5 Reasons Why You Must Automate To Protect Your Profits
When it comes to order fulfillment, order efficiency should be the top priority. As eCommerce orders increase, e-Tailers have to be ready to meet this growing demand and be ready to exceed customer expectations during order packaging and delivery. The post pick, pre-ship area, commonly known as the last 100 feet of the order fulfillment line can have the most significant impact on your distribution centers’ performance metrics.
- Cost per order
- Order error rate
- Repeat order ratio
- Return order rate
- Order throughput rate
As eFulfillment companies find themselves struggling to keep up with the packaging of their customers’ orders; most still perceive automating their order fulfillment process as a high risk initiative. Many believe automation may increase order throughput marginally but it comes at a high cost that many believe will not improve their bottom line. Automated systems that integrate seamlessly on existing conveyor lines in these companies distribution centers’ cannot only enhance the original capital investment, but provide a handsome return on investment.
Five reasons why automating your order fulfillment line is Great for profit.
Reduces Bottlenecks and Operation Costs
Order fulfillment lines that flow seamlessly with minimal interruption increases order throughput which gets your customers orders out on-time. When online shopping was first introduced, an 80% on-time delivery rate was acceptable.* Today, on-time delivery is measured in “fractions” of a percent, such as 99.1% on time.
Many eCommerce companies have adopted a same day delivery strategy to stay competitive in their markets. This move forward strategy can have a crucial impact to these companies bottom line. The longer a customer has to wait for their purchase/order the less likely they will be satisfied with their order. The longer the delivery time the higher the cost per order.
Optimizes Labor Efficiency
Labor is the highest expense for most types of industries. Many eCommerce companies struggle with controlling labor costs effectively. When eCommerce companies automate their order fulfillment lines, especially pack stations, they require less manual labor, in particular part time labor, to fill customer’s orders.
Companies that have integrated automated systems within their day-to-day operations are experiencing increased productivity compared to those companies who have not. The direct and associated cost to manage labor decreases dramatically when automated system are integrated in D.C.’s which has an immediate impact on profit per order metrics.
Conquers Order Fulfillment and Peak Orders with 100% Accuracy
Has anyone ever got your drive through coffee order wrong? Did you drive back to the coffee shop to get another? The reality is that most of us don’t. The reality in the world of on-line shopping is that most customers will not bother buying from you again if they receive the wrong order.
The fact is, shipping incorrect orders to customers is costly. As demand for eCommerce orders continues to increase year over year, order delivery performance is becoming a benchmark measurement for many companies. To err is human; NOT so in this “fast paced”… “get it right”… world we live in today. The potential for errors to occur during manual packaging of orders at the pack station and during periods of peak order fulfillment is threefold. The automating of order fulfillment lines reduces human error rates, which increases customer satisfaction.
A fully integrated order fulfillment solution that includes video error monitoring can provide operations personnel peace of mind during fulfillment cycles. It reports errors in real time thereby minimizing the risk of wrong order deliveries to your customers.
Increases Repeat Orders
“What’s in it for me?” Most people love deals. The challenge is how to do it profitably during the packaging of orders.
Most eCommerce companies know the importance of placing marketing collateral and coupons during the packaging of their customers’ orders to prompt repeat sales. When combined with excellent order delivery; providing customers with an incentive toward their future purchases is essential to creating a loyal customer community. eCommerce companies cannot do this today; profitably. However most would like to do this to improve their competitiveness in the marketplace.
Based on time studies, manually it takes more than 30 seconds per order to print, fold and insert/apply the packing slip and marketing collateral to customers’ orders. Fully automated pack station systems integrated on existing conveyor lines can seamlessly print, fold and insert packing slip, personalized coupons, rebate offers and product samples with customer orders to drive repeat sales. It can be done without compromising profit per order. This alone is a compelling reason to automate your order fulfillment line.
Decrease Stress… Yours AND Your Customers!
Where is my order? Getting orders out on-time can be stressful to both eCommerce companies and their customer’s, especially during peak orders. Most distribution centers with manual order fulfillment lines and manual pack stations experience high levels of stress during periods of peak orders trying to get the right order to the right customer on time.
Should an incorrect order arrive, most customers will only be happy to inform customer service personnel about their disappointment. Have you ever listened to “the good”, “the bad” and “the ugly” of customer servicecalls? Unhappy customers are all too happy to complain about your company to your competitor. They can threaten future business by communicating on web based “Product & Company” review sites. Too late, the damage is already done.
An Automated order fulfillment line that packages customers’ orders and directly conveys them to the correct shipping lane for delivery can minimize stress associated with order fulfillment. Automation serves to improve the process which in itself reduces overall stress.
Manual order fulfillment distribution centers are costly to operate and maintain. Most have non streamlined processes, miles of conveyors and equipment which impacts order quality and order delivery. The demand of Peak Orders alone can have a dreadful impact on a D.C.’s ability to deliver orders correctly, profitably and on time.
eCommerce will continue to grow as will the demand for faster shipping; manual labor and manual pack stations will not suffice. Automated eFulfillment distribution centers with fully integrated automated systems will increase order throughput even during peak order periods. Post Pick… Pre-Ship is the most often overlooked area that can improve profitability and throughput. This is the one area where automation can efficiently handle peak order volumes, same day shipments and value add service. This is where you MUST automate to protect your profits.
Contact PrintPSI to learn more about how automation solutions can help improve your bottom line.