What is Order Fulfillment: The 6-Step Process & How to Make 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 an order.
The six steps in the order fulfillment process
There are six steps involved in order processing fulfillment:
- Taking the Order -The first step to order fulfillment 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, the software services would first need to be updated and maintained on a regular basis.
- Processing the Order -Once the orders have been submitted and received, it’s time to process them and get the inventory being stored ready for fulfillment. This involves first making sure the order is entered into the correct online systems. Order fulfillment software should be able to smoothly integrate with software for the shopping cart. During the processing, customers are often given the status of their online order to stay in the know. They should clearly see that the online order has been placed and is now in the processing stage. The customer may be given an approximate arrival date for the product items they ordered and then they will be able to see and know about given updates throughout the entire third- party delivery process to give them the best delivery order fulfillment experience possible.
- Picking Inventory -Whether it’s on-site or at another location, a 3pl will have the best efficient picking methodologies in place to accommodate each client, product, and fulfillment order type. Picking methodologies include batch picking, cluster picking, and, zone picking.
- Preparing for Shipping -Weighing, packing, and labeling ordered items are all part of the item and inventory preparation process that occurs before actual shipping services take place. These are detailed operations and services that all come together during this phase. What type of ordered product and items being shipped will determine the specific steps and processes involved in the preparation for the item delivery. Items that are perishable or breakable will have a more stringent preparation process than a book or a pair of shoes.
- 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 that have been ordered such as food or flowers will need to be shipped in a refrigerated or humidity-controlled environment to ensure the best quality. Shipping managers will need to decide on the best, most efficient, and safest way to ship an item that will ultimately drive up sales and put your best foot forward. A company should have a system in place to track and trace each product throughout the entirety of the processes from shipping to delivery to when the items ordered reach the customer. Customers love receiving tracking information for their orders because it gives them a sense of control and keeps them in the know about the order fulfillment process and the time it should take to receive their items. Many large carriers handle inventory shipping processes which is a major benefit during order fulfillment.
- Handling Returns -The sixth step is handling any order returns. A delivery 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 processes involved in return to ensure the best possible services. Return policies should be clearly posted on ecommerce websites. It should be clear when refunds are given when only credits or replacements are given, and what the time limits are for receiving each of these.
How can you improve your order fulfillment process?
Improving the order fulfillment 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 been receiving in the past can help you better know how to 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 to know about the management process. Improving the fulfillment process starts with analyzing your specific business from start to finish. There are, however, several general steps almost any company should know about so they can take to improve management of the processes in order fulfillment.
- Automate the Process – Transparent, cloud-based inventory is crucial to improving your overall order fulfillment processing system services. 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.
- Communicate with the Customer -Keeping the lines of communication open from start to finish is essential so the customer can see and know the processes that are taking place and continue to have future sales. 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. The customer wants to know that you care about their experience with your online store.
- Choose the Right Shipping Company -If you’re using an outside shipping company it’s important to conduct regular audits of this service so you can see and know the processes and services that are taking place to make sure that everything is under control. You should regularly evaluate your service and keep records of late or lost shipments. Keeping detailed records of sales and orders will enable you to more easily make a decision if you think it’s time to switch order fulfillment 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 and your sales will drop. 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 in-house decisions means spending more time and creating a chance for more mistakes which doesn’t help your company drive up sales. What type of packaging to use and ideal order shipping routes should be predetermined as much as possible.
- Evaluate In-House Versus Third-Party -Management from everything on-site and in-house requires an extensive process that may or may not be in the best interest of a company. Some organizations have the ability to store, manage, and handle all the products themselves in-house. This in-house management, however, often requires a company to build warehouses throughout the country in order to guarantee the delivery of products in only a few days. In-house order fulfillment also means increased operating and shipping costs to store and handle inventory and may limit future scalability while third-party order fulfillment centers are prepared for your business growth. If this isn’t feasible, a business is likely better off using a third-party order fulfillment option to handle and aid in management and control of order fulfillment instead of in-house order fulfillment. Having a third-party order fulfillment company handle inventory and help with management services saves your business time and money.
- 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. When customers see that making order returns is easy, they will want to continue to buy from your company and your sales will ultimately increase over time. Excellent management of order returns shows that you care about the customer and are willing to help them solve their order fulfillment issues.
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 third-party supplier. How the order is going to be handled and fulfilled is also currently being determined. It may be shipped from the company’s own in-house warehouse or from a third-party supplier. The items may require special packaging or certain types of transportation during the delivery process 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 processes are increasingly technological.
Traditional Processing System – A traditional, or manual system, is done primarily with the help of handwritten documents and manual file systems. Orders are written in a log and sent to the person in the company who handles and is in control of and 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 third-party 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.