Order fulfilment entails the entire lifecycle of an order— starting from order placement and ending when orders are delivered at the customer's doorstep. Successfully fulfilling orders is crucial for any ecommerce business because how you fulfil your orders directly impacts how customers will perceive your brand.

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Whether you fulfil orders in-house, or you have outsourced your order fulfilment to a logistics provider, you will need to ensure that you have a Standard Operating Procedure (SOP) for each phase of order fulfilment.

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In this blog, you'll learn what is a standard operating procedure, why do you need a standard operating procedure for order fulfilment, and how to create a standard operating procedure for ecommerce order fulfilment with a step-by-step guide.

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What is a standard operating procedure?

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A standard operating procedure (SOP) is a set of documented step-by-step instructions compiled by an organisation to streamline routine operations. Ultimately, SOPs are used to create process flowcharts to perform different tasks; this helps improve efficiency, quality and ensures uniformity in operational performance. SOPs also help reduce leakages due to miscommunication and non-compliance.

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The SOP for fulfiling orders will describe the tasks, procedures, and detailed instructions for each stage of order fulfilment. This will ensure that your customers will have a delightful post-purchase experience.

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Why do you need an SOP for order fulfilment?

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• There are various people involved in the order fulfilment process, each performing different tasks. This brings the need for a document that clearly describes the roles and responsibilities for a particular task.
• There are various different timelines involved — for example, some customers would opt for Same Day Delivery (SDD) or Next Day Delivery (NDD) for their orders. This brings the need for a document that clearly defines the timeline and compliance standards for each task.
• Sometimes, there is a change of operating personnel, i.e new employees are hired or substitute staff is controlling fulfilment operations. This brings the need for a document used to transfer the operational knowledge internally within an organisation. This also helps during employee training and development.

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How to create an SOP for order fulfilment

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Here's the step-by-step guide to understanding how to create an SOP for each stage of order fulfilment:

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Stage 1: Receiving inventory

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Receiving inventory is the stage where your merchandise is aggregated and stored in your storage facility or your logistics provider's fulfilment centre. In any case, you need to be very accurate while receiving inventory. If there are any manual shipping errors during sending the inventory or clumsy counting of the received goods, you will end up having to deal with unexpected circumstances such as shortage of stock.

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Here's an example of an SOP for receiving inventory:

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• Once you receive the inventory shipment — check if the number of boxes, pallets, or shipped units is correct. Record any variance between the received and expected inventory.
• Store the inventory at a designated area in your storage facility.
• Unpack the inventory and sort it by size, colour, type, and more based on your requirement.
• Conduct a reconciliation count for all the order items and re-check whether there's any variance between received and expected order items. If there's any variance, contact your supplier to resolve the same and update the modified inventory count in your database.
• Store the order items on designated shelves in your storage facility.

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Stage 2: Quality check

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Quality check is the stage of determining whether the products are in a sellable condition. Once you have received inventory, you need to conduct quality checks for each received product. Not doing so can result in quality reject products reaching your customers. This will force customers to return your products and ultimately hurt your brand identity. You need to establish a procedure to conduct a quality check for each product received.

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Here's an example of an SOP for quality check:

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• Configure a set of rules which help define the quality of a product, it could even be a set of questions. For example, is the product intact with all its components? Are there any signs of damages to the product?
• Conduct visual inspection of each product by comparing the product received with its image.
• If there are products with multiple variants, check the product attributes such as the colour, size, and more to validate that the product variants are as expected.
• Mark the items which have been quality checked and move them to their designated storage shelf.
• If any product is rejected in the quality check, move them to a designated spot. These products need to be returned to the supplier.

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Stage 3: Picking

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Picking is the stage when order items are picked up from their shelves in the storage facility or fulfilment centre. The person who picks order items from the storage facility or fulfilment centre is known as a picker. When orders are placed, pickers starting picking up various order items from the shelves and bring them to the packing station. Any inaccuracy during picking can result in the wrong product being shipped to the customer.

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Here's an example of an SOP for picking order items:

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• Create a different pick list based on product catalogue, warehouse location, and more to ensure picking optimisation.
• Print different pick lists which include the list of order items to be picked by a picker.
• Verify each item picked with the item in the picklist using a barcode scanner to maintain order picking accuracy.
• Do not move all the order items to one packing station.
• Conduct a final check before packing the products.

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Stage 4: Packing

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Packing is the stage when order items that are picked out of the shelves are packed and marked as 'ready-to-dispatch'. The person who packs the order items is known as the packer. The packers must determine what packaging needs to be used for different order items. For example, a fragile product needs to be bubble-wrapped. In addition to this, packers are responsible for adding marketing inserts such as coupons or freebies to your package. Any inefficiency during packing can result in products being packaged incorrectly or missing out including coupons, samples, and more.

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Here's an example of an SOP for packing orders:

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• Create a list of product size ranges and corresponding boxes it needs to be packed in.
• Define what packaging material will be used for different product types.
• Gather different boxes, mailers, and marketing inserts at each packing station.
• Once the order is packed and sealed properly, affix the shipping label and mark it as ready to dispatch.

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Stage 5: Shipping

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Shipping is the stage when orders marked as ready-to-dispatch are picked up from the storage facility or fulfilment centre and delivered to the customer's doorstep. The courier partner or the shipping provider is responsible for the delivery of items to your customers in good condition.

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Here's an example of an SOP for shipping orders:

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• If you work with multiple courier partners to fulfil your orders, sort the packed orders for each courier partner or shipping provider.
• Move the packed orders to a designated area where they can be picked by the courier partner.
• Make sure the orders are loaded into the delivery vehicles carefully to avoid damages.

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Stage 6: Handling returns

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Returns are the stage when orders are collected from the customer and brought back to the storage facility or fulfilment centre. Returns are a huge financial burden for any ecommerce business and it is crucial to have a well-defined SOP for managing returned items.

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Here's an example of an SOP for handling returns:

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• Check whether the item has been returned with all its original components, accessories and tags.
• Quality check the returned item for any defects or damages.
• If the returned item is in sellable condition, re-stock the item in the fulfilment centre.
• If the returned item is deteriorated or damaged, move the returned item for refurbishment.
• Update the changes in inventory.

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Bottom line

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The need for an SOP doesn't change whether you're just starting out or you're an established ecommerce business. A well-defined SOP will help you increase the operational efficiency of each stage of order fulfilment.