// industry insights
B2B Logistics: What’s B2B Fulfillment and what do merchants need to consider?
Published on: 2nd July 2020, 4 min read.
What’s B2B Fulfillment?
B2B (Business-to-Business) fulfillment involves companies and merchants (specialist-, wholesalers, and retailers) who replenish their stocks with so-called Multi-Unit orders. B2B logistics consists of logistics operations of the flow of goods between suppliers and business partners along the entire value chain.
B2B fulfillment involves at least two parties – logistics transactions can take place between manufacturer and merchant, but also between parts manufacturer and product manufacturer. Usually, deliveries in the B2B sector were predictable and delivered in large quantities to a few distributors.
However, nowadays B2B fulfillment is becoming increasingly transparent, flexible and small-scale. The logistics operations take place without central middlemen and with correspondingly new demands on logistics.
The Differences between B2B Fulfillment and B2C Fulfillment
B2B fulfillment is characterized by considerably higher order quantities than B2C fulfillment. B2B orders usually consist of several SKUs (Stock Keeping Units) and many units of products. In most B2B logistics operations, pallets (single SKU pallets or mixed pallets) are shipped instead of parcels.
Shipping in the B2B sector is usually carried out by a freight forwarder or, for smaller orders, by a classic last-mile service CEP provider (Courier, Express and Parcel) with heavy packages.
Furthermore, Just-in-Time delivery plays a major role in B2B fulfillment. In logistics, a delivery is called Just-in-Time if the items are sent and arrive at the customer at the exact moment of need. The concept of Just-in-Time Delivery is particularly relevant along the supply chain between supplier and producer. Only those parts are delivered to the producer that are needed for the planned production number of goods.
This type of demand-oriented production leads to lower material costs as overproduction is avoided and to lower inventory storage costs due to the coordinated material flow. Timely delivery is also typical in food retail, as retailers in the fresh food and non-fresh food sector must comply with the best-before date (BBD) and the timely distribution and consumption of the products.
Compared to B2C, Just-in-Time delivery plays a significantly larger role in B2B fulfillment due to the high dependencies within the value chain and the focus on cost- and time efficiency. The traditional delivery times in B2B fulfillment amount to at least 48 hours. In B2C fulfillment, however, short delivery times of less than 24 hours are the standard (Logistik-Heute, 2011).
The long delivery times in B2B logistics can be attributed to the nature of B2B – that is – companies in the B2B sector plan very precisely and proactively to avoid delivery bottlenecks and production stops. Hence, speedier deliveries were usually not of urgence compared to B2C fulfillment where customers want their shopped product not tomorrow, but yesterday.
Nowadays, however, we are increasingly seeing a trend in B2B fulfillment towards a growing demand for faster delivery times, sometimes under 24 hours as the complexity of B2B fulfillment is increasing. This is due to shortened production planning cycles in combination with high order quantities and Just-in-Time delivery.
The must do’s: Take this into account in B2B Fulfillment
In order to reduce time and costs involved in the picking process, the products should be stored in packaging units, so-called trays. Thus, for example, boxes of 10 products can be picked in one step instead of 10 individual picks. In case the supplier does not offer this service, the goods can be pre-packed by the external logistics provider in the goods receiving department.
In addition to an improved picking process, high-quality service is essential in B2B collaboration. Many merchants have their own regulations for deliveries. These include advance notice, certain labels on pallets, such as hazardous goods labels, and further requirements, including Just-in-Time delivery. To ensure a smooth logistics process, the third-party logistics (3PL) provider must meet these requirements.
In addition, technology is an essential part of achieving efficiency and transparency in B2B fulfillment. Automation and data transparency are important factors in constantly obtaining real-time data about orders and possible delays. Real-time data are particularly crucial because reliability and thus optimal inventory planning are essential when dealing with existing B2B relationships. Therefore, companies cannot afford unexpected shortages or delays in delivery resulting from poor data quality and a black box in logistics operations.
Optimize your B2B Fulfillment together with everstox
Logistical processes in the B2B sector are characterized by complex requirements, for example in regards to delivery speed and reliability. The optimal B2B logistics provider differs significantly from the typical B2C logistics provider in terms of price level, operational focus, and service quality. It goes without saying that it should be avoided at all costs to select a B2C 3PL for B2B fulfillment.
In order to master the challenges concerning logistics processes, in cooperation with a broad network of qualified B2B logistics providers, everstox supports merchants in B2B distribution, e.g. in supplying retailers like Edeka, REWE or similar. Due to the state-of-the-art everstox cloud technology, merchants always keep track of orders and stock levels and thus achieve a high delivery quality.
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About the Authors
everstox is a technology and Logistics-as-a-Service (LaaS) platform enabling scalable and data-driven fulfilment for eCommerce, B2B and Retail businesses through a European network of independent logistics providers.
We enable transparent, efficient and ecological logistics solutions by forming Europe’s first tech-driven network of trusted warehousing & fulfilment partners.
Further information about everstox can be found under: www.everstox.com.