How to Better Manage Your E-Commerce Business’s Supply Chain Logistics
Customers, in general, want their packages as soon as possible. This is especially true if they have options. According to data from Deloitte, for example, 76% of customers say they would order household items locally if they could get same-day delivery.
For any e-commerce company, good logistics is key to overall positive customer experience. If you can ensure your products are always available, items arrive quickly and returns are handled promptly, then you can avoid most of the headaches customers are afraid of when shopping online.
These eight tips will help any e-commerce business take control of their logistics so they can work toward ensuring product availability and speedy delivery:
1. Start by analyzing your business's supply chain
In optimizing the supply chain, information will be your business's most valuable asset.
The goal of this process is to identify the suppliers and vendors your business relies on, plus all the suppliers those companies depend on. At the end, you'll have a strong idea of which companies and regions your business needs, which can help you identify weaknesses in the supply chain.
Mapping or auditing the supply chain can be a significant undertaking, especially for businesses that are particularly large or have limited resources.
2. Create a strong internal supply chain staffing structure
Talented employees will be invaluable in optimizing business logistics and maintaining that supply chain visibility. In the same way that you want to carefully structure and organize your business's supply chain, you should take internal stock of the employees you have dedicated to supply chain work. You also want to examine the practices, policies and structures that may be holding them back.
Good communication is necessary for supply chain optimization. Building structures that encourage and simplify internal communication will help information about supply chain difficulties reach the people who need to hear it.
There should be a leader or group of leaders in charge of managing your company's supply chain. These leaders will coordinate supply chain communication and processes across your business, ensuring some level of workflow standardization and information visibility.
3. Improve visibility and supplier communications
Supply chain visibility refers to a business's ability to track each item, raw material or component as it moves from the suppliers to the company's inventory. The best way to improve this visibility is with better supplier communications. Staying in close contact with essential vendors — updating them on your situation and asking for updates on theirs — can provide you with advanced notice on things like delays or opportunities.
In some cases, this may mean providing suppliers with extra information on your situation — like a regularly updated count of certain goods or components, so they can prepare a shipment when numbers run low.
4. Shore up supply chain vulnerabilities
Once you have a good sense of who your business depends on, you can start looking for potential weaknesses. Suppliers clustered in the same region, for example, could make your business vulnerable to natural disasters or infrastructure failure.
It can be good practice to begin building relationships with suppliers who can act as backups or alternatives to vulnerable vendors.
5. Manage inventory and storage
Optimized storage can provide some serious benefits for your business. Improving inventory visibility — creating systems that give you real-time tracking of the items your company is holding on to — and storage workflows should be a major priority.
Even simple changes to storage sites can help here. For example, tweaks that optimize a warehouse's racking layout can improve a building's efficiency by making it easier for workers to move through the facility and access stored items.
6. Prioritize supplier relationships
A strong relationship with your suppliers can create a situation where both companies become invested in the other's success. This can provide some significant benefits for your company — like prioritized communications on supply updates, industry tips and possibly assistance in optimizing your company's supply chain management.
These supplier relationships can be valuable in other ways, as well. For example, a supplier that is invested in your business's success may be willing to pass on tips about optimizing your warehouse storage.
7. Keep product info accurate and updated
A well-designed e-commerce website is essential to your business's success, as all of your customers are almost guaranteed to go through that site when shopping with your brand.
Many large-scale e-commerce businesses use logistics platforms to completely automate elements of this online storefront — like product orders, delivery and listings.
If you can't or don't want to automate your storefront fully, frequent manual updates are a good alternative. You want to do what you can to avoid out-of-stock products remaining purchasable. This automation can save your customer support team from telling customers that they'll either have to wait longer than expected or that their item is simply unavailable.
8. Regularly review supply chain performance
A system of regular supply chain reviews will help you tell where your optimization efforts are making the biggest difference. With this data, you can further improve supply chain processes, deepen supplier relationships and identify additional opportunities and vulnerabilities.
These supply chain reviews don't need to be that frequent, especially if you have robust controls for supply chain optimization integrated into your business structure and workflows. However, conducting these reviews every few months — or whenever possible — will help you catch issues that may have otherwise slipped by.
Optimizing your business's supply chain
An agile supply chain can be a major competitive advantage for e-commerce businesses. With the right management practices, you can optimize your company's logistics, which can potentially speed up deliveries, maximize warehouse efficiency and catch mistakes before they can become major issues.
Lexie is a UX designer and digital nomad. If she’s not traveling to various parts of the country, you can find her at the local flea markets or hiking with her goldendoodle. Check out her design blog, Design Roast, and connect with her on Twitter @lexieludesigner.