eCommerce Supply Chain: 6 Ways to Effectively Manage It
In recent years, eCommerce has allowed many businesses to expand their reach and scale their operations. However, doing so isn’t easy. Companies are more pressured than ever to start or move online to meet new consumer demands since there are more than 2.14 billion digital buyers worldwide today.
More than having an excellent website with an extensive catalog, you must also have a strategic system to deliver your customers’ purchases with little to no hassle for all parties. Supply chain management can help you with that.
Supply chain management covers the processes involved in the supply chain, from product development to last-mile delivery, making it one of the most important aspects of eCommerce.
If you want your eCommerce business to succeed in the long run, you may establish a more effective supply chain management scheme. This article provides everything you need to know about the importance of supply chain management and how it can elevate your brand.
What is an eCommerce Supply Chain?
The eCommerce supply chain is a network of different processes and entities that deliver a product from start to finish. It can be categorized into five major segments:
- Supply and demand
- Inventory tracking
- Order fulfillment
- Distribution, delivery, and returns
Each segment is controlled by various players, such as material suppliers, product manufacturers, warehouse and inventory managers, and logistics companies. These entities help eCommerce businesses meet their goals, bring quality products to their end customers, increase profits, and ensure their overall success.
Why Does Supply Chain Management Matter in eCommerce?
Now that you know what an eCommerce supply chain is, you may also be wondering: what is supply chain management, and why is it important for businesses to enhance their processes?
With supply chain management, you can connect your company’s production, financial, and sales aspects. You can also manage and distribute important data, resources, and funds to every segment in the eCommerce supply chain to bring quality products to end customers.
A streamlined supply chain management system allows businesses to have complete visibility of their supply chain, manage costs and delays efficiently, and even enter new markets. Studies show that companies with an optimized supply chain see 79% more revenue growth, 50% fewer inventory holdings, and 15% lower supply chain costs.
6 Tips for a Successful eCommerce Supply Chain Management
Supply chain management can get overwhelming, especially as many processes and players are involved in getting your products out the door. Below are some tips to help you effectively manage your eCommerce supply chain.
1. Expand and optimize your warehouse
In the Philippines, most online orders are typically shipped out of Metro Manila. While it benefits customers in the city, shipping fees are costly, and lead times are long for those outside the capital.
To make things easier, you can take advantage of provincial warehouses to enable multi-warehousing and hyperlocal fulfillment. It can help reduce costs and lead times, resolve stock shortages, decrease carbon emissions, and increase customer satisfaction overall.
2. Use the right supply chain technologies
Running an eCommerce business means employing the best technologies to optimize your operations. For instance, you can adopt tools such as order management systems (OMS) and warehouse management systems (WMS) to process orders automatically, monitor your inventory, and minimize operating costs.
You can also use automated barcode technology to streamline product data while logistics and transportation management systems can track your deliveries.
3. Devise effective communication strategies
With so many participants in your supply chain, you must keep everyone aligned with the same goals through clear and efficient communication. Poor communication can lead to late deliveries and human errors, consequently decreasing profits and productivity by up to 10%.
You can improve your supply chain communication by promoting transparency and accountability among your teams. You can also set key objectives, employ messaging tools, and schedule regular meetings with your crew and partners.
4. Improve sourcing strategies
Strategic sourcing is an essential part of the eCommerce supply chain management process. Before signing with new suppliers, consider taking preliminary steps, such as analyzing your finances, organizing business requirements, and collecting supplier information.
Once you have a supplier, regularly monitor their performance and integrate a supplier relationship management system to nurture your partnership.
5. Simplify supply chain processes
Your supply chain will inevitably become more complex as your business grows. While this can be seen as a good sign, it implies that your operations have become complicated and cluttered.
To resolve this, consider simplifying your supply chain by consolidating similar tasks, collecting data only relevant to your business, and improving manual operations.
6. Partner with experts in eCommerce
The eCommerce industry saw its quickest evolution during the COVID-19 pandemic, where total global retail sales jumped from 16% to 19% in 2020.
Today, customer behavior has never been the same, even as the world slowly operates at near pre-pandemic levels again. According to an eMarketer study, total retail sales are expected to hit 21% in 2022 and 24.5% come 2025.
This upward trend in the sector makes it more difficult for traditional and new businesses to catch up. If you can’t do everything in-house, consider leaving your eCommerce needs to the experts.
For example, you can partner with a third-party logistics company as they already have relationships with reliable carriers and fulfillment centers. You can also hire an eCommerce enabler to manage your store, launch your marketing campaigns, and improve your customer service.
Optimize Your eCommerce Supply Chain Today
Among other things, the success of your business relies on the effectiveness of your supply chain management system. Enhancing your supply chain can serve customers better and keep them happy throughout their journey.
eCommerce enablers like etaily can help you navigate supply chain management in the digital space. With our skills and expertise in eCommerce, we can help you sort your supply chain management needs from start to finish.
Check out our list of services on our website, or contact our team to learn more!