Fulfillment System and the Logistics Application
The fulfillment system offers a number of advantages for e-commerce stores after its implementation, especially for those that choose to outsource services.
Fulfillment or order fulfillment is an expression in the English language that means fulfillment and in Logistics it concerns all the operations involved to serve the customer, from the moment the consumer orders the goods until the moment it is delivered, without forget the evaluation of the shopping experience, made later.
Throughout these first two decades of the 21st century, the system ended up being strengthened, thanks to the growth of online sales . Without the support of the Logistics sector, it would be impossible to gain consumer confidence. Confidence ratified now, during the COVID-19 Pandemic. If not for the Internet, the world would have collapsed financially. And the growth is vertiginous. Now, in the first five months of 2022, virtual purchases grew by 785% compared to 2019. Data from SmartHint, which heard more than a thousand companies. And what provides operational support for this expanding e-commerce is the fulfillment system.
A system that encompasses five steps, according to the Hivecloud website:
- Inventory — Storage can be carried out both in private warehouses and in rented spaces. The important thing is that any of the options meet the necessary requirements to keep the goods stored correctly, in order to have full control of what is there. This is because, if an article is available on the website, but not in stock, the inconvenience generated can be enormous.
- Separation or Picking — After the order is placed in the e-commerce and the payment is confirmed, the second step is to find the products requested by the customer in the stock and place them in separation. This is also another step that requires extreme organization from professionals, because if the volume of orders is too high, they can mix up requests and even send the wrong one, causing rework and losses.
- Packaging or Packing — To make sure that the customer will appreciate the service offered by the company, it is essential that his order is delivered without any damage. So all products need to be packed properly, which will help to avoid damage during transit.
- Transport — In this stage the product is shipped to the customer. It is here that the professional responsible for this activity must take all the boxes that will be dispatched to the carrier or to the post office, depending on which service will be contracted by the company, so that the transport is carried out to the destination. The route must value the integrity of the items and within the specified period. A good option is to have the transport logistics well planned and executed, so the delivery can be made quickly, safely and at the lowest possible cost.
- Post-delivery — Here, feedback will be collected regarding the service in terms of quality, agility and punctuality. However, it is good to keep in mind that after receiving the goods, the customer can still request a return or exchange, so the post-delivery follow-up must be done thoroughly. After all, satisfied customers buy again.
According to Totvs, a company specialized in Information Technology, companies can use different fulfillment methods . However, the most common are these:
- “ Dropshipping: With the dropshipping model, as soon as an order enters your pipeline, you simply place an order with your supplier or retailer, who sends it directly to the customer.
- Internal : As the name implies, all fulfillment system processes are carried out internally, using software and automation to facilitate the operation.
- Outsourced : The company has a partner specialized in the fulfillment system, responsible for running its fulfillment center and storing, preparing and sending orders ”.
The fulfillment system offers a number of advantages for e-commerce stores after its implementation, especially for those that choose to outsource services, hiring companies such as Amazon, Mercado Livre or Correios Log+:
- Cost reduction;
- Reduction of delivery times;
- Stock decentralization;
- Elimination of stock out (when the sale is executed, but the company does not have the product);
- Contingent reduction;
- Increased business scalability;
- Consumer satisfaction.
And how to implement the fulfillment system ? According to virtual business specialist Vinícius Guimarães, in an article published on the Escola de Ecommerce website, just follow the guidelines below:
- “Have a robust e-commerce platform — A good e-commerce platform must be able to integrate with ERPs, APIs and inventory control software.
- Manage your inventory well — Products must always be available, packaging must ensure product integrity, and delivery deadlines must be met.
- Have good service channels — At all stages, it is necessary to ensure that consumers understand what stage their purchase is at, especially in tracking during shipment and after-sales.
- Outsource the workforce — Depending on the volume of sales, relying on a third-party company can make the logistical fulfillment process more efficient. If this is the case, look for references and companies specializing in the subject. This type of practice generates less costs than hiring new employees. Hiring the outsourced service can also be done during seasonal periods such as Christmas and Black Friday, for example, when sales are higher.
- Segment the SKUs — In order not to create confusion with the SKUs (product codes/references) it is necessary to separate them all by brand. This process facilitates the identification of the product when assembling the order placed in the store and also reduces costs for the company.
- Define KPIs for fulfillment — Defining metrics is essential for you to be able to measure the results of your fulfillment strategy. It is important to measure the number of orders received by the store and the number of shipments made per period, as this is the only way you will have valid information about the proper functioning of the fulfillment system. Furthermore, it is important to observe the number of orders returned due to delivery failure, shipping error or defective product.”
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Sources: SmartHint, Hivecloud, Totvs, Escola de Ecommerce