5 - What is a shipment?
SHIPMENT VS. ORDER: Understanding the Difference
In our previous installments, we've covered topics like SKUs, barcodes, locations, and orders. Today, we're delving into the concept of a "shipment" and distinguishing it from an "order." We'll also discuss the importance of containerization in the 3PL fulfillment process.
Understanding the Difference Between an Order and a Shipment
In the world of 3PL fulfillment, it's crucial to understand the distinction between an order and a shipment. While these terms are sometimes used interchangeably, they refer to different concepts in the logistics process. Here's a quick breakdown of their differences:
Order: As we've discussed before, an order is a customer's request to purchase products from your business. It contains essential information such as the products being purchased, their quantities, and the shipping address. Orders serve as the foundation for the entire fulfillment process, setting it in motion.
Shipment: A shipment, on the other hand, is the physical result of processing an order. It's the tangible manifestation of the order, consisting of the actual products being sent to the customer, packed and prepared for transportation by the 3PL provider. Shipments represent the end product of the fulfillment process and are the final outcome of executing an order's instruction set.
The Role of Containerization in 3PL Fulfillment
Orders are just lines of text and numbers; they are ultimately just bits. Shipments are physical; they’re made of atoms. And there’s the rub. Everything gets real with shipments. Significant decisions have to get made. In a small, less-tech oriented 3PL, these decisions get made on the floor, often by line workers. For more mature 3PLs (like Amplifier), these calls are driven by system logic and printed for line workers in advance.
One key aspect of the automation of shipment creation is called “containerization.” Containerization is the process of selecting the appropriate shipping container(s) to package the product(s) in a shipment. This process is crucial in 3PL fulfillment for several reasons:
Efficiency: Containerization helps to optimize the use of space in shipping containers, reducing shipping costs and ensuring that products are packed as efficiently as possible.
Protection: Proper container selection helps to safeguard the products during transportation, minimizing the risk of damage and ensuring that they reach the customer in good condition.
Compliance: In some cases, there may be specific regulations regarding the packaging and transportation of certain products. Containerization ensures that shipments adhere to these requirements.
Amplifier’s Warehouse Management System (Manhattan SCALE) plays a significant role in our containerization process. While we will elaborate on our WMS in a different post, let it suffice to say that our systems use your product attributes and volumetric data (IUMs) to determine the most suitable shipping container(s) for a shipment. This process generally involves the following steps:
Analyzing product attributes: The WMS examines the dimensions, weight, and other relevant characteristics of the products in the order.
Determining container options: Based on the product attributes, the WMS generates a list of potential shipping containers that can accommodate the items in the shipment. (For example, a polybag is great for apparel shipments because they are lightweight. But a bag is the last container you’d use for fragile goods!)
Selecting the optimal container(s): The WMS then chooses the most appropriate container(s) for the shipment, considering factors like efficiency, cost, and product protection.
In conclusion, understanding the difference between an order and a shipment is crucial. While an order serves as the instruction set that drives the fulfillment process, a shipment is the tangible result of processing that order. While these distinctions may seem simple, they are the essence of third-party logistics.