What is the Most Frequent Cause of Inventory Fulfillment Issues?

Inventory fulfillment has become synonymous with having a successful E-commerce business. The number of orders timely delivered is directly proportional to customer satisfaction and that leads to a good long-standing impression of your company. Earlier it was easy to barter goods in the old-fashioned brick and mortar system. There was a simple structure set in place which got over as soon as it was initiated. Changes of issues arising were next to nil in the physical store setting. As both buyer and seller are at the same place, at the same time. This is not the same with online businesses. Hence, the process gets complex and might require more layers of operations than a brick-and-mortar store would pursue.

Below are 8 points explaining why Issues occur in Inventory Fulfillment Business:

 

1. Multi- Product Inventory

A business needs a rich interdisciplinary stream of multi-item inventory stocked which complement the brand of the company. For example, Adidas is a shoe brand, but it also holds multiple product items like bags, athleisure clothing, soccer gear (gloves, balls, shin pads). Nearly all businesses have multi-disciplinary items in their inventory as part of the brand offering. With this, the orders coming in will also be varied. The multiple SKUs provides a huge challenge to face when having a multi-item order to fulfill. This is the first and foremost issue companies need to address in their fulfillment process to make sure everything else following this will move smoothly.

2. Human Error

The shipping procedure might sound mundane and regular, like - packing, sticking a label, sending off the package for delivery. Sounds almost too easy to do. But rather in fact, a study which gathered 200 small businesses insights claimed that 62% of all major inventory issues are because of human error. This is the toughest phase in the whole point of contact as it is one step bridging the gap between company and customer. And in this phase, humans are very much present. Humans are bound to make mistakes, and the stakes are high as they are working against a specified time frame in this industry. Inventory management should step in to ensure all supervisions are audited and all employees are well rested and not over worked so as to avoid errors.

3. International Shipping

There can be issues in wrong product SKUs printed, stickers might not meet guidelines, tapes might not fulfill criteria because of International policies for product shipment. There are lengthy documentations to adhere to and greater penalties as fine if not done so in the proper manner. Many companies are penalized for mistakes in order dispatched by small businesses as they do not meet requirements of import level standards. Businesses should take double precautions if and when their orders are to be shipped overseas.

4. Lack of On-site Experts

There are managers in inventory chains for all businesses. But what companies fail to understand is that having managers and getting inventory specialists are poles apart. The specialists will be better equipped to negate the faults that a general manager might not be aware of as the field knowledge might be limited or outdated.

5. Inadequate Space

The seller inventory of big E-commerce chains like Amazon and Flipkart own huge spaces to stock hundreds of seller SKUs in a single outlet. Their systems are a result of years of experience and achieved status in the field. However, artisans’ companies or small-scale running e-commerce chains usually do not have enough capital to sustain such heavy inventory spaces. There arises an issue with inadequate space to store SKUs of multi-items.

6. Sensitive & Perishable Items

Some inventories need extra care while in storage as they are sensitive and can perish if not kept under specific conditions as per their instructions. Products like chocolates melt quickly in the summer and in general - so breakdown of cooling rooms, air conditioning systems might be the cause of failure in fulfilling inventory orders to customers. This affects the name of the brand and might cause backlash.

7. Suppliers Issue

The company and its suppliers need to have a bond tightly knit together to overcome discrepancies in order shipments from the warehouse to the customer’s house. Even if the supplying materials are from the inhouse company itself, this does not guarantee that products will be stocked efficiently. Supplier parties must resolve any travel, legal, containment procedures so that there is a perfect flow in fulfilling inventory.

8. Understaffed Workplace

Many businesses overlook shipping of products to be the least of their concerns as it is the end of the production process and it seems like a handover to courier services - this is a flawed rationale to go by as the staff overworking to fill in many employee’s work will be bound to make hefty mistakes that can cause huge blows to the legal admin department of the business. To avoid such unpleasant scenarios, companies must make sure to hire enough trained personnel to their company for best inventory fulfillment systems.

Updated On Oct 17, 2021