The Process of Order Fulfillment, Essay Example

Abstract

In an online company, the process of order fulfillment is important for successful business performance. The quality, the speed, and the effectiveness of the order fulfillment process determine business success and customer satisfaction. Without these elements, delivering the finished product to the customer would become difficult and even impossible. Unfortunately, very often online companies are not able to cope with the workloads and to improve the quality of order fulfillment: the process of delivery is delayed; employees cannot effectively organize the order fulfillment time, while products can be lost and orders can be neglected. The larger the company is the more complex and difficult these problems become. As a result, companies face serious problems and need to organize the order fulfillment process in a more effective way.

Introduction

In an online company, the process of order fulfillment is important for successful business performance. The quality, the speed, and the effectiveness of the order fulfillment process determine business success and customer satisfaction. For the customer, the process of order fulfillment is often limited to making an online order and receiving the order at home (or picking it up at some specified location). For an online business, however, the process of fulfilling the order includes several different stages and elements. Without these elements, delivering the finished product to the customer would become difficult and even impossible. Unfortunately, very often online companies are not able to cope with the workloads and to improve the quality of order fulfillment: the process of delivery is delayed; employees cannot effectively organize the order fulfillment time, while products can be lost and orders can be neglected. The larger the company is the more complex and difficult these problems become. As a result, companies face serious problems and need to organize the order fulfillment process in a more effective way.

Order fulfillment: description and a flow chart

Different companies use different principles of order fulfillment. The exact principles and norms of order fulfillment depend on the company’s size, the value and the features of products sold, the number of employees, the company’s organizational structure, etc. Many of the order fulfillment principles and processes are the same or similar across companies. Unfortunately, only a few companies are prepared to deal with problems, which arise in the process of fulfilling an online order. When a company is large enough, when it serves hundreds of orders daily, and when it holds several warehouses, order fulfillment becomes almost automatic and smooth. That is why when customers suddenly cancel their orders employees may lack skills and knowledge to make cancellation possible and quick.

In a usual online company, order fulfillment includes several stages. Everything begins, when a potential customer visits the company’s website. The latter presents customers and users with the detailed information about products and their availability. Very often, the company’s website also contains information regarding shipping and freight costs. The website’s interface should be easy enough to help the customer make the most appropriate and justified choice. As soon as the product is chosen and as soon as the availability of the product is checked, the customer confirms his (her) choice and places a formal order. That means that the customer knows the price of the product, possible discounts, the cost and the time of delivery. To place a formal order also means to make a payment, either by using a credit card or other method.

The moment the customer makes the payment the company transfers the order to the warehouse. At the same time, the marketing department is notified about the order, the customer’s address and personal details. The warehouse begins processing the order, to make sure that the customer receives the product in time. Given the growing number of orders and the variety of destinations which the company must cover, the order fulfillment process resembles a kind of a moving line, in which every order is given a logical number, and in which employees follow a predetermined sequence of activities and events. That is why, if the customer suddenly refuses the order which was given a “processing” status, employees should, on the one hand, react immediately to the cancellation request, and on the other hand, should also reverse the procedures that had already been initiated to deliver the product on time. In this situation, the line of the orders and activities is broken; employees may feel lost and confused. Creating a separate cancellation department may be too problematic and costly even for a big company. That is why to resolve these process issues, the company should design a new policy, which will help address these cancellation problems and will protect employees and processes from confusion and delays.

Order fulfillment: the role of an effective order cancellation process

Customers cancel their orders for a variety of reasons. Some of them simply change their minds. Others happen to find the same product for a lower price. Regardless of the reason, companies should be prepared to react to a cancellation request quickly and without any delay. When a company can timely react to cancellation requests, it can also preserve customer loyalty, show high quality of customer service, and maintain positive relationships with customers. For many online companies, cancellation is just another form of cooperation with customers. Although it does not reflect in profits, it may also lead to better customer satisfaction and even make customers return next time the need similar products.

For a customer, to request cancellation looks similar and quick, but a company that needs to cancel an order must perform a range of actions and activities, starting from the need to inform the warehouse about the cancellation and up to paying back the money. The whole process of cancellation should be non-problematic and fast. This is a part of the company’s brand name and positive market image. Very often, companies lack a formal mechanism of cancellation. For this very reason, employees simply do not know what to do when receiving a cancellation request. Whenever a customer asks to cancel the order which was paid, employees have to leave their primary obligations and to concentrate on arranging and organizing cancellation procedures. As a result, even if the customers, who have asked for cancellation, remain satisfied, others waiting for their products may be dissatisfied. Online companies cannot not afford creating a separate cancellation department. Even in case such department is created, it will not work without a clear description of the major activities and procedures. It is obvious, that resolving this problem is impossible without creating a new cancellation process. This process should make it easier for employees to react to cancellation requests. This very process would also make customers prepared to possible difficulties associated with cancellation.

Cancellation must be easy and simple. It should be effective. Now, each time a customer asks to cancel his order, operations become difficult and complicated. For this reason, the company should change the process of order fulfillment. The process should leave enough space for easy cancellation. On the one hand, customers should know that they can cancel an order – the sign of customer respect and customer satisfaction. On the other hand, cancellation should not go against the principles of effectiveness in business. Easy and fast cancellation is important to the extent that does not contradict the company’s values and principles. In order for an online company to remain competitive, it should create a new form of order fulfillment process, which will make cancellation possible. The better the process is designed, the less problematic and costly the process of order fulfillment will become. The company must understand the important of a good and well working cancellation process.

Order fulfillment: resolving the issue

If an online company wants to be successful, it should change the process of order fulfillment in order to give customers more freedom in their purchasing decisions. Now, the very moment a customer places a formal order and makes a payment, the order confirmation is sent to the warehouse. But sometimes, customers cannot weigh all pros and cons of choosing and buying a product. That is why they may sometimes regret their decision and may want their money back. And that is why it is important that between the moment of paying for the product and the moment of sending order confirmation to the warehouse, both customers and the company have some time to change their decisions. For example, three days can be enough for the company to make sure that the customer does not change his (her) decision to buy a product, and that the order is not cancelled after it is sent to the warehouse and is given a “processing” status.

Here, it is important to address several issues. First of all, the company should create a new policy, which will educate customers about the principles and rules of canceling orders. This policy should be made public. It should be written in the form clear enough for customers to understand. The policy should explain that for the order to be confirmed and approved automatically, three days will pass from the moment of payment to the moment of informing the warehouse about the order. The customers should know that within the three days after making the payment, they have the full right to cancel the order without any problem. During these three days, each order will be given an “intermediate” or “pending” status.

There are situations, when customers cannot wait for three days until their orders are automatically approved. Some of them may need to receive their products within three days or earlier. In this situation, customers should be required to complete and sign a form, which will notify them about the order, which will also immediately approve the order, and which will also leave no chance for cancellation and refund. The policy should warn customers, who want their orders processed immediately, that such orders cannot be cancelled; nor can customers restore their funds. The customer’s official agreement will guarantee that he (she) is aware of the conditions of purchase/ sale.

Certainly, even in big companies, customers value individual approaches. Sometimes, the company should be able to cancel even urgent orders. The reasons for canceling orders can be different and many, but the customer must be confident that even in the most difficult situations, the company will be open to their issues and complaints. Generally, the changes in order fulfillment process will involve:

1. Determining the status of the order (standard / urgent)
2. Requesting order confirmation for the urgent order.
3. Giving a three-day-pending status to the standard order.
4. Informing customers about the order status policies.

These changes will also require the company to open an intermediate

financial account for standard orders – in case of cancellation, it will be easier for the company employees to transfer the money back to the customer’s account.

Order cancellation process: how the new flow chart and the discussed solution will improve the quality and efficiency of order fulfillment

The proposed solution to the order cancellation problem will improve the process of order fulfillment in several ways.

1. The warehouse and employees involved in order processing activities will have more clarity and understanding about their order status.
2. By dividing orders into the two categories (urgent and standard), employees will have reasonable expectations about orders. That means that when working with standard orders, employees will reasonably expect possible cancellation, and will be better prepared to react to cancellation requests.
3. When reading the new policy, customers will become familiar with the principles of order fulfillment. They will know their rights and possibilities to cancel an order. They will also know that they cannot cancel an urgent order. This understanding and awareness will increase customer satisfaction and the quality of relationships with customers.
4. The changes in the order fulfillment process will show the company’s commitment to high quality of service and fast product delivery.
5. With the discussed changes at hand, the need to cancel an order will not negatively change the quality and the speed of other operations and processes.
6. The company will be able to manage its activities more effectively. The cancellation will not decrease the quality of other standard and urgent orders, which were already transferred to the warehouse.

Conclusion

Efficient and fast order fulfillment is important for the success of an online business. In online business environments, the quality of order fulfillment also determines customer satisfaction and the quality of the company’s relationships with customers. Unfortunately, when a customer needs to cancel an order, many companies seem unprepared to such cancellation requests. With three days from the moment of payment to the moment of sending the order to the warehouse, customers will have a chance to ask for refund and to cancel their orders. For the urgent orders, customers will not have the right for cancellation, and with their written agreement orders will be immediately sent to the warehouse. The solution will make it easier for the company employees to manage orders. It will also create reasonable expectations as for whether an order can be cancelled. Finally, the company will be able to manage cancelled orders without changing the stability of its business operations. This will lead to a better quality of customer service and will speed up the process of resolving cancellation issues with customers.