The growing influence of Amazon is sending a ripple effect through e-commerce, impacting customer expectations and leaving merchants and warehouses scrambling for ways to keep up. With this changing environment, sellers are looking to stay relevant with their existing customer base and to continue expanding in a way that protects their business and their margins. With limited time and resources, this leaves many asking for the best way to use metrics and business intelligence for decision-making, especially for identifying and implementing efficiencies.
There are three main areas e-commerce merchants and warehouses can focus on to meet the changing two-day delivery expectations: pay increased shipping costs to meet service level; increase geographic footprint for closer proximity of major cities to allow for more efficient distribution; and increase operational efficiencies to reduce the time from order processing to delivery.
While the first two options are typically cost-prohibitive for most merchants, the third option, driving efficiency in the end-to-end order fulfillment process, is viable for most merchants looking to improve operations and protect margins. To that end, order cycle time may be the most useful metric for examining and optimizing fulfillment.
To do so, it’s imperative to begin by identifying the key measurable components of cycle time. Cycle time can be broken down into a few specific measurements, such as:
- Order processing time
- Location-based order routing
- Shipping service selection time
- Pick/pack time per employee
- Label creation time
With definition around the data required and initial measurements obtained, the next step is to figure out what to do with this data. It’s key to look for areas within the overall process where rework is occurring, execution is manual and repeatable, bottlenecks are present, or more intelligent decisions can be automatically made. Let’s start by digging into:
Systems – One of the most impactful investments for cutting order cycle times is within the technical system(s) used throughout the order fulfillment process. Are you using multiple e-commerce platforms for selling with automated order import, or are your systems isolated? Pick/pack quality control, inventory, order management, carrier selection, and label print can be fully integrated, and their handoffs automated, to dramatically cut manual order processing times and increase throughput. If you fulfill from more than one location, investing in a system to intelligently route orders to the fulfillment center where you’ll optimize service level and shipping costs can have significant ROI.
Workstations & Scalability – Having a multi-carrier workstation with the right custom automations in place can be a game-changer for cycle times, especially as seasonality changes the volume and pressure on your team. A single order management tool can automatically pull orders from all sources, make optimal shipping selections, and print labels, regardless of carrier, at every packing station. In addition, a consolidated system helps to quickly and efficiently add workstations as demand changes. Migrating from single to multi-carrier workstations adds significant workforce efficiencies and cuts training times and IT costs.
Box Sizes & Packing – Limiting the number of standard box sizes and how those boxes are chosen can speed up the packing process. Are box assignments prescribed by your order management system based on the items in the order rather than the person packing the shipment? Are you using programmatic rather than manual QC processes to speed up quality control times?
Inventory Management – Staging inventory within the warehouse can have a significant impact on your ability to efficiently fulfill orders. Are there travel route bottlenecks you can alleviate that otherwise suppress the potential number of orders your workers can pick in a day? Are there opportunities to relocate your most commonly picked items near your packing station? Tweaks to your organization and floorplan can increase throughput, especially during seasonal peaks.
Label Print Speed – Every second matters. A system needs to print labels efficiently. There are ways to automate aspects of the label process to accelerate throughput. For example, some multi-carrier solutions provide the ability to automate the shipping selection and label print through a single scan.
There is no one-size-fits-all solution for increasing throughput across all e-commerce merchants and warehouses. The key is to understand your gaps as well as you do your strengths. Investing in the right systems to add efficiencies will pay for themselves. Once those systems are in place, you’ll be freer to focus your time and energy on your business strengths. There are many great technology and consulting partners who are focused on maximizing your operations. With the right partner to optimize your cycle times, you can stay focused on what makes you unique while fulfilling more orders (faster!), keeping business strong, and making customers happy.
Dominic Lozano is General Manager of ShipWorks, the leading enterprise shipping software program for serious and successful e-commerce merchants and warehouses. ShipWorks software and order fulfillment solution helps online retailers and warehouses organize, process and ship their orders quickly and easily from any PC. In 2019, ShipWorks launched The Works, a simplified user interface for processing labels for a single piece shipping workflow.