In today’s competitive retail environment, dark store fulfillment is becoming a critical aspect of the supply chain. A leading transport aggregator and warehouse service provider faced significant challenges in managing their dark store operations, serving multiple clients from the same facility. With over nine clients relying on them, the company needed to optimize its operations to meet customer service level agreements (SLAs) efficiently.
Key Challenges in Dark Store Operations
The company’s primary challenge was optimizing its order processing to ensure timely delivery while adhering to strict SLAs. Due to the lack of a dedicated order slotting mechanism, orders were often delayed, causing issues across the fulfillment cycle. Pickers did not have time-tracking systems for picking orders, leading to further delays in packing and dispatch.
Another critical challenge was the risk of shipping errors. There was no re-verification step during packing, resulting in incorrect shipments, and no mechanism to trace back these errors. Additionally, the company needed a system that could seamlessly handle the requirements of different brands without the need for re-barcoding merchandise, which added complexity to their operations.
Space Utilization and Inventory Management Issues
Managing the storage space within dark stores was another significant hurdle. Due to the inability to store inventory from different brands in a co-mingled manner, there was excessive space utilization. The varying space requirements of different brands led to ongoing reallocation of space and unnecessary stock movements. Moreover, there were no effective mechanisms for verifying product quality during returns processing, leading to inaccuracies in inventory records.
The lack of proper tracking mechanisms also resulted in ineffective inventory management. The company needed a better way to manage its inventory, especially in terms of cycle counts, which were previously handled manually. This manual process resulted in errors and inaccuracies that affected overall operations. Additionally, the absence of packing material consumption tracking led to incorrect planning and frequent stockouts of essential packing materials.
Delivery and Customer Satisfaction Challenges
The fulfillment cycle’s predictability was compromised due to a lack of integration with shipping platforms, resulting in delivery delays. There was also no smart algorithm to allocate the right courier partner or rider, leading to frequent order cancellations when couriers refused to deliver for various reasons. This gap created a significant obstacle in maintaining customer satisfaction and retaining clients.
Enhance Your Fulfillment Efficiency
Dark store operations come with unique challenges that require innovative solutions to optimize performance and reduce costs. Download the full case study to explore how a leading WMS solution can transform your dark store fulfillment capabilities and elevate your supply chain management.
