Supply chain management in e-commerce is basically about the planning and coordination of the movements of goods with suppliers of online shoppers. It comprises procurement, inventory management, order fulfilment, warehousing, and logistics for optimizing operations and cost reduction with fast product deliveries.
When processes such as these are managed effectively, an organization stands the chance of achieving superiority through the optimization of investments in inventories and becoming a market leader in the delivery of quality products—all as a value-based commitment to the ordering party’s satisfaction.
To ensure efficiency, you need to know the best e-commerce supply chain strategy. There are quite a few strategies that can optimise your e-commerce supply chain. Let’s see them.
14 Ways to Optimise Supply Chain Management in E-commerce
Here are some of the best ways to ensure that your supply chain performs at its peak and smooths out the process:
1. Implement an Inventory Management System (IMS)
An inventory management system can monitor product movements. Not just that, it also tracks stock levels and optimises replenishments. When you implement efficient tracking systems, it helps online businesses avoid stockouts and overstocks.
Supply chain management in e-commerce has thousands of products that move through the supply chain, so one must be able to track these from their raw material.
Radio Frequency Identification (RFID) know-how helps in realizing actual stock levels in the whole supply chain. Firms can attach RFID tags to their merchandise. With it, they can track the inventory and the movement history of products. This paves the way for effective inventory management and enhanced transparency in the supply chain.
2.Optimise Warehouse Layout
Optimising the layout of your e-commerce warehouse involves properly arranging shelves and storage areas. It maximises space utilisation thus allowing you to move goods smoothly. This, in turn, minimises picking and packing times, reducing errors, and thus improving overall warehouse productivity.
3.Collaborating with a 3PL Service Provider
When companies partner with 3PL, they get access to special expertise, advanced information technology, and robust infrastructure. This is related to warehousing, transportation, and order fulfilment. Reliable 3PL companies can help scale e-commerce businesses well and also help them in cost reduction with the assurance of service quality.
4.Using E-Commerce Fulfilment Warehouse
As you are planning supply chain management in e-commerce, you can opt for a fulfillment warehouse. It’s a specialised facility that handles storage, picking and packing, and even shipping of all your orders.
Using these facilities allows businesses to take advantage of faster order processing, and reduced shipping costs. With it, they can also enter new markets, expanding their reach.
5.Streamline Inbound and Outbound Logistics
Online businesses must always strive to improve their inbound and outbound logistics. It helps to reduce lead times and minimise transportation costs, thus increasing customer satisfaction. Inbound logistics optimises the entire process of receiving, inspecting, and storing the items from suppliers.
In the same way, optimising outbound logistics also leads to accurate order fulfilment, shipping, and packaging.
6.Conduct a Comprehensive Supply Chain Audit
Start with a thorough audit of your existing e-commerce supply chain. Evaluate the raw material flow, products, data, and finances for identifying profitability issues. It also pinpoints inefficiencies. Understanding your current supply chain operations allows you to make informed decisions, improving efficiency and reducing costs.
Mustard Made, founded by sisters Jessica Gray and Becca Stern, specialises in colourful, vintage-inspired lockers. When expanding into the U.S. market, the company enlisted potential customers to assess its shipping process.
These testers, who received complimentary products, shared valuable feedback through photos, messages, and reviews of the product’s condition upon delivery.
7.Have Advanced Inventory Management Software
Inventory management software is essential for tracking products and preventing stockouts or overstocking. Maintaining optimal inventory levels ensures that your e-commerce supply chain stays efficient, lean, and cost-effective.
8.Implement Automation in Order Processing
When you integrate into software for supply chain management in e-commerce, you would want to streamline your order processing. With automation, you can do that. When a customer clicks “Buy,” this software will extract the order details, confirm the stock levels, allocate the item from inventory, and generate packing slips and shipping labels.
You can do all of this without any manual entry. It leads to reduced lead times, quicker fulfilment, and faster shipment. As a result, you can ensure reliable and swift customer service.
9.Enhance Supply Chain Visibility with RFID Solutions
Integrating RFID in your supply chains allows real-time tracking of materials and products. The system uses RFID tags on the items to transmit data to the RFID readers. Then the readers process and monitor the information, providing instant visibility at every supply chain stage.
Such transparency allows you to make swift adjustments in case of fluctuations in demand or supply chain disruptions. With enhanced tracking, you can get more efficient operations and better inventory management that allows you to meet customer demands.
10.Streamline Your Inbound and Outbound Logistics
Managing incoming and outgoing goods can reduce delays, cutting costs. Establishing solid partnerships with trusted suppliers and distribution centres ensures that your raw materials and finished products get transported smoothly through the supply chain.
It avoids hold-ups, which could affect customer satisfaction. A practical way to optimise logistics is by developing long-term relationships with your partners to achieve a consistent and reliable flow of goods.
11.Swift Response to Supply Chain Challenges
Even though data is valuable, it’s not possible to foresee every supply chain issue. That’s why you need to have flexible supply chain management in e-commerce. A swift response to supply chain challenges is crucial for maintaining business continuity and customer satisfaction.
By quickly identifying disruptions, such as delays. Shortages or logistical bottlenecks: companies can implement proactive solutions like rerouting shipments, adjusting inventory or leveraging alternate suppliers.
This agile approach minimises downtime and reduces costs, ensuring timely delivery of products. Real-time data and advanced technologies allow businesses to monitor and react to issues so they can stay competitive and meet customer demands, even in a rapidly changing market environment.
12.Lower Delivery Times and Shipping Costs
Today’s customers expect lightning-fast deliveries. So, if you want to meet or even exceed your customers’ expectations, then lower your shipping costs and delivery windows.
Keep in mind that providing free shipping can enhance your profit margins with lower freight rates. Conversely, if customers are responsible for shipping costs, they’re likely to leave positive feedback if those expenses are kept low.
Also, when you give your customers multiple service-level options, they have the option to choose the flexible service they want. This increases conversion rates and customer satisfaction scores.
13.Better Management of Workforce
Most fulfilment centres around the world still rely on manual labour. This can add to the expenses as your company grows. If you fail to secure a favourable ROI through automation, the best thing you can do is manage your employees effectively.
Use productivity benchmarks and better time management to create a better-managed workforce. This will lower your cost-per-order (CPO), thus increasing your order fill rate. Brick-and-mortar retailers can maximise in-store labour and inventory when stores ship orders when there is slow footfall, thus maximising inventory turnover.
And here’s the last trick to optimise your supply chain management in e-commerce.
14.Reorganising Existing Warehouse Space
A larger warehouse is not always the solution to streamlining your e-commerce supply chain process. It’s also not possible for SMEs. Instead of more space, you can strive to make your existing warehouse more functional by optimising storage space.
Reimagine the layout, addressing inefficiencies. It will reduce footsteps, and improve efficiency and inventory management of your supply chain.
FAQs:14 Ways to Optimise Supply Chain Management in E-commerce
What are the types of supply chain management in e-commerce?
Types include procurement, production, distribution, and logistics management, each ensuring efficient product flow and delivery.
What is the role of CRM in e-commerce supply chain?
CRM helps manage customer relationships, streamlining order processing, demand forecasting, and improving overall supply chain efficiency.
What are some advantages of supply chain management in e-commerce?
Advantages include cost reduction, faster delivery, improved customer satisfaction, efficient inventory management, and streamlined operations for business growth.
Conclusion
Effective supply chain management in e-commerce ensures smoother operations, reduced costs, and faster deliveries, ultimately improving customer satisfaction. By implementing the right strategies, your business can achieve long-term success. For expert assistance in optimizing your supply chain, partner with Qodenext today and elevate your e-commerce performance!
