In the retail sector, order fulfillment has proved time-consuming and prone to human errors. eCommerce companies are using conventional strategies like shipping rate negotiation (37%) and switching carriers (33%) to cut down their costs. The question remains, is that the right way?
A 2023 Stitch Labs survey found that 62% of companies cite human error as the leading reason for order fulfillment-related problems. As online orders continue to increase, eCommerce companies can no longer rely on manual order fulfillment to deliver an improved shopping experience. It’s clear that manual order fulfillment is behind problems such as:
- Delayed orders
- Inaccurate orders
- Customer frustration
It’s clear that automation is the only feasible solution for eCommerce players to improve their order fulfillment process. An automated process can streamline every meaningful aspect of order fulfillment, from order receipt to the final delivery.
Smart (or automated) order fulfillment is the way forward for eCommerce companies to stay relevant and competitive. In this blog, let’s talk about the benefits and challenges of implementing smart order fulfillment.
What is Smart order fulfillment?
Smart order fulfillment is the process of automating order validation and processing to minimize human errors to ship products on time. What’s more important is that smart fulfillment can integrate with existing systems like inventory management and logistics to streamline the entire workflow.
Smart fulfillment is also about leveraging the right technology. In recent times, AI-powered automation solutions are addressing specific customer pain points and improving the fulfillment process. Similarly, eCommerce warehouses are deploying technologies like industrial robots and barcodes to accelerate the turnaround time. With smart automation, they can scale up their operations without hiring any additional staff.
More importantly, smart fulfillment automates the end-to-end order fulfillment process including:
- Order receipt and acknowledgment
- Inventory receiving and storage
- Order processing
- Order pickup and packaging
- Product shipping to customer
- Returns management (if required)
As part of smart order fulfillment, eCommerce companies are also deploying smart order routing in their logistics operations. This can automatically determine the most efficient and cost-effective way to fulfil customer orders. With smart order routing, companies no longer have to manually address questions like:
- Which distribution center has all the inventory items to fulfil a particular order?
- Which location is closest to the customer’s delivery address?
- What are the costs of transporting the requested products to the customer?
4 Benefits of Smart fulfillment
How can eCommerce companies benefit from adopting smart order fulfillment? Here are some of its benefits:
- Operational efficiency
By reducing their dependence on manual labor, eCommerce companies can improve operational efficiency across various tasks including:
- Order picking and processing
- Product packaging
- Order shipment
With automation solutions, companies can process received orders in real-time – without any human intervention. As each order is unique, smart fulfillment solutions perform a strategic workflow process to pick, package, and ship the order according to the customer’s requirements.
Even before receiving the order, companies can optimize their inventory control – thus ensuring that high-demand items are in stock at all times. This, in turn, can minimize the risk of overstocking or stockouts.
- Faster deliveries
Through smart routing, eCommerce companies can now dispatch ordered items from the nearest fulfillment center (for instance, micro-fulfillment centers or MFCs). This can drastically cut down on transportation time, thus ensuring faster or on-time deliveries. With the emergence of MFCs, online retailers are even able to implement same-day or next-day deliveries.
Besides transportation, smart fulfillment can expedite order processing through automated picking and packaging. With manual picking, warehouse operators take a lot of time to simply find the right item for packaging. On the other hand, a warehouse robotics system can automatically locate and pick up the item from its correct storage location.
- Flexibility & scalability
Warehouses that rely on manual operations are unable to scale up whenever there is an increase in customer orders due to seasonal demands. For a growing company, smart order fulfillment is necessary to deliver both scalability and flexibility. Using automation, eCommerce companies can automatically select the fulfillment centers at the right location to process the order.
Additionally, smart fulfillment is flexible to cater to the customer’s unique requirements. For instance, they can fine-tune order fulfillment based on:
- The mode and route of order delivery
- Proximity to the customer’s delivery address
- Shipment costs
- Returns management
The average rate for product returns in the eCommerce sector is between 20-30%. Effective returns management is an integral part of any order fulfillment process. 65% of online shoppers want to understand the terms for returning the product – before placing the order. Inaccurate orders are among the leading reasons for returned products.
With smart fulfillment, eCommerce retailers can automatically verify if the right product is being shipped to the customer. Additionally, smart automation can streamline the returns process through optimized reverse logistics.
Why is smart order fulfillment challenging to implement?
Automation in order fulfillment is beneficial to both customers and eCommerce companies. That said, it’s equally challenging to automate the entire fulfillment process. Among the major drawbacks, the initial cost of automation is high, thus making it expensive for small-time retailers to invest in this solution.
Among other challenges, automation solutions require specialized skills in the eCommerce domain and technology. Retailers must invest heavily in hiring and training staff to build the necessary expertise. Additionally, the automation process can disrupt the company’s existing operations, thus causing both downtime and loss of productivity. To avoid this, companies need to integrate their fulfillment solutions into their existing systems.
With a warehouse automation solution like Carte+, companies can overcome these challenges. Here’s how Carte+ makes a difference:
- Faster installation and deployment with minimum disruption to existing operations.
- Optimized order fulfillment using its AI-powered algorithms that deliver higher throughput.
- Easier to retrofit into an existing warehouse – instead of investing in a new facility.
- Support for end-to-end fulfillment process including order picking, packaging, shipping, and product returns.
Conclusion
From improving operational efficiency to cutting costs, smart order fulfillment can overcome the limitations of manual fulfillment in the eCommerce domain. As the demand for existing warehouses and fulfillment increases, automation solutions are the answer for growing eCommerce brands.
With its expertise in eCommerce solutions, Cartesian Kinetics is facilitating the automation of order fulfillment with its Carte+ tool. If you want to experience the future of order fulfillment, reach out to our team today!
