A lack of set processes and standard operating procedure for fulfillment can cost e-commerce and shipping-based businesses money and time. Workflows based on an SOP can be standardized and optimized. Here are seven steps stakeholders can take to establish and improve processes and procedures for fulfillment.
Inventory management is an aspect of business workflows that can benefit from establishing standard procedures. Effective fulfillment managers take systematic approaches to the tasks and processes that are involved in taking in and storing new inventory.
Order procedures should start at this stage, as failure to perform reconciliation counts for variance, to do quality check inventory or to maintain suitable storage conditions can have repercussions for the customer experience.
An SOP for checking the number of boxes, pallets or shipped units and unpacking and sorting the contents for selection by pickers is the basis for accountable and efficient end-to-end fulfillment workflows.
A manager should seek input from employees who are tasked with managing inventory as well as pickers and clearly articulate roles and responsibilities. Once inventory procedures have been set, it is easier to optimize processes and train new workers.
Picking plays an important role in fulfillment.
Once inventory has been counted and stored, pickers select items for orders to deliver to packing stations. This is one of the most error-prone stages of fulfillment workflows and stands to benefit the most from SOP.
The use of barcode scanners has also become standard industry practice for increased accuracy.
An organization should consider ways to optimize picking, including pick list segmentation based on product catalogs, storage locations or other factors that allow for optimization.
In addition to initial quality checks, it can be helpful to include another round of checks at this stage in the fulfillment process to reduce returns.
Many new shipping-based businesses and sellers forget to plan for packing.
Just as organizing inventory allows for accurate picking, packing stations must be set up to accommodate any order. The SOP in this area may involve matching products to box sizes and specifying packing materials for contents.
Every packing station should be equipped with boxes and packing materials suitable for inventory being processed.
A procedure should set standards for the effective and efficient usage of supplies.
Once an order has been packed and checked and a shipping label has been attached, a package is ready to dispatch.
At large enterprises, a rotating staff of packers may work at all times. Small sellers can benefit from setting aside time and designating space for packing.
Shipping is the point at which orders shift from the purview of a merchant or seller to that of couriers or shipping partners. The most effective Ecommerce businesses have procedures for shipping, which often involve negotiating with providers for the most cost-effective prices.
This stage of order fulfillment commences when packed orders that are ready to dispatch are positioned for pickup. Standard procedures should account for the way in which packages are loaded to avoid damage.
If a package is damaged during these early stages of the fulfillment process, it is much more affordable to repick and pack a replacement order than deal with returns down the road. Seer Production can recommend procedures for every contingency related to fulfillment.
It is not always possible to catch defects through quality checks during inventory and order picking. For this reason, businesses should have an SOP for customer returns.
To minimize costs associated with processing damaged products, a merchant or seller should confirm the presence of all original components and tags and identify any defects or damage.
A procedure for processing returns should start with return shipping and continue through receipt, inspection and either restocking returned items in good condition or refurbishing or otherwise clearing out saleable products that lack tags or can be sold as-is for a reduced cost.
Recouping as many costs as possible is a good standard for dealing with the inevitability of returned shipments.
The best practices for fulfillment draw on universal standards of efficiency and productivity, but also have unique specifications based on the business model of a merchant or seller and the type of products sold.
For instance, some products may be more fragile than others and require more careful handling from processing inventory to the picking, packing and shipping of orders.
It is a good idea to ensure that fulfillment practices are consistent. This is the only way to get a clear sense of what works, what does not work and what could be improved.
It is important to map out tasks and processes into procedures that account for every aspect of inventory management and order fulfillment workflows.
Once a workflow has been broken down into component processes and tasks, it is possible to identify areas for optimization.
In some cases, staff or resources may be reallocated for more efficient operations. Other situations may call for upgrades to technology such as barcode reader systems for use in picking or packing or changing logistics providers.
Experimentation can reveal potential improvements to order fulfillment procedures.
A clear sense of existing practices is necessary to get the most benefit out of testing new ways to store, process, pick, pack, ship and fulfill orders. Identifying quantifiable benchmarks or key performance indicators enables a shipping-based business to assess the effectiveness of the procedures currently in place and measure the performance of alternative approaches.
As procedures change, it is also crucial to update SOP.
These steps guide stakeholders from setting up or auditing fulfillment processes to optimizing workflows in accordance with best practices.
An ecommerce operation may need to periodically revise or update the SOP for order fulfillment to prepare for rush hour or a sudden spike in orders.
Along with forming efficient fulfillment processes, working with Seer Production can help organizations establish effective internal strategies to support increasing brand visibility and conversions.
Sources:
https://searchbusinessanalytics.techtarget.com/definition/standard-operating-procedure-SOP
https://smallbusiness.chron.com/standard-operating-procedure-inventory-control-75283.html