Is Your Order Fulfillment Lean How Can You Tell
Order fulfillment best practices used to reduce bottlenecks, touches, and fulfillment cycle time are best done when they align with Lean Six Sigma (LSS) methodologies. Seeking an experienced order fulfillment and management authority can help you plan and implement best practices for your order fulfillment.
Lean may be described as a methodology used to create more customer value while using fewer resources.
Managers do these things daily. However, LSS practitioners have more tools, methods, and best practices which they deploy on a regular basis. It would be wise to seek out these resources to define issues and measurable improvements. Here’s a brief orientation:
In lean, the goal is to reduce waste – which can be defined as activities that consume resources but create no customer value. Adding manual pack stations ensures peak orders will be delivered on time, assuming there are no bottlenecks; but, if volumes are lower or arrive later than expected, it becomes waste. The labor cost is higher, but it creates no customer value. When pickers wait for people to manually fold and insert orders into “slapper” pouches at the pack station, that too is waste and creates no customer value.
Sometimes actions can detract from value. Such is the case when you have excess void fill in a box too big for the items shipped. Customers may perceive they are paying more for shipping and they may also be annoyed by the need and cost to dispose of void fill. If competitors are shipping in smaller boxes with less void fill, there is a noticeable difference that may cause customer defections.
When customers complain, there’s an opportunity to make improvements, but they may not complain about minor annoyances such as excessive void fill, irrelevant promotions sent with orders or failure to include a return ship label. If competitors present promotions with a discernible and sought-after difference, surveys indicate these actions will attract online customers.
Once non-value activities are addressed, time between steps is reduced where possible.
A bottleneck of orders backed up at manual packing stations is a good example. If competitive deliveries arrive when expected and yours do not, customers will notice the variance. LSS aims to reduce variance within each process.
A major beef company discovered that grocers would pay a price premium for shipments that are “cold, clean, correct, and on-time.” To make the process capable of delivering these attributes consistently, they commissioned an automated case handling systems to reduce variance in their process and deliver this value to the customer.
Low customer retention can cause revenues to be growing at a slower pace than overall eCommerce. Survey data indicates that those customers who have a negative experience do not return.
Order fulfillment competitive strategies must be informed by online customer value so needs can be anticipated and served profitably. If customers want personalized cards sent with gifts and your operation lacks this capability, they will shop elsewhere. If online shoppers are not buying from your organization, again the question has to be asked…why?
When your business is ready to take the next steps in improving order fulfillment and management – PSI Engineering has the expertise to help you plan and implement order fulfillment best practices into your organization. Contact us today.