Problem
A fast-growing e-commerce company struggled with accurate order fulfillment. With an average of 8 SKUs per customer order, the manual picking process was becoming increasingly tedious with the company’s growth. This labor-intensive process not only led to inaccuracies in orders but also fostered an environment prompting high employee turnover. The fulfillment department evolved into a bottleneck, erasing efficiencies found in other areas of the company. Escalating customer returns and dwindling retention rates further highlighted the issue. The company recognized the need for an automated pick and pack process, to handle growth, reduce employee turnover, and improve overall efficiency.
Solution Details
The Toro Async team created a fulfillment app that serves as the backbone of efficient order fulfillment. The fulfillment app has the ability to ingest orders from a multitude of ordering platforms and Enterprise Resource Planning (ERP) systems. This automation not only eliminates manual data entry errors but also ensures that orders are seamlessly integrated into the fulfillment pipeline.
What truly sets Toro Asyncs solution apart is its robust segmentation capabilities. The app empowers businesses to tailor their fulfillment processes based on an array of variables, offering an unique personalized fulfillment experience. Here are some of the key variables that users can leverage for segmentation:
- Brand: Businesses can categorize orders by brand, allowing for specialized treatment based on brand preferences.
- Shipping Week: Orders can be organized by shipping week, enabling efficient batch processing and delivery coordination.
- Shipping Date: Granular control over shipping dates facilitates timely deliveries, especially for special occasions or promotions.
- Region of the Country: Segmenting orders by specific regions aids in optimized logistics and regional marketing efforts.
- State: Geographical categorization ensures compliance with state-specific regulations and tailored shipping options.
- Zipcode: Precise zipcode-based segmentation supports targeted marketing campaigns and delivery optimization.
- Certain Products in Order: Customized packaging or handling can be applied based on the specific products included in each order.
- Customer Lifetime Value (LTV): Orders can be prioritized or treated differently based on the customer’s LTV, fostering loyalty among high-value customers.
- First Time Order vs. Returning Order: Distinguishing between first-time and returning customers allows for tailored marketing and retention strategies.
- Box Size: Orders are matched with appropriate box sizes, minimizing excess packaging and reducing shipping costs.
- Number of Items in Order: Efficient packing and shipping strategies can be applied based on the number of items in each order.
- Weather Patterns: Real-time weather data integration enables businesses to make weather-dependent fulfillment decisions, such as packing products sensitive to temperature.
- Shipping Carrier: Customize shipping methods and handling based on the selected carrier, ensuring timely and cost-effective delivery.
Outcome
- Significant Improvement in Order Accuracy: Following the implementation of Toro Async’s fulfillment app, the accuracy of order picking saw a remarkable improvement. The company’s order accuracy rate surged from 90% to an impressive 99% across thousands of orders processed each week. This dramatic increase in order accuracy translated into higher customer satisfaction and a substantial reduction in the number of returns and customer complaints.
- Reduction in Employee Turnover: The introduction of the automated pick and pack process had a positive impact on the work environment. The labor-intensive manual picking process, which was a major contributor to high employee turnover, was replaced with a more efficient and less physically demanding system. As a result, employee turnover decreased by 25%, leading to a more stable and motivated workforce.
- Enhanced Picking Speed: With the implementation of the Toro Async fulfillment app, the picking speed saw a remarkable improvement. Employees were able to pick and pack orders at a rate 150% higher than before. This increased efficiency allowed the company to process more orders in less time, reducing the fulfillment department’s role as a bottleneck and improving overall operational efficiency.
- Increased Customer Lifetime Value (LTV): The improved order accuracy and personalized fulfillment experience had a direct impact on customer retention and loyalty. On average, Customer Lifetime Value (LTV) increased by 15%. Customers were more satisfied with their orders, which in turn led to repeat business and a higher likelihood of becoming long-term, high-value customers.
- Diversification of Revenue Streams: The implementation of the automated fulfillment solution not only improved internal operations but also opened up new opportunities for the company. Leveraging its newfound efficiency and accuracy, the company ventured into nationwide fulfillment services for other businesses. This additional source of revenue allowed the company to expand its market presence and further capitalize on its fulfillment expertise, contributing to overall business growth and stability.
In summary, Toro Async’s innovative fulfillment solution not only resolved the company’s initial challenges related to accuracy, efficiency, and employee turnover but also had a transformative impact on its business operations. The company achieved remarkable improvements in order accuracy, employee satisfaction, and processing speed, which, in turn, led to increased customer loyalty and the establishment of a new revenue stream through nationwide fulfillment services. This success story showcases how embracing automation and personalization can revolutionize e-commerce fulfillment and drive significant business growth.
