Supply Chain Management Tips For Ecommerce


At the core of electronic retailing is a direct relationship with the consumer. From the very beginning, there is a point of connection with the shopper-something compelling that spurred him or her to action-establishing a strong foundation for future interaction, loyalty, and lifetime value.

In the high-pressure eCommerce environment where we constantly face aggressive metrics for sales revenue, margin, and conversion-it’s easy to forget about those human relationships and their long-term value. Thinking about your customers first and optimizing your supply chain around their needs can yield incredible dividends, turning one-time shoppers into repeat customers and transforming customers into advocates for your brand.

Supply chain management includes all the business processes, systems and services needed to move raw materials and finished product from manufacturer to retailer, distributors and customers.

A supply chain is only the strongest at its weakest link. A lot goes into those relationships behind the scenes, and caring about your customer isn’t enough if you can’t back it up with the top-level service and efficiency that customers today have come to expect, particularly online.

To ensure that your supply chain is up to the challenge of meeting and exceeding your customers’ expectations, focus on the following three areas:

Provide the Right Products

Retailers can combine owned inventory with drop-ship and marketplace assortment to maximize product selection for shoppers. Because direct response retailers have such a close relationship to their customers, they are ideal partners for suppliers who are looking for efficient channels to get their products in front of shoppers. On the flip side, working with more suppliers and having them ship directly to your customers provide direct response retailers with the opportunity to increase their product assortment without the increased risk or capital investments.

While leveraging additional suppliers can expand your product assortment and increase visibility, it also entails a certain loss of control. Of course, you have to trust your suppliers to provide quality products and service to your customers. Perhaps even more importantly, you need to set yourself and your partners up for success by optimizing your supply chain.

New technology makes it possible to bridge the gap between your processes and those of your suppliers. Tight electronic integration not only makes sure product orders and details aren’t lost in translation but also ensures products are taken off of your site when inventory runs out. With this level of control and visibility, you can track, analyze, and gain complete order transparency across all suppliers and drive greater supplier efficiency, responsiveness, and compliance.

Optimize Inventory Management

Your suppliers are a vital part of SCM, and inventory is one of your largest balance sheet assets. Having items in stock a high percentage of the time an order arrives is a continual challenge.

The efficiency of this aspect of planning, purchasing and managing inventory has a major effect on FC capacity and storage from overstocks, as well as your order fill rates. Merchants will also have a major say in adopting vendor compliance policies and enforcing the standards.

They are also the key to communication with the vendors on purchase order delivery dates. Changing mode of inbound transportation as an example from ship to air freight not only destroys gross margin but often is part of the delay in receiving and shipping orders.

Make the Brand Experience Seamless

Your customers don’t know, and aren’t interested in, how you source and supply products to them so long as their experience remains consistent and positive. Supplier mistakes are no excuse for subpar service, presentation, or efficiency. In addition to ensuring you get the right products to the right customers quickly and smoothly, your supply chain should also be set up to cascade your brand identity throughout the whole process.

Branded packing slips can be shared automatically with suppliers’ warehouse management system, strengthening your relationship with customers from order through delivery. The particular opportunities and challenges that will face retailers in the coming years will be varied and demanding, ranging from the economic to the technological to the cultural. Despite this unpredictability, one bulwark will remain core-an agile and efficient supply chain.

By optimizing your supply chain to meet shopper expectations today, you have the opportunity to build on the relationships that will sustain your business. By ensuring that those processes are flexible and adjustable, you can set yourself up to continue to delight those customers far into the future.