Five Ways to Improve Your Fulfillment Operation

It’s only natural that as we prepare for the New Year, we review the year that passed. One of the big questions one must ask is what have we done well this year that we can do even better next year to drive profit and customer satisfaction.

One area where most companies can always improve is in fulfillment. Here are five ways you can enhance fulfillment immediately in the coming year:

Benchmarking

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.

Inventory Management

For most businesses, inventory is that 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 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 always 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.

We hope these tips have shed new light on a few ways you can increase profitability and improve processes in the coming year.