How to optimize order fulfillment
September 2, 2022
Optimizing fulfillment reduces the number of man-hours it takes to fill orders. And that can save your business money. It also helps your team efficiently and accurately get orders out the door.
Getting the most out of your fulfillment means auditing your warehouse and processes. When you do, you’ll evaluate aspects of your labor, facilities, workflow and procedures, and software.
Goals for Optimizing Fulfillment
1. Reduce the number of times a human has to touch a product and footsteps a person must take to fulfill the order.
Cutting down these things reduces the amount of time each worker needs to pick and pack each order. This lets you schedule fewer workers, or simply get much more productivity out of the same workers.
2. Focus on the things you can change.
For example, maybe you’re paying more for workers because of the labor market near your warehouse. You can’t change the labor market, but you can rearrange your warehouse to require fewer workers.
3. Prioritize optimization for fast-moving products.
Sort your inventory by picking size (pallet, case, or piece). Then classify the products by how fast they sell — fast, medium, slow, and very slow. Did you know that 80% of your sales probably come from your top-selling 20% of SKUs?1 If changes seem overwhelming or are slow going, concentrate on making the changes that affect your top-selling 20%.
5 Steps to Assess Your Fulfillment2
Use this free fulfillment audit checklist to guide your assessment. It goes in depth
how to evaluate your labor, facilities, workflow and procedures, and software.
1. Do a walk-through.
Pay attention to more than just how orders are picked. Note where workers are delayed and bottlenecked. Where are they taking extra steps to get the product and bring it back? Pay attention to lighting, general cleanliness, morale, and pace. Clean, well-lit warehouses are more efficient. And they’re safer. Morale and pace can give you an idea of how your teams are faring.
2. Gather data.
Gather order accuracy, customer service complaint, order turnaround, and inventory control reports. Add in any quality assurance reports you’ve commissioned, such as secret shopper reports and customer satisfaction surveys. The data should give you an overall picture of any places your fulfillment is lacking. In step 5, you’ll analyze the data you’ve gathered.
3. Interview staff.
Ask your team leaders about their ideas for growth and efficiency and then talk to the workers on your warehouse floor. They’re the boots on the ground. They see where problems are.
4. Analyze reports and benchmark.
It’s time to dive deep into the data you’ve gathered. What conclusions did you find? You’ll also want to use outside benchmarking to see how your company is performing. Compare your stats to companies of similar size that sell similar products.
5. Make recommendations and take action.
Write a report with your conclusions and suggested changes. Break changes down into detailed action steps. Sort your changes. Put the ones with the most impact on your business first and implement improvements slowly. It helps reduce disruption and lets workers get used to changes. Assign someone to be accountable for each step, provide an expected completion date, follow up on changes. You’ll want to see what worked and what needs improvement.
