How Ecommerce Success Depends Greatly on Supply Chain Management

By James Mellor posted 07-07-2021 00:50


E-commerce involves selling and buying goods online and the movement of the goods between the seller and the buyer. The ability to dispatch the right products at the right time to the right buyer is essential, which means having good supply chain management. 

When a supply chain is efficient, e-commerce is able to meet and even surpass customer expectations. A well-developed supply chain, therefore, has the power to make or break a company. 

Supply chain management includes the management of supply and demand, warehousing, tracking of inventory, entering and managing orders, distributing and delivering products to customers. The more uniform, automated and faster the data exchange, the better the links in the supply chain interlock. 

Enhance customer satisfaction

Customer satisfaction is vital for the success of e-commerce enterprises and customer reviews can influence the reputation of an e-commerce business and impact its growth. It is important for e-commerce enterprises to figure out how to attract customers and keep them without blowing their marketing budget. Keo Marketing, an award-winning B2B marketing agency, offers reliable marketing programs that deliver outstanding leads and sales. 

Efficient supply chain management means that enterprises can track demand, know how much time they need to order goods from suppliers and keep the right amounts in their inventories. Customers want the right products at the right time and are satisfied with nothing less. A slow delivery process increases the risk of losing customers. Fast delivery can increase customer retention, repeat buys and boost revenue. 

Reduce costs and react to changing needs

Entrepreneurs need to decide on factors like whether they will resell products or manufacture their own, what quantities they expect to deal with on a daily basis and how they will ship to their customers quickly at the lowest expense. 

Reducing costs in supply, production, and distribution processes will lead to higher profits. Merchants today need to use real-time data transparency to enable them to react in a timely manner to changing customer demands.

Inventory represents a significant amount of the total investment of an e-commerce business and carrying excess inventory increases costs. Buying too much inventory means businesses run the risk of obsolete stock and carry additional costs in warehousing. Improving inventory control can help to eliminate warehouse back orders, not being able to find products etc. 

Reduce human error through automation

Optimizing a supply chain involves more than just implementing automation software but automating processes can certainly help. Supply chain management software often comes equipped with new technologies like cloud computing and big data analytics to make it easier to handle a whole range of activities in the supply chain. 

In 2020, many e-commerce businesses invested in inventory and order management software and this trend is likely to continue. Automating order tracking and inventory can greatly reduce human error and therefore increase efficiency. 

Increase speed and improve efficiency

Automating the supply chain can significantly speed up processes. Most e-commerce businesses try to automate wherever they can, especially when it comes to administrative processes. Artificial intelligence and machine learning technologies can validate invoices, process orders etc., at a much more efficient rate.

Making use of barcode technology is bringing about more efficiency in labor productivity, material handling and the flow of products. Implementing barcode technology can help when it comes to warehouse activities like packing, receiving, shipping, returns etc. Order picking and packing are two areas where companies can gain significant labor cost savings. 

When supply chain management is automated and efficient, e-commerce companies can readily customize a store with new products, launch new stores, and branch out to additional regions.