What is Order Processing Fulfillment: Defining and Improving it

Published : January 24, 2020

What is Order Fulfillment: 6-Step Process & Improvements

Order processing fulfillment involves each individual step a business or organization takes from the initial point of receiving an order to getting that order to the customer. It is the way that each organization responds to and ultimately fills each individual order.

The six steps in the order fulfillment process

There are six steps involved in order processing fulfillment:

  1. Taking the Order - The first step is taking an order. This could be by phone, in person, EDI, or through an online process. If the order is taken manually, the individual taking the information would be responsible for making sure all the information was entered correctly into an online system or sent to the right department for processing. If taking orders is completely automated, software would need to be updated and maintained on a regular basis.

  2. Processing the Order - This involves making sure the order is entered into the correct systems. Fulfilling software should be able to smoothly integrate with software for the shopping cart. During the processing, customers are often given the status of their order. They should clearly see that the order has been placed and is now in the processing stage. The customer may be given an approximate arrival date for the product and then be given updates throughout the entire process.

  3. Picking Inventory - Whether it's on-site or at another location, a 3pl will have efficient picking methodologies in place to accommodate each client, product and order type. Picking methodologies include batch picking, cluster picking and, zone picking. 

  4. Preparing for Shipping - Weighing, packing, and labeling are all part of the preparation process that occurs before actual shipping takes place. These are detailed operations that all come together during this phase. What type of product is being shipped will determine the specific steps and process involved in the preparation. Items that are perishable or breakable will have a more stringent preparation process than a book or a pair of shoes.

  5. Shipping the Order - Shipping the order may involve sending the order directly to the customer or there might be distribution points along the way. Items such as food or flowers will need to be shipped in a refrigerated or humidity-controlled environment. Shipping managers will need to decide on the most efficient and safest way to ship a product. A company should have a system in place to track and trace each product throughout the entire process.

  6. Handling Returns - The sixth step is handling any returns. An item that is returned needs to be inspected for any damage and returned to the inventory. It's also important to stay in contact with the customer throughout the return process. Every company should have a clear return policy posted on their website. It should be clear when refunds are given, when only credits or replacements are given, and what the time limits are for each of these.

How can you improve your order fulfillment process?

Improving the process begins with having a strategy that is designed for your specific business needs. How many orders is your company shipping out each month? Careful tracking of how many orders you've received in the past can help you better manage future inventory needs. Are you featuring multiple products or just one or two? If there are dozens of products, you'll want to consider a detailed inventory classification system. Improving the fulfillment process starts with analyzing your specific business from start to finish. There are, however, several general steps almost any company can take to improve the order fulfillment process.

  1. Automate the Process - Transparent, cloud-based inventory is crucial to improving your overall processing system. Integrated automation can help make sure that any products listed on your website are actually available and ready to be shipped before a customer places an order. All aspects of your business need to be in sync or you risk frustrated customers and lost sales. Having a seamless automated system for integration is especially important if you're using third party suppliers and distributors.

  2. Communicate with the Customer - Keeping the lines of communication open from start to finish is essential. Emails or texts should be sent to the customer regarding the status of their product at several stages during order processing fulfillment. It's also a good idea to provide periodic surveys and questionnaires so you'll know exactly where you can specifically improve your order processing fulfillment system. A simple, "Thank you for ordering from our company," email is not sufficient.

  3. Choose the Right Shipping Company - If you're using an outside shipping company it's important to conduct regular audits of this service. You should regularly evaluate your service and keep records of late or lost shipments. Keeping detailed records will enable you to more easily make a decision if you think it's time to switch companies. You may have an incredible product and amazing customer service, but if your shipping company is dropping the ball, customers still won't be satisfied. If shipping is done internally you can make improvements by streamlining the process and eliminating the number of decisions that need to be made by the third-party warehouse staff. Making decisions means spending more time and creating the chance for more mistakes. What type of packaging to use and ideal shipping routes should be predetermined as much as possible.

  4. Evaluate In-House Versus Third-Party - Managing everything on-site requires an extensive process that may or may not be in the best interest of a company. Some organizations have the ability to store and manage all the products themselves. This, however, often requires a company to build warehouses throughout the country in order to guarantee the delivery of products in only a few days. It also means increased operating and shipping costs and may limit future scalability. If this isn't feasible, a business is likely better off using a third-party fulfillment option.

  5. Make Edits and Returns Easy - Whether intentional or not, too many companies make it difficult for customers to return items or edit an order after it has been sent. Providing lots of options while making returns and edits as easy as possible is a true test of excellent customer service. It's also a major component of a successful business. Consider implementing software that completely manages the return process. This process should send customers return labels to use, and track each stage of the return from customer back to the warehouse.

What does order status sent to fulfillment mean?

This means the order is in the processing stage. The order has now been entered into the system and is likely being sent to employees in an on-site warehouse to retrieve the product or it has been sent to an off-site supplier. How the order is going to be fulfilled is also currently being determined. It may be shipped from the company's own warehouse or from a supplier. The product may require special packaging or certain types of transportation to make sure it arrives without being damaged. Once an order has been sent to fulfillment a customer is usually not able to cancel or edit an order at this point.

 

What is the order processing system?

The order processing system is a method of capturing all necessary data regarding a customer and the order. Some processing systems may be manual, while most are increasingly technological.

Traditional Processing System - A traditional, or manual system, is done primarily through handwritten documents and manual file systems. Orders are written in a log and sent to the person in the company responsible for filling the order. Copies of the order, along with the product, are then sent to the individual who will deliver the product to the customer. In a small company one individual may fulfill one or all of these positions.

Technological Processing System - A system that makes use of technology would begin with orders being placed online. Different types of software are available that a business would use to capture and record the ordering information. The order would automatically be sent to the manufacturer who would be responsible for packing and sending the product to the customer. In some cases the product may be sent to the business, which would then ship it to the customer. Returns would also be handled through an online system that may include software specifically for this purpose.

For over 30 years, Aero Fulfillment has been providing easy and efficient 3pl fulfillment services. Using real-time data to track each step of the fulfillment process, Aero maintains all current industry standards. For both B2B and B2C, Aero offers cost-effective 3pl solutions with expandable warehouse capabilities, multi-channel capabilities, and complete, end to end support. Contact Aero Fulfillment to find out how to reduce costs and increase customer satisfaction by improving your order fulfillment process.

 

 

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