A fulfillment center should be nothing like a traditional distribution center in this age of e-commerce, according to executives at Tompkins International, supply chain consultants.
“Distribution operations are stressed, and companies are struggling to keep up with online demand,” says Kelly Reed, EVP and fulfillment center expert at Tompkins. “Orders need to be picked and shipped right away to meet customer expectations for speedy delivery, and this means designing fulfillment centers that are dedicated to responding to online orders instead of replenishing stores.”
The operational requirements behind a successful fulfillment center are also different than for a distribution center, Reed states in a new video. It is the business and operations strategy that drives the order fulfillment network. The capabilities needed for each company’s e-commerce strategy are customized and include developing flexible solutions for shorter time horizons, understanding the balance between automation and constraints, and properly sizing the packing operation.
Peak shipping times are more intense in fulfillment centers, orders sizes are smaller, and there are typically more stock-keeping units (SKUs) to provide customers with an “endless aisle” experience.
“Traditional retail and wholesale distribution centers will need to evolve into flexible, multichannel fulfillment centers,” Reed adds. “Let’s face it – companies that provide the best customer experience and deliver the right products, at the right time, and in the right quantities and condition, will build customer loyalty. This will determine the winners in the new e-commerce world.”