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all about fulfillment

Eric Ammirati • 5/5/2023

Lately you must have heard about fulfillment. Although the provision of warehousing and goods management services to external customers has existed for some time in the logistics market, the concept has become more comprehensive and gained notoriety after the rise of e-commerce, especially in the last 2 years.

Learn more about fulfillment and its importance for retailers.

After all, what is fulfillment?

In the last 2 years, the word fulfillment began to be more present in the logistics market, but after all, what is the difference between the traditional logistics operation and fulfillment?

Providing warehousing and merchandise management services to external customers has been around for a long time. What happened, in this sense, was an evolution of services, mainly driven by the increase in online sales during the first year of the pandemic.

Eric Ammirati, Location Manager at Cushman & Wakefield, explains that for a long time traditional logistics operators were the main occupants of warehouses in Brazil. From 2020, this began to change, and since then, these have seen their scopes become more comprehensive and adapted to current needs, thus the service has evolved into what we call fulfillment today.

Fulfillment is a more comprehensive and complex service that the company offers, an evolution of the logistical operation. In fulfillment, the provider performs the entire product management cycle until the goods are delivered to the end customer:

• Product receipt
• Inventory management
• Item handling
• Exit order
• Control of serial numbers
• Validity control, in the case of perishable products
• Destination/delivery of orders
• Reverse logistics in some cases

These are some of the processes that the fulfillment service can contemplate.

For this, computer systems, warehouse management, routing are used, always taking care of delivery, regardless of whether the order goes directly to the final address or if it still goes through the last mile stage.

In general terms, they are all management processes, inventory management and delivery to the final customer.

‘‘The idea is that by taking care of the entire product delivery cycle, the provider becomes an arm of the company for which it provides services, exempting it from the need for certain areas that it would need to maintain internally to carry out such activities. In some cases, the operator even takes care of the after-sales service,’’ comments Eric.

Therefore, the company can focus on producing, buying well, selling, and all the rest of the delivery chain is in the hands of specialized companies, making it possible to have a leaner and more competitive operation, with a smaller and cheaper structure.

Today, the market has a lot of participation from outsourced fulfillment companies: DHL, AGV and FEDEX are some of the best known.
A good part of the pharmaceutical and electronics industries, for example, have these processes in the hands of third parties. No matter how big the company is, it's a common practice.

But anyone who thinks fulfillment is only for large companies is wrong. Small and medium-sized companies can also benefit from this outsourcing.

Ideal warehouse for fulfillment operations
The size of the CD varies according to the volume of products to be handled. Some companies will need three, five, fifty, one hundred thousand square meters. In addition, a fulfillment logistics operator can be single or multi-client, that is, provide services to several clients on the same site, or even serve a single dedicated operation.

Regardless of the volume and size of the CD, the concept of fulfillment remains.

Eric says that fulfillment operations do not require very specific infrastructure for warehouses, however, the most modern properties end up having favorable technical characteristics, such as thermal comfort, technology, quality of lighting: ''This constructive efficiency tends to generate more savings and make this property profile is more sought after by occupants, as well as the strategic location and easy access to important highways also attract more demand'', he concludes.

Cushman & Wakefield has solutions both for occupiers looking for the ideal location to set up their fulfillment operation, and for owners and players of logistics condominiums looking to attract occupiers. In addition, the company provides sustainability consultancy for certifications such as LEED and EDGE.

Click here to learn more about Cushman & Wakefield's Transaction services.

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