April 4, 2023 | Transportation & Integrated Logistics

Building a strategic supply chain for ecommerce is not an easy task as it comes with many moving parts: the transfer of finished goods from the manufacturer to the seller or to a third party, keeping track of inventory levels, managing a warehouse, picking and packing orders, shipping products to customers, and handling returns and reverse logistics. If one stage of the supply chain gets off track, it can derail the entire process and cause major delays downstream.

How well your supply chain management in ecommerce is handled is a determining factor of future growth. Once you have a solid ecommerce supply chain model in place, there are always ways to improve your supply chain as you grow your online sales and evolve your business model. The goal is to have your ecommerce supply chain process in sync with your sales channels.

E-commerce supply chain strategies

  1. Use multiple fulfillment centers
  2. Customers expect fast delivery times at an affordable price. By using multiple warehousing and storage locations, you can expand customer reach and significantly reduce delivery times.

  3. Implement real-time inventory management
  4. As orders are placed and shipped out, inventory control is a challenge if not managed quickly and in real-time. The right inventory management system or an ERP inventory system can help you prevent stockouts, optimize freight shipping from your manufacturer, and speed up customer deliveries.

  5. Optimizing the warehouse
  6. It is essential to constantly focus on improving inventory storage, reducing carrying costs, and finding ways to streamline the fulfilment process. A warehouse management system can help to manage inventory levels and storage, improve productivity, and efficiently fulfil orders to reduce errors & improve order accuracy.

  7. Partner with a 3PL
  8. Managing a fast-moving supply chain for ecommerce with many moving parts can be a challenge. Many fast-growing ecommerce brands choose to partner with a third-party logistics company that offers a network of fulfillment locations, connected technology, and deep ecommerce supply chain expertise.

  9. Audit your current supply chain.
  10. Review your supply chain at regular intervals to better understand the current state of your product, data and cash flow.

    Is what you’re currently doing profitable? Are there any issues with the data available? Are there any gaps between shippers and distributors? Look for inefficiencies in the operations, spending and processes to identify gaps and fulfil necessary tasks.

  11. Implement automated order processing.
  12. Automated order processing can help improve your supply chain operations’ efficiency and day-to-day effectiveness, even at the service level. It allows you to process orders faster by eliminating manual work, reducing lead time and expediting your shipping and fulfillment tasks.

    There are dedicated automated order processing solutions available that integrate with multiple sales channels and apps to automate, verify, process and implement orders as they come in — bridging the gap between supplier and customer.

  13. Map out your warehouse and distribute inventory strategically
  14. Keeping your warehouse inventory organized while utilizing all available space is critical for an effective ecommerce supply chain management. What happens too often is that items get misplaced, products are put in the wrong location or the warehouse operations as a whole are not as efficient as they should be.

    Through the use of tools such as a warehouse management system,one can help organize inventory, dictate where items and containers are located and establish location-specific distribution patterns.

  15. Increase Paperwork Accuracy, Decrease Processing Time
  16. One of the foundational technologies for warehouse systems and automation is implementing barcode technology. Barcodes let you track the what, who and when for all activities within the four walls.

  17. Manage Labor More Efficiently
  18. Most FCs rely on manual labor, which is not cheap. If you can’t achieve a favorable return on investment in applying automation, managing labor more efficiently should be a major strategic goal. Make improving labor productivity a key objective.

  19. Increase the Number of Picked Orders Per Day
  20. Order picking is one of the highest labor costs, and order accuracy and timely fulfillment are keys to a successful customer experience. For larger FCs, voice picking, pick-to-light and put-to-light, picking modules and robotics can provide an ROI for many applications. But they must be designed to fit your facility, products and material handling.

  21. Use Your Existing FC Space More Efficiently
  22. Warehouses are expensive to operate considering the total fulfillment costs of labor, occupancy, storage and material handling. Often, facility costs are 15% to 20% of the cost per order. Increasing efforts to gain space efficiency should consider options for layout, product flow, labor efficiency, storage and material handling, as well as safety, throughput and system functions.

  23. Implement Lean Principles:
  24. Lean principles focus on reducing waste and improving efficiency. You can apply lean principles to your supply chain by eliminating non-value-added activities, optimizing inventory levels, and reducing lead times.

POSTED ON April 4, 2023