Order Fulfillment Services — No need to master a complex and evolving set of business operations
Order Fulfillment refers to the way that companies respond to customer orders. It involves a series of processes that are often initiated with a sales inquiry and generally ends with the delivery of a product to a customer. Here are some of the common services that are part of the overall order Fulfillment process:
- Warehousing (Receive, stock and store inventory)
- Kitting & Re-Packaging
- Order Processing (Order Entry, Order Acknowledgement)
- Pick & Pack
- Shipment & Delivery
Most companies, whether their customers are other businesses or consumers, fulfill their customer’s orders by outsourcing some or all of the services listed above. Why is that true? Because, we have found that when a company can buy good services from an outside supplier it is usually wasteful to go through the expense of mastering a complex and evolving set of business operations.
Companies that provide services that are part of the overall order Fulfillment process for other companies are referred to as Order Fulfillment Service (OFS) providers. Almost all companies experience at least some discrepancy between their sales forecast and the actual demand for their products. Therefore, in addition to providing the services they have been contracted to provide, OFS providers also work with their clients to provide flexibility and improve their forecasting accuracy.
To survive in a competitive market place, OFS providers, like every service oriented business, must focus on creating value for their clients. Many OFS providers accomplish that by becoming problem solvers for their clients and by offering technological innovations that can be leveraged across many users. In addition, OFS providers must have strategies to respond to the challenges associated with transportation management, scheduling, and effective inventory management.
Because of their understanding of logistics and distribution, most OFS providers are capable of helping their clients with both one-time projects and also with on-going programs. Often OFS providers will seek to take advantage of other types of expertise that they may possess in addition to their operational skills and their knowledge of logistics. A couple examples of other types of expertise that an OFS provider might be able to utilize to benefit their client is their expert knowledge of a particular vertical market or their understanding of marketing events and marketing promotions in general.
OFS providers that offer Pick & Pack services seek to leverage their physical space, processes, people, software, expertise, and equipment to efficiently provide their services. Because it is difficult to master Pick & Pack processes, not only can OFS providers who specialize in Pick &Pack provide better, more accurate service, they can usually do it faster and cheaper than their clients can provide those services for themselves. Although having state-of-the-art imaging and scanning technology certainly helps to minimize the number of inventory and picking errors, over the years in this business we have learned that nothing is more crucial to a successful partnership between a company and their OFS partner than communication. Communication between the primary contacts at each entity is the key. That personal relationship is shaped by the corporate cultures of the two organizations; cultures seeking to grow through innovation and organization have a great chance to succeed.
Tags: Fulfillment, Order Fulfillment
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