The COVID-19 pandemic, and the resulting eCommerce boom, showed many B2C companies that they need help with timely order fulfillment. Whether due to an inability to handle high order volumes or simply inexperience in the B2C marketplace, these companies have turned to a third-party logistics (3PL) provider to handle pick and pack fulfillment operations. In this article, we’ll provide a primer on the processes of order picking and packing, and explain all that happens after your customer hits the “Buy Now” button.
Order picking and packing at a glance
When you partner with a 3PL for pick and pack fulfillment services, your 3PL handles everything from the moment the order is placed to when the package is given to the carrier (e.g., UPS, USPS, FedEx, etc.) for shipment.
Order information is fed to your logistics partner’s warehouse management system (WMS). This commonly occurs via an integration between your eCommerce platform (e.g., Amazon, Shopify, Magento, Big Commerce) and your 3PL. This WMS is a software application that handles all operations of the fulfillment warehouse, including inventory management. After the order is received, it’s time for the order to be picked, packed, and shipped.
The Pick. Once an order is received by the WMS, the system directs warehouse associates to “pick” the ordered items from inventory. The WMS is programmed to assign the most efficient picking pattern to associates to reduce walking distance and overlap, and therefore to minimize labor costs. The picked items for each order are scanned by the warehouse associate (which updates inventory in the WMS) and set aside for packaging.
The Pack. After being picked, each order’s items are compiled and placed – along with dunnage and any other extra materials (e.g., promotional materials) – into the appropriate box or bag. The printed shipping label is then affixed. Quality Assurance (QA) measures take place at this stage to ensure that what was ordered is what was picked. QA checks include order accuracy, packaging appropriateness, and labeling accuracy. Once QA is complete, the finished packages are staged for carrier pickup.
The Ship. You might have your own agreements with parcel shipping partners, or you may rely on your 3PL to manage parcel shipping on your behalf. If your volumes are modest, there could be a significant cost benefit to shipping under your 3PL’s negotiated agreements with carriers. Some 3PLs can negotiate rates based on their aggregate volume across many different clients. You may be able to piggyback on these rates to reduce your parcel costs, which will be the largest portion, by far, of your total fulfillment costs.
3PL Pick and Pack Fulfillment
It is important to note that it’s now harder than ever to attract, hire, and retain associates to perform these warehouse pick, pack and ship functions. Simply put, there are fewer associates than there are open positions. As a result, competition for employees is fierce among manufacturers and 3PL providers. And, even when you manage to hire adequate numbers of employees, it’s common for them to leave for more money elsewhere.
This labor uncertainty is another key reason that companies entrust their pick and pack fulfillment operations to 3PL providers. Attracting, hiring, and retaining associates is a core function of 3PLs. If it’s not a core part of your business, you may want to sidestep the competition and rely on your 3PL to maintain adequate levels of staffing.
Kanban Logistics and the importance of flexibility
If you’ve controlled every aspect of your operation until now, it may seem difficult to relinquish that control and trust someone else to handle everything correctly. At Kanban, we understand this and are happy to customize our pick and pack fulfillment processes to deliver exactly what you need.
Your products and your needs in terms of inventory, eCommerce platform, reporting, promotions, and visibility can dictate exactly how your fulfillment operation is set up. And, many 3PLs offer additional value-added services such as kitting, packaging, and rework.
In addition to powerhouse 3PL capabilities, we pride ourselves on being flexible – and that includes the volumes we work with. We work with smaller eCommerce companies who have a handful of orders a day, as well as customers who routinely have over 1,000 orders a day. One Kanban customer is regularly featured on TV and experiences a huge volume spike when this happens. With proper planning, such spikes can be handled routinely.
We’re also flexible in terms of our WMS. We prefer to use our own WMS when we can, but can install your system at our warehouses when that makes the most sense.
To learn more about how Kanban can take your fulfillment operation to the next level, contact us today.