Technology and Data Flow
For brands that choose to outsource their warehousing and fulfillment operations to a 3rd party fulfillment company (3PF), the systems technology utilized by the 3PF is important to understand and validate at a fairly detailed level.
First of all, a brand may have very specific functional needs which come into play based on product type or vertical market (e.g. strict lot control, first expiry first out, product expiry reporting for consumable product with a shelf life… or hazardous materials handling which can be a true burden without proper systems technology) … or by selling channel (e.g. GS1-128 compliance labeling for EDI/routing-based retail channels).
It’s also important to consider the flow of data (e.g. order, returns or inventory data) for eCommerce and/or B2B channels and what role the 3PF will play within this flow as some brands have a robust ERP while others may not yet utilize an ERP.
If your business has associated intricacies like these that must be properly managed within the 3PF’s warehouse management system (WMS), then you should get a close up look at these functionalities in action before pressing the “Go Button” with a new fulfillment partner. Trust but verify!
Putting these specific functional features aside for a minute, let’s talk about baseline attributes you should look for in how the 3PF handles pick-pack-ship from a technical standpoint and what makes them important (or maybe not so important).
Accuracy Trumps Everything Else
I’ve walked out onto quite a few “floors” in the world of warehousing and fulfillment… some filled with motorized conveyance, mezzanine levels, tilt-tray sorters, product chutes, overhead print and apply labeling, robotic picking arms, robots that travel to pick locations or drag carts to pack stations, automated put-walls, manual put walls, pick to light, put to light, lit carts… really cool stuff for a nerd like me! I’ve also been through many that have standard pallet racks with shelving, pick facings and trays where they use hand-held scanners and batch order carts.
Some have been manual paper pick operations as well… either onto batch carts or even one order at a time on paper. I’m sure I haven’t seen it all, but I’ve seen a lot… and I’m guessing that someone researching 3PFs would generally think that the more bells and whistles within the warehouse, the better the operation.
First off, it should be known that accuracy in inventory trumps everything else… and inventory accuracy has as much (or more) to do with people and process and training and culture as it does with system technology. Systems tech can truly support accuracy in inventory (e.g. robust cycle count functionality), but it takes training and a firm commitment from all associates on the floor to find your success in inventory control!
Attributes Align With Capabilities
With pick technology and automation… after 3+ decades in the business of fulfillment, my take is that a good marriage between a brand and a 3PF is based on how the unique operational attributes of the brand (e.g. order volumes, seasonal spikes, number of SKUs, lifecycle of SKUs, new SKU introductions, product dims/weights/characteristics within the SKU mix, order pack-out requirements…etc.) align with the capabilities of the 3PF.
Not every product is conveyable, not every product fits on a tilt tray or through an automated put wall… and some programs may not have the volumes or order attributes to properly capitalize on pick-pack automation solutions. Some programs could really use automation to their fullest potential while others just aren’t meant for it… it’s a marriage of needs and capabilities, and good partners are out there for all brands in the world of 3rd party fulfillment services!
So if it’s not motorized conveyance or a bunch of lights/bots/bells and whistles, what would be the absolute baseline attributes that you should look for with fulfillment pick-pack-ship technology? First in my mind is having everything managed on hand-held devices, with fast/real-time connectivity from the WMS to the associate on the floor. Assuming products are barcoded, scanning is a must in my mind… not only for accuracy, but also for real time visibility into the order status on the floor.
When the 3PF is running 100% on hand-helds, order status information is real-time… and orders can be updated based on their status, or addresses changed or orders cancelled right up until the very last step. With a good dashboard tool for brands to access, working in real time offers some significant benefits to supporting a first-class customer buying experience.
Order Waving and Shipping Functionality
Next up is order waving capabilities, or how the 3PF groups and waves orders to the floor. The importance of order waving can include separating out orders by sales channel or specific type (e.g. Amazon drop ship, express orders, international…etc.), or orders with hazardous materials, or straight FIFO rules, or waving for efficiency, or waving by pick-pack methodology (e.g. automation vs. properly sized batch cart)… units per order, cube per order…
All of these factors can come into play with how to properly manage what is in the queue… and it takes both systems capabilities and operational expertise to dial it in! Waving impacts pick pack efficiency immensely (and efficiency leads to greater throughput and hopefully competitive pricing for the brand)… and waving impacts customer satisfaction through proper prioritizations for aged orders and sensitive selling channels.
The last baseline attribute to mention is shipping functionality. Your 3PF partner should be able to accommodate and systemically integrate numerous carriers within a shipping manifest system. This may include carrier accounts that are managed by the 3PF and carrier accounts that are client-owned… but it all should flow through a single shipping manifest system that is utilized at the tail end of the pick-pack-SHIP fulfillment process.
Once the order is packed, dimensions are captured, and down-to-the-ounce scale weight is measured… the system should be capable of choosing the best carrier and service level for that particular order and package.
This is rate shopping or decision-tree based carrier/service selection based on the goals for days in transit (which is driven by the shipping code passed by the brand) combined with the lowest cost shipping method. Shipping is extremely complex in today’s world of eCommerce… there is no “one carrier fits all” solution any longer.
Any brand selling via eCommerce must control the cost of shipping while delivering a satisfying customer experience… and your 3PF partner should lead the way on this front through a robust shipping solution!
Our Proprietary Technology – WAMS
AMS Fulfillment has been developing its proprietary WMS technology (which we proudly refer to as WAMS) for over 20 years, with functionality that delivers on all fronts and across all selling channels. You cannot succeed in this business without a commitment to technology, automation, data integrations and top-tier responsive support. If you’d like to talk “Ops Shop”, feel free to give AMS Fulfillment a call!
