding between picking strategies to allocating space to specific products, WMS platforms possess multiple advanced functionalities. Fulfillment management systems (FMS) like Logiwa IO go beyond these capabilities, empowering companies to process complex multi-channel orders, direct operations across multiple facilities, and unify data that comes from disparate channels. The result is a shift from a warehouse-centric approach to an order-centric approach, giving companies greater agility, resiliency, and visibility — and ultimately higher profits.
- Adoption of robotics and AI: Robots and cobots can pick and pack items with much greater speed and efficiency than human workers alone — and with far fewer errors. Their physical capabilities combine with a FMS platform’s AI-powered planning capacities, helping achieve perfect order fulfillment.
- Data-driven decision making: The data analytics functionalities that a WMS platform possesses can yield clearer, more actionable insights. Warehouse managers can optimize their order fulfillment processes on a better basis than simply a hunch. This enables more precise demand forecasting, helping anticipate changes in market demand.
From enabling more efficient packing and shipping processes to improving customer satisfaction with faster fulfillment, technology plays a central role in optimizing warehouse management systems.
Strategies for managing returns efficiently
Unfortunately, even with the most efficient order fulfillment processes, consumers will return some packages.
Effective returns management is an essential part of optimizing order fulfillment, and this phase can prove especially costly. Companies may negate their own sales when consumers return their products, and the cost of returning an item only increases the expense. Add to that the cost of customer dissatisfaction if they’re unable to send back a package, and the expense becomes even worse.
WMS platforms can help companies streamline their return management policies in several ways.
For example, warehouses that use intelligent WMS/FMS systems have a higher order accuracy than their counterparts, which reduces the number of defective products sent to consumers. This improves customer satisfaction and leads to fewer returns.
WMS systems also help warehouse managers implement a smooth reverse logistics process that enables customers to return or exchange their products efficiently. They can help communicate with drop-off locations and send off shipping labels as needed, simplifying the return for the customer. This can boost consumer satisfaction — and even save you a customer.
Optimizing order fulfillment with Logiwa
From receiving an order and processing it in the warehouse to sending it off to the customer, order fulfillment is truly an end-to-end task. Not only that, but optimizing order fulfillment is an iterative process, requiring continuous review and improvements. The payback is worth the investment though, as effective order fulfillment operations can improve worker productivity, reduce costs, elevate customer satisfaction, and ultimately bring in more profit.
In the future, look for sustainability and omni-channel strategies to play prominent roles in companies’ order fulfillment processes. For example, replacing excess, non-biodegradable packing material with more durable, compostable components can both reduce overhead and the amount of waste that goes into a landfill. FMS systems can also simplify omni-channel order fulfillment by routing orders to the nearest possible shipper, thereby reducing fuel costs and emissions at the same time.
Our flagship FMS solution, Logiwa IO, goes even further beyond legacy WMS platforms to empower order fulfillment optimization. Our advanced AI algorithms combine with automation to provide real-time inventory management to each phase of your processes. Our scalable cloud-based solution grows alongside you. Logiwa IO’s headless architecture also makes it easily configurable for your facility’s operations so that it can adapt to your specific business needs.
Schedule a call with one of Logiwa’s experts and let us show you how to optimize your order fulfillment processes.
FAQs about optimizing order fulfillment
What are the main stages of the order fulfillment process?
The main stages of the order fulfillment process are receiving, picking, packing, shipping, and return management, but others exist as well. It’s also essential to monitor incoming inventory to ensure your ability to fulfill orders as they come in. Otherwise, you may end up with overstocks or stockouts. WMS and FMS platforms help you stabilize inventory levels, so they improve order fulfillment in this way as well.
