CASE STUDY

Order Fulfillment Optimization for a Leading Electronics Retailer

Apr 26, 2017

From managing the performance of the sales force and improving the ability to process more loads to utilizing the optimal technologies, organizations, especially in e-commerce, have a number of challenges to overcome while optimizing their order fulfillment processes. Though the increased customer preference towards e-commerce helps the online retail industry improve revenues, the rising demand for faster deliveries makes it extremely difficult for players in this market space to provide a better experience for the customers. With the intensifying competition, the failure to make faster deliveries will result in a significant decrease in an organization’s revenue shares.

By providing effective insights, Quantzig’s order fulfillment optimization solution helps businesses make better decisions and also aids in improving various business processes including inventory management, supply chain visibility and merchandising. With a clear understanding of the client’s business processes and requirements and leveraging our expertise in data analytics, we also offer actionable insights to enhance supply chain effectiveness, network optimization, category tracking and consolidation, demand planning, and tail spend optimization.

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The Business Challenge and Quantzig’s Approach

By realizing the need to deliver better customer experience to improve revenues, the client, one of the leading online electronics retailer in the US collaborated with Quantzig to develop an effective solution for order fulfillment optimization to reduce the delivery time and also decrease costs of priority orders, which would, in turn, help them enable the faster delivery of online orders. With more than 600,000 products under 117 categories, the client received almost 2800 online orders every day, including priority orders, where customers paid for the delivery. As a result, there was a need to implement a store-to-door model, which would help them fulfill online deliveries much faster. Additionally, with more than 250 retail outlets, the client also had to identify the right store to source the delivery of priority orders.

The primary objective of this order fulfillment optimization was to identify the challenges involved in optimizing the delivery process. By analyzing the historical sales data and segmenting the order history, the analysts at Quantzig also helped rationalize the shipping cost by identifying the priority orders to be delivered from the stores.

To meet the specific requirements of the leading online retailer for electronics, our supply chain analytics team developed an effective solution based on the identification of influencers from the analytics data collected from various segments. Moreover, to gain a clear understanding of the business requirements, our analytics experts also considered various parameters including footfall, cost of shipping, and the volume of inventory left in the store.

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Business Benefits and Insights

Order Fulfillment

With the objective to help the leading electronics online retailer deliver better customer experience through faster fulfillment of online orders, a team of supply chain analytics experts with significant experience in offering insights through similar order fulfillment optimization assignments offered an effective solution to reduce the delivery time and deliver a better experience for loyal, high-value, and new customers. By developing a random forest decision tree-based approach, this order fulfillment optimization solution also helped identify the influencing factors for customer ratings in each segment and also approximated a cost function to recognize the right store to fulfill the order. Additionally, by analyzing the factorial combinations resulting in good reviews, we built a classifier that also helped identify orders to be fulfilled from the stores.

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Furthermore, by analyzing the historical sales data and segmenting the order history into four classes based on fulfillment source and fulfillment ratings, this order fulfillment optimization helped identify the interconnected problems resulting from the new model. Additionally, this supply chain visibility assignment also offered recommendations such as to serve the new, high-value customers whose product is available at the nearest store, and paid for faster delivery to a location nearer to the store compared to the warehouse, with store-to-door delivery services.

In a span of just eight weeks, this order fulfillment optimization helped the leading online electronics retailer was able to reduce the delivery time of priority orders and identify the right source of delivery for each order.

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