Clients depend on their 3PLs and order-fulfillment partners to execute their all-important logistics and distribution functions. Therefore, while selecting a distribution center, be sure to check their order execution policies so that they can execute your orders quickly.
Best practices for 3PLs and distribution centers to achieve rapid order fulfillment
Fuelled by the phenomenal growth of e-commerce players the world over, along with a global business eco-system where supply materials, components, and finished products are now shipped all over the world, the demand for logistics companies has also skyrocketed.
However, while looking for a suitable partner, check their business procedures, i.e., are they following best practices in running their operations?
Top 13 ways for order-fulfillment firms to deliver client orders quickly
1. Vendor Compliance Programme (VCP): At the very core of your relationship with your order-fulfillment partner is a Vendor Compliance Programme. A well-planned and suitably resourced VCP streamlines all aspects of a 3PL’s operations, improves all functional areas, minimizes cost, and creates customer satisfaction.
This enables a mutually efficient working relationship between your warehouse partner and yourself.
This includes integrating processes of all downstream vendors, forward integration with upstream stakeholders, and inculcating best practices down to the very smallest of functions (such as labeling methods and carton cost and design). All this goes a long way in establishing a solid client-vendor relationship.
2. Does your 3PL use a robust Warehouse Management System (WMS): The more your 3PL adopts the correct technology to optimize his order-fulfillment performance, the more efficient his operation will be.
A suitable WMS will improve system integrations, forecast demand-supply better, and optimize inventory management (etc.).
3. Record and measure: Unless a 3PL constantly analyses the critical KPIs that indicate the health of the business, he doesn’t have the correct pulse of his operations! Metrics that define its operating functions and provide a clear idea of “Planned vs. Actual” should be a constant focus area for all warehouse managers.
4. Does your 3PL deploy data-analytics? With all aspects of a logistics and supply-chain operation now being automatically recorded and available for analysis, make sure your 3PL has a comprehensive data analytics team.
If not, it will not gain the critical insights required to constantly improve and maintain high operating benchmarks.
5. Does your 3PL optimize its inventory management? Unless an order-fulfillment center follows cutting-edge policies with regard to inventory planning and movement, it will fall well short of achieving maximum efficiency. This, in turn, would not only hamper its operations but also result in inflated costs of operations. Some popular methods for distribution centers to check or improve their inventory policies include:
- Re-examine warehouse design for ease of access, flow, and space.
- Use clear labels for work areas, aisles, shelves, items, and safety protocols.
- Stock items are based on ABC analysis, so that fast-moving goods are accessed easily.
6. Omni-channel communication: This one may seem like a no-brainer but its importance cannot be emphasized enough!
A supply chain is a complex maze of numerous stakeholders, each performing a set of functions that are linked to the others. Inefficiencies at any point would disrupt the entire process.
Therefore, it is vital you select a 3PL that maintains an efficient omnichannel method of communication, including phone, Whatsapp, text messages, automatic notifications via popups (etc.). Designated teams must be responsible and accountable for the process of communication.
7. Does your 3PL offer workplace benefits to its workers? 3PLs, warehouses, and order-fulfillment centers are labor-intensive industries. They employ a lot of labor across all aspects of their operations. Full-time, part-time, or contracted, the teams work 24 hours a day and often battle the hazards of weather and traffic.
It is natural that these armies of workers seek to be recognized for the amount of effort they put in. In addition to financial rewards, be sure to devise and implement other employee programs (e.g. health facilities, retirement benefits, workplace celebrations) to make them feel valued.
8. Does your 3PL maintain efficient operating policies? Warehouse operations typically suffer from innate problems such as order over-processing, maintaining excess inventory, over-production, poor reverse logistics…the list goes on.
Such pitfalls result in inefficiency that affects its ability to deliver your orders quickly. Be sure to investigate your distribution partner’s operating policies.
9. Employee training: Don’t forget that whatever technology you use in your processes (and, however modern they may be) they are still being operated by your employees!
If fulfillment-center employees aren’t familiar with the systems that are in use, not only will they not be able to utilize them for best performance, but also create an atmosphere of confusion and inefficiency.
Check to see how well-trained and knowledgeable your 3PL’s workers are, the type of training programs they undergo, and whether their annual appraisals are linked to their training and skill development programs (etc.).
10. Schedule arrival and departure of shipments smartly: By setting up shipments to arrive and depart simultaneously, the warehouses can utilize labor, machinery, and time more efficiently. This enables multi-tasking and consolidates the loading and unloading of shipments, which ultimately results in cost reduction and improved resource utilization.
11. Take advantage of cross-docking: While setting up a cross-docking system by a 3PL isn’t cheap, its results are certainly worth it, and it pays for itself via money and time saved (especially for large fulfillment centers).
Cross-docking allows 3PLs to load products from one transportation vehicle/container to another and completely circumvents the need for storage/warehousing by reloading them directly onto the next vehicle.
This helps 3PLs reduce client order-fulfillment time.
12. Does your 3PL use dynamic-slotting? Look for distribution centers that arrange their inventory smartly by adopting dynamic slotting as opposed to the traditional batch-based process. Here, products are stored (locations within the warehouse, shelf levels, etc.) based on the next order to be delivered. Therefore, they can be loaded quickly and delivered quickly.
13. Evaluate regularly: Clearly, fulfillment centers and warehouses work at frenetic speeds. Therefore, it is imperative that its management team constantly examines its operational procedures against relevant metrics to ensure they are working at the requisite levels of efficiency.
Conclusion: Distribution centers and 3PLS are important business partners. While selecting one, make sure your potential 3PL adopts all the necessary best practices across cost, data, labor, and technology, such as the most advanced last mile delivery software.