Order Fulfillment - A Different Game

A DIFFERENT GAME

Companies sell their products in different ways. Some provide wholesale products to other businesses or distributors for re-sale. Others sell directly to consumers, and some use a combination of both approaches. E-commerce spending is expected to exceed $3 trillion by 2003, according to Warehousing Management, and the potential for additional revenue has lured companies in all of these categories to the Web.

In the process, those attempting to sell directly to consumers quickly discovered that online order fulfillment differs in many ways from traditional fulfillment models used for brick-and-mortar stores. Rather than shipping relatively small numbers of large orders to retail chains or distributors, high volumes of smaller orders for individual consumers must be processed. This presents a new set of requirements for retailers, such as providing customers with real-time information about available products in inventory. Once a product is ordered, successful companies provide shipping and order confirmations, notices about problems, and other real-time, up-to-the-minute details. As explained in World Trade, "Today's customers want to know a lot about their order: whether it's in stock, when it was shipped, where it is, and how soon they'll get it. Statistics say that Internet customers typically check on their order seven times before they receive it."

Having the ability to offer information of this nature to consumers is easier said than done. To do so, companies not only need to make sure all of their systems—including accounting and shipping—are able to handle high volumes of consumer orders efficiently, they also must make sure the systems are integrated. As explained in InfoWorld, "Retail success hinges on what happens behind that fabulous Web site: logistics and fulfillment, payment systems, systems and policies to handle returns, customer service, and, running through it all, integration. Without these the site won't scale, and customers who once loved the Web store will quickly turn fickle and point their browsers elsewhere."

Integration allows data from one order to be shared instantly, in real-time between multiple areas of the organization, including the billing, shipping, marketing, and customer service departments. If systems aren't connected, the movement of data and the fulfillment process slow down.