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What is Order Fufillment?
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What is Order Fufillment?

From Initial Inquiry to Final Delivery

Order fulfillment is the process of completing a sale, from an initial inquiry (or its forecasted demand) to the final delivery of any given product. Outsourcing this service has increasingly become a profitable scenario for both the client and the order fulfillment firm. A proper order fulfillment services team will manage its clients’ inventory as well as implement an inventory planning strategy for the future. The order fulfillment consulting company may also directly distribute products to the customer. High volume order fulfillment companies often negotiate lower shipping costs with delivery companies, and these savings can be passed on to the customer. Outsourced order fulfillment allows companies to focus their efforts on day-to-day operations, without sacrificing efficiency in inventory management and shipping logistics. An efficient order fulfillment system will take care of all the product requirements thereby eliminating the need to maintain a warehouse.

Efficient order fulfillment not only directly saves time and money for a company, but also offers many other indirect benefits. Product demand can be tracked more accurately, leading to inventories free of unnecessary stock. Quick, accurate order fulfillment rates improve a company’s reputation and strengthen their brand, and may turn their commodities back into capital faster.

MRO Inventory Management

There is more to managing inventory than merely keeping track of sellable goods; there is an inherent cost in producing goods and/or services. These are known as maintenance, repair, and operations costs, or MRO. These costs could include basic things such as oil for lubricating and maintaining manufacturing equipment, repairing broken down machinery, and typical day-to-day operation costs. Having an outside team manage, inventory, and account for these variables lets your company focus on what it does best.

One example of ATC’s solutions is its partnership with Clean Harbors (read the Clean Harbors case study here), a leading environmental, energy, and industrial services company. The client needed a more efficient system for its MRO spending across 240 field offices. ATC built an online catalog and established business rules to control the wasted spending, and successfully delivered MRO savings of 5%-10% leading to a greater bottom line for Clean Harbors.

Supply Chains

A supply chain is the sequence of events that lead to the distribution of a product. This chain starts at the source of a product, with the sourcing of raw materials and natural resources that are converted into a finished, delivered product. There are both physical and informational aspects to the supply chain.

The flow of information up and down the supply chain is just as crucial as the tangible goods they help deliver. Incorporating a free flowing network of information throughout a company’s supply chain is critical to success.

Each link in this chain is filled with many smaller steps of its own, and each step holds the potential for lost profit. Designing information systems to analyze every step and maximize efficiency is critical to providing customers with competitively priced products while maintaining optimal profit margins. Some of the factors that could affect efficiency are erroneous deliveries, and improper accounting and billing. Efficient supply chains not only maximize the profit of current orders, but also add revenue in the future by improving a company’s reputation.

Outsourcing the supply chain comes with many benefits. As mentioned earlier, hiring a third party to manage the supply chain will allow an organization to focus on other important aspects of their company. This could increase a company’s productivity and provide extra time to spend on other critical initiatives, such as marketing and innovation to help business expansion. Often, the costs of outsourcing supply chain management will minimize costs; an effective supply chain management team should have the infrastructure and expertise to provide this service for less than it would cost to manage it alone.

If a company is unable to keep up production with the demand for its product, you’ll find that their business can no longer grow. In a situation where a company is unable to meet their customer demand, third party management can help locate the resources and deliver production-planning strategies.

Of course, not every business will benefit from outsourcing supply chain management. Knowing your business and doing the proper research to hire the right organization for your needs is very important. If you discover your company is wasting money or has grown too quickly for its own good, hiring a supply chain consultant may be the answer.

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