Select Page

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.


Services Offered:

  1. SOPs Writing
  2. Layout Designing
  3. Warehouse Consulting
  4. E-commerce Consulting

FAQs

How to improve order fulfillment process?

Key considerations to streamline Ecommerce Order Fulfilment Process:

  1. 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.
  2. 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.
  3. 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:

  1. 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.
  2. 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.
  3. 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:

  1. 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”
  2. 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.
  3. 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.
  4. 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.
  5. 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:

  1. Ordered items out-of-stock
  2. Returns by customers
  3. Undelivered returns
  4. Unpaid COD orders returns
  5. 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:

  1. 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.
  2. Implementing WMS: Warehouse Management System is essential to manage the inventory and warehouse processes.
  3. 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.
  4. Audits & Training: Implementing systems are done effectively, but these systems shall be maintained as per required standards with help of regular training & Audits.

Related Blogs

How Hyper-Localization Helps Retail Jewellery Brands?

How Hyper-Localization Helps Retail Jewellery Brands?

Shoot for the Cut Is being a renowned brand enough to develop new markets or achieve growth and expansion in existing ones? In the retail jewellery sector, these feats are not easy even for established brands and businesses. Even a renowned jewellery brand may find it...

read more
Supermarket CX Improvement

Supermarket CX Improvement

CX is the New Super The retail supermarket industry is fiercely competitive. With the homogeneity of products (and services), customer experience is a key differentiating factor. A pleasant and superior shopping experience can help build a loyal customer base. With...

read more

We work only for Visionaries.

PROCESS AUTOMATION

The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.

VIDEOGRAPHY & PHOTOGRAPHY

No matter how good your product is, the customer would know only if it looks good.

Photography includes the following steps:

  • Cataloguing your products
  • Cataloguing your images
  • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
  • Choose the right camera & lens (You may also outsource the photography to a third party agency)

DIGITAL MARKETING

Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.

IT INTEGRATION

Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.

WAREHOUSE & LOGISTICS PLANNING

  • How many cities or countries you wish to sell in?
  • Where should your Warehouse be located?
  • Should you have one warehouse in each country or city?
  • Should you be having your own delivery team in your base city?
  • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
  • How should I manage the logistics if my goods are coming from different countries?
  • How should the goods be stored and barcoded?
  • How much space do I require for warehouse?
  • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.

 

At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.

UI & UX DESIGNING

This Step involves 03 distinct parts:

Part 1: Choosing the right Platform:

From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

Part 2: UX Designing:

“UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

“As per statistics, 68% of the customers abandon the carts before payment”

An interesting UX ensures the customer sticks on to the website for a longer time.

Part 3: UI Designing:

UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

If User experience is the bare bone, user interface wraps it up with an attractive cape.

At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!

SAMPLING & PRODUCTION

This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

Production Sample is made before the production which is the replica of what is going to be finally produced.

Once you are through with all this, you are good to go ahead & get your goods manufactured.

PRODUCT DESIGNING / SOURCING

Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

Product Designing / Sourcing can be done in several ways, as follows:

  • In-house Design Team
  • Freelance Designers
  • Outsourced Design Team
  • Ready Product Sourcing (From Manufacturer or Wholesaler)

At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

Sourcing includes fabric, trims, lining & all the raw material required to build the garment.

BRANDING

Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

It is an integral part to attract the target audience.

ORGANOGRAMS & SOP’s

Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.

CRITICAL PATHWAY

Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.

BUSINESS STRATEGY & BUSINESS PLAN

Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.

MARKET RESEARCH

Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.