As a business owner, one of your top priorities is to get your products to your consumers as soon as possible. However, order fulfillment is not as easy as it sounds.
For one, you need to efficiently manage your product inventory and keep your customers informed. In addition, you should be prepared to face errors during shipping and delivery such as delays and damages. Fortunately, by having a clear understanding of the order fulfillment process, you can address these common challenges.
To guide you, here’s an infographic that presents the step-by-step order fulfillment process along with the challenges and solutions every business should know.
Step-by-Step Order Fulfillment Process
1. Product Inquiry
This is the first step of the order fulfillment process where the consumers inquire about your product. This could be done through a request for a catalog or a visit to your website.
2. Sales Quotation
When a consumer is interested to buy your product, he might ask you about its availability, price, as well as other promos or discounts you might be offering.
3. Sales Order
Once the consumer is decided to buy from your business, you should issue him a sales order. This is a formal order placement in which a product should be exchanged for an established and agreed price.
4. Order Acknowledgment
After issuing the purchase order, you should acknowledge the consumer’s order and inform him that his request is being booked and received.
5. Sales Invoice
The presentment of the sales invoice to the customer happens after order acknowledgment.
It is a contract between the seller and buyer that the payment for products should be done at a certain time or due upon the issuance of a receipt.
6. Order Changes
Businesses occasionally receive requests from consumers who want to change their orders. This could be a change in the size or quantity of the product, or a change in the shipment destination.
7. Order Processing
If there are no changes to orders, you can now process and fulfill the consumer’s request.
This includes going to the warehouse, finding the items to be shipped, then picking them up off the shelf.
8. Order is Packed
After the order is picked, you can start packing the items in preparation for shipping.
It typically involves checking the quality of the products, adding packing slips and labels as necessary, and sealing the box.
Once the product is properly wrapped and packaged, the order is now ready for shipment and transportation.
10. Track and Trace
The consumer is notified that his order is on its way. And during the transit of the products, he may want to know and track its current location.
11. Order Delivery
The order of the customer arrives at its designated location.
After the delivery of the order, you can now request the payment for the products.
13. Return and Refund
There are cases where consumers find the shipped products unacceptable or not required. As a result, they will request a return and refund of their order.
Common Order Fulfillment Challenges Faced by Businesses
Whether you’re a big industry leader or a startup, you will encounter several problems that can hinder you from providing efficient order fulfillment. However, there are essential guidelines to help you resolve these issues.
Here are the facts you need to know about the most common order fulfillment challenges along with the solutions you can implement to ensure your business runs smoothly and successfully.
1. Poor Demand Planning
Poor demand planning has catastrophic effects for your business such as:
- Pending orders
- Out-of-stock items
- Expensive fulfillment costs
As such, it’s essential to know how much demand for a product will be.
2. Neglected Inventory Management
One of the worst areas you can neglect in order fulfillment is your inventory. You can lose sales revenue as well as valuable customers if you constantly run out of products.
3. Substandard Supply Chain Execution
Having a substandard supply chain execution means you don’t have the ability to quickly get your items back in stock. This negatively impacts your sales and customer satisfaction.
That’s why you always have to consider the amount of time your manufactures can produce more products and how long will it take them to get to your warehouses.
4. Insufficient Logistics Planning
Once the orders of your consumers are ready to ship, you should think about the shipping method and how long will it take to get the items to them. Do also consider if you can handle the products safely so they arrive in one piece.
If you don’t carefully plan these logistics concerns, expect delayed or damaged deliveries and irate customers.
5. International Shipping Demands
If you cater to international customers, you know that it can take a week to several months for their orders to be delivered at their doorsteps.
Most buyers are aware of this but they can simply forget about your business and move on to the next one if your process takes too long.
Did You Know? According to a survey conducted by Marketing Profs, 80% of online shoppers want same-day delivery.
6. Miscommunication with Supplier
Other businesses don’t handle the shipping and delivery of their products and opt to outsource the service to a third-party.
As such, it’s common to encounter miscommunication with your supplier. This includes poor handling of products and delayed updates which ultimately affect the success of your business.
7. Incorrectly Filled Order
If you don’t have the ability to properly take orders and correctly store products, you can send and deliver the wrong items to your customers. This can lead to often expensive returns and make your business untrustworthy.
Did You Know? At least 30% of all products ordered online are returned by consumers.
Order Fulfillment Solutions Business Owners Can Implement
1. Classify Inventory
You should reclassify your inventory from the fastest to slowest moving items. This can help you have the proper amount of stocks on your most popular and in-demand products.
2. Implement Proper Systems for Visibility
In order to have visibility to the most crucial areas of your business, you should implement systems such as sales order management and inventory management.
These systems can store financial data as well as inventory levels which ultimately allow your business to efficiently and successfully handle the order fulfillment process.
3. Automate Processes
Besides having visibility for your business, you should also consider how you can speed up the process to cater to your consumers better.
One way to do this is by investing in automation. However, this doesn’t have to be expensive robotics or conveyors, you can simply buy scanners to easily manage items coming in and out of your warehouse.
Tip: If you don’t want to spend a considerable amount of money on automation, you can also download numerous software applications on your smartphone.
4. Consider Your Location
Nowadays, more consumers want to receive their orders quickly. As such, it’s important to consider the location of your stores and warehouses:
- Choose a warehouse that can meet the demands of quick-picking, packing, and shipping
- Store products in several warehouses located in different areas to ensure fast and inexpensive delivery costs
Did You Know? According to a survey conducted by PwC, 88% of consumers are willing to pay for faster delivery services.
5. Keep Customers Informed
You should always have close communication with your consumers as they expect you to provide real-time order and shipment status. You can add a tracking page on your website or a chatbot to quickly chat with them.
Overall, failing to give your customers this vital information will have a negative effect on their shopping experience.
6. Have Connection with Suppliers
The shipment of products is usually something you don’t have control over, especially if you acquired the service of third-party logistics companies.
As such, it’s important to have proper communication with your suppliers so you have the latest information about inventory stocks and delivery status.
7. Accept Returns and Refunds
As a business owner, you should handle returns and refunds with a good attitude. Make sure the process is smooth for your customers by having a clear-cut return policy.
Having an easy product return process can ultimately make them more likely to buy again from your business.
The order fulfillment process comes with a lot of challenges that can affect delivery efficiency and quality. Hopefully, with this infographic as your guide, you can have a better understanding of the process to provide better service for your customers.
Need more help in the order fulfillment process? You can ask Worklink Services Inc., a reliable logistics company in the Philippines. For over 25 years in the industry, we have been providing logistics management services to various local businesses. Contact us today to learn more!