Ecommerce Fulfillment Center Assessment: A 12-Step Guide to Improve Operations
Most ecommerce fulfillment centers process in-stock orders within a day, achieving inventory accuracy rates up to 99.98%. Improving Inventory Management Achieving an inventory accuracy rate of up to 99.98% is a realistic target for fulfillment centers. Automation with AMRs enhances efficiency, flexibility, and order accuracy, while 3PL partnerships improve sh…
Most ecommerce fulfillment centers have streamlined their processes to the point where in-stock orders are typically processed within a single day. However, achieving high inventory accuracy, maintaining efficient operations, and managing evolving business needs require a structured approach. This guide outlines 12 steps to enhance fulfillment center operations.
Improving Inventory Management
Achieving an inventory accuracy rate of up to 99.98% is a realistic target for fulfillment centers. Maintaining slotting based on one week's average sales is a crucial strategy to ensure that the most frequently ordered products are readily available. By concentrating on the top 10% of fast-moving SKUs, businesses can streamline inventory management, ensuring that these items are always in stock and reducing the likelihood of stockouts.
Order volume should not be the sole focus when assessing fulfillment efficiency. Other metrics, such as the accuracy of inventory and the speed of processing, are equally important. An efficient inventory system allows businesses to balance between carrying costs and service levels, ensuring customer satisfaction while minimizing excess stock.
Deciding Between Self-Fulfillment and Outsourcing
Choosing between self-fulfillment and outsourcing is a critical decision for any ecommerce operation. Self-fulfillment can provide greater control over the fulfillment process and potentially improve profit margins, especially for lightweight items. In contrast, outsourcing is often more suited to heavy or oversized products, where the logistical burden can be significant.
Internal fulfillment offers direct oversight of packaging and presentation, which can be crucial for brand consistency. However, when fulfillment tasks consume two or more hours daily, or when leaders find themselves overwhelmed by operational demands, it may be time to consider outsourcing. Outsourcing can relieve the logistical burden, allowing companies to focus on core business activities.
Benefits of Partnering with 3PL Providers
Third-party logistics (3PL) providers can significantly enhance fulfillment operations by improving shipping efficiencies and reducing outsourcing barriers. Geographic expansion through 3PL partnerships can lead to faster customer deliveries and improved loyalty. These providers offer flexibility to accommodate demand spikes and can reduce transit times through their distributed networks.
For businesses experiencing fulfillment challenges, 3PLs can provide a scalable solution. The transition to outsourcing should be initiated during a slow season and accompanied by thorough documentation of existing processes to ensure a smooth handover. Regular check-ins with the 3PL partner are vital to maintain operational alignment.
Embracing Automation in Fulfillment Centers
Automated Mobile Robots (AMRs) are becoming integral to modern fulfillment center design. These robots navigate warehouses dynamically, augmenting human workers and improving labor efficiency. AMRs can increase order accuracy and provide flexibility without necessitating major infrastructure changes.
To integrate AMRs effectively, fulfillment centers must evaluate aisle widths and docking areas, ensuring space optimization. Fleet management software is essential for coordinating AMR operations, and ongoing support, alongside software updates, is crucial for maintaining performance. AMR dashboards offer real-time insights, aiding in operational decision-making.
As businesses evolve, their fulfillment operations must adapt to increased complexity. The maturity of fulfillment processes often correlates with business growth, progressing from founder-led fulfillment to small in-house teams and beyond. Whether opting for self-fulfillment or outsourcing, businesses must continuously assess their needs and adapt their strategies to maintain efficiency and customer satisfaction.