Why Your eCommerce Business Needs Better Supply Chain Management

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December 10, 2020 Business

One of the most important parts of running a successful eCommerce business is managing your supply chain. Even if your company isn’t directly involved in manufacturing, understanding the best way to run your distribution centers, shipping policies, and vendor relationships will allow you to improve customer satisfaction and retention. Reliable fulfillment can distinguish your business from other competitors in the direct-to-consumer market segment. Read on to discover how robust supply chain strategies can take your business to the next level.

Visualize Your Supply Chain

In the global economy, smooth coordination between vendors, suppliers, and manufacturers is the key to successful manufacturing. Even for small businesses, it’s not uncommon to have dozens of different sources of raw materials and pre manufactured goods. Unfortunately, with your suppliers spread out over thousands of miles and several different time zones, it can be challenging—if not impossible—to discern where friction and delays are most likely to develop in your supply chain.

Improving your supply chain visibility strategy can help you discover manufacturing conditions you can’t be present to see. Opaque supply chains are a major cause of inefficiency, but modern high-tech solutions can keep costs under control and streamline operations. Advanced systems that combine smart sensors enabled with live updates about conditions onsite with artificial intelligence enable your business to take advantage of the latest advances in predictive technology. Better insights into the future of customer demand is essential to managing a just-in-time supply chain, and helps you save money on inventory while consistently meeting customer demand.

Distribute Your Fulfillment Centers

If you manage your own fulfillment strategy, you already know that customers expect you to ship their packages as fast as Amazon does, even if you’re nowhere near the same size. With shipping costs rising even faster than customer expectations, it can be difficult to figure out how to meet the demand for fast shipping without devoting all of your budget to it.

Larger eCommerce businesses can consider transitioning to a distributed fulfillment center strategy instead of a centralized warehouse. Improving supply chain transparency allows you to ship from multiple locations and offer delivery in one to two days instead of three or more. Well-implemented distributed fulfillment strategies can help you increase customer satisfaction and develop a competitive edge in the direct-to-consumer market. Each fulfillment center should be designed for the best use of labor and space and should use real-time cloud inventories managed with barcodes to keep paperwork and inefficiencies at a minimum.

Discover and Address Inefficiencies

With access to high-quality data about your manufacturing and fulfillment processes, you have all the power you need over your in-house processes. However, inbound supply chains, which are controlled by vendors, are just as likely to snarl your production schedules as their outbound counterparts. When shipments contain unapproved substitute items, arrive in the wrong packaging, or create inconsistencies within your order processing system, it costs your business both time and money.

To solve these problems, audit your recent invoices and assess which of your suppliers are most commonly implicated in your inbound supply chain difficulties. If you don’t have a clear system in place for receiving orders, spend some time developing one before you confer with your partners about expectations for future incoming shipments. Ask vendors to agree to new practices in writing before you place your next order and before your receiving department signs off on the next purchase order they deliver to you. In the event that your suppliers can’t or won’t accommodate your new policies, start searching for suppliers that will.

Especially if your eCommerce experience mostly concerns direct-to-consumer marketing strategies, supply chain management may seem like an afterthought. However, efficient inbound and outbound logistics practices make all the difference in delighting your customers, maintaining a competitive edge, and reining in costs.

Intelligent supply chain planning is crucial because brittle supply chains can damage your reputation, but fast, reliable delivery will help you stand out in the competitive direct-to-consumer market.