How to Invest to Make Your Supply Chain More Efficient!

Make Your Supply Chain More Efficient

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With the advent of Amazon Prime’s free two-day and one-day delivery, customers have come to expect faster, free shipping from online sellers. How do you make your Supply Chain more efficient?

A PayPal study shows that 43% of shoppers will abandon their carts if hit with high shipping costs, while 84% won’t purchase from a brand again after a single negative delivery experience.

To compete favorably with their grown-up brothers like Amazon, small businesses in the eCommerce sector should know how to invest in keeping their supply chain running like a well-oiled machine. That way, they can dwarf shipping times and delivery costs to meet customers’ expectations.

Of course, a supply chain upgrade is a major investment that may require you to obtain a working capital loan from reliable lenders. But the resulting time and cost savings are so huge that the loan pays for itself in a few years.

7 Ways to Make Your Supply Chain More Efficient

1. Invest in supply chain visibility

Manual inventory control procedures can be a pain in the neck for small business merchants everywhere. Human error, inconsistent records, inventory shrinkage, and cases of missing/misplaced stock result in stockouts, backorders, and delayed order fulfillment. 

Consider investing in a modern Inventory Management Software(IMS) to sidestep the costs and errors associated with pen-and-paper manual systems. Inventory automation entails using barcode labels and wireless scanners that accurately capture and route data to an IMS in real-time when you receive new inventory or ship out packages. 

Thus, you can have real-time visibility of stock levels on each product in your warehouse. With accurate stock data and avoid stockouts, our overstocking. You can easily implement an IMS system with a working capital loan.

2. Automate order fulfillment processes

Order fulfillment is the most expensive and time-consuming activity in every small business warehouse. It entails the pick, pack, and ship cycle. Formerly, this process was rife with errors because it was entirely dependent on humans. The technology to automate these repetitive, time-consuming tasks is finally here. Think of Amazon robots! They can pick, wrap packages, and load them on delivery trucks. 

To automate your order fulfillment process, you’ll need to invest in warehouse automation robots like retrieval machines, automated guided vehicles(AGVs), and modular shelving or rack structures. These automated storage and retrieval systems (AS/RS) work alongside humans to improve order picking, packing, and shipping. 

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Once the fulfillment cycle is streamlined, merchants benefit from reduced fulfillment costs, increased employee productivity, and accurate/timely departure of customer orders. Being a costly investment, most merchants use working capital loans or equipment financing to automate the order fulfillment cycle.

3. Implement a Warehouse Management System

While inventory management control helps you keep tabs on your inventory levels, a Warehouse Management System(WMS) helps you manage your overall warehousing activities, from inventory ordering and storage to shipping automation. A WMS comes with order management tools, reporting/analytics tools, and shipping automation tools that help you manage inventory ordering, storage, and shipping.

For instance, WMS connects with your IMS and your supplier’s warehouses. Thus, you can set automatic reorder points. When a product reaches a predetermined stock threshold, an order is automatically sent out to your supplier. You’ll also have access to stock data analytics and demand forecasting for each product in your warehouse so that you can make better business decisions.

4. Invest in employee training

Your supply chain is as efficient as the people who manage it. As you continually invest in new technology to automate and streamline your supply chain, don’t leave your employees behind. 

Have a training plan for your workers so that they can maximize any new technology you integrate into your warehouse. For instance, order fillers should be trained to work seamlessly with automated storage and retrieval systems (AS/RS). Logistics managers should be up to date with the standard operating procedures and be skilled enough to use your WMS and IMS effectively.

Of course, you’ll need money for employee training. Working capital loans, which can easily be obtained from a reputable online lender, come in handy for continued employee training. 

5. Partner with reliable suppliers

The first leg of your supply chain rests with your suppliers. Consider working with reliable suppliers who consistently deliver quality products without delays. That way, you can avoid stock shortages and order fulfillment delays due to faults that aren’t yours.

Once you find reliable suppliers, cultivate clear communication and inventory visibility between your warehouse and the supplier’s warehouse. Savvy merchants integrate their WMS with their Supplier’s systems so that inventory ordering is done automatically at specific reorder points.

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6. Outsource fulfillment to a reliable 3PL

Keeping order fulfillment in-house becomes costly and time-consuming as your business grows. A partnership with a reliable third-party logistics company can help you save time and money on warehousing costs and order fulfillment. 

These are companies that store inventory on your behalf at a fee. When you receive orders, you pass on order details to your partner, who picks, packs, and ships products on your behalf. They have centers in different locations to help you with shipping time and delivery costs and powerful shipping software and inventory management systems that you can take advantage of to keep tabs on your inventory.

7. Work with reliable couriers

The final leg of your supply chain is when packages from your store board a delivery truck on their journey to the final customer. To keep your customers happy and buying, work with reliable couriers who can help you ensure a streamlined post-purchase experience for your customers. 

Provide your buyers with order tracking information so that they can know where their packages are throughout the delivery process. This helps lessen delivery anxiety, especially for big-ticket items.

Invest In Your Supply Chain Today

Clearly, a supply chain upgrade can be a game-changer in your everyday business operations. Yes, it’ll take money to invest in business equipment and build/integrate the software systems required to change. But once you have everything in place, you can slash order processing costs, reduce carrying costs/labor costs, improve employee productivity, and keep your customers happy and buying with faster delivery.

Whether you want to start by building an inventory management system or purchasing more inventory, a working capital loan can help you make your Supply Chain more efficient.

Make your Supply Chain more efficient article and permission to publish here provided by Alejandro Carrera. Originally written for Supply Chain Game Changer and published on July 1, 2021.
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