5 Solutions to Common eCommerce Supply Chain Management Challenges

The supply chain isn’t what it used to be. The eCommerce industry has changed the way businesses move their products from the warehouse to consumers. Companies like Amazon and Walmart now offer two-day delivery or even same-day delivery, which puts smaller e-retailers at a disadvantage. Consumers now expect to receive their products in just a few days or less. To keep up with these trends, smaller e-retailers need to adjust their operations if they want to stay competitive.

How eCommerce Has Changed the Supply Chain

Long gone are the days when consumers had to get in the car to buy the products they need. Today, consumers can quickly shop for and buy products from all over the world and have them delivered to their front door. This means consumers have more choices today than they did in years past. If one online store runs out of a particular product, they can quickly jump over to another website until they find the item they need. E-retailers need to keep their inventories up-to-date if they want to keep their customers satisfied.

Products are no longer sitting on shelves in a store. They’re being held in warehouses all over the country. Larger e-retailers have the resources to keep their products all over the country at separate warehousing facilities, but smaller e-retailers often can’t afford these services, leaving them to depend on third-party carriers like UPS and FedEx.

Common Challenges Facing E-retailers

With these changes in mind, e-retailers need to focus their efforts on effective inventory management and speeding up the delivery timeline. When competing with hundreds of e-retailers all over the world, companies need to make sure they always have enough products for their consumers using effective demand forecasting. Seventy percent of shoppers would shop for an item at a competitor if it was unavailable, rather than wait any length of time for back-ordered inventory.

E-retailers also need to ensure they’re fulfilling orders as quickly as possible. That means finding products quickly on the shelf, getting them ready for shipment and ensuring timely delivery. Nearly two-thirds (65 percent) of consumers say they are willing to shift to other retailers that can offer the same fast delivery options as Amazon.

Inventory Management Solutions for E-retailers

With e-retailers focusing on delivery and inventory management, here are some tips to get these companies moving in the right direction.

Maximizing Space Efficiency

Any delay in order fulfillment can increase the delivery timeline, which some consumers may find unacceptable. E-retailers need to keep their inventory organized if they want to get their orders out the door as fast as possible. Companies can organize inventory with storage containers, allowing employees to quickly retrieve the items they need. Containers and aisles need to be marked and labeled properly so employees can quickly find their way around the facility. Stacking items on top of one another also helps companies use their warehouse space more efficiently. Warehousing tends to be one of the most expensive aspects of running an e-retail operation. Using every inch of space can be crucial to ensuring a company’s success.

Automatic Product Retrieval

When getting products out the door as fast as possible is the name of the game in the eCommerce industry, some e-retailers may want to invest in automatic pickers and stockers that retrieve items automatically. This process speeds up the order fulfillment process, enabling companies to deliver their products to consumers faster. Companies can connect automatic pickers and stockers to their eCommerce platform, so every order will be filled automatically.

Faster and Cheaper Shipping

Shipping tends to be one of the most important decision-making factors for eCommerce consumers. Companies need to make sure they’re meeting their customers’ needs when it comes to expedited shipping, real-time package tracking, hassle-free returns and guaranteed delivery. Smaller e-retailers will need to partner with package carriers like FedEx, UPS and other third-party carriers without dramatically inflating the cost of shipping. Companies can purchase used shipping containers to keep these costs low.

To lower the cost of shipping, e-retailers may decide to move some of their inventory closer to the end consumer. This may include investing in warehouse space or distribution centers in densely-populated areas. Companies should have a firm understanding of where their customers are located in order to prepare for timely deliveries before the orders have even been placed.

Demand Forecasting

Whether it’s from a supplier or the company is manufacturing these products themselves, e-retailers need to be able to accurately predict demand for their products, so they can keep their inventory levels up-to-date. Today’s online consumer simply won’t wait for back-ordered inventory, meaning these companies need to keep their most popular items in stock at all times. Using data analytics can help these companies better predict demand for their products in the months and years to come based on not only previous sales data but whole host of other external data such as competitor pricing, web searches, weather and social media data. By using machine learning algorithms, software programs like Solvoyo can use this data to understand and quickly adapt to changes in demand profile and automatically adjust inventory levels.

Real-Time Inventory Tracking

When every order can either make or break an e-retailer’s reputation, companies can’t afford to have any of their products go missing. Real-time inventory tracking helps these companies keep track of their inventory throughout the supply chain, thus keeping their customers informed every step of the way. If a shipment is delayed, the company can alert the consumer and try to come up with a solution. This also makes it easier to find inventory in the warehouse, so companies can fulfill orders as quickly as possible.

Author

David Madden is an efficiency expert, as well as being the Founder and President of Container Exchanger. His passion and business is to save companies money through the use of used reusable and repurposed industrial packaging such as plastic and metal bulk containers, gaylord boxes, bulk bags, pallets, IBC totes, and industrial racks. He holds an MBA as well as a certificate from Daimler Chrysler Quality Institute for completion of six-sigma black belt training.

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