Analyst insight: The world of fulfillment services has become mainstream in consumer culture thanks to e-commerce platforms like Amazon. Service companies must now perform two-day, next-day and same-day delivery at a low — or no — cost to customers. 

Customer demand for fast and cheap delivery is forcing the marketplace to step up performance. Delivery windows that historically ranged from four to five days are quickly dropping to two or fewer days as shoppers — and e-commerce giants like Amazon — have set the pace.

How are fulfillment service providers meeting these new customer expectations? 

Strategic automation is one answer: Robots are increasingly popping up in fulfillment to increase speed and cut costs. Robotic systems also offer a solution to the growing problem of obtaining a qualified workforce in many markets where workers are hard to find and retain.  

Technology improvements over the past few years have also helped to reduce costs and provide companies with the information needed to effectively manage fulfillment processes. Advanced tools like warehouse management systems (WMS), warehouse control systems (WCS), warehouse execution systems (WES), distributed order management (DOM), transportation management systems (TMS) and other supply-chain systems for inventory management and reporting have moved the industry forward. Huge improvements in network planning and design software are also making major contributions to new competitive requirements. 

Transportation is typically the largest component of supply-chain cost and delivery times, so advancements in transportation planning and network design are critical to reducing costs and increasing delivery speeds. Transportation innovations are occurring daily to help fulfillment service providers meet these needs more effectively. 

The resurgence of fulfillment as a key business function in supply chain has driven many outstanding leaders and thinkers to join the ranks of fulfillment service companies. New ways of performing operations through methods like “Lean” and “Six Sigma” have led to breakthroughs that save both time and money.

Outlook

The future is bright for fulfillment companies that invest in strategic automation, advanced technology solutions and talented leadership to increase speed while driving down cost — ultimately meeting consumers where they’ve already taken the market.

Bruce Tompkins is president of Tompkins Fulfillment Services.