Order fulfillment is one of the most important things to keep your business running. You need to implement a robust order management system in your firm or organization to fulfill orders timely. It involves numerous steps such as receiving orders, sending information, picking products, packing, shipping, and then delivering the orders. The time taken by your firm to complete all these steps is referred to as order fulfillment cycle time.
You need to keep this cycle time minimum to deliver orders timely and satisfy your customers. However, it’s not a cup of tea to manage all these things in a short time. Numerous factors affect the order fulfillment cycle. You need to control them to reduce the cycle time. Today, we will tell you about all the major factors that can impact the time taken by your workers to fulfill orders.
Factors Affecting Order Fulfillment Cycle Time
The following are the major factors that impact the order fulfillment cycle.
Complexity of Orders
The first factor is the complexity of orders. If you receive a simple order, you will deliver it in a short time. However, sometimes customers send complex orders. Fulfilling these orders can even be challenging sometimes. Your teams have to spend a lot of time fulfilling such orders. So complexity of order is directly proportional to the time taken to complete order fulfillment cycle.
Order Processing System
The next factor that can impact this cycle time is the order processing system. Order processing involves picking, packing, and shipping of the products. All these processes needed to be kept streamlined to proceed quickly. In this modern era, numerous advanced order processing systems have been introduced.
Leveraging the power of these systems can help you process orders in a very short time. However, if you are sticking to the old system, it will be hard for you to process orders swiftly. In such a condition, you should swap your current system with an advanced one.
Transportation and Shipping
Once you pack the required products of your customers, you have to ship and deliver them. The mode of transportation you use for all these purposes hugely impact the order fulfillment cycle time. Most companies often use third-party courier services or delivery partners to deliver orders to customers.
If you too are doing so, then opting for well-reputed delivery partners who are known for their quick working can be a good option. It will ultimately reduce the cycle time as customers will receive orders in a short time.
Prioritization
This factor is often neglected, however, it has a major impact on the order fulfillment cycle time. Let’s say you receive two orders at the same time. One is more important for your firm and you prioritize it. So, your team will first focus on this prioritized order. As a result, the fulfillment cycle time will be less for one order and high for the other. In this way, prioritizing orders can impact the cycle time.
Inventory Management
Inventory or warehouse management also has a deep impact on the time required to fulfill an order. Efficient warehouse management will help you know about the availability of products even before you accept the order. It also helps you locate the products in the inventory without spending much time.
When the whole warehouse is properly managed, the products will be immediately picked and packed. Now they will be ready for shipping. On the other hand, if warehouse management is not up to the mark, you have to spend a lot of time finding, picking, and packing the products.
Returns or Exchanges
When you fulfill orders, you need to deal with returns and exchanges as well. Returns and exchanges are the order management system. You have to quickly respond to the customers when they opt for any of these options. As a result, you may not be able to pay full attention to the current orders and the cycle time will increase. In short, if the returns rate is low, order fulfillment cycle time will also be short. It will be reversed when the return or exchange rate is higher.
Final Words
To sum it up, order fulfillment cycle time is one of the key performance indicators in your order management department. The aforementioned factors have a deep impact on it. So, if you want to reduce the cycle time, you have to control these factors.