Fulfilment Strategies and Models From An African Perspective

It is all about your customers, and fulfilment strategies are the game plan that allows the flow of products right to the consumer.

A transaction is never closed until the product sold gets to the consumer. It may often have to go back into the supply chain, prompting a redo of the entire delivery process. However, getting the delivery of fulfilment right may not come naturally to many businesses and organizations across the continent. The reason is because they do not have the knowledge, skill, or expertise to pull it off.

In this article, we will highlight fulfilment strategies that work in Africa and will be instrumental in helping businesses and their supply chain manage customer satisfaction.

What are The Fulfilment Strategies?

The customer is central to any supply chain operation.

And Africa is the fastest-rising economy in the world. This means that customers have more purchasing power, and they are demanding more. Businesses and supply chains have to adapt. One of the ways to achieve this is by leveraging fulfilment strategies that work for them.

Here are some of the fulfilment strategies that are critical for supply chains operating on the continent.

Identify The Best Inventory Management Model For The Supply Chain

Inventory management is a major challenge for businesses and supply chains across Africa.

The reason is that many of them are stuck between finding the right model that will help them reach customers more efficiently and holding lots of inventory to avoid stockouts and missed sales. The problem with this is that one is complicated to figure out and the other is too expensive. Many businesses settle for the latter option because of a sense of security. But that’s far from the truth.

Without an inventory management model, the business will either constantly run out of goods or pay so much to hold inventory.

You have probably heard of stores and market units burnt down, and the businesses lost everything. The reason is that the cost of holding inventory gets so high that these businesses try to cut corners by not paying for insurance. When the challenges come, the entire business is swallowed up. So what is the solution?

Identify the right inventory management model that will ensure the business holds just enough inventory at every point in time while being able to feed the customer’s demand.

That is the sweet spot. It is vital to note that having a combination of these models is okay. The supply chain can leverage the best parts from multiple inventory management models to decide on the best fit for its operation. For instance, some supply chains like to combine the Just-in-Time inventory strategy and the pill strategy.

Implement Efficient Picking and Sorting

These two are probably the most time-consuming in the entire fulfilment process.

They can also be riddled with mistakes, significantly impacting the performance of the fulfilment process and ultimately costing the supply chain. Fulfilment is not just about time or speed. One of the most critical factors is ensuring customers get the right product when needed. Think about the waste and stress a returns management operation will entail.

Investing in technology solutions that will optimize these two processes is critical to improving the fulfilment process’s efficiency.

Some of these technology solutions include open-source warehouse management and barcode scanning. However, there are other non-tech approaches. These could be: gravity flow racks, zone picking, investing in staff training, and optimizing the warehouse. Getting this part of fulfilment right would give any business an edge in the market.

Amazon’s acquisition of Kiva was a game-changing for its picking and sorting operations.

Promote Communication and Relationship With Partners

In pursuit of an optimized fulfilment process, supply chains must invest in establishing great relationships with their partners.

A great partnership with clear communication would greatly improve the fulfilment process. For example, your warehouse might be as efficient as possible. But the effort might be for nothing if your logistics partners cannot pick up and deliver on time. To avoid such disappointments, practice these three:

1. Communicate goals and expectations to partners as clearly and often as possible.

2. Integrating the fulfilment process with the partner to promote visibility is possible.

3. Build a relationship with the partners with an eye on the long term to ensure they always prioritize your business.

Optimize Warehouse Layout

Although often overlooked, your warehouse layout could greatly impact the speed of the fulfilment process.

The idea is to set up the inventory for easy access and proper movement. A fast-moving item wrongly placed in the warehouse tends to slow down fulfilment. It might cause a few-minute delay for one item, but when there are several orders for that item, those minutes begin to add up. Improving the layout of your warehouse and strategically placing items could go a long way in improving the fulfilment process for your company.

For example, as a rule of thumb, always position items in high demand in front.

Streamline Reverse Logistics

Reverse logistics is the part of fulfilment supply chains do not like but unfortunately have to deal with.

Streamlining the process would prevent the supply chain’s inventory management from getting complicated, especially in peak seasons when the merchants experience a higher order rate. There are a few ways the merchants can go about doing this. One of them is outsourcing the process to enable a continuous supply chain flow. Reducing mistakes through tech tools would drive down the reverse fulfilment rate.

Order Fulfilment Models

Fulfilment strategies are great but a successful fulfilment operation begins with the order fulfilment model.

There are mainly three of them. A business can go either way or use a combination of them. However, success will depend on the nature of the demand and how the supply chains can leverage the chosen model(s).

In-House Fulfilment

This model is also known as the self-fulfilment model.

It is common among businesses just starting out and are yet to experience very high demands or traffic. In this model, the supply chain handles every step of the fulfilment process, including smaller and larger orders. There are some advantages and disadvantages of this type of model. For example, on the one hand, it helps a small business save costs; on the other, it can be pretty time-consuming.

Typically, once the company grows to a certain point, it shifts towards outsourcing.

Third-Party Fulfilment

Third-party fulfilment, as the name implies, is the outsourcing of the fulfilment arm of any business to partners who are experts in fulfilment.

This way, the business and supply chain can focus on their core strengths while getting the best value from its fulfilment operation. Depending on the leadership and nature of the business, when the supply chain grows to a certain point, in-house fulfilment becomes a nuisance. At this point, it would typically opt for a partnership with a fulfilment company to ensure the fulfilment is optimized.

This model saves costs and is more efficient for the business. On the flip side, it can be compromised and sometimes may require a lot of due diligence to keep the fulfilment partner in check.

Dropshipping

Not common in Africa.

However, in this model, the business or merchant serves as an order-receiving platform. The business interfaces with the consumers directly, receiving their orders and then forwarding them to the manufacturer. The business could forward this order manually or automate the process. The manufacturer handles the other fulfilment steps, including shipping and delivery.

With this model, the business partners with manufacturers abroad, which might take a while before the consumers receive their product.

This method is easy to start and doesn’t usually require a lot of capital. However, businesses do not have control over their inventory.

The Order Fulfilment Process

For the fulfilment strategies to work effectively, there has to be an in-depth understanding of how the process works.

There are a few nuances, but this section should clarify everything.

Step 1: Receiving the Inventory

To begin the fulfilment process, you must ensure you have access to inventory. Your business can either do this itself or outsource the process, but inventory must be present.

Step 2: Storing the Inventory

Once the inventory is received, the next step is to store it and ensure it is properly stored in the warehouse. Maintain adequate warehouse management systems for the safeguarding and easy flow of inventory.

Step 3: Processing the Order

This step entails the picking, sorting, and packing processes. As mentioned earlier, it is where the brunt of the work is done. To make the order processing step more effective, businesses can invest in the automation of the process.

Step 4: Delivery or Shipping Out The Order

This is probably the most exciting part of the process for any merchant or business. In this process, the merchant ships the order to the consumer using in-house logistics infrastructure or partnering with a third-party logistics service.

Step 5: Managing Returns

Probably the least desirable part of the process. It happens when the supply chain makes a mistake or when consumers have second thoughts about the commodity they ordered. It prompts them to return the order. The process can be stressful and complicated for the merchant. It is best to outsource this process as well.