As we prepare for the upcoming holiday season of 2021, it’s important for businesses to reflect on what’s been happening with their supply chain.
One area where most companies can always improve is in fulfillment. Here are five ways you can enhance fulfillment immediately in the coming months:
The key to efficiency is good data collection and great analysis. Measure your key units of work produced per hour by department. Are there specific hours when performance is higher or lower? What accounts for those differences? Provide feedback to employees, and often, you will find they will improve performance on their own.
Also measure customer service statistics like dock-to-stock, order turnaround, and return processing. Once you know where your starting points are you can move to the next way to improve fulfillment, analysis.
Process Analysis and Improvement
You have your benchmarks, now let’s see if you can improve yours by reviewing the process. Can you reduce handling by eliminating unnecessary touches? Are there any vendors who are regularly late, frequently back-ordered, or aren’t consistently delivering a quality product?
Tighten up workflow by removing extra touches. Talk to your vendors and begin sourcing others if those talks aren’t fruitful.
For most businesses, inventory is the largest balance sheet asset. Tracking inventory location and status is imperative to profitability. To adequately monitor and manage inventory, be sure to use these four key metrics: inventory turns, inventory aging, order fill rates, and inventory carrying costs. These metrics will ensure you know how the product moves in the system and how to avoid over orders and shortages.
Warehouse Automation and Technology
As warehouse labor costs increase, it’s time to look for ways to automate and improve warehouse technology. Voice-enabled technologies have historically proven return on investment. Start slowly as you integrate automation and human power, choosing to focus on one key area at a time. Automate storage or movement of goods first and see how the process flows. If one is successful, automate an additional part of fulfillment, particularly an area that it is hard to keep consistent human labor for, like picking.
Switching to a 3PL
Many eCommerce and multichannel businesses have found that partnering with a third-party logistics company allows them to not only increase profitability but also enhance the customer experience. Businesses can also generally cut infrastructure and capital costs as well. A well-vetted 3PL will also be able to scale up or down according to your needs and sales cycle. This will be especially important with the ongoing supply chain challenges due to inventory shortages and shipping delays.