In a competitive market, the speed of throughput in efficient order fulfillment has become essential. 38% of online shoppers cancel their order if it takes longer than one week to deliver. 69% of shoppers are unlikely to purchase from the same retailer if they don’t receive their package within 2 days of the delivery date. Same-day deliveries are emerging as the “new” norm to boost customer satisfaction.
In short, high throughput in order fulfillment is essential for customer satisfaction, brand reputation, and revenue generation. With the continued reliance on “manual” processes and constant human intervention, companies struggle to accelerate their throughput across MFCs and distribution centers.
What is stopping companies from achieving high throughput? Here’s our list of the top 5 barriers:
- Inaccurate inventory
According to NetSuite, the average stockout rate is around 8%. Higher incidents of stockouts can frustrate customers and lead to a loss in sales. 43% of consumers are more likely to ditch a product purchase – after two (or more) stockouts.
Proper inventory management is the key to preventing stockouts. The challenge is when companies rely on manual stock counting to manage inventory levels, which is both time-consuming and prone to human errors.
Without an accurate inventory estimate, companies often understock or store excessive stocks. This, in turn, is likely to impact throughput in the order fulfillment process. This is especially hurtful in MFCs that need to carry a smaller number of SKUs that are likely to move fast.
Retailers can address this challenge by:
- Investing in efficient inventory management solutions.
- Enabling real-time visibility into inventory movement
- Forecasting future demands and industry trends.
- Delayed shipping
Around 22% of shoppers will likely discontinue their online shopping with a brand because of delayed shipping. Besides speed, free shipping is another reason why 45% of customers prefer online shopping.
Domestic retailers face the challenge of delayed shipping due to a variety of reasons including:
- High shipping costs
- Damaged goods
- Lost or missing packages
Furthermore, international companies face shipping delays due to additional export costs and customs duties. Shipping or transportation delays can directly impact throughput in order fulfillment.
Besides working with reliable shipping and logistics companies, businesses must look at solutions like:
- Efficient order management
- Real-time shipment tracking
- High-quality packaging to prevent damages during transit
- Manual picking and packing
On average, retail warehouses and distribution centers have an error rate of 1-3% in manual picking. Even a single error can reduce profits by up to 13%. The same statistics apply to the manual packing of products for order delivery. Without any barcode scanning of packaged items, the error rate hovers between 1 and 2% (or higher).
Additionally, companies can indirectly incur the following costs from manual picking and packing:
- High labor costs
- Repackaging costs
- Poor customer experience
- Sales-related losses
Companies can reduce these manual errors by:
- Automating their warehouse and MFC operations.
- Accurately labeling their packaged products.
- Implementing a warehouse management solution.
- Limited scalability
54% of warehouses are increasing the number of their inventory SKUs over 5 years. Similarly, warehouses and distribution centers are handling 5x more SKUs than a few years back.
With their growing business, retailers need to meet growth-related challenges related to:
- Increasing the number of sales channels
- Growing volume of products and SKUs
- Higher order volumes and inventory levels
To meet these demands, companies need to maximize their existing resources or systems for a better yield or output. They also need to balance between their order fulfillment capabilities and the additional costs of maintaining existing service levels.
Here’s how they can overcome limited scalability:
- Implementing a scalable fulfillment solution.
- Leveraging data analytics for demand forecasting and planning.
- Omnichannel fulfillment
Companies with a strong omnichannel reach have a customer retention rate of 89%, as compared to just 33% for those without any omnichannel strategy. Businesses now have to deal with the complexities of multiple sales channels including:
- Online marketplaces
- Direct-to-consumer websites
- E-commerce and physical retail stores
Across all these sales channels, retailers need to streamline order fulfillment and manage complexities related to inventories, product returns, and shipping methods.
Given these challenges, retailers can overcome omnichannel complexities by:
- Investing in an end-to-end omnichannel fulfillment solution or platform.
- Integrating inventory and order information across all channels.
- Centralizing returns management.
Addressing throughput challenges using Carte+
How can retailers respond to rising consumer demands for faster and more accurate deliveries? Through technologies like robotics and automation. Automation systems or automated processes can improve order fulfillment efficiency and eliminate human errors. For instance, automated robotic pickers can reduce human errors during picking and packaging.
At Cartesian Kinetics, we work with global companies and address their various pain points in faster order fulfillment. Hence, we are reimagining order fulfillment through our automated Carte+ product. Here are some capabilities of Carte+ that it can deliver for your business:
- Last mile fulfillment
- Same-day deliveries
- Warehouse automation
- Reverse logistics
How can our Carte+ solution elevate your order fulfillment? We can help. Reach out to us today!
