How Order Fulfillment Works In American Business
Published by Fred at July 7th, 2010Order fulfillment is the process of fulfilling an order, and can include everything from delivery to distribution. It’s an act that major companies rely on third party logistics services in order to save money, time, and increase their business efficiency.
If you have ever ordered a completely custom private jet plane, you made use of an engineer-to-order logistics process. This process demands that the product be created and engineered at the factory. The parts are usually custom and not sold in large numbers. Other examples might include a race car that was built to order. This type of logistics is seldom used in anything but big businesses.
Not all the products you buy will be shipped to you. You probably already have computer programs, games, and applications that you paid for over the Internet. This is another type of logistics operation that is known as digital copy. Managing digital downloads with things such as piracy in mind is a difficult process that must be handled with attention to detail.
You can imagine the tough time that some retailers have in guessing what their supply and demand will be. This is a classic tale of made-to-stock logistics. In this operation, a retail store will try to forecast a demand for the product and buy it in advance. Whether or not the product actually sells is the defining moment. A proper forecast will avoid buying too much or too little inventory. New DVD releases are an example of MTS services that are used quite frequently.
Returning a product is necessary when it is defective. The Microsoft Xbox 360 is a golden example of why a return policy needs the proper attention to ensure minimal expenditures are observed with return policies. The product mentioned is notorious for failing, and thus, Microsoft had to enact a proper plan to repair the devices and then ship and receive the item. With an inefficient system in place, Microsoft could quickly lose thousands more in expenses.
Inventory is tracked in every business to calculate supply and demand, make forecasts, and to quickly find items when they must be shipped. Large warehouses will have electronic tracking systems to make the process easier. With the proper programs in place, finding a product and shipping it out only takes a matter of minutes even in a large warehouse. Compare this to looking at paper records and searching without confidence.
Final Thoughts
Order fulfillment is a service that is best expedited through the use of a third party logistics company. These services are found in every major city, and even in some smaller locations where business is conducted. Review several companies and take them up on a free consultation to see what they can do.
Learn more about 3PL and contract packaging.