1. Unpredictable customer demand
Consumer demands don’t stay steady all the time. In contrast, the demands keep changing continuously and can be affected by lots of unprecedented factors like natural phenomena. Besides, the limited storage capacity of micro fulfillment centers makes it hard for retailers to adjust to abrupt demand changes caused by any other social or economic trends.
For example, a storm or tornado can cause a surge in demand for specific types of products and disrupt fulfillment operations in certain areas, thus leading to inventory imbalance of some MFCs.
2. Frequent stock replenishment
Due to small space for storage, a micro fulfillment center can only hold a certain amount of stock in the short term. Therefore, these centers need to be replenished constantly. To avoid stockouts, retailers have to accurately manage their inventory in real time to make timely replenishment decisions.
In addition, how much inventory to place in each center is also challenging. Sellers should consider carefully to balance the inventory among these facilities so there are enough stocks to meet the demands of each location.
3. Ineffective micro-fulfillment systems
Using ineffective systems to operate and manage order fulfillment might cause great damage. An outdated system that can’t integrate with other retail systems such as ERP or POS makes you lose track of the inventory levels and any order changes. Not grasping inventory and order updates might result in inaccurate deliveries, underselling, or overselling, which may discourage customers from more repeat purchases.
As a result, finding a suitable system that integrates seamlessly with other software and apps helps you deal with complex fulfillment operations. A good micro fulfillment solution can inform you of the stock replenishments and generate demand forecasts to decide which products to stock in specific locations.
4. Unsuitable for all product types
The limited storage space of micro-fulfillment centers also restricts the type of products they can store. Intended for short-term inventory storage, these centers are not an appropriate place to hold large or bulky items that might occupy a large area. Besides, these products are not purchased frequently and are difficult to stock. Micro-fulfillment centers are more suitable for seasonal or perishable products like groceries or clothes.
Consequently, retailers must consider which types of products they should store and fulfill in micro-fulfillment centers.
