How an ERP can help order fulfilment

Reading Time: 3 minutes

Order fulfilment is becoming increasingly important. Why? Because fulfilment = loyalty. Manufacturers as well as consumer-oriented businesses need to embrace better fulfilment experiences for their customers. Perfecting order fulfilment can turn business transactions into repeat customers and advocates.

What is order fulfilment?

Order fulfilment refers to the process of receiving, processing, and delivering an order to a customer. This process involves multiple stages, including receiving the order, getting parts and materials, manufacturing or assembling the items, picking and packing in the warehouse, shipping, and tracking the shipment to ensure successful delivery.

The goal of order fulfilment is to ensure that customers receive the products they ordered in a timely and accurate manner whilst minimizing costs and maximizing efficiency and throughput.

The Association for Supply Chain Management’s Supply Chain Operations Reference (SCOR) model provides seven primary processes that will ensure order fulfilment is carried out properly and efficiently — Orchestrate, Plan, Order, Source, Transform, Fulfill and Return.

SCOR Process Model

SCOR Processes

To measure and monitor the performance of these processes, the SCOR model also has metrics which can be used for supply chain performance — Reliability, Responsiveness, Agility, Cost, Profit, and Asset Management, and has recently added metrics for Environmental and Social attributes.

By using the SCOR model, manufacturers have a tested and comparable framework for assessing their order fulfilment processes and performance.

How an ERP system can improve order fulfilment

An ERP system has the set of tools that can manage the entire order fulfilment process by integrating the various processes and departments involved.

Order processing — an ERP system can receive and process customer orders, automating order entry, invoicing, and payment processing. By streamlining the order processing, an ERP system can reduce errors and minimize delays.

Sourcing and receiving — most companies use suppliers to provide parts or materials or a product. An ERP system can help manage the process of sourcing items from suppliers, and on delivery at the warehouse, automate the counting and inspecting to ensure the proper amount was received and the quality is acceptable. It can also handle the putting away of the items into the warehouse so that they can be quickly retrieved when needed.

Demand Planning — optimal fulfilment can be more easily achieved if the demand is planned for. Using historical data and trend information, an ERP system can help to predict and plan for demand levels in order to keep adequate supplies in stock without creating problems of under- or over-stocking.

Inventory management — an ERP system can help manage inventory levels to ensure that items are available to fulfil orders. With accurate inventory data, businesses can avoid stockouts, and reduce the costs of overstocking.

Production or assembly — once parts or materials have arrived from suppliers, the next step is to use a manufacturing or assembly process to make the product. An ERP system has various production planning and monitoring tools that can optimize the process of putting the product together. This will also include integrating with inventory management and order processing to ensure the product is ready for on-time delivery.

Order tracking — using an ERP system a business can have real-time visibility into the status of orders, including shipment tracking and delivery confirmation. This also helps to identify bottlenecks in the fulfilment process, and ensure that orders are delivered on time.

Picking and packing — when a product is ready for delivery, an ERP system can streamline the process of picking the correct items from the warehouse using a variety of picking strategies. The ERP system can also help to optimize the packing of items to lower shipping speed costs and make transport more efficient.

Shipping and logistics — getting a product out of the warehouse and delivered to a customer can be greatly assisted by an ERP system which can provide real-time tracking information, minimizing shipping costs and improving delivery times.

Returns processing — orders can get mixed up, or there may be a problem with a product, therefore handling returns is also critical. When a customer returns a product for exchange or a refund, the process must be executed quickly and carefully. Returns processing involves quality control checks and sorting returned products accordingly. Returned products are then returned to a vendor for a distributor refund or credit.

The importance of order fulfilment

Order fulfilment is important for businesses because it helps ensure that customers receive their orders promptly and as expected. Fulfilling orders efficiently also helps to reduce costs associated with inventory management and shipping. By fulfilling orders correctly and in a timely manner, businesses can build customer satisfaction and loyalty, which leads to repeat business.

Stay ahead of the rest...

SYSPRO blog gives you weekly industry insights supplied by experts.

Leave a Comment