Over the last few years, three major trends have transformed distribution in many diverse industries: e-commerce, cloud applications and mobile devices. E-commerce has blurred the lines between retailers, wholesale distributors and manufacturers. Cloud-based applications that manage e-commerce and enterprise resource planning (ERP) have lowered the barrier to entry for small- to medium-sized companies, and fueled an explosion of innovative products and high growth organizations. Mobile technology has transformed how customers order, and how goods are fulfilled from the store or warehouse. So what’s been the effect on order management and fulfillment processes?
Poor Integration Leaves Gaps in Automation
While companies are investing heavily in applications to support e-commerce, cloud-based ERP and mobility, these applications are not, however, tightly integrated and they often lack all of the features necessary to fully automate order management and fulfilment processes, especially across new fulfillment models. This often leads to pockets of manual work or gaps in automation, which creates labor-intensive clerical tasks, error-prone data entry and compromised customer service.
For example, it’s typically a manual process to re-enter orders captured by e-commerce applications such as BigCommerce, Shopify and Magento into ERP solutions such as NetSuite, QuickBooks or Acumatica. Similarly, in the warehouse, purchase order receiving and picking processes are often paper-based, which are inherently inefficient and inaccurate. The challenge in filling these types of gaps exists for small businesses and Fortune 500 companies alike. While small- to medium-sized companies often lack the IT resources or expertise, the huge IT departments at larger companies are often consumed by bigger projects.
The E-Commerce-to-ERP Divide
Image 3D felt the strain of disparate manual processes when a new e-commerce strategy led to the launch of a Magento website to sell directly to consumers. A business traditionally built at trade shows and through specialty stores, Image 3D creates 3D slide shows from customer photos and also sells the retro viewers you might remember from your childhood. When online sales began to grow rapidly, the lack of integration between Magento and QuickBooks became problematic.
It created an administrative bottleneck as orders had to be typed into QuickBooks and, when shipped, status and tracking information needed to be manually entered into Magento. Another issue was ensuring the integrity of addresses. When traditional wholesalers open up e-commerce channels, they start shipping orders in the thousands to consumers versus the smaller number of repeat orders for dealers. For Image 3D, integrating its e-commerce app into the order fulfillment process and validating addresses prior to streaming them into QuickBooks were powerful new capabilities.
Omnichannel Shakes up the Warehouse
For companies who take on an e-commerce strategy, supporting multiple fulfilment channels also has a huge impact on the warehouse. In other cases, companies “born” into e-commerce (i.e., sell only online since inception) find they need to expand fulfillment models as they attract attention from and become suppliers to large retailers. OYO Sports, a leading fan engagement company in the sports consumer marketplace, is such an example.
Targeting youth, fan and collector markets with both physical and digital products, OYO Sports has achieved tremendous growth selling both online to consumers and to specialty stores. This required, however, two different pick models in the warehouse to drive efficiency as consumer orders are high volume compared to lower volume specialty store orders.
For consumer orders, the company integrated warehouse and inventory operations with its NetSuite ERP to create a batch process where pack slips were all printed with shipping labels on 8.5×11” sheets. This allowed OYO Sports to efficiently pick multiple orders with one pass through the warehouse and pre-label for shipping. For specialty orders, it remained more efficient to pick orders one at a time.
More recently, ongoing growth has seen the company add large retailers who require EDI, and also have orders with hundreds of lines where picking takes hours or even spans days. This workflow was also automated through integration. Shipping rules and profiles were also adapted to streamline fulfillment as EDI orders required Advanced Shipment Notification (ASN) information, printing UCC 128 labels, and a mix of small package and freight shipment.
Agility Requires Integration
The trends affecting order management and fulfillment are forcing companies to be more agile and spurring investment in new technologies, but actual responsiveness lies in integrating underlying business applications to streamline e-commerce, warehouse and shipping processes. Other interesting products of integration include:
- Sending branded e-mails to customers at the time of shipment (many legacy ERP systems do not support this)
- Incorporating destination weather and temperature to select packaging and service options to protect perishable items
- Pack validation to increase order accuracy and capture box contents
- Wireless picking to streamline fulfillment
- Printing customer labels during picking with wireless Bluetooth printers
The possibilities are virtually endless! What are the tasks in your order management and fulfillment processes that require someone to carry out administrative work or make a decision that could be automated?
Brian Hodgson is VP Sales and Marketing at Descartes. He has over 20 years of sales, marketing, and business development experience. Brian has worked with hundreds of companies to apply enterprise software and process improvements to drive value and cost savings in their supply chain and logistics functions. He joined Oz Development in 2012, and is chartered with increasing customer value, expanding solutions, markets and driving growth. Brian has held executive positions in sales, marketing, and channel with Kewill, SupplyWorks, Eleven Technology and Computer Network Technology. He received his Bachelor’s Degree in Electrical Engineering from the University of Waterloo.