HOW THE FULFILLMENT PROCESS WORKS
The way fulfillment happens differs from company to company, but many aspects of the process are similar among successful e-tailers. Fulfillment begins after marketing efforts bring potential customers to a company's Web site. At this very early stage, companies take steps to make sure products are easy to find and order. Some e-tailers offer chats with customer service representatives or lists of frequently-asked questions to make this process unfold smoothly.
When consumers select products for purchase online, they often place them into a virtual shopping cart—technology that keeps track of items consumers are interested in until they are done shopping. When items are added to a shopping cart, the Web site may automatically check a company's inventory for availability. Otherwise, out-of-stock items may not even appear on the Web site.
Immediately before a consumer actually submits an online order, shipping and freight charges are often calculated and displayed. If the charges are excessive, this may cause the order to be abandoned. After a customer provides their name, address, and payment information during the order submission, the data is shared with appropriate areas throughout the company almost instantly. If a credit card is used, the number is verified before payment is authorized. The customer's name, street and e-mail addresses might be sent to the marketing department for use in future campaigns, to customer service in case the customer contacts the company with questions or concerns, and to the shipping and receiving department.
Next, the company's warehouse is notified about the new order. If a company has several warehouses or distribution centers in different regions of the country, the order is sent to the one closest to the consumer, taking inventory and workload issues into account. When an order is received on the Web, workers might be notified on handheld devices via a wireless computer network and directed to perform different tasks in order to pack, label and prepare items for shipment. In the early 2000s, companies relied on warehouse management software (WMS), overhead scanners, conveyor belt systems, wireless computer networks, wearable computers, hand-held bar code scanners and portable printers to streamline operations and automate the movement of goods through their warehouses. The way such technologies were used was complex and varied depending on the warehouse or distribution center. However, in general they eliminated the need for human involvement for tasks like checking incoming shipments against paper purchase orders and figuring out where incoming shipments need to go in a warehouse (to inventory or to another dock for immediate delivery).
Eventually, the packaged product makes its way to the loading dock, where a carrier like United Parcel Service (UPS) or Federal Express (FexEx) handles delivery. Those retailers with regional or national networks of physical stores are able to use them as a strategic advantage, whereby goods ordered online are available for pickup at nearby retail locations. This saves consumers money on shipping, and also makes it easier for them to return unsatisfactory products. In the early 2000s, one national convenience store chain was considering contracting with different pure-plays (retailers who sell exclusively online) so its stores could be utilized as locations for online order pickups.
At some point in the process, an e-mail confirmation is sent to the consumer, providing details about the order (product descriptions, model numbers, quantities, colors or sizes) and outlining how the package is being delivered. Information about the company's return policy may be included in the e-mail. A tracking number also may be provided so the consumer can check on the delivery status of their order and stay informed about the date and time it will be delivered. The entire process—from Web order to the shipping dock—can happen in a matter of minutes or hours if an efficient system is in place. But the fulfillment process doesn't always end at the dock. If customers order groceries or large items like appliances, which require them to be home for delivery or setup, a company may enable communication between drivers from its own fleet and the customer.
Online fulfillment allows companies to tie manufacturing more closely to actual demand, thereby reducing storage space and financial resources associated with large inventories. If a company doesn't manufacture its own products but resells goods from other manufacturers (such as a sporting goods e-tailer), an effective high-speed fulfillment network will allow it to see inventory and supply information from one or more trading partners, giving them the ability to spot supply shortages before they cause problems. Additionally, by using special software, companies can forecast demand and make necessary adjustments for seasonal or cyclical fluctuations.
User Comments Add a comment…