Is inept forecasting holding back online fulfillment?
According to a survey from Peoplevox, purchasing and forecasting is the most common challenge to the e-commerce fulfillment process.
The study found that 24 percent of the 154 retailers surveyed worldwide indicating that purchase and forecasting was the one fulfillment area that required the most improvement in 2017.
In its report, Peoplevox, an e-commerce warehouse management system provider, said suppliers are striving to gain real-time visibility of stock levels and sales volume, both key indicators when planning what to buy. Other challenges in the area of purchasing and forecasting include avoiding buyers working off historical sales data and dealing with a wide SKU base.
“In determining the level of optimum inventory for operation, this will only be achieved when a full range of what’s wanted is actually available and stock doesn’t sit gathering dust and subsequently requires discounting,” said Peoplevox.
Ultimately, retailers may choose to rely on “back to back ordering” — or issuing purchase orders only when customer orders arrive — versus always having all items in stock. Often, back-to-back orders are drop shipped directly from suppliers to customers.
“With increasingly reliable global supply chains, the need to keep everything on sale in stock is diminishing with more retailers electing to sell certain product ranges that they will only purchase on the back of sales order demand,” wrote Peoplevox. “This allows businesses the flexibility of fulfilling a far more extensive range of products to customers while optimizing their up-front purchasing costs and available storage space.”
Other findings from the survey:
- Only 53 percent of the retailers were happy with their fulfilment and warehouse operations.
- Sixty-three percent admitted to not always shipping on time, with 34 percent citing the unavailability of stock being a key reason.
- When it comes to rectifying shipping errors, 80 percent appear accepting of the additional carriage, customer service and warehouse labor expenses as an inevitable cost of order fulfilment.
- New E-commerce fulfilment survey finds evidence of retailer growing pains – Peoplevox
- The 2017 E-Commerce Fulfilment Report – Peoplevox
DISCUSSION QUESTIONS: What do you see as the main hurdles to improving forecasting for online fulfillment? Do you see back-to-back orders or drop shipments as viable solutions that retailers should explore?