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.
Warehousing
If your company has inventory, warehousing will be required in one form or another. Whether you take care of it in-house or through outsourcing, a warehouse is just a location to effectively store your products. The concept is simple enough, but as with any business discipline, there are best practices, techniques, and general know-how that can and should be employed to reduce complications and headaches.
In order to remove any obstacles to your company’s growth, these warehouse practices should be synchronized with the overall supply chain operation, including fulfillment and distribution. Warehousing includes receiving, putaway, storage, inventory audits, picking, packaging, sorting and shipping. If you just don’t have the space or need help managing warehouse overflow, outsourced warehousing is a great option. Leveraging both the physical space and technical expertise of a warehousing services provider allows your team to focus on other tasks like hitting your sales goals.
Fulfillment
Order fulfillment refers to the process of receiving, packing and shipping an order for customers. Like a warehouse, a fulfillment center holds inventory, but fulfillment services go one step further to send out orders to customers and retailers as instructed. Fulfillment centers work with corporations, retailers or ecommerce companies to provide B2B or B2C order fulfillment.
The point of fulfillment services is to quickly react to incoming orders and get products delivered effectively. Unlike a warehouse-only operation, inventory in a fulfillment center doesn’t sit long. While startups or smaller companies may fulfill orders in-house initially, utilizing a fulfillment warehouse is a big part of scaling up.
The Relationship Between Warehousing and Fulfillment
Warehousing and order fulfillment are two separate but equally important links in the product supply chain. A warehouse has the role of storing products safely and securely until they’re needed while a fulfillment center focuses on meeting customer expectations when it comes to orders.
Fulfillment warehouses offer additional services not included in a warehousing arrangement such as return and exchange management. Some companies advertise both warehousing and fulfillment services on their website and do an acceptable job in each area, while others only specialize in one or the other. At NewStream, we’re a full-service supply chain management company and excel at both.
Finding a Service Provider: Warehousing, Fulfillment or Both?
What type of service do you need? Making that determination starts with doing some research, educating yourself and looking at your options online. If you only need to store and ship goods, you may just require warehousing for now. But before you make this decision, you should consider your company’s growth plans.
Do you anticipate shipping a high volume of orders or needing other services like inventory management, developing receiving protocols, product picking, kitting multiple items into one product, packaging, product assembly, labeling, negotiating logistics, transportation or managing returns? If so, it’s best to find a provider that can do it all, including order fulfillment, so that you have room to grow.
At NewStream Enterprises, LLC., we work with companies of all sizes to provide not only our services but also our guidance in creating customized programs that make sense for you. We pride ourselves on being a low-risk, frictionless team that our partners enjoy working with. Let us know what your needs are and we can set up a plan that not only works for you now, but offers seamless integration as your company grows in the future.