Ecommerce Fulfillment Center | E-commerce Warehouse
Ecommerce Fulfillment Center | E-commerce Warehouse
Ecommerce Fulfillment Center / E-commerce Warehouse
The stupendous growth and expansion of the e-commerce sector mean there is ample choice for the customer and this directly translates to a demanding customer who seeks the best service from a brand. Such a scenario makes it imperative that e-commerce brands leave no stone unturned in providing value and satisfaction in a time-bound manner to the customer.
This can be ensured if an e-commerce brand pays close attention to two critical components in the e-commerce ecosystem namely order management and warehousing. An e-commerce system kicks into action as soon as the order is received on the portal, which is then directed to an online fulfilment centre or ecommerce fulfillment warehouse and is delivered to the customer.
Amongst this chain of events, the fulfilment centre plays a pivotal role in ensuring the timely delivery of the order. And the best way to ensure the streamlined functioning of an e-commerce fulfillment center (also called online fulfilment centre) is through standardizing critical processes through Standard Operating Procedures (SOPs). This write-up is an attempt to interest readers on how to bring standardization and incorporation of SOPs into processes in a fulfilment centre or fulfillment warehouse for ecommerce companies. Let’s understand the critical areas of fulfillment management process, also called, ecommerce warehouse process or ecommerce fulfillment process:
- Inbound Operations: This is the manner in which an online business receives stocks from external sources or manufacturers into the ecommerce warehouse or the ecommerce distribution centre location. Upon arrival, there is the registration of the stock with a barcode scanner. This is followed by quality and quantity checks of the stock from where it is transferred to the respective bins in the e-commerce warehouse. Apart from these procedures, there can also be other paperwork like purchase order (PO), gate entry, inbound transfer order, supplier invoice, sales return order, and so on. All this paperwork is vital to the tracking of inbound goods. But at times, these can become cumbersome unless there are standardized processes in place with SOPs. Through standard operating procedures for ecommerce warehouse operations, the entire mechanism becomes more streamlined with minimal room for error or lapses.
- Outbound Operations/ Ecommerce Order Fulfillment Process: The outbound operations is focused towards the sales order fulfillment process steps which includes, receiving orders, generation of a pick-up list, and the ordered items are picked-out from the respective bins. These are later packaged and dispatched to the respective customers. For smooth functioning of the outbound operations, companies must choose the right distribution networks, maintain a robust inventory monitoring system, and should ideally have the maximum number of delivery options. The ecommerce order fulfillment process steps may vary as per the degree of automation implemented within order fulfillment process supply chain management with the help of warehouse management software for ecommerce and ecommerce warehouse SOPs. Once the order is delivered the inventory management system automatically makes real-time adjustments to the inventory levels. This long list of processes can be standardized using SOPs to ensure the seamless working of the outbound operations.
- Product Returns: This is one of those crucial areas with the ecommerce order management process flow that helps an e-commerce brand earn trust and drive sales in the long-term. The faster an e-commerce fulfillment system works the earlier the customer would get a refund. Also, certain e-commerce brands only allow the return of certain categories of products subject to approval from sellers. In such a situation, it becomes essential that the customer remains updated on the status of the return through customer service channels. All these processes have to work seamlessly to make returns efficient that will keep the customer satisfied. By having standardized SOPs, any gaps in the return process can be mitigated, and the overall efficiency can be improved. This process is very crucial to build customer trust and brand loyalty.
- E-commerce Warehouse Layout: Improving the operational efficiency of e-commerce warehouse operations is directly dependent on 03 major factors i.e. ecommerce warehouse management system, SOPs (Standard Operating Procedures) and the ecommerce warehouse layout design. Practices like warehouse slotting and slotting optimization are the common practices for improving warehouse efficiency. Warehouse slotting refers to the concept of finding an appropriate storage location for each commodity while slotting optimization allows the staff to pick items from the ecom warehouse quickly to be delivered to the customer in the fastest possible time. Besides this, there are other processes like room management, optimal solutions to aisle layout, and operation area workflows that are known to improve efficiency across the board. Also, you need to be knowledgeable about shelving options that can improve productivity by a large margin. SOPs can be incorporated right from the layout design stage to get the maximum output during ecommerce warehouse setup.
Role of SOPs in E-commerce Fulfillment Center
- Improves Overall Operations: By incorporating SOPs into the running of a fulfillment center, the e-commerce brand can reduce the existing error rates and to a large extent can improve the productivity among the staff working at the fulfilment centre.
- Defining KPIs and SLAs: SOPs can be integral to the creation and achievement of KPIs associated with the online business. Moreover, SOPs can streamline the creation and adherence to service level agreements (SLAs) by internal and external stakeholders associated with the business.
- Reduce Negative Customer Reviews: With the streamlining of the warehouse for ecommerce operations through SOPs, the chances of negative reviews from the customer are brought to the minimum and the probability of them converting to repeat customers remain quite high.
- Implementation of ecommerce warehouse management system: E-commerce WMS software implementation fails when the To-Be processes are not defined after Gap analysis within the As-Is process. Example: SAP order fulfillment process flow must be mapped with the As-Is process to identify the gaps. These gaps must be mitigated with SAP ensuring the new process implemented with SAP is suitable to business operations and team is trained to implement it. Thus, writing SOPs is the first step towards implementing WMS.
Why YRC for Creation of SOPs for eCommerce fulfillment center?
YRC as a consultancy comes with extensive experience of having helped clients in more than 25 different e-commerce niches. This makes it possible for us to create customized SOPs suited to your needs. We are especially known for creating system-dependent SOPs that require minimal manual interventions. In addition, we make it a point to create SOPs which are well-articulate, easily accessible, and system-integrated. This makes the incorporation of our SOPs into the existing IT systems quite easy that translates to visible results on the ground. Overall, our SOPs are created by academically trained domain experts who come with hands-on experience in creating and running successful e-commerce operations.
How to improve order fulfillment process?
Key considerations to streamline Ecommerce Order Fulfilment Process:
- Inbound Process: Inbound process until putaway process is very critical to ensure the order fulfilment is carried out without errors. Wrong or poor systems for putaway can lead to order delays, wrong product delivery and orders received for out of stock items.
- Outbound Process: Outbound process until last mile delivery process has to be carried out on-time because outbound process starts when customer order is received. Any delay in the outbound process leads to delay in order, thus resulting in customer dissatisfaction.
- Inventory Management: Real-time inventory not available on the online sales channel is the root cause to most problems faced in order fulfilment which results in customer dissatisfaction. Eg: Out of stock items still visible for purchase, damaged items being sold online, wrong items description shown online, etc. Thus inventory management processes need to be aligned to avoid order failures.
To know more about how to improve your order fulfilment process, get in touch with YRC Experts. Click here.
How ecommerce warehouses work?
Lets understand this with help of e-commerce warehouse process flow, as follows:
- Inbound Process: Once the purchase order is placed to suppliers they shall deliver the stock to the warehouse. Once the stock is received at the warehouse, an inbound process shall start which includes: Gate-entry, GRN, QC and Put-away. After put-away the Inbound process is completed and all your quality checked approved stock is ready to be sold online. With help of inventory sync between ERP and website platform, the stock is visible online for selling immediately after put-away is completed.
- Outbound Process: Outbound process is triggered with customer order. Online orders are notified at the warehouse with the help of OMS (Order Management System). The warehouse team shall start the item pick, pack and delivery process.
- Last Mile Delivery & Returns: It’s important to keep a track of orders which are successfully delivered to customers and orders which were returned due to customer non-availability. Managing returns is very critical because this has to be communicated to the customer care team and take actions as per return policies.
To explore “5 Simple Tips for ECommerce Inventory Management”, click here.
Steps for ecommerce warehouse setup ?
Key steps for Ecommerce Warehouse Setup:
- Layout Planning: This includes Architectural layout and functional layout. Functional layout is prepared by ecommerce experts while architectural layout is prepared by architect or a structural engineer. Click here to learn the “7 Steps to Design E-Commerce Warehouse Layout”
- Business Plan: It’s important to do feasibility checks on the investment and its effect on the overall business ROI. Key consideration is also to analyse whether outsourcing to an 3PL warehouse operator would be beneficial or setting up inhouse ecommerce warehouse would be required.
- Warehouse Civil work and Interiors Setup: Depending upon the state of infrastructure, the setup needs to be planned well in advance to ensure the operation can start soon.
- SOPs & Systems: IT systems i.e. WMS or an OMS software is a must which needs to be integrated with the website and your customer service software. Along with the software, defining SOPs for Order Fulfilment for warehouse and customer service team shall be required, as both the team shall work in tandem toward order fulfilment and order return management.
- Last Mile Delivery Partners: On-boarding LMD partners/ courier partners would be required to complete the process. Planning shall be required even for first-mile, mid-mile deliveries along with last-mile delivery process.
If you are confused about the size requirement for ecommerce warehouse, checkout the video curated by YRC on “6 Simple Steps to Determine E-Commerce Warehouse Size”. Click Here.
What are the steps in the fulfillment process?
Key steps in fulfilment process:
1st: It starts with Order receiving at the warehouse via Order Management System
2nd: Start the pick process of all the items within the order. This can be done for multiple orders together.
3rd: Pack the items as per defined guidelines. Ensure the packing is done in a way, so that the items are not damaged or distorted when it reaches the customer/ end user.
4th: Notify to collect goods for delivery to the last mile delivery partners
5th: Handover to courier partners/ last mile delivery partners, when they arrive to pickup
6th: All items within the order once delivered to the customer, the process shall be considered as completed.
Plan for deviations such as:
- Ordered items out-of-stock
- Returns by customers
- Undelivered returns
- Unpaid COD orders returns
- Order delays
What is order fulfillment in supply chain management?
Order fulfilment is the process which includes the following:
The main objective of the order fulfilment process is to deliver the order within the timelines committed.
It starts from receiving the order from online websites or sales channels and it ends when the product ordered is delivered to the customer.
How to run an e-commerce warehouse?
E-commerce Warehouse can be managed by implementing following key prerequisites:
- Defining the warehouse staff structure: It’s important to define the team members required at each grade/ level with their reporting structure, KRAs and KPIs. It’s important to define the structure as per expected inbound and outbound volumes, also it must be financially feasible, which needs to be validated within the financial business model.
- Implementing WMS: Warehouse Management System is essential to manage the inventory and warehouse processes.
- SOPs: Defining SOPs (standard operating procedures) in a simple and detailed format is important especially for entry level / blue collar staff. Video SOPs are highly recommended along with well-documented SOPs.
- Audits & Training: Implementing systems are done effectively, but these systems shall be maintained as per required standards with help of regular training & Audits.
Abracadabra Today, even 5-year-olds know how to search on Google or YouTube using the voice feature enabled on smartphones. All they need is an unlocked smartphone connected to the internet. Measured today, maybe the adults will lag in statistics on this. However, the...
Artificial Intelligence (AI) is a term we have known for a long time. However, this word has been buzzing more often than ever. The word immediately brings the image of an elegant glass robot to our minds. We also know that such conceptions are insufficient to...
Why Store Layout Matters in Retail The layout of a retail store carries several internal and external business implications. Layout is an important physical aspect of branding efforts. It creates an opportunity to create the desired atmosphere in stores thereby...