Best Practices

Why Backorders Are Hurting Your Business—And What to Do About Them

In the past, whenever a merchant ran out of a given SKU, the company would simply issue a backorder while they purchased or manufactured more items. Customers would then wait for the item, taking the delay as a fact of life. Those days are long gone.

Today, modern warehouses are tracking both inventory levels and item velocity, making precise predictions about Low Stock and Out of Stock levels, and using that information to trigger workflows so that inventory never “runs dry.” In effect, data and planning have basically eliminated the backorder.

And that is a great thing when it comes to the customer experience.

Why Eliminate Backorders?

Easier Warehouse Management Means Reducing Touches

Reducing the number of “touches” an order needs before it ships out the door reduces the complexity inherent in your fulfillment operation. And as complexity is removed, error goes down while speed and efficiency go up.

In most fields of engineering, complexity is the enemy. The more parts something has, the more chances there are for something to break down. The more an item is handled or taken apart, the more space there is for something to go wrong.

A similar principle is at work with any complex operation, including order fulfillment. Although no one step in fulfillment is complicated in itself, orchestrating the many steps, time and again, and ensuring their accuracy, can be a substantial task.

How to Achieve Inventory Certainty—and What Happens When You Fail

“Inventory Certainty” is a term of art in warehousing and fulfillment circles. It simply means having accurate, real-time counts of your inventory available in such a way that it is useful and timely. While it seems easy, inventory certainty is vital for today’s efficient warehouses.

In fact, most warehouse and fulfillment teams believe they have something like inventory certainty, but in reality, they do not. And when they fail to have that certainty, entropy creeps into the system. Small errors begin to grow out of proportion, and then the real trouble begins.

Exceptions Are Common. Make Them Standard Using Software.

The idea that there is one single, ideal way to handle an order is a myth. Still, exceptions can be anticipated and systematized so that more of your warehousing and fulfillment operations can be automated. And that’s good for the bottom line.

There is no doubt that automation is changing traditional warehouse operations. Companies across all types of industries are looking for ways to improve throughput, maximize order accuracy, and shave valuable time off standard operations. What makes automation such a complex challenge is that there is rarely a single standard operating procedure (SOP). Contingencies and exceptions are, ironically, the norm. So these need to be automated as well.

One way to automate exceptions is to anticipate them and then trigger certain actions when they are detected. For example:

Optimizing Your Labor: 4 Things Warehouse Managers Must Do

Optimizing warehouse labor is much more than hiring the right number of workers. The actual work they do should be optimized as well for peak productivity. This requires having a modern warehouse management system that can collect and analyze the data from your warehouse.

This might seem counterintuitive, as the trend in management right now is to avoid micro-managing your labor. Although good employees do not have to be micro-managed, they still are your most important and useful asset. Good managers, then, learn to use their workforce in the most efficient ways possible. This is not micro-management, so much as finding ways for your workers to do more work with less effort. In warehouse management, this requires managers to do four things:

5 Steps to Fine-Tune Your Inventory

Suppose you need to store inventory. How much should you carry? At first blush, the answer is simple: Enough to meet demand, but not so much that it sits around, tying up capital.

Maintaining this optimal amount is more difficult than it sounds. If items move too fast, you will run out of stock and might find yourself in a backorder situation. If items do not move quickly enough, you’ve bought too much inventory. There’s lead time too: If you need to reorder, you want to reorder before running out of items, not when the last item leaves your shelves.

Reducing Your Carrier Costs in the ‘Gotta Have It Now’ Era

Call it the Amazon effect: Being able to ship goods in a timely matter is now a requirement for anyone doing online business, no matter their size.

Indeed, a customer’s impression of a business depends in part on the delivery of goods: Was delivery timely? Was I able to track the package? Was I home at the time, or was the item left outside? The impression formed, for good or ill, also determines customer service calls, online reviews, and social media reactions.

Here, then, is the paradox this creates for online merchants. According to one survey by Dotcom Distribution, roughly two-thirds of shoppers said they would pay for faster delivery…but nearly 80% said

How Breaking Down Data Silos Makes eCommerce More Efficient

If you are a retailer or otherwise sell direct-to-customer, you will want to find ways to fulfill orders quickly, accurately, and efficiently. While there are many processes that must be put in place to achieve this, integrating systems—particularly when it comes to your data—may be the one key you are still missing.

In fact, one of the biggest business obstacles identified by business experts over the past few years has been silos. Silos are simply teams (or sometimes entire departments) that work in isolation, with little functional access to, or communication with, other groups.

Recouping Costs with an Efficient Returns Process

If there is one key idea that retailers need to keep in mind in the days after a holiday, it is that returns are a huge part of customer satisfaction. But consumer-friendly return policies can be a nightmare for your logistics operations.

What Metrics are You Using to Measure Customer Service?

Good customer service is always a part of a brand’s promise to its consumers, whether assumed implicit or stated explicitly in a Service Level Agreement (SLA).

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