The retailer, a prominent footwear company with over 200 stores across multiple countries, produces its own footwear and partners with global brands to offer a diverse range of products in both online and physical stores.
Previously, the retailer focused primarily on physical stores and fulfilled online orders from a single retail location, as they did not have any dedicated warehouses. With the implementation of HotWax Commerce, they have transitioned to using all their stores as fulfillment centers. This shift optimizes inventory management and enhances order fulfillment efficiency across their entire store network, benefiting both in-store and online orders.
The retailer offers several shipping options, including:
Next-Day Delivery
Two-Day Delivery
Three-Day Delivery
Standard Shipping (Within 7 days)
The retailer aims to maintain a minimum stock level at each store before allocating orders. This ensures inventory availability at all locations, optimizing fulfillment efficiency and reducing the risk of stock shortages and order cancellations.
Since the retailer operates within a limited geographical area, proximity is not a major concern. Instead, order routing is based solely on stock availability to ensure efficient fulfillment and prevent inventory shortages.
If no store has sufficient inventory to fulfill an order, the order should be flagged and brokered again after a set time to check for inventory replenishment, ensuring the order can eventually be fulfilled.
The retailer requires regular brokering to ensure timely processing of both regular and rejected orders. For unfillable orders, the brokering process should occur within a predefined interval, allowing time for potential inventory replenishment.
The routing process for the retailer must filter locations based on Minimum Stock availability. Locations with 15 or more units of an item should be prioritized first.
If inventory is insufficient, the criteria need to be adjusted to include locations with 10 or more units, then 5 or more units, expanding the search while still focusing on locations with higher stock levels.
If no location has the minimum stock, any location with available inventory should be included to ensure that orders are fulfilled.
If no single location can fully meet the order requirements, partial fulfillment should be allowed. This approach optimizes inventory usage and improves order completion rates by combining stock from multiple locations.
Expedited Orders should be prioritized before standard orders when routing orders. Furthermore, if there are orders that are rejected once from any fulfillment location due to inventory unavailability, these orders should be prioritized before regular orders that are being routed for the first time.
We begin by creating a Regular Order Run. This run will manage all regular orders, excluding unfillable orders, which the retailer prefers to broker separately since the schedule of these run would be different. The regular run will consist of multiple routing rules, each configured based on different shipping methods and fulfillment priorities. The regular order runs are scheduled every 15 minutes for timely order processing and fulfillment.
Within the Regular Order Run, set up an Order Routing Rule to define which orders will be routed in this batch based on queues, shipping methods, and priority. The orders are fetched based on the following configurations:
The retailer applies multiple filters to ensure proper order routing:
Queues: Orders are filtered from the Brokering Queue to broker all orders that will be fulfilled for the first time.
Shipping Method Filter: Only orders using Standard Shipping are included.
Orders are sorted by Order Date, ensuring that the oldest orders are fulfilled first.
For inventory management, the retailer sets up five inventory rules to ensure orders are routed to stores based on stock availability.
Inventory Filter: Orders will be routed to stores that have 15 or more units of inventory available for the ordered items.
Inventory Sort: Orders are sorted by inventory balance, ensuring stores with the highest available stock are prioritized.
Action: If this rule is not met, the order is sent to the next inventory rule.
Inventory Filter: Stores must have at least 10 units of inventory available.
Inventory Sort: Orders are sorted based on inventory balance.
Action: Orders that do not meet this rule are sent to the next rule.
Inventory Filter: Stores must have at least 5 units of inventory available.
Inventory Sort: Orders are sorted by inventory balance.
Action: If the stock requirement is still not met, the order moves to the next rule.
Inventory Filter: No specific stock limit is required; any store with available inventory is considered.
Inventory Sort: Orders are sorted by inventory balance.
Action: Partial fulfillment is not allowed. If inventory is still unavailable, the order moves to the next rule.
Inventory Filter: No specific stock limit is required; any store with available inventory is considered.
Inventory Sort: Orders are sorted by inventory balance.
Action: Partial fulfillment is allowed so that available inventory can be allocated to the orders. If the orders remain unfulfilled, they can be sent to the unfillable queue.
This system aligns with the retailer’s Minimum Stock Availability and Order Fulfillment Priority requirements by ensuring orders are routed based on stock availability and fulfillment efficiency.
The second routing rule handles all orders with expedited shipping options, including Next-Day, Two-Day, and Three-Day Delivery. The orders are fetched based on the following configurations:
The retailer applies multiple filters to ensure proper order routing:
Queues: Orders are filtered from the Brokering Queue to broker all orders for the first time.
Shipping Method Filter: Only orders using Next-Day, Two-Day, and Three-Day Shipping are included.
Orders are sorted by Shipping Method (prioritizing Next-Day, Two-Day, and then Three-Day) and by Order Date.
Note: The inventory rules for this order batch are the same as the rules for standard orders, focusing on maintaining inventory balance.
This routing rule manages rejected standard orders that were previously rejected due to stock unavailability. The orders are fetched based on the following configurations:
Order Filter:
Queue Filter: Orders are fetched from the Rejected Queue.
Shipping Method Filter: Only orders using Standard Shipping are included.
Order Sort: Orders are sorted by Order Date, ensuring that orders rejected earlier are processed first for potential fulfillment.
Note: The inventory rules for this order batch are the same as the rules for standard orders, focusing on maintaining inventory balance.
This routing rule manages rejected expedited orders, including Next-Day, Two-Day, and Three-Day Shipping orders that were not fulfilled initially due to stock unavailability. The orders are fetched based on the following configurations:
Order Filter & Sort
Order Filter:
Queue Filter: Orders are fetched from the Rejected Queue.
Shipping Method Filter: Only orders with Next-Day, Two-Day, and Three-Day Shipping are included.
Order Sort: Orders are sorted by Shipping Method (Next-Day first, followed by Two-Day, and then Three-Day) and by Order Date to ensure expedited orders are prioritized appropriately.
Note: The inventory rules for this order batch are the same as the rules for standard orders, focusing on maintaining inventory balance.
Since the client wants Rejected order routing first before the regular orders and wants to prioritize expedited orders, the routing Rules should be sequenced in the following manner:
Rejected Expedited Orders
Rejected Standard Orders
Expedited Orders
Standard Orders
Retailers need to create a separate run to handle orders when inventory is unavailable across all stores. This is created as a separate run since inventory replenishment can take time so checking for inventory in every 15 minutes is not required. Therefore, this run is scheduled to run in evey 6 hours and once stock is available, the orders are re-brokered.
This routing rule manages unfillable expedited orders, including Next-Day, Two-Day, and Three-Day Shipping orders that were not allocated initially due to stock unavailability. The orders are fetched based on the following configurations:
Order Filter:
Queue Filter: Orders are fetched from the Unfillable Queue.
Shipping Method Filter: Only orders with Next-Day, Two-Day, and Three-Day Shipping are included.
Order Sort: Orders are sorted by Shipping Method (Next-Day first, followed by Two-Day, and then Three-Day) and by Order Date.
Note: The inventory rules for this order batch are the same as the rules for standard orders, focusing on maintaining inventory balance.
This routing rule manages unfillable standard orders that were previously rejected due to stock unavailability. The orders are fetched based on the following configurations:
Order Filter:
Queue Filter: Orders are fetched from the Unfillable Queue.
Shipping Method Filter: Only orders using Standard Shipping are included.
Order Sort: Orders are sorted by Order Date, ensuring that orders rejected earlier are processed first for potential fulfillment.
Note: The inventory rules for this order batch are the same as the rules for standard orders, focusing on maintaining inventory balance.
Since the client wants to prioritize expedited orders, the routing Rules should be sequenced in the following manner:
Unfillable Expedited Orders
Unfillable Standard Orders
Ensure all inventory rules are active. Move the order routing from "Draft" to "Active" to ensure it's live and processing orders.
Set a schedule for how frequently each routing run will execute. For regular orders, schedule the run every 15 minutes for timely order processing, while for unfillable orders, schedule the run every 6 hours.
This retailer utilizes HotWax Commerce’s advanced routing system to streamline order fulfillment. By leveraging Brokering Safety Stock, the retailer ensures orders are prioritized based on available inventory, optimizing fulfillment for both expedited (Next-Day, Two-Day, Three-Day) and standard shipping. Orders that cannot be fully or partially fulfilled are routed to a separate unfillable queue, with regular brokering runs every 15 minutes and unfillable runs every 6 hours, ensuring efficient handling and timely delivery across their retail network.
This document presents a case study of a Canada-based online retailer operating a central warehouse and multiple retail stores, with shipping capabilities extending to the USA. The retailer focuses on optimizing logistics to improve delivery speed, reduce operational costs, and enhance inventory management. This guide explores how businesses with similar models can leverage an advanced order routing system to achieve these goals.
The retailer offers standard shipping with delivery within 7 days for all USA and Canada orders.
All orders should be prioritized by the FIFO rule, ensuring that orders placed first are brokered first.
To minimize international shipping costs, it is essential to fulfill all orders through the central warehouse rather than retail stores. Shipping directly from the warehouse ensures cost efficiency and avoids the higher expenses associated with international shipping from individual retail locations.
For orders within Canada, the warehouse is the primary fulfillment center. Retail stores act as backup fulfillment points only when the warehouse lacks sufficient inventory. This strategy enables effective inventory management while still providing backup options to meet demand.
If no inventory is available at any locations, the order should be available for re-routing. These unfillable orders should be rerouted along with regular orders.
The brokering should be scheduled frequently to ensure continuous and timely order processing.
US Orders should be prioritized before Canada Orders since Canada orders can also be fulfilled from the store while US orders can only get inventory from the warehouse.
All US orders must be fulfilled exclusively from the central warehouse in Canada.
Warehouse First: Canada orders should be prioritized to be fully fulfilled from the warehouse.
Store Fulfillment: If the warehouse lacks inventory, orders should be fully fulfilled from stores.
Partial Fulfillment from Warehouse: If neither the warehouse nor stores have the entire stock, orders items with available inventory should brokered to the warehouse.
Partial Fulfillment: If the warehouse is out of stock, partial fulfillment from stores should be allowed.
The retailer operates two separate online stores in the US and Canada. During the initial mapping of shipping methods, they should be configured distinctly to differentiate between orders destined for the USA and those for Canada.
U.S. Orders: Mapped to "US_Standard_Shipping." All standard orders from the US store will use this shipping method.
Canada Orders: Mapped to "Standard_Shipping." Standard orders from the Canada store will use this shipping method.
Two facility groups need to be created:
Group for Warehouses: To centralize warehouse-based fulfillment.
Group for Stores: To route orders to retail stores when necessary.
A single brokering run is scheduled every 15 minutes to ensure timely order processing for both U.S. and Canada orders. This regular interval ensures that orders are brokered efficiently across different regions.
This routing rule is dedicated to handling Canadian orders, ensuring they are processed separately from U.S. orders.
Two filters are applied in this routing rule:
Queue Filter: Orders are fetched from three queues to ensure complete coverage of all types of Canadian orders:
Brokering Queue: Includes orders brokered for the first time.
Rejected Item Parking Queue: Includes orders rejected from fulfillment locations.
Unfillable Queue: Includes orders that were previously unfillable due to a lack of available inventory.
Shipping Method Filter: The filter is set to include only Standard Shipping, which is the designated shipping method for Canada orders.
The orders are sorted by Order Date, ensuring that Canadian orders are brokered on a first-come, first-served basis, following the FIFO principle.
The following five inventory rules are applied to route Canadian orders effectively:
Inventory Filter: A Facility Group Filter is applied to prioritize fulfillment from Warehouses Only.
Inventory Sort: Orders are sorted by Proximity to the customer.
Action: Partial fulfillment is turned off, and if no warehouse can fulfill the order, the order is sent to the next rule.
Inventory Filter: A Facility Group Filter is applied to allow fulfillment from any store.
Inventory Sort: Orders are sorted by Proximity to the customer to prioritize the nearest store.
Action: Partial fulfillment is turned off. If no store can fulfill the entire order, the order is sent to the next rule.
Inventory Filter: A Facility Group Filter is applied to allow fulfillment from warehouses only.
Inventory Sort: Orders are sorted by Proximity to the customer to minimize delivery time from the warehouse.
Action: Partial fulfillment is turned on, meaning available inventory in the warehouse is allocated to the order. For items that are unavailable, the order is sent to the next rule.
Inventory Filter: A Facility Group Filter is applied to allow fulfillment from all stores.
Inventory Sort: Orders are sorted by Proximity to the customer, ensuring the closest store can fulfill the order.
Action: Partial fulfillment is turned on so that available inventory in the stores is allocated to the order. For any remaining unfilled items, the order is sent to the Unfillable Queue for further processing later.
For U.S. orders, a U.S. Routing Rule is created to manage routing and fulfillment. This batch ensures U.S. orders are processed based on their specific requirements.
Order Filter: Two filters are applied to U.S. orders:
Queue Filter: Orders are fetched from the Brokering Queue, Rejected Item Parking, and Unfillable Queue, ensuring all orders are processed, including previously unfulfilled or rejected orders.
Shipping Method Filter: Only orders using the US_Standard Shipping Method are included in this batch, ensuring that only U.S. standard shipping orders are routed.
Order Sort: Orders are sorted by Order Date, ensuring that earlier orders are processed first, following the first-in, first-out (FIFO) principle.
For U.S. orders, the following inventory rule is applied to prioritize the central warehouse as the fulfillment location.
Inventory Filter: The Facility Group Filter is set to include only the warehouse as the fulfillment source for U.S. orders.
Inventory Sort: Orders are sorted by Proximity to ensure that the nearest location is considered.
Action: Turn on partial fulfillment to allow the system to fulfill orders from available inventory in the warehouse. If any items are unavailable in the warehouse, the order is moved to the Unfillable Queue for future processing.
U.S. orders should be mapped to "US_Standard_Shipping," and a new routing batch should be created to ensure that these orders are fulfilled on a FIFO basis.
All U.S. orders should be fulfilled from the central warehouse. Select the facility group filter for the warehouse, allowing partial fulfillment to allocate available inventory. If items are unavailable, move them to the unfillable queue.
Activate Inventory Rules: Define fulfillment strategies for U.S. and Canadian orders.
Activate Each Order Batch: Ensure orders are processed according to their respective shipping methods.
Activate the Brokering Run: Schedule the brokering run every 15 minutes to ensure continuous and timely order brokering.
By leveraging a robust order routing system, retailers can optimize order fulfillment. Specific batches for U.S. and Canada orders, combined with precise inventory rules, ensure that U.S. orders are fulfilled from the central warehouse, and Canada orders are managed efficiently between the warehouse and stores. This streamlined approach enhances order processing efficiency, reduces costs, and supports reliable delivery within the 7-day standard shipping timeframe.