For retailers, the journey from “buy now” to “package delivered” involves a series of intricate steps. To do it efficiently, companies must allocate time and resources to inventory management, shipping, and tracking.
When managed manually or through disparate systems, these processes can create bottlenecks, resulting in a less-than-seamless customer experience. Automated order fulfillment is a game-changing solution, bringing these diverse tasks under a single, cohesive framework.
In this guide, learn more about automated order fulfillment and how you can strategically use it in a retail environment.
What is automated order fulfillment?
Automated order fulfillment is a technology-driven approach to managing the various stages of the order fulfillment process. It integrates software and hardware solutions to automate manual and repetitive tasks when tracking and managing inventory or while picking, packing, and shipping orders.
By centralizing these operations under one system, retailers can streamline their workflows, minimize manual interventions and reduce errors as well as increasing accuracy in fulfilling customer orders.
Benefits of automated order fulfillment
- Eliminates manual data entry to reduce time spent in repetitive tasks and monitoring
- Optimizes warehousing for better inventory management
- Saves money through efficient fulfillment operations
- Improves customer experiences through faster order processing
- Simplifies returns management with easier reverse logistics
Automated order fulfillment is akin to having a well-oiled machine power your ecommerce business—each cog, from inventory to shipping, works in harmony. Here are a few benefits:
Eliminates manual data entry
Manual data entry is time-consuming and can lead to errors, which can cause supply chain issues. When you reduce human error in customer order processing and other repetitive tasks, you remove manual tasks from your plate while also improving the reliability of your order fulfillment processes.
Optimizes warehousing for better inventory management
Automated fulfillment improves warehouse management, allowing for real-time updates and better control of stock levels. With the right warehouse management system, you can automate various tasks from demand planning (projecting future demand) to inventory planning (deciding how much inventory to order).
Better control of inventory management means ecommerce businesses can prepare for sudden changes in demand.
Saves money through efficient fulfillment operations
Automating your fulfillment process saves money. Automated processes in the fulfillment center and distribution center reduce labor costs by minimizing the need for manual, routine activities.
Automation also streamlines operations, allowing for bulk shipping discounts and more efficient use of packaging, lowering shipping costs. Moreover, quickly adapting to market changes allows for more effective inventory and supply chain management, leading to further cost reductions.
Improves customer experiences through faster order processing
Customers expect swift and accurate delivery when they shop online. By automating the order management process, you can have quicker, more reliable service, directly influencing customer satisfaction.
Fulfillment automation also reduces the likelihood of delays and mistakes, contributing to a more positive online shopping experience.
Simplifies returns management with easier reverse logistics
Returns are an inevitable part of running an ecommerce business. Automated order fulfillment software manages the entire return process, from receiving a package at the fulfillment center to updating store inventory.
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The Shopify guide to shipping and fulfillment
Boost customer satisfaction while driving sales growth for your ecommerce business with an effective shipping and fulfillment strategy. Use this guide to create a plan that covers all aspects of shipping and fulfillment, from how much to charge your customers to choosing the right fulfillment method.
How to implement automated order fulfillment
- Evaluate existing fulfillment operations
- Choose a robust fulfillment software
- Integrate with your ecommerce platform
- Automate inventory management
- Optimize warehouse functions
- Streamline shipping processes
- Use automated returns management
- Audit and improve your fulfillment process
Here’s a step-by-step guide to help you navigate the order fulfillment automation process:
1. Evaluate existing fulfillment operations
Audit your current order fulfillment system to identify inefficiencies and areas requiring manual data entry. Track metrics like time-to-ship and order accuracy rates so you know your starting point.
2. Choose a robust fulfillment software
Opt for an order fulfillment solution that offers features like:
- Real-time inventory tracking
- Automatic order synchronization
- Shipping algorithms
- Integration abilities
The Shopify Fulfillment Network does all of this and more so you can automate much of the process and select the most cost-effective shipping options. All you need is a Shopify account to get started. By centralizing these functions, it allows for real-time tracking and quicker turnarounds, making the entire fulfillment process more efficient.
3. Integrate with your ecommerce platform
Link your ecommerce platform with your selected fulfillment software and automatically transfer data to keep inventory and order processing up to date. This integration will be the cornerstone of your automated fulfillment, ensuring orders flow smoothly from your online store to your distribution center.
Shopify’s Fulfillment Orders API allows for the seamless integration of external fulfillment services, enabling automated syncing of order data, inventory levels, and shipping information between your ecommerce platform and your chosen fulfillment solution.
4. Automate inventory management
An advanced inventory management solution offers features like automated restocking alerts and predictive analytics for demand planning. Use these tools to enable just-in-time inventory practices, reducing storage costs.
Shopify POS integrates in-store and online sales, allowing retailers to manage inventory and stock levels centrally and continuously, enhancing stock visibility and control.
5. Optimize warehouse functions
If you manage your own warehouse, adopt a warehouse management system (WMS) that automates crucial operations. Warehouse slotting algorithms and automated picking and packing routines can optimize your warehouse space and resources.
Properly automated warehouse functions can drastically reduce human error and speed up the entire fulfillment process.
6. Streamline shipping processes
Integrate algorithmic shipping solutions that automatically select the best shipping carrier per individual order. These algorithms use factors like cost, destination, and package weight to determine which carrier is best suited to each order, so you can reduce costs and speed up fulfillment times. Implementing automated label printing and batch processing features can also speed up shipping.
Shopify Shipping streamlines the shipping process, offering discounted rates and enabling faster label printing and order fulfillment—all within a single platform. These automated processes can significantly save your customers on shipping costs, providing a competitive advantage.
Even if you don’t use Shopify Shipping, you can automate the rest of the order fulfillment process with Shopify Flow. The automation tool has preconfigured templates that can complete fulfillment tasks such as:
- Sending low stock notifications before a stockout happens
- Automated reordering to ensure a continuous supply of inventory
- Generating order tags, packing slips, and shipping labels
- Prioritizing orders for fulfillment
- Choosing shipping carriers based on the order criteria
For example, you could configure Shopify Flow to prioritize orders from customers who’ve paid for expedited shipping. These orders get routed to a fast shipping carrier that can commit to next-day delivery. All of this happens without your manual input, so you can do what you do best: sell.
7. Use automated returns management
Employ a specialized returns management platform that automates the returns process. This speeds up the process for customers and allows for quicker inventory turnover.
To enhance customer satisfaction, use features such as automated return merchandise authorization (RMA) generation, real-time inventory updates upon receiving returns, and auto-triggered refunds.
8. Audit and improve your fulfillment process
Regularly review your automated order fulfillment system to spot inefficiencies and areas for improvement. Use key performance indicators (KPIs) like order accuracy, fulfillment costs, and customer satisfaction scores to measure the effectiveness of your automation.
Make data-driven adjustments to your workflows, software configurations, and inventory management strategies to ensure continual optimization. If you’re spending two hours each week writing order tags, for example, that’s more than 100 hours you could save each year with Shopify Flow.
Integrating automated order fulfillment with your supply chain
Traditionally, fulfillment teams wouldn’t have access to sales or inventory data. They’d be working from their siloed warehouse management system—a software that held inventory and order data specific to their fulfillment center.
Unified commerce platforms like Shopify bring data from multiple sources into one dashboard. Instead of having to manually update suppliers and fulfillment partners with inventory or product data, they can get real-time and automated updates by integrating their WMS with your Shopify account.
This becomes especially important in omnichannel fulfillment. You might have orders coming in from online channels like your website and others from in-store shoppers who’ve used a ship-to-home service.
A centralized dashboard for fulfillment and inventory data ensures you have enough products to serve customers and consistent processes, regardless of where they placed their order.
Strategies for optimizing supply chain automation
Order fulfillment is just one part of the supply chain. There have been rapid advancements in automation tools across the logistics industry, such as:
- Predictive analytics. Instead of making decisions based on historical data alone, combine it with seasonal trends and market conditions. Most automated WMS solutions have this type of predictive analytics to forecast demand and optimize inventory levels.
- Automated storage and retrieval systems (AR/RS). These robotic systems can pick and pack products without having your warehouse team manually search for them. This reduces travel time and allows you to fulfill orders quickly and accurately.
- Automated invoicing and payments. Timely payments keep you on good terms with your suppliers, which ensures a continuous supply of inventory. Tools like Shopify Bill Pay help you automate these payments to improve cash flow and avoid late payment fees.
Automated order fulfillment FAQ
What are the different types of order fulfillment?
Order fulfillment types include direct fulfillment, third-party fulfillment (3PL), and dropshipping. Each option has varying degrees of inventory ownership and control.
How do you automate an order process?
Automating an order process involves integrating specialized software that streamlines inventory management, order processing, and shipping by replacing manual labor with automated workflows.
What types of businesses are most suitable for automated order fulfillment solutions?
Ecommerce businesses, retailers with high order volumes, and enterprises with complex supply chains are the most suitable for automated order fulfillment solutions, due to their need for speed, accuracy, and efficiency.
How much does automated order fulfillment cost?
It’s free to automate order fulfillment using Shopify Flow. Merchants with a Shopify plan can use the app to automate tasks like routing orders, choosing shipping carriers, and generating shipping labels.
How do I choose the right automated fulfillment provider?
If you’re working with a 3PL that automates order fulfillment, check that their systems integrate with yours. Shopify’s Fulfillment Orders API allows external vendors to sync order, customer, and shipping data between your Shopify admin and their fulfillment automation software.