Customers are growing accustomed to rapid order fulfillment. With fast and flexible being the buzzwords around the order fulfillment space, it’s important to understand what you can do to ensure your customers receive their orders on-time and in-full.
This guide will help you understand what type of order fulfillment software is best for you, and the different types of order fulfillment and fulfillment systems.
Looking to skip ahead?
- What Is Order fulfillment Software?
- The Order Fulfillment Process
- The Main Types of Order Fulfillment Systems
- How to Choose the Best Order Fulfillment Software
What Is Order Fulfillment Software?
Order fulfillment software is responsible for automating inventory management, generating picking lists, packing, shipping, and tracking. Fulfillment software can include any of the following:
- Supply chain management and optimization
- Warehouse management systems
- Omni-channel management
- Inventory control
- Overall order processing
Fulfillment software should always integrate with your existing e-commerce platforms and help you increase efficiency and automate the fulfillment process (which we’ll touch on briefly below).
The Order Fulfillment Process
Before we dive into the main types of order fulfillment systems and how to determine the best order fulfillment software for you, let’s explore what order fulfillment as a process encompasses. We can break it down into five steps:
#1 Warehouse organization. Organizing a warehouse isn’t the same as organizing a room. This is a SKU-fueled process based on an effective warehouse management system. Keeping everything in order will help you improve accuracy and efficiency.
#2 Order management. Anyone still trying to keep track of orders manually is sacrificing accuracy somewhere. This step requires up-to-date warehouse management systems and an optimized warehouse space conducive to picking and packing. The less back and forth means the less room there is for error.
#3 Packaging. Kitting and packaging are the last steps before a customer receives their order. This process requires proper scales, machinery, and trained associates.
#4 Shipping. Tracking the parcel from transit point to transit point is important. You need to give the carriers and your customers complete transparency so all parties can track the parcel.
#5 Customer communication. Keep a line of open communication with your customers. Be sure you have the capabilities to provide your customer with real-time tracking and delivery updates. If not, you’ll want to partner with a third-party logistics company (3PL) that can.
The Main Types of Order Fulfillment Systems
Now that we’ve covered the order fulfillment process, let’s take a look at the main types of order fulfillment systems. These include:
- Self-fulfillment and shipping. Generally reserved for smaller businesses, this model means you handle the picking, packing, and shipping.
- Drop-ship fulfillment. This is a method of order fulfillment where a business doesn’t keep the products they sell in stock. Instead, they purchase the necessary inventory on an as-needed basis to fulfill orders.
- Third-party fulfillment. This model is the go-to for larger companies. Here, the order is processed, packaged, and shipped directly to the customer from the 3PL. In this case, the 3PL will also have its own order fulfillment software to ensure seamless integrations, real-time data updates, and order tracking.
How to Choose the Best Order Fulfillment Software
The best-fitting order fulfillment software for you is one that highlights your company’s advantages and minimizes the risks to orders and sales. The fulfillment software you utilize should help you strengthen your business’s reputation and increase customer satisfaction.
Here are some valuable considerations to determine which type of inventory and order fulfillment software is right for you:
- What type of products do you offer? Heavy? Lightweight? High value or inexpensive?
- How many different products do you keep in stock?
- Do customers typically order a lot of products at once?
- Who picks and packs orders, and what equipment do they need?
- Do you use packaging as a differentiator?
- On average, what’s your monthly order volume? Does it change drastically depending on seasonality?
- Where do you sell?
- Where do most of your customers live?
- Do customers demand two-day shipping or have other specific needs?
- How many SKUs do you carry and what’s your inventory turn?
Fulfillment software is customizable. Some are more specialized than others for certain products — such as perishables or inventory that falls under the hazardous materials category. Others are more general and can work well in a garage or warehouse.
Finding a 3PL with advanced fulfillment technology can remove a lot of unnecessary stress from your business, and ultimately boost sales by reaching more customers at a quicker rate. If your business is scaling beyond what you can feasibly manage, it’s best to partner with a 3PL and utilize their e-commerce fulfillment software.
However, it’s still important to understand the process of choosing the right fulfillment software — even if it’s just to ensure your logistics partner is up to par with the latest requirements. We’ve broken the process down into four steps below.
Step #1: Determine What Orders to Manage
The shipping fulfillment software you’re using should work with you as your business develops. For instance, are you looking to outsource all of your fulfillment needs to a third party right now? Do you want to start with a portion of your inventory until you’re comfortable transitioning everything? Fulfillment software should make it easy to manage separate inventories and route orders to the proper location.
Always ensure the 3PL you’re looking to partner with can accommodate your unique situation, and help you learn what fulfillment options are best for you.
Step #2: Review Your Existing Software
The software needs to seamlessly integrate with your existing platforms. If not, you’re likely creating a ton of extra work for your team. Your order fulfillment software should allow you to automate checks and reorder supplies when a SKU is low. Broken integrations mean you’ll have to manually perform stock checks and reorder goods — which leaves a large room for error.
If you’re struggling to find the right tool, our fulfillment software at Jay Group easily integrates with leading marketplaces, shopping carts, and other channels.
Step #3: See If Reports Make Sense to You
First and foremost, fulfillment software needs to make sense. Be sure to choose software that provides you with valuable information and analytics. Remember, even the most detailed reports aren’t valuable if they don’t give you insights that are relevant and actionable.
Knowing your company’s order picking accuracy, on-time delivery, and inventory accuracy (among others) KPIs is vital for future success.
Step #4: Partner with a Third Party
You likely started your business to follow a passion and solve a problem — not to focus on fulfillment and software comparison testing and troubleshooting. If you’re finding yourself spending too much time on order fulfillment and thinking about software upgrades, it’s probably time to outsource to a 3PL.
Additionally, you’ll likely need to add more warehouses to hold inventory and deliver quickly as your company grows. The last thing you want to think about when scaling your company is purchasing individual e-commerce fulfillment software for each of your warehouses.
Be sure your fulfillment software supports multiple warehouses. If not, you’ll need to consider partnering with a 3PL with multiple warehouses and advanced fulfillment technologies so you don’t run into any issues during peak seasons or times of growth.
The right order fulfillment software is one part of the larger model of strategic and effective fulfillment. Understanding what’s right for your business — from what KPIs to track to what 3PL to partner with — will ultimately help you keep pace with consumer demand.
At Jay Group, we offer state-of-the-art software and two temperature-controlled, FDA-registered facilities totaling 500,000 square feet. Contact us today to see how we can help you take the burdens of fulfillment off your hands.
