Inventory & Fulfillment Optimization

Inventory tells you what you can sell. Fulfillment determines how you deliver it. It’s not one or the other. It’s a system.

What is inventory and fulfillment optimization?

The best way to answer this is to look at the potential impacts to your business when you optimize inventory and fulfillment. Inventory and fulfillment decisions touch almost every part of your business.

Hard to believe? Sure.

Easy to prove? Certainly:

Fulfillment & Logistics

• 01 Canceled order rate
• 02 Order fill rate
• 03 On-time-in-full rate
• 04 Order processing time
• 05 Cost to fulfill / Delivery cost per order
• 06 Cost of returns
• 07 Split shipments

Inventory

• 08 Inventory turnover rate
• 09 Inventory carrying costs
• 10 Cost of discounts / markdowns
• 11 Inventory processing time
• 12 In-stock rate
• 13 Out-of-stock rate / Backorder rate
• 14 Weeks / Days of supply

Customer Service

• 15 Call volume
• 16 Call resolution time
• 17 Customer Satisfaction Score (CSAT)
• 18 Net Promoter Score (NPS)
• 19 Cost of appeasements
• 20 First call resolution
• 21 Average call handling time

eCommerce

• 22 Add to cart rate
• 23 Order completion rate
• 24 Conversion rate
• 25 Cart abandonment rate
• 26 Sales (digital and physical)

Store

• 27 Click and collect / Buy Online Pickup In-Store
• 28 Store traffic
• 29 Second basket
• 30 Ship from store
• 31 Orders fulfilled from store
• 32 Rejection rate

Technical

• 33 Implementation time
• 34 Webpage latency / speed
• 35 System uptime (during peak periods & flashes)
• 36 Roll-out speed (brands, countries, extensions)
• 37 Maintenance costs
• 38 Security & compliance
• 39 Order failure rate

Thirty-nine KPIs. One system deciding all of them.

What does inventory optimization actually mean?

Have enough stock.

In the right place.

At the right time.

Available to the right channel.

Without tying up unnecessary capital.

So your customers get what they want, when they want it, and how they want it.

How does that show up in an Order Management System?

• Real-time inventory visibility
• Inventory accuracy
• Available-to-promise inventory
• Safety / buffer stock
• Stock segmentation
• Channel allocation
• Multi-location inventory
• Inventory pooling
• Store inventory
• DC inventory
• In-transit inventory
• Inventory availability for AI/LLMs

…just to name a few

What does fulfillment optimization actually mean?

The order isn’t won when the customer clicks Buy. It’s won when you can actually fulfill the promise you made.

Accuracy and speed over everything.

How does that show up in an Order Management System?

• Order sourcing
• Fulfillment location
• Delivery speed
• Delivery cost
• Split shipments
• Ship-from-store
• Click & collect
• BOPIS
• Distributed fulfillment
• Carrier selection
• Fulfillment capacity
• Returns
• Peak / flash-sale fulfillment

…to name a few more

What are the biggest inventory and fulfillment challenges?

The ones we hear in every discovery call. In the customer’s own words.

Inventory Challenges

• “My inventory batch loads once a day”
• “We keep canceling orders for stock we don’t have”
• “Customers keep canceling orders”
• “We don’t trust our inventory data.”
• “We have too much inventory.”
• “We’re constantly out of stock.”
• “We don’t know how much inventory we have or where it is”

Fulfillment Challenges

• “Orders are taking too long to fulfill.”
• “Orders are getting stuck in different fulfillment stages”
• “Our delivery costs are too high.”
• “We’re shipping too many split orders.”
• “We’re making delivery promises we can’t keep.”
• “Our delivery estimates are huge ranges”
• “Peak volume breaks our fulfillment process.”

In a nutshell: Inventory tells you what you can sell. Fulfillment determines how you deliver it.

It’s not one or the other. It’s a system.

You can have perfect inventory visibility and still have terrible fulfillment.

You can have brilliant fulfillment logic and still promise inventory you don’t actually have.

You need both. A system that allows you to optimize it all. Improve every KPI across the business.