Articles
Fulfilment Risk Assessment and Contingency Planning Tips for Brands
Risk Assessment and Contingency Planning Tips for Reliable Order Fulfilment
Efficient order fulfilment is necessary to maintain a good brand reputation, stay in the competition and retain your customers.
However, the supply chain can be disrupted by economic downturns, bad weather and lack of visibility and communication, which can affect how you deliver your customers' orders. That is why it is necessary to have contingency plans in place to predict the effects of an emergent event, build strategies for preparation and remediation and minimise disruption.
This article provides tips on fulfilment risk assessment and how you can create contingency plans.
Are you looking for a reliable fulfilment partner? At Bezos, we help brands grow by using technology to provide fast and reliable order fulfilment services. Also, we offer scalable order fulfilment services to support you as you grow. Get your free quote.
What Is Fulfilment Risk Assessment?
A risk assessment identifies potential hazards that can affect your business's ability to provide reliable order fulfilment services. It assesses your order fulfilment readiness, identifies threats and provides measures to reduce the impact of the risk to your business operations.
Let's consider some of the biggest risks in order fulfilment services.
Economic Downturns
There is no gainsaying that economic downturns are profoundly impacting global supply chains.
With inflation running high in different regions of the world, prices are soaring, customers' confidence is dropping, and product demand is shrinking while inventory stock starts collecting dust.
Although challenging, you must get rid of dead stock, selling at full price instead of a discounted price. Inventory managers might be stuck with extra stock and uncertainties around their pricing modules.
This will increase pressure on profit margins, making it harder for businesses to build accurate demand forecasts.
Also, it will lead to logistics plans being ripped and unforeseen bottlenecks, longer lead times and delays in delivery.
Unpredictable Weather
Extreme weather poses a significant risk to efficient order fulfilment and can bring the supply chain to a grinding halt.
The inability to move packages from one point to the other will cause a delay in shipping to the destination point. Also, the inability of the pickup truck to arrive at the location because of bad weather conditions like storms or floods will result in delays.
In the supply chain, a delay at one point will cause a hold at the next point, resulting in a chain reaction. This will eventually result in unpredictable delivery times and significantly affect your brand's reputation.
So, to reduce the risk associated with unpredictable weather, you should have a contingency plan.
One way to do that is having different fulfilment centres in various locations. If one location is hit by bad weather, you can still fulfil your customers' orders from other locations in unaffected regions.
When planning for unpredictable weather, there might be setbacks. That is why continuous monitoring with a real-time shipment tracker can help set the right delivery expectations for your customers.
If businesses can assess the risk and plan, they will have a competitive advantage and send packages on time with a positive result.
Lack of Visibility
Many 3PL companies succeed by providing visibility into their customers' supply chains. Providing visibility assists the logistics providers in identifying gaps and inefficiencies that can disrupt their operations.
Visibility enables the operations team to know of potential disruption in advance so they won't be impacted. Poor visibility into the delivery process means potential disruptions are not taken care of, which can cause delays in delivery time.
Businesses should bring visibility and control over the logistics network to achieve operation alignment.
To make it possible, 3PL providers integrate technology with their customers' processes and leverage their in-house IT team to allow data flow throughout the entire network, increasing operation visibility.
At Bezos, we use technology to give complete visibility of every stage of the order fulfilment journey. This makes tracking your orders and accurately estimating the delivery time easy.
Poor Communication
What if your 3PL is negatively impacted by poor communication? If you have a question, nothing is more frustrating than a logistics company that is hard to reach.
Most 3PL companies don't have the workforce to give every customer the attention they deserve; hence the lack of communication customers get after placing orders.
Poor communication in the supply chain can lead to all kinds of problems, including:
- Late delivery
- Lost items
- Delivering the wrong items
- Negative customer reviews.
Clear communication and transparency are necessary, especially since the sellers are caught in the middle if and when customers request updates on their orders.
When 3PL providers communicate every step from warehouse to home, your business will receive fewer "where is my order?" questions from customers because they will know what to expect.
Order Surges
While an order surge can be good for eCommerce businesses, it can negatively impact your business if the 3PL provider cannot handle it.
Whether it is a seasonal boom in sales or a sudden demand for a product, if your delivery partner isn't prepared or lacks the warehouse space to accommodate more inventory, you risk your reputation being damaged if your customers can't get their orders.
At Bezos, we implement a good contingency plan and have multiple facilities in several locations. Also, we ship 24/7 and scale our services to meet the demands of your products.
Strike Action
Strikes can disrupt delivery services.
An example is the Royal Mail strike action on 30th September and 1st October 2022. There were no deliveries on those dates, resulting in delays in sending packages to customers.
A good contingency plan should focus on getting mail delivery back to normal as soon as possible after the strike and delivering as many special deliveries and medical supplies as possible.
Missed SLA
A service level agreement (SLA) sets the expectations between the 3PL provider and the customer.
It describes the products to be delivered, inventory management, the point of contact in case of problems and accountability. An unexpected surge in orders can clog up a reliable order fulfilment process.
If the 3PL provider has no contingency plans to tackle unexpected surges, it will struggle to meet and, in most cases, miss the SLA, which can create a poor customer experience for your business.
While no one-size-fits-all service level agreement exists for order fulfilment, you can partner with a robust fulfilment provider to meet your business needs.
At Bezos, we personalise the SLA to suit your business and ensure we deliver on your brand promise and build customer loyalty for you.
Technology
Businesses are increasingly relying on technology to get things done. 3PLs use technology to track orders and update their customers at every stage.
What happens if there is a system failure or data breach? This can be a risk because data will be lost, and tracking orders will become difficult or impossible.
These are reasons 3PLs must establish a contingency plan to mitigate the effect of a data breach or system failure.
Backing up data in the cloud and taking steps to protect your system from attacks are ways fulfilment service providers can mitigate the effect of technology failure.
At Bezos, we use technology to process and track your orders till they are delivered to your customers. This makes it easy for our team to trace your order and give precise information about when it will be delivered.
What Is a Contingency Plan?
It is an action plan designed to help a business respond to a potential future incident that can affect it regardless of the likelihood of its occurrence.
You can think of the contingency plan as the backup that guides the business through a worst-case scenario. It outlines the steps the business team will take in the event of a crisis occurring.
A contingency plan helps you reduce disruptions and conduct business like normal.
Here are suggestions for developing your contingency plan.
- Conduct Risk Assessment
You can't create contingency plans if you don't know what you are up against. That is why an order fulfilment contingency plan begins with a risk assessment.
Evaluate your business processes, technologies and people to determine their vulnerability. Then, think about worst-case scenarios and how they could impact your operation.
For example, if your logistics partner uses technology to process orders, one worst-case scenario would be if there is a system failure and you cannot keep track of orders.
Another example is if there is a surge in orders, how will you handle the increase without missing the SLA? Unpredictable weather and natural disasters can disrupt the logistics chain; how will you handle the disruption?
- Plan for Each Scenario
Now that you know possible risk cases, you can start thinking about ways to keep your business going by creating a plan. Your contingency plans should include the following:
- Specific triggers. These triggers are what will set the plans in motion. For instance, a flood contingency plan should go into effect once you are certain that the risk can disrupt your business. Another example is the use of technology. Data breaches or system failures should be the trigger that will activate your plan.
- Make clear who is responsible. Your contingency plan should define who is in charge of carrying out different parts of the plan and what is expected of them. Be specific when setting key roles and responsibilities to prevent any confusion. This part of your contingency plan will ensure everyone is trained on what to do.
- Response strategy. You should include a brief overview of how your employees handle different risks. If you use technology to process customers' orders, a good plan would be to store data in the cloud and back it up regularly. With daily backups, you can quickly retrieve data from the cloud if there is a system failure or in case of cyber attacks. For example, suppose your business is based in a region prone to storms that can disrupt the supply chain. In that case, a contingency plan that includes storage in several warehouses in different locations will be a good idea.
- Communicate Your Contingency Plans
Creating contingency plans to manage risk is incomplete until you communicate the plans to all levels of your business. This means getting your team members onboard so that they can respond appropriately in case of an emergency.
Communicating the plans doesn't mean giving each team member a full rundown of all the risks. You can share specific risks and contingency plans relating to their roles and how they will tackle them.
Also, it is a good idea to have contingency planning guides and make them available to your employees so that they will know what they are expected to do in case of risk.
Partner with a Reliable Fulfilment Partner
Working with a reliable fulfilment partner like Bezos is a sure way to deliver your customers' orders, earn positive reviews and stay ahead of the competition.
We are a full-service fulfilment provider that helps eCommerce businesses to handle storage, picking, packing, despatch and timely delivery of their customers' orders. Bezos stands out from other 3PL providers in many ways.
- Quick account setup and management
From using our portal to create an account to sending your inventory directly to us and seamlessly integrating your sales channels with our portal, you can get started in as little as 72 hours.
Our easy-to-use portal provides real-time visibility to help you track your customers' orders. The dashboard shows updates on the fulfilment status, the courier delivery status and your stock level. And if there are delivery delays, we will notify you immediately and prevent "where is my order?" enquiries from your customers.
- Fast communication and issue resolution
At Bezos, we provide efficient communication to resolve issues that arise during delivery and help brands increase their customers' experience. Our two hours response time to tickets ensures that you are not left in the dark if you have questions or want an issue resolved.
As part of our contingency plans, we use technology to track every step of the delivery process and resolve issues before they become a problem for you or your customers.
- Distribution centres in different locations
Also, to ensure that we help fulfil your customers' orders reliably, we have several fulfilment centres in 17 countries, making it possible to deliver to your customers even in trying situations.
- Efficient operation
We help eCommerce businesses increase sales by giving customers different delivery options and letting them choose when and how they will receive their orders.
From standard delivery, which is between three and five days, to next-day delivery, same-day delivery and green delivery, our shipping options put your customers at the forefront of our services.
Do you need a fulfilment service provider that will deliver your customers' orders efficiently? Bezos is your trusted partner! Get your free quote.
Conclusion
Risk is inherent in every business, and order fulfilment services are not exempted. That is why fulfilment risk assessment and contingency plans to tackle those risks are necessary to create a good customer experience.
Common risks in order fulfilment include bad weather, order surges, economic downturn and poor communication. Tackling those risks means creating plans to minimise their effects to ensure you fulfil your customers' orders on time.
Frequently Asked Questions
What are fulfilment problems?
Fulfilment problems occur when a breakdown or bottleneck occurs at some point in the order delivery process. Common fulfilment problems are a disruption in delivery due to bad weather, strike action, flood, poor communication, order surges and employee shortages.
What are the three steps of risk assessment?
An effective risk assessment involves risk identification, analysis and evaluation. After assessing risks, you can then create contingency plans to tackle them.
What is a good contingency plan?
A good contingency plan must include all events that might disrupt operations. Some specific risks to include in the plan include natural disasters, strike actions, poor communication and technology failure. The plan should outline how to reduce the effects of those risks to mitigate delivery disruption.
