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How to Prepare for Supply Chain Issues Affecting Order Fulfilment

17 Jun, 2024 11 mins min read

Despite what we see on our screens during advertisements, which show a completely smooth ord...

In this article:: Order Fulfilment Process

Despite what we see on our screens during advertisements, which show a completely smooth order fulfilment process from start to finish, most business owners know that not every aspect of pleasing customers can always be successful.

Most businesses have probably experienced this, maybe due to packing issues, personal disruptions, unexpected demand fluctuations that you have not been prepared for, or external issues out of your control—not everything is within your control.

As your supply chain grows and more external links are established, the likelihood of problems increases. But how do we, as businesses, prepare for these issues, even those out of our control?

This guide will explore the typical challenges businesses may encounter in order fulfilment. We'll advise you on effectively handling these emergencies and disruptions.

Understanding Order Fulfillment Risks

Did you know that 43% of customers say they won't shop with a retailer again for at least a month after a negative delivery experience? As your business expands and your supply chain grows, the risks associated with order fulfilment become increasingly apparent.

Covid-19 changed the way businesses need to adapt to crises. No one was fully prepared for it, even large businesses. No one anticipated that every aspect of the supply chain would be impacted in one way or another.

In the early stages, retailers took 1.5 days longer than usual to fulfil orders, and efficiency suffered, particularly for those with international suppliers. These disruptions caused order lead times to double because many international suppliers operated at only 50% of their capacity.

After the challenges brought on by the pandemic, businesses have gotten better at adapting to these, but several common disruptions can still affect the order fulfilment process. Let’s discuss these.

Common Supply Chain Disruptions

Supply chain disruptions can have far-reaching consequences beyond just delays. They can significantly damage a business's reputation (54% of respondents in a recent survey reported this) and lead to logistical nightmares.

The most common of these disruptions are entirely out of your business hands and can involve:

Raw Material Shortages: Shortages in essential materials can disrupt production and lead to delays in fulfilling orders. In 2023, 71% of global companies highlighted raw material costs as their number one supply chain threat.
Transportation Delays: Issues such as traffic congestion or adverse weather conditions can slow the delivery process, causing delays in order fulfilment.
Natural Disasters: Events like earthquakes or hurricanes can severely disrupt supply chains, affecting the availability of goods and services.
Demand Fluctuations: Consumer demand is only sometimes consistent and can be influenced by various factors, including seasonal trends, successful marketing campaigns, and economic changes.

Potential Issues Within Your Operation

It's not just external factors that can impact order fulfilment; potential issues within your operations can also contribute to challenges. These can include:

Equipment Failure: Malfunctions in machinery can disrupt production schedules, leading to delays in fulfilling orders.
Labour Shortages: Shortages in staff can strain your operations and lead to delays in order processing and fulfilment.
Communication Breakdowns: Inefficient communication channels can result in errors and delays in order fulfilment.

By being aware of these risks, your business can enhance its ability to navigate the complexities of order fulfilment successfully. Being prepared can make all the difference in maintaining customer satisfaction and preserving your brand reputation.

Top Strategies for a Resilient Order Fulfillment Operation

As we have established, nothing is ever fully in control. Still, now that we have discussed the most common supply chain issues and order fulfilment process disruptions, we can begin exploring how to prepare for these events.

Let's examine our top strategies for ensuring your business stays as resilient as possible in the face of difficulties.

Diversification

Diversification is like having a safety net for businesses of all sizes regarding supply chain issues. Mixing up their supplier network and manufacturing locations allows companies to bounce back quicker from challenges and keep their order fulfilment running smoothly.

For example, a boutique sourcing fabric from multiple suppliers can easily switch to an alternative when faced with unexpected delays, maintaining customer satisfaction.

There are several benefits of diversification in mitigating issues with the supply chain. When implemented successfully, these typically include:

Risk Mitigation: Diversifying suppliers and production spots spreads risk and prevents businesses from being too vulnerable to one problem. This proactive approach helps companies keep their engines running even when there are bumps in the supply chain road.
Operational Flexibility: A diversified supply chain gives businesses room to operate when things get tricky or complicated. With different options for getting materials and making products, companies can adapt to keep order fulfilment running smoothly.
Enhanced Resilience: Diversification gives businesses backup plans and other options when things go sideways. Being able to switch gears quickly means keeping orders on track and customers happy, even when things aren't going according to plan.
Competitive Advantage: Businesses that diversify their supply chains have a leg up on the competition. They can keep products flowing, meet customer demands, and weather storms better than those with all their eggs in one basket. Being prepared and flexible helps businesses stand out and stay ahead.

Applying Diversification

For Small and Medium-sized Businesses (SMBs)

SMBs can reduce supply chain risks by diversifying their supplier network and manufacturing arrangements. They create a safety net by teaming up with multiple suppliers for critical materials. If one encounters issues, others can step in, reducing dependency on any single supplier and cushioning the impact of supply shortages or disruptions.

While setting up multiple manufacturing locations may not be possible for smaller businesses, they can collaborate with contract manufacturers or explore outsourcing. This ensures continuity in production. Production can go smoothly and change to another if one location hits a rough patch. Essentially, you are preventing putting all of your eggs in one basket.

For larger eCommerce companies, spreading out their suppliers reduces reliance on any source. This provides them with backup options in case of supply chain issues.

Large enterprises can strategically place their production operations to minimise the impact of local problems. By spreading out manufacturing, they can keep production running smoothly even if there are challenges in one area.

Using different suppliers and production locations that suit your size and needs can make your business more resilient. Diversification helps you handle challenges better, keeps operations smooth, and sets your business up for long-term success and growth.

Internal and External Communication

In your business, maintaining strong communication in the supply chain is vital for building strong partnerships and resilience, particularly in order fulfilment and managing supply chain disruptions. Keeping communication channels open with your suppliers supports trust and collaboration, enabling you to handle challenges more effectively.

Supplier Communication

Maintaining open communication with suppliers is key to building strong partnerships that benefit your business and enhance order fulfilment services. For example, if your trusted supplier alerts you to upcoming factory maintenance affecting delivery schedules, you can adjust production timelines and proactively communicate any delays to your customers.

Positive relationships with suppliers can also lead to more flexible arrangements, such as expedited deliveries or extended payment terms during challenging times, which helps manage supply and demand effectively.

You can begin to create these relationships, no matter the size of your business, by:

Regularly check in with suppliers to discuss potential issues or changes in demand related to order fulfilment.
Set up regular meetings or calls to foster relationships and address concerns proactively, especially when dealing with supply chain issues.
Implement a communication platform for real-time information exchange to ensure smooth order fulfilment processes.
Work with suppliers to find solutions and minimise the impact on order fulfilment to avoid potential disruptions.

Cross-Functional Teams

Encouraging collaboration between different departments within your business enhances resilience, especially concerning order fulfilment and supply chain disruptions. For instance, aligning procurement with order fulfilment allows your teams to anticipate inventory needs more accurately, reducing stockouts and ensuring customer order fulfilment.

Additionally, cross-functional teams support problem-solving and decision-making when addressing supply chain issues. When faced with a logistics challenge, collaborative brainstorming sessions result in creative solutions that optimise routes and reduce transportation costs, improving order fulfilment services.

Just like your business is unique, your team is too, and that means your teamwork strategies should be tailored to fit. While we can't map out your communication strategy entirely, here are some steps to make sure your internal comms are ready for any challenges:

Get order fulfilment, procurement, and customer service teams to work on supply and demand goals.
Encourage communication between departments, especially for order fulfilment.
Schedule regular meetings for different departments to collaborate and solve supply chain issues.
Simplify processes and find risks together across teams to improve order fulfilment and manage supply and demand changes.

Focusing on communication and teamwork within your business and with suppliers can boost resilience and bring many benefits to order fulfilment and supply chain management. But remember, they can't protect you from everything, like natural disasters.

Still, building solid relationships and working together effectively can make your business more adaptable and resilient, ready to handle challenges.

Flexibility, Adaptability and Contingency Planning

It is crucial to adapt to unexpected challenges. Businesses adapting to disruptions and fulfilling orders on time are more likely to satisfy customers. A Business Continuity Institute (BCI) study found that organisations with a documented business continuity plan could resume normal operations 23% faster on average following a disruption.

Additionally, companies with a documented disaster recovery plan experienced 53% less downtime than those without a plan. More generally, companies focusing on supply chain resilience achieved 10% higher profitability margins than their less resilient counterparts.

It’s clear there are several benefits in preparation, but how do you prepare in advance for things that are not always in your control? Here are some practical steps to build a robust contingency plan and ensure flexibility and adaptability in your order fulfilment operations:

Establish Flexible Operations

Building resilience in your order fulfilment operations starts with creating adaptable processes that can smoothly handle fluctuations in order volume. This flexibility allows your business to respond quickly to changing market demands, ensuring customer satisfaction and maintaining a competitive edge.

For instance, imagine your business experiencing a sudden surge in orders due to a promotional campaign. With scalable operations, such as flexible staffing arrangements and automated systems, you meet increased demand without compromising service quality and disappointing customers.

Examples of this may include:

Hire temporary staff as needed for busy periods
Use software for automated order processing
Invest in equipment for quick production adjustments
Partner with suppliers able to adjust to order fluctuations

Develop Clear Protocols

Establishing clear protocols for navigating disruptions that may arise, such as supply delays or transportation issues, is essential. Clear protocols provide your team with predefined guidelines and procedures to follow during challenging situations, reducing ambiguity and ensuring a coordinated response.

Let's say a key supplier encounters unexpected production delays. With predefined response plans and alternative sourcing strategies, your team can quickly switch to alternative suppliers to minimise the impact on your fulfilment process and ensure timely delivery to customers. These protocols help prevent further risks and build customer trust by demonstrating your ability to manage disruptions effectively.

Examples of these may include:

Protocol for communicating with suppliers regarding order status updates and potential delays.
Protocol for activating backup suppliers or sourcing alternative materials in case of supply chain disruptions.
Protocol for proactively updating customers about delays and providing alternative solutions or compensation if necessary.

Prioritise Critical Functions

Identifying and prioritising critical functions within your order fulfilment process ensures that essential operations run smoothly during disruptions. This proactive approach minimises the impact of disruptions on customer satisfaction and helps maintain business continuity. By thoroughly analysing dependencies and bottlenecks, you can pinpoint essential steps from order processing to shipping and allocate resources accordingly.

For instance, streamlining the packing and shipping process for high-demand products ensures timely delivery to customers, even during peak periods or unexpected disruptions. Prioritising critical functions improves operational efficiency and strengthens your business's ability to weather unforeseen challenges and emerge stronger.

Though different for each business, this may look like:

Identify essential tasks in order fulfilment.
Allocate resources accordingly.
Streamline high-demand processes.
Improve efficiency and resilience.

Create Effective Communication Channels

Clear communication is essential for effective collaboration and coordination during disruptions. Establishing strong communication channels with internal teams, suppliers, and customers ensures that everyone remains informed and aligned, minimising confusion and maximising efficiency.

Real-time communication tools support timely updates and quick decision-making, while dedicated communication leads ensure that information flows smoothly across all stakeholders. This enhances operational resilience and supports trust and transparency, strengthening relationships with internal and external partners.

You can do this by:

Use one platform for all communication.
Appoint communication leads.
Train teams on communication.
Use instant messaging.
Have emergency communication plans.

By integrating these approaches into your business practices, you can build a resilient supply chain capable of navigating unforeseen challenges effectively, setting your business up for long-term success and growth.

Order Fulfilment: Final Thoughts on Proactive Strategies

When facing supply chain challenges, it's crucial to acknowledge that complete prevention is impossible. However, there are proactive steps you can take to mitigate risks and enhance your business's resilience.

Embracing this reality means understanding that the business environment is unpredictable. By proactively addressing potential disruptions, you position your company to navigate challenges effectively and maintain continuity to fulfil orders.

Remember, while you can't eliminate supply chain issues, you can prepare your business to respond effectively when they arise. It's about becoming organised, resilient and adaptable in uncertainty, ensuring your business can thrive despite complexities.

Ready to Optimise and Elevate Your Supply Chain Management?

We're experts in all aspects of order fulfilment and supply chain management and are committed to your growth. With extensive experience partnering with eCommerce businesses, we've tailored solutions to meet their specific needs. As a reputable 3PL service, we aim to ensure you're equipped to manage your business activities effectively, meeting customer demand and boosting satisfaction.