Fulfillment centres also known as
fulfilment centers are major providers of logistics and supply chain management
services to e-commerce and retail companies. These facilities are used in the
storage of products, packaging and shipment of products to ensure that the
needs of the customers are met in terms of order placement and final delivery
of products.
What is a Fulfillment Center?
Fulfillment centers
are inventory storage locations in which products from different sellers are
held and sent to buyers. Fulfilment centres are different from traditional
warehouses in that their designs focus on creating quick turnaround for items.
They are manned with high-tech facilities to handle the inventory; the order
process; and the business of delivering the orders. Such centres can take
responsibility for all the activities from receiving the products to offering
storage and processing them, selecting the products, packaging them, and
delivering them straight to the customers.
The Importance of Fulfillment Centers
1. Speed and Efficiency: The core of fulfillment center is made of order fulfilment to ensure the right orders are made. The fulfilment process can be extremely time-consuming, as the order has to move from one facility to another, which vastly increases the delivery lead time. This speed is crucial in the age of the economy, where the customers’ expectation is the same or next-day delivery.
2. Scalability: The concept of a fulfilment centre enables organizations to increase or reduce order capacity without having to incur further expenditures related to the establishment of new infrastructure. This is of particular importance during busy seasons like the holiday season when fulfillment centers are tasked with dealing with high arrival rates.
3. Cost Savings: Utilizing a fulfillment center and outsourcing work to a separate facility can be more cost-efficient than hosting it in-house. Companies are exempted from high labour costs in the factories, storage expenses, and the expenses that are related to the transportation of goods from one place to the other.
4. Focus on Core Activities: The utilization of fulfillment centers saves businesses from having to deal with labour-intensive tasks like order fulfillment and shipping, allowing them to concentrate on their core functions which include new product development, marketing, and sales.
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