Supply Chain Management: What Are the Types of Order Fulfillment?

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Your supply chain is among the fundamental elements of your business. Without its optimization, you are bound to lose loyal clients because of non-fulfilled orders and your goods to pilferage. Moreover, your stock might run out without you realizing it. This means coming up with a significant cash amount within hours to re-stock products you are not sure a manufacturer has or will take time to reach your warehouse.

One element that business consulting services for your Perth-based company will thus cover is the management of your supply chain. The foundation of this is order fulfillment. This encompasses the receipt of goods, their processing, and their delivery to your clients. The order fulfillment process generally starts when a client places an order and ends when they receive the goods. Nowadays, it also encompasses what happens if a client returns goods.

The following are the different order fulfillment categories for your supply chain.

In-House Fulfillment

With this alternative, your employees will handle all elements of your order fulfillment. These include the receiving of your goods, their storage in off-shore locations, and the delivery to clients. The in-house fulfillment model works best for established companies that can comfortably handle all steps of their supply chain. This option also allows these companies to protect their brands by managing their supply chain. Even so, it often only suffices for small order volumes. You can change to hybrid and outsourced fulfillment as your company grows and start handling large orders.

Outsourced Fulfillment

With this model, the shipping, storage, and delivery of your goods are all controlled by a third party. This works for companies without enough personnel or storage space, such as the big ones that have outgrown their available warehouse space and employee numbers. Outsourced fulfillment is also the leading choice for small home-based companies that only need a solution for the storage and delivery of goods. While it means not spending much on the storage of your products, outsourced fulfillment gives you minimal control over your brand.

Dropshipping

This option resembles outsourced fulfillment, but unlike the latter, it has no inventory to manage. A retailer, in this case, will not have the goods they need in stock. They will immediately order them from a supplier when a client places an order. The company you contract for dropshipping then picks them from a supplier and delivers to a client. This means you will pay only for what you sell. The dropshipping model is the perfect choice for startups and e-commerce stores.

Hybrid Fulfillment

Supply chain management concept

This type is a blend of dropshipping, in-house, and outsourced fulfillment. You might, for instance, opt to handle custom products that are assembled before transport in-house and use dropshipping for non-customized products or large ones you cannot store in your company. Hybrid fulfillment works for companies going through rapid expansion or looking for flexibility.

Your order fulfillment option from the above will significantly impact your clients’ orders. If clients have a negative experience with your deliveries, they are less likely to buy from you again or refer people to you. As such, consulting an expert on what works best based on your company’s specifics is essential for success.

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