Best Practice for Outsourced Warehousing Automation and Fulfillment
Growing companies are increasingly outsourcing their inventory storage and fulfillment functions to third party warehousing and fulfillment partners (often referred to as integrated 3PL providers). The benefits are many and most obviously for the fact that warehousing and logistics are not core business functions, and thus not core competencies.
Why Outsource Warehousing and Distribution Fulfillment Services?
Quite simply, to increase business operating effectiveness and efficiencies and if it didn't accomplish both, it would not be a worthwhile proposition. In particular, greater effectiveness means greater accuracy. Things are done "right" and "on time". In business, that translates into bottom line savings.Efficiency means human intervention is kept at a minimum and more tasks are highly automated. The degree to which tasks are automated drives efficiency and effectiveness. That is right, well executed systems automation drives both business efficiency and effectiveness.
E-Commerce and E-Fulfillment in the Amazon Age
You don't have to be Amazon to automate the process of fulfilling sales - from warehouse floor to your customer's door. Today, many leading Canadian and US courier services are as much in the business of helping you automate your order fulfillment as 3PL warehouses are eager to take your orders electronically into their Supply Chain Management Systems (SCMS) and generate courier/carrier specific labels to fulfill your orders. It is becoming increasingly rare that organizations - both mid-size and larger - are investing millions in capital for their own in-house IT infrastructure platforms, let alone investments in physical capital for establishing a distribution centre. The truth is, for a "background" function such as this, companies are increasingly willing to have a third party fulfillment partner.Every company will have their own process flow for handling incoming orders but the broad steps are:
- Win order
- Communicate order to 3PL warehouse
- Pick/pack inventory
- Create shipping labels
- Ship via courier/carrier
- Confirm with tracking information - order fulfilled
Along the way there are details that will be unique to individual businesses. The level of integration between you and your warehousing and fulfillment is critical for the reasons noted earlier - accurate, timely order fulfillment feeds the bottom line. Inaccuracies take a long time and human intervention to sort out.
Selecting a Third Party Warehousing and Logistics Partner
There are many things to consider when selecting an outsourced warehouse to take on your storage and fulfillment needs. Everything from cultural/people fit to location to value added services provided. Automation and efficiency though, should be among the top considerations if you are operating a business that is on a growth trajectory. The most scalable systems and partners will prove to be those that will support your growth in the mid to longer terms.