New strategies for fulfillment logistics

As we know, the market is changing daily, whether companies need to update the software or procedures they work with or adjust and integrate new strategies to satisfy the market demands. 

This also applies to the logistics context. As we discussed in our last article about fulfillment center Mexico, having a fulfillment distributor nowadays is very important if you want to save money and improve your rankings on client satisfaction. 

However, if you are still trying to decide what logistic strategy is the best for your company, do not worry. In today’s article, we will talk about new fulfillment strategies that are pretty popular, in case one of these is the one you are looking for.

A brief tour through the fulfillment process

In case it’s your first time on our blog, we would like to welcome you and explain a little bit about what a fulfillment center is and the process they go through to take care of your orders and shipments. 

First, a fulfillment center is a distribution center companies use to store and ship their products to customers. Bigger or multinational businesses tend to have their fulfillment centers, but smaller companies can hire the specialized services of fulfillment distributors. 

These facilities play a crucial role in the supply chain and e-commerce operations. Hereunder we share a breakdown of their key functions:

• Receiving and storage: Products from manufacturers or suppliers are received at the fulfillment center, where the staff organizes and stores the products until they are needed for order processing.

• Order processing and picking: When a customer places an order, the fulfillment center staff picks the items from the shelves, ensuring accuracy in the selection of products.

• Packing: After the items are picked, they are packed into boxes or other packaging materials. This process often involves labeling, adding invoices, and preparing the package for shipment.

• Shipping: The packed orders are then handed over to shipping carriers for delivery to the customers. Fulfillment centers in Mexico work with various shipping companies to ensure efficient and timely delivery.

• Returns processing: Within the solutions of fulfillment centers, you have return logistics; this means that if customers return items, the fulfillment center may handle the processing of returns, inspecting products, and returning them to inventory if appropriate.

As you see, fulfillment centers are essential for every industry and company. However, nowadays, they are highly required for eCommerce, where quick and accurate order fulfillment is necessary to meet customer expectations.

Many companies either operate their fulfillment centers or outsource these services to third-party logistics providers specializing in order fulfillment. This allows businesses to focus on their core activities while relying on experts to manage the storage and shipping of their products efficiently.

New strategies of fulfillment solutions

Now that we have discussed the basic solutions of fulfillment centers, we want to share with you 3 strategies that are gaining popularity within the fulfillment solutions world, although they are not so new. 

1.- Management systems (FIFO)

Management systems, specifically the First In, First Out (FIFO) method, play a crucial role in various industries and businesses to ensure effective inventory control and resource allocation. 

FIFO is a widely adopted inventory management system that operates on the principle of using the oldest stock first before moving on to newer inventory. By prioritizing the utilization of older inventory, FIFO helps prevent product obsolescence and reduces the risk of wastage, contributing to cost efficiency and optimal resource utilization.

Another advantage of the FIFO management system is its simplicity and ease of implementation. Companies can easily track and manage their inventory by following the chronological order of stock intake and usage. This transparency in inventory control enhances decision-making processes related to restocking, pricing, and production planning. 

Additionally, FIFO is aligned with generally accepted accounting principles (GAAP), making financial reporting more accurate and reflecting a more realistic representation of the cost of goods sold. This enhances the reliability of financial statements, contributing to better stakeholder trust and compliance with regulatory standards.

2.- Returns handling

Returns handling is a critical aspect of a company's customer service and supply chain management, including all the processes and strategies employed to manage product returns from customers. 

Efficient returns handling is essential for maintaining customer satisfaction and loyalty. Some fulfillment companies have clear and customer-friendly return policies, providing transparency on the return process, reasons for return acceptance or rejection, and associated timelines. Streamlining the returns process not only enhances the customer experience but also contributes to overall operational efficiency. 

3.- Multi-Channel Fulfillment

Multi-channel fulfillment has become a pillar of modern retail strategies, allowing businesses to seamlessly integrate order processing and inventory management across diverse sales channels. 

What does this mean? In a multi-channel fulfillment model, retailers can efficiently fulfill orders from various platforms, including eCommerce, brick-and-mortar stores, mobile apps, and online marketplaces. This approach allows for a cohesive and synchronized customer experience, irrespective of the channel through which a purchase is made. 

By consolidating fulfillment processes, businesses gain a centralized view of inventory, enabling them to optimize stock levels and prevent stockouts or overstocking issues. This also allows increased flexibility for retailers since businesses can reach a broader audience by diversifying their sales channels without sacrificing operational efficiency.

Now that you have learned more about new fulfillment strategies, don’t forget to share this article on your social media and stay tuned to our blog for more information to help you consolidate your company or eCommerce.