What is a Fulfilment House?
A fulfilment house is a common term used to describe a Third Party Logistics (3PL) provider that is responsible for the storage and fulfilment of your product. This can include the storage, processing and distribution of customer orders, returns handling, with some Fulfilment houses handling payments and customer service.
One of the key functions of a fulfilment house is the ability to select a multitude of products in a single trip which is referred to as a picking line, which forms part of a pick and pack service.
Warehouse Management System (WMS)
All fulfilment houses should be equipped with a WMS system, this allows for all incoming stock to be recorded and allocated based on the most intelligent and efficient picking routes. As orders are received across the fulfilment house the WMS will automatically plot the picking route for the product(s) to be picked and packed for distribution in one seamless journey.
As well as substantial warehouse floor space, which can be up into the 000’s in sq ft floor space, a fulfilment house should have racking as the most optimal storage space. Most commonly two versions of racking are available; Much larger racking that is accessible by forklift and other machinery for bulk storage / or less frequent picked items. Second version of racking being accessible by hand for smaller and frequently picked products that can be stored along the picking route(s).
To intelligently manage costs a fulfilment house will employ staff full time for all operations, but will also have pre-trained dynamic staff that are able to be called upon if required, or if seasonal spikes are required or expected. This method allows for a consistently high SLA (Service Level Agreement) at the most cost effective price all year round.
The location or locations of the fulfilment house is key, by strategically locating itself near logistical advantages such as motorways, docks and airports the ability to distribute become easier, quicker and much more cost-effective.
SLA (Service-level agreement)
Service-Level agreement or as commonly referred to SLA, is the minimum level of service that the fulfilment house will operate at to fulfil your requirements. Whilst not a guarantee it offers a platform for improvements or adjustments to the current levels of operation. An example of SLA from a fulfilment house could be picking accuracy, delivery time or length of time from order processing to distribution.