Three Steps To How Order Fulfillment Improves Customer Retention & Increases Profits

Order Fulfillment Improves Customer Retention

Order fulfillment improves customer retention as well as increases profits.  A recent study determined that it costs seven times more to acquire a new customer than it is keeping one existing customer. Customer acquisition costs are steadily increasing, so the key is to assure every new customer is satisfied and stays a customer. Likewise, studies show that the holiday and Q4 period is often the time when organizations generate the most first-time customers.

There are many important steps in obtaining and satisfying customers, but the most critical step in keeping happy customers is the warehouse. Your order fulfillment and distribution system will often make or break an organization’s success.

So how does the warehouse make (not break) and keep happy customers?

  1. Orders delivered on-time.
  2. Orders are accurate.
  3. Items are in great shape.

An order delivered not only on-time, but as promised… and that promise must include processing the order in just a few hours from receipt with late cut-off times. So, we are talking about taking orders and fulfilling them within 2-3 hours before pick-up. This may not be a big deal if you are processing hundreds of orders per day, but how about thousands?

A piece of cake with the right automation equipment. A Dispen-SI-matic® A-Frame or portable Mobile-Matic™ A-Frame system can often pick 2,200 to 4,200 orders per hour while utilizing zero order picking labor. Imagine your warehouse without the hassles and costs of a significant portion of your labor. Items are automatically picked by the Dispen-SI-matic A-Frame directly into totes or shippers and then routed to packing and shipping (for completed orders) or to the next zone (for SKUs required to complete the order).

The goal is to automate in an A-Frame the 20% of the fastest moving SKUs which often account for 60% to 80% of your orders. Hours of human labor translate into minutes of automated order picking.

Order accuracy beyond 99%…  an Dispen-SI-matic A-Frame system utilizes multiple sensors to assure the proper item and its quantity has been dispensed into the correct order.

The A-Frame system reads an inducted tote’s or shipper’s license plate. The WMS/WCS assigns the Dispen-SI-matic A-Frame controller the content for each order or an order can be started by the A-Frame controller by automatically assigning an order to a specific tote or shipper. Either way, as the order goes through the center of the Dispen-SI-matic A-Frame, each dispenser automatically inserts the correct item(s) and quantities of items in the order.

Sensors on every channel in the Dispen-SI-matic A-Frame helps assure there is inventory ready to be dispensed and that it has been dispensed into the correct order. In the rare case, any anomalies are flagged and communicated to the WMS to be re-routed for manual checking.

Items are in great shape… The item moves from the dispenser directly onto a slide pan and into a tote, shipper or belt. The distance a dispensed item moves is often dramatically less than the distance a manual picker drops an item into a tote. As an example, a large contact lens distributor has used Dispen-SI-matic A-Frames for over 20 years. Their Quality Control considers a pin-head dent on a box as “damaged.” In the decades, since the system has gone live, it has processed millions of units through the Dispen-SI-matic A-Frame. Our customer and just as important… their customers are very happy with the results.

So, organizations looking to retain their new and old customers should be reviewing their warehouse practices and looking to automation that provides their customer’s demands and its management’s financial requirements. As you can see, order fulfillment improves customer retention and increases profits.

About SI Systems

SI Systems has been providing world class automated material handling solutions, systems and software for order fulfillment, distribution center, warehouse, manufacturing and assembly operations for over 55 years. Solutions and systems include workstation A-Frames, portable A-Frames, document inserters, towline conveyor, carousels, VLMs, AGV and AGC, WES, WMS and WCS software plus consulting, slotting and integration services.

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Order Fulfillment Improves Customer Retention
Ed Romaine
Ed Romaine
Romaine has spent over 30 years involved with organizations looking to optimize their distribution, manufacturing, and warehousing operations. Focusing on customer’s processes, systems and business model, Romaine has helped dozens of organizations improve profitability by reducing labor, floor space, errors and inventory while improving accuracy, inventory turns and cut-off times.Within the industry trade association, MHI, Romaine has taken numerous leadership positions over his 18 year membership including: Chairman of the Automated Storage & Retrieval (AS/RS) Group, Chairman of the Order Fulfillment Council of America, Chairman of the Warehouse Execution Systems Group and was one of the originators of the Carousel and VLM Product Section Group.Romaine is a frequent editorial and information contributor to hundreds of publications, blogs and online publications and has been a speaker at dozens of Supply Chain, Logistics, Lean and Facility organizations and functions.

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