Typical Fulfillment House
The typical Fulfillment House infrastructure includes four key elements:
- A Warehouse facility
- Inventory control system
- Staff and equipment for Pick and Pack
- Shipping capability
- Customer Service
Below is a detailed description of each of these elements:
1. Warehouse Facility
A Warehouse is required for the secure storage of products. Typically a Warehouse is a large secure storage area that is organized into rows of indexed multilevel shelving, with enough space between each shelving row to operate a forklift for the placement of palletized blocks of stock.
2. Inventory Control System
The inventory control system is a very important, if not integral part of the Fulfillment infrastructure. The inventory control system is typically a computerized information system that keeps track of product inventory. If a product has been shipped to a customer, the quantity for that product would need to be deducted appropriately in the inventory control system. It is very important that the inventory control system be kept up to date, in order to maintain optimum stock levels. To this end a good reporting system is helpful, alerting managers to stock that needs to be replenished, as well as assisting in the projection of product production.
3. Pick and Pack
The Pick and Pack process requires warehouse and packing equipment, as well as staff trained to use that equipment to perform the Pick and Pack function. When the warehouse receives an order, a trained staff member retrieves (picks) the product or products for the order from where it is stored in the warehouse and then packs it ready for shipment.
4. Shipment
The final step in the Fulfillment process is shipping the product to the end customer. Although a company could potentially maintain its own shipping infrastructure sufficient for its own needs, more commonly the shipping process is outsourced to a shipping company, like FedEx or UPS.
5. Customer Service
Although Customer Service is not an essential part of the physical process of fulfilling orders to customers, it is often required in order to respond to any customer queries about an order.
As is obvious from the Fulfillment infrastructure outlined above, a Fulfillment House requires a significant investment. Among other reasons, the weight of this investment, especially for small or new companies, has given rise to the phenomenon of companies outsourcing their Fulfillment needs to dedicated Fulfillment Houses.
