Undertaking supply chain analysis is a great approach to determine ways to lessen fulfillment expenses by streamlining supply chain management processes and systems.
FREMONT, CA: A chain is only as strong as its weakest link. The proverb aptly fits the modern supply chain systems. All the business processes, services, and systems for moving finished products and raw materials from manufacturer to retailer, distributors, and customers are a part of the supply chain management (SCM).
A typical e-commerce supply chain includes storage, sourcing, distribution, fulfillment, distribution, IT, and transportation. Their primary applications are inventory management, merchandising planning, and analyses of product assortments for reorders as well as initial purchases, manual and electronic procedures for enabling purchase orders for the product via customer and vendor portals. Other applications include consolidation, inbound freight services, and carrier management with real-time visibility and dock scheduling.
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E-commerce Supply Chain Areas for Potential Improvements
Inbound Processes of the Supply Chain
- Using Advanced Shipping Notices (ASNs) improves vendor-customer IT and standards. Vendor-customer IT protocols can be implemented to purchase orders, ASNs, and other electronic documents.
- Increasing order cycle time and throughput allows the product to arrive ready to fill orders or to delay them, eliminating congestion and stock delays.
- For process improvement that involves identifying orders that can be pushed up to the wholesaler or the manufacturer
Maintaining items in the inventory perennially with respect to the arrival of orders is challenging. The improvement of the aspect has a significant impact on fulfillment centers’ (FC) capacity and storage from overstocks. It will also allow the merchants to adopt as per the vendor compliance policies and enforcing the standards.
Offsetting the Delivery Time and Costs
With Amazon contributing to around 72 percent of the shipments in the US, e-commerce companies are striving to reduce their delivery time efficiently. Expansion of FC network is a widely adopted approach, but there are challenges such as having inventory planning and management, enough nodes at the right place, and ability to ship from the node closest to the customers. Outbound freight exceeds fulfillment costs combined, including, facilities, labor software, automation, software, and packaging. Organizations must look for ways to reduce costs on the outbound side of their ecommerce supply chain.