While offering access to global markets, eCommerce has also created a new set of challenges for businesses, particularly when it comes to supply chain management. Consumers expect fast and personalized delivery options, and a well-designed supply chain network can help them meet these expectations and enhance the overall customer experience.
Let’s explore the changing eCommerce landscape, the challenges faced by businesses, and how they can be addressed through intelligent eCommerce supply chain excellence.
The eCommerce Landscape
Consumers today expect fast and customizable delivery options. The rise of eCommerce has created a competitive environment where businesses must find ways to meet these expectations to remain competitive. According to a survey, 65% of consumers are willing to pay more for faster delivery.
Additionally, a well-designed eCommerce supply chain management strategy can improve delivery times, order tracking, and overall customer satisfaction.
Conversely, sub-par supply chain visibility can result in order delays and negatively impact the customer experience. For example, cart abandonment rates tend to increase when delivery times are longer than expected, and because of this, eCommerce stores lose over $18 billion in sales revenue each year.
By investing in comprehensive eCommerce supply chain management, businesses can improve their operations, make it easier for customers to purchase goods and services, improve their bottom line, and ultimately increase sales.
Challenges in eCommerce Supply Chain Management
Despite the advantages of a well-designed supply chain, eCommerce stores still face several challenges. Some of these include:
Lack of visibility: One of the biggest challenges in eCommerce supply chain management is a lack of end-to-end visibility. This is especially true when dealing with multiple partners, suppliers, and fulfillment centers, making it difficult to track inventory, shipments, and deliveries in real-time. Without complete supply chain transparency, it can be challenging to optimize operations, reduce costs, and ensure timely delivery. This can lead to delays, increased expenses, and poor customer experience.
Complex order fulfillment: Businesses must fulfill a large number of orders in a short amount of time, and this process can be complex and time-consuming. With the increasing demand for faster delivery times, businesses need to optimize their fulfillment operations to remain competitive. This includes automating the order fulfillment process, reducing the number of touches required to complete an order, and improving inventory accuracy.
Partner collaboration: Businesses often rely on partners and suppliers to help them fulfill orders. Collaborating with partners can be challenging, particularly if communication is poor or processes are not aligned. They must establish clear communication channels, define roles and responsibilities, and align processes across the entire supply chain. This includes establishing service level agreements (SLAs) that outline expectations, establishing a clear escalation path for issues, and providing regular feedback on performance.
Predicting risks: Organizations must be able to predict potential risks in the supply chain and take proactive measures to mitigate them. This includes identifying potential bottlenecks, anticipating demand fluctuations, and planning for potential disruptions such as natural disasters or geopolitical events.
Overall, eCommerce supply chain management presents a unique set of challenges that must be addressed to remain competitive in today’s fast-paced marketplace. By investing in technology, automating processes, and establishing collaborative relationships with partners, businesses can overcome these challenges and deliver high-quality service to their customers.
Addressing the Challenges through Supply Chain Excellence
To address eCommerce supply chain management challenges, businesses should consider the following strategies:
1. Implementing an end-to-end supply chain management solution: Investing in a comprehensive supply chain platform can help businesses streamline their operations and improve visibility into their supply chain. A good supply chain platform should allow businesses to manage their supply chain from end-to-end, from order placement to delivery.
A fitting, real-world example of this is Y. Hata’s implementation of an end-to-end supply chain management solution. Hawaii’s largest independent, family-owned food service distributor was facing multiple supply chain challenges. There was a lack of unified connectivity and end-to-end visibility. Also, the company was handling a complex web of (EDI) and Non-EDI transactions with a high degree of manual effort, leading to inefficiency.
To address these challenges, Y. Hata enacted a technology overhaul by leveraging a comprehensive supply chain platform. The organization achieved improved transparency, end-to-end visibility and connectivity, reduced costs, and increased customer satisfaction. Read more about the Y. Hata story.2. Convert order fulfillment into a competitive edge: By using innovative technologies such as Intelligent Order Management (IOM), businesses can deliver on their order promise intelligently and efficiently. Supply chain excellence can be attained through channel-agnostic inventory management at distribution centers, allowing for efficient fulfillment of both online and in-store demand. To achieve this, an IOM system powered by AI and real-time inventory data guarantees profitable, on-time delivery via rule-based order orchestration.
The Collected Group, a world-renowned designer, distributor, and retailer of women’s contemporary apparel, achieved omnichannel excellence by implementing an adaptive eCommerce supply chain management software. The organization was running its daily
state of affairs on legacy ERP and POS systems. This was handicapping their ability to handle multiple sales channels and international business.
By leveraging this supply chain management platform, The Collected Group drove partner collaboration and delivered enriched customer experiences via a multi-tier and adaptive global supply chain network – optimizing retail operations, providing end-to-end visibility, and reducing order cycle times. Read more about it.3. Predict risks with AI-driven capabilities: Artificial Intelligence (AI) helps businesses predict potential risks in the supply chain and takes proactive measures to mitigate them. AI can analyze data from a variety of sources and assist in devising a sound strategy to make informed commercial decisions.
4. Improve partner collaboration: Integrating data systems and clear communication builds trust and mutually beneficial relationships. Regular performance analysis drives continuous improvement and ensures all partners work towards common goals, resulting in an optimized supply chain and business success.
Empower your business with eCommerce Supply Chain Management
Despite the advantages of a well-designed supply chain, many companies still struggle with supply chain limitations. Lack of visibility, complex order fulfillment, partner collaboration, and anticipating risks are only a few.
Adopting a value-driven platform can be a game-changer for global eCommerce businesses, by equipping your business to address challenges while helping to streamline operations, reduce costs, and empower businesses to make informed decisions about your supply chain.
A state-of-the-art eCommerce supply chain management software will feature inventory management, order fulfillment, warehouse management, shipping and logistics optimization, supply chain visibility, and data analytics. These are fundamental capabilities that will enable your business to keep up with the changing customer and network partner preferences for continued growth.