In the world of order fulfillment, no one will argue this point: fast is good. Modern consumers have a short attention span and a low tolerance for delay. In today's pick-and-click world of shopping, customers can find whatever they need, in any color and any size, by simply picking up their laptops or perusing their smart phones. They expect the shipment of their purchases to be just as quick as their shopping experience and grow impatient when that's not the case.
You know speed is vital to your business success and run your shipping department with that in mind. But, just because your fulfillment center is operating at high speed, does that mean it's also operating efficiently? Not always.
As important as happy customers are to the business-success equation, quick shipments alone can't compensate for money lost through shipping inefficiencies.
Order Fill's Most Wanted
Lingering efficiency issues can plague even the fastest of fulfillment operations. Read through our list carefully and see if your fulfillment center is guilty of any of these crimes against efficiency.
1. Over packaging.
Sure, you want every order to arrive in perfect condition every time. That's a no brainer. Flawless products are the hallmark of customer satisfaction. But, what isn't a no brainer is determining how much packaging is actually needed to safely deliver any given product.
If you're shipping a china bluebird to Grandma for her birthday, go ahead and use however much bubble wrap you want. Go overboard, even, it's her birthday after all. But, if your company is shipping thousands of bluebirds, too much packaging is a costly mistake. Every step in the packaging process costs you money and time, from purchasing and storing packing materials, to handling them during the actual packing process, to shipping possibly larger-than-needed parcels.
Don't make assumptions. Test your packaging model. Determine just how much packaging is needed to ship those bluebirds safely. Any more is pure waste.
2. Lack of transparency.
In today's global marketplace, your fulfillment operation may have many different branches scatter across continents. Materials can be produced in one country, while assembly takes place in another. Without a clear picture of what each of these branches is accomplishing, and just how they interact with each other, it's hard to know if—and where— inefficiencies exist.
3. Inventory mismanagement.
Proper inventory control is a vital part of a lean shipping operation. When planning to purchase materials or products, the benefits of instant availability must be weighed against the cost of excess inventory. Excess inventory must be paid for, processed, stored and tracked. All of this costs your business vital time and money. Funds that are tied up in excessive inventory represent a real loss. Those assets could have been used, instead, for research and development or for expansion.
Sometimes the excess stock itself isn't the problem; it's just a symptom. Excessive inventory can, according to Introduction to Inventory Management, by Terry Esper and Matthew Waller, represent "ineffective supply chain management decision making."
4. Refusing to change.
Today, innovations in every industry and every industrial process happen at the speed of light. Newer and better ways to reach customers, track inventory and process orders are introduced every day. To keep up, businesses must be willing to change. Just because a process worked well yesterday does not mean it's the most efficient and competitive process available today. If you want your business to thrive, you must stay on top of the latest innovations.
Whether you're a manufacturer or a retailer, your fulfillment center is the heart of your operation. Inefficiencies at any level of that process can be detrimental to your business as a whole.