The positive influence of E-commerce on Supply Chain Management

It is interesting to notice how E-commerce is redefining virtually all logistical processes today. These changes are mainly due to the way consumers are buying the goods and services they need. Increasingly, people are buying from their mobile devices and avoid moving somewhere to buy clothes, food or electronics, among thousands of things. Because of this sophistication in consumption, the integration of E-commerce in the supply chain is a matter of great importance for the achievement of competitive advantages, as well as the best possibility to excel among the competition.

In this post, we’ll talk about how E-commerce relates to supply chains and how you can start implementing new changes in your logistics.

The most tangible consequence of millions and millions of Internet purchases is, of course, the need for more effective logistics than the one that has been running until not too long ago. It has meant a series of changes and rethinking of more traditional supply chains. For example, many companies have sought to offer home delivery in less than 24 hours or even in less than 2 hours, as well as store delivery, key lockers at stations and airports or collection at convenience points. A simple example is McDonald’s: Now it is possible to order from a smartphone app and get your food at home thanks to an agreement that this company has with Uber.

Recommended: Supply Chain Trends To Follow In 2017

Moreover, regardless of the delivery method, customers need to be informed at all times during the delivery process about the status of his order. Because of this level of demand, companies require partners that can offer them a global shopping experience thanks to the integration of both the communication and the logistics channels.

In the fashion industry, for example, E-Commerce has become the general rule in some parts of the world. The new context of the fashion industry has led to the development of a complex cross-channel platform in which the growing combination of online and physical stores forces retailers try to find truly cost-effective synergies between storage, transport, return and manipulated goods. Several European textile chains have introduced thousands of new articles annually, much more than their direct competitors (who, in addition, keep working with old logistic models,) with a time between the design of the garment and its placing in the market of an average of three weeks. For this reason, a correct execution is the only way for a specialized chain to obtain cost savings and improve sales, especially in a market as volatile and changing as fashion in order to retain customers.

Read also: Supply Chain: a technological field, by David Kiger

When it comes to distribution, these changes are generating new possibilities for partnership. Alibaba Group, for example, has come to an agreement with Maersk so that Alibaba sellers can book slots on Maersk ships directly from its website. This is a revolutionary change since, traditionally, trades are forced to pass through intermediaries when reserving spaces in the containers of the ships of the shipping companies. This situation greatly improves the times of the supply chain processes. Precisely, this will be a possible trend among the main players in global E-commerce.

What does it take to start implementing these new changes? Without a doubt, it is essential to have a marketing strategy and knowing which platform to use according to the needs and the niche market of each particular company. This is the only way to redefine the course of all the processes that make up a supply chain.

BarcampCologne_supply chain management_e-commerce_logistics
Image courtesy of Tomas Caspers at Flickr.com

An example that you can consider is Drop Shipping, which is positioned as an increasingly widespread E-commerce model. It consists of a form of retail sale that takes place when a retailer does not have the necessary products in its facilities, so the wholesaler delivers the merchandise instead to the final customer. Therefore, the seller just needs to delegate the orders to the supplier itself. Drop Shipping can even drive you to create smartphone apps associated with your brand, which will definitely make things easier for your customers.

The financial risk is significantly lower, compared to the solo performance, following the traditional E-commerce model. Hence, it is an especially recommended formula when it comes to risk and costs: Your investment only consist of a good online platform, and an effective communication strategy to spread your brand.

Now, regarding the transportation and shipping of your products, it is highly recommended to hire a shipping company when it comes to a B2C since it will be impossible for you to reach each of the destinations of your customers (both domestic and foreign.) Note that in the E-commerce the shipment is usually free (or it is included in the purchasing price.) Same-day-express-shipping options are secure and practical possibilities that will bring huge benefits to the logistic processes of your company and, of course, to your clients.

* Featured Image courtesy of David Erickson at Flickr.com

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s