The Importance of Scalability in Order Fulfillment Software for 3PL Providers

Growth, complexity, and unpredictable demand require scalable fulfillment software

The modern fulfillment landscape is drastically different from past markets. Some high-volume fulfillment trends include:

• Higher customer standards: The rise of ecommerce has customers expecting faster, more accurate deliveries across a multitude of channels.
• Sharper inventory fluctuations: Seasonality, promotions, and shifting consumer tastes can cause sudden swings. High-volume fulfillment centers for 3PLs and DTC brands can stay ahead by using predictive analytics and demand forecasting to prevent stockouts, eliminate overstock, and maximize warehouse space. 
• Omnichannel retail: Many emerging brands began as online-only stores at the height of the COVID-19 pandemic, but changes in customer expectations have caused them to integrate all their channels into one. Omnichannel retail models require full visibility into the supply network and careful coordination between online marketplaces, physical stores, and social media sites.

In this complex fulfillment environment, suppliers must optimize their inventory and warehouse processes, oversee their retail pipeline across every channel, and fill orders in near real-time with perfect accuracy. If they don’t, they may fail to meet rising customer expectations, tarnishing their brands and damaging profitability.

What does scalability in 3PL fulfillment software really mean?

Scalability is the ability of a fulfillment system to handle growth without a significant decline in performance or major increases in operational costs — and it’s essential for overcoming the challenges that modern fulfillment companies face.

Designed to improve operational agility without adding cost, scalability is about more than higher order volumes. True scalability in a fulfillment management system (FMS) like Logiwa IO applies to your fulfillment processes in multiple ways, including:

• Workflows: Efficiently managing a higher volume of orders, picks, and shipments without needing to overhaul your processes
• Technology: Integrating new technologies, automation strategies, and sales channels without disrupting your current operations
• Geography: Easily establishing and replicating fulfillment operations in new warehouse locations to be closer to end users, improving delivery speed

Whether it’s handling more orders, adding more tools, or expanding to new locations, scalability refers to your ability to grow your operations as your business expands — and the right order fulfillment software makes it possible.

Request a free demo to learn more about Logiwa WMS.

The high cost of unscalable software in high-volume fulfillment

While scalable fulfillment operations are essential for driving your business growth, a rigid WMS solution can keep you from realizing your full potential. 

When your ‘solution’ becomes the bottleneck

The wrong WMS tool can actually become a bottleneck that chokes out your scalability. Legacy systems often have limited automation functionalities, using manual processes that can’t keep up with the higher order volumes that arrive during peak seasons. Growing companies may have to turn down new clients as a result simply because they can’t handle the additional load. 

Aside from missing out on new sales opportunities, companies that rely on legacy WMS solutions may have trouble fulfilling orders from their current customer base. They often experience more fulfillment errors and delayed shipments, dampening customer satisfaction and tarnishing their brand image. Far from facilitating your expansion, legacy fulfillment software doesn’t just keep you from scaling — it may be the reason your business is shrinking.  

Financial drain and diminishing margins

Unscalable systems often lead to rising fulfillment costs as a percentage of revenue. Issues like labor shortages and rising transportation costs are magnified by inefficient software, and many traditional WMS vendors use a per-user pricing model, which misaligns costs with productivity. Your software costs increase as you hire more temporary staff to handle volume, punishing you for your growth.

Unlike rigid WMS solutions, newer tools employ a volume-based pricing model. By aligning your technology costs directly with your business growth and revenue, volume-based models ensure that you only pay for the features you use. This gives you more room to invest in your growth upfront and keeps your software costs under control.

Key features of truly scalable order fulfillment software

Cloud-native, headless architecture

Cloud-based fulfillment platforms are serverless and headless, empowering companies to seamlessly integrate software based on their operation’s needs. This offers them the flexibility and resilience needed to handle fluctuating order volumes quickly.

These architectures work by decoupling a platform’s backend operations from front-end user interfaces, enabling seamless integration with other components of your fulfillment environment. That eliminates the need for time-consuming customizations and improves your interoperability, letting you work across other CRMs, ERPs, and TMS platforms more efficiently. The result is greater visibility and coordination across all your sales channels, so that you can manage your fulfillment pipeline from end to end.

AI-powered automation and optimization

Modern FMS solutions like Logiwa IO leverage AI to elevate your throughput and drive higher warehouse productivity. AI is essential for scalability, empowering you to make data-driven decisions at every layer of your operations. Some applications of AI in 3PL fulfillment are:

• Order routing: By assigning customer orders to the warehouse that’s best able to fill them, you can improve your delivery speed and ensure that you’ll always have the right product on hand. 
• Warehouse layout optimization: From placing fast-moving inventory nearby to storing products based on special conditions, AI-powered fulfillment tools recommend the best locations for each product, improving your picking speed and reducing human errors. 
• Picking path and packing suggestions: Deciding between wave picking, batch picking, or zone picking can significantly impact your shipping speed and productivity, and the right picking path can reduce travel time throughout your warehouse. Logiwa IO’s AI-driven job creation and batching logic optimizes picker routes, a method that’s been shown to reduce labor costs and minimize the strain on your workers, improving employee safety.

AI-driven software goes beyond the warehouse floor. Its use of predictive analytics empowers more accurate demand forecasting, letting you anticipate demand and optimize your inventory levels accordingly. The result is not only fewer stockouts and less wasted space, but better visibility, improved customer satisfaction, and scalable operations that help you capitalize on new sales opportunities. 

Seamless multichannel and multi-warehouse management

Multichannel fulfillment is essential in today’s ecommerce-driven economy, where merchants may sell products on their own website, Amazon, or any number of social media platforms. Scalable fulfillment software should provide a single unified view of your operations across every location, enabling intelligent order routing and preventing overselling and stockouts. 

Future-proof your fulfillment operations with scalability

In today’s competitive market, fulfillment is a key differentiator that separates you from the rest of the competition. Choosing the right order fulfillment software can boost your flexibility, fulfillment speed, and operational efficiency, and can increase customer satisfaction while facilitating your future expansion at the same time. It’s an investment in your future, and along with innovative AI and automation capabilities, scalability is one of the most important factors you can consider. 

Logiwa IO is a leading-edge FMS solution for 3PLs, DTCs, and B2B brands, and it’s designed to scale alongside your growth. Its headless architecture makes Logiwa IO compatible with the other tools in your environment, and its serverless, cloud-native ecosystem lets you expand your technological and geographical footprint with ease. Rather than letting your software dictate the limits of your growth, scalable FMS solutions like Logiwa IO ensure that your fulfillment operations can meet any challenge and seize every fulfillment opportunity.

Ready to scale with Logiwa IO? Request a live demo today to see how we can grow with you. 

FAQs about scalable order fulfillment