Month: December 2022

According to the eMarketer report, global retail ecommerce sales that amounted to $4.248 trillion USD in 2020 are expected to reach $7.391 trillion USD by 2025. The rise in ecommerce is indicative of the shift in consumer preference in shopping. You can sell your products online if you want to expand your business. If you are new to the ecommerce platform or want to improve your ecommerce sales profile, you are in the right place. We will guide you through the nine key steps you should take for the ecommerce order fulfillment process.

 

What is order fulfillment?

The order fulfillment process begins from the time the company receives an order to the time it is delivered to the customer. The order fulfillment process includes inventory management, as the products to be delivered should be acceptable in quality and quantity. The order fulfillment process should cover the goods returned if the customer is not satisfied with them.

A company can fulfill orders in the following ways:

• In-house transfers: In-house transfer is when the company wants to transfer goods from one department to another. It is inclusive of transfers from the warehouse to factories.
• Third-party logistics: Sometimes, the company uses third parties to carry out product transfers. This phenomenon is called third-party logistics (3PL).
• Dropshipping: Dropshipping is a process where your supplier delivers the goods directly to your customer. This method of shipping saves transportation and overhead costs for the company. It is a good option for startups that want to save overhead expenses.
• Hybrid: Companies don’t often stick to one type of shipping method but use different types of methods at once for separate orders.

As easy as it sounds, the reality is quite different if you don’t have a reliable system to follow. Inventory management systems like Cin7 can assist you in carrying out the order fulfillment process smoothly. Let’s discuss the nine key steps of ecommerce order fulfillment.

 

Nine key steps for the ecommerce order fulfillment process

If all the processes in your business organization run smoothly, your business can maximize its profits. Even if you already have an order fulfillment process, you must verify whether it is running efficiently. An optimized process can prevent damages and losses to the enterprise. The following steps should be followed for a well run order fulfillment process:

Step 1: Receive inventory

Every order fulfillment process starts with the receipt of inventory. The warehouse receives goods from the supplier. Goods received should be accounted for and adequately documented. The quantity and quality ordered should be verified. If there are any issues, concerns should be raised immediately.

As soon as the products are received and found satisfactory, identification codes, such as barcodes and QR codes, used by the company should be assigned to them. Identification codes allow the company to track these items and get information on them quickly.

Step 2: Racking the inventory

Some items need specific storage conditions, like lower temperatures, dry conditions, or sunlight exposure. All the items should be sorted and stored under the required conditions immediately to prevent deterioration.

Moreover, the goods should be arranged to reduce the space they take up in the warehouse. The storage location should be based on the frequency at which the items need to be moved from the warehouse.

Step 3: Receive orders

For receiving the order, it should be determined whether the company owns the stock and the time it would take to arrange the items. When a customer places an order, they should be informed about the expected delivery date and other delivery conditions based on the availability of the products. The company sends the confirmation of the order to the customer.

Step 4: Process the order

If you have inventory management software installed, the order fulfillment process is much simpler. It can automatically determine which warehouse or fulfilling station should be sent the order based on

• the delivery location,
• the warehouse location, and
• the quantity of the goods ordered.

The order should be accounted for and passed to the relevant warehouse manager for further processing.

Step 5: Pick the order

Once the warehouse receives the order, the staff will start picking the items for that order. Picking means separating the items ordered from the warehouse inventory. A picking slip is used to list the items that are in the customer’s order. A picking slip can speed up the picking process and increase order fulfillment efficiency.

Typically, picking is carried out in the following manner:

• Batch picking: The staff picks the items of several orders at once.
• Piece picking: When one person picks one order at a time.
• Zone picking: When every person is responsible for picking items for multiple orders from a specific part of the warehouse. The collected items are categorized into different orders for packing.

While picking the goods, the warehouse staff ensures that the products’ quality is according to the company standards. If the employee finds that some of the items have deteriorated in quality, they should contact the warehouse manager soon. The company’s reputation depends on the quality of the goods delivered to the consumer.

Step 6: Pack the order

The next step of the order fulfillment process is packing. The items should be packed in appropriate containers and wrapped in protective covering to ensure safe delivery. Delicate items must be packed separately and labeled accordingly. The containers must be sealed and a packing slip attached. The packing slip contains all the details of the order, including

• Customer name and address,
• Item details,
• Payment method, and
• Dimensions and weight of the package.

The packing slip should contain information on whether the delivery person is supposed to collect any amount for the delivery.

Step 7: Ship the order

A company has several options to ship the goods. They can ship the order themselves, use an agency to ship it for them, or ask the supplier to ship the goods directly to the customer (dropshipping). Except for when a company chooses dropshipping, it has to prepare the goods for dispatch. The company hands over the packed goods to the shipping partner.

The customer is informed that the goods are shipped and receive the tracking number. The company also has a tracking number to determine when and where the packet arrives.

Step 8: Deliver the order

The order is delivered to the customer. Typically, automation allows the company to notify the customers that their order has been fulfilled. Delivering the goods on time can boost the company’s reputation. The customer can communicate delivery preferences to the company, such as having their parcel left with a neighbor or changing the delivery timing for convenience.

Delivery is usually followed with customer feedback about the product and delivery experience. If the customer is happy, the fulfillment process is complete. If not, the customer initiates a return.

Step 9: Process the return

The company must handle the return of goods if the customer is unsatisfied with the products. It must arrange the return pickup and delivery. It is a crucial part of the ecommerce experience.

 

In a nutshell

In-person fulfillment doesn’t involve the complexity of the ecommerce fulfillment process, and therefore, the latter needs more attention. We have discussed the nine steps necessary for an efficient fulfillment process for ecommerce sales. Every company in ecommerce must audit their steps for optimization, and if they find some issue, they must resolve it immediately. This will increase the profitability of the company.

You can request a demo with our experts to learn how Cin7 can help you fulfill your ecommerce orders.

If you are a business owner, you must communicate with other organizations, including your suppliers, customers, and stakeholders. Communicating in an old-fashioned way using a ton of paper is slower, less secure, and less efficient. With the world moving towards digitalization, business communication should also be digitized. This will not only improve the speed, security, and efficiency of communication but will also leave a legitimate document trail for future reference. So, if you are considering EDI software for your business, you are in the right place.

The electronic format for these basic business exchanges is called Electronic Data Interchange, or EDI.

 

What is EDI?

Electronic Data Interchange (EDI) is an automated system that puts documents like invoices, shipping bills, purchase orders, and payment confirmations into a standard digital format that can be read by both the senders’ and recipients’ servers and transfers the files directly from one business’s computer network to another.

 

What are the benefits of EDI?

Instantaneous communications

When you’re ranking the advantages an EDI system can provide you with, speed probably comes out on top. EDI-generated documents go from being produced to the intended destination in practically the blink of an eye. The automated system saves time, and as a consequence, money.

Greater efficiency

EDI streamlines and improves the tasks it takes care of. It also sharply decreases human intervention to make the whole process of sending and receiving documents much more efficient. What’s more, it’s the level of efficiency in communication that impacts all the other areas of an organization. With EDI, employees can do other things, like focus on activities that will grow the company; communication gaps become virtually nonexistent; and more business can be generated.

Security

Most companies that have not yet automated their business management systems, use basic spreadsheets, like Excel and Google sheets to maintain inventory records. Documents are sent to various stakeholders via emails or printed hard copies. Although this method is cheaper and simpler in some ways, it has its drawbacks.

Inventory management software, like Cin7, can offer EDI benefits by securely transporting the required data to other networks using standardized and encrypted methods. Cin7 also builds two-way connections and our experts carry out compliance testing for you.

Sustainability

Climate change isn’t something that can be ignored anymore, and any steps taken to mitigate it count. EDI can be considered one of those steps. It cuts paper use to practically zero since it does away with the need for mail or transport systems to get documentation from one company to another. This reduces the carbon footprint of the organization significantly and contributes to making it more sustainable.

 

How does EDI work?

Put very simply, a document is first put into a digital format that makes it readable by another computer system; then it’s converted into a format that will actually get it to the other computer system.

Step 1 – making documents readable:

One company might conduct business in one currency, another might use a different one; similarly, measurement systems may differ – metric vs. imperial. EDI overcomes this by giving documents a standardized format that creates uniformity. While there are several of these  formats, the rules they adhere to are recognized globally.

Called EDI standards, these formats are:

• American National Standards Institute (ANSI): ANSI defines the standards for products, services, processes, systems, and personnel in the United States.
• United Nations/Electronic data interchange for administration, commerce, and transport (UN/EDIFACT): UN/EDIFACT is a standard developed for the United Nations and approved by the International Organization for Standardization (ISO) as ISO 9735. It provides syntax rules for data structure, standardized message format between multiple countries and industries, and interactive exchange protocol (I-EDI).
• Trading data communication standard (TRADACOMS): TRADACOMS is an older UK standard that is on the brink of being obsolete today. However, it is still in use in the UK.
• Electronic business extensible markup language (ebXML): ebXML is an exhaustive standard for secure business communication. After a couple of upgrades, ebXML is presently in its 3.0 version.

Sometimes, of course, the company sending a document may use a different standard than the one receiving it. For cases like that there’s EDI translator software. This puts the document into an EDI standard that allows it to be transmitted; the computer that receives it is able to convert it into the format it uses and recognizes.

EDI follows an envelope structure. Rather like paper envelopes, this structuring of the data puts one piece of information inside another. A design that has security in mind, the outer envelope shows the sender and receiver along with general information about what’s inside.

Typically, there are three types of envelopes: interchange, functional group, and transaction set. The first contains several documents; the second several of the same type of document, like associated invoices; and the third has something transactional inside.

Step 2 – Getting one computer system to speak to another

This is done with what’s called EDI protocols. The most popular of these protocols are:

•  SFTP – secure file transfer protocol
•  SOAP – simple object access protocol
•  AS2 – applicability statement 2

For the interchange to work, both systems have to use the same protocol.

 

Transmitting documents with EDI

EDI uses the Internet to transmit documents. It does this in two basic ways:

• Direct connection: This is a point-to-point connection. Put simply, a document goes from a computer in one company to a computer in another. The secure protocols described above are in place during this.
• Value-added network (VAN):  VAN is a third-party intermediary, an EDI broker that converts the original document into EDI data and then routes it to the receiver. Again, a secure protocol is used.

 

How to make your business EDI compliant

In essence, this means adopting an EDI system that lets you communicate digitally with your trading partners. Trading partners include all the organizations you exchange data and documents with: your suppliers, customers, and contractors. Many large corporations have specific EDI requirements for their trading partners, and if you want to do business with them, you’re going to have to comply.

Did you know Cin7 inventory management software is equipped with built-in EDI that’s EDIFACT and X12 of ANSI compatible?

 

To sum it all up…

If you are considering EDI software for your business, you are not alone. When you’re aware of the speed, efficiency, transparency, and security digital gives you, you’ll wonder what took you so long to convert.

Cin7 can be the right stepping stone for you. Book a call with one of our experts by clicking here.

 

 

 

In today’s automated world, retail and manufacturing companies control their business processes with several different software applications, each of which performs a specific function. For instance, there are applications for accounting, supply chain management (SCM), and inventory management (IMS). While they’re separate and perform their own clearly defined tasks, it’s vitally important for them to communicate with each other and for the data they use to be passed between them. Simply put: If your SCM can’t pass its data on to your IMS, information about your stock would have to be input manually.

When these different applications are able to communicate, you have application integration.

 

Different ways application integration can be performed

Application integration sounds simple enough, but there are four basic ways it can take place.

Data level integration

Called data level integration, this method puts the data stored in each application into a single, separate database. This separate database is called an enterprise database or an enterprise database repository. To create this centralized system, the data stored in each individual application are extracted, cleansed, and reformatted to be consistent with whatever standard the enterprise database uses. From that point, individual applications can tap into the central system to get the data it needs.

This method is the lowest-cost application integration due to the minimal amount of programming needed to set it up and the speed with which that can be done. Data level integration only takes the data an application stores, not the coding of the application itself.

Application interface level

Known as application interface level, this method doesn’t have a centralized database that stores everything. Instead, data extracted from one application are converted into a standardized format and then loaded directly onto the target application. Hence, application to application.

Application interface level is currently the most popular method for data sharing because most application codes now provide interfaces. Cin7’s IMS, for instance, offers over 700 integrations, and new integrations are being added regularly.

Method level

Here, it’s not data that are shared, but business functions. This may sound precarious, but the actual business functions are not included in the code that’s passed along. An evolving way of exchanging data, method level is promising because it’s compatible with technologies like Java RMI, DCOM, and Cobra. A big drawback, however, is that the application code has to be changed before it can be used.

User interface

User interface (UI) is about having the different applications designed in such a way that users (human) can log on to their company’s network and bring up the data they need from any computer in the network. Application codes don’t have to be changed for this method to work  – a factor that makes the cost minimal – but that also gives it less flexibility.

Benefits of application integration for inventory management software

When it comes to inventory management, application integration is essential. Having the ability to input data from other applications into IMS software or passing the data it stores into another system, and being able to do so accurately and quickly, is vital to business operations. The benefits are:

Inventory optimization

Inventory optimization, or having the right amount of inventory, means carrying enough to fill orders and prevent stockouts, while not having too much of it.

If your inventory management software is integrated with accounting and ecommerce applications, you’ll have a clear idea of the quantity of items you should be warehousing as well as information about which actual items you should stock. You’ll also be alerted when you need to reorder.  This means less worry about overstocking or understocking.

Making good financial decisions

Information about how well certain goods have sold in the past and predictions about how well they’re expected to do going forward informs decisions that are made in the present. In order to get this information, reports and forecasts have to be accessed from several applications in real time.

When this information is available to IMS systems, better decisions can be made about which stock to carry. Additionally, application integration with a variety of systems makes audits more accurate. You’ll be able to verify that the stock listed in your books is a real reflection of the goods you have in storage, and you’ll have complete information about items that are in transit.

 

Types of integrations available on Cin7

There are more than 700 integrations in Cin7’s software, but they can be categorized into the following business operations:

Accounting apps

Accounting software records and manages your financial transactions, everything from purchases and sales to operating costs and payroll. Cin7’s system can integrate popular accounting software like QuickBooks Online, Xero, and QuickBooks.

Ecommerce platforms

Cin7 can integrate with ecommerce platforms that include Magento, WooCommerce, Shopify, and others. If you’re selling through any one of them, IMS integration will give you oversight and let you know how your sales are going. If you’re selling items through more than one of these ecommerce platforms, Cin7 will allow you to integrate their data and accounts into a single platform on your system.

EDI retailers

Electronic data interchange (EDI) is the system through which documents like invoices and purchase orders are transferred electronically. There are several electronic standards to choose from for these exchanges, but whichever one is used, both sender and receiver have to be using the same one. Cin7 can facilitate most of them. Some larger retailers like Scheels, Sears, Sephora and Walmart have their own EDI systems, and Cin7 can be synced with them also.

EDI suppliers

EDI suppliers are organizations that provide EDI-compatible solutions and technologies to other companies. Two of the leading suppliers are Synnex and Tech Data, and Cin7 can integrate seamlessly with both.

Marketplaces

If the website you’re selling your goods through is charging you commission for each sale, you’re on a marketplace. Marketplaces are a good way to get your product out and make a name for yourself, especially if you have a new company or are small in size. To keep on top of your business in these marketplaces, you’re going to have to integrate them with your inventory management system. Cin7 can do this for all the major marketplaces, including Amazon, Etsy, Iconic, and eBay.

Payment gateways

When you sell online, you need a payment gateway to process payments. You also need to integrate this payment gateway with your IMS. More than just getting paid for your goods, integration with your IMS streamlines their flow and ensures you have enough in stock.  To make this easy, Cin7 can integrate with payment interfaces like PayPal, Dejavoo, EVO Payments, and others.

Sales and marketing

Sales and marketing software uses technology to get your advertising to the right audience. That means customizing and posting it on social media and other pertinent sites. To facilitate this, Cin7 inventory management software integrates with Customer Relations Systems (CRMs) such as Salesforce, Mailchimp, Senter, and HubSpot.

Shipping

The very nature of ecommerce involves shipping. Goods that are purchased online have to be physically transported to their buyers. If you hire a third-party to take care of this shipping, you still have to keep track of the items and maintain your records. Cin7’s software can integrate with shipping partners Shippit, GoSweetSpot, Shiptheory and many others, ensuring you’ll always have the information you need at your fingertips.

Supply chain planning

The supply chain covers every step in the fulfillment/manufacturing process from purchasing and inventory management to sales and deliveries. To organize all this in the best possible way, Cin7 integrates with supply chain planning apps like StockTrim, Streamline, and Easy Insight.

Third-party connectors

Sometimes a company uses another organization, a third party, to provide the application integration software (API) that allows different applications to speak to each other. To enable this, Cin7 can communicate with Syncware, Hyperspace HQ, and Pipe17.

Third-party logistics

Logistics is the physical act of moving items and people from one area of a business to another. If you’re parceling out your warehousing and transportation to another company, you’re using third-party, or 3PL logistics. Some of the companies that provide 3PL include JAS, JD Smith, Quiet Logistics, and Ship Depot. Cin7 lets you integrate your systems with any one of them.

 

Winding up

In summary, application integration refers to the process of connecting two or more applications so that the data each holds can be exchanged. When it comes to IMS systems, this ability to share data makes the entire inventory side of the business operate efficiently, and ensures that there’s enough of it all times in the right quantities.

Cin7’s inventory management software lets you integrate with all the relevant apps, making sure you have all the information you need to keep your inventory at optimum levels.

If you want to learn more about Cin7, book a demo by clicking here.