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Supply Chain Industry Updates

Is Your Fulfillment System Losing Customers for You?

  • Many companies continue to use “antiquated methods to fulfill orders.”
  • Nor are they effectively addressing the most common customer concerns.

Many companies are not being smart enough about their intelligent order management systems, a study released this week suggests.

Forrester Consulting found that 88% of organizations continued to rely at least somewhat on manual processes, potentially slowing down a process in which consumers expect ever-faster order fulfillment. Moreover, the study suggested that the fulfillment capabilities companies have implemented to better serve customers actually don’t correspond with consumers’ top priorities.

“As online sales continue to soar, companies are failing to match the growth in demand by depending on antiquated methods to fulfill orders,” said Sean Breeze, director of management consulting for Perficient, which commissioned the research. “This leads to lost time, revenue and customers. Fulfillment infrastructures are complex, and they require sophisticated order allocation to fulfillment centers for rapid delivery. Intelligent ordering systems can help companies adequately balance demanding service expectations with inventory holding costs across a large distribution network.”

The study found that organizations continue to manage their increasingly complex order fulfillment operations via manual methods. Asked how they determine which inventory location fulfills an order, 76% of organizations answered they rely “on rules to allocate inventory to an order from a specific warehouse based on proximity.” That appears to be in conflict with the 60% who also reported that they “intelligently allocate inventory to orders based on customer service requirements and projected inventory turnover.”

“The margin of error is razor thin, and it’s only going to become more challenging.”

Companies that take an approach to intelligent fulfillment that is unencumbered by manual processes are more likely to see improvements in profit margins and customer satisfaction, according to Perficient. Those that don’t are taking a risk.

“Seven in 10 firms say one delayed order is enough to lose a customer; the margin of error is razor thin, and it’s only going to become more challenging,” said Pawan Gupta, Perficient commerce solutions principal. “Successful order management systems are unique in their ability to create brand loyalty and generate new revenue streams. When executed correctly and optimized with intelligent fulfillment, they demonstrate a unified commerce approach for sellers spanning all points along the customer purchase lifecycle.”

Companies boasted that their top order fulfillment capabilities were real-time and push notifications about order and shipment status, buy online/pick up in store and ship from store. They might want to rethink that, however, because the 3 most-frequent incoming customer service calls concerned order placement, order inquiry and substitution.

“Firms’ technology is not effective enough at resolving common issues or questions without contact center support,” Forrester observed. “This causes frustration for increasingly digitally savvy customers.”

You can download the study here.


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