With a current market size of $514 billion and an anticipated CAGR of 7.8 percent, U.S. eCommerce revenues are anticipated to exceed $740 billion by 2023. Given the size and growth of eCommerce, it’s no longer a question of whether your company will be selling products online. Instead, given how vital eCommerce is becoming to your company’s success, how will you manage your eCommerce business today and in the future? Specifically, how will you create a fulfillment system that minimizes your costs, meets your customer’s expectations, and easily scales to meet the needs of your growing eCommerce business?
Even companies with large warehouse operations need to take a close look at their current fulfillment model -- designed to manage and move products in bulk – and ask themselves if they have the warehouse space, technology, and labor to create an efficient, cost-effective eCommerce fulfillment solution that stores, picks, consolidates, and ships smaller, more frequent orders, quickly and accurately?
The measure of success for a warehouse is typically determined by results: the units of product successfully and efficiently received, processed and shipped, minimal inventory damages, no injury incidents. If target numbers for categories like these are achieved, warehousing strategies might not venture beyond maintaining the status quo — the adage of "don't fix what isn't broken" at work. What fulfillment center managers often fail to realize, however, is that assessing and improving warehousing layout can move a business from treading water to real change, the lasting kind that bolsters the all-important bottom line.
Is your warehouse working as hard for you as it should be?
Efficiency isn’t just a business buzzword.Efficient production means making products without wasting materials, natural resources or man hours. Efficient facility management means running your business while reducing your energy costs and minimizing its carbon footprint. Efficient advertising means targeted ad campaigns that make the very most of your marketing dollars.
Moving your product from point A to point B is rarely a A-to-B process. As customers happily dive into their shipments, little thought goes to the intricate network behind the scenes that made it happen, but those same shipping solutions are likely a major concern for you. One of the most challenging aspects of shipment is the dual selection of mode and carrier. While it's tempting to lean on a basic freight quote to keep things moving along, you'd be doing yourself a disservice. Basic freight quotes are full of holes, and may not be meeting your fulfillment center's needs in a meaningful, consistent way.
There are three things you need to consider that are often missed.
Even if your fulfillment center doesn't have Santa's workload to contend with, they'll still have to work a little peak season magic to keep the peak influx of orders. Often customers are unavailable and gift-giving timelines are non-negotiable, your supply chain needs to be backed by a strategy that holds up to scrutiny and stress to remain viable. As with most supply chain planning, it's in your best interests to be proactive, not reactive, so here are a few last to-do list items to cross off before ecommerce marches into the busiest weeks of the year
It’s no secret that managing warehousing expenses has always been tricky for COOs and supply chain managers. What happens when your warehouse is reaching capacity? Do you build, relocate or outsource your fulfillment needs?
Space doesn't come cheap and can't easily be expanded in small increments. When a company decides to build new warehouse, it typically must build more than it presently needs. In the near-term, much of the new capacity will probably sit empty. On the other hand, space limitations will cap your company's potential revenue or potentially create safety issues for your associates. In both instances, something must change.
How do you strike a balance between current warehousing needs, anticipated future warehousing needs and justifying the projected budget? If you’re looking to expand, follow these steps to determine if it’s time to outsource your fulfillment needs.
As the weather shifts into cooler temperatures, you can almost hear the stampede of holiday customers waiting to test the mettle of your supply chain. Your e-commerce vendors—and, subsequently, your vendor management practices—are your first line of defense against the three great customer reputation-killers as the holidays loom. Improve your fulfillment efficiency by ironing out wrinkles and close loopholes to avoid unpleasant surprises in the middle of what is likely one of your busiest periods. Maintain your reputation with customers by avoiding these three missteps.
With e-commerce fulfillment centers facing down a proverbial tide of year-end business, productivity and efficiency soar to the top of managers' wish lists. How do you fulfill your e-commerce orders and give these must-have gifts to your managers? Here are five ways to prepare for the winter storm of orders without breaking a sweat or investing in expensive new warehouse technology:
A goal-oriented supply chain is a focused series of connected modules - raw materials to components, components to manufacturing and so on. When the initial approach amounts to what is essentially a collection of moving parts, it seems reasonable to apply solutions the same way: piecemeal. However well this may work for each individual module, that success is at the cost of a greater supply chain strategy - one that embraces a top-down approach and encourages that all-important trait of transparency. Considering today's increased demand for transparency from both the consumer side and that of your trading partners, it's not a facet your company can afford to let slip.
The holiday season is almost upon us and customers are waiting to test the mettle of your supply chain. It’s time to iron out any holiday shipping frustrations now to avoid unpleasant surprises of what is likely your busiest time as a business. Your vendors—and, subsequently, your vendor management practices—are your first line of defense against the three great customer reputation-killers. Here's why solid, consistently performing vendors are worth their weight in GPS-tracked gold.
Four Areas to Evaluate for the Best Supply Chain KPIs
It can be tempting to set a static goal and measure daily progress against it; however, in a climate that can change direction in a moment, your business practices can become outdated quickly. Warehouse key performance indicators (KPIs) are the best tools to guide actionable measures in afulfillment center. KPIs reflect the state of your efficiency on multiple levels.
Do you have the best supply chain KPIs for the job? The following four areas will help you start.
There may be times customer orders pick up throughout the year; however, in general, the fourth quarter is most demanding for a warehouse distribution facility. If you weren’t 100% satisfied with how last year’s peak season went, now is the time to examine your options to ensure you are providing the best solution to keep happy, repeat customers.
Before summer is in full swing, it’s time to figure out what part of your order experience didn’t function well last year and seek to find strategic improvements that are best for your business.
Peak season is a huge challenge for companies like yours, whether you manage it inhouse or have a 3PL that provides your order fulfillment. Effectively meeting the need throughout the year regardless of volume is something not every provider can do well.
Many business experts say that you should treat such a function as a type of customer service. Do it well, it can have a huge boost for relationship building and growing your brand. Do it poorly, and it doesn’t matter how great your product may be— customers are going to remember that experience when they think of your brand .g dock and then, eventually, to the customer's doorstep, packaging fulfillment is often one of the most overlooked and thereby dysfunctional parts of a business.
Despite the fact that your fulfillment team has a direct impact on consumer buying behavior and building brand loyalty, it’s likely you’re less concerned about developing a coherent supply chain strategy than you are about creating your next marketing campaign— even if you are pouring a considerable amount of money into operations.
Businesses which fall into the trap of putting too much focus on manufacturing and inventory costs are being held back from their full potential as they fail to acknowledge the inefficiencies arising through weak links in the supply chain.
Measurements — determining them, changing them, inferring from them — are a backbone of every industry. Whether the measure of success is something as simple as profit, or as complex as reducing the amount of time a product spends during its travels in the supply chain, having the right "ruler" is absolutely crucial. If you're using the wrong logistics KPIs, or endlessly tracking them for a future purpose that never manifests, you're not only wasting company resources — you're paying out an opportunity cost that could actually make a difference in your goal progression. In only three steps, you can clean up your approach to KPIs and maximize the value obtained from each one.
What makes a warehousing and distribution center a standout among its industry peers? Is it great geographical positioning, superior IoT-enabled technology, or it’s beneficial contracts with carriers? The truth is, without the individuals who keep a given warehouse stocked, organized and able to pack and ship at a moment’s notice, it's little more than a very large concrete or metal box, filled with disorganized products. A trustworthy, intelligent employee is worth more, over time, than just about any product or component you could possibly stock.
From learned industry behaviors to innovative thinking, the humans between your shelves are the "brain cells" that keep your warehouse running. Lose too many of those cells, and you lose industry standing and reputation right along with them. Just as tasks like 3PL contract negotiations or making space for new product lines are integral parts of a logistics managers' job, so is the responsibility of attracting and retaining employees. Having too many new employees means a heavy burden of training and newcomer mistakes to contend with — so make sure you get it right the first time, and keep your talent in place.
Even if your fulfillment center doesn't have Santa's workload to contend with, they'll still have to work a little holiday magic to keep the upcoming influx of holiday orders. As customers travel and gift-giving timelines become non-negotiable, your supply chain needs to be backed by a strategy that holds up to scrutiny and stress to remain viable. As with most supply chain planning, it's in your best interests to be proactive, not reactive, so here are a few last to-do list items to cross off before ecommerce marches into the busiest weeks of the year.
One of the biggest mistakes that a company can make is believing there's no way to improve, especially when it comes to warehouse processes. It's not a stretch to say that continuous improvement is the only surefire way to remain competitive, that standing still essentially means falling behind in the current business arena. Even if your team and facility work amazingly well together, chances are there's at least a few of these seven warehousing and logistics tips you can leverage towards fine-tuning.
It's the nature of the supply chain professionals to feel a need to have contingency plans for their contingency plans and contingency plans for those as well. Designing and implementing a "tight ship" is more than a matter of pre-planning, however: Eventually, something unexpected will happen and even the best supply chain risk mitigation framework will bend in the wake of questions and uncertainty.
Good mitigation practice isn't necessarily about building a ship that's entirely waterproof, it's about knowing what to do and how quickly to do it when it springs a leak. Here's a few of the ways you can add more efficiency into your backup plans: