How To Improve Order Fulfillment Efficiency: 7 Effective & Efficient Tips

By
February 23, 2024
5 min read
How To Improve Order Fulfillment Efficiency: 7 Effective & Efficient Tips

An efficient order fulfillment process is essential to keep pace with today's supply chain and logistics climate. At its core, to improve order fulfillment efficiency is to simultaneously streamline operations, reduce the time from order receipt to delivery, and improve customer satisfaction and loyalty. 

By prioritizing and optimizing order fulfillment, companies can ensure a seamless flow of goods to the end consumers, establishing a reliable and responsive supply chain fundamental to achieving outstanding business outcomes.

What Should Be Measured to Improve Order Fulfillment Efficiency?

Before we start on how to improve order fulfillment efficiency, it’s important to establish a benchmark at the onset to effectively measure any improvements going forward and identify areas of improvement. While efficiency metrics can vary from one warehouse to another, focusing on key performance indicators (KPIs) offers a framework to understand how well the present fulfillment process is managed. 

Some KPIs include: 

  • Fulfillment costs: All the expenses included in receiving and storing inventory, packing a product when the order is received, and shipping it to customers. 
  • Order cycle times: Tracking the duration from order placement to delivery completion
  • Labor productivity: The output of the workforce against the resources consumed

For more granular insights into operational efficiency, consider measuring order picking accuracy, the rate of return due to errors, and inventory turnover rates

Analyzing these warehouse metrics enables companies to pinpoint inefficiencies, drive business value, optimize the supply chain, and have an efficient order fulfillment process in place to meet the dynamic needs of their customers.

7 Tips to Improve Order Fulfillment Efficiency

For modern businesses, it's necessary to embrace technological advancements to refine inventory management strategies and enhance their logistics framework with the right tools. Here are seven tips to improve order fulfillment efficiency: 

1. Optimize Warehouse Layout 

Optimizing the warehouse layout is the first step to improving the flow of goods throughout the supply chain. An efficient layout ensures that the most frequently picked items are easily accessible, reducing travel time for warehouse staff. Identify high-performing products and prioritize ease of access to these items. 

To optimize your warehouse layout, consider implementing zone-picking strategies and regularly analyze order data to adjust layouts based on changing demand patterns. Vertical storage solutions can maximize space utilization, allowing warehouse workers to quickly access and retrieve products. 

2. Real-time Inventory Management

Effective inventory management enables businesses to maintain and communicate accurate stock levels to customers. Discrepancies in the actual stock levels can negatively impact a business's ability to process, pick, pack, ship, and fulfill orders efficiently.

Real-time inventory tracking plays a critical role in this process, providing visibility into stock levels and ensuring that orders are fulfilled accurately and promptly. By implementing a warehouse management system (WMS), businesses can automate inventory tracking, reduce errors, and streamline inventory control. 

To prevent backorders and partial order fulfillment, consider implementing strategies such as:  

  • Safety stock levels
  • Regular demand forecasting
  • Reorder point algorithms
  • Appropriate naming and labeling practices
  • Spot checks

3. Optimized Slotting

Order slotting strategically places items in the warehouse to minimize picking times and proactively address picking challenges. Best practices in slotting involve analyzing picking data to determine the most efficient locations for products based on their size, weight, and frequency of orders. 

Stakeholders must regularly review and adjust slotting positions to ensure that high-demand items are more accessible, reducing travel time for pickers. Account for seasonal variations in demand to adapt slotting strategies accordingly.

4. Streamlined Order Picking

In any given distribution center, order picking can account for up to 55 percent of operating costs. Streamlined order picking boosts the speed and accuracy of getting products from the warehouse into the hands of the end consumer. The choice of picking method—wave picking, waveless picking, small batch picking, zone picking, or order/discrete picking—depends on specific operational needs and product types.

  • Wave picking is structured and scheduled — it’s ideal for handling large volumes of orders with similar items.
  • Waveless picking adapts to real-time order demands, offering flexibility and continuous flow in dynamic environments.
  • Small batch picking groups small orders together, reducing travel time, and is suitable for operations with a high mix of small orders.
  • Zone picking assigns pickers to specific areas — it’s ideal for specialized handling needs and can be combined with other methods for efficiency.
  • Discrete picking, where orders are picked individually, suits high-value, large, or custom orders where accuracy is a priority.

Choosing the right picking method involves assessing your order profiles, product types, and fulfillment goals.

5. Efficient Packing and Shipping

When it comes to efficient packing and shipping, there are three primary aspects that businesses have to consider to improve order fulfillment processes.

  • For packing and shipping processes, automation plays a critical role. Automated systems can select the optimal box size, generate and print labels, and even pack orders with minimal human intervention. This reduces the time and labor involved and reduces the potential for errors.
  • Selecting the right shipping carriers and services influences both delivery speed and cost. Businesses should evaluate carriers based on their delivery times, costs, and reliability to find the best fit for their shipping needs and customer expectations.
  • Minimizing packing materials and optimizing box sizes are key strategies for reducing waste and shipping costs while also enhancing sustainability efforts. Choosing the right size of packaging ensures product safety during transit and reduces excess material use and freight costs.

6. Utilizing Technology for Order Tracking

Implementing an integrated order tracking system enables businesses to provide customers with real-time updates on their order status from the moment an order is placed until it's delivered. This encourages transparency in the bid to improve order fulfillment processes and increases customer satisfaction by setting clear expectations for delivery times.

Integrating the right technology into the fulfillment process allows customers to stay informed every step of the way, reducing the need for customer service inquiries and increasing trust in the brand. Moreover, it provides valuable data for businesses to analyze and optimize fulfillment strategies and choice of vendors.

7. Defined Communication Channels

Improving internal communication between sales, warehouse operations, and customer service departments enables businesses to anticipate and resolve issues more rapidly, align inventory levels, and coordinate delivery expectations. Centralized communication is the key to implementing a single source of truth and ensuring everyone is on the same page regarding order status and customer queries.

Best practices to establish defined communication channels include strategies such as regular alignment meetings, shared performance metrics, and integrated technology systems. Clear, consistent communication with external partners ensures that inventory is replenished on time and orders are dispatched and delivered according to schedule.

Hopstack Order Fulfillment Software

How to Improve Order Fulfillment Efficiency with Hopstack

Hopstack improves order fulfillment efficiency through its intelligent and guided pick, pack, and ship operations to:

  • Reduce order lead times
  • Boost throughput
  • Improve labor productivity.

With smart picklists, guided picking workflows, and seamless integration with advanced picking technologies, Hopstack ensures accurate and efficient order processing. The platform's optimized packing solutions and comprehensive shipping carrier integrations further streamline operations, minimizing packing material consumption and simplifying carrier selection. 

Schedule a demo today to discover how Hopstack can integrate with your existing processes to improve the order fulfillment process and increase efficiency.

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