What Order Fulfillment Challenges Do Logistics Companies Deal With?

By Logistics Tech Outlook | Thursday, July 09, 2020

Order fulfillment can cause some challenges in the retail sector because of the increasing growth of online orders.

FREMONT, CA: The retail industry is booming as the disposable income of consumers in developing economies keeps increasing. The primary driver of the retail sector is the higher market penetration of e-commerce. With the increasing number of internet users, the number of orders placed online through an e-commerce platform is growing exponentially. Products purchased through online channels need to be delivered from the vendors to the end consumers. This process is the entire process is known as order fulfillment. Order fulfillment starts when an order is placed and ends when the product is finally delivered. The method includes packaging, inventory management, billing, transportation, and delivery.

Top 10 Supply Chain Solution Companies - 2019Companies are investing in significant resources and technology on supply chain management and customer services. However, there remain substantial shortcomings in the order fulfillment process adopted by major players in the industry:

Incorrect order placement

If the orders placed are not monitored efficiently, the entire order fulfillment process might get affected, and the customer might not receive the product on time. Besides, the companies should provide substantial assistance to their customer, through their website or helpline services, in choosing the right product and services. Failing to do this also ends up affecting the order fulfillment process.

Inefficient inventory management

Large multinational companies invest heavily in technologies such as big data and supply chain management software to optimize inventory management. However, medium and small organizations struggle with inventory management, thus resulting in high demand products becoming stocked out. This impacts the order fulfillment process if an order is placed and the inventory is stocked out.

Delay in order fulfillment and lack of communication

Order fulfillment is a chain of the process which demands efficient communication, coordination between different departments, and quick turn-around time. Delay in one stage, such as packaging, might impact the entire order fulfillment process. Besides, shipping products to international or foreign destinations might complicate the communication process even further. Organizations can use business optimization software such as customer relationship management (CRM) to coordinate and communicate between different teams for a smooth order fulfillment process.

Check out: Top Logistics Technology Companies in APAC

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