It’s no secret that running an eCommerce business requires much more than simply setting up a digital marketplace with items for sale. While it may appear simple, understanding logistical touchpoints and the journey products go through before reaching your customers is vital to the health and growth of your business. From manufacturing to quality assurance to storage and shipping, proper supply chain management, and a knowledge of how inbound and outbound logistics can affect this cycle is imperative in setting yourself above competitors and delivering memorable customer experiences that resonate.
What is a Supply Chain?
A supply chain is a series of interconnected touchpoints that detail the movement of a product or service from the supplier to the end customer. This system often involves sellers, manufacturers, management personnel, detailed logistical information, physical resources, transportation modes, and channels.
What is Supply Chain Management?
In the simplest of terms, supply chain management monitors the movement of raw materials or finished goods from a point of production to final delivery.
How effective supply chain management can make or break your eCommerce business.
With so many different moving parts, knowing how to plan and optimize a supply chain before it’s set in motion is imperative. No matter the size of your business, supply chain planning offers an unmatched opportunity to improve your logistical prowess.
Whether you plan to branch out manufacturing, work with different suppliers, or alter your inbound/outbound logistics design, outsourcing fulfillment to a competent third-party logistics provider (3PL) is one of the many ways to improve efficiency and save valuable time and money.
Right products, right time
Precise supply chain management involves looking to the past and future in accurately anticipating and forecasting demand. You never want to cut yourself short and underestimate consumer demand and lose potential profit. That said, it’s just as important not to overestimate demand and order too much inventory. Excess inventory can add costs like warehousing fees which eat up capital.
Comprehensive supply chain management brings an enhanced level of transparency for all involved parties. Monitoring the status of sourcing, production, warehousing, and distribution activities through a comprehensive WMS like DriveLine offers real-time tracking and complete transparency, so you know exactly where your products are and when they will arrive at a customer.
Minimize Lag Time
Cutting down lag time means eliminating excess time between touchpoints along the supply chain. In your effort to analyze your current flow and supply chain effectiveness, consider the following questions and possible solutions:
- Are your shipping and transfer times slow, average, or too long?
- Find warehouse locations closer to end customers and a 3PL provider like Drive Fulfillment that can offer game-changing shipping discounts with major couriers and the peace of mind that timely delivery is guaranteed.
- Do your products take too long to be manufactured?
- If so, negotiate better terms or find a manufacturer with the competencies and speed you require.
- Are your most popular items in stock or out of stock?
- Ramp up production on sought-after items, forecast inventory, and set frequent re-ordering goals.
Diving into each of these aspects of your supply chain will undoubtedly help you find areas of improvement and make the necessary changes you need to grow.
Reduce Fulfillment Costs
Poor geographic locations, outdated automation, and unoptimized labor can add unnecessary costs and eliminate profit margins essential to driving revenue and growing your business. If optimized correctly, efficient order fulfillment awards a strategic advantage over competitors in continually improving your supply chain flow.
How to Manage an Effective Supply chain
Find the right supplier
The first link of your supply chain is finding a manufacturer that can safely, efficiently, and quickly supply your products. Although it may depend on the type of products you sell, ask yourself the following questions when it comes to weighing potential suppliers:
Placing orders based directly on your demand planning allows you to anticipate and plan for variables, including seasonal trends that can alter demand and volume. Using an inventory management system like Driveline helps guarantee you aren’t tieing up money in excess inventory costs.
Plan transportation logistics
Clearly outline shipping needs with your manufacturer on how products and raw materials are transported. Coordinate so that the right items are properly organized and reach the appropriate warehouse with adequate documentation on time.
Streamline receiving and storage
Once your inventory reaches the fulfillment center, items must be received and stored by SKU in an organized and systematic way that facilitates the Pick Pack Ship process once an order is placed. For standard shipping and receiving protocols, visit our guide.
Pick, Pack Ship Orders
The last step and link in the supply chain involve picking, packing, and shipping products to end customers. As each unit is picked and scanned from an inventory container or storage space, inventory counts automatically update in real-time, providing up-to-date stock levels for you, and detailed tracking for the end customer. A Custom Warehouse Management software that automatically assigns similar orders with inventory in the same warehouse locations can significantly reduce the number of steps required to pick orders. Expert picking, packing, and shipping increase both the speed and accuracy of order fulfillment while keeping customers happy and in the loop.
How to sync supply chain elements?
Seamlessly linking supply chain elements to ensure a smooth transfer of physical goods and information from stakeholders to customers and manufacturers is the goal of effective Supply Chain Management. With so many moving parts, it’s never a bad idea to explore how your business can benefit from best-in-class distribution services eCommerce Fulfillment, Custom Packaging, Kitting and Assembly, Direct to Garment, and On-Demand Printing. Get in touch or to receive a customizable Drive Fulfillment quote today. Contact us to learn more.