NewStream Blog

A third-party logistics provider (3PL) offers a broad range of services that can include fulfilling orders. An order fulfillment provider is also sometimes called a fulfillment center and is defined as a company that takes care of tasks associated with picking, packing and shipping of customer orders.

Warehousing and fulfillment are important components of supply chain management. Sometimes these terms are used interchangeably, and often, warehousing and fulfillment services are offered by the same company. There are, however, distinct differences between the two. Understanding the relationship between warehousing and fulfillment, and the need for both, can significantly improve order processing and inventory management. 

With the use of a fulfillment center, companies reduce the burden of overhead and labor costs associated with shipping, storing and managing inventory. Not all companies have the capacity to develop and manage their own fulfillment center and instead, seek to partner with fulfillment companies. A strategic partnership with a warehouse and fulfillment center can also offer additional value-added warehouse services such as inventory management, inventory receiving standard protocols, negotiating logistics, product picking, kitting multiple items into one product, packaging, and managing returns. But what are some challenges that may hinder the order fulfillment process?

Kitting is a process by which separate but related items are picked, packaged, and supplied together under one part number, providing the manufacturer with a list of benefits, both internal and external. The process is usually provided by a third party logistics (3PL) provider due to their knowledge and expertise with inventory accuracy and other integral portions of the supply chain.

Reducing fulfillment costs is a priority for most companies that are either creating a new fulfillment process or trying to improve upon a current system. If you’re looking for information on how much fulfillment will cost you, comparing costs of outsourcing or doing research on how to reduce fulfillment costs for your organization, this post will provide valuable insights.