For any seller, a new sale is worth celebrating, but the work isn’t complete until the order is fulfilled or, in layman’s terms delivered to the end buyer. Order fulfillment includes critical tasks such as assembling the order and shipping it off to the customer.
The complete order fulfillment lifecycle is made up of 8 significant steps starting with strategic sourcing and ending with shipping. Many businesses also include inventory management, supply chain management, order processing and customer service in order fulfillment.
Here’s an overview of the order fulfillment processing steps:
- Receiving inventory shipments
- Inventory storage
- Order processing
- Picking
- Packing
- Shipping
- Delivery
- Returns processing
Order fulfillment can be a costly and complex process. That’s why some businesses outsource order fulfillment to a third-party logistics (3PL) company.
Order Fulfillment Process: How Does It Work?
The order fulfillment process takes place in mostly one or more distribution centers. It involves order management for eCommerce, warehouse management, order processing, quality control and support for customers that need help, or product exchanges or returns.
Receiving Inventory
Inventory or goods can come from a third party, another company, a department or a warehouse. The incoming inventory should always be counted, inspected and set according to product size and type. Then SKUs or bar codes on the arriving products should be used in the receiving and storage processes to retrieve products from internal storage.
Inventory Storage
Once goods are received in the fulfillment center, they are usually inventoried and sent to their respective storage spaces. It is best to store items for short-term sales rather than storing them for long term.
Order Processing
This is a management system that dictates the product picking and packing activities according to the order received by the seller. eCommerce sellers can integrate their order management software with the shopping cart, which will automatically initiate order processing.
Picking
Businesses need a picking team or warehouse robots to select items from the warehouse according to packing slip instructions. The packing slip has all relevant information, such as the list of item SKUs, product colours, sizes, number of units and location of where the product is kept in the warehouse.
Packing
Packing materials are selected by a packing team or automated fulfillment robots to achieve the lowest practical dimensional weight, which is then calculated by multiplying the package length times width times height.
Shipping
This is when the order is shipped to a customer via an appropriate transportation channel. Most carriers have packaging rules to optimize their profits from whatever space they have available. If businesses fail to meet these requirements, the carrier might refuse to accept the order, leading to shipment delays.
Delivery
It is common for shipping routes to include more than one carrier. For example, FedEx may pick up a package at the fulfillment center that the USPS will later deliver to the customer’s home. There are many reasons for these hybrid shipping methods. One common example is that the USPS delivers even to remote areas where most other commercial carriers do not. It’s simply more practical to use the USPS for the last mile of delivery in those cases.
Returns Processing
Returns processing begins by including shipping materials and a return label with the original customer’s order. When a customer does return a product for an exchange or a refund, the process must be executed carefully to ensure it’s appropriate to restock it.
Also Read: Pros and Cons of Cash on Delivery in Ecommerce
Why Is Order Fulfillment Important?
Order fulfillment is more or less the heart of every business. Many businesses need order fulfillment centers to complete their fulfillment process. Businesses make more money by selling products and services to direct consumers than to other businesses. It doesn’t matter whether you’re a B2B or D2C; the sale is incomplete until the customer receives the sold items.
