What Does the Post-Pandemic Fulfillment Model Look Like?
With both just-in-time and just-in-case strategies posing challenges, approaching e-commerce fulfillment with these four best practices is the key in 2023.
Online order fulfillment used to rely on just-in-time (JIT) inventory practices, wherein predictive software leveraged historical data to identify optimal restocking times. This method allowed retailers to avoid overpaying for storage. The COVID-19 pandemic exposed a major flaw in JIT inventory philosophies as e-commerce sellers quickly ran out of inventory in the face of massive disruption to their resupply channels. This emergency brought warehouse stocks near to bursting.
COVID-19 restrictions have lifted, bringing some sense of normalcy back to the supply chain. However, consumer demand slowed in the face of record inflation as the global economy moves steadily toward recession. In response, retailers found themselves unexpectedly purging safety stock to make room for holiday peak season inventory.
With all this change, retail and logistics professionals find themselves asking the following question: What should my fulfillment model look like in 2023?
4 Best Practices for Online Order Fulfillment in 2023
JIT doesn’t work anymore, but just-in-case (JIC) has problems when paired with uncertain consumer demand. So, how can fulfillment centers meet customer demands without opening themselves to unnecessary risk? Here are some best practices that can help you ease into 2023’s next normal:
1. Optimize labor with technology. Fulfillment is a labor-intensive process, and long-time logistics professionals like to throw more bodies at problems as they arise. For example, fulfillment centers hire thousands of temporary warehouse workers to accommodate increased peak season order volumes annually. But this practice has become more challenging as the labor market continually tightens.
In 2023, fulfillment operations must enhance the capabilities of warehouse workers with better technology. Warehouses that rely on manual processes will be behind the curve, and even those that still rely on outdated technology and legacy systems will struggle. However, technologies like advanced warehouse management systems, voice picking, light picking, and robotics can help fulfillment houses do more with less labor.
2. Leave room to pivot. In 2023, flexibility will be the name of the game. You won’t need the same safety stock levels that you carried in early 2021, but you also don’t want to incur the risks associated with your 2019 inventory replenishment strategies.
Finding balance will be key to successful fulfillment, but businesses will also need room to lean one way or the other as market conditions change. Ensure you have the physical space to shift toward a safety stock model. Conversely, benchmark suppliers and determine which ones are reliable enough to allow you to lean up your carried inventory.
3. Focus on the customer experience. Consumers are fickle and will try another brand if you don’t provide the experience they seek. That experience extends beyond the ordering process. Unfortunately, many retailers fail to recognize the essential connection between fulfillment and the customer experience.
If the customer gets the wrong item, a broken item, or no item at all, they will most likely abandon your brand. Your products must be handled and shipped with care to ensure you remain competitive with other e-commerce and omnichannel sellers.
4. Rely on trusted partnerships. Keeping up with best practices in a volatile supply chain can prove difficult for retailers focused on sales, marketing, and product development. Partnering with a trusted third-party logistics provider ensures that online and omnichannel retailers can adapt quickly to changing environments.
About Phoenix Logistics. Strategic Real Estate. Applied Technology. Tailored Service. Creativity. Flexibility. These fundamentals reflect everything we do at Phoenix Logistics. We provide specialized support in locating and attaining the correct logistics solutions for every client we serve. phoenix3pl.com