How to Reduce Split Shipments with KIBO and Shipium

In ecommerce, delivering a seamless customer experience while maintaining operational efficiency is paramount. One significant challenge that retailers face is managing split shipments—situations where a single order is divided into multiple packages due to inventory constraints or fulfillment strategies. While split shipments can expedite delivery times, they often lead to increased shipping costs and potential customer dissatisfaction. This blog post delves into how the integration of KIBO’s fulfillment optimization and Shipium’s Fulfillment Engine API can help businesses minimize split shipments, thereby enhancing efficiency and customer satisfaction.

Split Shipments Kill Margin

Split shipments occur when items from a single order are dispatched from different fulfillment centers or at different times. This scenario can arise due to various reasons:

• Inventory Distribution: Products are stocked across multiple warehouses, and not all items in an order are available at a single location.
• Product Characteristics: Variations in product size, weight, or handling requirements necessitate separate shipments.
• Backorders: Some items may be out of stock and shipped later when they become available.

While split shipments can ensure faster delivery for available items, they present several challenges:

• Increased Shipping Costs: Multiple shipments lead to higher transportation expenses.
• Environmental Impact: More shipments contribute to a larger carbon footprint.
• Customer Experience: Receiving an order in multiple packages can be inconvenient for customers and may affect satisfaction.

Since shipping tends to be the highest operating expense on the P&L, reducing splits is one of the single best ways to improve margins. It is a top area of focus for the partnership between KIBO and Shipium.

Integrating KIBO and Shipium

By leveraging the combined strengths of KIBO’s fulfillment optimization and Shipium’s Fulfillment Engine API, retailers can effectively reduce the occurrence of split shipments:

• Intelligent Order Routing: KIBO’s platform enables automated fulfillment logic, allowing businesses to customize workflows that optimize picking, packing, and shipping processes. This automation enhances both speed and accuracy while boosting productivity.
• Optimized Fulfillment Decisions: Shipium’s Fulfillment Engine API assists your KIBO environment in making informed decisions about which fulfillment centers to use for shipping specific products at the right time. By posting orders with item lists and inventory statuses, the API recommends optimal shipment plans, including item quantities and fulfillment centers, thereby reducing the likelihood of split shipments.

How KIBO Enhances Fulfillment Optimization

KIBO offers a suite of tools designed to streamline fulfillment operations:

• Automated Fulfillment Logic: KIBO’s advanced software automates complex logistics, including split shipments and predefined substitutions. This customization of workflows optimizes picking, packing, and shipping processes, enhancing both speed and accuracy while boosting productivity.
• Flexible Fulfillment Processes: KIBO’s platform supports flexible fulfillment processes, enabling businesses to adapt to changing consumer demands and achieve enhanced customer experiences, reduced costs, and increased productivity.

How Shipium’s Fulfillment Engine API Reduces Split Shipments

Shipium’s Fulfillment Engine API focuses on optimizing the logistics of order fulfillment:

• Intelligent Consolidation: The Fulfillment Engine considers key criteria, such as inventory levels and critical pull times, to optimize shipment consolidation for multi-item orders. This intelligent approach reduces the need for split shipments by ensuring that items are shipped together whenever possible.
• Real-Time Decision Making: The API provides real-time recommendations for shipment plans, including the selection of fulfillment centers and packaging options. This dynamic decision-making process helps in aligning fulfillment strategies with business requirements, further minimizing split shipments.

The unique approach Shipium has with this problem is found in the Shipium Intelligence layer. The platform uses data to power several dozen machine learning models, including speed, cost, accuracy, carbon, and more.

In this instance, Shipium’s Fulfillment Engine API is leveraging the Dynamic Time-in-Transit model to estimate probable future delivery times for all eligible carrier service methods, then using the Fully Loaded Costing model to understand probable future costs of each service method, which is similar to other use cases, but in this case, it’s doing so across the entire network to examine instances where a single shipment from an eligible origin can still hit a delivery date, and is cheaper than shipping multiple packages.

The Benefits of KIBO and Shipium’s Collaboration

The network optimization workflow used by joint customers is extremely powerful.

1. As multi-SKU orders come into the system, KIBO makes an API call to Shipium’s Fulfilment Engine API with the following information:
   1. Desired delivery date
   2. Delivery information (destination address, package level detail, dimweights, etc.)
   3. Inventory availability at each origin in your network
2. Shipium looks across your network and finds where a single shipment comprising multiple shipments can be made that hit the desired delivery date.
3. Shipium can return either the full results or, to streamline the API, simply reply the recommended origin.

Integrating KIBO’s fulfillment optimization with Shipium’s Fulfillment Engine API offers several advantages:

• Cost Reduction: By minimizing split shipments, businesses can significantly lower shipping costs, leading to improved profit margins.
• Enhanced Customer Satisfaction: Consolidated shipments provide a better customer experience, as orders arrive complete and on time, reducing potential confusion or dissatisfaction associated with multiple deliveries.
• Operational Efficiency: Automated and optimized fulfillment processes reduce manual interventions, streamline operations, and allow staff to focus on more strategic tasks.
• Environmental Responsibility: Fewer shipments contribute to a reduced carbon footprint, aligning with sustainability goals and appealing to environmentally conscious consumers.

The partnership between KIBO and Shipium addresses the critical challenge of split shipments in e-commerce. By integrating their respective strengths in fulfillment optimization and intelligent shipment planning, businesses can achieve a harmonious balance between operational efficiency and exceptional customer service. This collaboration not only reduces costs and environmental impact but also fosters customer loyalty through reliable and consolidated deliveries.