What Is Fulfillment Management?

February 15, 2022

Inventory constantly moves around when it reaches a warehouse. It is touched by workers and equipment when it is going on to shelves, getting picked for orders, during packing, and when leaving the warehouse. To effectively manage each point in the process, many companies use shipping fulfillment services to gain a clearer picture about inventory levels, order fulfillment, logistical strategies, and return policies.

What Is Order Fulfillment Management?

When discussing order fulfillment, many people assume it deals with customers placing orders to available sales channels, such as online shops, over the phone, or in the store. The “management” aspect begins by supervising how products are picked, packed, and shipped. It also involves implementing strategies for when products return.

However, retail fulfillment starts long before the customer places an order. Order fulfillment management begins when the products are received at the warehouse. It involves proper management of inventory when on shelves, organizing it in the right way to improve item turnover rates, and picking products quickly when orders are received. It also involves packing products for orders, shipping the items to customers, and processing when customers send items back to the warehouse. Another important aspect of fulfillment involves managing the inventory data to ensure it accurately reflects inventory levels, sales history, and returns processing.

Fulfillment Systems & Strategies

A retailer’s fulfillment department may differ depending on various factors, such as their industry, the size of operations, where they store products, how customers place orders, and how shipments are handled. They may select one or several types of management systems:

  • In-House Services: This retail model involves all storage, picking & packing, and shipping that is done by employees within a company. A business manages the entire process from start to finish, and it typically stores the inventory in a warehouse it owns or leases. It takes charge of inventory levels, orders, backorders, receiving, and transportation.
  • Drop shipping: A retail store may select drop shipping when it does not plan to keep any inventory in stock. In this case, the retailer handles marketing the products — not the storage or shipping. Managing product orders, picking & packing orders, and shipping is overseen by the manufacturer or the company that obtains products from a manufacturer. Drop shipping may be ideal if a retailer does not have the storage capacity available or if the company is new and doesn’t have enough workers to handle warehouse tasks.
  • Outsourced Services: Outsourced services is another option for retailers that do not have storage capacity or enough workers. They can hire a third-party logistics company (3PL) to oversee receiving and storage of products as well as orders, picking, packing, and shipments. Outsourced fulfillment differs from drop shipping, as there is still inventory to manage with outsourcing. A 3PL will usually control and own the warehouses where the products are stocked.
  • Hybrid Services: This type of retail model involves using several of the other services as a customized solution. This strategy is ideal when certain products require different shipping methods. For example, a company may sell customized products that need to be assembled and shipped in-house. Yet, other products may come directly from suppliers and could be drop shipped to customers. 

The Importance of Fulfillment

Fulfillment services ensure that the right system is employed at the right time for specific products. It allows continuous improvements to be made to increase efficiency and minimize waste. A great order fulfillment process is designed to please customers while adding value to the services that are offered. If any part of the process fails or is inefficient, it may create bottlenecks and increased costs. Customers may also be dissatisfied with their ordering experience if products are late, never received, or damaged.

With fulfillment, a company can expand its operations on a global scale while keeping supply chain costs manageable. It can improve its marketing fulfillment to successfully please its existing customer base while bringing in new customers. A business can also be more competitive in its industry. It can adapt operations when any unforeseen issues arise to ensure that the supply chain continues to operate at full capacity.

AMS Fulfillment for Better Order Processes

For shipping fulfillment services, relying on the experts can provide unique advantages to companies of all sizes. AMS Fulfillment partners with our clients to offer expert workers, attention to detail, and responsiveness. We ensure that your supply chain operates at its most efficient level.

Our company has been in operation since 2002, and we have developed a company culture where we are committed to serving our customers, employees, and community. If you require superior fulfillment services for your supply chain and order fulfillment tasks, reach out to AMS Fulfillment. Contact us today to learn more.